1

IN THE HIGH COURT AT CALCUTTA

CRIMINAL REVISIONAL JURISDICTION

APPELLATE SIDE

PRESENT:

THE HON’BLE DR. JUSTICE AJOY KUMAR MUKHERJEE

CRR 1594 of 2018

With

IA No. CRAN 1 of 2025

CRAN 4 of 2025

Ahilya Sharma & Ors.

Vs.

The State of West Bengal & Anr.

For the Petitioners : Mr. Pawan Kumar Gupta

Mr. Sreyash Kumar Singh

For the State : Mr. Ranabir Roy Chowdhury

Mr. Siladitya Banerjee

For the SEBI : Mr. Sandipan Ganguly

Mr. Sudip Kumar Dutta

Mr. Karan Dhudhewala

Heard On : 15.01.2026

Judgment on : 27.03.2026

Dr. Ajoy Kumar Mukherjee, J.

1. Petitioners herein have prayed for quashing of the complaint case

being C-671 of 2004 under section 24(1)/27 of the Security and Exchange

Board of India Act, 1992 (in short, SEBI Act.), Presently pending before the

court of learned Chief Judicial Magistrate, Alipore.

2

2. The instant complaint has been filed on behalf of the securities and

exchange Board of India (in short SEBI) to prosecute the petitioners for their

alleged deliberate violation of section 11B, 12(1B) of the SEBI Act, 1992 and

Regulations 5 (1) Read with Regulations 68(1), 68(2), 73 and 74 of the

Securities Board of India (collective investment scheme) Regulations 1999.

3. It is alleged in the complaint that company/accused no.1 was

operating collective investments scheme (CIS) and had raised an aggregate

amount of nearly Rs. 0.004 crores (Rs.40,000/-) from the general public and

its failure to refund the said amount to those investors is violative of SEBI

Act and Regulations which are punishable under section 24(1) of the SEBI

Act, in as much as that inspite of repeated directions, issued to them to

furnish certain documents disclosing status of the company, to formulate

schemes for refund of the said amount to the investors and to submit

application before the SEBI for the provisional registration with it or to take

steps for winding up of the schemes and repayment to the investors as

provided under the Regulations, 1999, those directions were allegedly not

complied by the petitiners.

4. Being aggrieved by the aforesaid complaint case, petitioners counsel

submits that the entire amount involved in this case is only Rs.40,000/-

and the accused company was a Limited Company incorporated under the

provisions of the Companies Act, 1956 and to that extent certificate of

incorporation was also issued by the competent authority. Presently the said

company has been dissolved by virtue of a notification dated 15

th March,

2008 issued by Registrar of Companies.

3

5. Mr. Gupta Learned Counsel appearing on behalf of the petitioners

further submits that the company as well as other similarly situated

companies which issued instruments like Agrobond plantation bond etc.

were brought under the purview of ‘collective investment scheme’ under

SEBI Act and a press release was made by SEBI, on 18.12.1997 that all

existing collective investment schemes which are desirous of taking benefit

of section 12(1)(B) and continue their operation shall send to SEBI by

15.01.1998 necessary information with regard to the scheme. The petitioner

no.1 filed information details with the SEBI as has been admitted in the

complaint. Even though the company filed information before the SEBI but

it issued a show cause notice dated 31.03.1998 to the company as to why

action should not be initiated against the company and also advised to

forward certain information mentioned therein by 30

th April, 1998. The

petitioner no.1 filed reply along with the details through registered letter

dated 01.04.1998, where company has stated that further mobilization of

fund has already been suspended and a sum of Rs.35,000/- mobilised

earlier has also been refunded and as such question of deployment of funds

does not arise.

