Karnataka Theatres Ltd. and Others vs S. Venkatesan

P.A. Kulkarni, J.—Sri B. V. Acharya for the petitioners and Shri A. C. Yadurayagowda for the respondent submitted that the matter itself may be heard finally on merits. Accordingly, final arguments on the merits of the petition are heard and it is disposed of.

This is a petition by accused Nos. 1 and 3 to 10 against the order issuing process against them for the offence u/s 111(2) read with section 629-A of the Companies Act, 1956.

According to the complainant, he is a shareholder of the accused No. 1 company and he was holding 46 shares. Sri Sriramulu Naidu and his wife, Smt.Rupalatha Naidu, who were also the shareholder of the accused No. 1 company and who were holding 50 shares under Certificate No, 514, sold their shares to the complainant on September 12, 1985. On the same day, the complainant sent a letter to the company for transfer. This was acknowledged by accused No. 2. The transferors. Sri C. B. Sriramulu Naidu and Smt. Rupalatha Naidu, also wrote to A-1 on the same day to register the transfer of the shares. The board of directors did not intimate to the complainant that they were not inclined to register the transferred shares in the name of the complainant. This was not done within two months. Hence, the offence u/s 111(2) read with section 629-A.

In the sworn statement, the complainant has not stated that the company refused to register such transfer of shares within two months from the date on which the intimation of the transfer was made. In the complaint, no doubt, he has made an allegation to that effect. The allegation in the complaint is not evidence by itself. The main ingredients of the offence must be spoken to in the sworn statement. The sworn statement of the party is most important. If a party himself does not speak of the main ingredients of the offence, the simple bare allegation to that effect in the complaint will not supplement the omission made in the course of the sworn statement. Therefore, the main ingredients showing violation of section 111(2) have not been spoken to by the complainant in the course of his evidence. Therefore, the court below committed an error in issuing the process for the offence u/s 111(2) read with section 629A of the Companies Act, 1956.

In the result, the order passed by the court below issuing the process is set aside. The petition is allowed. The proceedings are quashed. The complaint is dismissed.