Set-off. Innocent Penalty on falsification of books. confirmed. IN RE Ambrose Lake Tin and Copper Mining Co., ex parte Taylor, ex parte Moss, 14 Ch. Div., 390, and see also IN RE British Seamless Paper Co., 17 Ch. Div., 467. A director cannot set-off a debt due to him from the Company for money advanced by him for expenses against his liability under this section for the misappropriation of the Company's money, IN RE Anglo-French Co-operative Society, ex parte Pelly, 21 Ch. Div., 493; see also on this point IN RE Exchange Banking Co., Flitcroft's case, 21 Ch. Div.. 519, and IN RE Carriage Co-operative Supply Association, 27 Ch. D, 322. But a Company cannot set-off a sum of money which a director has been ordered to pay under this section against dividends payable to an assignee of debts due from the Company; such debts having been purchased by the assignee bona fide and for value from the director, who had purchased the debts from the original creditors of the Company, and had assigned them before he was ordered to pay the sum of money under this section, IN RE The Milan Tramways Co. ex parte Theys, 52 L. J. Ch. D., 29; 25 Ch. Div., 587. Claims under this section against a director are "things in action" within sec. 95 of the English Companies' Act, 1862, and assignable by the official liquidator, and a misfeasant by purchasing such claims can prevent proceedings being taken, IN RE Parkgate Wagon Co., 17 Ch. Div., 234. See sec. 144, supra. But an innocent director of a Company is not liable under this section for the fraud of his co-directors in issuing to the shareholders false and fraudulent reports and balance sheets, if the books and accounts of the Company have been kept and audited by duly appointed and responsible officers, and he has no ground for suspecting fraud. Nor is a director bound to examine entries in any of the Company's books; nor is the doctrine of constructive notice to be so extended as to impute to him a knowledge of the contents of the books. IN RE Denham & Co., 25 Ch. D., 752. If a director sells property of his own to a Company at a profit, the Company cannot recover such protit from him if the recission of the contract has become impossible, IN RE Cape Breton Co., 26 Ch. D., 221. For forms of orders under this section, see Palmer's Precedents, 3rd ed., p. 508. 215. If any director, officer or contributory of any Company wound-up under this Act destroys, mutilates, alters, falsifies, or fraudulently secretes any books, papers, writings or securities, or makes, or is privy to the making of, any false or fraudulent entry in any register, book of account or other document belonging to the Company, with intent to defraud or deceive any person, every person so offending shall be punished with imprisonment for a term which may extend to two years, and shall also be liable to fine which may extend to five hundred rupees. Sec. 166 of the English Companies' Act (25 and 26 Vic., c. 89), 1862, which concludes as follows: "every person so offending shall be deemed guilty of a misdemeanour, and upon being convicted shall be liable to a term of imprisonment for any term not exceeding two years, with or without hard labour." Sec. 186 of the Indian Companies' Act X. of 1866 concluded thus: "every person so offending shall be punished with imprisonment of either description, as defined in the Indian Penal Code, for a term which may extend to two years, &c." as Cf. sec. 76 of Act XIX. of 1857. Sec. 53 of the Indian Penal Code XLV. of 1860 defines imprisonment rigorous, that is with hard labour or “simple.” The words " fraudulently secretes" are omitted from the English Companies Act, and are inserted in the Indian Acts" to provide for an offence not unlikely to occur in India." Whitley Stokes, Indian Companies' Act, 1866, p. 71. by Court. 216. Where any order is made for winding-up a Prosecution of delinquent Company by the Court or subject to the supervision directors in of the Court, if it appear in the course of such the case of winding-up that any past or present director, winding-up manager, officer or member of such Company has been guilty of any offence in relation to the Company for which he is criminally responsible, the Court may, on the application(i) of any person interested in such winding-up or of its own motion, direct the official liquidators or the liquidators (as the case may be) to institute a prosecution for such offence, and may order the costs and expenses of such prosecution to be paid out of the assets of the Company. Sec. 167 of the English Companies' Act (25 and 26 Vic,, c. 