Case: H.V. Jayaram Vs. The Industrial Credit and Investment Corporation of India Ltd

situated as from that place the share certificates can be posted and are usually posted. If the addressee is available at the same locality where the registered office of the company is situated, it is reasonable to think that service of documents may be effected by personally delivering to him. But if the addressee is residing at a distant place it is unreasonable to expect the company to depute somebody to travel upto that distance to personally deliver it to him. The only usual mode which any company would then adopt is to send it to him by post. For such default, as contemplated under Section 113(1), there is no question of any cause of action arising at the place where complainant was to receive postal delivery. What is punishable under sub-section (2) of Section 113 is non-delivery, in accordance with the provision laid down under Section 53, of the certificates of shares within prescribed time. So, if the documents are posted within stipulated time, there would be compliance of Section 113 and that there would not be any offence. 7. In H.P. Gupta v. Hiralal, 1970(1) SCC 437, the Court considered a similar provision of Section 207 of the Companies Act, which provides for payment of divided within 42 days of its declaration by a company and its non- payment within stipulated period is punishable. Section inter alia provides that where dividend is declared by the company but has not been paid, or warrant in respect of thereof has not been posted within 42 days from the date of its declaration, to any shareholder entitled to the payment of dividend, then it would be an offence punishable under Section 207. In that case, Court also considered Section 205(5)(b), which is similar to Section 53, which inter alia provides that any dividend payable may be paid by cash or a cheque or a warrant sent by post directed to the registered address of the shareholder entitled to the payment of the dividend. The Court held that when the company posts the dividend warrant at the registered address of the shareholder, the post office becomes the agent of the shareholder and the loss of a dividend warrant during the transit thereafter is at the risk of the shareholder. The Court further held that the place where the dividend warrant would be posted is the place where the company has its registered office and the offence under Section 207 of the Act would also occur at the place where the failure to discharge that obligation arises, namely, the failure to post the dividend warrant within 42 days. In the facts of that case, the Court observed thus :- .....The venue of the offence, therefore, would be Delhi and not Meerut, and the Court competent to try the offence would be that Court within whose jurisdiction the offence takes place, i.e., Delhi. This should be so both in law and common-sense, for, if held otherwise, the directors of companies can be prosecuted at hundreds of places on an allegation by shareholders that they have not received the warrant. That cannot be the intention of the Legislature when it enacted Section 207 and made failure to pay or post a dividend warrant within 42 days from the declaration of the dividend an offence. 8. Same would be the position for the offence punishable under Section 113 of the Act. Cause of action for failure to deliver the share certificates or documents within prescribed time would arise where the registered office of the company is situated. 9. However, learned counsel for the appellant relied upon the decision of Rajasthan High Court in Ranbaxy Laboratories Ltd. v. Smt. Indra Kala, 1997(24) CLA 203 (Raj.). In the said case, complaint was filed before the Judicial Magistrate at Jaipur in Rajasthan for the offences punishable under Section 113 of the Act against the directors and officers of the company alleging that the complainant had purchased 200 shares of the Company and had duly sent such shares to the head office of the company for registration of the transfer in its books, but despite repeated requests, reminders and efforts made by her, the Company did not register the transfer of the shares in her name. Registered office of the company was at Delhi. The High Court negatived the contention of the company that Judicial Magistrate at Jaipur did not have jurisdiction to deal with the case by holding thus :- Company collects money from the public at large by selling its shares and transactions of sale and purchase are governed by the provisions of the Companies Act. Registration of the transferred shares is one of the duties of the company in the course of conducting its business according to the provisions of law. Therefore, the interest of the members of the public transacting such business cannot be allowed to be defeated on the plea that relief to the aggrieved persons can be granted only at the place where the office of the company is located. 10. In our view, it appears that the attention of the learned Judge was not drawn to the decision rendered by this Court in H.P. Gupta v. Hiralal, 1970(1) SCC 437 and also to Section 113 of the Act, which inter alia provides that company shall deliver the documents, such as, certificates of shares, debentures and certificates of debenture stocks allotted or transferred in accordance with the procedure laid down in Section 53. Section 53 prescribe the mode of delivery inter alia by sending the document by post at registered address and sub-section (2) is the deeming provision for delivery of such letter. In Upendra Kumar Joshi v. Manik Lal Chatterjee and others, 1982 (Vol. 52) Company Cases 177 (Patna), the Patna High Court has followed the decision rendered by this Court in the case of H.P. Gupta (supra) and has rightly arrived at the conclusion that the cause of action would arise at the place where registered office of the company is situated.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]10. In our view, it appears that the attention of the learned Judge was not drawn to the decision rendered by this Court in H.P. Gupta v. Hiralal, 1970(1) SCC 437 and also to Section 113 of the Act, which inter alia provides that company shall deliver the documents, such as, certificates of shares, debentures and certificates of debenture stocks allotted or transferred in accordance with the procedure laid down in Section 53. Section 53 prescribe the mode of delivery inter alia by sending the document by post at registered address and sub-section (2) is the deeming provision for delivery of such letter. In Upendra Kumar Joshi v. Manik Lal Chatterjee and others, 1982 (Vol. 52) Company Cases 177 (Patna), the Patna High Court has followed the decision rendered by this Court in the case of H.P. Gupta (supra) and has rightly arrived at the conclusion that the cause of action would arise at the place where registered office of the company is situated.