- (1.) N. G. CHAUDHURI, J. : This revision petition under section 397/401 read with section 482 of the Cr. P. C. is directed against order dated 27. 6. 80 passed by the Judicial Magistrate 9th Court, alipore in Case No. C/813 of 1977 (T. R. No. 496 of 1977) arising out of a petition of complaint made by the Registrar of companies, West Bengal under section 211 (7) of the companies Act, 1956. The petitioners before this court are two directors of a public limited company namely, Jagadishpur company Limited.
(2.) THE principal allegation made against the petitioner accused in the petition of complaint was to the effect that as per balance sheet and profit and loss account for the financial year ending 31. 3. 76 and filed in the office of the complainant it transpired that the accounts of the company have been drawn up on cash basis; and as such the said accounts; without adjustment of the outstanding receipts/payments did not give a true and fair view of the state of affairs of the company and as such infringement of section 211 of the Companies Act was made. The learned Magistrate took cognizance and issued summons. The accused petitioners after entering appearance filed a petition under section 633 of the Companies Act praying for relieving them wholly from their liability if any as alleged in the petition of complaint. They alleged that ever since incorporation of the company in 1953 the company has been keeping books of account in cash system and they have been filing tine balance sheet and profit find loss accounts with the Registrar of companies every year but no objection was ever taken. When they received the audit report of the company for the year ending on 31. 3. 73 they noticed from the auditor's report that the company having its report that the company have been keeping its books of account in cash system and the Registrar of companies by its letter dated 14th December, 11973 called for a clarification from the company and by a letter dated 21. 12,73 the company replied to the said letter. No further instructions were received from the complainant opposite party. The petitioners alleged that cash system is a recognized and accepted system of the company and was followed by the company since its incorporation in 1953 and they have all along acted honestly and reasonably.
(3.) AFTER the above petition was filed the learned Magistrate passed the impugned order. The learned Magistrate has observed in the order that the auditor's report is qualified one and it is matter of evidence if it gives true and fair view of the financial affairs of the company. The learned Magistrate proceeded on to hold that it could not be said that there was no prima facie case against the accrued at this stage. On that view he rejected the prayer of the accused for quashing the proceeding.;