- (1.)THIS is an application in revision by Mahalaxmi Mills Company Limited. Beawar, its four Directors viz. , Pannalal Kothari, Navratanmal Kothari, Kastur Chand Mehta, amarchand Kothari and Deo Dutt Takiar. Secretary against the order of the City magistrate, Jaipur dated 27th August, 1966, by which they with the exception of amarchand, were sentenced to a fine of Rs. 200 each for their default in giving notice of increase in share capital to the Registrar as required under Section 97 (1)and (2) of the Companies Act (hereinafter called the Act) and which is punishable under Clause (3) of the said section.
(2.)THE Company was registered under the Indian Companies Act VII of 1913 with the authorised capital of Rs. 25,00,000 divided into 25,000 shares of 100 each. According to the Articles of Association of the Company, its capital could be increased in accordance with the regulations of the Company and the Legislative provisions for the time being in force in this behalf and the increased capital must be divided into shares of Rupees hundred or less or more as the Board of Directors, may deem fit. On 31st October. 1960, the Company passed t Special resolution making new Memo randum and Articles of Association applicable to the company and the said Memorandum and Articles of Association contained the following clause :-"the capital of the Company is Rs. 1,00,00,000 (one Crore), to be divided into 1,00,000 (one lac) shares of Rs. 100/-each," in pursuance of this special resolution, it is alleged by the Registrar of the companies that the share capital was increased from Rs. 25,00,000 to Rs. 1,00,00,000/- and it was the statutory obligation of the Company and its officers to file with the Registrar a notice of increase of capital in Form No. 6 prescribed under rule 3 of the Companies (Central Government) General Rules and Form, 1956, with filing fee of Rs. 5625 calculated in accordance with Clause (3) Schedule X to the Companies Act. 1956. latest by 15-11-1960, i. e. within 15 days from the date of passing the resolution authorising the increase in the share capital of the company. It was also alleged in the complaint that the petitioners had not filed the return in spite of service of notices upon them in that behalf. The counsel for the petitioners who was appearing on their behalf before the trial court, admitted in his statement that the share capital was increased from 25. 00,000 tu Rs. 1. 00,00,000 and was divided into one lac shares of Rs. 100 each. He also admitted that no notice as provided in Section 97 of the Act was given to the Registrar. It was further stated that after passing of the resolution actual capital was not increased and he had also intimated to the Registrar about the said resolution although it had not been done in the prescribed form along with the prescribed fee. On the basis of the above admission the trial court found the petitioners suiltv and sentenced them as stated above The petitioners preferred an appeal against their conviction in the court of the Sessions Judge, Jaipur City, but did not put in appearance at the time of hearing and so the learned Sessions Judge after considering the grounds taken in the memo of appeal, rejected it.
(3.)IN this Court learned counsel for the petitioners has contended that the share capital of the Company could only be increased in the manner provided in Section 94 and unless this i. s so done it cannot amount to an increase of share capital. In other words the argument is that unless the new shares are issued as provided in section 94 (1) (a), there is no increase in the share capital within the meaning of section 97 of the Act and as such if the petitioners failed to give notice of increase of share capital to the Registrar they did not commit any offence. It is pointed out that the new shares are issued in the manner provided in Section 81 of the Act. It is urged that so far the Company has not done anything towards the issuing of shares beyond passing the said resolution on 31st October, 1960.
;