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TMI Blog1957 (12) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... four cases for alleged offences under the Companies Act. These cases were Summary Trial Cases Nos. 394 of 1955, 395 of 1955, 396 of 1955 and 397 of 1955 on the file of the Additional First Class Magistrate's (Judicial) Court, Kozhikode. In Summary Trial Case No. 396 of 1955 the charge against the several accused was that on account of their failure to comply with the direction contained in sub-section (1) of section 76 of the Companies Act they were guilty of an offence punishable under sub-section (2) of the same section. In all the other three cases the charge was that the company and its directors had failed to comply with the directions contained in sub-section (1) of section 131 of the Companies Act and had thus become guilty of an of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... figured as accused Nos. 1, 2, 6 and 7 guilty under sub-section (3) of section 133 and sentenced each of them to pay a fine of one rupee. The complaint in the other case, viz., Summary Case No. 396 of 1955, was about the non-compliance of the direction contained in sub-section (1) of section 76. That sub-section states that "a general meeting of every company shall be held within 18 months from the date of its incorporation and thereafter once at least in every calendar year and not more than 15 months after the holding of the last preceding general meeting." Sub-section (2) of the same section states that "if default is made in holding a meeting in accordance with the provisions of this section, the company and every director or manager of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case the offences consist in the default to comply with the directions contained in sections 76 and 133 of the Companies Act and the maximum sentence that could be awarded under sub-section (2) of section 76 and under sub-section (3) of section 133 is a fine of Rs. 500. This is clear indication that the Legislature considered the offence under these sections to be real offences deserving substantial punishment. No doubt the Legislature has only fixed the maximum of the sentence that could be awarded in a particular case being left to the discretion of the court. Such discretion has to be judicially exercised. The court must be guided by a sense of proportion in fixing the quantum of fine in any particular case. It must bear some reasonable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent case the respondents could not file any appeal against their conviction and sentence because the sentence was only to pay a fine of one rupee. They could only have filed a revision against such conviction and sentence. Even though they did not file any formal application in that direction they are entitled to request the court to exercise its revisional jurisdiction under section 439 and to examine the sustainability of the conviction recorded against them. 4. What is contended on behalf of the respondents is that the prosecution has not adduced any evidence against them to make out the essential ingredients of the offences punishable under sub-section (2) of section 76 and sub-section (3) of section 133 of the Companies Act. It is cle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to afford protection to innocent defaulters and to punish only those who are consciously and intentionally committing default. There may be instances where the default may have occurred and some at least of the directors of the company may be totally ignorant of the same. It could be said that they have been indifferent or negligent in the due discharge of their duties as directors of the company. In their capacity as directors they must be deemed to be parties to the default. But it will not be correct to say that they have been knowingly and wilfully parties to such default in the absence of any evidence to support such an inference. There must be some evidence, direct or circumstantial, to sustain an inference that they also contribute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dvertent to sustain a conviction. The significance of the expression "knowingly or wilfully" as used in the section to determine the penal liability of the officers of the company as distinguished from the company itself has been explained in Public Prosecutor v. B.V.A. Lury Company [1941] 11Comp. Cas. 331 in the following terms : "A company as a corporate body cannot either 'know' or 'will'. That the Legislature did not personify companies and impute to them minds is made clear by the wording of the relevant sections. The punitive clause of section 32 for example, reads: 'If a company makes default in complying with the requirements of this section, it shall be liable to a fine not exceeding Rs. 50 for every day during which the default c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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