R. Ramakrishnan and Others vs V.S. Dhanasekar

Sathar Sayeed, J.—The respondent herein filed a private complaint numbered as C.C. No. 3286 of 1981 before the IV Metropolitan

Magistrate, Saidapet, Madras against he petitioners under Ss. 120-B, 408, 409 read with SS. 34 and 1C9 I.P.C., contending that the

Management of the Madras Race Club, under Art.34 of the Articles of Association vests with the members of the Committee of Management,

who would constitute as Directors of the Madras Race Club under the Companies Act, 1956 and they control the funds of the Club. The members

of the Committee of Management, were bound in law by the Companies Act, 1956, by the license granted to the Club by the Government of

India, and by the Memorandum of the Articles of Association, to apply the income and its property solely for the promotion of the objects of the

club so that no Portion of the funds were paid or transferred either directly or indirectly by way of profit to the members. It was contended by the

respondent in the private complaint, that between November 1980 and March the petitioners herein, who are the members of the Committee of

Management, entered into a conspiracy to enrich themselves and misappropriated large sums of money from the funds of the Madras Race Club

and with this view and with a common intention to enrich themselves, their relatives and friends, the petitioners have dishonestly and fraudulently

misappropriated or converted to their own use the said monies of the Club. The respondent has also stated in the complaint, that on 24th

November, 1980 the Committee of Management sanctioned the granting of loans to the Club Members who would include petitioners 1 to 6, and

the petitioners knowing fully well that they could not utilize the loans without the permission of the Company Law Board, passed a resolution

authorising the Secretary of the Club to apply to the Company Law Board for permission, for the Committee members to utilize the loans, that the

act of the petitioners is in direct violation of the trust imposed on them and the petitioners have conspired and drew several amounts as and by way

of loans from the funds of the Club. In addition, a sum of RS. 36,250/- was given to the relations of the first petitioner, Rs. 30,000 to the relations

of the third petitioner, Rs. 1,36,500 to the relations of the fourth petitioner, and Rs. 60,000 to the relations of the fifth petitioner. In short, in the

complaint, the respondent herein contends, that the petitioners acting in conspiracy between 14th November, 1980 and 23rd March, 1981 acted

dishonestly to obtain for themselves pecuniary benefits and misappropriated for their own use a sum of Rs. 4,77,750 which, according to the

respondent, is illegal. This complaint was filed on 20th April, 1981. The IV Metropolitan Magistrate took the complaint on file on the allegations

leveled by the respondent against the petitioners in the complaint and issued summons. It is only to quash the aforesaid proceedings in C.C. No.

3286 of 1981, the above petition in Crl. M.P. No. 2196/81 has been filed by the petitioners under S. 482, Crl. P.C.

In the affidavit filed before me in Crl. M.P. No. 2196 of 1981 by the secretary of the Madras Race Club, the seventh petitioner herein, it is

contended, that the Madras Race Club is registered under the Indian Companies Act and was established in the year 1922. Under the Articles of

Association, there shall be a Committee of Management consisting of 12 members elected from amongst the members of the Club and 4 members

were nominated by the Government of Tamil Nadu. One-third of the elected numbers of the Committee of Management is to retire once a year

and there shall be an election every year to fill up the vacancies of the members retiring by rotation. Under the Articles of Association, the Madras

Race Club is entitled to invest funds not immediately required by the Club, in such a manner, as may be determined from time to time and the

object of the Club is to carry on the badness of the Race Club in all its branches and to conduct, hold and promo to race meetings, etc. It was also

contended in the affidavit filed by the Secretary of the Madras Race Club, that under the Scheme known as M.R.C. Scheme, the club grants loans

to the members for the purchase of two year old Indian Bloodstock at the auction sales. This loan is granted to the Committee members as well as

to other members of the Club. Likewise, for the year 1980-1981, loans were granted in accordance with the resolution of the Committee in its

meeting held on 26th December, 1980. The complainant/respondent is a party to the said resolution dated 26th December, 1980 and has not

raised any objection for the grant of loans.

