ANDHRA PROVINCIAL POTTERIES LIMITED TADEPALLI Vs. REGISTRAR OF COMPANIES ANDHRA PRADESH HYDERBAD
HIGH COURT OF ANDHRA PRADESH
ANDHRA PROVINCIAL POTTERIES LTD., TADEPALLI
REGISTRAR OF COMPANIES, ANDHRA PRADESH, HYDERBAD
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P.Jaganmohan Reddy, C.J. -
(1.)The question before us is whether, under S. 220 of the Companies Act, 1956 (I of 1956), (hereinafter referred to as the Act), the holding of an annual general meeting of a company and laying before it the balance sheet and the profit and loss account are prerequisities for a prosecution under Section 220 (S).
(2.)The High Court of Bombay in Emperor v. Pioneer Clay and Industrial Works, AIR 1948 Bom 357, and earlier, the Madras High Court in Lakshmana v. Emperor, AIR 1932 Mad 341 had held under Sec. 134 and the analogous provisions of the Indian Companies Act, 1913 (hereinafter called the old Companies Act) corresponding to Section 22o of the Act that the omission to file with the Registrar the balance-sheet and the profit and loss account of a company is not a contravention of those provisions in as much as either no general meeting was held at which the balance-sheet was laid, or no general meeting was due to be held. After the decision of the Supreme Court in State of Bombay v. Bhandhan Ram, AIR 1961 SC 186, some of the High Courts have taken the view that the decision of the Bombay High Court in AIR 1948 Bom 357 has been overruled and that therefore the Directors cannot take shelter in the defence that no general meeting was held, when the non-holding of the general meeting was due to their own default. It may be stated that even after the Supreme Courts decision, this Court in Public Prosecutor v. H. R. Basav Raj, AIR 1963 Andh Pra 389, took a similar view to that taken by the Bombay High Court, AIR 1948 Bom 357 (supra). But having regard to the decisions of several High Courts which have taken a contrary view, Sharfuddin Ahmed and A. D. V. Reddy, JJ., have referred this matter to a Full Bench.
(3.)The petitioners who are the Directors of the Andhra Provincial Potteries Limited, have been prosecuted for contravention of the provisions of Section 220 (1) of the Act. INDIAN COMPANIES ACT (VII OF 1913) 32. (1) "Every company having a share capital shall within eighteen months from its incorporation and thereafter once at leaset in every year make a list of all persons who, on the day of the first or only ordinary general meeting in viz., for not filing the balance sheet and the profit and loss account with the Registrar of Companies, as contemplated in that section within the prescribed time. On 14/12/1967, a notice was issued by the Registrar of Companies, informing the petitioners that the annual general meeting of the company ought to have been held at the latest on 30-9-1967, that the balance sheet and the profit and loss account ought to have been laid before the said annual general meting and that they should have been filed before the Registrar on or before 30/10/1967 in accordance with the provisions of Section 220 (1) of the Act. Inasmuch as the said balance sheet and profit and loss account were not filed, they being the directions of the company, it would be presumed that they are the officers of the company in default within the meaning of Section 5, and as such, are liable to be prosecuted. The Registrar therefore asked them to make good the default mentioned above within one month form the date of issue of the notice. To this, a reply was sent on 17/02/1968 by one of the petitioners, stating that they were arranging to send the concerned documents immediately and requesting for condonation of delay. As no balance sheet and profit and loss account were filed, a complaint was lodged.
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