2020 (10) TMI 306 - HC - Companies Law

Summon of accused to face trial for the offences punishable u/s 129 of Companies Act - HELD THAT - From the very perusal of impugned summoning order it is apparent that the summoning has been made u/s 129 of Companies Act but neither the name of the accused has been given nor their parentage has been given nor the specific offence in which they been summoned is given. The complaint was with prayer for summoning accused persons for offences punishable u/s 129 of the Companies Act for making defiance of provisions of Section 129 of Companies Act and penal clause is there in Companies Act u/s 129(7) for making defiance against the provisions of section 129 of the Companies Act regarding financial statement. Hence request was made for making summoning of accused for offences punishable u/s 129(7) of the Act and it was with penal liability u/s 129(7) of the Act, but the Magistrate has summoned u/s 129 of the Companies Act without specifying penal provision u/s 129(7) of the Act. Hence it is prima-facie apparent that the Special C.J.M., Agra, was not careful to go through the complaint and relevant penal provision under which punishment was sought. Even names of accused persons with their parentage, who have been summoned, were not given nor contention of complaint is there nor any application of judicial mind is apparent from the impugned order. Hence apparently there is non application of judicial mind by concerned Special C.J.M., Agra, in passing the impugned summoning order. The impugned summoning order dated 27.2.2019 is being quashed with a direction to the court of Special C.J.M., Agra, to pass a judicial order in the matter - application allowed.

Summary

Issues:
Quashing of summoning order under Section 129 of Companies Act due to lack of specificity in the order.

Analysis:
The judgment involves an application filed under Section 482 Cr.P.C. to quash the entire proceeding of a complaint case under Section 129 of the Companies Act. The applicants challenged the summoning order dated 27.2.2019 passed by the Special C.J.M., Agra, which summoned them to face trial for offenses under Section 129 of the Companies Act. The learned counsel for the applicants contended that the summoning order was vague, as it did not specify the names of the accused, their parentage, or the specific offense for which they were being summoned. The order merely mentioned the section under which the summoning was made without reference to the penal provision under Section 129(7) of the Companies Act, which deals with defiance against the provisions of Section 129 regarding financial statements.

In a similar case, a coordinate Bench of the Court had previously quashed an impugned summoning order. The Court noted that the summoning order lacked essential details and did not reflect any application of judicial mind by the Special C.J.M., Agra. The Court observed that the magistrate failed to consider the complaint and relevant penal provisions under Section 129(7) of the Companies Act, which carries penal liability for defiance against Section 129 provisions. The lack of specificity in the summoning order, including the absence of accused names and their parentage, indicated a non-application of judicial mind. Therefore, the Court found merit in allowing the application and quashing the summoning order dated 27.2.2019. The Court directed the Special C.J.M., Agra, to pass a judicial order in the matter, emphasizing the importance of judicial magistrates exercising due diligence and providing detailed reasoning in their orders.

Furthermore, the Court ordered the communication of this decision to the District & Sessions Judge, Agra, to prevent the passing of sketchy orders by Judicial Magistrates. The directive aimed to ensure that all judicial orders are based on thorough examination and application of legal provisions, emphasizing the need for clarity and specificity in summoning orders under the Companies Act.

In conclusion, the judgment highlights the significance of detailed and well-reasoned summoning orders under the Companies Act, emphasizing the requirement for judicial magistrates to apply a judicial mind, consider relevant provisions, and provide specific details in their orders to uphold procedural fairness and legal accuracy.