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Emperor Vs. Dr. H.L. Batliwalla Sons and Co. Ltd. - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtMumbai
Decided On
Case NumberCriminal Application for Revision No. 278 of 1940
Judge
Reported in(1941)43BOMLR105
AppellantEmperor
RespondentDr. H.L. Batliwalla Sons and Co. Ltd.
Excerpt:
indian companies act (vii of 1913), section 73--company--name-board of company--business premises or office of company--place where name--board can be affixed.;the words 'outside the office or place where the business is carried on' in section 73(a) of the indian companies act, 1913, do not mean outside the premises. the section has nothing to do with advertising the whereabouts of a company or affording facilities to members of the public in finding its place of business. the requirements of the section will be satisfied if a company affixes a board of the necessary conspicuousness and legibility outside the office room though it be inside the building. ;hence, where the office of a company is situated in a building within a compound, it is not necessary that the name of the company..........73 or whether that section requires that the company should have maintained a board with its name outside one or other of the compound gates. in the view we take the requirements of the section are satisfied by the board outside the office room.5. the learned: magistrate's view is that 'outside the office' in section 73(a) means outside the premises. but that is not what the section says. according to the literal meaning of the words used there has been no contravention of the section. it is a penal provision and has to be construed strictly, and therefore the burden is very strongly on the prosecution, i.e. the opponents in this application, to show that there really has been an infringement of the law and that in circumstances such as those existing in this case a meaning must be.....
Judgment:

Broomfield, J.

1. This revision application involves a question of the construction of Section 73(a) of the Indian Companies Act. The applicants are (1) Dr. H.L. Batliwalla Sons & Co., a limited company, which manufactures and sells a patent medicine called Batliwalla Ague Mixture, and (2) Kaikobad Cawashaw Batliwalla, who is one of the directors of this company. They have been prosecuted for an alleged contravention of Section 73(a) of the Indian Companies Act which requires that every limited company shall paint or affix, and keep painted or affixed, its name on the outside of every office or place in which its business is carried on, in a conspicuous position, in letters easily legible and in English characters. The complaint was that on the first three days of September, 1937, this company had not got its name painted or affixed outside its office or place of business as required by the section, and the learned Presidency Magistrate has found this proved as a fact and has convicted the applicants under Section 74(1) of the Act, which makes the contravention of Section 73 penal, and imposed sentences of fine.

2. The firm in question is a family firm. The complainant in the case is a member of the family. It appears that he has had disputes with the directors of the company for some time, and so far as the facts of the case are concerned, it is a purely private quarrel of no general importance. The point of law involved is however of some importance to companies generally.

3. The office of the company is situated in a bungalow at Worli which is surrounded by a compound. The office is on the first floor. There are two entrance gates to the compound. At one of these gates there is a board bearing the name of the bungalow 'Saklat Villa' but no board bearing the name of the company. It was disputed whether there was a board bearing the company's name at the other gate of the compound, which was on the north. The accused alleged that there was such a board and called evidence to prove it. The learned Magistrate, while apparently prepared to accept the view that there normally was a board at that gate, has found that on these particular days in September, 1937, there was no board there. On behalf of the complainant it is now contended that the evidence showed that there was no board anywhere on these three particular days. The learned Magistrate in the course of his judgment says that he visited the premises on December 14, 1939. He was then shown a board on one of the pillars of the north gate of the compound, i.e. the board which, as I say, he has found was not in existence at that place on the relevant dates. He also says that he was taken upstairs to the landing of the upper storey of the bungalow where the office room is located and on the wall opposite the landing he found a small board, as he describes it, with the words 'Dr. H.L. Batliwalla Sons & Co., Ltd.' This board was fixed in such a manner that it would be visible to anyone who goes up the staircase but would not be visible from the road. The board was two feet by one foot and the largest capital letters were two and a half inches, the others about one inch.

