GOPAL KHAITAN Vs. STATE

JUDGEMENT

(1.) This Appeal is against an order dated the 23rd November, 1966 passed by Shri A. Sen Gupta, Presidency Magistrate, 5th Court, Calcutta in case no. C/1452 of 1966 convicting the three accused -- appellants under Section 614A (2) of the Companies Act, 1956, and sentencing them to pay a fine of Rs. 300/-each, in default to undergo simple imprisonment for six weeks each, with the further direction under Section 626 of the Companies Act, 1956 that one-tenth of the fine, if realised, is to be applied towards the payment of the costs of the proceedings.

(2.) The facts can be put in a short compass. The three accused-appellants, viz., Sri Gopal Khaitan, Sri Dhan Raj Khaitan and Sri Shew Bhagwan Mahe-swari are the Directors of M/s. Khaitan Finance Corporation (Private) Limited, a company registered under the Companies Act. Two cases being cases Nos. C/380 and C/381 of 1965 were started against them under Sections 162 (1) and 220 (3) respectively of the Companies Act, 1956, by the Registrar of Companies before the Chief Presidency Magistrate, Calcutta, for failure to submit the Annual Return of the Company for the year ending the 31st December, 1963, and also three copies of the balance-sheet for the same period. As a result of the trial, the accused-appellants were convicted on 29-4-65 of the offences charged and sentenced in each case to pay a fine of Rs. 100/- each, with a further direction on them under Section 614A (1) of the Companies Act. 1956, to file the requisite documents and papers, within six months from the date of the said order, that is, Within 28-10-65. Ater the abovemen-tioned conviction a notice by registered post was sent on 14-5-64 by the Registrar of Companies (Ext. 2) for submission of the returns as directed in due time and the same was acknowledged duly by the accused persons (Ext. 3 collectively). The accused-appellants, however, did neither reply to the said notice {Ext. 2} nor comply with its directions. On 22-6-65, however, it appears that the accused-appellant No. 1, Sri Gopal Khaitan made over some documents to the Income Tax Officer as per receipts (Exhibit B), The documents concerned are some files relating to vouchers, bills, receipts, confirmation, income-tax notices, the party's confirmation, and also some Rokar Kha-tas for 1960-1962. No Rokar Khatas for 1963 as well as no account books were made over to the Income-tax Authorities. After the expiry of the period of six months, the Assistant Registrar of Companies filed on 16-4-66 the present two complaints dated 13-4-66 under Section 614A (2) of the Companies Act, 1956 for the failure on the part of the accused-appellants to comply with the order of the Court passed in case Nos. C/3110 and C/381 of 1965 under Section 614A (1) of the said Act. On the prayer of the prosecution and in the absence of any objection on the part of the defence, the two cases Nos. C/1452 and C/1453 of 19GR were tried jointly by Stiri A. Sen Gupta. Presidency Magistrate, 5th Court, Calcutta. The defence case inter alia is that the accused-appellants are not guilty; that it is the Managing Director Who is responsible for submitting the returns and the compliance of the directors and the other Directors having not knowingly defaulted or non-complied, have no mens rea, and are not consequently 'officers in default' within the meaning of the Act; and that in any event the accused-appellants could not comply with the Court's order passed Under Section 614-A (1) of the Companies Act, 1956, due to circumstances beyond their control inasmuch as in the meanwhile the relevant books of account and other papers of the company were taken away by the Income-tax Authorities and are so lying with them since 22-6-65.

(3.) The prosecution in this case examined one witness, P. W. 1, Mahaprabhu Roy, Assistant Officer under the Registrar of Companies, Calcutta, to prove its case while the defence examined D. W, 1, Sunil Kumar Mazumdar, an Inspector of the Income-tax Department, attached to the Special Investigation Branch, to prove the defence version of affairs and as a result of the trial the trying Magistrate by his judgment dated 23-1-66 convicted and sentenced the three accused-appellants as mentioned above. It is the said order of conviction and sentence that has been impugned and forms the subject-matter of the present Appeal.