Resolution void ab initio cannot attract residuary penal liability, so acquittal for single-resolution appointment is upheld.

A resolution proposing two or more directors by a single motion that is void ab initio under the statute cannot form the basis of penal liability under the residuary penal provision. The note clarifies that Section 263(2) treats such resolutions as never having existed, leaving no contravention to be punished under the residuary penalty; penal provisions must be strictly construed and ambiguities resolved in favour of the accused. Consequent acquittal of persons moving the single resolution is therefore upheld and the appeal against acquittal dismissed.

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Issues: Whether respondents were punishable under Section 629A of the Companies Act for moving a single resolution proposing two or more directors in contravention of Section 263(1) of the Companies Act.

Analysis: Section 263(1) prohibits making a motion for appointment of two or more directors by a single resolution, while Section 263(2) renders a resolution moved in contravention of subsection (1) void. Section 629A is a residuary penal provision providing punishment for contraventions of the Act where no specific punishment is prescribed. The language of Section 263(2) makes a resolution moved in breach of subsection (1) void ab initio so that, in law, it is treated as never having existed. Where a resolution is void ab initio under Section 263(2), there is no valid contravention left to attract punishment under Section 629A. Penal provisions are to be strictly construed, and where two interpretations are reasonably possible the interpretation favourable to the accused must be adopted.

Conclusion: Respondents are not punishable under Section 629A of the Companies Act for the single resolution proposing multiple directors; the appellate Court's acquittal of the respondents is upheld and the appeal against that acquittal is dismissed.

Ratio Decidendi: A resolution void ab initio under Section 263(2) of the Companies Act cannot constitute a punishable contravention under the residuary penal provision (Section 629A); penal statutes must be construed strictly and ambiguities resolved in favour of the accused.

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