Research › Browse › Judgment

Calcutta High Court · body

1979 DIGILAW 17 (CAL)

Kamal Narayan Bhagat v. State

1979-01-22

A.N.BANERJEE, P.C.BOROOAH

body1979
JUDGMENT P.C. Borooah J. The petitioners Kamal Narayan Bhagat and Rajbir Singh who are Directors of Carrit Moran & Co. Private Limited, have in this Rule prayed that the proceedings pending against them before the Metropolitan Magistrate, 11th Court, Calcutta, in case No.C-109 of 1978 under S.210 (5) of the Companies Act, 1956 (hereinafter the Act) be quashed. 2. On January 24, 1973 the Assistant Registrar of Companies, West Bengal (the opposite party No.2) filed a petition of complaint in the Court of the learned Chief Metropolitan Magistrate, Calcutta against the petitioners and two others as Directors of the aforesaid Company - a copy of the complaint being annexure "A" to petition. On the basis of the said complaint the learned Chief Metropolitan Magistrate took cognizance and transferred the case to the learned Metropolitan Magistrate, 11th Court, Calcutta for disposal. 3. In the complaint it was alleged that the petitioners and the other Directors of the aforesaid Company had committed an offence under S. 210(5) of the Act. The relevant portion of the complaint from which the offence under S. 210(5) of the Act is purported to have been made out is paragraph 2, which reads as follows; "That the accused were under a statutory obligation under S. 210(1) of the Companies Act, 1956 to lay before the aforesaid Company in its annual general meting which should have been held in pursuance of S. 166 of the said Act by 30.11.76 (extended time) at the latest its balance sheet and profit and loss account for the financial year ending on 31.3.76. However, they have failed and neglected to take all reasonable steps to comply with the said provisions of S. 210(1)(3) of the said Act in spite of repeated references and reminders made to them by the complainant and have thereby committed an offence punishable under S. 210(5) of the said Act." 4. However, they have failed and neglected to take all reasonable steps to comply with the said provisions of S. 210(1)(3) of the said Act in spite of repeated references and reminders made to them by the complainant and have thereby committed an offence punishable under S. 210(5) of the said Act." 4. It was submitted on behalf of the petitioners that the Company held the annual general meeting for the year ending March 31, 1975 on October 10, 1975 and as such the annual general meeting for the year ending March 31, 1976 which was held on January 7, 1977 was within the time permitted under S.166(1) of the Act and violation, if any by the Company was of S. 210(3) of the Act as the permissible limit had been exceeded, and there being no specific averment to that effect in the complaint the cognizance taken on its basis should be quashed as there has been complete non-application of mind by the learned Magistrate. 5. Mr. J.N. Ghosh, learned Advocate appearing on behalf of the Assistant Registrar of Companies, West Bengal, has argued before us that under S.166(1) of the Act a Company must hold an annual general meeting in each calendar year and the Company; of which the petitioners were the Directors, not having held any such meeting in the year 1976 and the accounts having been laid in an annual general meeting held in January 1977, there has been a violation not only of S. 166(1) but also of S.210(3)(b) of the Act. Mr. Ghosh's further submission is that the petition of complaint taken at its face value makes out a prima facie case under S.210(5) of the Act against the petitioners and the other accused persons. 6. The relevant provisions of the Act with which we are concerned are Ss. Mr. Ghosh's further submission is that the petition of complaint taken at its face value makes out a prima facie case under S.210(5) of the Act against the petitioners and the other accused persons. 6. The relevant provisions of the Act with which we are concerned are Ss. 166(1) and 210(3)(b) of the Act which read as follows;- S. 166(1): "Every company shall in each year hold in addition to any other meetings a general meeting as its annual general meeting and shall specify the meeting as such in the notices calling it; and not mote than fifteen months shall elapse between the date of one annual general meeting of a company and that of the next: Provided that a Company may hold its first annual general meeting within a period of not more than eighteen months from the date of its incorporation; and if such general meeting is held within that period, it shall not be necessary for the Company to hold any annual general meeting in the year of its incorporation or in the following year: Provided further that the Registrar may, for any specific reason, extend the time within which any annual general meeting (not being the first annual general meeting) shall be held, by a period not exceeding three months". S. 210(3)(b) : "in the case of any subsequent annual general meeting of the company, to the period beginning with the day immediately after the period for which the account was last submitted and ending with a day which shall not precede the day of the meeting by more than six months, or in cases where an extension of time has been granted for holding the meeting under the second proviso to sub-s. (1) of S. 166, by more than six months and the extension so granted". 7. Section 165(1) of tile Act thus makes it compulsory for every Company to hold an annual general meeting, not being the first annual general meeting every year within a maximum period of fifteen months from the previous annual general meeting, unless the time is extended by the Registrar for a period not exceeding three months. Therefore, if the word 'year' used in the section be restricted to a calendar year the time given to a Company under the Act for holding an annual general meeting would become meaningless. Therefore, if the word 'year' used in the section be restricted to a calendar year the time given to a Company under the Act for holding an annual general meeting would become meaningless. Thus if a Company holds its annual general meeting on the last working day of a calendar year, it need not hold such meeting in the following year because it would have time till the end of March of the next year, without any extension being granted. 8. Section 210(3)(b) lays down the maximum permissible gap between the dates of the accounts submitted in two successive annual general meetings. Therefore a Company may hold an annual general meeting in accordance with the provisions of S.166(l) of the Act, yet violate the provisions of S.210(3)(b) if the permissible limit is exceeded. 9. In the instant case, admittedly the Company held the annual general meeting for the year ending March 31, 1975 on October 24, 1975. Even accepting Mr. Ghosh's argument that the word 'year' in S. 166(1) of the Act refers to a calendar year, the Company had time till December 31, 1976 for holding the annual general meeting for the year ending March 31, 1976. Therefore, the averment made in paragraph 2 of the petition of complaint that the Company was under a statutory obligation under the provision of 210(1) of the Act to lay the accounts for the year ending 31.3.76 at an annual general meeting which should have been held in pursuance of S.166 of the Act by 30.11.76 (extended time) is clearly erroneous. 10. Where a complaint is filed in writing by a public servant acting or purporting to Act in the discharge of his official duties, a Magistrate can under proviso (a) of S. 200 of the Code of Criminal Procedure, 1973 take cognizance without examining the complainant. 10. Where a complaint is filed in writing by a public servant acting or purporting to Act in the discharge of his official duties, a Magistrate can under proviso (a) of S. 200 of the Code of Criminal Procedure, 1973 take cognizance without examining the complainant. The statute has extended this privilege to public servants in the obvious expectation that a complaint would be filed by such public servants with duo care and caution obviating the necessity of their examination as in the case of private complaint s Where an error which goes to the root of the matter appears on the fact of a complaint filed by a public servant and cognizance is taken on the basis of such a complaint it goes to show that not only the complaint was filed without due care and caution but the cognizance taken on its basis was mechanical and without proper application of mind. 11. In the light of the principles enunciated above we have to hold that in the instant case in view of the ex facie error on the complaint on a misconception of the scope and purview of S. 166(1) of the Act, the cognizance taken and the process issued on its basis are illegal and cannot be sustained. 12. The application is thus allowed and the proceedings pending against the petitioners and the other accused persons in Case No.C-109 of 1978 are quashed as the continuance of the said proceedings would cause unnecessary harassment of the petitioners and others tantamounting to an abuse of the process of the Court. The Rule is made absolute. A.N. Banerjee J. I agree. Rule made absolute.