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Judgment
The impugned order passed in Crl.M.P. No. 282 of 1996 in E.O.C.C. Nos. 263 to 265 of 1994 dated 3-10-1996 by the learned Additional
Chief Metropolitan Magistrate (E.O. II) Madras, fixing the petitioner to represent the A1 firm in prosecution proceedings, is challenged in this
revision.
Mr. Sundar, learned senior counsel representing Mr. Sundaramohan, counsel on record appearing for the petitioner would mainly contend that
the order passed by the lower Court on the application filed by the complainant Income Tax Officer, then respondent herein, u/s 305 of the Code
of Criminal Procedure making the petitioner as the representative to the first accused firm cannot be sustained under law. Therefore, the impugned
order is liable to be set aside.
The facts of the case are these :
The Income Tax Officer filed a complaint against the first accused firm and its partner Peer Mohideen (A2) for the offences under the Income Tax
Act. When the proceedings were pending, Peer Mohideen (A2) passed away. The petitioner Syed Ibrahim filed a petition for waiver of interest
and also paid a substantial amount of the bills on behalf of the first accused firm. The complaint was filed in the year 1994. On 17-4-996 the
Income Tax Officer, the Complainant filed a petition u/s 305 of the Code of Criminal Procedure requesting the lower Court in Crl.M.P. No. 282
of 1996 to fix the liability on the petitioner to represent the first accused firm in the criminal proceedings and issue processes to him for his
appearance. The petitioner on receipt of summons filed a counter before the lower Court that he did not have any connection with the said firm and
as such he was not competent to represent the firm as he was not in charge of or responsible for the said firm. He also further contended that
Section 305 of the Code of Criminal Procedure would not apply to the firm and even assuming it to be so, the representative can be appointed
only by the accused and not by the complainant.
After hearing both sides, the learned Additional Chief Metropolitan Magistrate, while allowing the petition filed by the complainant observed as
follows :
Whatever may be the reason for taking part in the departmental proceedings it may be construed that he is the person to be considered as a
competent person to represent the firm in the prosecution proceedings also. The second respondent is competent person only to represent the first
accused firm and he has not personal liability in the offence.
Mr. Sundar, counsel for the petitioner in this revision, challenging the above said order, would press into service the following two contentions :
(1) Section 305(1) of the Code of Criminal Procedure does not apply to the first accused firm and therefore, fixing the liability on the petitioner u/s
305(1) of the Code of Criminal Procedure, to represent the firm is not permissible under law.
(2) As per Section 305(2) of the Code of Criminal Procedure, even in case the Section 305(1) of the Code of Criminal Procedure applies, only
the accused firm has got a right to appoint its representatives and the complainant cannot pick and choose the representative, especially when the
other partners are still available.
Admittedly, the petitioner is the son of the one late Mohammed Idris who was a partner of the firm. The father of the petitioner was not an
accused in this case. When it is so, it is stated, that the petitioner who is his legal representative cannot be asked to represent the firm.
Mr. K. Ramasamy, counsel for Income Tax cases, in a bid to support the impugned order stated that Section 305 of the Code of Criminal
Procedure would be very much applicable to the present case and even assuming that said Section is not applicable, the relevant provisions u/s
159(6), 189(3) and (5) of the Income Tax Act would provide for the department to make the legal representative of the partners of the firm to be
representative for the firm in a Criminal Case. In support of the contentions raised on either side, several authorities have been placed.
Now, this revision could be disposed of, on a short ground. The question is this whether Section 305 of the Code of Criminal Procedure under
which the Court was asked to fix up the responsibility on the petitioner is maintainable or not ? Section 305 of the Code of Criminal Procedure
reads as follows :
Section 305. Procedure when Corporation or registered society is an accused :-
(i) In this section, ""corporation"" means an incorporated company or other body corporate, and includes a society registered under the Societies
Registration Act, 1860 (21 of 1860).
(ii) Where a Corporation is the accused person or one of the accused persons in an inquiry or trial, it may appoint a representative for the purpose
of the inquiry or trial, and such appointment need not be under the seal of the Corporation.
(iii) Where a representative of a Corporation appears, any requirement of this Code that anything shall be done in the presence of the accused or
shall be read or stated or explained to the accused, shall be construed as a requirement that that thing shall be done in the presence of the
representative or read or stated or explained to the representative, and any requirement that the accused shall be examined, shall be construed as a
requirement that the representative shall be examined.
(iv) where a representative of a Corporation does not appear, any such requirement as if referred to in sub-section (3) shall not apply.
(v) where a statement in writing purporting to be signed by the managing director of the corporation or by any person (by whatever name called)
having, or being one of the persons having the management of the affairs of the corporation to the effect that the person named in the statement has
been appointed as the representative of the corporation for the purposes of this section, is filed, the Court shall, unless the contrary is proved,
presume that such person has been so appointed.
(vi) If a question arises as to whether any person appearing as the representative of a corporation in an inquiry or trial before a Court is or is not
such representative, the question shall be determined by the Court.
This section is applicable only to the corporation or registered society. According to this section, the meaning of ""corporation"" is an incorporated
company or other body corporate and includes a society registered under the Societies Registration Act. The contention of the counsel for the
petitioner is that admittedly the first accused is a firm and it can neither be called as a corporation nor as a registered society. As pointed out by the
counsel for the petitioner, in various other enactments the word company has been given an enlarged meaning to include the firm. This is provided
even under the Income Tax Act, 1961 and in support of the above position, the learned counsel cited a case in M/s. Haji Esmail Noor Mohammed
and Company v. State of Uttar Pradesh 1990(2) FAC 279. The relevant observation is as follows :
In my opinion the argument advanced by the learned counsel cannot be accepted. Section 305 Criminal Procedure Code applies when a
Corporation or a registered society is an accused. At the time of arguments the learned counsel for the petitioners conceded that M/s. Haji Esmail
Noor Mohammed is not a company or a registered society, but it is a firm. The description of Razak Abdul Latif as partner of the firm in the
heading of the petition clearly shows that it is a partnership firm and not a Corporation or a registered Society. Section 305, Cr.P.C. has,
therefore, no application to the present case.
In the instant case, though a faint attempt has been made by the counsel for the respondent, that the Corporation includes firm, the said
submission was not substantiated by any basis either with reference to the relevant section of the Code of Criminal Procedure or the section of
Income Tax Act, or by citing authorities. Instead, the learned counsel for the respondent would contend that by virtue of Sections 159(6), 189(3)
and 189(5) of the Income Tax Act, the legal representative of the deceased could be made as a representative even in criminal proceedings. But
the reading of the relevant section would make it clear that it relate to the penalty imposable by the authorities of Income Tax Act falling under
Chapter XXI from Section 271 and it would not relate to the prosecution and offences falling under Chapter XXII from Section 275-A of the
Income Tax Act.
Therefore, in my view, the various sections pointed out under the Income Tax Act would not relate to the prosecution. It is also made clear
from the above discussion that section 305 of the Code of Criminal Procedure would not be applicable for a firm. Therefore, the order passed by
the learned additional Chief Metropolitan Magistrate, Madras, fixing the responsibility on the petitioner to represent the first accused firm cannot
stand and the same is liable to be set aside. However, if law permits, the complainant can proceed against the firm or against whomsoever who are
responsible for the affairs of the company, since it is stated that the other partners are available.
In view of the above conclusions, this revision is allowed setting aside the impugned order of the Additional Chief Metropolitan Magistrate,
Madras. Consequently, Crl.M.P. No. 3735 of 1996 is disposed of.
Revision allowed.