Skip to content


Gopala Pillai Vs. Registrar of Companies - Court Judgment

LegalCrystal Citation
SubjectCompany;Criminal
CourtKerala High Court
Decided On
Case NumberCriminal Revn. Petn. No. 21 of 1959
Judge
Reported inAIR1960Ker155; [1960]30CompCas272(Ker); 1960CriLJ597
ActsCompanies Act, 1913 - Sections 141A and 282; Companies (Amendment) Act, 1956 - Sections 242 and 628
AppellantGopala Pillai
RespondentRegistrar of Companies
Appellant Advocate T.K. Narayana Pillai and; D. Narayanan Potti, Advs.
Respondent AdvocatePublic Prosecutor
DispositionRevision dismissed
Cases ReferredCommissioner of Police v. Gordhandas Bhanji
Excerpt:
company - charge - sections 282 and 141 of companies act, 1913 and sections 242 and 628 of companies (amendment) act, 1956 - petitioner prosecuted for offence punishable under section 282 - petition for quashing charges framed against him - nothing in section 141a given which excludes persons other than those mentioned in section from preferring complaints in respect of offenses relating to company - registrar competent to prefer complaint and magistrate has jurisdiction to try case - petition dismissed. - .....or exclusive. a recent decision of the madras high court (unreported) in k.s. narasimhachari v. registrar of companies madras; writ petition no. 620 of 1956, d/- 25-4-1957 supporting the above view was also brought to my notice. 6. though the preponderance of authority is against the view contended for by the petitioner it was urged that the decision of the supreme court in commissioner of police v. gordhandas bhanji, air 1952 sc 16 supported him. in that case the commissioner of police, bombay, gave permit to an applicant to build a cinema theatre on a certain site. he cancelled it later at the instance of the government. after examining the relevant sales the supreme court held: 'it is dear to us from a perusal of those rules that the only person vested with anthority to grant or.....
Judgment:
ORDER

T.K. Joseph, J.

1. The petitioner who is the first accused in C. C. 927 of 1956 of the First Class Magistrate'sCourt, Vaikom, has preferred this revision petition seeking to have the charge framed against him quashed. The petitioner and other directors of the Bharat Ayurvedic Works Limited, Vaikom, are being prosecuted for offence punishable under Section 282 of the Indian Companies Act, VIII of 1913 for having published a false balance sheet of the company for the year ending 31st December, 1952. The case was taken up on the complaint of the Registrar of Joint Stock Companies who has been authorised by the Government of India in this behalf. The petitioner's contention is that under Section 141A of the Indian Companies Act (VII of 1913), the Registrar of Joint Stock Companies is not competent to prefer the complaint and that the only persons who can do so are theAdvocate-General or the Public Prosecutor, to whom the matter may he referred by the Government. The matter was taken in revision before the District Magistrate, Kottayam, who declined to interfere. The petitioner has therefore moved this court in revision.

2. The only point arising for decision is whether the Registrar of Joint Stock Companies was competent to prefer the complaint. Section 141A on which the petitioner bases his case is extracted below;

'141A. (1) If from any report made under Section 138 it appears to the Central Government that any person has been guilty of any offence in relation to the company for which he is criminally liable, the Central Government shall refer the matter to the Advocate-General or the Public Prosecutor.

(2) If the officer to whom the matter is referred considers that the case is one in which a prosecution ought to be instituted, he shall cause proceedings to be instituted and it shall be the duty of all officers and agents of the company, past and present other than the accused in the proceedings, to give to him all assistance in connection with the prosecution which they are reasonably able to give.

(3) For the purposes of Sub-section (2), the Expression 'agent' in relation to a company shall be deemed to include the bankers and legal advisers of the company and any persons employed by the company as auditors, whether those persons are or are not officers of the company.

(4) Any director, manager or other officer of the Company convicted as the result of a prosecution initiated under this section shall not without the leave of the Court be a director of or in any way whether directly or indirectly be concerned in or take part in the management of a company for a period of five years from the date of such conviction.'

According to the petitioner, only the persons mentioned in Section 141A (1) are entitled to initiate the prosecution.

