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1987 DIGILAW 191 (CAL)

RAMA CAST LTD v. ASST. REGISTRAR OF COMPANIES

1987-06-12

MONORANJAN MALLICK

body1987
MONORANJAN MULLICK, J. ( 1 ) - This revision petition is directed against the conviction and sentence passed by the Learned Magistrate against the present petitioners under Section 220 (3) of the Companies Act. The facts are briefly as follows: ( 2 ) OPPOSITE party, the Assistant Registrar of Companies, filed a petition of complaint under Section 220 (3) read with Section :162 (1 ). of the Companies Act, 1956 alleging that M/s. Rama Cast Limited and the Directors who are the petitioners No. 2 to 4 herein, of the Company, were under statutory obligation to file three copies of Balance-Sheet and Profit and Loss Account placed in the Annual General Meeting within 30 days, that the Annual General Meeting of the Company should have been held on or before 30. 6. 81 and the Balance Sheet, etc. , were required to be produced in the office of the complainant on or before 29. 7. 1981 but that the petitioners caused did not file the Balance Sheet and Profit and Loss Account as on 31. 12. 1980 inspite of show case-notice. That is how they have contravened the provisions of Section 220 (1) of the Act and are liable to be prosecuted and punished under that section read with Section 162 (1) of the Act. ( 3 ) THE learned Magistrate on considering the evidence produced by the complainant as well as by the present petitioners cause to the finding that the prosecution has been alibi to prove the charge against the accused petitioners, that the accused persons are responsible for the default regarding non-submission of the Balance Sheet and Profit and Loss Account and liable to be punished under Section 220 (3) of the Companies Act. So he convicted all the petitioners under that Section and sentenced the petitioner No. 1 to a fine of Rs. 200 only and the other petitioners to a fine of Rs. 200 each in default to S. I. for 5 days each. He also directed to the prosecution as costs. ( 4 ) BEING aggrieved this revision petition has been filed. ( 5 ) IT is contended firstly that the Learned Assistant Register of Companies has no competence to file a petition of complaint and the complaint filed by him is illegal and the conviction and sentence is, therefore liable to be set aside. ( 4 ) BEING aggrieved this revision petition has been filed. ( 5 ) IT is contended firstly that the Learned Assistant Register of Companies has no competence to file a petition of complaint and the complaint filed by him is illegal and the conviction and sentence is, therefore liable to be set aside. The second contention is that the learned Magistrate considered the documentary evidence proved by P. W. 1, did not have the competence to prove documents and the contents of the documents cannot be read in evidence. Third contention is that there is no evidence that the petitioners Nos. 2, 3 and 4 are in default and under Section 5 of the Companies Act, 1956 they can only be prosecuted if they are officers in default and consequently, the conviction and sentence against the petitioners No. 2 to 4 is liable to be quashed. ( 6 ) THE revision petition is contested by the opposite party. On behalf of the opposite party it is contended that the decision of this Court in LXXXIII C. W. N 108 (Ajit Kumar Sarkar vs Assistant Registrar of Companies) where it has been held that the Assistant Registrar of Companies has the competence to file the petition of complaint as against the accused persons for offence punishable under Section 220 (3) of the Act answer the first point. It is also submitted that P. W. 1 has clearly proved the documentary evidence can be placed on such evidence. It is further contended that in view of the judgment in AIR 1968 Cal 79 Madan Gopal Dey and others versus State and another the Director have obligation to follow the provisions of the companies Act, 1956 and therefore, when they failed to perform their statutory duties, they bring themselves within the mischief of penal provisions of law, and. in the circumstances, the conviction of the Directors was quite proper and is not liable to be set aside. ( 7 ) AS regards the first contention raised by the learned Advocate for the petitioners, I am of the view that the judgment of this court in 83 Calwn 108 answers the point. There the Learned Single Judge has held that an Assistant Registrar of Companies is competent to file any petition of complaint for contravention of any provisions of the Companies Act. There the Learned Single Judge has held that an Assistant Registrar of Companies is competent to file any petition of complaint for contravention of any provisions of the Companies Act. I have carefully persued this decision and I fully rely on the said decision as it appears to lay down the correct principle. I find no reason to differ with the. observation made by the Learned Judge in coming to the conclusion that the Assistant registrar of Companies is competent to make a complaint against the limited company and the Directors thereof under the provisions of the Companies Act, 1956. Therefore, the contention of the learned Advocate for the petitioners in this regard is not tenable. ( 8 ) AS regards the question of admissibility of the documentary evidence being proved by P. W. 1. I am of the view that it is true that P. W. 1 is an assistant in the office of the Registrar of Companies and has no personal knowledge about the case nor about the notices sent. He has proved the signature of the complainant 'in the petition of complaint and some acknowledgement receipts showing that notice was sent to the accused petitioners which was duly received by all other except one and his notice had been returned unserved by the postal authority. The documentary evidences which have been tendered in this case are formal in nature. Mr. Mukherjee learned Advocate for the Assistant Registrar of Companies submits that the Registrar of Companies does not have any obligation to issue notice on the company and its directors asking them to submit Balance Sheet, etc. , but by way of abundant caution, the notices have been issued and he is not placing any importance on such notices and he is of