6. However, inspite of compliance of all the directions issued by the

SEBI, they again issued a letter to the company on 24.08.1998 stating

therein that the records shows that no information has been filed by the

company in compliance to its public notice dated 18.12.1997 and

accordingly directed to file reply by 15.12.1998. Learned counsel for the

petitioners submits that the aforesaid series of letters issued by SEBI clearly

suggest that records of the SEBI itself is not in order and thereby they are

4

causing undue harassment to the petitioners. The petitioners herein in their

reply have categorically submitted that it has already withdrawn the scheme

and the amount has already been refunded to the investors and has no

assets and liabilities. However, SEBI once again issued similar direction to

the company on 25.11.1998 which were already replied. However the

petitioners by a letter under certificate of posting reiterated that the scheme

floated by the company has already been withdrawn and no new scheme is

being floated nor they intend to float any new scheme and the small amount

realized under the scheme has already been refunded. Thereafter on

30.03.2000 the company submitted the application in accordance with law

before Registrar of Companies, for winding up the company with a request

to strike out the name of the company from its register. On the basis of such

application the Registrar of Companies, Bihar and Jharkhand Struck off the

name of the company/petitioner no.1 from its register and dissolved the

company vide notification no.43 dated 15.05.2008.

7. Mr. Gupta Strenuously argued that from the facts and circumstances

of the case it is clear, whatever directions had been issued by the SEBI and

received by the company, it has complied the same and therefore SEBI has

no cause of action to initiate the instant proceeding. Moreover, the amount

of Rs. 40,000/- which is alleged to have been raised from investors is infact

the share money subscribed by the petitioner no. 1 to 4 themselves and

therefore, the allegation of non-refund of hard earned money to the investors

is absurd and mis conceived allegation, which do not attract violation of

provisions of the SEBI Act or its rules.

5

8. However, SEBI by its letter dated 18.12.2000 again directed to refund

the money in default to initiate proceeding under section 24 of the SEBI Act

and thereafter by an order dated 02.07.2001 SEBI debarred the petitioners

and the company from accessing the capital market for a period of 5 years,

invoking their power under section 11B of the SEBI Act,

9. He further submits that one of the accused namely petitioner no.3 has

already expired and the petitioner no. 1 and 2 are senior citizens and are

suffering from various health disorder. He further submits that continuation

of the present prosecution would be clear abuse of process of law as it would

serve no statutory or public purpose. It does not involve any allegation of

any claim of any investor and the petitioners have fully disclosed and

winding up the internal scheme decades ago. Therefore, pursuing the

instant matter will achieve nothing substantially and only create undue

burden on the criminal justice system, and therefore the proceeding is liable

to be quashed.

10. Mr. Sandipan Ganguly learned Counsel appearing on behalf of the

SEBI argued that the petitioners had illegally mobilized funds from the

public in contravention of the laws of the lands. The petitioners did not

apply for registration under the SEBI Regulations nor took any steps for

winding up of the scheme and repayment to the investors as provided under

the said Regulation inspite of order passed by SEBI on 10

th July, 2001.

Accused company admittedly raised an amount of Rs. 40,000/- and its

failure to refund thereof has caused huge damage to the investors. Accused

no. 2 to 5 are the persons who are in charge of and responsible for the day

to day management of the accused company at the relevant point of time.

6

The accused persons have clearly contravened the SEBI directions. A bare

perusal of the petition of complaint makes it clear that all charges have been

prima facie made out against the petitioners who had collected money from

public and were operating a collective investment scheme in contravention

of SEBI Act and Rules and Regulations. In fact after enactment of SEBI

regulations 1999 it was mandatory in terms of regulation 73(1) that existing

collective investment schemes, which failed to make an application for

registration with SEBI shall wind up the existing collective investment

schemes and repay the amounts collected from the investors. He further

submits that from the representation dated 12.01.1998 made by the

accused company it has admitted that the accused company had collected

Rs. 35,000/- from the public and petitioners also admitted that they were in

charge of and responsible for the affairs of the company.

11. Mr. Ganguly further argued that no documentary proof or otherwise

has been shown by the petitioner to substantiate their claim that they have

repaid any sum of money to the investors from whom they had collected the

money. As such mere verbal assertion made in the application cannot form

the basis of quashing the entire proceeding.

