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It is stated that the Complainant (ROC, NCT of Delhi and Haryana) has passed 323 adjudication orders from 2015-2018, however, majority of companies & its directors have not complied with adjudication order for payment of adjudication penalty under section 454(8) of the Companies Act, 2013 (‘CA, 2013’). Hence, it was stated by the ROC that the Directorate has given sanction for filing prosecution under section 458(8) of the CA, 2013 for more than 200 companies and their directors.

First to understand, it is submitted that in one case, ROC has passed an Adjudication Order dated 16.12.2015 under section 454(3) for penalty for violation of section 12(1) r/w Section 12(4) of the Companies Act, 2013 imposing of Rs. 1,00,000 on each of the addressees of their order i.e. company and its two directors. Later on, a show cause notice under section 454(8) (i) and (ii) of the Companies Act, 2013 for the violation of Section 12(8) of the CA, 2013 which state that

“(8) (i) Where company fails to comply with the order made under sub-section (3) or sub-section (7), as the case may be, within a period of ninety days from the date of the receipt of the copy of the order, the company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees.

(ii) Where an officer of a company or any other person who is in default fails to comply with the order made under sub-section (3) or sub-section (7), as the case may be, within a period of ninety days from the date of the receipt of the copy of the order, such officer shall be punishable with imprisonment which may extend to six months or with fine which shall not be less than twenty-five thousand rupees but which may extend to one lakh rupees, or with both.”

In the above cases/this case, ROC has filed a condonation of delay before the Special Court stating that adjudication of penalty was not paid by the company directors till the date of filing of the prosecution, therefore, it is a continuous offence and for adamant caution, application for condonation of delay is being filed along with the prosecution. This is a fit case of condonation of delay under section 473 of Code of Criminal Procedure, 1973 (‘Cr.PC’) in the interest of justice.

The relevant section 473 of Cr.PC may be produced herein for kind reference-

Bar to filing prosecution by ROC after lapse of period of limitation

“473. Extension of period of limitation in certain cases. Notwithstanding anything contained in the foregoing provisions of this Chapter, any Court may take cognizance of an offence after the expiry of the period of limitation, if it is satisfied on the facts and in the circumstances of the case that the delay has been properly explained or that it is necessary so to do in the interests of justice.”

ROC has stated that unfortunately the complainant had failed to file the compliant within the limitation as provided under section 468 of Cr.PC i.e. within one year from the expiry of 90 days of penalty order dated 16.12.2015.

The relevant section 468 of CrPC may be produced herein for kind reference-

468. Bar to taking cognizance after lapse of the period of limitation.

(1) Except as otherwise provided elsewhere in this Code, no Court shall take cognizance of an offence of the category specified in sub- section (2), after the expiry of the period of limitation.

(2) The period of limitation shall be-

(a) six months, if the offence is punishable with fine only

(b) one year, if the offence is punishable with imprisonment for a term not exceeding one year;

(c) three years, if the offence is punishable with imprisonment for term exceeding one year but not exceeding three years.”

Now, we here would like to point out that ROC has also mentioned in his condonation application about the Ministry Circular 03/73/2017/DGCoA(PF) dated 19.06.2020 for giving relation under the provisions of CA, 2013, however, it is relevant to mention herein that the relaxation given in the said circular was only upto 30.09.2020 for only COVID period which was started since 24.03.2020.

It is submitted that one side Ministry is stating that the officers and staff of the office of Complainant is attending all District Courts/High courts/Supreme Court/NCLT/NCLAT with their routine registry functions. More than 3500 High Court writ petitions, 2800 NCLT petitions and 700 lower court cases are pending and maximum of manpower is used for these cases. Whereas on the other side is filing prosecution with more than 6 years delay. I think there should be a penalty settlement provisions for smooth working for both company as well as complainant.

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Disclaimer: Nothing contained in this document is to be construed as a legal opinion or view of either of the author whatsoever and the content is to be used strictly for informational and educational purposes. While due care has been taken in preparing this article, certain mistakes and omissions may creep in. the author does not accept any liability for any loss or damage of any kind arising out of any inaccurate or incomplete information in this document nor for any actions taken in reliance thereon.

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