1. There were five accused in this case of whom accused 1 to 4 were the directors of a certain company called National Livestock Registration Bank Ltd., Madras, and accused 5 was the company itself. There were three charges against them: the first Under Section 134(4), Companies Act, the second Under Section 32(4) and the third Under Section 87(2). All the accused were found guilty of the first two offences. Accused 3 was acquitted of the third offence. Accused 1, 2, 4 and 5 were convicted and various fines imposed. Accused 3 is since dead. Cr. R. C. No. 641 of 1931 has been put in by accused 1 and 2 and Cr. R. C. No. 648 by accused 4 and 5.
2. Taking the first charge Under Section 134(4), Section 134(1) says:
After the balance sheet has been laid before the company at the general meeting a copy thereof signed by the Manager or Secretary of the Company shall be filed with the Registrar at the same time as the copy of the annual list of members and summary prepared in accordance with the requirements of Section 32.
3. The first balance sheet, Ex. Y, prepared for the year ending 31st July 1928, was passed at a general meeting of the company held on 26th December 1929 and filed with the Registrar on 16th January 1930. The next annual balance sheet of the company representing the state of the Bank on 31st July 1929 has not as yet been tiled. On 9th January 1930 the Registrar sent a reminder (Ex. Z) to the Bank to expedite the balance sheet. The Managing Director of the Bank replied by Ex. Z (1) dated 18th January 1930 acknowledging receipt of Ex. Z and promising to sent the balance sheet. A further reminder, Ex. C, was sent on 29th May 1930 to which Ex. P, dated 5th June 1930, is the Bank's reply promising to send the balance sheet. A still further reminder, Ex. Q, dated 14th July 1930 and another, Ex. S, on 19th August 1930 were sent. The contention of the accused is that as the last general meeting was held on 26th December 1929 there was time to convene the next general meeting till 26th December 1930 and therefore the call for the balance sheet by the Registrar was premature. It is in the evidence of the Registrar's clerk himself that the last general meeting was held on 26th December 1929 and the next general meeting should be held within 15 months and that for the purpose of the general meeting there was time till 31st December 1930. The learned Presidency Magistrate got over this plea by saying that Under Section 131(1) of the Act the Bank should have its balance sheet prepared at intervals of not more than 15 months and the latest date up to which the balance sheet should have been prepared is therefore up to the period ending 31st October 1929 and that Under Article 151 of the Articles of Association such a balance sheet should have been put before the general meeting within not more than four months, and hence there should have been a general meeting not later than 28th February 1930. Apart from the fact that the Articles of Association have no statutory force, this is not what Article 151 says. It runs:
At every ordinary general meeting the directors shall lay before the company a profit and loss account, and a balance sheet, containing a summary of the property and assets and liability of the company made up to a date not more than four months before the meeting, from the time when the last preceding account and balance sheet were made up.
4. The clear meaning of this article, I think, is that the shareholders of the company are entitled to have a balance sheet made up to within four months before the meeting; but there is nothing to indicate the converse, namely, that a meeting must be called within four months from the date when balance sheets under the rules are made up. The case quoted by the lower Court, Debendranath Das Gupta v. Registrar of Joint Stock Companies  45 Cal. 486, in which it was held that the director of a company cannot plead, in answer to a charge Under Section 134, his own omission to call the annual general meeting of the company required by Section 76 and to place before it such balance sheet, has no application to the present case. In that case there was an omission to call the annual general meeting. Here the whole defence is that the annual general meeting was not due to be held and therefore had not been held at the time when the Registrar called for the balance-sheet. The charge being one Under Section 134(1) the charge of nonfiling of the balance sheet before the Registrar receives a complete reply if the accused can show that the balance sheet was not due to be filed before the Registrar. It is altogether immaterial whether they had or had not prepared the balance sheet.
5. It was attempted to be argued for the respondent that the accused had committed an offence Under Section 131(4) and that that section must be read along with Section 134. That is to my mind a quite untenable argument. The accused might have had quite a good defence against a charge under this head and in fact it is suggested that the books had all been taken away and therefore they could not make up the accounts. However that may be, the charge is not Under Section 131(4) but Under Section 134(4); and to my mind it is clear that they have met this charge effectually, and there can be no conviction for this offence.
6. The second offence was one Under Section 32(4). That section requires a company to make every year a list of all persons who on the day of the first or only ordinary general meeting in the year, are members of the company, or have ceased to be members of the company, together with the summary required by Section 32(2). The bank filed Ex. J, dated 11th February 1930, list of members and summary. The Court found that the figures in Cols. 2 and 3 of items 2 and 3 did not agree with the total of the returns of allotments already filed in respect of three matters.
(1) In Col. 2 the number of preferential shares allotted in cash is noted as 25,847, whereas the correct figure according to the return of allotments is 26,126.
(2) Again in Col. 3, the number of ordinary shares allotted for cash is noted as 7,294, whereas it ought to be 7,310.
(3) The transfer of shares for the year and the number of shares forfeited had not been noted.
