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2025 (2) TMI 964
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....e petitioner No.1/accused No.1 was originally Chief Executive Officer and thereafter, became the Managing Director of the petitioner - Company. On 18.06.2022, respondent filed a complaint before the Special Court of Economic Offences, Bengaluru against the petitioner and accused No. 2 for the alleged violation of Section 197 (3), 197 (9) of Companies Act and Rule 7 (2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. On 22.06.2022, Special Court took cognizance against the petitioner and accused No. 2 for the offences punishable under Sections 197 (15) of the Companies Act, 2013, pursuant to which, the petitioner-company received summons from the Special Court and as such, the petitioner is before this Court by way of the present petition. 3. Heard learned counsel for the petitioner and learned Central Government Counsel for the respondent and perused the material on record. 4. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner has invited my attention to Section 197 (15) of the Companies Act in order to point out that as on the date of complai....
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....Constitution Bench of the Hon'ble Supreme Court in the case of SHYAM SUNDER & Others vs. RAM KUMAR & Another reported in AIR 2001 SC page 2472, while dealing with the question whether a substituted provision necessarily means the amended provision is retrospective in nature has held as under: "A substituted section in an Act is the product of an amending Act and all the effects and consequences that follow in the case of an amending Act the same would also follow in the case of a substituted section in an Act." 12. In fact, the Division Bench of this Court in the case of SHA CHUNNILAL SOHANRAJ VS. T. GURUSHANTAPPA reported in 1972(1) MYS.L.J. PAGE 327 DB has held as under: "When an amending Act has stated that the old subsection has been substituted by the new sub-section the inference is that the Legislature intended that the substituted provision should be deemed to have been part of the Act from the very inception." 13. Recently, the Hon'ble Apex Court in the case of GOVERNMENT OF INDIA VS. INDIAN TOBACCO ASSOCIATION reported in 2005 (187) ELT PAGE 162 (SC), while dealing with the exemption notification which was issued by way of subst....
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....efinition of the word "export" in the SEZ Act, in Sec. 2 (m) included supply of goods to a "Unit" or "Developer", in clause (i) of sub-rule (6) of Rule 6 of the Cenvat Credit Rules, 2004 the word "Developer" was conspicuously missing and only "unit" was included before the 2008 amendment. It is in that context the aforesaid amendment by Notification No. 50/2008 CE (N.T) dated 31.12.2008 was brought in, to clarify the doubt. As the said amendment is clarificatory in nature, that is the reason why it was brought by way of "substitution". The effect of the said "substitution" is that the Cenvat Rules 2004 are to be read and construed as if the altered words had been written into the Rules of 2004 with pen and ink and the words "to a developer of the SEZ for their authorized operation" was there from the inception. This is the understanding of the Government as is also clear from the circular issued by the CBEC bearing No. 29/2006-Cus., dated 27.12.2006 wherein clause 4 reads as under:- "4. In the light of the aforesaid provisions, with effect from 14.3.2006, Chapter XA of the Customs Act, 1962, the SEZ Rules, 2003, the SEZ (Customs Procedure) Regulations, 2003, and the exempt....
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....pecified therein. 19. The proviso appended to sub-clause (iv) of clause (2) of the notification dated 7-4-1997 empowers the Commissioner of Customs to permit imports and exports from any other seaport, airport, inland container depot or through a land customs station. 20. The Commissioner of Customs has advisedly not exercised his jurisdiction under the proviso appended to sub-clause (iv) of clause (2) of notification dated 7-4-1997. By reason of the notification dated 27-11-1997, the only amendment made was the words "Tuticorin and Vishakhapatnam" were substituted by the words "Tuticorin, Vishakhapatnam and Kakinada", which are "seaports" and the words "Ludhiana and Hyderabad" were substituted by the words "Ludhiana, Hyderabad, Nagpur, Agra, Faridabad, Jaipur, Guntur and Varanasi" which are "inland container depots". 21. It is not in dispute that "Guntur" was one of the inland container depots. It is also not in dispute that such duty exemption had all along been granted for export from "Guntur". In terms of the policy decision, the tobacco exporters had filed blue shipping bills which having not been accepted and they had no option but to file normal wh....
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....n Bench of this Court observed: (SCC pp. 240-41, para 8) "What we are concerned with in the present case is the effect of the expression 'substituted' used in the context of deletion of sub-sections of Section 14, as was originally enacted. In Bhagat Ram Sharma v. Union of India [1988 Supp SCC 30 : 1988 SCC (L&S) 404 : (1988) 6 ATC 783] this Court stated that it is a matter of legislative practice to provide while enacting an amending law, that an existing provision shall be deleted and a new provision substituted. If there is both repeal and introduction of another provision in place thereof by a single exercise, the expression 'substituted' is used. Such deletion has the effect of the repeal of the existing provision and also provides for introduction of a new provision. In our view there is thus no real distinction between repeal and amendment or substitution in such cases. If that aspect is borne in mind, we have to apply the usual principles of finding out the rights of the parties flowing from an amendment of a provision. If there is a vested right and that right is to be taken away, necessarily the law will have to be retrospective in effect and if such a l....