12. Mr. Ganguly further argued that the contention of the petitioners that

the instant proceeding involved a paltry amount of Rs. 40,000/- is fallacious

as the petitioner herein by making such submissions is seeking that the

court should turn a blind eye to the offence committed by the petitioner

merely because the amount of money raised and failure to repay the same is

small amount. It is trite law that any offence under the criminal law does

not distinguish between the amount which an accused has misappropriated

7

as the punishment for failure to repay any amount is the same. He further

submits that in SEBI VS. Ajay Agarwal reported in (2010) 3 SCC 765 the

Supreme Court held that SEBI Act is Social Welfare legislation seeking to

protect the interest of common men who are small investors and as such it

is the duty of the courts to adopt such an interpretation which furthers the

purpose of law and not one which frustrate it. Therefore he prayed for

dismissal of the instant application.

13. I have considered submissions made on behalf of both the parties.

14. Before going to further details let me reproduce section 24(1), Section

27 of SEBI Act and Regulation 5 , 68, 73, 74 of the SEBI Regulation 1999

24. (1) Without prejudice to any award of penalty by the adjudicating officer

under this Act, if any person contravenes or attempts to contravene or abets the

contravention of the provisions of this Act or of any rules or regulations made

thereunder, he shall be punishable with imprisonment for a term which may extend to

ten years, or with fine, which may extend to twenty-five crore rupees or with both.

Section 27 Offences by companies . (1) Where an offence under this Act has

been committed by a company, every person who at the time the offence was

committed was in charge of, and was responsible to, the company for the conduct of

the business of the company, as well as the company, shall be deemed to be guilty of

the offence and shall be liable to be proceeded against and punished accordingly:

Provided that nothing contained in this sub-section shall render any such person liable

to any punishment provided in this Act, if he proves that the offence was committed

without his knowledge or that he had exercised all due diligence to prevent the

commission of such offence.

(2) Notwithstanding anything contained in sub-section (1), where an offence under

this Act has been committed by a company and it is proved that the offence has been

committed with the consent or connivance of, or is attributable to any neglect on the

part of, any director, manager, secretary or other officer of the company, such director,

manager, secretary or other officer shall also be deemed to be guilty of the offence and

shall be liable to be proceeded against and punished accordingly.

Explanation : For the purposes of this section,—

(a) ―company‖ means anybody corporate and includes a firm or other association

of individuals; and (b) ―director‖, in relation to a firm, means a partner in the firm.

Securities and Exchange Board of India (collective Investment

Schemes) Regulation, 1999 Application by existing Collective

Investment Schemes. Regulation 5 . (1) Any person who immediately prior to

the commencement of these regulations was operating a 15[collective

investment scheme], shall subject to the provisions of Chapter IX of these

regulations make an application to the Board for the grant of a certificate within

a period of two months from such date.

8

(2) An application under sub-regulation (1) shall contain such particulars as

are specified in Form A and shall be treated as an application made in

pursuance of regulation 4 and dealt with accordingly.

Regulation 68 - Existing collective investment schemes to obtain

provisional registration (1) Any person who has been operating a collective

investment scheme at the time of commencement of these regulations shall be

deemed to be an existing collective investment scheme and shall also comply

with the provisions of this Chapter. Explanation: The expression ‘operating a

collective investment scheme’ shall include carrying out the obligations

undertaken in the various documents entered into with the investors who have

subscribed to the 187[collective investment scheme].

(2) An existing collective investment scheme shall make an application to

the Board in the manner specified in regulation 5.

(3) The application made under sub-regulation (2) shall be dealt with in any

of the following manner:

(a) by grant of provisional registration by the Board under sub-regulation

(1) of regulation 71;

(b) by grant of a certificate of registration by the Board under regulation 10;

(c) by rejection of the application for registration by the Board under

regulation 12.

