K KANAGASABAPATHI Vs. T M SHANMUGHAM

JUDGEMENT

(1.) THIS revision petition is directed against the judgment of the Sixth Presidency Magistrate, Saidapet, convicting the petitioner, who is the secretary of the Mylapore Hindu Permanent Fund Ltd. (hereinafter called "the Fund"), of the offence under section 209(4)(a) read with section 209(5) and (6) of the Companies Act, 1956, and sentencing him to pay a fine of Rs. 100 and, in default, to suffer simple imprisonment for one month. The circumstances leading to the prosecution of the petitioner are briefly these: The capital of the Fund as shown by the memorandum and articles of association and bye-laws is one crore of rupees, and the object of the Fund is to enable persons to save money, to secure loans at a favourable rate of interest on the security of immovable property or jewels, etc. The Fund is managed by a board of directors elected by the shareholders at the annual general meeting. At every annual general meeting, one-third of the directors have to retire by rotation, and the general body may fill up the vacancy by appointing the retiring director or some other person thereto. The 97th annual general meeting of the shareholders of the Fund was held at Radha Manram, Vepery, Madras, on the 25th April, 1970, at 2 p.m.

(2.) AT that meeting, the shareholders got up on the dais and snatched the minutes book. Owing to confusion and pandemonium, the meeting could not be commenced, whereupon Company Application No. 220 of 1970 was filed on the original side of the High Court and Mr. S. Venkatachala Sastri, advocate, was appointed on the 7th July, 1970, as chairman to hold and conduct the 97th annual general meeting of the Fund, to ascertain at the meeting as to the manner in which the election of the directors should take place and to conduct the election. It was in this context of excitement that one Shanmugham, the complainant in this case, in his capacity as one of the directors, sent a communication dated August 25, 1970, to the secretary (accused) for permission to inspect the office file relating to the nominations filed by candidates for election to the board of directors. Under article 138 of the articles of association of the Fund, all communications to the Fund shall ordinarily be addressed to the secretary and all correspondence between the Fund and the shareholders and others shall generally be carried on by the secretary under the orders of the president.

(3.) IN this connection, it is submitted that the court chairman has directed the office not to furnish copy of the proceedings to allow inspection of the minute book to anybody as the 97th annual general meeting is not yet over. Attempts were also made to seize the minutes book by some members on April 25, 1970, when the 97th annual general meeeing was scheduled to be held. Orders are requested as to what precautions are to be taken to ensure safety of the minutes book, till the 97th annual general meeting concludes and all the proceedings is drawn, and signed by the chairman. Submitted for orders. " The president passed the following orders : " Secretary to keep the books with lock and key in safe custody." * It appears that P.W.1 continued to write to the secretary, repeating his request. On September 13, 1970, the secretary put up the following note to the president.