GANGIPATI APPAYYA Vs. STATE OF TAMIL NADU
LAWS(MAD)-1952-1-8
HIGH COURT OF MADRAS
Decided on January 17,1952

GANGIPATI APPAYYA Appellant
VERSUS
STATE OF TAMIL NADU Respondents

JUDGEMENT

Ramaswami, J. - (1.) These are five connected cases filed against appeals filed against the convictions and sentences of the Additional First Class Magistrate, Vijayawada in C.C. Nos. 178 and 179 of 1949.
(2.) The petitioners before us are the directors of Sri Gopalakrishna Motor Transport Company Ltd. and whose affair were the subject matter of investigation till recently on the original side of the High Court. How this company came into existence was as follows: These directors were originally competing bus-owners running a few buses each. The Government of Madras then insisted that groups of 20 buses should be formed into fieets and then only they would be allowed to operate as public transport vehicles. Therefore by reason of this requirement the erstwhile warring competitors were thrown together. It is not too much to say that it was more like a case of a number of wild cats being thrown into a cage and asked to live amicably thereafter. It needed therefore no astrologer to forecast the future of such a company. The company was incorporated under the Indian Companies Act of 1913 as Joint Stock company limited by shares on 20-12-1944 having its registered office at Vijayawada. Sri Veeramachaneni Seethayya became the Managing director and the other petitioners became the directors. According to Section 131(1) of the Indian Companies Act the first balance sheet must be placed before the General Body meeting not later than 18 months after the date of the incorporation and subsequently the balance sheet should be placed before the General Body once in every calendar year. No balance sheet was placed before the General Body meeting and not even the first balance sheet in the General Body meeting which was managed to be held in 1947. The balance sheets upto and including 14-11-1945 and from 15-11-1945 to 31-12-1945 were prepared in 1948. I may point out for completeness of information that the petitioners became Managing Director and directors from 1-7-1946 and the first General Body meeting was held on 19-6-1946 and as I just pointed out before, no balance sheet was placed before it. The balance sheet was only adopted by the General Body only in 1948. Therefore the Assistant Registrar of Joint Stock Companies, Kistna Masulipatnam filed a complaint under Section 131(1) of the Indian Companies Act read with Section 133(3) against Seethayya and five others for their failure, being the directors of Sri Gopala Krishna Motor Transport Company Ltd., Vijayawada to place the balance sheet before the General Body meeting of the company as required by the Act.
(3.) The case for Seethayya is that no offence has been made out against him because, inasmuch as no General Body meeting was held within the period prescribed, no question of placing the balance sheet arose and that the charge against him, as it stands, is misconceived and that no offence has been committed by him on that footing. The case for the ordinary directors is that there has been no wilful default on their part and that owing to circumstances beyond their control the placing of the balance sheet could not be done and hence they are not guilty.;


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