1978 (6) TMI 119

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.... of the Companies Act, 1956. It was stated, inter alia, in the complaint that the said opposite party was a shareholder of Graphite India Ltd. and on perusal of the annual report and accounts of the company for the year 1976, he came across an item of expenditure of Rs. 1,52,000 stated to have been incurred for advertisements in the All India Congress Committee Souvenirs. It was further alleged that the aforesaid expenditure paid to a political party in any manner is a contribution to a political party for a political purpose in contravention and in violation of the provisions of section 293A of the Companies Act. The learned Magistrate after perusing the petition of complaint and examining the complainant took cognizance and issued summon....

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....er saw the light of the day and the expenses of Rs. 1,52,000 incurred by the company was in fact a contribution to the Congress party and as such a prima facie case under section 293A of the Companies Act must be said to have been made out. Taking up the second submission of Mr. Ray first, section 293A of the Companies Act prohibits a company from making any contribution to any political party or for any political purpose to any individual or body. Therefore, the question that has to be determined is whether the sum of Rs. 1,52,000 paid by the petitioner-company for an advertisement in the All India Congress Committee souvenirs can be deemed to be a contribution to the All India Congress Committee ? In West's publication of "Words and Phr....