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Issues:
Violation of sections 292(3), 292(1)(d), and 211 of the Companies Act, 1956; Whether the investments made by the managing director and former directors were in the nature of short-term deposits or portfolio management schemes; Whether the petitioners acted honestly and reasonably in the best interests of the company. Analysis: The petitioners, managing director, and former directors of a government undertaking filed a petition under section 633(2) of the Companies Act, 1956 seeking relief from liability. The Registrar of Companies alleged violations of sections 292(3), 292(1)(d), and 211, regarding investments made in SBI Capital Markets Ltd. and ANZ Grindlays Bank without proper authorization. The petitioners argued that the investments were short-term deposits and not portfolio management schemes, hence no violation occurred. They contended that any prosecution should be barred by limitation, as the offenses were time-barred. The court held that the complaints were indeed time-barred, relieving the petitioners from liability under the mentioned sections. Regarding the offense under section 211 for non-disclosure of investments in the balance-sheets, the court analyzed the limitation period. The court determined that the date of knowledge for the offense was September 19, 1994, and as the petitioners obtained a stay of prosecution on September 7, 1995, the limitation period was not over. The court rejected the argument that the limitation had expired for prosecuting the petitioners under section 211. The petitioners also argued that they acted honestly and in the best interests of the company, as no loss was incurred, and they gained no personal advantage. The court noted that the company did not suffer any loss and gained substantial interest on surplus funds. The court accepted the petitioners' claim of acting honestly and reasonably, relieving them of liability under section 211. The court distinguished a previous case cited by the petitioners, emphasizing the unique circumstances of the current case. In conclusion, the court allowed the company petition, relieving the petitioners of liability under sections 49(1)(a), 292, 292(1)(d), 292(3), 49(9), and 211 of the Companies Act, 1956. The court found that the petitioners had acted honestly, reasonably, and in good faith, leading to the dismissal of charges against them.
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