It was further contended that the respondent and his father were nurturing ill-feelings, malicious motives and vendetta against some members of

the Committee of Management, as a result of an enquiry and suspension of the license to Trainer, R.R. Reddy, and the Jockey R.W. Alford, in

connection with their horse on 1st January, 1981. The respondent''s father, in order to wreck vengeance, has filed a civil suit in CS. No. 21 of

1931 in this Court seeking to disqualify and remove the petitioners 1 to 6 herein from acting as the ''Committee members mainly on the ground that

petitioners 1 to 6 have utilized the loins granted to them for purchase of race horses for the year 1980-81 in contravention of S. 295 (1) of the

Indian Companies Act, 1956. Thus the father initiated civil proceedings against the petitioners for their removal and his son, who is the respondent

herein, has initiated the aforesaid criminal proceedings under the aforesaid sections of the I.P.C. against the petitioners on the same and similar

allegations found in the civil suit. Is was contended that the respondent has distorted the facts and willfully suppressed the true facts regarding the

transactions of the Club. It was also contended that the allegations in the private criminal complaint that the petitioners 1 to 7 have entered into a

conspiracy to enrich themselves and misappropriated huge sums of money, that they have conspired to ensure that they and their relatives, friends

and associates drew out monies entrusted to them by the Club, are devoid of truth and that there is no misappropriation or unlawful enrichment as

contended by the respondent. Loans were granted by the Committee of Management in the usual manner in accordance with the provisions of the

Companies Act and that the approval of the Central Government was obtained by the Club and that, there is no contravention of S. 295 (1) of the

Companies Act as alleged by the respondent. In any event, it was contended in the affidavit, that the averments against the petitioners in the

complaint do not constitute an offence under Ss 406, 408 and 409 I.P.C, or under any of the other sections of the I.P.C. and that the essential

ingredients for the offence under the I.P.C. are conspicuously absent. The complaint lodged against the petitioners by the respondent cannot be

said to be one. that any such offence as alleged by the respondent under the I.P.C. is said to have been made out, in respect of violation of S. 295

of the Companies Act, 1956. It is further contended in the affidavit filed by the Secretary of Madras Race Club, that the said complaint against the

petitioners filed by the respondent is only, with a view to harass the petitioners and that the father of the respondent having filed a suit, CS No. 211

of 1981 in this Court against the petitioners, the filing of the criminal proceedings against the petitioners on the same allegations a criminal court will

amount to abuse of process of Court and consequently the proceedings are liable to be quashed. It was further contended that at the time of

passing the resolution by the Committee of Management on 26th December, 1980, the earlier sanction granted by the Company Law Board was

existing upto 15th January, 1981, and therefore, the granting of loans on the said date is perfectly legal, that there is no contravention of the

provisions of the Companies Act or the Memorandum of Articles of Association or the license granted by the Central Government and that no

offence as alleged is committed by the petitioners. It was also contended that the grant of approval by the Central Government, to the resolution of

the Committee of Management of the Club, for the period from 16th January, 1981 to 15th January, 1982, dates back to the date of the

application filed by the Club for such approval, that the said application was made by the Club on 29th November, 1980 and the delay if any, for

according the approval by the Company Law Board is not on the part of the Club and it might be due to the administrative procedurals of the

Central Government and that apart, the Central Government, while granting the approval, granted the same specifically with effect from 16th

January, 1981 thereby approving the grant and utilization of the loans by the members of the Committee. In any event, it was contended that the

delay on the part of the Central Government in approving the resolutions of the Club cannot in any manner adversely affect the Club or the

petitioners herein, as there was a valid approval obtained from the Central Government and that there has been no contravention of the provisions

of the Companies Act or the Articles of Association as alleged in the complaint.

Inter alia, it was contended by the petitioners that the practice of granting loans to the members of the Committee of Management for purchase

of race horses has been in vogue for the past several years and in fact the complainant-respondent herein and his father have also obtained such

loans from the Club on previous occasions without demur. There is no deprivation of the property of the Club in contravention or in violation of

any of the provisions of the Law or contract. No wrongful loss is occasioned by the Club nor any wrongful gains to the petitioners herein as alleged

in the complaint and that on the face of the complaint and on the facts, no criminal offence is made out. In any event, since the loans have been

repaid by the petitioners 1 to 6 as early as 11th April, 1981 even before instituting the complaint, there is no question of any criminal breach of

trust involved and that the complaint filed by the respondent against the petitioners is an abuse of process of court and is motivated by ill-feelings to

wreak vengeance with the petitioners and also to harass and blackmail them. Hence the above petition to quash the proceedings.

