iminal Appeals Nos
93  941958
Appeals by special leave from the judgment and order dated April 9 1956 of the former Bombay High Court in Criminal Appeals Nos 419 and 420 of 1956 arising out of the judgment and order dated October 15 1955 of the Chief Presidency Magistrate Bombay in Cases Nos 370S and 371S of 1955
C K Daphtary Solicitor General of India N section Bindra and R H Dhebar for the appellant in both the appeals
section P Varma for respondents Nos 1 2 and 3 In both the appeals
A N Goyal for respondent No 4 In both the appeals
N P Nathwani section N Andley J B Dadachanji Rameshwar Nath and P L Vohra for respondents Nos
5 to 7 In both the appeals
September 23
The Judgment of the Court was delivered by 803 SARKAR J
The respondents were Directors of Hirjee Mills Ltd They were prosecuted before the Chief Presidency Magistrate Bombay for two offences under the Companies Act 1913 as amended by Act XXII of 1936
The first offence was that they knowingly and wilfully authorised the failure to file the summary of share capital for the year 1953 and thereby became punishable under sub section
5 of section 32 of the Act for a default in carrying out the requirements of that section
The second offence was that they were knowingly and wilfully parties to the failure to lay before the Company in general meeting the balance sheet and profit and loss account as at March 31 1953 and thereby became punishable under section 1333 of the Act for a default in complying with the requirements of section 131
There was a separate trial in respect of each offence
The learned Magistrate found that no general meeting of the company had been held in the year concerned
Following Imperator vs The Pioneer Clay and Industrial Works Ltd 1 he acquitted the respondents being of the view that no offence under either section could be committed till the general meeting had been held
The learned Magistrate did not go into the merits of the cases on the facts
Appeals by the appellant to the High Court at Bombay from the orders of the learned Magistrate were summarily dismissed
It has preferred the present appeals from the decisions of the High Court at Bombay with special leave granted by this Court
The appeals have been heard together and are both disposed of by this judgment
It appears that respondent No 7 N K Firodia was discharged by the learned Magistrate because it was conceded at the trial that he was not a director of the Company at any material time
He has been made a respondent to the present appeals clearly through some misapprehension
The appellant the State of Bombay does not and cannot proceed against him
The name of respondent Firodia should there fore be struck out from the records of this appeal
i ILR 804 Respondent No 5 Fateh Chand Jhunjhunwala died while this appeal was pending in this Court
The appeal is therefore concerned with the remaining five respondents only
Sub section 1 of section 32 requires a company once at least in every year to make a list of its shareholders as on the date of the first or only ordinary general meeting in the year
Sub section 2 requires that the list shall contain a summary specifying various particulars mentioned in it
Sub section 3 states that the list and summary shall be completed within twenty
one days after the day of the first or only ordinary general meeting in the year and the company shall forthwith file a copy with the registrar together with a certificate from a director or the manager or the secretary of the company that the list and summary state the facts as they stood on the day aforesaid
Sub section 5 contains the penal provision that  If a company makes default in complying with the requirements of this section it shall be liable to a fine not exceeding fifty rupees for every day during which the default continues and every officer of the company who knowingly and wilfully authorises or permits the default shall be liable to the like penalty
It is said on behalf of the respondents that there is no default in complying with the requirements of the section until a general meeting is held
That it is said follows from the language of the section for it requires certain things as at the date of the meeting to be stated in the list and summary and also requires these to be filed within a certain time of the meeting
So it is said that the section requires certain things to be done only after the meeting has been held and no question of performing those things arises till the meeting has been held
A contrary view has been taken in England on the corresponding provisions of the English Companies Acts of 1862 and 1908 see Gibson vs Barton1 Edmonds vs Foster2 and Park vs Lawton 3
It was said in these cases that a person charged with an 1 2 1875 45 Law J Rep MC 41
3 805 offence could not rely on his own default as an answer to the charge and so if the person charged was responsible for not calling the general meeting he cannot be heard to say in defence to the charge that the general meeting had not been called
It was also said that the company and its officers were bound to perform the condition precedent if they could do that in order that they might perform their duty