89), 1862; and sec. 187 of the Indian Companies' Act X. of 1866, verbatim. (i) Application under this section is to be made by petition, see rule 49, post, Appendix. Where the Court was satisfied, upon a petition presented by the liquidator for a direction that he should prosecute a director at the expense of the assets, that the opposition to the petition came, not from a desire to save the assets, but from a desire to save the director, and that if the petition were not at once acceded to there would be risk of justice being defeated, a prosecution was at once directed without further consulting the creditors of the Company, IN RE Charles Denham & Co., 32 W. R. (Eng.) 920 (Chitty, J.) "Where a In the English Act there follows a section (168) as follows:Company is being wound-up altogether voluntarily, if it appear to the liquidators conducting such winding-up that any past or present director, manager, officer or member of such Company has been guilty of any offence in relation to the Company for which he is criminally responsible, it shall be lawful for the liquidators, with the previous sanction of the Court, to prosecute such offender, and all expenses properly incurred by them in such prosecution shall be payable out of the assets of the Company in priority to all other liabilities." "The above section was omitted because the case was supposed to be sufficiently provided for by the Penal Code," Stokes, p. 71. 217. If any person, upon any examination upon Penalty for oath authorized under this Act, or in any affidavit, false evidence deposition or solemn affirmation, in or about the winding-up of any Company under this Act or Winding-up may be referred to District Court. otherwise in or about any matter arising under this Act, intentionally gives false evidence, he shall be liable to imprisonment for a term which may extend to seven years and shall also be liable to fine. Sec. 169 of the English Companies' Act (25 and 26 Vic., c. 89), 1862, concludes thus: "wilfully and corruptly gives false evidence, he shall, upon conviction, be liable to the penalties of wilful perjury." Sec. 188 of the Indian Companies' Act X. of 1866 concludes thus: "intentionally gives false evidence, he shall, upon conviction, be liable to imprisonment of either description, as defined in the Indian Penal Code, for a term, &c." As to false evidence generally see the Indian Penal Code (Act XLV. of 1860), Chap. XI. secs. 191, et seqq. In the English Act there follow secs. 170---173, relating to the powers of the Lord Chancellor of Great Britain, the Court of Session in Scotland, the Vice-Warden of the Stammaries, and of the Lord Chancellor of Ireland, to inake rules as regards winding-up; and in the Indian Act, sec. 189, empowering the High Court to make rules concerning the mode of proceeding for winding-up. See in this Act, see. 254, post. 218. Where the High Court makes an order for winding-up a Company under this Act, it may, if it thinks fit, direct all subsequent proceedings to be had in a District Court; and thereupon such District Court shall, for the purpose of winding-up the Company, be deemed to be "the Court" within the meaning of this Act, and shall have, for the of such winding-up, all the jurisdiction and powers of the High Court. This section is new. purposes Cf. sec. 265 of the Indian Contract Act IX. of 1872, as to the jurisdiction of District Courts over partnership suits; as to which see Sorabji Furdoonjee v. Dulabai Hargovandas. 1. L. R., 5 Bom. 65; Prosad Doss Mullick v. Russick Lall Mullick, 1. L. R., 7 Calc., 157; 8 Calc., 329 Chunder Shaha v. Manick Chunder Banickya, I. L. R. 7 Calc., 428; Ramasami v. Theruvengadasami, 1. L. R., 1 Mad., 340, and Ramaya v. Chandra Sekaya, I. L. R., 5 Mad., 256. Under Act XIX. of 1857 it was held that no appeal lay from an order of a District Judge placing the name of an alleged allottee on the list of contributories of a Company which was being wound-up under that Act; Jamiyatram Himmatram v. The Guzarat Trading Co., 6 Bom. H.C. A. C. J. 185, 1866; see now sec. 169, supra. An order made by a Court in the Mofuseil of the Bombay Presidency to wind-up a Company may, under sec. 288 of Act VIII. of 1859, be executed by the High Court of Bombay, by staying suits against the Company under sec. 72 of Act XIX. of 1857; but such claim will only take effect from the date of its being filed in the High Court, and suits can only be stayed from that time. Where a decree in a suit has actually been executed by the attachment of property, though the sum decreed may not have been realized