the view that on the basis of the other evidence before the learned Magistrate, the finding of the learned Magistrate, that the petitioners are guilty of offence under Section 220 (3) of the Companies Act can be supported. ( 9 ) IN view of the above submissions, I am not going to take into consideration the-evidence regarding the service of notices because the P. W. 1 did not have any personal knowledge. The petition of complainant was also a formal document to be tendered in evidence. ( 9 ) IN view of the above submissions, I am not going to take into consideration the-evidence regarding the service of notices because the P. W. 1 did not have any personal knowledge. The petition of complainant was also a formal document to be tendered in evidence. I am to see whether the prosecution has been able to bring home the charge against the petitioners on the basis of other evidence produced. ( 10 ) SO far as the petitioner No. 1 is concerned, there can be no doubt that the company has the obligation to hold the Annual General Meeting and to submit the Balance Sheet and Profit and Loss Account to the Registrar of Companies within the specified period. It is not the case of the present petitioners that the Balance Sheet and the Profit and Loss Account were submitted within the above period specified. Therefore so far as the company is concerned, the evidence adduced by the P. W. 1 that no Balance Sheet and Profit and Loss Account were submitted within the specified time is sufficient to convict the company. So the conviction and sentence of the company cannot be set aside. ( 11 ) LEARNED Advocate for the petitioners vehemently urges that even if the company can be convicted under Section 220 (2) of the Act, its Directors cannot be convicted, as there was no evidence that they were in default. My attention has been drawn to the provisions of Section 5 of the Companies Act in whi. ch it is stated as follows: 'for the purpose of any provision in this Act which enacts that an officer of the company who is in default shall be liable to any punishment or penalty, whether by way of imprisonment fine or otherwise, the expression 'officer who is in default' means any officer of the company who is knowingly guilty of the default, non-compliance, failure, refusal or contravention mentioned in that provision, or who knowingly and willfully authorise or permit such default, non-compliance, failure, refusal or contravention'. Mr. Bhattacharjee learned Advocate for the petitioners has drawn my attention to the evidence of P. W. 1 and has submitted that P. W. 1 has not stated in his evidence that the petitioners Nos. 2 to 4 were knowingly guilty of the default and permitted to continue such default. Mr. Bhattacharjee learned Advocate for the petitioners has drawn my attention to the evidence of P. W. 1 and has submitted that P. W. 1 has not stated in his evidence that the petitioners Nos. 2 to 4 were knowingly guilty of the default and permitted to continue such default. This fact has not been proved by evidence and in the absence of such evidence by P. W. 1 the only witness for the prosecution it is fit and proper that the conviction as against the petitioners No. 2 to 4 cannot be upheld. ( 12 ) MR. Mukherjee, learned Advocate for the complaint opposite party submits that necessary averments to the above effect were made in the petition of complaint and if the evidence along with the petition of complaint which is also admitted as an exhibit in the case, then there cannot by any doubt that there is evidence that the petitioner Nos. 2 to 4 were also in default. Mr. Mukherjee Learned Advocate has also referred to me the decision of AIR 1968 Cal 79 to argue that the Directors can be prosecuted because of their statutory obligation to file the Balance Sheet and the Profit and Loss Account in accordance with the provisions of the Companies Act. There the Learned Judge held as follows: -'when the Directors fail to perform their statutory duty they bring themselves within the mischief of the penal provisions of the law. In order that a conviction under the sections involved in the present eases, of an officer of the company' may be sustained, the only thing to prove is that the particular officer knowingly and wilfully authorised or permitted these defaults. The offence is complete if the officer of the company knew of the defaults and permitted the same. ' so, from the above observation of the Learned Judge, there can be no doubt that there must be the evidence to show that the particular officer knowingly or wilfully permitted the default or authorised the defaults. But the question remains whether there is such evidence in this case or not. P. W. 1 has not made any such averments in the evidence Mr. Mukherjee learned Advocate for the complainant submits that such averment was made in the petition of complaint and if this averment in the petition of complaint be read as evidence then there is evidence to prosecution directed. P. W. 1 has not made any such averments in the evidence Mr. Mukherjee learned Advocate for the complainant submits that such averment was made in the petition of complaint and if this averment in the petition of complaint be read as evidence then there is evidence to prosecution directed. ( 13 ) I am unable to accept the above submissions of Mr. Mukherjee. The petition of complaint though tendered in evidence cannot be held to be substantive evidence. The prosecution case has to be proved by evidence at the trial; the petition of complaint cannot be a substitute for legal evidence to be produced to prove the case. I am of the view that the petitioners Nos. 2 to 4 cannot be held guilty of default when the decision of the learned single Judge referred to above makes it clear that there must be clear evidence before the directors can be convicted. In the circumstances I am unable to sustain the order of 'conviction passed against the petitioners Nos. 2 to 4 in this case. ( 14 ) IN the result, the conviction and sentence against the petition No. 1 stands but against the petitioners Nos. 2 to 4 is set aside. The revision petition is thus allowed in part. Fine, if realised, from the petitioners Nos. 2 to 4 may be refunded, revisional application allowed in part. .