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Issues:
Director's petition under section 633(2) of the Companies Act, 1956 for relief from liability for non-compliance with sections 210 and 220 of the Companies Act. Analysis: The petitioner, a director of a company, sought relief from potential liabilities arising from non-compliance with sections 210 and 220 of the Companies Act. The company, initially a private limited company, converted to a public limited company. The directors were spread across different locations, with the company manufacturing televisions for another group company. The financial year was extended due to tax laws amendments, leading to a delay in holding the annual general meeting. Section 210 requires directors to present a balance-sheet and profit and loss account at the meeting, with penalties for non-compliance. Section 220 mandates filing these documents with the Registrar within 30 days of the meeting. The petition was filed before the scheduled meeting, citing reasons for the inability to prepare the financial documents. Firstly, irregularities in Orson Electronics Limited's accounts delayed the process, with ongoing investigations and audit reports pending. Secondly, a raid by Central Excise authorities on the company's offices disrupted document availability. The petitioner argued that these circumstances justified relief from liability. The court, however, declined to grant relief, emphasizing the directors' duty to act honestly and reasonably. The judge noted that the wide powers under section 633(2) should be sparingly used, and directors cannot automatically seek immunity from legal consequences. The reasons provided for non-compliance were deemed insufficient, with the court highlighting that the issues with Orson's accounts should not affect Nihon Electronics Limited's obligations. The raid by authorities was also not accepted as a valid excuse, given that xerox copies of documents were provided. The judge rejected the argument that the petitioner did not fall under the definition of an "officer in default" as per the Companies Act, emphasizing that the issue of knowledge or connivance with the default could be addressed in potential prosecution proceedings. A reference to a previous judgment was made but deemed inapplicable to the present case. Ultimately, the petition was dismissed without costs, indicating that the directors would need to address any liabilities through legal proceedings initiated by the Registrar of Companies.
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