STATE OF KARNATAKA Vs. SATISH TIMBLO

JUDGEMENT

(1.) THIS appeal by the State is directed against the Judgment and order dated 12-12-1978 passed by the Sessions Judge, U.K., Karwar, in CrJ. A. No. 22 of 1978 setting aside the judgment and order dated 24-6-1 78 passed by the Judicial Magistrate I Class, Haliyal, in C.C. No. 1488 of 1977 convicting the respondents, who are A-1 to A-7, for an offence punishable under S. 210 (5) of the Companies Act, 1956 (hereinafter referred to as 'the Act') and sentencing each on,e of them to pay a fine of Rs. 300 and in default to suffer simple imprisonment for a period of two months. A few facts of the case are, that M/s TimbJo Minerals (P) Ltd. is a Company registered under the Act on 3-3-1972 having its registered office at Castle Rock U.K., Karwar, and that A-l is its Managing Director and A-2 to A-7 are its directors. It is the case of the prosecution that under the provisions of sub-sec. (1) of S. 210 of the Act at every annual general body meeting held in pursuance of S. 166 of the Act, the Board of Directors of the Company have to lay before the company a balance sheet as at the period specified in that section as also the profit and loss account for the said period. The said Directors of the Company at its annual general body meeting held on 31-12-1976 did not comply with the said mandatory provisions and as such committed an offence punishable under sub-section (5) of S. 210 of the Act. The complaint was presented by the Assistant Public Prosecutor before the trial Court on 23-5-1977. It was registered and summons were issued. As the case is triable as a summons case Sri R O. Kamath, who was representing the accused before the trial Court, had received documents on behalf of the accused as required under S 207 Cr.P.C The accusation was put to the learned counsel who pleaded not guilty and claimed to be tried by the Court. Thereafter the prosecution examined one K. Raghu, a clerk who was working in the Registrar of Companies office at Bangalore as P.W.-1 and through him got marked Exs. P-1 to P-13 and the learned counsel Sri Kamath was examined on behalf of the accused under S. 313 Cr.P.C. He contended that the allegations made against the accused were false and baseless and that they have not committed any offence. The learned Magistrate after assessing the evidence of the prosecution came to the conclusion that the prosecution has proved the offence against the accused and convicted" and sentenced them as aforesaid. Aggrieved by the said conviction and sentence the accused preferred an appeal before the Sessions Judge, U.K., Karwar, in Crl. A. No. 22/1978, who by his judgment dated 12-12-1978 allowed the appeal and set aside the conviction and sentence passed on the accused by the Magistrate and acquitted them. Aggrieved by the said judgment of acquittal the State has preferred this appeal. Sri Jayaram Chouta, learned High Court Government Pleader, appearing for the State, contended among other grounds that the judgment, of acquittal passed by the learned Sessions Judge is erroneous inasmuch as he has not taken into consideration the admitted fact that the accused had not placed before the annual general body meeting held on 31-12-1976 the profit and loss account and balance sheet as spoken to by'P.W.-1, in which' case the learned Sessions Judge could not have come to the conclusion that the accused have not committed the offence alleged against them. He further contended that even otherwise there is nothing placed on record by the accused by way of rebuttal that the accused have complied with the mandatory provisions of sub-section (1) of S 210 of the Act and therefore the judgment of acquittal passed by the learned Sessions Judge cannot be sustained. On the other hand Sri G. Sarangan learned counsel appearing for the accused submitted that the learned Sessions Judge was justified in coming to the conclusion that no offence has been proved against the accused inasmuch as the prosecution has failed to prove the requirements and ingredients which constitute an offence under S. 210 (5) of the Act. Elaborating his argument" what he submitted was that what constitutes the offence which is made punishable under S. 210 (5) of the Act is not mere failure to place before the annual general body meeting the required profit and loss account as also the balance sheet, but the failure to take all reasonable steps to comply with the provisions of the said section. In the absence of specific proof in that behalf, he submitted, that the learned Sessions Judge was justified in holding that the prosecution has failed to prove the charge against the accused. He also commended the reasoning of the learned Sessions Judge for acceptance. To appreciate the rival contentions of both the learned counsels it is necessary to advert to the relevant provisions of the Act. Sub-section (1) of S. 210 of the Act reads thus:- 210 (1) :