S S LAKSHMANA PILLAI Vs. REGISTRAR OF COMPANIES

JUDGEMENT

(1.) THE petitioner who is facing his criminal prosecution as accused No. 2 in C. C. No. 25489 of 1975 on the file of the VII Metropolitan magistrate, G. T. , Madras , has preferred this criminal miscellaneous petition invoking the inherent jurisdiction of this court under section 482, Criminal Procedure Code, to quash the proceedings in the said case as against him. THE first respondent, namely, registrar of Companies, Tamil Nadu, Madras , has instituted criminal proceedings against the petitioner in the above case under sections 159 and 162 of the Companies Act, 1956

(2.) THE only point that arises for consideration is whether the letter of resignation sent by the petitioner dated December 4, 1972 , would itself constitute a valid resignation without its acceptance by the board and absolve him of all his liabilities from the date of the resignation. It may be noted here that the company was incorporated in September, 1946, and admittedly as per the latest annual return avaiable on the records of the company, i. e. , as per the annual return made upto December 4, 1972, one Sri S. S. Sivan Pillai and Sri S. S. Lakshmana Pillai (the petitioner herein) were the directors of the company and that the said Sivan Pillai had expired and Form No. 32 to that effect was filed in the office of the Registrar of Companies by the petitioner on April 10, 1972, and that the petitioner was the only remaining director of the company thereafter. If the letter of resignation was sufficient for a valid resignation, the petitioner will not be liable to submit the return for the failure of which criminal proceedings have been instituted. This proposition of law is not in dispute. THErefore I shall now go to the legal question whether the resignation takes effect from the date of the letter of resignation or only after the acceptance of the same by the board of directors. In the Indian Companies Act (hereinafter referred to as "the Act") there is no provision relating to resignation of office of director as it was in the case of the managing agent provided under section 342 of the Act as it then stood and now omitted by section 6 of the Act XVII of 1969 which read that "unless the managing agency agreement otherwise provided, the managing agent might, by notice to the board, resign his office with effect from such date as might be specified in the notice" *

(3.) IN the absence of any provision in the articles the ordinary rule of common law as regards resignation by an officer or agent must be followed, namely, intimation by notice given either to the company or the board and acceptance of the same by them. See Glossop v. Glossop 1907 (2) Ch 370 (Ch D), Latchford Premier Cinema Ltd. v. Ennion IN the latter case, even resignation orally tendered at a general meeting and accepted by the meeting was held to be effective. See also State of Bihar v. Sitaram Jhunjhunwala 1967 air (Patna) 433 and Mohan Chandra v. INstitute of Chartered Accountants 1972 air (Delhi) 91.