This seems to us to be the correct view to take
If the person charged with the failure to carry out the requirements of the section could have called the meeting he cannot defeat the provisions of the section simply by not calling the meeting wilfully
It is true that under section 76 of the Act a general meeting of a company has to be held once at least in every calendar year and if a default is made the company and every director or the manager of the company who is knowingly and wilfully a party to the default shall be liable to a fine not exceeding five hundred rupees
That however is in our opinion no reason for saying that a person charged with a failure to file the list and summary as required by section 32 where a meeting had not been held could only be prosecuted under section 76 and not under section 32
Section 76 imposes an obligation to hold a meeting and attaches a penalty to a failure to perform that obligation
In the case of section 32 it is necessary that the meeting should be held in order that the requirements of that section may be carried out
It is no less necessary to call a meeting for performing the obligations imposed by section 32 because under section 76 there is an obligation to call a meeting the breach of which entails an independent penalty
The two sections deal with different matters and section 76 does not interfere with the operation of section 32
The effect of section 32 must be derived from its terms the terms cannot have different effects depending on whether there is a provision like section 76 in another part of the Act or not
Without a provision like section 76 a delinquent officer of the company may make section 32 infructuous and therefore as already stated it must be held that liability 103 806 under section 32 would be incurred where the officer has wrongly assisted in the meeting not being held
The result cannot be different because of the presence of a provision like section 76
Nor do we think that sub sec
5 of section 32 by imposing a daily fine during the continuance of the default indicates that the default is not committed till the meeting has been held
In order that the default may continue it has no doubt first to occur
In our view it occurs after the expiry of 21 days from the day when the meeting should have been held within the year
The respondents referred to the case of Queen vs Newton 1 where it having been proved that the general meeting was not held the persons charged with the default were acquitted
That case however is clearly distinguishable  because the decision proceeded on the ground that the summons having alleged in terms that the default was made after the general meeting had been held it became essential to prove when the meeting was held as a matter of fact and in the absence of proof the court held that the summons was rightly dismissed 
In this case Cockburn C J expressed some doubts about the correctness of the decision in Edmonds vs Foster 2
In Park vs Lawton 3 however Lord Alverstone said that he was unable to share those doubts and with this view we agree
We may add that such doubts have not been shared by anyone upto now
Another case to which we were referred on behalf of the respondents was Dorte vs South African Super Aeration Ltd 4
There a company was convicted for a failure to file the list and summary in a case where the general meeting had not been held and fined Id and Id per day upto a certain day
Subsequently a further summons against it was taken out in respect of the same default for further penalties from that day to another later day
It was held that the word  default  implied a wilful and continued neglect to do an act required and that the company could not 1 1879 48 Law J Rep M C 77
2 1875 45 Law J Rep M C 41
3 4 1004 807 be liable to a continuing daily fine for an omission which it was impossible to remedy
The report does not set out the arguments nor the judgment and it is not clear on what grounds the decision was given
It appears however that Lord Alverstone was one of the Judges who decided that came
In Park vs Lawton1 Lord Alverstone himself observed with regard to the Dorte s case that there  there was no question of the defendant being also in default as to the general meeting and that decision therefore in no way conflicts with the earlier authorities
 We do not think therefore that Dorte s case assists the respondents at all
It is authority only for the proposition that a continuing daily fine will not be exacted where owing to no meeting having been held it is impossible to remedy the default see Buckley s Company Law 13th Ed p 311
Turning now to section 131 we find that it requires the directors of a company once at least in every calendar year to lay before the company in general meeting a balance sheet and profit and loss account of the company
Sub section 3 of section 133 makes the company and every officer of it who is knowingly and wilfully a party to the default in carrying out the provisions Of section 131 punishable with fine which may extend to five hundred rupees
