CALCUTTA HC ENDORSES RELEASE OF CHARTERED ACCOUNTANT IN COMPANY LAW CASE DUE TO LACK OF MENS REA & LIMITATION BAR REGISTRAR OF COMPANIES VS RANJAN MEGHANI (CALCUTTA HIGH COURT)

 CALCUTTA HC ENDORSES RELEASE OF CHARTERED ACCOUNTANT IN COMPANY LAW CASE DUE TO LACK OF MENS REA & LIMITATION BAR

REGISTRAR OF COMPANIES VS RANJAN MEGHANI (CALCUTTA HIGH COURT)  

FACTS OF THE CASE

The Calcutta High Court (Justice Uday Kumar, judgment dated 1 August 2026) upheld the discharge of Chartered Accountant Ranjan Meghani in Registrar of Companies v. Ranjan Meghani, ruling that prosecution failed due to absence of mens rea (criminal intent) and being barred by limitation.

The Court clarified that while CAs can be prosecuted if active complicity is shown, mere certification of statutory forms without evidence of knowing falsification does not attract liability.

KEY FACTS

The case arose from ROC’s investigation into Adorable Agrotech Ltd., which allegedly raised funds through preference shares treated as disguised public deposits.

Meghani’s role was limited to certifying statutory e-Forms (Form 2, Form 5) filed on the MCA portal.

ROC’s ALLEGATION

The ROC alleged defects in filings (missing shareholder names, mismatched allotment dates).

Complaint filed in March 2020, years after the alleged filings (2011–2013).

KEY FACTS

The case arose from ROC’s investigation into Adorable Agrotech Ltd., which allegedly raised funds through preference shares treated as disguised public deposits.

Meghani’s role was limited to certifying statutory e-Forms (Form 2, Form 5) filed on the MCA portal.

The ROC alleged defects in filings (missing shareholder names, mismatched allotment dates).

Complaint filed in March 2020, years after the alleged filings (2011–2013).

COURT’S FINDINGS

MENS REA REQUIREMENT

A CA certifying false returns can be prosecuted under Section 628 of the 1956 Act if active complicity or knowledge is proven.

In this case, no specific allegations showed Meghani knowingly connived with management.

LIMITATION BAR

The alleged offences dated back to 2011–2013.

Complaint filed in 2020 was time-barred under CrPC limitation provisions.

PROFESSIONAL INDEPENDENCE

Court emphasized that independent professionals (like CAs) are not automatically liable for company frauds unless direct involvement is established.

KEY TAKEAWAYS

CLARIFICATION OF LIABILITY:

 CAs are not immune, but liability requires proof of mens rea.

PROTECTION AGAINST OVERREACH:

Prevents ROC from using retrospective prosecutions without timely action.

CORPORATE GOVERNANCE IMPACT:

Reinforces distinction between company officers and external professionals.

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