Manner of repayment and winding up Regulation - 73. (1) An existing

collective investment scheme which:

(a) has failed to make an application for registration to the Board;

or (b) has not been granted provisional registration by the Board;

or (c) having obtained provisional registration fails to comply with the

provisions of regulation 71; shall wind up the existing 209[collective investment

scheme].

(2) The existing Collective Investment Scheme to be wound up under sub-

regulation (1) shall send an information memorandum to the investors who

have subscribed to the 210[collective investment scheme]s, within two months

from the date of receipt of intimation from the Board, detailing the state of

affairs of the collective investment scheme, the amount repayable to each

investor and the manner in which such amount is determined.

(3) The information memorandum referred to in sub-regulation (2) shall be

dated and signed by all the directors of the 212[collective investment scheme].

(4) The Board may specify such other disclosures to be made in the

information memorandum, as it deems fit.

(5) The information memorandum shall be sent to the investors within one

week from the date of the information memorandum. (6) The information

memorandum shall explicitly state that investors desirous of continuing with

the collective investment scheme shall have to give a positive consent within

one month from the date of the information memorandum to continue with the

collective investment scheme.

(7) The investors who give positive consent under sub-regulation (6), shall

continue with the collective investment scheme at their risk and responsibility :

Provided that if the positive consent to continue with the collective investment

scheme, is received from only twenty-five per cent or less of the total number of

existing investors, the collective investment scheme shall be wound up.

(8) The payment to the investors, shall be made within three months of the

date of the information memorandum.

9

(9) On completion of the winding up, the existing collective investment

scheme shall file with the Board such reports, as may be specified by the

Board.

Regulation 74. An existing collective investment scheme which is not

desirous of obtaining provisional registration from the Board shall formulate a

scheme of repayment and make such repayment to the existing investors in the

manner specified in regulation 73.

15. In the instant case neither the company nor its directors applied for

registration under the said regulation nor took any steps for winding up of

the scheme or repayment to the investors as provided under the said

regulation. The accused company has raised nearly an amount of Rs.

40,000/-(Rs. 0.004 crores). It is also not disputed that petitioner nos.2 to 4

were the persons in charge of and responsible for the day to day

management of the accused company, at the relevant point of time which

has been alleged in para 17 of the complaint. After enactment of the

aforesaid Regulation of 1999, it was mandatory in terms of Regulations 73(1)

that existing collective investment schemes, which failed to make an

application for registration with SEBI shall wind up the existing collective

investment schemes and repay the amounts collected from the investors.

Further in terms of Regulation 74 an existing collective investment scheme

which is not desirous of obtaining provisional registration from SEBI, shall

formulate a scheme of repayment and will make repayment to the existing

investors in the manner specified in Regulation 73. The specific allegation

made in the complaint is that the petitioners neither applied for registration

under the said regulation nor took any step for winding up of the schemes

and repayment to the investors as provided under the Regulation, which

amounts to violation of section 12(B) of SEBI Act 1992 and Regulation 5(1)

10

Read with Regulations 68(1), 68(2), 73 and 74 of the Regulations 1999. It is

further alleged that upon alleged violation of the said provisions SEBI

directed the accused company on December, 7 2000 to refund the money

collected under the aforesaid collective investment scheme in the manner

specified in Regulation 73 to the persons who invested therein, within a

period of one month from the date of said directions. It is further alleged

that the petitioners failed to comply the said direction inspite of proper

service. Thereafter by another direction dated July, 2, 2001 the petitioners

who are in charge of the business of the schemes were restrained from

operating in the capital market for a period of 5 years from the date of the

order. It is admitted position in this case that petitioners being in charge of

and responsible for the affairs of the company had collected Rs. 35, 000/-.

However, no documentary prove has ever been shown to this court till date

by the petitioners that the said amount has been repaid to the investors.