7. Now, it may be observed in the first place that the Court evidently proceeded on the supposition that the previous returns were correct. The previous returns have not been marked as exhibits. There is no evidence that the previous returns were correct. Also there is no evidence that the difference in figures is not merely an arithmetical error in counting. Evidently from the steps which the Registrar took he did not regard the matter as one of deliberate misrepresentation. The whole charge obviously fails in any case unless there is evidence that the previous return is correct because otherwise one must arrive at the conclusion that, if there is any mistake in one year it cannot be corrected in the next. As I have said, the original return has not been marked as an exhibit and there is no proof that it is correct. The case quoted by the lower Court, In re Briton Medical and General Life Association  39 Ch.D. 61, has no application. What was hold in that case was that the forwarding to the Registrar of a list of members and summary which, upon the face of them purport to satisfy the requirements of the Act, is not a sufficient compliance with that section unless such list and summary are in accordance with the facts and the Court can go into this. Finally it is clear that an officer of a company cannot bo convicted under this section unless it is found that he knowingly and wilfully authorized or permitted the default: vide Sundar Das v. Emperor A.I.R. 1929 Lah. 836. For all that appears here as regards the first two charges, as I have said, they are purely arithmetical mistakes in addition.
8. As regards the question of reporting the transfer of the shares in the year, there was a resolution on 17th December 1929 of the directors forfeiting certain shares, and this no doubt does not appear in Ex. J. The contention of the accused is that that resolution was cancelled at a general meeting held on 29th December 1929, whereas Ex. J was not submitted till 11th February 1930. The learned Presidency Magistrate says that according to Article 41 of the Articles of Association of the company shares may be forfeited by a resolution of the directors. But there is nothing in the Articles to show that the general power of the shareholders at a public meeting to cancel a decision of the directors is not possessed by this company or that the cancellation or 29th December 1929 was ultra vires. Therefore the failure to note the forfeiture of the shares in Ex. J, which forfeiture had by that time been cancelled, is not a default. This second charge must therefore also fail and the accused must bo acquitted of it.
9. The third offence was Under Section 87(2). Section 87(1) requires that every company shall keep at its registered office a register containing the names and addresses and the occupations of its Directors and file with the Registrar a copy thereof, and from time to time file with the Registrar notice of any change amongst its directors or managers. On 29th May 1930 accused 3 sent in his resignation of his directorship of the bank. But at a meeting of the directors held on 29th October 1930 that resignation was withdrawn and the resignation of accused 4 was accepted. The lower Court has dropped the resignation of accused 4, and only deals with the resignation of accused 3. In Form 26 it is stated that the notice of change should be given within 30 days from the date of occurrence. The resignation of accused 3 no doubt took effect from the date of the resignation letter: vide Glossop v. Glossop  2 Ch.D. 370 quoted by the lower Court. But it has been held in Kumud Chandra Nandi v. Emperor : AIR1931Cal265 , that the provision in the foot-note of Form No. 26, Appendix A of the Act, requiring a notice of the change among Directors to be given within 30 days from the date of occurrence is not mandatory and that no offence is committed by a company by not filing such notice. If there had not been this decision on this point, it might certainly be argued with a good deal of force that as Section 87(1) contains only such a vague expression as 'from time to time' the particular period prescribed in the form was meant to supplement it and was mandatory. However I see no reason for not following this decision and there is none other on the point. It seems to me in the light of this decision that the time mentioned in Section 87(1) should be made more specific.
10. I find that the conviction on none of the three offences can stand. It is not therefore necessary to deal at great length with the two other objections raised. One is that the complaint was not properly instituted, the complaint being only signed by the Registrar's clerk and there is nothing to show that the Registrar authorized it. In this connexion Sidheswar Ghose v. Emperor  12 Cri.L.J. 596 and Emperor v. Shiv Das  11 Cri. L.J. 577 were quoted for the petitioners. The first case seems to be distinctly against them, for though it was said that the Court should be chary of admitting such complaints it was held that the complaint was competent. The second case is a decision in the petitioner's favour. I do not think it is necessary to express an opinion on this point.
11. The other point is that there has been misjoinder of parties. That I think is clear. Accused 3 was obviously not chargeable under the third charge but he was tried jointly with the other accused in all the charges. It has been held in J. pendranath Biswas v. Emperor A.I.R. 1914 Cal 603 that Section 233, Criminal P. C. applies to summons cases, and as regards misjoinder of charges vitiating trial, may be mentioned the well-known Privy Council case in Subramunia Ayyar v. Emperor  25 Mad. 61. I would therefore hold that in any case the misjoinder of parties had vitiated the trial.
12. In the light of the above it is hardly necessary to deal with Cr. R. C. No. 648 put in by accused 4 and the bank accused 5 represented by its liquidator T. A. Doss. With regard to this I may say that this liquidator has failed to prove his status. In the Fort Saint George Gazette dated 13th January 1931 three liqidators were appointed and he says that two of these resigned and the third appointed petitioner in his place. But he failed to show me any authority for one liquidator appointing another in his place. I consider therefore that he has no focus standi. As the grounds taken by accused 4 are the same as those taken by the other accused this petition must also be allowed.
13. In the result the convictions are set aside and the accused acquitted. The fines will be refunded.