Company secretary need not be an employee under section 383A; acquittal upheld for alleged contravention.

Section 383A of the Companies Act, 1956 required companies with the prescribed paid-up capital to appoint a whole-time secretary and addressed situations where a person held office as secretary in more than one company, but it did not expressly require the secretary to be an employee of the company. On the admitted facts, the person concerned was not an employee, and that interpretation was found reasonable. The respondents were therefore held not to have committed the alleged offence under section 621(1A), and the acquittal was upheld.

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Issues: Whether section 383A of the Companies Act, 1956 required the company secretary to be an employee of the company, and whether the respondents had committed any offence punishable under section 621(1A) for allegedly contravening that provision.

Analysis: Section 383A mandated that companies with the prescribed paid-up share capital have a whole-time secretary, and dealt specifically with situations where an individual held office as secretary in more than one company. The provision did not expressly require that the secretary be an employee of the company. On the admitted facts, the person concerned was not an employee of the company, and the interpretation accepted by the trial court was found to be reasonable.

Conclusion: The respondents had not committed the alleged offence, and the acquittal was upheld.

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