DINA NATH Vs. EMPEROR

JUDGEMENT

(1.) This matter and Revisions Nos. 1012 and 1013 of 1912 arise out of the following circumstances:

(2.) The three applicants, Lala Dina Nath, Lala Kashi Ram and Lala Hazari Lal, and one Lala Debi Dat are the Directors of the Union Indian Sugar Mills Company, Ld., Cawnpore. They were placed upon their trial on the complaint of the Registrar of Joint Stock Companies on a charge under Section 74 of the Companies Act VI of 1832, no balance-sheet having been filed with the Registrar within the time fixed or within the extension allowed by him, the offence being that of knowingly and wilfully authorising or permitting the default mentioned above. The case was tried summarily by a Magistrate of the first class, who acquitted Lala Debi Dat and imposed a penalty of Rs. 50 on each of the other Directors. The three latter have come here in revision. A great deal has been said about the merits of the case, but in view of the order which I am going to pass, I abstain from making any remarks thereon. It is urged that the Magistrate had no power to try the case summarily. With this, I cannot agree. Under Section 260 of the Code of Criminal Procedure, a Magistrate has power to try summarily all offences not punishable with death, transportation or imprisonment for a term exceeding six months. The word offenceis defined in the Code, "as any act or omission made punishable by any law for the time being in force." Section 5 of the Code lays down that "All offences under the Indian Penal Code shall be investigated, inquired into, tried and otherwise dealt with according to the provisions laid down in the Code of Criminal Procedure." Clause (2) of the section lays down that All offences tinder any other law shall be similarly dealt with according to the same provisions, bat subject to any enactment for the time being in force regulating the manner or the place of investigating, inquiring into, trying or otherwise dealing with such offences." There is nothing in the Companies Act which lays down that a Magistrate having summary powers shall not try an offence under that Act in a summary manner. It is true that under Section 252 all offences under the Act may be tried by any Magistrate of the first class unless the period of imprisonment to which the offender is liable exceeds that which such officer is competent to award under the law for the time being in force in the place where he is employed. When the period of imprisonment provided by the Act exceeds the period that may be awarded by such officer, the offender shall be committed for trial to the Court of Sessions. There is nothing in this portion of the section which takes away the Magistrate s power to try summarily cases within his jurisdiction, nor does the second clause of the section take away any such power. As a matter of fact, a Presidency Magistrate has power to try all cases under the Act in a summary way irrespective of the sentence he may impose. Section 262 of the Code of Criminal Procedure lays down the limit to the sentence of imprisonment which may be awarded at a summary trial. There is nothing in Chapter XXII which limits the amount of fine which may be imposed in a summary trial. The sections which deal with appeals in the Code, however, show that a sentence of fine exceeding Rs. 50 is an appealable sentence; but though it cannot be said that the Magistrate has been guilty of any illegality in trying the case summarily, there are very good grounds why he should not have done so. In the first place, the penalty which may be imposed under Section 74 is one of Rs. 1,000 neither more nor less. An examination of the Act would show that everywhere (with two exceptions), where the Act lays down a penalty for an offence in the shape of a fine, it clearly lays down a maximum, which is not to be exceeded and Sections 25, 55, 57 and 66 are all instances of this. In Section 66(1), a Limited Company which does not paint or affix its name in the manner directed by the Act is held liable to a penalty not exceeding Rs. 50, but in the last clause of the same section, it is distinctly laid down that the Director, Manager or officer of the Company who is guilty of the act mentioned in this clause shall be liable to a penalty of Rs. 1,000. Similarly in Section 74 it is laid down that a Director or Manager of a Company shall be liable to a penalty of Rs. 1,000. If the Legislature had intended that in these two cases there should be a maximum penalty and not a fixed penalty, it would have used the same language as it has used in other sections of the Act just in the same way as in the Indian Penal Code. It has been laid down that the sentence shall not be more nor less than a fixed amount, clearly showing that the Court should not exercise its discretion as to the sentence to be imposed. The only decision which is on all fours with the present case is the one reported in Queen-Empress v. Moore 20 C. 676. That was a case under Section 35 of the Companies Act which has since been repeated. That section ran as follows:

(3.) If a share-warrant is issued without being duly stamped, the Company issuing the same, and also every person, who at the time when it is issued, is the Managing Director or Secretary or other principal officer of the Company shall forfeit the sum of Rs. 500." It was in that case held that the forfeiture was a penalty and that a forfeiture of Rs. 500 was the fixed penalty laid down by the statute. It seems to me clear that the penalty laid down in Section 74 is also a penalty fixed by statute and the Magistrate was not competent to inflict any lesser penalty. If the Magistrate had inflicted this penalty, it is clear that the persons convicted would have had a right of appeal. The case is one in which a great deal of correspondence has been put forward and is by no means of that simple character to which a summary trial is intended to be restricted. In deciding whether or not he will try a case summarily, it is for the Magistrate to exercise a wise discretion and ordinarily he ought to restrict such trials to simple cases. In my opinion, the present case was one, which even if it had been tried summarily and a proper penalty imposed, an appeal would have been of very little use to the persons convicted, as a great mass of important evidence is not on the record. It seems to me essentially one of those cases which the Magistrate should have tried in an ordinary way duly recording the evidence.