Central Government approval for remuneration increase was held insufficient to found a penal contravention without a specific prohibition or condition.

An alleged failure to obtain Central Government approval for increasing remuneration under section 310 of the Companies Act, 1956 was treated as not constituting an offence under section 629A, because section 310 was described as declaratory and not as imposing a positive obligation or express prohibition. A penal prosecution under section 629A requires breach of a specific direction, prohibition, or condition attached to approval or sanction, and no such condition or restriction was pleaded here. On that reasoning, the complaint was held misconceived and the proceedings liable to be quashed.

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Issues: Whether the alleged non-obtaining of Central Government approval for increase in remuneration under section 310 of the Companies Act, 1956 constituted a contravention punishable under section 629A of the Companies Act, 1956.

Analysis: Section 310 was held to be declaratory in nature. It states only that an increase in remuneration shall not have effect unless approved by the Central Government, but it does not impose any positive obligation to seek approval or contain an express prohibition against the act complained of. A contravention punishable under section 629A requires either breach of a specific direction or prohibition, or violation of a condition attached to an approval or sanction. Since the complaint did not allege breach of any such condition, limitation, or restriction imposed by the Government, the penal provision could not be invoked. The reasoning was supported by analogous treatment of similarly worded provisions in prior decisions.

Conclusion: The complaint was misconceived and not maintainable as an offence; the proceedings were liable to be quashed, and the decision was in favour of the petitioner.

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