TMI Blog1936 (9) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... had acted as a director without possessing qualification shares in accordance with Article 56 of the Articles of Association. A question arose as to whether his prosecution could be ordered or whether he could be tried by the High Court. Accordingly the following questions have been referred to this Fall Bench for answers: (1)Are contraventions of the provisions of the Companies Act 'offences'? (2)If so, has the High Court jurisdiction to take cognizance of and try such offences and to impose the fines prescribed by the provisions of the Act? Section 85(3) of the Indian Companies Act like numerous other sections of the Act makes any unqualified person who acts as a director of a company "liable to a fine not exceeding Rs. 50 for e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is very difficult to say that Section 3 has specifically mentioned that the High Court would be the court which should as a court of first instance try persons who have been guilty of an offence committed on account of breaches of the provisions of the sections of the Act. On behalf of the opposite party it was first suggested that Section 278(1) which lays down that no court inferior to that of a Presidency Magistrate or a Magistrate of the first class shall try any offence against the Act, shows that the Magistrates are mentioned as the court which should try such offences. We are unabe to accept this contention All that Section 278 lays down is that no court of a grade inferior to that of certain Magistrates shall have power to try ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court can take cognisance of the offence straight off, try the accused and convict him and punish him without following the procedure laid down in the Code. Indeed we are of opinion that there are elaborate rules of procedure laid down in the Code regulating the trial of accused persons, and it is imperative that they should be followed. Ordinarily under Section 177 every offence is to be inquired into and tried by a court within the local limits of whose jurisdiction it was committed. Then a Magistrate is empowered to take cognizance of an offence under Section 190. Section 193 lays down how a court of session can take cognisance of an offence when the accused has been committed to it by a Magistrate. Section 194(1), then, provides ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the winding up of a company where in the course of the enquiry the Company Judge came to the conclusion that an offence has been committed in which event he may order an enquiry under Section 237 of the Indian Companies Act. The matter is not pending before the High Court at all and the Court has been moved for the first time by applicant. We therefore think that if the case was committed to the High Court under Section 194(1), Cr. P.C, or proceedings were started on an application of the Advocate-General under Section 194(2) or were transfered to it under Section 526, Cr. P.C, then the High Court would have jurisdiction to try the accused; but that it would not have jurisdiction to try the accused merely on an application made under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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