by sale, there is no longer any suit or action to be stayed under Act XIX. of 1857, sec. 72, from which section however the word "proceeding" was omitted, as to which see supra. Motiram Dalpatram v. Guzarat Trading Co., 3 Bom. H. C. O. C. J., 20. See the definition of "the Court," supra, sec. 3 and sec. 130, supra, and "District Court," sec. 3. from one 219. If during the progress of a winding-up in As to transfer a District Court it is made to appear to the High of winding-up Court that the same could be more conveniently District Court prosecuted in any other District Court, the High to another. Court may transfer the same to such other Court, and thereupon the winding-up shall proceed in such other District Court. This section also is new. Query. Whether an appellant from an order of a District Court in a winding-up would have ninety days from the date of the order to appeal to the High Court under No. 156 of Sched. II. of the Limitation Act (XV. of 1877); or would he be limited to the three weeks provided for by sec. 169, supra? For the rule of construction in such cases, per Bovill, C. J. in The Queen v. Champneys, L. R. 6 C. P., 384. It is a fundamental rule in the construction of statutes, that a subsequent statute in general terms is not to be construed to repeal a previous particular statute unless there are express words to indicate that such was the intention, or unless such an intention appears by necessary implication." See also Thorpe v. Adams, L. R. 6 C. P. 125; and Unnoda Persaud Mookerjee v. Kristo Coomar Moiteo, 15 Beng. L. R. 60 (note) P. C. 19 Suth. W. R. 4. 220. PART V. REGISTRATION-OFFICE. tion office. The registration of Companies under this Constitution Act shall be conducted as follows (that is to say):- of registra(a) The Local Government may, after the sanction of the Governor-General in Council to the creation of any such offices shall have been obtained, from time to time appoint such Registrars, Assistant Registrars, clerks and servants as it may think necessary for the registration of Companies under this Act, and remove them at pleasure: (b) The Local Government may make such regulations as it thinks fit with respect to the duties to be performed by any such Registrars, Assistant Registrars, clerks and servants as aforesaid: (c) The Local Government may from time to time determine the places at which offices for the registration of Companies are to be established, so that there be at all times maintained in each of the towns of Calcutta, Madras and Bombay, at least one such office, and that no Company shall be registered except at an office within that part of British India in which, by the memorandum of association, the registered office of the Company is declared to be established: (d) The Local Government may from time to time direct a seal or seals to be prepared for the authentication of any documents required for or connected with the registration of Companies: (e) Every person may inspect the documents kept by the Registrar of joint stock Companies. There shall be paid for such inspection such fees as may be directed by the Local Government, not exceeding one rupee for each inspection. Any person may require a certificate of the incorporation of any Company, or a copy or extract of any other document or any part of any other document, to be certified by the Registrar. There shall be paid for such certificate of incorporation, certified copy or extract, such fees as the Local Government may direct, not exceeding three rupees for the certificate of incorporation, and not exceeding two annas for each hundred words of such copy or extract: (f) The existing Registrar, Assistant Registrars, clerks and other officers and servants in the office for the registration of joint stock Companies shall, during the pleasure of the Local Government, hold the offices and receive the salaries hitherto held and received by them, but they shall in the execution of their duties conform to any regulations that may be issued by the Local Government: (g) There shall be paid to any Registrar, Assistant Registrar, clerk or servant that may hereafter be employed in the registration of joint stock Companies such salary as the Local Government may, with the sanction of the Governor-General in Council, direct: (h) Whenever any act is herein directed to be done to or by the Registrar of joint stock Companies, such act shall, until the Local Government otherwise directs, be done to or by the existing Registrar of joint stock Companies, or in his absence to or by such person as the Local Government may |