ROHTAS INDUSTRIES LTD Vs. STATE OF BIHAR

JUDGEMENT

(1.) This is an application in revision under Sections 397 and 401 of the Code of Criminal Procedure, 1973 (in short 'the Code'). It is directed against the order dated 21-9-1985 passed by the Chief Judicial Magistrate, Sasaram in Official Suit No. 61 (O) of 1985 by which he had taken cognizance of the offences against the petitioners and others under Sections 58-A(5) (a) (b) and 58-A(6) of the Companies Act, 1956 (in short' the Act) and Rule 3 (2) (i) and Rule 3 (2) (ii) of the Companies (Acceptance of Deposits) Rules 1975 (in short 'the Rules).

(2.) It appears that this case was instituted on the basis a written complaint filed by the Registrar of the Companies (Opposite party no. 2) It has been alleged in it that petitioner no. 1 is Rohtas Industries Limited, Dalmianagar incorporated as a Public Limited Company in the year 1933 (in short 'the company') under the Act petitioners 2 and 3 happened to be the Joint Director and Managing Director respectively of petitioner no. 1 at the relevant time. It has been allaged that as paid up capital and free reserve, the company was having Rs. 1081.95 thousands in deposit. The Company had accumulated balance of loss and balance of other intangible assets of Rs. 1,29,277 thousands as per its relevant balance sheet as on 31-3-1983. As such in terms of explanation given under Rule 3 the Company was already running in minus and was not entitled to accept or receive any deposit covered under Rule 3 (2) (ii) of the Rules. It would, however, appear that the Company accepted/renewed deposits of Rs. 20,000/- during the period from 1-4-1983 to 31-3-1984. From the return filed on 21-2-1985 it would appear that the Company had a balance deposit of only Rs. 15,000/- on 31-3-1984 after the repayment of Rs. 64,000/- deposited during the period from 1-4-1983 to 31-3-1984. According to Rule (3) 2 (i) of the Rules, no company was allowed to accept any deposit if the amount of such other deposits of all kinds exceeded 10% of the aggregate of the paid up share capital and free reserve of the Company. Hence, the action of the Company for having accepted/renewed the deposit of Rs. 20,000- during the peried from 1-4-1983 to 31-3-1984 in addition to the deposits amounting to Rs. 71,57,000/- as outstanding on 1-4-1983 was definately against the Rule 3(2) (ii) of the Rules. Since as per the balance sheet on 31-3-1983 the aggregate paid up capital and free reserve in terms of the explanation given under Rule 3 was in minus, the company was not entitled to accept/receive any daposit covered under Rule 3 (2) (ii) of the said Rules. Therefore, the acceptance/renewal of the deposits amounting to Rs. 20,000/- was clearly in violation of these rules which is punishable. Accordingly, the complaint petition was filed before the learned Chief Judicial Magistrate, Rohtas at Sasaram who was pleased to take cognizance of the offence as mentioned above.

(3.) In this petition the petitioners have contended that the complaint petition is vague inasmuch as it does not specifically mention the date on which the deposits were renewed/received. It has simply been alleged that this was between the period from 1-4-1983 to 31-3-1984. This shows that the complainant had not properly examined the matter before lodging the complaint. It also shows that the learned Chief Judicial Magistrate had mechanically taken the cognizance of the offence. The deposits were renewed only in the months of April and May, 1983 and not thereafter. As a matter of fact, the balance sheet of the year 1982-83 was made available to the petitioners on 15-11-1983 and therefore the relevant balance sheet for the purpose of renewal/receipt of the deposit in the case of the petitioner Company as available till May, 1983 would be the balance sheet of the Financial Year, 1981-82 which shows a sum of Rs. 771 lakhs and odd as available reserve and surplus for the calculation of the amount of deposits for which the Company was eligible 35% of the aforesaid sum amounting to Rs. 270 lakhs was therefore available to be reserved by the Company. However, the total deposits including the deposits of Rs. 20,000/- which were outstanding only came to Rs. 90.02 lakhs which was much less than what the Company was entitled to get as deposit. Tae Company, because of its closure and other reasons, suffered heavy loss during the financial year 1982-83, its financial position became bad and the capital reserve went in minus. It was under this circumstance that the balance sheet which was available on 15-11-1983 indicated that the Company could not renew or take any fresh deposit. Out of the deposit of Rs. 20,000/- which is the subject matter of the complaint petition a sum of Rs. 17,000/- was paid well within the time and the remaining amount of Rs. 3,000/- would be paid on maturity in the March, 1986. There is no allegation that the Company has failed to pay any deposit.