Ordinary director liability under Companies Act default provisions rejected where managing director, whole-time directors, and manager existed.

An ordinary director cannot be prosecuted as an "officer who is in default" for non-compliance with section 150 of the Companies Act, 1956 where the company already had a managing director, whole-time directors and a manager. Section 5 assigns default liability primarily to those specified office-holders, or to persons specifically charged by the board, and ordinary directors are covered only in the absence of those designated officers or a specific delegation. On the admitted facts, the petitioner was only an ordinary director, so the criminal complaint against him was not maintainable and its continuation would amount to abuse of process. The complaint was quashed as against that director, while proceedings against the remaining accused continued.

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Issues: Whether an ordinary director can be prosecuted for non-compliance with section 150 of the Companies Act, 1956 when the company had a managing director, whole-time directors and a manager, so as to make him an "officer who is in default".

Analysis: Section 5 of the Companies Act, 1956 defines "officer who is in default" by reference to the managing director, whole-time director, manager, secretary, persons controlling the board, and persons specifically charged by the board. Only where the company 't have the officers specified in clauses (a) to (c), or where no director is specifically designated, can ordinary directors be treated as officers in default. On the admitted facts, the company had a managing director, whole-time directors and a manager, and the petitioner was only an ordinary director. In that situation, prosecution of the petitioner for the alleged breach of section 150 was not maintainable and continuation of the criminal case would amount to abuse of process.

Conclusion: The petitioner, being only an ordinary director, could not be treated as an officer in default and was not liable to be prosecuted for the alleged default under section 150 of the Companies Act, 1956.

Final Conclusion: The criminal complaint was quashed insofar as it related to the petitioner, while the proceedings against the remaining accused were left to continue in accordance with law.

Ratio Decidendi: Where a company has a managing director, whole-time director or manager, an ordinary director cannot be treated as an "officer who is in default" for liability under penal provisions using that expression.

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