16. Mr. Gupta learned counsel for the petitioners strenuously argued that

prior to 2002, the offences under section 24 of the SEBI Act, were

punishable for one year or with fine or with both. However, on and from

29.10.2002 by way of an amendment the said offence has been made

punishable for ten years or with fine which may extend to Rs. 25 croes or

with both. Therefore, since the alleged offence of noncompliance with the

direction of SEBI was committed in the year 2001, the period of limitation as

per section 468 of Cr.P.C. was one year from the date of completion of the

offence. Now the instant case was filed in the year 2004, which is beyond

the limitation period of one year and therefore the complaint is barred by

11

limitation and learned Magistrate ought not to have taken cognizance upon

such offence.

17. Per contra Mr. Ganguly learned counsel appearing on behalf of the

SEBI argued that offence committed by the petitioners is a continuing one

as they have continued to hold on to the investment of the investors and

failed to make any repayment to the said investors despite several directions

passed by the SEBI. Therefore, it is each date thereafter that they have

failed to comply with the direction of SEBI to repay the investors and

thereby they have committed fresh offence on each date. He further argued

that the concept of ‘continuing offence’ does not wipe the original guilt of the

accused but keeps the contravention alive day by day. For such reason

section 468 of the Cr.P.C. cannot have any application in the instant case

and the offence which is alleged against the petitioner will be governed

under section 472 of the Cr.P.C., according to which, a fresh period of

limitation begins to run at every moment of the time during which the

offence continues. He further pointed out that since such failure to wind up

the schemes and refund the investors continued beyond the date of

aforesaid amendment(which came into effect on 29.10.2022), the petitioners

are guilty of committing offence punishable under the enhanced punishment

provided under the amendment.

18. In this context Mr. Ganguly further argued that the provision of

section 473 of the Code is an overriding provision according to which any

court may take cognizance of an offence after the expiry of the period of

limitation, if it is satisfied interalia that it is necessary to do so in the

interest of justice. The instant case relates to defrauding of innocent

12

investors and as such in the interest of justice due weightage and

consideration ought to be given to the provisions contained in section 473 of

the Code, as opposed to the rule of limitation governing prosecutions.

Therefore, the offence committed by the petitioners is a continuing one and

when the instant case was filed in the year 2004 the provisions of section 24

of the SEBI Act had already been amended, thereby making the offence

punishable with ten years or with fine or with both and as such the question

of limitation does not arise. He further argued that prior to the initiation of

the instant case accused company had made an application to ROC to wind

up the company but initiation of the winding up process of the accused

company on 30.03.2000 is of no consequence for adjudicating of the lis of

the impugned proceedings, especially when the company was struck off on

15.03.2008 i.e. after the initiation of the instant case.

19. Therefore, the moot point to be adjudicated in the present case is

whether the allegations levelled in the complaint is barred by law under

section 468 of Cr.P.C. and therefore whether liable to be quashed applying

the principle laid down in clause (6) of para 102 of the case of State of

Haryana and Ors. Vs. Bhajanlal and Ors. reported in 1992 supp(1) SCC

335, which states that a criminal proceeding is liable to be quashed, where

there is an express legal bar engrafted in any of the provisions of the Code or

the concerned Act.

20. It is beyond dispute that the SEBI Act, 1992 was framed mainly to

protect the interest of the investors. The Apex Court while dealt with the

legislative intent of the Act of 1992 held in SEBI Vs. Ajay Agarwal, (2010) 3

SCR 70

13

39. If we look at the legislative intent for enacting the said Act, it transpires

that the same was enacted to achieve the twin purposes of promoting orderly

and healthy growth of securities market and for protecting the interest of the

investors. The requirement of such an enactment was felt in view of

substantial growth in the capital market by increasing participation of the

investors. In fact such enactment was necessary in order to ensure the

confidence of the investors in the capital market by giving them some

protection.

40. The said Act is pre-eminently a social welfare legislation seeking to protect

the interests of common men who are small investors.

41. It is a well known canon of construction that when Court is called upon to

interpret provisions of a social welfare legislation the paramount duty of the

Court is to adopt such an interpretation as to further the purposes of law and

if possible eschew the one which frustrates it.

