ACHUTHA PAI Vs. REGISTRAR OF COMPANIES

JUDGEMENT

(1.) THESE two revision petitions can be disposed of by a common judgment as the point involved is the same. The Registrar of Companies had filed two complaints. The first accused in each of these cases being the company --The Hindustan Corporation (P.) Ltd.-second accused the petitioner here, the governing director of the company and accused Nos. 3 and 4 being ordinary directors. The subject-matter of the charge in the case in Criminal Revision Petition No. 286 of 1964 was for failure to submit returns as required by Sections 159 and 161 of the Indian Companies Act (shortly stated the Act), offence punishable under Section 162 of the Act. In Criminal Revision Petition No. 287 of 1964, it was for failure to file the balance-sheet and profit and loss account as required by Section 220 of the Act, offence punishable under Section 220 (3) of the Act. Learned District Magistrate on the evidence found all the accused guilty as charged. The company and the petitioner were each sentenced to pay a fine of Rs. 50 and accused Nos. 3 and 4 were sentenced each to pay Rs. 25. Out of the fine collected Rs. 10 each was awarded as costs from accused Nos. 1 and 2 and Rs. 5 each from accused Nos. 3 and 4. In appeal by the petitioner to the Sessions Judge of Ernakulam, the conviction and sentence were confirmed and he has therefore come up in revision.

(2.) THAT the returns were not sent and the balance-sheet and profit and loss account was not filed is admitted. According to the petition he had resigned his director's place on 7th August, 1961, and was, thereafter not liable to send up the returns, the default of which has given rise to the prosecution. Accused Nos. 3 and 4 admitted that the returns were not sent, but they would say that the petitioner was in control and charge of the books and accounts and that he was the person who ought to have sent up the returns. Admittedly, returns became due after 7th August, 1961, the date on which the petitioner had sent up his letter of resignation and the only question for decision is whether by merely sending up the resignation letter the liability of the petitioner could be considered to have ceased. Reference was made to exhibit P-2, the articles of association of the company, and reliance was placed on Clause (f) of Article 21 which states that one of the ways in which the office of the director shall be vacated is by notice in writing. But here the position of the petitioner was not merely that of a director, but he was the governing director of the company. His position under the Act is that of the manager of the company because he was in management, control and supervision of the affairs of the company.

(3.) THE definition of the term "manager" in the Act may be looked into. Section 2 (24) says: