2013 (10) TMI 948 - HC - Companies Law

Prosecution for Offence u/s 97(3) of Companies Act Held that - The very fact that the petitioners have filed Form No.5 and remitted an amount towards fee and additional fee subsequent to Annexure-B judgment of the appellate court would conclusively reveal the factum of violation of statutory mandate - No case was brought out by the revision petitioners to find that the judgments suffer from palpable, perverse appreciation of evidence warranting interference with the conviction of the revision petitioners under Section 97 (3) of the Companies Act invoking the revisional jurisdiction of the court - the conviction entered against the revision petitioners calls for no interference and accordingly it was confirmed. Sentence Imposed u/s 97(3) - Whether the sentence imposed against the revision petitioners for the conviction under Section 97 (3) of the Act calls for interference Held that - On considering the circumstances and the failure of the revision petitioners to file Form No.5 for the increased share capital and also the failure to pay the fee and the additional fee, the appellate court while reducing the fine and directed the revision petitioners to pay a fine The conviction of the revision petitioners under Section 97 (3) of the Companies Act was confirmed and the sentence imposed on the petitioner to pay fine was reduced and modified - the revision petition was allowed in part.

Summary

Issues:
Violation of Companies Act, 1956 - Failure to file notice for increase in share capital and pay requisite fee within 30 days.
Conviction and sentencing of petitioners.
Interference with the sentence imposed.
Appeal against conviction and sentence.

Analysis:

Violation of Companies Act:
The case involved a violation of the Companies Act, 1956, where the 1st revision petitioner company increased its share capital but failed to file notice in Form No. 5 and pay the required fee within 30 days of passing the resolution. The petitioners were prosecuted under Section 97(3) of the Companies Act, 1956. The trial court convicted them, imposing fines and a custodial sentence. The appellate court confirmed the conviction but modified the sentence by reducing the fine amount. The revision petition was filed challenging these decisions.

Conviction and Sentencing:
Both the trial court and the appellate court found the revision petitioners guilty of the offence under Section 97(3) of the Companies Act. The trial court relied on evidence presented by the prosecution and the lack of defense evidence. The appellate court evaluated the evidence and contentions but found no grounds to overturn the conviction. The revision petitioners' subsequent filing of Form No. 5 and payment of fees did not alter the fact of the statutory violation. The High Court confirmed the conviction, stating that no palpable error in evidence appreciation warranted interference.

Interference with Sentence:
The appellate court reduced the fine imposed on the petitioners but maintained the direction to pay costs to the complainant. The High Court, after considering the submissions and circumstances, modified the fine further, reducing it to Rs. 25 per day of default. This adjustment was deemed sufficient to meet the ends of justice. The High Court partially allowed the revision petition, confirming the conviction but modifying the fine to Rs. 25 per day of default, directing each petitioner to pay Rs. 83,125.

Appeal Against Conviction and Sentence:
The High Court upheld the conviction under Section 97(3) of the Companies Act and the modified fine amount. The direction to pay costs to the complainant and the custodial sentence for the 2nd revision petitioner in default of fine payment were also confirmed. The judgment addressed the violation, conviction, sentencing, and subsequent modifications in detail, ensuring compliance with statutory requirements and principles of justice.