INDIAN PETRO CHEMICALS Vs. STATE OF RAJASTHAN

JUDGEMENT

(1.) AS a common question of law and fact is involved in these cases they are decided by this common judgment. (The facts in the matter of Smt. Kanta Devi are taken into consideration for deciding the appeals).

(2.) PETITIONER No. 1, Indian Petro Chemicals Corporation Limited (for short 'the petitioner -company') is a company incorporated under the Companies Act, 1956 (for short 'the Act'). It has its registered office at P.O. Petro Chemicals, District Vadodara -391346 (Gujarat). Petitioner No. 2, K.G. Ramanathan is the chairman and managing director of the petitioner -company. The petitioner -company has invited applications for allotment of public issue of equity shares of rupees ten each for cash at a premium of rupees one hundred and fifty per share. At the relevant time when the public issue was made the Government of India held 80 per cent. of the equity share capital of the company and it was declared by the company that subsequent to the proposed issue the holding of the Government of India will be 70.87 per cent. of the enhanced equity. In pursuance of the invitation, respondent No. 2 Smt. Kanta Devi Agrawal applied for allotment of equity shares. As per respondent No. 2 although hundred shares were allotted to her, she was not delivered the share certificates. She was neither informed regarding the share certificates nor was informed about the remaining call money nor was she sent share offer forms for rights shares. Complaints were filed in, the Special Court of the Judicial Magistrate (Economic Offences) Rajasthan, Jaipur (for short 'the court below') for non -compliance with the provisions of the Act and thereby committing an offence under Sections 113 and 116 of the Act. The learned court below conducted an enquiry in the matter and vide its order dated July 12, 1995, issued process against the petitioners along with some other persons after taking cognizance of an offence under Sections 113 and 116 of the Act. The petitioners entered appearance in pursuance of the summons issued by the court below and submitted preliminary objections as to the maintainability of the complaints in the Jaipur court and of the jurisdiction of the court of taking' cognizance and issuance of process on the complaint made by respondent No. 2.

(3.) IT is submitted by counsel for the petitioner that the complaint under Section 113 of the Act could be filed before the Company Law Board (for short 'the Board') only as provided under Sub -section (3) of Section 113 of the Act ; that the petitioner -company's registered office being situated at Vadodara (Gujarat), the court below has no jurisdiction to entertain the complaint made under Sections 113 and 116 of the Act ; that the court below has committed an error in taking cognizance on a complaint of respondent No. 2 who claimed herself to be a shareholder for an offence under Sections 113 and 116 of the Act against the petitioner -company which is a Government company. I shall deal with the submissions made by counsel for the parties one by one.