NEPTUNE STUDIOS LIMITED Vs. STATE

JUDGEMENT

(1.) THE appellants were found guilty of offenses under section 220(3) read with section I62(I) of the Companies Act, 1956, by the Sixth Presidency Magistrate, Saidpet, and each of them was sentenced to pay a fine of Rs. 500 in each of the two cases. THE appellants were accused Nos. I to 7 in the lower court. Accused No. I is the Neptune Studios Ltd., accused No. 2 is the managing director, accused Nos. 3 to 6 are the directors and accused No. 7 is the general manager of the company A clerk in the office of the Registrar of Companies examined as P.W. I stated that the accused company did not file copies of balance-sheet and profit and loss accounts as on December 31, 1958, and the statement was due in the office of the Registrar by the middle of October, 1959. As the balance-sheet was not received, the office sent a letter, exhibit P-IO, dated December 6, 1960, calling upon the company to furnish the balance- sheet. In spite of correspondence, the balance-sheet was not submitted till the complaint was field. It is admitted that the balance-sheets for the years 1958 and 1959 were submitted only on August 14, 1961. Learned counsel for the appellants submitted that the conviction of the appellants under section 220(3) of the Companies Act is unsustainable. He submitted that under section 220(3), the filing of the profit and loss account with the Registrar is contemplated only after the balance-sheet and profit and loss account have been laid before the company at the annual general meeting.

(2.) IT was contended that due to various difficulties in the working of the company, no general body meeting was convened, and, as the section contemplates filing of the balance-sheet and profit and loss account with the Registrar after those documents have been laid before the company in its general meeting, the appellants cannot be found guilty of the offense under section 220(3), as no general meeting was held. In support of his contention learned counsel relied on Emperor v. Pioneer Clay and Industrial Works Ltd. Referring to section I34(I) of the Indian Companies Act, 1913, which corresponds to section 220 of the 1956 Act, Chagla, Ag. C. J. (as he then was), observed as follows

(3.) ". . .a person charged with an offense could not rely on his own default as an answer to the charge, and so, if the person charged was responsible for not calling the general meeting, he cannot be heard to say in defence to the charge that the general meeting had not been called . . . If the person charged with the failure to carry out the requirements of the section could have called the meeting, he cannot defeat the provision of the section simply by not calling the meeting wilfully."