1936 (9) TMI 15 - HC - Companies Law

Summary

Issues:
Jurisdiction of High Court to try offences under Indian Companies Act and imposition of fines.

Analysis:
The case involved an application under Section 85 of the Indian Companies Act alleging contraventions by a director of a company. The primary issues referred to the Full Bench were whether contraventions of the Companies Act constitute 'offences' and whether the High Court has jurisdiction to try such offences and impose fines as prescribed by the Act.

The Court analyzed Section 85(3) of the Companies Act, which imposes a fine on unqualified persons acting as directors. It was established that contraventions of this provision are indeed offences punishable with fines, leading to an affirmative answer to the first question posed.

Regarding the jurisdiction of the High Court, the Court scrutinized Section 3 of the Companies Act, which designates the High Court having jurisdiction at the place of the company's registered office. It was clarified that this jurisdiction is specific to the Act's provisions and not for trying criminal offences directly.

The Court examined Section 29 of the Code of Criminal Procedure, which empowers the High Court to try offences not specified under other laws. However, it was emphasized that this provision does not grant the High Court the authority to take immediate cognizance of an offence, try, convict, and punish without following the procedural requirements outlined in the Code.

Furthermore, the Court highlighted the procedural rules governing the trial of accused persons, emphasizing the necessity to adhere to the prescribed procedures, including inquiries within local jurisdiction, Magistrates' power to take cognizance, and the High Court's discretion to take cognizance upon commitment or application by the Advocate-General.

In conclusion, the Court determined that the High Court does not possess the jurisdiction to try an accused solely based on an application under Section 85 of the Companies Act. Jurisdiction would only be conferred if the case is committed under Cr. P.C Section 194(1), initiated via the Advocate-General's application under Section 194(2), or transferred under Cr. P.C Section 526.

Therefore, the answer to the second question regarding the High Court's jurisdiction to try such offences was negative, as clarified by the detailed analysis of the relevant legal provisions and procedural requirements.