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TMI Blog1956 (7) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... or the prosecution briefly is that the complainant Mahabir Prasad Surekha was appointed a salesman under the Rasayansala Department of the society under Exhibit 3 which is dated the 23rd of April, 1953. One of the terms of his appointment was that the employee will have to deposit a cash security of Rs. 500, on which he was to get 6 per cent. annual interest so long as the amount would be kept in deposit with the society and so long as the employee would continue in the service of the society. Towards the end of the letter of appointment occurs the following paragraph : "You will do only society's work under orders from the office and you will not do any part-time work etc . Otherwise society will have the right to dissociate you without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the 23rd April, 1953. It is the complainant's case that he deposited Rs. 500 as cash security in five one-hundred rupee notes but he was not granted any receipt by the society. The defence on the other hand is that the money was not actually paid by the complainant but by D.W.1, Purushottamdas Kajriwall, who happened to be a close relation of the complainant and although the amount was ultimately transferred to the account of the complainant it was not a deposit made by the complainant so as to bring the society or any of its directors or officers within the mischief of section 282B of the Indian Companies Act. The learned Magistrate appears to have held that the complainant deposited the money in cash. Of course he has not said so clearl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch the complainant might put the society would be recouped from the security deposit and from the absence of such a term in the letter of appointment it is argued by Mr. Sen that the deposit would amount to a loan and not to a deposit of cash security. There is, however, the sentence to which I have already referred that in such events the society will realise the loss sustained by it from the complainant. The context in which this sentence occurs clearly means that in the event of the society "dissociating the complainant without any previous notice" the society will recoup any loss sustained by it from the complainant and although there is no clear mention here of the loss being recouped from the money deposited, if the letter of appointm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind it impossible to agree with this contention. Section 282B(1) consists of two parts ; the first places on the company an obligation to keep all moneys or securities deposited with the company by its employees in pursuance of their contract of service, with the company, in a special account in a scheduled bank; the second portion prohibits the utilisation of any such deposit except for the purposes agreed to in the contract of service and has really nothing to do with the first part. The first imposes an obligation and the second imposes another obligation by a prohibition and this prohibition does not necessarily mean that the money must be a security deposit. As a matter of fact, if it was intended that the money must be a security depo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the society but they shall have no powers except as are expressly stated in these articles. It appears from the articles of association that the society had no directors at all. It had an executive committee consisting of not more than 35 and not less than 25 members. The members under article 3 of the articles of association were classified as life members, honorary members and ordinary members. Out of 25 or 35 members of the executive committee, there were only 4 directors, viz., the president, two vice-presidents and the general secretary, the rest were mere members of the executive committee. I have already stated that the petitioner No. 1 was the general secretary and the petitioner No. 2 was the president. According to the evidence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... committee and the petitioners were two of the members of the executive committee in 1953-54. That being so, the learned Magistrate rightly held that these petitioners knowingly contravened the provisions of section 282B(1). Mr. Sen finally contends that as the trial was held after the amended Criminal Procedure Code came into force it was the duty of the learned Magistrate according to the English practice to tell the petitioners that they had a right to examine themselves as witnesses and as he did not do so the case should be sent back in order to enable the accused to examine themselves as witnesses in the case. Section 342 A which is the relevant section nowhere imposes upon the Magistrate the duty of explaining to an accused person ..... X X X X Extracts X X X X X X X X Extracts X X X X
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