1987 (11) TMI 306 - HC - Companies Law

Summary

Issues:
- Alleged contraventions under the Companies Act, 1956, related to not holding the first annual general meeting and not complying with statutory requirements.

Analysis:
The judgment pertains to four appeals involving the same parties accused of various contraventions under the Companies Act, 1956. The first issue concerns Labour Case No. 329 of 1982, where the directors failed to present the balance-sheet and profit and loss account at the first annual general meeting, contravening sections 210(1) and (3) of the Act. Despite admitting to the lapses, the directors were acquitted by the Judicial Magistrate, citing the company's private nature and lack of wilful intent. However, the High Court held that the contraventions were proven, ordering each respondent to pay a fine of Rs. 75 under section 210(5).

In the second appeal, Labour Case No. 330 of 1982, the directors were acquitted for contravening section 166, which mandates holding the first annual general meeting within 18 months of incorporation. The Magistrate accepted the defense that the accountant's sudden departure caused the delay. The High Court overturned the acquittal, finding the contravention established, and imposed a fine of Rs. 60 per respondent under section 168.

The third appeal, arising from Labour Case No. 331 of 1982, involved contraventions of sections 159 and 161 as the company failed to file annual returns within 60 days of the first annual general meeting. The directors were acquitted based on similar grounds of lack of wilful intent. However, the High Court determined the contraventions were proven and ordered each respondent to pay a fine of Rs. 25.

The final appeal, from Labour Case No. 332 of 1982, centered on contraventions of section 220 by not submitting balance-sheets and profit and loss accounts to the Registrar within the stipulated time. The Magistrate's acquittal was based on similar reasoning as the previous cases. The High Court reversed the decision, finding the contraventions established, and imposed a fine of Rs. 25 per respondent.

In conclusion, the High Court allowed all appeals, holding the respondents guilty of the contraventions alleged against them. The court imposed fines ranging from Rs. 25 to Rs. 75 per respondent, with defaulters facing simple imprisonment ranging from 2 to 5 days. The judgment emphasizes the importance of compliance with statutory requirements under the Companies Act, irrespective of the company's nature or the absence of wilful intent.