Case Note & Summary
The present revision application was filed by Yogendra Gangawat, a practicing chartered accountant, challenging the order dated 03.09.2013 passed by the learned Additional Sessions Court, Ahmedabad in Criminal Revision Application No.146 of 2013, which had confirmed the order of the learned Additional Chief Metropolitan Magistrate condoning the delay in filing the complaint against him. The applicant was the statutory auditor of M/s Welvet Financial Advisors Pvt. Ltd. (now in liquidation). It was alleged that during the financial year 2004-05, the company entered into related party transactions and the applicant failed to discharge his statutory duties under Section 227 of the Companies Act, 1956 read with Accounting Standard-18. Pursuant to an order dated 16.05.2008 of the Central Government, an investigation under Section 235 of the Act was conducted, and the Inspector submitted his report on 10.01.2011 alleging, inter alia, an offence under Section 227 read with Section 233 against the applicant. Sanction for prosecution under Section 242 was obtained on 16.01.2012, and an application dated 09.11.2012 was filed by Respondent No.1 before the learned Magistrate seeking condonation of delay in filing the complaint. The applicant opposed the same on grounds that the alleged offence pertained to 2004-05, the application was vague, delay was not properly explained or quantified, and requisite sanction documents were not produced. The learned Magistrate, by order dated 25.02.2013, rejected the application for condonation of delay holding that the delay was not properly explained. However, the learned Additional Sessions Judge, by order dated 03.09.2013, set aside the Magistrate's order and condoned the delay. The High Court, after hearing the parties, found that the delay of over 7 years was inordinate and not sufficiently explained. The court held that the learned Additional Sessions Judge erred in condoning the delay without proper justification and that the prosecution was barred by limitation under Section 468 of the CrPC. Consequently, the revision application was allowed, the order dated 03.09.2013 was quashed and set aside, and the order of the learned Magistrate dated 25.02.2013 was restored.
Headnote
A) Criminal Procedure Code - Condonation of Delay - Section 468, 469 CrPC - Limitation for Criminal Complaints - The court examined whether delay in filing complaint under Companies Act, 1956 could be condoned without sufficient cause. Held that the delay of over 7 years was not properly explained and the order condoning delay was liable to be set aside (Paras 4-6). B) Companies Act, 1956 - Prosecution of Auditor - Section 227, 233, 242 - Sanction and Limitation - The applicant, a chartered accountant, was alleged to have failed in statutory audit duties. The court found that the prosecution was barred by limitation as the complaint was filed beyond the prescribed period without adequate justification (Paras 3-5).
Issue of Consideration
Whether the learned Additional Chief Metropolitan Magistrate erred in condoning the inordinate delay of over 7 years in filing the complaint under the Companies Act, 1956, without proper explanation and without considering the prejudice to the accused.
Final Decision
The revision application is allowed. The order dated 03.09.2013 passed by the learned Additional Sessions Judge, Ahmedabad in Criminal Revision Application No.146 of 2013 is quashed and set aside. The order dated 25.02.2013 passed by the learned Additional Chief Metropolitan Magistrate, Ahmedabad rejecting the application for condonation of delay is restored.
Law Points
- Condonation of delay
- limitation for criminal complaints
- Companies Act 1956
- Section 468 CrPC
- Section 469 CrPC
- sufficient cause
- prejudice to accused
