SELVARAJAN AND COMPANY Vs. REGISTRAR OF COMPANIES MADRAS

JUDGEMENT

(1.) BY consent of both parties, the writ petition itself has been taken up to day for final disposal. The writ petition is for a mandamus to direct the respondents to receive computer-printed memorandum and articles of association as printed matter for the purpose of section 15 of the Companies Act, 1956, and to issue certificate of incorporation after following necessary formalities. The short facts are as follows : The petitioner is a firm of chartered accountants which undertakes preparing of memorandum and articles of association for several companies. It also represents the promoters of new companies for presenting the memorandum and articles before the Registrar of Companies for obtaining the certificate of incorporation. Under section 15 of the Companies Act, 1956, the memorandum and articles of association shall be printed, be divided into paragraphs numbered consecutively and be signed by each subscriber. Under section 33 of the Companies Act, the memorandum and articles of association should be presented for registration to the Registrar of that State in which the registered office of the company is situate. A declaration by a chartered accountant who is engaged in the formation of the company shall be filed with the Registrar and the Registrar may accept such declaration as sufficient evidence of such compliance. As per the same section, if the Registrar is satisfied that all the requirements aforesaid have been complied with by the company and that it is authorised to be registered under the Act, he shall retain and register the memorandum and articles, if any. It is submitted in the affidavit that even though section 15 provides that the memorandum shall be printed, due to technological development and methods of printing developed recently, by a Circular No. 3/81 (F. No. 8131/15/80 CLV), dated December 15, 1981, the Government of India and the Department of Company Law Board declared that offset printing is one of the latest developed printing systems, that the said printing system was declared as good as normal printing and that it was declared that there was no objection for accepting offset printing by the Registrar of Companies.The petitioner would contend that, if the offset printing is a development in printing, the printing by computer is also a well developed technology in printing and, therefore, could be accepted. There is no justification for the Registrar to reject computer printing. Such printing is more legible and clearer and it can be done easily and quickly. BY avoiding composing, proof reading, etc., if a matter is printed in a computer and kept in the memory of the computer, it can be used at a later stage. Thus, there are so many advantages in printing by computer. In fact, the Government of India and particularly the Prime Minister of India advocate introduction of computers in all fields as modern technology.

