TMI Blog2018 (2) TMI 2110X X X X Extracts X X X X X X X X Extracts X X X X ..... ad into and seen in any provision unless expressly conferred taking its own rationale behind it. The said principle is to be applied with more rigour in a case where the show cause notice was given followed by explanation a consequential decision was made without passing orders thereon. This Court is of the considered view that when once the show cause notice is issued, then it would amount to initiation of the proceedings qua negligence, default, breach of duty etc., However, the same would not be applicable to a criminal action. The decision to initiate a criminal proceeding would naturally come on a factual finding resulting in the final order to be passed by the first respondent, on a consideration of the reply given to the show cause notice. Therefore, the first respondent has to pass a reasoned order on two aspects. One is on merit with respect to the negligence, default etc, attributable on the part of the officer and the second is with respect to the decision made to proceed under the criminal law. These two factors are mandatory as the Court under Section 463(2) of the Companies Act, 2013 is only required to say as to whether the officer has acted honestly and reasonabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioners would submit that the power of this Court under Section 463(2) of the Companies Act, 2013 is akin to the Court, before which, proceedings was pending under Section 463(1) of the Companies Act, 2013. Such a power can be exercised after the issuance of show cause notice followed by the reply given. The first respondent does not usually pass any order to the show cause notice but on receipt of the reply given, straight away prefers a complaint before jurisdictional Magistrate. Therefore, there is sufficient power for this Court to give a finding on the aspect of negligence, default, breach of duty, misfeasance or breach of trust and even assuming that such findings are against the petitioners, the other issue pertaining to honesty and reasonableness will have to be gone into. 4. Thus, once this Court comes to the conclusion that the petitioners have acted honestly and reasonably, then, there is no question of criminal action being initiated against them. Learned senior counsel would also submit that all the alleged negligence default etc., are technical in nature. To buttress his submissions, learned senior counsel made reliance on the following decisions: (i) T.K. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st, he may apply to the High Court for relief and the High Court on such application shall have the same power to relieve him as it would have had if it had been a Court before which a proceedings against that officer for negligence, default, breach of duty, misfeasance or breach of trust had been brought under sub-section (1). 7. As rightly held by this Court in Visram Financial Services (P) Ltd., Vs. V. Rajendran (2013 (6) CTC 183), Section 633(1) of the Companies Act, 1956, pertains to a Court before which a proceedings of negligence, default etc., is pending. On the contrary, a specific power is given to this Court under Section 463(2) of the Companies Act, 2013. Section 463 of the Companies Act, 2013 as such gives power to the Court to grant relief in certain cases. Though it is not a power which could be exercised in all cases, certain discretion is given to the Court under Section 463(1) of the Companies Act, 2013 only to decide as to whether an officer of the company has acted honestly and reasonably after coming to a finding that he is or he may be liable in respect of negligence, default, breach of duty etc., whereas under Section 463(2) of the Companies Act, 201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ext is designed to realise. As Aharan Barak puts it: Purposive interpretation is based on three components: language, purpose, and discretion. Language shapes the range of semantic possibilities within which the interpreter acts as a linguist. Once the interpreter defines the range, he or she chooses the legal meaning of the text from among the (express or implied) semantic possibilities. The semantic component thus sets the limits of interpretation by restricting the interpreter to a legal meaning that the text can bear in its (public or private) language. [3] 32. Of the aforesaid three components, namely, language, purpose and discretion 'of the Court', insofar as purposive component is concerned, this is the ratio juris, the purpose at the core of the text. This purpose is the values, goals, interests, policies and aims that the text is designed to actualize. It is the function that the text is designed to fulfil. 33. We may also emphasize that the statutory interpretation of a provision is never static but is always dynamic. Though literal rule of interpretation, till some time ago, was treated as the 'golden rule', it is now the doctrine of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mponent is concerned, this is the ratio juris, the purpose at the core of the text. This purpose is the values, goals, interests, policies and aims that the text is designed to actualize. It is the function that the text is designed to fulfil. 33. We may also emphasize that the statutory interpretation of a provision is never static but is always dynamic. Though literal rule of interpretation, till some time ago, was treated as the 'golden rule', it is now the doctrine of purposive interpretation which is predominant, particularly in those cases where literal interpretation may not serve the purpose or may lead to absurdity. If it brings about an end which is at variance with the purpose of statute, that cannot be countenanced. Not only legal process thinkers such as Hart and Sacks rejected intentionalism as a grand strategy for statutory interpretation, and in its place they offered purposivism, this principle is now widely applied by the Courts not only in this country but in many other legal systems as well. (emphasis in original) 11. The following paragraphs in the decision rendered by the Apex Court in State (NCT of Delhi) Vs. Brijesh Singh alias Arun K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spective of purposive and harmonious construction of statutes relating to the same subject matter. Long ago, it was said by Lord Denning that when a defect appears, a judge cannot fold his hands and blame the draftsman but must also consider the social conditions and give force and life to the intention of the Legislature. It was said in Seaford Court Estates Ltd. v. Asher that: A judge, believing himself to be fettered by the supposed rule that he must look to the language and nothing else, laments that the draftsmen have not provided for this or that, or have been guilty of some or other ambiguity. It would certainly save the judges trouble if Acts of Parliament were drafted with divine prescience and perfect clarity. In the absence of it, when a defect appears a judge cannot simply fold his hands and blame the draftsman. He must set to work on the constructive task of finding the intention of Parliament, and he must do this not only from the language of the statute, but also from a consideration of the social conditions which gave rise to it, and of the mischief which it was passed to remedy, and then he must supplement the written word so as to give force and life to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the first respondent will not only have a civil consequence but also a criminal consequence in which case, the petitioners are entitled to know the reasons resulting in such decision. It is to be noted that serving of the orders aforesaid would not only help the petitioners but also the first respondent as some of the offences can be compoundable which will result in revenue generation. Therefore, looking from any perspective, the contentions raised cannot be sustained in the eye of law. 14. This Court is of the considered view that when once the show cause notice is issued, then it would amount to initiation of the proceedings qua negligence, default, breach of duty etc., However, the same would not be applicable to a criminal action. The decision to initiate a criminal proceeding would naturally come on a factual finding resulting in the final order to be passed by the first respondent, on a consideration of the reply given to the show cause notice. Therefore, the first respondent has to pass a reasoned order on two aspects. One is on merit with respect to the negligence, default etc, attributable on the part of the officer and the second is with respect to the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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