P L D 1959 (W (PLP)

This is an application by the Crescent Bolts and Nuts Manufacturing Company Limited and its six officers in which they have prayed for reliefs under section 281 (2) of the Companies Act. They have committed default in tiling summaries of share capital with the Registrar of Joint Stock Companies for the years 1952, 1953, 1954, 1955 and 1956 under section 32 of the Act. Default has also been committed under section 72 of the Act on account of the failure of the Company to give notice of the situation to the office of the Registrar of Companies in 1951. The petitioners have further admitted that they have committed default under section 87 of the Companies Act by their failure to send the returns to the Registrar' regarding the Directors, Managers and Managing Agents for the years 1951 and 1955. They have pleaded that they received a notice from the Registrar of Joint Stock Companies on the 7th of December, 1957 to show cause why action should not be taken against them for contravening the provisions of sections 32, 72, 76 and 87 of the Act. Their explanation is that, in response to the notice, they appeared before the Registrar and explained to him that they were not well versed in Company Law and that their failure was neither wilful nor with knowledge. The Registrar, according to them, gave a warning to them to be careful in the future and showed to them how the forms were to be filled up. They have been represented in the Court by Mr. Badshah Advocate. His plea is simply of honesty and bona fides in making the default. The application has been opposed by the Registrar of Joint Stock Companies, who has denied that he gave them any impression that he would excuse the delay. In his written statement he has given the details of the defaults' committed by the applicants, and has pointed out that the present appli cation has been made after the commencement of the prosecution of the applicant at the initiation of the Registrar. The Registrar has been represented by Mrs. Sulaiman. She has contended that the application is neither competent on behalf of the company, nor on behalf of the other appli cants because no relief can be granted under the section after the commencement of prosecution. Both the objections area correct. Relief can be granted to the persons named in sub-section (3) of section 281 of the Act, and there is no mention in the provision of a company itself. Applicant No. 1, therefore, is not competent to apply for relief. The language 9 of subsection (2) shows that any person to whom the section applies can make an application to the Court for obtaining relief if he apprehends that any claim will or might be made against him in respect of any negligence default, breach of t duty or breach of trust. The words " any claim will or might be made " indicate that there should be an apprehension which has not materialized. In the present case, the apprehension has materialized and prosecution has commenced. The officers of the Company, who are applicants Nos. 2 to 7, therefore, have lost the opportunity for coming to Court for obtaining relief. The application is to be dismissed on the two‑fold ground stated above. But I should take notice of additional arguments which were advanced by Mrs. Sulaiman on behalf the Registrar. She contended that the Registrar was not bound to give any notice to the applicants to show cause before commencing their prosecution, and that there is no time limit within which prosecution is to be commenced and, therefore, a person who has committed default under the Companies Act can be prose cuted at any time after the commission of the default. This argument was advanced by, her in reply to the contention of the applicants' counsel that their prosecution for defaults com mitted in 1951, 1952 and similar old times is not just and proper. On considerations of justice and fair‑play I should mention that a prosecutor is though not debarred from com mencing prosecution after a decade or half a decade of the commission of an offence, yet he has to act reasonably and fairly, particularly in connection with offences in which the punishment is to be awarded for each day's default and for which separate fine can be imposed for every one of such defaults. It is true that a show‑cause notice is not required by law, but such a notice should be given, for otherwise those who are charged with offences will not be able to get opportunity to put forward their explanations and without them unnecessary prosecutions may be made. In the considera tion of those offences under the Company Law in which knowledge and willfulness are necessary ingredients, it is not easy to distinguish between mere forgetfulness and inadvertence on the one hand and deliberate negligence on the other hand. If a show‑cause notice is given, then those whose fault is accidental, get the opportunity of rectifying their mistakes, and those who persist in their default can be shown to have bee wilful. In 'this connection, Mr. Parmanand Advocate, has discussed the relevant law before me amicus curiae. He referred to the Digest of Company Cases (1957 Ed.) p. 200 in which the author has made the following observations :‑ " Apprehensions regarding prosecutions can arise only after the Registrar proposes to initiate criminal proceedings against the officers. The duty of deciding whether there should be prosecution or not is not the function of the High Court under section 281 (2). The proper sequence of events is that the Registrar should state his intention to initiate criminal proceedings. If he makes up his mind and actually initiates the prosecution, then there can be an application under section 281 (1) to the Court in which the prosecution is pend ing. If in such a case relief is sought before the prosecution is actually lodged, then the officers may apply to the High Court under section 281 (2) ". This statement of the law is correct. Mr. Parmanand has also discussed the question as to whether delay in commencing pro secution is a factor which should be taken into consideration for granting relief or not. He pointed out with plenty of justification that the power which is vested in the Registrar for commencing prosecution is not meant to be abused, and that i is an abuse of power if the Registrar sleeps over defaults for years and then launches prosecution. Mrs. Sulaiman pointed out that the present Registrar could not commence prosecu tion earlier because he was not the Registrar from the beginning of the defaults and because the files which were handed over to him were not in proper order. This can be an excuse as far as the present Registrar is concerned for delay in commencing prosecution if he can show that he did not have reasonable time to put the files in order, but inordinate delay in commencing prosecution is a factor which can be helpful to the applicants for obtaining relief. I dismiss the application with costs for technical reasons. K.B.A. Application dismissed.