GRAPHITE INDIA LTD Vs. DALPAT RAI MEHTA

JUDGEMENT

(1.) On November 3, 1977, the opposite party No. 1, Dalpat Rai Mehta, filed a petition of complaint in the court of the Chief Metropolitan Magistrate, Calcutta, against the petitioner and others alleging commission of an offence under Section 293A of the Companies Act, 1956. It was stated, inter alia, in the complaint that the said opposite party was a shareholder of Graphite India Ltd. and on perusal of the annual report and accounts of the company for the year 1976, he came across an item of expenditure of Rs. 1,52,000 stated to have been incurred for advertisements in the All India Congress Committee Souvenirs. It was further alleged that the aforesaid expenditure paid to a political party in any manner is a contribution to a political party for a political purpose in contravention and in violation of the provisions of Section 293A of the Companies Act.

(2.) The learned Magistrate after perusing the petition of complaint and examining the complainant took cognizance and issued summons under Section 293A of the Companies Act against the petitioners and others. In this rule, the petitioners have prayed that the proceedings instituted against them on the basis of the aforesaid petition of complaint in the court of the learned Chief Metropolitan Magistrate be quashed.

(3.) Mr. Balai Chandra Ray, learned advocate appearing on behalf of the petitioners, has firstly submitted that when the resolution was passed in an annual general meeting of the company on June 20, 1977, for insertion of the advertisements, the complainant was not registered as a shareholder, and as such he has no locus standi to question the expenditure and file the complaint.