1972 (8) TMI 82 - HC - Companies Law

Issues Involved:
1. Competency of revision petition under Section 439(5) of the Code of Criminal Procedure.
2. Applicability of Section 11 of the Probation of Offenders Act.
3. Interpretation of Section 439 of the Code of Criminal Procedure in relation to special laws.
4. Validity of the trial court's application of the Probation of Offenders Act.
5. Imposition of penalty under Section 220(3) read with Section 162 of the Companies Act, 1956.

Issue-wise Detailed Analysis:

1. Competency of Revision Petition under Section 439(5) of the Code of Criminal Procedure:
The primary legal question was whether a revision petition is maintainable when an appeal under the Probation of Offenders Act has not been filed. Section 439(5) of the Code of Criminal Procedure bars revision petitions if an appeal lies under the Code and is not filed. However, the court clarified that this bar applies only to appeals provided under the Code and not to those under special laws. Since the appeal in question was under Section 11 of the Probation of Offenders Act, this did not preclude the revision petition.

2. Applicability of Section 11 of the Probation of Offenders Act:
Section 11 of the Probation of Offenders Act provides for appeals against orders passed under Sections 3 and 4 of the Act. The court noted that the Registrar had a right to appeal under this section but did not do so. Despite this, the court held that the failure to appeal under the Probation of Offenders Act does not bar a revision petition under Section 439(1) of the Code of Criminal Procedure, as the bar in Section 439(5) applies only to appeals under the Code itself.

3. Interpretation of Section 439 of the Code of Criminal Procedure in Relation to Special Laws:
The court examined whether the general revisional powers under Section 439(1) of the Code could be exercised when a specific appeal provision under a special law (Probation of Offenders Act) was available but not utilized. The court concluded that the revisional jurisdiction of the High Court remains intact and can be exercised even if an appeal under a special law has not been filed. This interpretation ensures that the High Court can correct grave injustices or illegalities irrespective of whether an appeal under a special law was pursued.

4. Validity of the Trial Court's Application of the Probation of Offenders Act:
The trial Magistrate had convicted the respondents under Section 220(3) of the Companies Act for failing to file the balance-sheet and profit and loss account and had released them after administering an admonition under Section 3 of the Probation of Offenders Act. The High Court found that the respondents had knowingly and willfully failed to comply with statutory requirements despite multiple extensions and a notice. The court held that the trial Magistrate's application of the Probation of Offenders Act was inappropriate given the deliberate nature of the default.

5. Imposition of Penalty under Section 220(3) Read with Section 162 of the Companies Act, 1956:
The court emphasized the importance of compliance with Section 220 of the Companies Act, which serves to protect public interest and the interests of shareholders and creditors by ensuring transparency in the company's financial status. Given the deliberate default by the company and its directors, the court found that the offense was not merely technical and warranted a penalty. The court imposed a fine of Rs. 10 per day for the period of default from January 31, 1968, to August 19, 1968, rejecting the leniency shown by the trial Magistrate.

Conclusion:
The High Court overruled the preliminary objection regarding the maintainability of the revision petition and held that the High Court has the jurisdiction to entertain the revision petition under Section 439(1) of the Code of Criminal Procedure even if an appeal under Section 11 of the Probation of Offenders Act was not filed. The court imposed a fine on the respondents for their willful default in complying with the statutory requirements of the Companies Act.

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