VIDYA NAND, J. - (1.) THIS petition has been filed for quashing the impugned proceedings being No. C/1708 of 1988 pending before the Learned Chief Judicial Magistrate at Alipore, 24 Parganas. A complaint was filed alleging therein that inspite of Show Cause Notice Default Notices issued by the complainant, the Balance Sheet and Profit & Loss Account has not been filed before the complainant and as such accused No. 2 -4 who are Officers/Directors of the Company were in default and were knowingly guilty of the said default for non -compliance and failure to file the said Balance Sheet and Profit & Loss Account and as such they were liable for punishment under section 220(3) of the Companies Act, 1956. Cognizance was taken in this case.
(2.) THE case of the petitioners is that on August 30, 1988 the Officers attached to the Bureau of Investigation, West Bengal, conducted a search at the registered office of the petitioners and seized, inter alia, the Books of Accounts and other documents purportedly under section 14(3A) of the Bengal Finance (Sales Tax) Act, 1941, vide annexure 'B' of this petition. From the perusal of the said seizure receipt dated 30th August, 1988 it is manifest that the Cash Books for the year 1985 -86, 1986 -87, 198788 and 1988 -89; Sales Register for the year 1984 -85 1985 -86, 1986 -87 and 1987 -88 and other books of ledger were seized by the Officers of the Bureau of Investigation. In the petition, it has been further alleged that petitioner No.1 was unable to prepare and finalise the profit and loss account and balance sheet in absence of the said books of account, Cash book ledger and sales account, which were seized as pointed above. The Learned Lawyer appearing on behalf of the petitioner has submitted before me that as the Officers of the Bureau of Investigation, West Bengal, seized, inter alia, the Books of Account and other documents, it was not possible for petitioner No.1 to file the said balance sheet and Profit and Loss Account. He also submitted that the preparation of he balance sheet and profit and loss account is a continuous process and isolated balance sheet and profit and loss account for any one year cannot be made out without ascertaining the respective amounts carried forward from the balance sheet and profit and loss account of the preceding year and it was impossible for the petitioner to prepare and finalise the balance sheet and profit and loss account for the subsequent year ending on 31.3.89 and 31.3.90 without the balance sheet and profit and loss account for the year ending on 30.6.1988. It, therefore, cannot be said that the respondent No. 1 and 2 knowingly did not comply with the legal provisions of filing the balance sheet and profit and loss account as alleged in this connection he has relied upon a decision as reported in AIR 1960 per page 15 wherein His Lordship held that "it would appear from the affidavit filed in support of the petition that, soon after petitioners 1 to 11 became directors of the 12th petitioner company in pursuance of a scheme of reconstruction sanctioned by this court, the books of some of the branches of the company were seized by the police in connection with some criminal cases and are now in court, the,cases being still pending. That being so, it was not possible for the company to prepare its balance sheet and profit and loss account and get them audited and this was the reason why the company could not comply with the provisions referred to. I am satisfied that the default was due to reasons beyond the control of the company and its directors. Therefore, it would be hard if they are to suffer criminal liability on account of the default."
(3.) APPLYING the same principle it also appears to me that the default in non - submissions of the balance sheet and profit and loss account was due to reasons beyond control of the company and its directors. It further appears that neither intentionally nor knowingly the company did not comply with the provisions of Section 220 of the Companies Act. The learned lawyer for the, petitioners further submitted that where in the opinion of the Court chances of an ultimate conviction is bleak, no purpose can be served by allowing a criminal prosecution to continue. In this connection he has relied upon a decision as reported in AIR 1988 SCC page 692 wherein at paragraph 7 His Lordship held as follows : "The legal position is well settled that when a prosecution at the initial stage is asked to be quashed, the test to be applied by the Court is as to whether the uncontroverted allegations as made prima face establish the offence. It is also for the court to take into consideration any special features which appear in a particular case to consider whether it is expedient and in the interest of justice to permit a prosecution to continue. This is so on the basis that the court cannot be utilised for any oblique purpose and where in the opinion of the court chances of an ultimate conviction is bleak and therefore, no useful purpose is likely to be served by allowing a criminal prosecution to continue the court may while taking into consideration the special facts of a case also quash the proceeding even though it may be at a preliminary stage." It appears to me that the petitioners could not submit the balance sheet and Profit and Lost Account as submission of which was beyond their control and I, further find that there is no likelihood of any conviction in this case and as such no useful purpose is likely to be served by allowing the criminal prosecution to continue.;