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TMI Blog2023 (5) TMI 936X X X X Extracts X X X X X X X X Extracts X X X X ..... ger an offence. The Act not only mollifies the punishment prescribed for contravention, but also the procedure, for determining the penalty. The Hon'ble Apex Court in T. BARAI VERSUS HENRY AH HOE AND ANOTHER [ 1982 (12) TMI 186 - SUPREME COURT ] had an occasion to consider the amendments made to Section 16(1)(a) of the Prevention of Food Adulteration Act, 1954. The Act originally prescribed punishment of 6 years for the said offence of the Act. In 1975, an amendment was made by the State of West Bengal by the West Bengal Amendment Act, which provided for punishment upto imprisonment for life for the said offence. Thereafter, the Parliament passed the Prevention of Food Adulteration (Amendment) Act, 1976, which provided for reduced punishment for the offence. The question that was raised before the Hon'ble Supreme Court inter alia was whether the amendment would be prospective or would apply to pending prosecutions as well in the State of West Bengal. The amendment not only brought about change in the punishment, but also change in the procedure. By virtue of the amendment, the punishment prescribed was only 3 years, whereas, in the West Bengal Act, the punishment pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lding office as Director in companies more than the limits as specified in sub-section (1), immediately before the commencement of this Act shall, within a period of one year from such commencement: (a) choose not more than the specified limit of those companies, as companies, in which, he wishes to continue to hold the office of Director; (b) resign his office as Director in the other remaining companies, and (c) intimate the choice made by him under clause (a) to each of the companies in which he was holding the office of Director before such commencement and to the Registrar having jurisdiction in respect of each such company. Further, 165(5) of the Act provides that no such person shall act as Director in more than the specified number of companies. The complaint therefore states that the petitioner herein had violated the provisions of Sections 165(1), (3) and (5) of the Companies Act by holding Directorship in 29 companies and hence, liable for punishment under Section 165(6) of the Act. 3. The learned counsel for the petitioner made the following submissions praying for quashing of the complaint as against him. 4(a). Several of the companies in the petitioner is said t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the disposal of serious offences and the offender will be penalised. The objects and reasons, according to the petitioner is found in the Companies (Amendment) Act, 2018, Bill which contained a similar amendment, however, this Bill lapsed and ultimately, the Companies (Amendment) Act, 2020 was enacted. 4(e) The learned counsel further submitted that the intention of the Legislature was that the Companies must be able to do business easily and comply with the requirements and opportunity should be given to the Companies to comply with the provisions of the Act and only if they had failed to comply with the direction, it would constitute the offence. The learned counsel read to us Section 454(8) of the Companies Act, which is as follows: Section 454(8) (i) Where company 4[fails to comply with the order made under sub-section (3) or sub-section (7), as the case may be,] within a period of ninety days from the date of the receipt of the copy of the order, the company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees (ii) 5[Where an officer of a company or any other person] who is in default 6[fails to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing prosecution. The only question hence to be decided by this Court is whether the amendment that was brought into force on 21.12.2020 by virtue of the Companies (Amendment) Act, 2020 can be applied to pending prosecutions. 7. In this case, the complaint is of the year 2017. The law as stood on the date of complaint for the alleged violation committed by the petitioner is as follows: ...(6) If a person accepts an appointment as a director in contravention of sub-section (1), he shall be punishable with fine which shall not be less than five thousand rupees but which may extend to twenty-five thousand rupees for every day after the first during which the contravention continues. 8. At the relevant point of time, contravention was considered as an offence. Further, there was no Explanation II, which specifically clarified for the purpose of reckoning in the limit of Directorship of the 20 companies, the dormant companies shall not be included. By virtue of the Companies (Amendment) Act, 2019 and the Companies (Amendment) Act 2020, the contravention is now liable for penalty by the adjudicating officer appointed by the Central Government. If the contravention is liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amendment Act reduces the punishment for an offence punishable under s. 16(1)(a) of the Act, there is no reason why the accused should not have the benefit of such reduced punishment. The rule of beneficial construction requires that even ex post facto law of such a type should be applied to mitigate the rigour of the law. The principle is based both on sound reason and common-sense. This finds support in the following passage from Craies on Statute Law, 7th edn. at pp. 387-88 : A retrospective statute is different from an ex post facto statute. Every ex post facto law ..... said Chase J. in the American case of Calder v. Bull(1) must necessarily be retrospective, but every retrospective law is not an ex post facto law. Every law that takes away or impairs rights vested agreeably to existing laws is retrospective, and is generally unjust and may be oppressive ; it is a good general rule that a law should have no retrospect, but in cases in which the laws may justly and for the benefit of the community and also of individuals relate to a time antecedent to their commencement : as statutes of oblivion or of pardon. They are certainly retrospective, and literally both conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to Section 165(6) of the Companies Act as well, reads as follows: .....The Committee recommended that the existing rigour of the law should continue for serious offences, whereas the lapses that are essentially technical or procedural in nature may be shifted to in-house adjudication process. The Committee observed that this would serve the twin purposes of promoting of ease of doing business and better corporate compliance. It would also reduce the number of prosecutions filed in the Special Courts which would in turn facilitate speedier disposal of serious offences and the offenders shall be penalised.... Though this Bill lapsed, the subsequent Act in the year 2019, 2020 brought about the same amendment in Section 165(6) of the Act. In the 2019 Amendment Act, penalty was fixed at Rs.5,000/- for each day the contravention continues. However, the 2020 Amendment Act further mollifies it by fixing Rs.2000/- per day as penalty, subject to a maximus of Rs.2,00,000/-. Therefore, the object and reason in 2018 Bill are relevant, though it had lapsed. When that being the intention of the Legislature, we find that there is no reason why the said Amendment cannot be applied in f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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