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Petition seeking relief from liability under section 233B of the Companies Act, 1956. Detailed Analysis: The petitioner, a managing director of a company, sought relief from liability under section 233B of the Companies Act, 1956, related to the Cost Audit (Report) Rules, 1968. The company faced challenges in submitting cost audit reports due to labor issues causing delays. The Central Government's notification mandated appointing a cost auditor and submitting reports within specified timelines. The petitioner explained the delays and sought extensions, which were not granted, leading to a show-cause notice and subsequent legal proceedings initiated by the Registrar of Companies. The court analyzed the statutory provisions under section 233B and the Rules, emphasizing the audit requirements and penalties for non-compliance. It noted the company's efforts to comply despite labor disruptions affecting operations. The petitioner demonstrated diligence and honesty in managing the company's affairs, attributing delays to factors beyond their control, such as labor unrest. The court considered the petitioner's explanation for the delay in filing cost audit reports and the actions taken to address the issues, including requesting extensions. Referring to section 633(2) of the Companies Act, the court evaluated the petitioner's application for relief from potential prosecution due to alleged negligence or breach of duty. It compared similar cases where relief was granted under comparable circumstances, supporting the petitioner's claim for intervention to prevent prosecution. The court acknowledged the petitioner's compliance efforts and the mitigating factors contributing to the delays in submitting the required reports. Consequently, the court directed the Registrar of Companies to refrain from prosecuting the petitioner based on the show-cause notice, granting relief under section 633(2) of the Companies Act. The court's decision was influenced by the petitioner's demonstrated honesty, diligence, and the extenuating circumstances surrounding the delays in fulfilling the cost audit report requirements. The court's ruling allowed the petition, with no costs incurred, and closed the related company application.
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