9911796707
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Issues:
1. Alleged infringement of section 211 of the Companies Act due to accounts drawn up on a cash basis without adjustment of outstanding receipts/payments. 2. Petitioners seeking relief from liability under section 633 of the Companies Act. 3. Failure of the learned Magistrate to consider the petitioners' plea of acting honestly and reasonably. Analysis: 1. The case involved a petition of complaint against two directors of a public limited company for drawing up accounts on a cash basis without adjusting outstanding receipts/payments, allegedly infringing section 211 of the Companies Act. The learned Magistrate took cognizance, issued summons, and the accused directors filed a petition under section 633 of the Companies Act seeking relief from liability, claiming they acted honestly and reasonably by following the cash system of accounting since the company's incorporation in 1953. 2. The petitioners argued that the learned Magistrate should have considered their plea under section 633, which allows relief if the accused acted honestly and reasonably, even if they may be liable for the alleged defaults. The Magistrate's failure to provide reasons for not relieving the petitioners and not considering the applicability of section 633 to the facts of the case was highlighted as a flaw in the impugned order. 3. The court emphasized that the Magistrate's order did not address whether the accused petitioners acted honestly and reasonably, a crucial factor under section 633. The court noted that the Magistrate should have determined if the accused were liable for the alleged defaults but acted honestly and reasonably, warranting relief from liability. The court directed the Magistrate to reconsider the petition under section 633, focusing on the petitioners' plea and relevant documents, and make findings accordingly, emphasizing the importance of evaluating the petitioners' conduct in light of the legal provisions. In conclusion, the court set aside the impugned order, directing the Magistrate to reevaluate the petitioners' plea under section 633 of the Companies Act and make a decision based on whether the accused acted honestly and reasonably, while considering the circumstances of the case and the legal requirements outlined in the Act.
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