9911796707
TMI Blog1939 (1) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... requirement for an offence under sub-section (2) that the company must consist of more than twenty members, but I do not consider that any miscarriage of justice has been caused by this omission as appellant was throughout defended by counsel and evidence was given to show that there were many more than twenty members who subscribed for shares. He was also convicted of carrying on 'business under the name and style of Indo-Burma Union Ltd., using the word limited without the company being incorporated with 'limited liability' an offence under section 283, Companies Act. As to this second charge Mr. Rodriguez who argued the appeal for the appellant said that he could not contest that appellant had so carried on business and it will not there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sons to be illegal it must be shown that there is a legal relationship between more than 20 persons inter se giving rise to joint rights or obligations or mutual rights and duties. He says that all that the prosecution has been able to do here is to show that each of the so-called shareholders has entered into a contract with Dawson either with him personally or through his agents and there is no relation established between one shareholder and any other. Reference was made to Neelamega Sastri v. Appiah Sastri. This case concerned a chit fund and it was contended that the managers of the chit fund with the subscribers formed an association and the Full Bench found "that the parties to the instrument are not an association within the m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legal relation between the persons forming the company. Then it is said that there has only been an offer on the part of the subscribers asking for shares accompanied by a sum of money; that offer has not been clinched and turned into the form of an actual contract by acceptance. The money is still in deposit but nothing was done to clinch the contract. Then how can it be said that the individual subscribers were shareholders in this concern or entitled to joint rights rights as shareholders? Mr. Rodriguez said that if there had been a meeting between these so-called shareholders, legal relations might have been established between them so as to make sub-section 2 of section 4 apply. This argument is based on the notion that legal relations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them. It is true that the offences are non-cognizable but I cannot find that the case was investigated under Chapter 14, Criminal Procedure Code. It was not sent up under that Chapter but apparently by a private complaint by U Tin. Even though the case were wrongly investigated and sent up by the police there seems to me to be no obstacle to its being tried by the Magistrate. King-Emperor v. Sada, referred to by Mr. Rodriguez does not show that there is any such obstacle. I am of opinion that the fine imposed on the appellant for the first offence is heavy in view of the fact that he made genuine efforts to register his company, though they may have been clumsy efforts and I reduce the fine for the first offence to Rs. 40 and in defaul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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