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Issues:
Failure to file annual return under section 159 of the Companies Act, 1956, acquittal by the learned S.D.M., Cuttack, interpretation of section 162 of the Act, application of previous judgments, necessity of annual general meeting for compliance, liability of company directors, distinction between old Act and current Act provisions. Analysis: The appeal was filed by the Registrar of Companies against the acquittal of respondents under section 162 of the Companies Act, 1956 for not filing the annual return for the year ended September 30, 1969. The respondents argued that no annual general meeting was held due to lack of quorum, preventing the filing of the annual return. The trial revealed the respondents' failure to submit the annual return despite notices. The learned S.D.M. acquitted the respondents based on the requirement of wilful default for punishment under section 162, citing previous judgments not directly applicable to the current case. The High Court highlighted the distinction between the old Act and the current Act, emphasizing that the omission of "knowingly and wilfully" in the current Act's provisions makes non-compliance punishable even without wilful intent. Previous decisions supported this interpretation, emphasizing the liability of the company and its officers regardless of wilful default. The Court found the S.D.M.'s reliance on previous judgments misplaced, as they did not align with the specific provisions of section 162 of the Act. Regarding the necessity of an annual general meeting for compliance, the Court clarified that failure to form a quorum does not excuse directors from their responsibility to call the meeting. Directors cannot benefit from their failure to convene a meeting and then claim inability to file the annual return. The Court emphasized the mandatory nature of holding annual general meetings under section 166 of the Act, irrespective of quorum formation. The Court set aside the acquittal and convicted respondents under section 162, imposing a fine for the period of default. Additionally, the case against one respondent was remanded for re-trial due to procedural irregularities. The judgment underscored the importance of timely compliance with statutory requirements, holding both companies and their officers accountable for non-compliance, even in the absence of wilful intent.
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