21. In Kunnam Kulam Papers Mills Ltd and Ors. Vs. SEBI (date

05.07.2022, Crl. A.No. 626 of 2019) the Madras High Court by a judgment

dated 05.07.2022, while dealt with a similar issue considered a situation

where direction was made by SEBI to refund the amount within a period of

30 days from the order and the same was not refunded and the direction

was not complied. The court held that such noncompliance of direction

amounts to an offence under section 24(1) of the SEBI Act.

22. Now as regards the question whether the offence, if any, committed

under section 24 (1) of SEBI Act is a continuing offence or not I may

profitably refer in this context a judgment of the Apex Court passed in

Bhagirath Kanoria and Ors. Vs. State of MP reported in 1984 (4) SCC 222

where Apex Court has dealt with a similar type of issue as to whether non-

payment of employees contribution to the Provident Fund within due date is

a continuing offence. While considered the object and purpose of the

provision, which is to ensure the welfare of workers in the said case, Court

held that each day that they failed to comply with the obligation to pay their

contribution to the Fund, they committed a fresh offence and such offences

14

must be regarded as continuing offences to which the law of limitation

cannot apply. Para 21 and 22 of the judgment may be reproduced below:-

21. For these reasons, we are of the opinion that the offence of which the

appellants are charged, namely, non-payment of the employer's contribution to

the Provident Fund before the due date, is a continuing offence and, therefore,

the period of limitation prescribed by Section 468 of the Code cannot have any

application. The offence which is alleged against the appellants will be

governed by Section 472 of the Code, according to which, a fresh period of

limitation begins to run at every moment of the time during which the offence

continues.

22. Before we close, we consider it necessary to draw attention to the

provisions of Section 473 of the Code which we have extracted above. That

section is in the nature of an overriding provision according to which,

notwithstanding anything contained in the provisions of Chapter XXXVI of the

Code, any court may take cognizance of an offence after the expiry of the period

of limitation if, inter alia, it is satisfied that it is necessary to do so in the

interest of justice. The hair-splitting argument as to whether the offence alleged

against the appellants is of a continuing or non-continuing nature, could have

been averted by holding that, considering the object and purpose of the Act, the

learned Magistrate ought to take cognizance of the offence after the expiry of

the period of limitation, if any such period is applicable, because the interest of

justice so requires. We believe that in cases of this nature, courts which are

confronted with provisions which lay down a rule of limitation governing

prosecutions, will give due weight and consideration to the provisions contained

in Section 473 of the Code.

23. Same view has been reiterated in another judgment reported in (1991)

2 SCC 141, Gogak Patel Volkat Limited Vs. Dandiyya Gurusidhayya

Haiermath and Ors. where in connection with the same issue Supreme

Court rejected the contention of the High Court and held that where the

allegation is non-payment of the employers contribution to the provident

fund within the due date it is a continuing offence and therefore, section

468 of the Code does not have any application and it would be governed by

section 472 of the Code according to which a fresh period of limitation

started to run at every moment of the time during which the offence

continued. The relevant paragraph may be reproduced below:-

24. The concept of continuing offence does not wipe out the original guilt, but it

keeps the contravention alive day by day. It may also be observed that the

courts when confronted with provisions which lay down a rule of limitation

governing prosecutions, in cases of this nature, should give due weight and

consideration to the provisions of Section 473 of the Code which is in the nature

15

of an overriding provision and according to which, notwithstanding anything

contained in the provisions of Chapter XXXVI of the Code of Criminal Procedure

any court may take cognizance of an offence after the expiration of a period of

limitation if, inter alia, it is satisfied that it is necessary to do so in the interest

of justice.

25. The expression ‘continuing offence’ has not been defined in the Code. The

question whether a particular offence is a ‘continuing offence’ or not must,

therefore, necessarily depend upon the language of the statute which creates

that offence, the nature of the offence and the purpose intended to be achieved

by constituting the particular act as an offence.

