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Judgment
Bhairavia, J.—This appeal has been filed by the State against the judgment and oorder dated June 12, 1981, passed by the learned Chief Metropolitan Magistrate, Ahmedabad, in Criminal Case No. 69 of 1981 whereby the learned Metropolitan Magistrate acquitted the respondents-accused of the offences punishable u/s 621(1A) of the Companies Act, 1956.
It is the prosecution case that one Shri R. V. Patel was an employee of Sarabhai and Co. (P.) Ltd. He was also acting as the secretary of the present respondent No. 1-company. It is alleged that a company having a paid-up share capital of more than Rs.. 25 lakhs must have its own secretary as per the provisions of section 383A of the Companies Act, 1956.Therefore, the registrar of Companies filed a complaint against the present respondent- accused No. 1 and its directors respondent-accused Nos. 2 to 4 for viloation of the provisions oof section 383A of the Companies Act which is punishable u/s 621(1A) of the Companies Act. The said complaint was registered as Criminal Case No. 69 of 1981. The learned Chief Metropolitan Magistrate, after appreciating the evidence adduced by the parties,came to the conclusion that the respondents-accused have committed no offence and, consequently, acquitted the respondents of the offence with which they were charged. The State has filed this appeal challenging the said juudgment and order of acquittal.
In order to appreciate the case of the prosecution that the respondents-accused have committed a breach of section 383A of the Companies Act, it would be just and proper first to refer to the relevant provisions of the Act. Section 383A of the Companies Act, reads as under :
"S. 383A. Certain companies to have secreataries.-(1) Every company having a paid-up share capital of rupees twenty-five lakhs or move shall have a whole-time secretary,and where the board of directors of any such company comprises only two directors, neither of them shall be the secretary of the company.
(2) Where, at the commencement of the Companies (Amendment) Act, 1974,-
(a) any firm or body corporate is holding office as the secretary of a company, such firm or body corporate shall, within six months from such commencement, vacate office as secretary of such company.
(b) any individual is holding office as the secretary of more than one company having a paid-up share capital of rupees twenty- five lakhs or more, he shall, within a period of six months from such commencement exercise his option as to the company of which he intends to continue as the secretary and shall, on and from such date,vacate office as secretary in relation to all other companies."
Section 383A(2)(b) of the Companies Act is very clear on the point in the case of an individual holding post of company secretary in more than one company. The said sub-section clearly lays down that if any individual is holding office as the secretary of more than one company having a paid-up share capital of rupees twenty-five lakhs or more, then in that case, he has to elect or exercise his option in favour of one company only and has to vacate office as secretary in other companies.
Now, reverting back to the facts of the present case, it is the case of the respondents-accused that it is not provided in section 383A of the Act that the secretary of the company should be the employee of the said company.In the instant case, it is an admitted fact that the said Shri R. V. Patel is not an employee of the company. The view taken by the learned Metropolitan Magistrate regarding the interpretation of section 383A of the Act is just, proper and reasonable.Taking into consideration the facts and circumstances of the instant case, in my opinion, the learned Metropolitan Magistrate has rightly held that the respondents-accused have committed no ofence. I see no reason to interfere with the view taken by the learned Metropolitan Magistrate. Hence, there is no substance in this appeal and it requires to be dismissed.
Appeal is dismissed. The judgment and order dated June 12, 1981, passed by the learned Chief Metropolitan Magistrate, Ahmedabad, in Criminal Case No. 69 of 1981 is hereby confirmed.