1938 (2) TMI 5

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....residency Magistrate of Calcutta to show cause why the conviction of the petitioner Pramatha Nath Bose and the sentence of fine imposed upon him should not be set aside on the ground that the facts proved do not bring the case within the provisions of section 91-A (2), Companies Act, that the findings arrived at by the learned Magistrate do not warrant a conviction, and that the learned Magistrate has entirely misconceived the scope and intention of the section. The only point argued before us in this rule is as to the construction of the section. It has been strenuously argued on behalf of the petitioner that the only contracts referred to in the section are contracts entered into at a meeting of the directors and therefore it did not refe....

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....ectors, but contracts made on behalf of the company, it stands to reason that the same principle would be applicable to contracts entered into on behalf of the company, and these would not be entered into at a meeting of the directors. So that the words "in any other case" must refer not only to cases in which the interest of the director does not exist at the time of the meeting but must refer also to cases in which contracts were not made at a meeting of the directors. We think, therefore, that the plea of the petitioner as regards the interpretation of the section cannot be accepted and this being the only point raised in this Rule, the Rule must be discharged. Revision No. 826 of 1937. This Rule was issued upon the Chief Presidenc....

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....ra Publishing House after he had been appointed a managing director of the Kamala Book Depot Ltd. on behalf of the company and therefore under the terms of Section 91-A, in so far as these transactions were concerned, he was bound to disclose his interest in this firm at the next meeting of the company. In view of the findings arrived at by the learned Magistrate, it cannot be said that he was unaware of these transactions. Then it is argued that these are not contracts or arrangements within the meaning of Section 91-A. There can be no doubt that these transactions or purchases were contracts. A reference is made to Clause (3) of the section to suggest that such contracts as these were never intended as they were too petty to be entered....

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....ccused as managing director of Kamala Book Depot Ltd., at the time of each of the transactions with the Jogendra Publishing House or at the next subsequent meeting." Further on the Magistrate says: "If the defence desire to argue that he did disclose informally to the directors outside the meetings, I consider the onus is shifted on to him to prove his assertion which is within his special knowledge." The finding is therefore that such disclosure was not proved. Even if proved, it would not have complied with the terms of the section. Had the letter referred to been produced at the time of the trial before the Magistrate or referred to in the evidence, we would have expected to find some reference to it in the judgment. It is not r....