26. Applying the law enunciated above to the provisions of Section 630 of the

Companies Act, we are of the view that the offence under this section is not

such as can be said to have consummated once for all. Wrongful withholding,

or wrongfully obtaining possession and wrongful application of the company's

property, that is, for purposes other than those expressed or directed in the

articles of the company and authorised by the Companies Act, cannot be said

to be terminated by a single act or fact but would subsist for the period until the

property in the offender's possession is delivered up or refunded. It is an

offence committed over a span of time and the last act of the offence will control

the commencement of the period of limitation and need be alleged. The offence

consists of a course of conduct arising from a singleness of thought, purpose of

refusal to deliver up or refund which may be deemed a single impulse.

Considered from another angle, it consists of a continuous series of acts which

endures after the period of consummation on refusal to deliver up or refund the

property. It is not an instantaneous offence and limitation begins with the

cessation of the criminal act, i.e. with the delivering up or refund of the

propriety. It will be a recurring or continuing offence until the wrongful

possession, wrongful withholding or wrongful application is vacated or put an

end to. The offence continues until the property wrongfully obtained or

wrongfully withheld or knowingly misapplied is delivered up or refunded to the

company. For failure to do so sub-section (2) prescribes the punishment. This, in

our view, is sufficient ground for holding that the offence under Section 630 of

the Companies Act is not one time but a continuing offence and the period of

limitation must be computed accordingly, and when so done, the instant

complaints could not be said to have been barred by limitation. The submission

that when the first respondent upon his retirement failed to vacate and deliver

possession of the company's quarter to the company the offence must be taken

to have been complete, has, therefore, to be rejected.

24. What has been derived from settled position of law as quoted above is

whether the particular offence is a continuing one shall necessarily depend

on the language of the statute creating the offence, the nature of the offence

and above all the purpose which is intended to be achieved by constituting a

particular act is an offence. Viewing the issue from another angle, the

offences which arises out of a failure to obey or comply with a rule or it’s

requirement and which involves a penalty, the liability for which continues

until the rule or it’s requirement is obeyed or complied with, on every

16

occasion that such disobedience or non-compliance occurs and reoccurs,

there is the offence committed.

25. In the instant case the petitioners were unquestionably liable to

refund the invested amount to the investors within the date specified by

SEBI. Their subsequent prayer for winding up the company could not have

absolved them of their original guilt but it would have snapped the

recurrence and each day they failed to comply with the obligation to pay to

refund, they have committed a fresh offence.

26. Therefore, here also the allegation of wrongful withholding the money,

for whatever scanty amount, it may be, for the purpose other than the

purpose as mentioned in the SEBI Act, is an offence which subsists for the

period until the money in the offender’s possession is refunded, and is a

recurring/continuing offence and therefore complaint under section 24(1) of

the SEBI Act for alleged non refund of money to the investors inspite of

direction, cannot be said to be barred under section 468.

27. Mr. Gupta heavily relied upon the judgment of SEBI Vs. Gourav

Vershanny and Anr. but said judgment is factually distinguishable from the

present case. Para 100 of the said judgment states that since the appellant

therein had resigned as a director of the accused company prior to the

aforesaid amendment dated 29.10.2002, the period of limitation would be

one year in terms of section 468. However, in the instant case none of the

petitioners have ever resigned as directors prior to the initiation of the

instant case and as such it cannot be said that the period of limitation

would be one year in terms of section 468 of Cr.P.C. On the contrary, the

allegation levelled in the petition is that they have continued to hold on to

17

the investment of the investors and failed to make any repayment to the said

investors, despite several direction passed by the SEBI and therefore it is a

continuing offence.

28. In view of above I do not find any substance in the petitioners

application for quashment of the impugned proceeding.

29. CRR 1594 of 2018 thus stands dismissed. Connected Applications

also thus stand disposed of.

Urgent photostat certified copy of this order, if applied for, be supplied to the

parties, on priority basis on compliance of all usual formalities.

(DR. AJOY KUMAR MUKHERJEE, J.)