Court sets aside liability of some petitioners under Companies Act, directing appearance before trial court.

The court partially allowed the petition, setting aside the liability of petitioner No. 1 under section 146 and petitioners 2 to 4 under sections 146 and 628 of the Companies Act. Consequential proceedings against them were quashed, with the direction for the parties, excluding petitioners 2 to 4, to appear before the trial court on a specified date. The court clarified that the Managing Director was the officer in default, making the prosecution of the other directors unwarranted and illegal under the Companies Act.

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Issues: Violation of Sections 146 and 628 of the Companies Act

Violation of Section 146 of the Companies Act:
The case involved a complaint against the petitioners and other respondents under sections 146 and 628 of the Companies Act, 1956. The complainant alleged that the company and its directors failed to inform the Registrar about the change in the registered office, as required by section 146. The complaint led to the accused being summoned by the Chief Judicial Magistrate, Shimla. The petitioners challenged this, claiming they were not the "officers in default" and thus should not be accused. The court analyzed section 146, emphasizing that the liability for prosecution and punishment lies with the officer of the company who is in default. The definition of "officer who is in default" under section 5 of the Act was examined, clarifying that certain designated officers are primarily considered officers in default. It was concluded that since one of the respondents was the Managing Director, they were the officer in default, making the prosecution of the other directors unwarranted and illegal.

Violation of Section 628 of the Companies Act:
The accusation under section 628 pertained to filing false information, punishable under the Act. The section outlines penalties for making false statements or omitting material facts knowingly. The complainant alleged that false information was provided to the Registrar through Form 18, with one of the petitioners identified as the individual furnishing the form. The court determined that if the information was false, the petitioner providing it would be liable under section 628. As the other petitioners were not connected to the filing of the false form, their prosecution under this section was deemed unwarranted and illegal.

Judgment:
The court partially allowed the petition, setting aside the order holding petitioner No. 1 liable under section 146 and petitioners 2 to 4 under sections 146 and 628 of the Companies Act. The consequential proceedings against them were quashed. The parties, excluding petitioners 2 to 4, were directed to appear before the trial court on a specified date.

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