The main legal point established is that directors must disclose their interest in transactions entered into on behalf of the company as required by Section 91-A of the Companies Act.

JUDGMENT

Jack, J. - This is an application u/s 435, Criminal P.C. in connexion with case No. C/1423 of 1926 u/s 91-A, Companies Act, in the Court of D. J. Cohen. Esq., Presidency Magistrate, Calcutta. A rule was issued calling upon the Chief Presidency 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 con-tracts referred to in the section are con. tracts entered into at a meeting of the directors and therefore it did not refer to the contracts in question. The section runs as follows:

Every director who is directly or indirectly concerned or interested in any contract or arrangement entered into by or on behalf of the company shall disclose the nature of his interest at the meeting of the directors at which the contract or arrangement is determined on, if his interest then exists, or in any other case at the first meeting of' the directors after the acquisition of his interest or the making of the contract or arrangement.

2. There is no such limitation in the section itself; but in connexion with the disclosing of the director's interest, the clause " shall disclose the nature of his interest at the meeting of the directors at which the contract or arrangement is determined on," no doubt refers only to contracts entered into at a meeting of the company, but the first portion of the section refers to contracts not only entered into by the company, but contracts entered into on behalf of the company. Further we find at the end of this paragraph the words

or in any other case at the first meeting of the directors after the acquisition of his interest or the making of the contract or arrangement.

3. If the interpretation sought to be put upon it on behalf of the petitioners is correct then the words " or the making of the contract or arrangement" would be superfluous. Moreover, once it is admitted that the contracts referred to are contracts not only made by the company at a meeting of its directors, 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

4. This Rule was issued upon the Chief Presidency Magistrate of Calcutta to show cause why the conviction of and the sentence passed on the petitioner should not be set aside. The conviction is one u/s 91.A (2), Companies Act (Act 7 of 1913) and the sentence is a fine of Rs. 20 or in default one week's simple imprisonment. The case for the prosecution was that the accused as managing director of the Kamala Book Depot Ltd. entered into a contract or arrangement for the purchase of books worth Rs. 3-15-0 from Jogendra Publishing House, a firm in which the accused had an interest and which he did not disclose at the time he entered into the contract or at the next subsequent meeting. Secondly, that on or about 23rd July 1936 as managing director he purchased books worth Rs. 55 from Jogendra Publishing House wi