The question for consideration is whether the complaint lodged by the respondent against the petitioners before the IV Metropolitan. Magistrate

on the facts of the case is maintainable and is it liable to be quashed.

If, on the facts placed before me, the members of the Committee of the Madras Race Club, without obtaining sanction as required under S. 295

of the Companies Act, 1956, have obtained monies by passing a resolution, for their own benefit, then they are liable as alleged by the respondent.

From the facts of this case, it is clear that the Madras Race Club is controlled, and administered by the Companies Act, 1956. For the purpose of

obtaining any loan by the Race Club, prior sanction is required under S. 295 of the Companies Act, 1956. The Secretary of the Madras Race

Club wrote a letter on 13th December, 1979 to the Under Secretary to the Government of India, which is as follows :-

I wish to inform you that the Committee of Management of this Club has decided to continue the Scheme of financial Assistance to the Members

of this Club for purchase of 2 year old Indian horses during the year 1980. I shall be grateful if you will kindly accord permission as per terms of

your letter No. 7/35/78-CL VI dated 10th January, 1979 (copy enclosed for reference) for a further ""period of one year with effect from 16th

January, 1980. A demand draft for RS. 50 being the fee together with a treasury challan in triplicate is enclosed.

I further request that while according sanction, the maximum amount of loan for any borrower at any point of time may be fixed at Rs. 1,00,000

which will include the balance of previous loans, as was permitted last year.

I wish to mention that Committee Members and their relatives are being granted loans on the same basis as is being granted to Club Members.

As was done in the past, the Club has decided to obtain a loan from the Bank for this purpose and the interest charged by the Bank will be passed

on to Members for the period of loan is utilized. This will be applicable to Members of the Committee of Management and their relatives also., and

therefore, the Club does not incur any liability.

I shall be grateful if you will kindly accord necessary permission under S. 295 of the Companies Act, 1956 for grant of loan to the Members of the

Committee of Management of this Club and their relatives.

Ishall be grateful for your early approval.

The Government of India, by the letter dt. 18th January, 1980 has approved the request of the Madras Race Club to grant loans to the

members of the Committee of Management and their relatives, which is as follows :-

With reference to your letter No. RS/001668 dt. the 13th December, 1979 I am directed to say that the Company I aw Board has been pleased

to approve under S. 205 of the Companies Act, 1956, real with the Government of India, Department of Company Affairs, Notification No. GSR.

443 (E) , dt. 18th October, 1972, the grant of loans to the members of the Committee of Management of the Club and their relatives in terms of

the provisions of the scheme of the Club subject to the following conditions :-

(i) The maximum amount of loan to any borrower shall not exceed Rs. l,10,000 at any point of time.

(ii) The loan shall be fully secured.

(iii) The loan shall be recovered in five equal half. yearly installments within a period of 3 years commencing from 16th January, 1980.

(iv) The Club shall not suffer in any way in respect of interest on the loan transaction. The interest charged shall not be less than the interest paid by

the Club on the loans raised for the purpose.

(v) The approval shall be valid for a period of one year from 16th January, 1980.

This letter is issued by order of the Company Law Board.

Again on 26th December, 1980, the Committee of Management of the Madras Race Club passed a resolution to which the respondent herein was

a party, which is as follows :-

It was decided to sanction loans to only such members and Trainers whose applications were received upto 16th December, 1980, on the

following basis :-

Club Members Owners Rs. 40,000.,

Club Members Rs 30,000. Stand Member Owners Rs. 25,000. ''Trainers holding ''A'' license Rs. 25,000.

It was further decided that in case of partnership, maximum of Rs. 1,60,000 per horse can be utilized and not Rs. 1,20,000 as decided at the

Committee Meeting held on 24th November, 1980.

The loans were sanctioned as per list attached.

The loans are sanctioned on condition that the previous installments, if any, due from members must be paid on or before 14th January, 1981 by

cash or by Bank Draft.

The loans sanctioned to Committee Members and their relatives are subject to approval by the Company Law Board.

The Chairman was authorised to grant loans on the above basis for applications received after 16th December, 1980, if funds permit''.

Even before passing the resolution by the Committee of Management, the Secretary of the Madras Race Club wrote a letter on 29th November,

1930, to the Under Secretary to the Government of India, Ministry of Law, Justice and Company Affairs, Department of Company Affairs

(Company Law Board), New Delhi seeking permission under S. 295 of the Companies Act, 1956 for grant of loans, which is as follows :

I wish to inform you that the Committee of Management of this, Club has decided to continue the scheme of financial assistance to the Members of

this Club for purchase of 2 year old Indian horses during the year 1981.

