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TMI Blog1947 (11) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... for nine months. The act for which he has been so convicted and sentenced is that he, as a director of the Santal Parganas Electric Supply Corporation Ltd., made in the balance sheet of that company for the year 1944, a statement to the effect that the company owed a debt of Rs. 73,000 secured by a first mortgage on all its properties and undertakings, although in fact, there was no such mortgage and that he thus made a false statement, knowing it to be false in a material particular in the said balance sheet. The facts are simple and are not disputed. It appears that a firm called Dutta Brothers obtained a licence from the Government of Bihar for the supply of electricity within the town of Deoghar and adjacent localities and the presen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or neglected to apply for or to secure the sanction of the local government within the time aforesaid, the mortgagee would be entitled to call for immediate repayment of the whole amount. In fact, however, no application was made to the Government for sanction, nor was any mortgage ever executed. The balance sheet of 1941 shows debts owing by the company to the appellant which apparently included the aforesaid sums, but no mention is there made of any mortgage. No balance sheets were published either in the year 1942 or 1943 on account, it is said, of the ban, then existing, on the disclosure of details regarding public utility companies, but in 1944 a balance sheet was published which contained an entry to the following effect: Loans secu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he disputed entry was challenged at the meeting of the shareholders the appellant at once disclosed the real facts. As to how the entry came at all to be made, it appears that Ex. H, which is a draft statement as regards the position of the company supplied by the Managing Agents to the auditors, described this loan as unsecured one but added, it had been taken as per agreements dated 8th November, 1938, and 1st January, 1939. The final balance sheet which is Ex. G in the case was ultimately prepared by the auditors from Ex. H but there the loan of Rs. 73,000 was described as a loan secured by the first mortgage of all the properties and undertakings of the company. The learned Magistrate has found that since no mortgage admittedly exists ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1936] 40 CWN 1341 . It is not necessary for us, nor is it possible, to lay down any proposition of universal application. It is true that the Companies Act speaks of statement which is false, which is known to be false, which is wilfully made and which is false in any material particular. Our enquiry in the present case must, therefore, be as to whether these elements are supplied by the special facts. The document concerned here is balance sheet and section 132(1) of the Indian Companies Act does enjoin that the balance sheet shall give such particulars as will disclose the general nature of the liabilities and assets and how the value of the fixed assets has been arrived at. The form of the balance sheet is contained in From "F" set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l facts of the case, the answer must be in the negative. It is not necessary to decide finally one way or the other the contention of Mr. Deb that questions of mens rea are altogether immaterial to a charge under section 282 of the Indian Companies Act. We might however refer to the recent decision of the Privy Council in the case of Srinivas Mall Bariolly v. King Emperor [1947] 51 CWN 900 where their Lordships quoted with approval the proposition laid down in an earlier case, which is to the effect that "unless a statute by itself or by necessary implication rules out mens rea as a constituent part of a crime, a person should not be found guilty of an offence against the criminal law unless he has got a guilty mind." Be that as i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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