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TMI Blog2001 (2) TMI 963X X X X Extracts X X X X X X X X Extracts X X X X ..... nferred exclusive rights for the sale of their instruments for the territory of Northern India consisting of the States of Uttar Pradesh, Punjab, Haryana, Rajasthan, Himachal Pradesh, Jammu and Kashmir and Union Territories of Delhi and Chandigarh to Medley Marketing (P.) Ltd. and for the North East region including Bihar and Orissa to P.V. Kuruvilla. According to the respondent, it is not stipulated in the said agreement entered into by the petitioners with their above sole selling agents that their appointments 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 appointments are made. It is also alleged in the complaint that both the agreements were renewed on 9-9-1992, for a further period of three years from 28-8-1992 to 27-8-1995, in the case of Medley Marketing (P.) Ltd. and from 31-8-1992 to 30-8-1995, in the case of P.V. Kuruvilla and the agreements were again renewed on 5-8-1995, for a further period of three years, the terms and conditions of the agreements remaining the same. The respondent, therefore, alleged that by not following the mandatory directions contained in section 294(2), the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not constitute an offence punishable under omnibus provisions of section 629A. But, the learned counsel for the respondent pointed out that in the above referred decision the Court observed that : "On a fair reading of the aforesaid provisions, it will at once become clear that the provisions of sub-sections (1) and (2) shall have to be regarded as not directory but mandatory having regard to the negative language employed therein." (p. 766) It is further observed in the same para that : ". . . However, in my view, if regard be had to the manner in which the section is enacted, the language used therein and the place at which the section appears in the entire scheme of the Act, it will be clear that the conditions mentioned in sub-section (2) will have to be regarded as a condition which attaches to the very act of making the appointment of a sole selling agent by the board of directors and, therefore, a condition precedent. The object of the section, as I have already indicated above, is to place restrictions or curbs on the powers of the board of directors. The language employed in sub-section (1) and sub-section (2) is clearly negative which suggests that the provisions a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the language employed in section 294(2), I have no hesitation to hold that the directions and the restrictions imposed by the Legislature are mandatory in nature as interpreted in the above decision. Section 629A of the Act makes it clear that : " Penalty where no specific penalty is provided elsewhere in the Act. If a company or any other person contravenes any provision of the Act for which no punishment is provided elsewhere in this Act or any condition, limitation or restriction subject to which any approval, sanction, consent, confirmation, recognition, direction or exemption in relation to any matter has been accorded, given or granted, the company and every officer of the company who is in default or such other person shall be punishable with fine which may extend to five hundred rupees, and where the contravention is a continuing one, with a further fine which may extend to fifty rupees for every day after the first during which the contravention continues." Since no specific penalty is provided for the above provision under the provisions of section 294, in my view, the penalty provision under section 629A is clearly attracted to the present case. At this stage, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 220(1)( a ) of the Companies Act, is not a continuing contravention. The determination whether a given crime is a continuous offence is a matter of statutory interpretation. But the judicial consensus is that the doctrine of continuing offence should be applied only in limited circumstances. Since the doctrine effectively extends the statute of limitations beyond its stated term. A particular contravention or offence should not be deemed to be a continuous one unless the explicit language of the substantive criminal statute compels such a conclusion . . . the court should not be eager to hold that an act or omission is a continuing wrong or default unless there are words in the statute concerned which make out that such was the intention of the Legislature. Section 220(1) of the Act by itself does not impose any liability the contravention of which is susceptible of continuance. The default would be complete with a failure to furnish the copies of balance-sheet and profit and loss account in the manner and within the time stated therein. Such an offence is committed once and for all as and when a person/s commit/s the default. A careful reading of section 220(1) would show t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... served as follows : "Section 473 confers power on the court taking cognizance after the expiry of the period of limitation, if it is satisfied on the facts and in the circumstances of the case that the delay has been properly explained and that it is necessary so to do in the interest of justice. Obviously, therefore, in respect of the offences for which a period of limitation has been provided in section 468, the power has been conferred on the court taking cognizance to extend the said period of limitation where a proper and satisfactory explanation of the delay is available and where the court taking cognizance finds that it would be in the interest of justice. This discretion conferred on the court has to be exercised judicially and on well recognised principles. This being a discretion conferred on the court taking cognizance, wherever the court exercises this discretion, the same must be by a speaking order, indicating the satisfaction of the court that the delay was satisfactorily explained and condonation of the same was in the interest of justice. In the absence of a positive order to that effect, it may not be permissible for a superior court to come to the conclusion t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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