The Committee of Management has decided to grant loans during the year 1981 free of interest as the amount required will be met by the Club''s

own resources and no loan will be obtained from the Bank for this purpose. However in case of instalment being not paid by due date, an interest

of 18% per annum will be charged from the date of the instalment fell due. The other terms and conditions will remain the same as in the past.

I wish to mention that the Committee Members and their relatives will also be granted loans on the same basis as is being granted to Club

Members.

I shall be grateful if you will kindly accord permission as per terms of your letter No. 7/1/80-C.L. VI dated 18th January, 1980 (copy enclosed for

reference) for a further period of one year with effect from 16th January, 1981. A demand draft for Rs. 30 being fee together with treasury challan

in triplicate is enclosed.

I further request that while according sanction the maxim urn amount of loan to any borrower at any point of time may be fixed at Rs. 1,00,000

which will include the balance of previous loans.

I shall be grateful if you will kindly accord necessary permission under S. 295 of the Companies Act, 1956 for grant of loan to the Members of the

Committee of Management of this Club and their relations.

I shall be grateful for your early approval.

The Company Law Board its letter No. 7/4/81-CL-VI, dated 23rd April, 1981 has approved, under S. 295 of the Companies Act, 1956 read

with the Government of India, Department of Company Affairs, Notification No. G.S.R. 443 (E) , dated 18th October, 1972., the grant of loans

to the members of the Committee of Management of the Club and their relatives in terms of the provisions of the scheme of the Club subject to the

following conditions :-

(i) The maximum amount of loan to any borrower shall not exceed Rs. 1,00,000 at any point of time;

(ii) The loan shall be fully secured.

(iii) The loan shall be recovered in five equal half-yearly installments within a period of 3 years commencing from 16th January, 1981.

(iv) The Club shall not resort to borrowings to finance the loans and shall advance it from its own funds.

(v) ""The approval shall be valid for a period of one year from 16th February, 1981.

From this, it is obvious that while sanctioning the loans, the Government of India has approved the grant of loans to the members of the Committee

of Management of the Club and their relatives in terms of the scheme of the Club.

The Learned counsel appearing for the petitioners contends that under S. 292 of the Companies Act, 1956 the petitioners can exercise powers

on behalf of the Company by means of resolutions passed at the meetings of the board and they have power to make loans. S. 295 (1) of the Act

provides that no company, without obtaining the previous approval of the Central Government, shall directly or indirectly make any loan to, or give

any guarantee or provide any security in connection with a loan made by any other person, to, or to any other person, etc., and if there is any

violation, then the other provisions of the Companies Act, 1956 come in for a check.

In the instant case, on 13th December, 1979, the Secretary of the Madras Race Club wrote to the Government of India placing all the facts with

a request that while according sanction, the maximum amount of loan to any borrower at any point of time may be fixed at Rs. 1,10.000 which will

include the balance of the previous loans. The Company Law Board by its letter No. 7/1/80-C.L. VI, dated 18th January, 1980 referring to the

letter of the Secretary of the Madras Race Club, dated 13th December, 1979, has approved the grant of loans to the members of the Committee

of Management of the Club and their relatives in terms of the provisions of the Scheme of the Club under S. 295 of the Companies Act, 1956. It is

clearly mentioned in the letter of the Government of India dated 18th January, 1980 that the sanction accorded to the members of the Committee

of Management of the Club was valid for a period of one year from 16th January, 1980. During the subsistence of the sanction, another resolution

was passed on 26th December, 1980 by the Committee of Management of the Madras Race Club which is extracted supra, to which resolution,

the respondent herein was a party. On 23rd April, 1981, the Government of India by its letter No. 7/4 81-C.L. VI, granted sanction under S. 295

of the Companies Act, 1956 and the said sanction was for a period of one year from 16th January, 1981 to 15th January, 1982. It cannot be said,

on perusing the sanction orders of the Government of India dated 18th January, 1980 and 23rd April, 1981, that the Committee of Management

of the Madras Race Club have violated the terms of S. 295 (1) of the Companies Act, 1956. At the time when the sanction was accorded by the

Central Government by its letter No. 7/1/80. C.L. VI, dated 18th January, 1980, it was valid for a period of one year from 16th January, 1980.