(2.) AS a firm of chartered accountants, the petitioner submitted the memorandum and articles of association of six companies and all of them were printed in a computer by a reputed firm, namely, Data Base System P. Ltd., Madras. When this memorandum and articles of association were presented before the first respondent, the Registrar of Companies, he returned the same. The reason, as the petitioner would gather, is that the memorandum and articles of association have not been printed in accordance with section 15 of the Act. Thereafter, the petitioner firm wrote a letter on June 18, 1986, addressed to the first respondent explaining the position and in their letter, the petitioner-company requested the first respondent to direct the office of the Registrar of Companies to accept the documents. But the first respondent refused to receive the letter and directed the petitioner firm to once again print the memorandum and articles of association. It is under those circumstances the present writ petition had come to be preferred for the above relief. In the counter-affidavit filed on behalf of the first respondent, it is stated that sections 15 and 30 of the Companies Act strictly provide that the memorandum and articles of association of companies presented for registration shall be printed. The Department of Company Affairs, vide Circular No. 3/81 (F. No. 8/31/15/80-CLV), dated December 15, 1981, has clarified that offset printing is one of the methods of printing developed recently and as good as normal printing and hence the memorandum and articles of association printed by offset printing can be accepted by the Registrar of Companies for the purpose of registration of companies. In terms of sections 15 and 30 of the Companies Act, read with the circular dated December 15, 1981, of the Department of Company Affairs, apart from the conventional printing, the only other mode of printing recognised for submission of memorandum and articles of association for incorporation of new companies is "offset printing". The petitioner himself admits that the memorandum and articles of association in question were not printed by "offset printing" and hence not prepared in accordance with the Circular dated December 15, 1981, of the Department of Company Affairs relied upon by the petitioner. The so called computer printing as claimed by the petitioner is more akin to that of typing susceptible to erasing, defacing, etc., and hence not recognised as "printing" to meet the requirements of sections 15 and 30 of the Companies Act. The petitioner submitted the memorandum and articles of association for registration of only five companies on the dates noted against each :1. Mantralaya Finance and Leasing P. Ltd. 26-5-86 2. Maruti Finance and Leasing P. Ltd. 26-5-86 3. Nagammai Hire Purchase and Finance P. Ltd. 28-5-86 4. Allzewek Sales P. Ltd. 5-6-86 5. Target Investments P. Ltd. 11-6-86 No memorandum and articles of association have been filed with the first respondent for the registration of a company under the name and style "Ayyappa Security Bureau P. Ltd." It is not correct to say that mere presentation of documents by the promoters at the receipt counter of the first respondent office amounts to the first respondent accepting the documents unless and until the documents are properly scrutinised after the receipt in the office and found correct. When the documents were scrutinised, it was found that the memorandum and articles of association of the above-noted five companies were not in conformity with the provisions of sections 15 and 30 of the Companies Act, read with the Department of Company Affairs clarifications dated December 15, 1981, referred to above. Therefore, these were returned to the parties for rectifying the defects as provided under regulation 17 of the Companies Regulations, 1956. The documents in question being defective were lawfully and properly returned by the first respondent in exercise of the powers and functions provided to him under regulation 17 of the Companies Regulations, 1956. It is further submitted that the petitioner himself has admitted that the memorandum and articles of association in question were not printed as per the recognised methods and the so called computer printing has not been recognised for the purpose of sections 15 and 30 of the Companies Act, read with the Department of Company Affairs clarification dated December 15, 1981, as it is more akin to typing and susceptible to erasing, defacing and tampering. It is further submitted that present clarity and legibility of the memorandum and articles of association cannot be the sole criterion. The documents being of permanent nature, their reference value in the long run is the key factor. It is uncertain that the so called computer printing will stand the test of time in the printed matter not fading away with efflux of time. Further, if on the ground of present legibility, the so called computer-printed documents are accepted, it will open the flood gates for recognising typewritten or cyclostyled materials undermining the very object with which the statute has prescribed printed documents. Lastly, it is added that every year thousands of companies are registered all over the country, including the State of Tamil Nadu. Any watering down of the qualitative requirement of printing will cause serious damage to public interest, as documents are to be preserved permanently for information and use to the investing public, especially the creditors and contributories of the companies. Further, the memorandum of association and articles of association are permanent records and they are public documents, open to inspection by the public and other agencies including for use in court proceedings and also for providing certified copies, including photo copies to those who require. So, it is absolutely essential that these documents should be very legible and the matter should remain intact without fading away for all times to come. Knowing very well the importance of the documents, the Legislature has put it in the statute itself that the documents should be printed ones. The petitioner is agitating only from a selfish angle to save a few hundred rupees in printing cost unmindful of the far-reaching adverse consequences resulting from watering down of the statutory requirement.Mr. B. Ramamurthy, learned counsel for the petitioner, would contend that, having regard to the meaning of the word "print", it means engraving or any other method of multiplying copies as stated in Stroud's Judicial Dictionary and the printing is a mark made by pressure to create an impression. Certainly the word "print" must have an enlarged meaning and cannot be confined to mere technicality, especially with the advancement of technology. Having regard to the fact that offset press has come to be accepted as printing, by the same line of reasoning, the computer-printing also must be regarded as printing, within the meaning of section 15 of the Act. The memorandum and articles of association of a company is its charter defining the objects of its existence and operation. If it is a matter of preservation, certainly this document could also be preserved and it has every prominence that is expected of the memorandum.

(3.) A device or instrument for impression or forming a print. Words and Phrases, permanent edition, volume 33, states that "printing" is a process of multiplying the copies of a composition by sheets. As defined in Bouvier's Law Dictionary, printing "is the art of impressing letters, the art of making books or papers by impressing legal characters. "" Printing" * means the impress of letters or characters upon paper, or upon other substance, and implies a mechanical act. "Print" is a word of wide signification, but, in its ordinary sense, means to impress letters, figures and characters by types and ink of various forms and colors on paper of various kinds or on some such yielding surface. Webster defines "to print":... (2) to take an impression of : to copy or take off the impress of to stamp. (3) Hence, specifically to strike off an impression of or impressions of form types, stereo-types, or engraved plates, or the like, by means of a press or to print books, handbills, newspapers, and the like. (4) To mark off by pressure, to form an impression upon, to cover with figures by a press or something analogous to it as to print calico, etc. Print, noun : A mark made by impression a line, character, figure or indentation made by the pressure of one body or thing upon another. (5) A printed cloth, a fabric, figures by stamping. [Arthur v. Moller 97 US 365, 367, 368 24 L.Ed 1046)].Encyclopaedia Britannica, concerning "printing" states as follows: "Printing" traditionally has been defined as a technique for applying under pressure a certain quantity of colouring agent onto a specified surface to form a body of text or an illustration. " " The invention of printing at the dawn of the age of the great discoveries was in part a response and in part a stimulus to the movement that, by transforming the economic, social and ideological relations of civilisation, would usher in the modern world. "Judged by the above, if there is to be transformation of economic, social and ideological relations of civilisation and if similar transformation has to be ushered in the modern world, one has to necessarily recognise computer printing. It should be remembered that the memorandum and articles of association is not a work of art nor is it an art required to be done in a particular way. It requires to be printed. With the advancement of printing technology, certainly computer-printing fulfils every requirement of printing.