Decided on April 02,1954

R.A.MASSEY Respondents


- (1.) The facts of this case are as follows : A complaint under Sections 31, 31-A and 36, Indian Companies Act has been filed by Mr. R. A. Massey against the All India Anglo Indian Association and its President Mr. Frank Anthony and its Secretary Mr. G. W. Russel, and this complaint is pending in the Court of Mr. M. L. Batra Magistrate. 1st Class, Delhi. A preliminary objection was raised on behalf of the accused, and it was that under the Companies Act a complaint of this type by a private individual was not competent, as under the regulations made by the appropriate Government under Section 248, Sub-section (2) Indian Companies Act the Registrar of Joint Stock Companies, or a person duly authorised by him, were the only persons competent to lay a complaint. Reliance was placed on a decision of the Lahore High Court, Ganpat Rai v. Emperor, AIR 1948 Lah 30 (A). The learned Magistrate did feel that the decision in question covered the case, but, finding that it was a decision of a foreign Court, the learned Magistrate held that he was not bound to follow it, and as on other grounds the learned Magistrate thought that a private complaint was not barred, he overruled the objection. Against this order the present petition for revision has been filed on behalf of the accused. Learned counsel urges that under Section 5, Sub-section (2), Criminal P. C., all offences under any law other than the Indian Penal Code are to be investigated, enquired into, and tried according to the manner provided in that special law, and since a regulation has been made under Section 248, Indian Companies Act authorizing the Registrar of Joint Stock Companies, or a person authorized by that officer, to file complaints and launch prosecutions under the Indian Cpmp. Act, no other person can initiate such proceedings and no Court is competent to take cognizance of such offences, except on the complaint of the Registrar or his nominee. Section 5, Criminal P. C. says this:-- "All offences under the Indian Penal Code shall be investigated, enquired into, tried, and otherwise dealt with according to the provisions hereinafter contained." Sub-section (2):-- "All offences under any other law shall be investigated, enquired into, tried, and otherwise dealt with, according to the same provisions but subject to any enactment for the time being in force regulating the manner or place of investigating, inquiring into, trying, or otherwise dealing with such offences." It is clear, and this is more or less conceded, that if the Indian Companies Act provides a special manner for enquiry into, or trial of, offences under the Indian Companies Act, then those provisions would override the general provisions of the Criminal Procedure Code. The Indian Companies Act does not itself contain any such special procedure. Section 248, Sub-section (2), however, says this: "The Central Government may appoint such Registrars and Assistant Registrars as it thinks necessary for the registration of companies under this Act, and may make regulations with respect to their duties." It is admitted that as far as Delhi is concerned, regulations have been made. The relevant portion of the regulation governing this particular matter is in these words : -- "The Registrar shall take notice of omission to file or register documents on the due dates and he or any person duly authorized by him may institute or conduct any prosecution under the Act". The question in the present case is, whether this language should be taken to mean that the Registrar alone can institute and conduct any prosecution under the Indian Companies Act, or whether it merely means that he may also do so without debarring any other person from doing so. To put it in another way, the question is, whether the words of the regulation are merely meant to enable the Registrar to institute prosecutions under the Indian Companies Act, or whether the power to institute such proceedings is given to the Registrar alone and, therefore, taken away from every other person. This matter was for consideration before the Lahore High Court in Gan-pat Rai v. Emperor (A), already referred to, and the language of the regulation in force in the Punjab at that time was identical to the regulation in force in Delhi. Marten J. who decided the case, held that the meaning of the regulation was that the power of instituting prosecutions under the Indian Companies Act was confined to the Registrar, and he held that a private complaint was not competent. It is, in my opinion, of no consequence that the Lahore High Court happens to be a foreign Court at the moment. The question really is not, whether the decision in question is binding on the Courts in India, but whether the view adopted by a learned Judge of a High Court, even Sf it be foreign High Court, should or should not be followed. It is contended on behalf of the complainant that the view adopted in Ganpat Rai v. Emperor (A), is not sound, and that the meaning of the regulation relied upon In this connection merely is that the Registrar can also file a complaint if he so chooses, but that it is not intended to take away the right of an ordinary complainant to go to Court and file a complaint. To me, however, it appears that if a special Act or a regulation made under that Act sets up a special machinery for the institution of proceedings under the Indian Companies Act, then that must be deemed to be the only machinery to institute such proceedings, unless, of course, it is otherwise clear that such is not the intention. A very similar matter came up for consideration before the Calcutta High Court in Ashu-tosh Ganguly v. E. L. Watson, AIR 1927 Cal 149 (B) in connection with Section 72, Provincial Insolvency Act. Sub-section (2) of Section 72 of that Act provides that, "where a Court has reason to believe that an undischarged insolvent has committed an offence mentioned in Sub-section (1) (the Court after making any preliminary enquiry that may be necessary may send the case for trial to a Magistrate of the 1st Class. The question raised in the Calcutta High Court was whether a person could be prosecuted, except in accordance with the mode mentioned in Section 72, Sub-section (2), and B. B. Ghose J., who decided the case, expressed his opinion thus : "I am of opinion that where a special offence is created by a statute, and the mode how the penalty should be imposed is provided in that etatute, it can only be Imposed in the mode provided therein and in no other mode." Reference was made to Section 196, Criminal P. C., and it was sought to be argued that the Provincial Insolvency Act did not in any manner take away the power of a criminal Court from taking cognizance of an offence under the Provincial Insolvency Act, except in the manner provided in Sub-section (2) of Section 72, but this argument did not find favour with the High Court. It would thus appear that the view adopted by Marten J. in AIR 1948 Lah 30 (A) finds support from the Calcutta Case. On behalf of the complainant, reliance