When this sanction was valid till 15th January 1981, another resolution was passed by the Committee of Management of the Madras Race Club

on 26th December, 1980 which was also approved by the Central Government.

The learned counsel Mr. Govind Swaminatha, appearing for the respondent contends that in this case, the Secretary of the Madras Race Club

has written a letter on 29th November, 1980 to the Company Law Board seeking permission under S. 295 of the Companies Act for grant of

loans to the members of the Committee of Management and their relatives, but at the meeting of the Committee of Management, a resolution was

passed on 26th December, 1980 seeking sanction of loans to the members and Trainers and thereafter the Company Law Board accorded

sanction on 23rd April 1981 to the said resolution, which is violative of S. 295 of the Companies Act, 1956, in the sense, that the petitioners have

not obtained prior sanction of the approval of the loans from the Central Government at a time when the Committee of Management of the Madras

Race Club passed a resolution on 26th December, 1980. But we have to see that in the resolution dated 26th December, 1980 passed at the

meeting of the Committee of Management, it was specifically recorded that ""the loans sanctioned to the Committee Members and their relatives

are subject to approval by the Company Law Board"". This shows that there was no mens tea at the time of passing the resolution. He stated

earlier that at the time of passing the resolution, the respondent herein was also a party to it and he has not raised any objection at the time of the

resolution. What we have to see is whether the resolution passed by the Committee of Management, was passed at a time when there was no prior

sanction from the Central Government. I am of the view that the very mentioning of the fact in the resolution dated 26th December, 1980 that the

loans sanctioned to the committee members and their relatives are subject to approval by the Company Law Board, makes it clear, that the

sanction will take effect only after the approval of the Company Law Board. The Central Government, after perusing the letter of the committee of

Management of the Madras Race Club, has approved the grant of loans to the members of the Committee of Management of the Club and their

relatives in terms of the provisions of the scheme of the Club. The approval and sanction of the Central Government for the period 16th January,

1981 to 15th January, 1982 dated back to the date of the application filed by the Club for such approval, as the prior approval of the Central

Government was obtained and was subsisting on the date of the grant of such loans. The respondent herein was aware of the approval and had, on

previous occasions, obtained loans for himself and others and his approaching the criminal court without disclosing the material facts amounts to

suppressioveri and suggesito falsi. The person who goes to court and seeks punishment of the petitioners without disclosing the correct facts is an

abuser of process of court. The obtaining and utilising the loans by the members of the Committee of Management, on the resolutions passed by

the members of the Committee of Management of the Club, which resolutions have been approved by the Company Law Board, cannot amount

to misappropriation of any Club''s funds or conversion of Club''s funds to the use of the members of the Committee.

When once it is brought to the notice of this Court, that the act of the petitioners as Committee Members of the Madras Race club in passing

the resolution on 26th December, 1980 which contains that the loans sanctioned will be subject to the approval of the Company Law Board it

cannot be said to be violative of S. 295 of the Companies Act, 1956, but it is only a technical defect and on that score it cannot be said that the

petitioners have in terms violated S. 295 of the Companies Act, 1956 and are, therefore, liable to be proceeded with in a criminal court under the

aforesaid sections mentioned in the complaint.

Then the further question that requires for consideration is, are the petitioners liable for the offence on the allegations of the complaint lodged

by the respondent. On perusing the resolutions, it cannot be said that the resolution of the Committee Members of the Madras Race Club, to

which the respondent was a party, in seeking sanction of! the loans from the Government of India for the purpose of the Club and the Members, to

be a dishonest act coming within the purview of S. 405,1 P.C., and it cannot also be said} that there was conspiracy amongst the petitioners to

conspire and utilise the funds for their own benefit.

