No criminal prosecution can be maintained against the company in the absence of basic ingredient of offence (mens rea) – [section 209(a), 211(1) (2), 217(1) (a) & 633(2) of the Companies Act, 1956]
May 31, 2011
Case Law : SOUTH ASIAN PETROCHEM LIMITED & ORS v.THE REGISTRAR OF COMPANIES [CAL] Decided on – 05.04.2011 After inspection of books of accounts by the Registrar of Companies, notices were issued to the Respondent alleging that the Company had violated several provisions of the Act along with disclosures to be made in Balance-sheet, Profit and Loss Account & Directors Report. The court held that all the notices were sufficiently explained by the respondent and criminal prosectuions cannot be maintained:
- Where there exists difference of opinions between two professionals regarding the method to be applied for preparation of accounts, balance sheet, directors report etc, provided both the views are reasonable by ordinary Professional Standards and
- In the absence of mental elements like intention or negligene or recklessness.