Registrar of Companies (RoC) prosecuted a Director of a Public Sector Undertaking under the provisions of the Companies Act, 1956 for non-filing of Balance Sheet and Annual Return. The Director pleaded before the Court t

Section 197 of Criminal Procedure Code, 1973, provides that the sanction of the appropriate government is required in order to take cognizance of any offence which is allegedly committed by a person who, at the time of commission of the offence, was employed by the Central Government or a State Government. The Andhra Pradesh High Court in the matter of Andhra Pradesh State Essential Commodities Corporation Limited v. Registrar of Companies [2002] 38 SCL 1016 (AP), quashed the criminal prosecution for an offence under section 220 of the Companies Act, 1956 against the directors of a public sector undertaking on the ground that the necessary sanction for prosecuting the directors under Section 197 of the Criminal Procedure Code, 1973 has not been obtained. Therefore, the pleadings of the Director are tenable.