The Madras Cricket Club v. M.Subbiah

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 03.02.2010CORAMTHE HONOURABLE MR. JUSTICE C.T.SELVAMCRL.O.P. No.10627 of 2004andCRL.M.P.No.3610 of 20041.The Madras Cricket Club2.R.Rajasekharan3.K.Premkumar4.K.R.Ganapathy5.M.Meyyappan6.Ajit Kumbhat7.Akbar Ebrahim8.K.Dhananjaya Das9.Hiten Kumar Joshi10.J.Prabhkar11.T.E.Srinivasan12.G.Thyagarajan13.V.J.Thambuswamy14.B.Vijaykumar15.V.Nataraj16.M.Vijayakrishna...Petitioners/Accused 1 to 16-Vs-M.Subbiah...Respondent/ComplainantCriminal Original Petition filed under Section 482 of CriminalProcedure Code to call for the records in E.O.C.C.No.762 of 2002 onthe file of the Additional Chief Metropolitan Magistrate., E.O.I.,Egmore, Chennai and quash the proceedings therein.For Petitioners: Mr.A.RaghunathanFor Respondent: Mr.A.K.MylsamyO R D E RThe petitioners herein number 16, the 1st petitioner being acompany registered under Section 25 of the Companies Act, 1956 andthe others being the office bearers thereof. The petitioners arefacing prosecution in C.C.No.762 of 2002 wherein the respondentherein has preferred a complaint informing that as a member of the 1staccused club he was entitled to have true copies of the minutes of https://hcservices.ecourts.gov.in/hcservices/ the general meetings thereof held from time to time that he hadsought from the 1st accused by his letter dated 19.06.2002, a copy ofthe Memorandum and Articles of Association and the Minutes of theGeneral Meetings for appointment of captains of cricket and tennisteams respectively and the circular sent for these appointment forthe year 2001-02 and that as the petitioners herein had failed tofurnish the same in keeping with Section 196(2) of the Companies Act,1956 which required the same to be furnished within a period of 7days, an offence stood committed by the petitioners which entails afine of Rs.5000/- in respect of each offence under Section 196(3). 2.Section 196(3) of the Companies Act, 1956 provides that if anycopy required by a member which he may duly seek under Section 196(2)is not furnished within the time specified, the company and everyofficer of the company who is in default shall be punishable withfine which may extend to Rs.5000/- in respect of each offence. It ison the strength of the provisions of Section 196 of the CompaniesAct, 1956 that the respondent has filed the complaint before theAdditional Chief Metropolitan Magistrate, E.O.I., Egmore, Chennai.3.The learned Senior counsel for the petitioners informs thatthe 1st petitioner club had time and again requested therespondent/complainant to inspect the records in the office premisesand that in any event the complainant had obtained copies of thepapers required by him through the Company Law Board. In suchcircumstances, the offence, even if made out, would be so trivialthat no reasonable person would complain of it. Though the learnedSenior counsel raises such submission touching upon Section 95 of theIPC which provides that "nothing is an offence by reason that itcauses, or that it is intended to cause, or that it is known to belikely to cause, any harm, if that harm is so slight that no personof ordinary sense and temper would complain of such harm", the mainthrust of the learned Senior Counsel is under Section 621 of theCompanies Act, 1956. To appreciate such contention, the relevantsection may be reproduced:Section 621 – Companies Act 1956:"(1) No Court shall take cognizance of any offenceagainst this Act other than an offence with respect to whichproceedings are instituted under section 545, which is allegedto have been committed by any company or any officer thereof,except on the complaint in writing of the Registrar, or of ashareholder of the company, or of a person authorised by theCentral Government in that behalf:Provided that nothing in this sub-section shall apply to aprosecution by a company of any of its officers:Rest of the Sections : Otiose https://hcservices.ecourts.gov.in/hcservices/

4.The learned Senior counsel submitted that as the offence issaid to have been committed by the 1st petitioner/ accused company andits officers and the respondent/complainant was not a person who fellwithin the category of persons entitled to file a complaint, thecomplaint case in E.O.C.C.No.762 of 2002 on the file of theAdditional Chief Metropolitan Magistrate, E.O.I., Egmore, Chennaiought to be quashed on this ground alone.5.The learned counsel for the respondent sought to sustain themaintainability of the complaint on the strength of Section 41 of theCompanies Act, 1956 which reads as follows:(1)The subscribers of the memorandum of a companyshall be deemed to have agreed to become membersof the company, and on its registration, shall beentered as members in its register of members.(2)Every other person who (agrees in writing) tobecome a member of a company and whose name isentered in its register of members, shall be amember of the company.(3)Every person holding equity share capital ofcompany and whose name is entered as beneficialowner in the records of the depository shall bedeemed to be a member of the concerned company.6.The submission of the learned counsel for the respondent isthat the respondent/complainant was a member of the 1st accused club,there was no distinction between a member and a shareholder and assuch he would fall within the meaning of the term shareholder underSection 621.7.I have considered the rival submissions.8.Even if the submissions of the learned counsel for therespondent is considered for the purpose of appreciation it would beseen that the respondent/complainant would not fall within the threecategories of persons envisaged in Section 41 of the Companies Act,1956. The respondent is neither a subscriber of the memorandum ofthe company who has agreed to become a member thereof nor is a personwho has agreed in writing to become a member of the company. The 1staccused is a company registered under section 25 of the CompaniesAct, 1956 which has no equity share holding, holding whereof wouldhave constituted the respondent/complainant a shareholder. Thelearned Senior counsel for the petitioner would refer to thecommentaries on Section 621 of the Companies Act, 1956 in thecelebrated work A.Ramaiya's Guide to the Companies Act wherein it isstated as follows: https://hcservices.ecourts.gov.in/hcservices/ "It may be noted that only in the case of a companyhaving share capital divided into shares, a'shareholder' can prefer a complaint under this section.In the case of any other company such as a companylimited by guarantee (for instance, a club or acharitable society), no complaint can be made by a'member'. Only the Registrar or a person authorised bythe Central Government can make the complaint."9.In view of the clear and unambiguous position that a complaintalleging offence under the Companies Act, 1956 only can be maintainedin strict keeping with the provisions of Section 621 of the CompaniesAct, 1956 and that the present complaint which is sought to bequashed would not fall thereunder, this Court would allow the quashpetition. Accordingly, the proceedings in E.O.C.C.No.762 of 2002 onthe file of the Additional Chief Metropolitan Magistrate, E.O.I.,Egmore, Chennai shall stand quashed. Consequently, the connectedmiscellaneous petition is closed.Sd/-Asst. Registrar//true copy//Sub Asst.RegistrargmToThe Additional Chief Metropolitan Magistrate.E.O.I., Egmore, Chennai.1 cc to Mr.A.Raghunathan, Advocate, Sr.No.18871 cc to Mr.A.K.Mylsamy, Advocate, Sr.No.6335CRL.O.P. No.10627 of 2004andM.P.No.3610 of 2004BKY {CO}TP/16.2.2010.