As in the case of section 32 and for the same reasons here also it is no defence to the charge for breach of section 131 to say that a meeting was not called
As regards Imperator vs Pioneer Clay and Industrial Works Ltd 2 OD which the courts below held that the respondents must be acquitted we find that it turned on section 134 of the Companies Act 1913
The language of that section is to a certain extent different from the language used in sections 32 and 131
Section 1341 says  After the balance sheet and profit and loss account   have been laid before the company at the general meeting three copies thereof  shall be filed with the Registrar
 Sub section 4 of this section provides a penalty for breach of section 134 in terms similar to those contained in sub see
5 of section 32
If the language of section 1341 1 2 IL R 808 makes any difference as to the principle to be applied in ascertaining whether a breach of it has occurred or not as to which we say nothing in this case then that case can be of no assistance to the respondents
If however no such difference can be made then we think that it was not correctly decided
We observe that Chagla C J who delivered the judgment of the Court in that case did not question the correctness of the decision in Park vs Lawton 1 which be was asked to follow
All that he said with regard to that case was that the scheme and terms of the section on which it turned were different from section 134 of the Companies Act 1913
That may or may not be so
There is however no difference between section 26 of the English Companies Act 1908 on which Parker s case turned and which apparently through some mistake Chagla CJ cited section 36 and section 32 of the Indian Companies Act of 1913 except that the English section required the summary to include a statement in the form of a balance sheet containing certain particulars mentioned whereas our section does Dot require that
Section 131 of our Act contains some provision about the laying of the balance sheet before the general meeting
This provision was inserted in the Act by the amending Act of 1936
The fact that one of the requirements of the English section 26 is not present in section 32 of our Act cannot create any material difference between section 32 of our Act and section 26 of the English Act
If the principle that a person charged with an offence cannot rely on his own default as an answer to the charge is correct as we think it is and which we do not find Chagla C J saying it is not then that principle would clearly apply when a person is charged with a breach of section 32 of our Act
We think therefore that the appeal should be allowed
The case will now go back to the learned Presidency Magistrate and be tried on the merits according to the law as laid down in this judgment
Appeal allowed
Case remanded


Summary:
The appellants were holders of ghatwali tenure called Rohini and Pathrole ghatwalis and were governed by Bengal Regulation XXIX of 1814
The Bihar Land Reforms Act 1950 was enacted by the Bihar State Legislature and came into force on September 25 1950
In suits instituted by the appellants the question was raised as to whether under the provisions of the Act the State could acquire their ghatwalis
They claimed 1 that the Act was not applicable to the Government ghatwali tenures like Rohini and Pathrole ghatwalis which could not be acquired by the State under section 3 of the Act in view of the definition clause in section 2 and SS
23 1 f and 324 2 that the Act did not purport to repeal Bengal Regulation XXIX of 1814 and inasmuch as the said Regulation dealt with special tenures the special law enacted with regard to such tenures would not be affected by the general law with regard to land reforms as embodied in the Act and 3 that in any case ghatwali tenures being of a quasi military nature must be held to fall under Entries 1 and 2 of List I of the Seventh Schedule to the Constitution of India and therefore the Act was outside the competence of the State Legislature
Held i that all ghatwali tenures including government ghatwalis came within the definition clause in section 2 of the Bihar Land Reforms Act 1950 and that SS
231 f and 324 though they might be inapplicable to the ghatwali tenures in question did not have the effect of excluding such tenures from the operation of the other provisions of the Act 2 that the Act in pith and substance related to acquisition of property and was covered by Entry 36 List II Seventh Schedule to the Constitution and had no relation to Entries 1 and 2 of List I Consequently the State Legislature was competent to enact the Act 89 696 The State of Bihar vs Maharajadhiraja Sir Kameshwar Singh of Darbhanga and Others  followed
3 that the principle that a special law relating to special tenure is not affected by a subsequent general law of land reforms had no application to the Act which in pith and substance related to acquisition of property and no question of the repeal of Regulation XXIX of 1814 arose
Raja Suriya Pal Singh vs The State of U P and Another  applied