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....ad ceased to exist and held that the substitution would have the effect of amending the operation of law during the period in which it was in force. In Koteswar case [(1969) 1 SCC 255] a three- Judge Bench of this Court emphasised the distinction between 'supersession' of a rule and 'substitution' of a rule and held that the process of substitution consists of two steps: first, the old rule is made to cease to exist and, next, the new rule is brought into existence in its place." 26. We are not oblivious of the fact that in certain situations, the court having regard to the purport and object sought to be achieved by the legislature may construe the word "substitution" as an "amendment" having a prospective effect but such a question does not arise in the instant case. 27. There is another aspect of the matter which may not be lost sight of. Where a statute is passed for the purpose of supplying an obvious omission in a former statute, the subsequent statute relates back to the time when the prior Act was passed. (See Attorney General v. Pougett [(1816) 2 Price 381 : 146 ER 130].) 28. The doctrine of fairness also is now considered to be a relevant factor....
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....The principle is well settled that when two views of a notification are possible, it should be construed in favour of the subject as notification is part of a fiscal enactment. But in this connection, it is well to remember the observations of the Judicial Committee in Coroline M. Armytage v. Frederick Wilkinson [(1878) 3 AC 355 : 38 LT 185 (PC)] that it is only, however, in the event of there being a real difficulty in ascertaining the meaning of a particular enactment that the question of strictness or of liberality of construction arises. The Judicial Committee reiterated in the said decision at p. 369 of the Report that in a taxing Act provisions establishing (sic enacting) an exception to the general rule of taxation are to be construed strictly against those who invoke its benefit. While interpreting an exemption clause, liberal interpretation should be imparted to the language thereof, provided no violence is done to the language employed. It must, however, be borne in mind that absurd results of construction should be avoided." The ratio of the said decision, therefore, runs counter to the submission of the learned counsel. 33. Reliance was also placed by the learn....
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....ot only mollifies the punishment prescribed for contravention, but also the procedure, for determining the penalty. 9. The Hon'ble Apex Court in T. Barai vs. Henry Ah hoe reported in (1983) 1 SCC 177 had an occasion to consider the amendments made to Section 16 (1) (a) of the Prevention of Food Adulteration Act, 1954. The Act originally prescribed punishment of 6 years for the said offence of the Act. In 1975, an amendment was made by the State of West Bengal by the West Bengal Amendment Act, which provided for punishment upto imprisonment for life for the said offence. Thereafter, the Parliament passed the Prevention of Food Adulteration (Amendment) Act, 1976, which provided for reduced punishment for the offence. The question that was raised before the Hon'ble Supreme Court inter alia was whether the amendment would be prospective or would apply to pending prosecutions as well in the State of West Bengal. The amendment not only brought about change in the punishment, but also change in the procedure. By virtue of the amendment, the punishment prescribed was only 3 years, whereas, in the West Bengal Act, the punishment prescribed was life imprisonment. Therefore, ....
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....unishment or change the rules of evidence for the purpose of conviction ..... There is a great and apparent difference between making an unlawful act lawful and the making an innocent action criminal and punishing it as a crime." 23. To illustrate, if Parliament were to reenact s. 302 of the Indian Penal Code, 1860 and provide that the punishment for an offence of murder shall be sentence for imprisonment for life, instead of the present sentence of death or imprisonment for life, then it cannot be that the Courts would still award a sentence of death even in pending cases. This dictum was followed by the Hon'ble Apex Court in (2018)17 SCC 448 (cited supra). 10. From the above extracted portion of the Judgment of the Hon'ble Apex Court, the following principles emerge: (a) It is only retrospective criminal legislation that is prohibited under Article 20 (1) of the Constitution of India. (b) No person can be convicted by such ex post facto law nor can the enhanced punishment prescribed by the amendment be applicable. (c) However, if the amendment reduces the punishment for an offence, the accused shall have benefit of such reduced....
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.... 13. The Hon'ble Apex Court in the case of B. Manna vs. State of West Bengal reported in AIR 1955 SC 84, which was quoted with approval by the Hon'ble Apex Court in T. Barai's case (cited supra), held that where the fresh legislation is brought on the same subject, the line of enquiry would be not whether the new Act expressly keeps alive, old rights and liabilities but whether it manifests an intention to destroy them. The new Act in the instant case i.e., the Companies (Amendment) Act, 2019 clearly manifestly an intent to treat the violations which are only technical to be adjudicated by a in-house process. Further, Section 454 of the Companies Act also makes it clear that where after adjudication and person either does not pay penalty or fails to comply with the order of adjudication, he is liable for punishment, either fine or imprisonment. Therefore, the object of the amendment Act is to give an opportunity to the person to comply with the provision and only after the order of adjudicating officer directing the compliance or his payment of penalty is violated, it would become an offence. 14. Therefore, we are of the view that the intention of the Parliame....