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TMI Blog2001 (5) TMI 886X X X X Extracts X X X X X X X X Extracts X X X X ..... strate by the respondent-complainant - Registrar of Companies, Karnataka, in CC No. 8 of 2001, pending on the file of the court below. It is averred in the complaint that petitioner Nos. 2 to 4 who are accused Nos. 2 to 4 before the learned magistrate, being the directors of the company, are the officers in default within the meaning of section 5 of the Act since no managing director or whole-time managing director or manager as such of the company was appointed by them. Its authorised capital is Rs. 5 crores of 50 lakhs equity shares of Rs. 10 each. Its paid-up capital is Rs. 3 crores 40 lakhs consisting of 34 lakhs equity shares of Rs. 10 each as per the annual return of the company made upto 29-9-1998. The paid-up capital of the company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions of sub-section (1) were taken or that the financial position of the company was such that it was beyond its capacity to engage a whole-time secretary. 5. The learned counsel for the petitioners, Mr. Vivek Chandy, assailing the legality and propriety of the criminal action initiated by the respondent against the petitioners, submitted that the accused-company having suffered setbacks and reverses in its business is being proceeded against for winding up in Company Petition Nos. 169 and 170 of 1999, and that its holding company under the name and style of Sandur Manganese & Iron Ores Ltd. has approached the Board for Industrial and Financial Reconstruction ('BIFR') to get it declared as a sick company. 6. Per contra, the learned couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the part of the company having a paid-up capital exceeding Rs. 50 lakhs to have a whole-time secretary appointed. It is also not in serious dispute at this stage of the proceeding that for the relevant period, the whole-time secretary was not appointed by the accused-company. These material allegations prima facie make out the offence punishable under sub-section (1A) of section 383A, justifying taking of cognisance by the learned magistrate and in his proceeding in taking further steps towards trial of the accused. A plain reading of the proviso to sub-section (1A) of section 383A makes it crystal clear that the accused could raise the defence stipulated therein in the course of his/their trial by the learned magistrate. At this stage of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him when the complaint does not make out any case against him and still he must undergo the agony of a criminal trial....". [p. 136 of 28 CLA] 10. The aforestated proposition enunciated by the Supreme Court, evidently, do not help the petitioners' case in the light of the complaint allegations adverted to above. On the other hand, they fully support the impugned criminal proceeding initiated against them by the respondent. 11. Furthermore, while considering the validity or otherwise of the criminal proceeding launched against any person, the court exercising its revisional jurisdiction will have to bear in view the pronouncement of the Supreme Court in Hareram Satpathy v. Tikaram Agarwala AIR 1978 SC 1568, where it has laid down : "Now a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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