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TMI Blog1986 (11) TMI 326X X X X Extracts X X X X X X X X Extracts X X X X ..... the first accused in the complaint. This petition is filed under section 482 of the Code of Criminal Procedure to quash the said complaint and other proceedings initiated thereon. Accused Nos. 2 to 13 shown in the complaint are the members of the board of directors of the first accused company. The first accused appointed M/s. Shaw Wallace Co. Ltd. (hereinafter referred to as "Shaw Wallace") as its consignment agent for marketing the products of the company with effect from March 16, 1982. It is stated in the complaint that the company ought to have obtained the approval for the appointment of Shaw Wallace in the first general meeting held after the date of the appointment of Shaw Wallace and that the company failed to obtain the appro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion is that no offence is disclosed in the complaint and hence no cognizance should have been taken by the Magistrate. Section 294(2) reads thus : "After the commencement of the Companies (Amendment) Act, 1960, the board of directors of a company shall not appoint a sole selling agent for any area except subject to the condition that the appointment shall cease to be valid if it is not approved by the company in the first general meeting held after the date on which the appointment is made." Sub-section (2A) provides that if the company in general meeting disapproves the appointment, it shall cease to be valid with effect from the date of the general meeting. Section 629A of the Companies Act provides penalty for contravention of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the annual general meeting. What is contemplated in the sub-section is that the appointment shall be made subject to the above condition. In other words, the appointment order should specify that the appointment is made subject to the aforesaid condition. This is how Tulzapurkar J. has interpreted the subsection in Arantee Mfg. Corporation v. Bright Bolts P. Ltd. [1967] 37 Comp. Cas. 758 (Bom.). A Division Bench of the Calcutta High Court in Shalagram Jhajharia v. National Co. Ltd. [1965] 35 Comp. Cas. 706 (Cal.) also placed the same interpretation on section 294(2). I am in respectful agreement with the aforesaid interpretation. It is not stated in the complaint that the appointment order (or the resolution by which the appointm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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