1978 (6) TMI 119

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..... e under section 293A of the Companies Act, 1956. It was stated, inter alia , in the complaint that the said opposite party was a shareholder of Graphite India Ltd. and on perusal of the annual report and accounts of the company for the year 1976, he came across an item of expenditure of Rs. 1,52,000 stated to have been incurred for advertisements in the All India Congress Committee Souvenirs. It was further alleged that the aforesaid expenditure paid to a political party in any manner is a contribution to a political party for a political purpose in contravention and in violation of the provisions of section 293A of the Companies Act. The learned Magistrate after perusing the petition of complaint and examining the complainant took cogni .....

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..... hat the alleged brochures never saw the light of the day and the expenses of Rs. 1,52,000 incurred by the company was in fact a contribution to the Congress party and as such a prima facie case under section 293A of the Companies Act must be said to have been made out. Taking up the second submission of Mr. Ray first, section 293A of the Companies Act prohibits a company from making any contribution to any political party or for any political purpose to any individual or body. Therefore, the question that has to be determined is whether the sum of Rs. 1,52,000 paid by the petitioner-company for an advertisement in the All India Congress Committee souvenirs can be deemed to be a contribution to the All India Congress Committee ? In Wes .....

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..... never saw the light of the day cannot be considered by us because no such case was made out either in the petition of complaint or in his initial deposition before the learned Magistrate. In our view, the allegations made by the complainant-opposite party in the petition of complaint and in his initial deposition taken at their face value, and even accepted in their entirety, do not make out a prima facie case against the petitioners and others under section 293A of the Companies Act. As such, the continuance of the proceedings against the petitioners before the learned Magistrate would tantamount to an abuse of the process of the court and would lead to their unnecessary harrassment. The proceedings, therefore, should not be allowed t .....

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