SHYAM SUNDER JHUNJHUNWALA Vs. STATE

JUDGEMENT

(1.) THE Applicant Shyam Sunder Jhunjhunwala is a Director of Messrs Lakshmi Devi Sugar Mills Private Ltd. Under Article 64 of the Articles of Association of the Company, the number of Directors of the Company is to be not less than four and not more than thirteen until otherwise determined by a General Meeting of the Company. Article 65 provides that the four persons named therein, representing their respective families, shall be the permanent Directors of the Company, not liable to retirement by rotation. Under Article 66(a) the Directors have the power to appoint any other persons to be the Directors, subject to the maximum number of Directors fixed by Article 64. At the time relevant to the present; case, the number of Directors was twelve and the Applicant was one of those nominated Under Article 66(a).

(2.) THE Company land its twelve Directors were prosecuted by the Registrar of Companies for non -compliance of the provisions of Section 220 of the Companies Act, 1956. The Company as well as eleven of the twelve Directors pleaded guilty and were convicted and sentenced; the Applicant, however, contended that the non -compliance of the provisions of Section 220 was not due to any wilful default on his part and hence he was not punishable.

(3.) NEITHER lower Courts has recorded a finding whether the Applicant was in fact calling upon the other Directors to hold the Annual General Meeting to place before it the balance sheet and the profit and loss account. Both of them have proceeded on the basis that the contention put forward by the Applicant is irrelevant and being a Director of the Company, he ought to be regarded as having committed default in not holding the Annual General Meeting as requited by Section 166 of the Companies Act and consequently in not filing with, the Registrar of Companies three copies of the balance sheet and the profit and loss account as required by Section 220 of the Act.