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TMI Blog1985 (9) TMI 298X X X X Extracts X X X X X X X X Extracts X X X X ..... . The notice having no effect, the Registrar of Companies filed a complaint on July 6, 1979, in the court of the Sub-Divisional Judicial Magistrate, Sadar, Cuttack, against the company and its directors, namely, Himansu Sekhar Misra, Bhimasen Misra and Balakrushna Sarangi, for having defaulted in complying with the statutory requirement under section 220 of/the Act. Before judgment, the prosecution against Balakrushna Sarangi was permitted to be withdrawn leaving the respondents to defend (themselves). Their plea in short was that the balance-sheet and the profit account for the year ending on June 30, 1977, could not be fi led as no annual general meeting was held. The plea of the respondents would have been forceful before December 24, 1977, when section 220 of the Act was amended by Act 46 of 1977 in view of the decision in Slate of A.P. v. Andhra Provincial Potteries Ltd. [1973] 43 Comp. Cas. 514 (SC), where it was laid down that until the annual general meeting is held, there is no question of filing of the balance-sheet and the profit and loss account for a period and, as such, no offence is committed under section 220(3) of the Act. This was also the view of this court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even after January 30, 1978, is a default. On the plain language of section 220(3), respondent No. 1, M/s. Orissa Paper Products Ltd., the company, is liable for the default. Respondent No. 2, Bhimsen Misra, and respondent No. 3, Himansu Sekhar Misra, were the directors of the company. A director is an officer of the company within the meaning of the inclusive definition of "officer" in section 2(30) of the Act. Under section 220(3), every officer of the company who is in default is also liable for the default. Mr. Misra, learned counsel for the respondents, however, relied upon a Division Bench decision in Nandlal More v. Ramchandiram Mirchandani [1968] 38 Comp. Cas. 39 (Bom.), to submit that only employees are officers and not directors. In the aforesaid decision, the consideration was whether a partner of a managing agency firm of a company would be an officer. In that context, it was held that an officer must be in the relation of an employee or servant of the company. The correctness of the observation in this decision is not required to be examined since the context in which the observation was made is completely different. Mr. Misra next relied upon a decision of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hey were reminded by the Registrar. In the absence of any lawful excuse, the omission is wilful. A letter dated October 10, 1977 (exhibit A), addressed by respondent No. 2, Bhimsen Misra, describing him as chairman of the company to the Project Officer, Balangir and District Industries Officer, Balangir, is purported to be the letter of his resignation as director. In this letter, it is has been indicated that respondent No. 3, Himansu Sekhar Misra, has also sent a similar letter of resignation that day to the addressee. No doubt, resignation of a director does not require acceptance. A letter to a third party like the Project Officer or the District Industries Officer would not be a valid letter of resignation. Thus, the liability of respondents Nos. 2 and 3 cannot be got rid of by issue of such a letter. Accordingly, whatever might have been the position till September 13, 1978, the omission to file the balance-sheet and the profit and loss account of the company after receipt of the notice (exhibit 1) becomes wilful and they are liable for the default under section 220(3) of the Act. To justify the acquittal, it is urged by Mr. Misra that the cognizance of an offence under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a continuing offence, then some other phraseology would have been used in the section or recurring penally for the continuing default would have been levied. " (emphasis supplied). Thus, the nature of penalty as envisaged in the language of the statute is to be taken into consideration to determine whether the act or omission which is punishable is a continuing offence. Relying upon the observation in State of Bihar v. Deokaran Nenshi, AIR 1973 SC 908, the Calcutta High Court in a decision in United Savings and Finance Co. P. Ltd. v. Deputy Chief Officer, Reserve Bank of India [1980] 50 Comp. Cas. 518 (Cal.) held an offence under section 58 B (2) of the Reserve Bank of India Act, 1934, providing for fine for each day to be a continuing offence. Under section 220(3), the defaulter is liable to the like punishment as is provided under section 162 of the Act. Section 162 provides for fine which may extend to fifty rupees for every day during which the default continues. In view of the nature of penalty provided for, there can be no doubt that the offence under section 220(3) is a continuing offence. Even where the act or omission is a continuing offence, attracting ..... X X X X Extracts X X X X X X X X Extracts X X X X
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