When a petition under S. 482, Crl. P.C. is filed to quash the proceedings and when on the facts of the case it is brought out that the

proceedings against the petitioners in C.C. No. 3286 of 1981 are an abuse of process of Court, the observation of the Supreme Court reported in

State of Karnataka Vs. L. Muniswamy and Others, , squarely applies, which is as follows at page 1492:-

In the exercise of this wholesome power, the High Court is entitled to quash a proceeding if it comes to the conclusion that allowing the proceeding

to continue would be an abuse of the process of the Court or that the ends of justice require that the proceeding ought to be quashed. The saving

of the High Court''s inherent powers, both in civil and criminal matters is designed to achieve a salutary public purpose which is that a Court

proceeding ought not to be permitted to degenerate into a weapon of harassment or persecution. In a criminal case, the veiled object behind a

lame prosecution, the very nature of the material on which the structure of the prosecution rests, and the like would justify the High Court in

quashing the proceeding in the interests of justice. The ends of justice are higher than the ends of mere law though justice has got to be

administered according to laws made by the legislature. The compelling necessity for making these observations is that without a proper realisation

of the object and purpose of the provision which seeks to save the inherent powers of the High Court to do justice between the State and its

subjects it would be impossible to appreciate the width and contours of that salient jurisdiction.

The learned counsel, Mr. Govind Swaminathan appearing for the respondent, relying on the observations of the Supreme Court reported in

Smt. Nagawwa Vs. Veeranna Shivalingappa Konjalgi and Others, contends that when the Magistrate, on a consideration of the complaint, was

satisfied that a prima facie case against the petitioners has been made out and his accordingly issued process against the petitioners and has

exercised his discretion to issue process, it is not for this Court to substitute its own discretion to that of the Magistrate or to examine the case on

merits with a view to find out whether or not the allegations in the complaint would ultimately end either in conviction or acquittal of the petitioners,

where evidence has to be let in with reference to the allegations leveled against the petitioners. I have heard the arguments of the learned counsel

Mr. Govind Swaminathan. No doubt, this Court does not interfere in cases where evidence is necessary to prove the allegations. But prima facie,

when the allegations leveled in the complaint are not clear on the facts, with reference to the sanction obtained by the petitioners and the

Government of India, Company Law Board approving the resolution of the Committee of Management of the Madras Race Club, it will be an

abuse of process of Court in allowing the proceedings to go ahead on a lame prosecution and on the very nature of the material on which the

structure of the prosecution rests.

In this matter, I gave notice to the Assistant Public Prosecutor who was present in Court, to assist the Court and also to place the law under S.

482, Crl. P.C. He has also brought to my notice the decision reported in State of Karnataka Vs. L. Muniswamy and Others, . In view of the

sanction accorded by the Company Law Board by its letter No. 7/4/81-CL.VI, dated 23rd April, 1981, it cannot be said that an offence has been

made out in the complaint to attract SS. 406, 408 and 409, I.P.C.

The allegations in the complaint, if taken into consideration, in view of the aforesaid discussion with reference to the sanction accorded by the

Company Law Board-to the members of the Committee of Management of the Madras Race Club, there are improbabilities appearing on the face

of the complaint with reference to the allegations leveled against the petitioners and there is a very thin line of demarcation between a probability of

the allegations leveled against the petitioners and establishment of a prima facie case against them. That apart, if the allegations made in the

complaint are taken on their face value and considering the sanction accorded by the Company Law Board by its letter dated 23rd April, 1981, it

can be said, that no case against the petitioners has been made out nor the complaint, on the facts of the case, discloses the essential ingredients of

the offence which is alleged against the petitioners. I am of the view that it will be an abuse of process of Court to allow the criminal proceedings to

go ahead with its enquiry in C.C. No. 3286 of 1981, for, the ends of justice are higher than to consider the technical defect in this case of not

following the provisions of S. 295 of the Companies Act, 1956. That apart, parties should not be encouraged to resort to criminal courts in a case

of this type in which the point at issue between them is one, which can more appropriately be decided by a civil Court by unfolding the panoramic

facts, and the parties should not be allowed to appease their anger by resorting to criminal proceedings, as it is so obvious from the arguments

advanced by the respective counsel that the father of the respondent herein has field a civil suit, C.S. No. 211 of 1981 on the file of this Court, for

a declaration that petitioners 1 to 6 have ceased to be members of the Committee of Management of the Madras Race Club and Stewards of the

Club on and from the date they took the loans from the Club and also, for a declaration that any vote cast in any meeting of the Committee of

Management or Stewards of the Club by any of the defendants in C. S. No. 211 of 1981 by virtue of S. 283 (i) (h) of the Companies Act, 1956 is

void and inoperative, and the respondent herein, filing the impugned criminal case against the petitioners herein.

Under the circumstances, the proceedings pending before the IV Metropolitan Magistrate, Saidapet, Madras, against the petitioners herein in

C. C. No. 3286 of 1981 are quashed and this petition is allowed.