is placed largely on Muthuveeran Chettiar v. Mottayan Chettiar, AIR 1942 Mad 283 (C). That was also a case under the Companies Act and proceedings had been initiated at the instance of a private person. It was urged in the High Court that the proceedings were bad, as the Registrar, Joint Stock Companies, had not filed any complaint. Horwill J. did not accept this contention. It appears that in Madras also certain regulations had been framed under Section 248, Indian Companies Act. What precisely the language of the relevant regulation was in that case is not very clear from the report, but I take it, that the words enabled the Registrar to file a complaint. Horwill J. found that this was merely permissible, and he said:- "These notifications merely permit the Registrar to do what before was not a part of his duty, viz., to lay complaints. They do not purport to restrict a Magistrate in the exercise of his powers under Section 190, Criminal P. C." This case was actually referred to before Marten J. in AIR 1948 Lah 30 (A), but he distinguished it on the ground that the language of the regulation in force in Madras was different. Apart from that matter, however, the View adopted in the Lahore case appears to me sounder on principle than the view taken in the Madras I say this because if in spite of a special machinery being set up for initiating prosecutions under the Indian Companies Act, it is still open to private complainants to start similar proceedings in criminal Courts, the object of setting up a special machinery would be largely frustrated. There is no other authority directly bearing upon this matter. The Madras case AIR 1942 Mad 283 (C) does refer to a Calcutta decision Surendra Nath v. Kali Pada Das, ILR (1940) 1 Cal 575 : (AIR 1940 Cal 232) (D) and learned counsel for the complainants has also referred to another Calcutta decision reported as Bhagirath Chandra v. Emperor, AIR 1948 Cal 42 (E). Neither decision is, however, of any assistance, because it appears that in Bengal no regulation under Section 248, Indian Companies Act, has been framed, in connection with such a matter. In ILR (1940) 1 Cal 575 :-(AIR 1940 Cal 232) (D) the argument rested on the language of Sections 137 and 141, Indian Companies Act, which sections, however, deal with an entirely different matter. In AIR 1948 Cal 42 (E) it was made quite clear that there was no regulation made in Bengal entrusting the institution of such complaints to the Registrar, and on that ground largely Lodge J. refused to follow Ganpat Rai v. Emperor (A). On a consideration of the authorities and the language of the relevant regulation made under B. 248, Indian Companies Act, it appears to me that the correct view to be adopted in this case is that a complaint by a private person like the present complaint is not competent under the Indian Companies Act. RECOMMENDATION I direct, therefore, that the record of this case be forwarded to the High Court with recommendation that the proceedings pending in the Court ol the learned Magistrate be quashed. A criminal complaint by the respondent Massey was filed under Sections 31, 31A and 36, Indian Companies Act against the All India Anglo-Indian Association, its President Frank Anthony and its Secretary G. W. Russel. A preliminary objection to this complaint was raised on behalf of the accused persons that the complaint was not competent because it had not been filed by the Registrar or by a person duly authorised by him as required by Regn. 14 framed for the State of Delhi Under Section 248 (2), Indian Companies Act. The question therefore arose whether a complaint by a private individual in respect of an offence punishable under the Indian Companies Act was competent. The case was reported to this Court by the learned Sessions Judge of Delhi who discussed the point at some length and after referring to a number of cases recommended that the proceedings pending in the Court of the Magistrate be quashed on the ground that a private Complaint of this type was not competent. The matter came up before me sitting singly in the first instance and I took the view that it should be considered by a larger Bench. My brother Kapur J. and I have now heard it and although there has been no appearance on behalf of Massey, the complainant in this case, we have had the advantage of hearing Mr. Bhagwat Dayal on behalf of the Association at considerable length. He has taken us through the entire case law bearing on the subject and his arguments have been of great assistance to us in coming to a conclusion on this point.
(2.) Regulation 14 framed under Section 248(2), Indian Companies Act authorises the Registrar of Companies to keep certain returns. It also empowers him to initiate proceedings in respect of an offence punishable under the Act. The question for our decision is whether this Regulation bars every other person from initiating criminal proceedings under the Act. The decision of this point in my view rests on the well-recognised principle generalia specialibus non derogant, that is to say, the general law does not override the special law in respect of any particular matter. The offences which have been created by the Indian Companies Act are not punishable under the Indian Penal Code. They have been specially created by the Companies Act and the Registrar has been given the authority to initiate criminal proceedings in respect or them. In my view this can only mean that the Registrar or a person duly authorised by him is alone competent to initiate proceedings and a member of the general public cannot (as he can under the Indian Penal Code in respect of offences punishable under the Indian Penal Code) initiate proceedings against the offender.
(3.) Of the cases cited before us AIR 1948 Lah 30 (A) is a case on all fours with the present one. Marten J. heard and decided this case on 3-3-1947, i.e., before partition and held that a prosecution Under Section 282, Indian Companies Act, against an officer of a company by a private complainant who had no status in the company was invalid. He relied upon the ratio decidendi of an older decision of the Punjab Chief Court in Emperor v. Shib Das, 8 Ind Cas 190 (Lah) (F). In that case the provisions of the old Regulation 5 framed under Act 6 of 1882 were considered. The wording of that Regulation was somewhat different but in substance it authorised the Registrar to see that all returns were duly and punctually furnished and also provided that "the Registrar shall be deemed the proper officer for Instituting and conducting all prosecutions under the Act." It may be said that the wording of that Regulation was more definite and it restricted the power of initialing proceedings to the Registrar because he was to be deemed the proper officer for this purpose. Regulation 14 is not quite so definite, but in my view it is intended to place a limit upon the rights of members of the public to launch proceedings in respect of offences punishable under the companies Act.;

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