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Issues: Whether, in a prosecution under Section 454(5) read with Section 454(5A) of the Companies Act, 1956, the prosecution had to prove in the first instance that the default was without reasonable excuse, and whether the conviction could stand when the prescribed summons-case procedure was not followed and no evidence was led by the complainant.
Analysis: The words "without reasonable excuse" were held not to create a statutory exception placing the burden on the accused. The complainant was required to establish the default without reasonable excuse at the outset, and the burden could shift to the accused only after some evidence was led. The statement and affidavit of the accused were not treated as an admission of guilt. The procedure under Chapter XX of the Code of Criminal Procedure, 1898, applicable to summons cases, was also not followed, since the particulars of the offence were not put to the accused under Section 242 and the procedure under Section 243 was not adopted. In the absence of prosecution evidence, there was no material to prove the absence of reasonable excuse.
Conclusion: The conviction was unsustainable and was set aside; the appellant was acquitted.
Ratio Decidendi: In a prosecution for default under Section 454(5) of the Companies Act, 1956, the complainant must first prove that the default was made without reasonable excuse, and conviction cannot rest on the accused's explanation or on a trial conducted without compliance with the summons-case procedure.
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