4. A perusal of the very long and careful judgment of the learned Magistrate points to the conclusion that the question between the parties was as to the existence of the board at the northern gate of the compound and ass to whether it was necessary that there should be a board at one of the compound gates in order to comply with the terms of Section 73. Elsewhere in the judgment the learned Magistrate says: 'I may add that the fact that there has been a board inside on the first floor landing does not help the defence.' The reason he gives for this finding is that the whole bungalow and the compound constitute the company's premises, and on the view he took of the construction of Section 73, it was necessary that there should be a board outside the premises and not merely outside the office room situated in: a bungalow in the compound. There is nothing in the whole of the judgment to suggest, as far as we can see, that it was seriously argued before him, or at any rate that he found as a fact, that the board, the nature of which I have described, was not in existence on the relevant dates outside the office room. The question for our consideration therefore is whether this board was a sufficient compliance with Section 73 or whether that section requires that the company should have maintained a board with its name outside one or other of the compound gates. In the view we take the requirements of the section are satisfied by the board outside the office room.

5. The learned: Magistrate's view is that 'Outside the office' in Section 73(a) means outside the premises. But that is not what the section says. According to the literal meaning of the words used there has been no contravention of the section. It is a penal provision and has to be construed strictly, and therefore the burden is very strongly on the prosecution, i.e. the opponents in this application, to show that there really has been an infringement of the law and that in circumstances such as those existing in this case a meaning must be given to the section which is not the literal one. The learned Magistrate's reason for holding that the words 'outside the office or place where the business is carried on' mean outside the premises or in this particular case outside the compound seems to be that in the absence of a board outside there would be a difficulty or might be a difficulty in finding one's way to the office. That is to say, he takes the object of this provision to be to require that companies should advertise their whereabouts and assist members of the public to find their way to the office of the company. There does not however appear to be anything in the Act to suggest that that is the object, and no authority of any kind has been cited in that connection. On the other hand in Palmer's Company Law (at p. 261 of the fifteenth edition) the learned commentator in dealing with the corresponding sections of the English Company Act gives the object of this provision as something quite different. He says:--

Why this solicitude on the part of the legislature as to publication of a company's name? The answer is, that the legislature, whilst allowing limited liability, desired by this means to make the company itself continually bring to the notice of those who dealt or might deal with it the fact that it was limited. This policy it has fortified by pecuniary penalties.

6. According to that view at any rate--and in our opinion that is at least as likely to be the correct view as that now put forward on behalf of the prosecution--Section 73 has nothing to do with advertising the whereabouts of a company or affording facilities to members of the public in rinding its place of B business. It is well-known that in most cities there are large buildings which contain a considerable number of offices of companies and it might be extremely inconvenient if the law required that boards bearing the names of these various companies should be affixed or that the names should be painted outside the building. We think that in such a case clearly the requirements of the Act would be satisfied by a board of the necessary conspicuousness and legibility outside the office room inside the building. No doubt in the present case the company owns the whole of the premises, but we do not consider that that makes any difference in principle, and we are not prepared to hold that when an office is situated within a compound the law requires the name of the company to be painted or affixed outside the compound as well as outside the office.

7. Our attention was drawn to evidence that was given in the case to show that certain persons who desired to enter the compound were prevented from doing so or obstructed in doing so by a watchman maintained by the company. We do not consider, however, that this fact has anything to do with the construction of Section 73(a).

8. The learned Magistrate has not found and we do not think that it could have been found that the board outside the office room did not comply with the section in respect of conspicuousness and legibility. It was not a large board nor were the letters on it very large. But the Magistrate said that it would be visible to anyone who gets up to the landing where the office is situated. The letters were obviously large enough to be read with ease and the board seems to have been sufficiently conspicuous. In our opinion the law does not require anything more than this.

9. This being our view of the construction of Section 73(a), we are of opinion that the conviction under Section 74 cannot be sustained. We, therefore, make the rule absolute, set aside the convictions and direct that the fines be refunded.


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