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Rajasthan High Court, Jaipur Bench
Honble M.A.A. KHAN, J.
Anandi Lal Deep Lal Agarwal - Appellant
Versus
Registrar of Companies, Rajasthan, Jaipur - Respondents
S.B. Criminal Misc. Petition No. 1972 of 1995
Decided On : January 27, 1997
It is the well established principle of construction of statues that a penal provision imposing penalty or punishment on the subject, should be subjected to strict construction. Moreover, where two views are possible of the interpretation of a word in a provision or of the provision in a statute the view which is more beneficial to the subject must be adopted. Above, all, an act which was not punishable as an offence when such act was committed cannot be made an offence with retrospective effect by subsequent legislation. It must have a prospective and not retrospective effect. The law which is in force at the time when the impugned act is done, would govern the consequences, if any, flowing from that act. Law is, as is well known, a living organism and it has to undergo changes in order to keep pace with the changes in the behavioural pattern of the people it is meant for. But in doing that it does not aim at making the acts, committed on earlier points of time, offences with retrospective legislation. Such a law would not be a sustaining pillar of any civilised society. (Para 10)
(2). The relevant facts are these :
M/s. Dalmia Industries Ltd. (DIL), formerly known as M/s. Dalmia Dairy Industries Ltd. is a company incorporated on 21.4.1937 under the Companies Act, 1913 and duly registered as such with Registrar of Companies, Jaipur. It has its registered office at Ghana Sewar Bye-pass Road, Bharatpur, Rajasthan. At the relevant point of time the present petitioner held the position of Company Secretary in the said company.
(3). Sometimes in the year 1986 the DIL thought of floating a subsidiarycompany Nepal for manufacture of instant powder, strained, dry baby food products etc. based on vegetables and fruits. It accordingly approached the Central Govern- ment for requirsite permission as per provisions contained in Sec. 27(3) of the Foreign Exchange Regulation Act, 1973 (FERA). The Central Government permitted the DIL to set up its subsidiary company in Nepal in the name of M/s. Dalmia Industries (Nepal) Ltd. (Nepal Company) with Equity of Rs. 5.39 Crores comprising of investiment of Rs. 0.80 Crores in Nepal currency and of Rs. 4.59 Crores in import of plant and machinery. The permission so accorded to DIL on its application dated 4.4.1986 was subsequently modified on 19.8.1987 by making it obligatory for the DIL to have and retain at least 51% of the share capital of the Nepal Company. The DIL accordingly set up the Nepal company, as its subsidiary and made an investment of Rs. 15,86,115/- (Nepali Rupees 26,64,673/-) from time to time upto 31.3.1988 reflecting the same in its Balance-sheet for the year 1988 which was duly sent alongwith a letter dated 22.8.1988 to the Registrar of Companies, the complainant-respondent (Annex. 1). The fact that the DIL had the power to appoint majority of the Director on the Board of Directors of the Nepal Company was also incorporated in Arts. 18(C) 1 and (C) 2 of the Article of Association of the Nepal Company.
(4). On 16.12.1993 the Government of India (Ministry of Law, Justice & Company Affairs) in its Department of Company Affairs came to notice that the DIL had remitted Nepali Rupees 21,19,960/- towards the establishment of its subsidiary company in Nepal without obtaining its prior approval as required by Sec. 372 (4) of the Act. Violation of the said provision which was punishable u/s. 374 of the Act, was thus read in the act and conduct of DIL and penal action against it was accordingly contemplated. Therefore, a notice dated 16.12.1993 (Annex. 2) requiring the DIL to show cause for the contravention of the provisions of Sec. 372 of the Act was issued to it. By its reply dated 1.1.1994 (Annex. 3) the DIL explained that in view of the condition imposed on 28.10.1985 in Art. 18 of the Memorandum and Articles of Association of the Nepal Company and as per Sec. 4(1) (a) of the Act the Nepal Company was the subsidiary company of DIL since its very inception and, therefore, the amended provisions of Sec. 372 (14), which came into force w.e.f. 17.4.1989 only and which withdrew exemption for making investment by the holding company in its subsidiary company, did not stand attracted to its case. The judgment of Delhi High Court in Oriental Industrial and Investment Company Ltd. (1), was also cited in support of its contention. The reply submitted by DIL did notsatisfy the Registrar. He, therefore, filed a complaint for offence u/S. 372(4), puni sh- able u/S. 374 of the Act against 11 Officers/employees/ directors of DIL on 20.1.1994 (Annex. 4) without impleading DIL itself and also without naming the person working as its Managing Director at the relevant time, though at the same time exemption from personal atten
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