BHASKARAN J. - (1.) This batch of revision petitions arises out of a common order passed by the learned Third Metropolitan Magistrate, Madras, upholding the preliminary objections with regard to the maintainability of the complaints and dismissing the complaints filed by the Assistant Registrar of Companies against several companies and the directors of those companies under section 162 of the Companies Act, 1956, 1956, hereinafter referred to as "the Act", for failure to file the annual return and certificate under section 161 of the Act and failure to file the balance-sheets, etc., as provided under section 220 of the Act. A preliminary objection has been taken in all the petitions under revision on behalf of the companies and the directors that the prosecution cannot be launched against all the directors for failure to comply with any provision of the Act but should be filed only against the company and those directors who are in default as defined under the Act, and since the complainant has mechanically stated that "the companies and the directors are under statutory obligation to file the statutory returns and since they failed to file the returns, all of them are liable" * , the complaints are not maintainable and the prosecution cannot be launched. The learned trial Magistrate upheld the objection and dismissed all the complaints as such. Hence, these revisions by the Assistant Registrar of Companies. Section 159 of the Act deals with submission of annual return by the company having a share capital. Sub-section (1) of this section provides that every company having a share capital shall, within sixty days from the day on which each of the annual general meetings is held, prepare and file with the Registrar a return containing the particulars Specified in Part I of Schedule V to the Act. Under section 220 of the Act, three copies of the balance-sheet and profit and loss account have to be filed with the Registrar of Companies within thirty days from the date on which the balance-sheet and the profit and loss account were so laid. Under section 220(3), for violation of the abovesaid requirements, the company and every officer of the company who is in default, shall be liable to the like punishment as is provided by section 162 of the Act. Under section (1) of section 162, if a company fails to comply with any of the provisions contained in section 159, 160 or 161, the company, and every officer of the company who is in default, shall be punishable. Under sub-section (2) of section 162, it is stated that the expressions "officer" and "director." shall include any person in accordance with whose directions or instructions the board of directors of the company is accustomed to act.
(2.) The term "officer" is defined under section 2(30) as including any director, managing agent, secretaries and treasurers, manager or secretary, or any person in accordance with whose directions or instructions the board of directors or any one or more of the directors is or are accustomed to act. Thus, the term "officer" includes any director of the company besides others. The term "officer who is in default" has been defined in section 5 as any officer of the company who is knowingly guilty of the default, noncompliance, failure, refusal or contravention mentioned in the provisions of the Act or who knowingly and wilfully authorises or permits such default, non-compliance, failure, refusal or contravention.A reading of the various provisions of the Act mentioned above would make it clear that for failure to comply with the relevant provisions of the Act, besides the company, any officer of the company, who includes a director, who is knowingly guilty of the default, is liable to be punished under section 162 of the Act.
(3.) In Ajit Kumar Sarkar v. Assistant Registrar of Companies it has been observed by the Calcutta High Court at page 920 as follows : "Here it was incumbent on the prosecution to fix the liability with respect to the particular ' officer in default ' and there should have been a specific averment to that effect in the complaint. In the petition of complaint, it is only stated that ' accused Nos. 2 to 5 are the officers and directors of the company ' and in para 3 there is an averment that ' the company and its directors are under a statutory obligation to file with the complainant an annual return.' This statutory obligation is imposed under sections 159 and 162 of the Companies Act, 1956. If all the directors are liable for every default, then the expression ' every officer who is in default ' becomes redundant and meaningless." * In the above case, the complaint did not contain a specific plea as to the officers who are in default apart from the company. The Calcutta High Court held that the complaint was bad. Further, the company in that case was not an accused and, therefore, the court held that the company was a necessary party and that the prosecution should be conducted only in the presence of the company as accused and that only if the company was convicted, the other officers in default can be convicted. On both the abovesaid grounds, the court quashed the prosecution. In the instant case, since in none of the complaints the complainant has fixed the liability on any director as officer in default but has simply stated that all the directors of the company are liable for non-compliance of the requirements under the Act, the trial Magistrate, following the above decision of the Calcutta High Court, held that the complaints are not maintainable and, accordingly, dismissed all the complaints.Learned counsel for the petitioner in these revisions would submit that the liability of the company for non-compliance is absolute, that in all these cases the companies are carried on by the board of directors and, as such, for non-compliance of the provisions of the Act, all the directors are liable and whether a particular director can escape liability on the basis that he is not an officer in default has to be gone into only after recording evidence and the complaints cannot be rejected in limine. He would further submit that an officer in default means an officer knowingly in default and in these cases all the directors must be deemed to be officers in default since notices have been served on all the directors before the prosecution was launched and none of the directors had given any reply and only after giving reasonable time after the issue of notice, the prosecution has been launched and, therefore, prima facie it must be taken that all the directors are officers in default knowingly. He would rely upon Arcot Citizen Bank Ltd., In re and Madan Gopal Dey v. State [1968] 72 CWN 312.;