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2010 DIGILAW 935 (MAD)

The Madras Cricket Club & Others v. M. Subbiah

2010-03-02

C.T.SELVAM

body2010
Judgment :- The petitioners herein number 16, the 1st petitioner being a company registered under Section 25 of the Companies Act, 1956 and the others being the office bearers thereof. The petitioners are facing prosecution in C.C.No.762 of 2002 wherein the respondent herein has preferred a complaint informing that as a member of the 1st accused club he was entitled to have true copies of the minutes of the general meetings thereof held from time to time that he had sought from the 1st accused by his letter dated 19.06.2002, a copy of the Memorandum and Articles of Association and the Minutes of the General Meetings for appointment of captains of cricket and tennis teams respectively and the circular sent for these appointment for the year 2001-02 and that as the petitioners herein had failed to furnish the same in keeping with Section 196(2) of the Companies Act, 1956 which required the same to be furnished within a period of 7 days, an offence stood committed by the petitioners which entails a fine of Rs.5000/-in respect of each offence under Section 196(3). 2. Section 196(3) of the Companies Act, 1956 provides that if any copy required by a member which he may duly seek under Section 196(2) is not furnished within the time specified, the company and every officer of the company who is in default shall be punishable with fine which may extend to Rs.5000/-in respect of each offence. It is on the strength of the provisions of Section 196 of the Companies Act, 1956 that the respondent has filed the complaint before the Additional Chief Metropolitan Magistrate, E.O.I., Egmore, Chennai. 3. The learned Senior counsel for the petitioners informs that the 1st petitioner club had time and again requested the respondent/complainant to inspect the records in the office premises and that in any event the complainant had obtained copies of the papers required by him through the Company Law Board. In such circumstances, the offence, even if made out, would be so trivial that no reasonable person would complain of it. In such circumstances, the offence, even if made out, would be so trivial that no reasonable person would complain of it. Though the learned Senior counsel raises such submission touching upon Section 95 of the IPC which provides that "nothing is an offence by reason that it causes, or that it is intended to cause, or that it is known to be likely to cause, any harm, if that harm is so slight that no person of ordinary sense and temper would complain of such harm", the main thrust of the learned Senior Counsel is under Section 621 of the Companies Act, 1956. To appreciate such contention, the relevant section may be reproduced: Section 621 – Companies Act 1956: "(1) No Court shall take cognizance of any offence against this Act other than an offence with respect to which proceedings are instituted under section 545, which is alleged to have been committed by any company or any officer thereof, except on the complaint in writing of the Registrar, or of a shareholder of the company, or of a person authorised by the Central Government in that behalf: Provided that nothing in this sub-section shall apply to a prosecution by a company of any of its officers: Rest of the Sections : Otiose 4. The learned Senior counsel submitted that as the offence is said to have been committed by the 1st petitioner/ accused company and its officers and the respondent/complainant was not a person who fell within the category of persons entitled to file a complaint, the complaint case in E.O.C.C.No.762 of 2002 on the file of the Additional Chief Metropolitan Magistrate, E.O.I., Egmore, Chennai ought to be quashed on this ground alone. 5. The learned counsel for the respondent sought to sustain the maintainability of the complaint on the strength of Section 41 of the Companies Act, 1956 which reads as follows: (1) The subscribers of the memorandum of a company shall be deemed to have agreed to become members of the company, and on its registration, shall be entered as members in its register of members. (2) Every other person who (agrees in writing) to become a member of a company and whose name is entered in its register of members, shall be a member of the company. (2) Every other person who (agrees in writing) to become a member of a company and whose name is entered in its register of members, shall be a member of the company. (3) Every person holding equity share capital of company and whose name is entered as beneficial owner in the records of the depository shall be deemed to be a member of the concerned company. 6. The submission of the learned counsel for the respondent is that the respondent/complainant was a member of the 1st accused club, there was no distinction between a member and a shareholder and as such he would fall within the meaning of the term shareholder under Section 621. 7. I have considered the rival submissions. 8. Even if the submissions of the learned counsel for the respondent is considered for the purpose of appreciation it would be seen that the respondent/complainant would not fall within the three categories of persons envisaged in Section 41 of the Companies Act, 1956. The respondent is neither a subscriber of the memorandum of the company who has agreed to become a member thereof nor is a person who has agreed in writing to become a member of the company. The 1st accused is a company registered under section 25 of the Companies Act, 1956 which has no equity share holding, holding whereof would have constituted the respondent/complainant a shareholder. The learned Senior counsel for the petitioner would refer to the commentaries on Section 621 of the Companies Act, 1956 in the celebrated work A.Ramaiyas Guide to the Companies Act wherein it is stated as follows: "It may be noted that only in the case of a company having share capital divided into shares, a shareholder can prefer a complaint under this section. In the case of any other company such as a company limited by guarantee (for instance, a club or a charitable society), no complaint can be made by a member. Only the Registrar or a person authorised by the Central Government can make the complaint." 9. In view of the clear and unambiguous position that a complaint alleging offence under the Companies Act, 1956 only can be maintained in strict keeping with the provisions of Section 621 of the Companies Act, 1956 and that the present complaint which is sought to be quashed would not fall thereunder, this Court would allow the quash petition. In view of the clear and unambiguous position that a complaint alleging offence under the Companies Act, 1956 only can be maintained in strict keeping with the provisions of Section 621 of the Companies Act, 1956 and that the present complaint which is sought to be quashed would not fall thereunder, this Court would allow the quash petition. Accordingly, the proceedings in E.O.C.C.No.762 of 2002 on the file of the Additional Chief Metropolitan Magistrate, E.O.I., Egmore, Chennai shall stand quashed. Consequently, the connected miscellaneous petition is closed.