3. For a proper appreciation of the question, it is useful to refer to Sections 138 to 141A of the Indian Companies Act (VII of 1913). Section 138 enables the Central Government to appoint Inspectors to investigate the affairs of any company and to report there-on such appointment being made on the application of members of the company or the Registrar. Section 139 requires that such application for inspection must be supported by evidence, and under Section 140 all oflicors of the company -- present and past --arc bound to produce books and documents in their custody relating to the company for the purpose of inspection. Section 141 provides that on the conclusion of the investigation the Inspectors have to report their opinion to the Central Government and that a copy of the report should be forwarded by the Central Government to the Registrar of Joint Stock Companies, to the company and to the applicants for investigation on their request. Section 141A deals with the institution of prosecution if the same be warranted by the report and the Government has to refer the matter to the Advocate-General Or the Public Prosecutor who are to institute proceedings, if in their opinion a prosecution ought to be instituted. The question is whether this debars prosecution by other persons.

4. Learned counsel for the petitioner relics on a decision of the Lahore High Court in Ganapat Rai v. Emperor, AIR 1948 Lah 30. The section which came up for consideration in that case was not Section 141A of the Act. In 1883 the Lieutenant Governor of Punjab acting under the provisions of Section 220 of the Companies Act as it then stood, issued a Regulation, paragraph 5 of which contained a provision that the Registrar would be deemed the proper officer for instituting and conducting all prosecutions under the Act. This was followed in 1910 by another Regulation framed under the same section which provided that the Registrar or any person duly authorised by him may institute and conduct any prosecution under the Act. Marten J., held that this Regulation continued to be in forceand as such the Registrar was the only person competent to institute the prosecution. The conclusion reached in that case is the one which the petitioner wants to be taken in this case. But, here the section which arises tor consideration is Section 141A of the Companies Act.

5. A Bench of the Calcutta High Court has held in Surendra Nath v. Kali Pada, AIR 1940 Cal 232 that there is nothing in the terms of Section 141-A to justify an inference that prosecutions by private individuals are barred. It was held that the terms of Section 141-A were quite different from those of Sections 196 and 198 of the Code of Criminal Procedure by which a bar is placed on the jurisdiction of criminal courts. It was further held that in the absence of a specific provision in the Companies Act, it could not be held that the intention of the legislature was to bar private prosecutions. The fact that Section 141-A would come into operation only after a report has been called for under Section 138 and made under Section 141 was also relied on in support of the above conclusion. This view wax followed in Emperor v. Viswanath, AIR 1942 Sind 9. Davis C.J., pointed out that the whole scheme of the section appeared to be enabling rather than mandatory or exclusive. A recent decision of the Madras High Court (unreported) In K.S. Narasimhachari v. Registrar of Companies Madras; Writ petition No. 620 of 1956, D/- 25-4-1957 supporting the above view was also brought to my notice.

6. Though the preponderance of authority is against the view contended for by the petitioner it was urged that the decision of the Supreme Court in Commissioner of Police v. Gordhandas Bhanji, AIR 1952 SC 16 supported him. In that case the Commissioner of Police, Bombay, gave permit to an applicant to build a cinema theatre on a certain site. He cancelled it later at the instance of the Government. After examining the relevant sales the Supreme Court held:

'it is dear to us from a perusal of those rules that the only person vested with anthority to grant or refuse a licence for the section of a building to be used for purpose of public amusement is the Commissioner of Police. It is also clear that under Rule 250 he has been vested with the absolute discretion iit any time to cancel or suspend any licence which has been granted under the rules. But the power to do so is vested in him and not in the State Government and can only be exercised by him at his discretion. No other person or anthority can do it.'

I do not see how this decision can help the petitioner. As pointed out earlier there is nothing in Section 141-A which excludes persons other than those mentioned in the section from preferring complaints in respect: of offences relating tn the company. With great respect I decline to follow the view taken by the Lahore High Court in AIR ]948 Lull 30, as in my opinion the view taken by the High Court of Calcutta in AIR 1940 Cal 232 lays down the law correctly. It follows that the Registrar was competent to prefer the complaint and that the Magistrate has jurisdiction to try the case.

7. No other point arises for consideration in this revision petition which is accordingly dismissed.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //