TMI Blog2006 (11) TMI 342X X X X Extracts X X X X X X X X Extracts X X X X ..... ons 542 and 543 of the Companies Act, 1956 ? ( b )Whether the learned company judge has jurisdiction under section 542 of the Companies Act, 1956, to punish the guilty person for the criminal offence mentioned thereunder ?" 3. The company in liquidation, namely, RPS Benefit Fund Ltd., (hereinafter referred to, as "the company") is a "Nidhi" started on 9-11-1990, by the second appellant, P. G. Saranyan and members of his family. The company had 16,000 depositors and collected a sum of Rs. 43 crores and later on collapsed. Number of company petitions being C.P. Nos. 233 to 238 of 1999 - P.G. Vivekanandan v. R.P.S. Benefit Fund Ltd. [2003] 115 Comp. Cas. 649 (Mad.), were preferred by the creditors with their claim for winding up of the company. It appears, as informed by Mr. Arvind P. Datar, learned senior counsel appearing for the administrator, that large number of "Nidhis" collected amount from number of depositors and were made to collapse or the amounts were misappropriated. A number of company petitions were filed wherein administrators were appointed (about 14 in number) to look into the affairs of such companies in liquidation covering four lakh depositors with loss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o were the respondents, raised the question of maintainability of the application under sections 542 and 543 of the Companies Act, 1956, preferred by the administrator of the company. Having noticed the provisions that a receiver could be appointed with the leave of the court, learned company judge observed that the administrator was appointed for that purpose and taking into consideration that an investigating committee was asked to go into the affairs of the company, held that the application under sections 542 and 543 preferred by the administrator is maintainable. 7. Mr. Arvind P. Datar, learned senior counsel for the administrator submitted that though the role of the administrator in no way competes with the jurisdiction of the Official Liquidator, would submit that his role is more in the nature of complementing the work of the Official Liquidator. The administrator having been empowered to investigate in the affairs and to take charge of the assets and to realise the dues by the sale of the properties, the logical conclusion should be that he was empowered to act on behalf of the Official Liquidator. According to him, the administrator has to act in accordance with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company as the Tribunal may direct. On the hearing of an application under this sub-section, the Official Liquidator or the liquidator, as the case may be, may himself give evidence or call witnesses. (2)( a ) Where the Tribunal makes any such declaration, it may give such further directions as it thinks proper for the purpose of giving effect to that declaration. ( b ) In particular, the Tribunal may make provision for making the liability of any such person under the declaration a charge on any debt or obligation due from the company to him, or on any mortgage or charge or any interest in any mortgage or charge on any assets of the company held by or vested in him, or any person on his behalf, or any person claiming as assignee from or through the person liable or any person acting on his behalf. ( c ) The Tribunal may, from time to time, make such further order as may be necessary for the purpose of enforcing any charge imposed under this sub-section. ( d ) For the purpose of this sub-section, the expression assignee includes any person to whom or in whose favour, by the directions of the person liable, the debt, obligation, mortgage or charge was created, issued or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nto the conduct of the person, director, manager, liquidator or officer aforesaid, and compel him to repay or restore the money or property or any part thereof respectively, with interest at such rate as the Tribunal thinks just, or to contribute such sum to the assets of the company by way of compensation in respect of the misapplication, retainer, misfeasance or breach of trust, as the Tribunal thinks just. (2) An application under sub-section (1) shall be made within five years from the date of the order for winding up, or of the first appointment of the liquidator in the winding up, or of the misapplication, retainer, misfeasance or breach of trust as the case may be, whichever is longer. (3) This section shall apply notwithstanding that the matter is one for which the person concerned may be criminally liable." 10. So far as the criminal action as envisaged under section 542 is concerned, for the purpose of enforcement of the order of the company judge/Tribunal, the Official Liquidator or liquidator can ask for permission to prosecute the guilty person by filing an application under section 457(1)( a ) of the Companies Act. The company judge/Tribunal, in such cases, af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law in a subsequent statute, or even if there is a casus omissus in a statute, the language of which is otherwise plain and unambiguous, the court is not competent to supply the omission by engrafting on it or introducing in it, under the guise of interpretation by analogy or implication, something what it thinks to be a general principle of justice and equity. To do so at page 65 in Prem Nath L. Ganesh Dass v. Prem Nath L. Ram Nath AIR 1963 Punj. 62, per Tek Chand J. would be entrenching upon the preserves of legislature , the primary function of a Court of law being jus dicere and not jus dare. " (p. 1043) 15. The principle of construction was discussed and elaborated by the Supreme Court in the case of CIT v. National Taj Traders [1980] 121 ITR 535 1 , wherein the Apex Court held as follows (page 541) : "10. Two principles of construction one relating to casus omissus and the other in regard to reading the statute as a whole appear to be well settled. In regard to the former the following statement of law appears in Maxwell on the Interpretation of Statutes (twelfth edition) at page 33 : Omissions not to be inferred. It is a corollary to the gener ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the obvious intention of the legislation and produce a wholly unreasonable result we must do some violence to the words and so achieve that obvious intention and produce a rational construction, [per Lord Reid in Luke v. IRC [1963] AC 557; [1964] 54 ITR 692, 709 (HL)] where at page 577 he also observed : This is not a new problem, though our standard of drafting is such that it rarely emerges . In the light of these principles we will have to construe sub-section (2)( b ) with reference to the context and other clauses of section 33B." (p. 541) 16. Similar view was expressed by the Supreme Court in the case of Unique Butyle Tube Industries (P.) Ltd. v. U.P. Financial Corpn. [2003] 113 Comp. Cas. 374 1 . 17. From a plain reading of sections 542 and 543 as a whole, as it is evident that the statute itself is very clear and there is no ambiguity with regard to entitlement to filing an application under sections 542 and 543, the principle of law of casus omissus cannot be supplied by the court in the absence of any necessity. 18. From the abovesaid finding, it will be evident that the application under sections 542 and 543 preferred by the administrator of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
