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Issues:
- Petition for exoneration of default under section 220 of the Companies Act, 1956. - Extension of time granted by the court for compliance with provisions of section 220. - Competence of the court to extend time fixed under section 633. - Interpretation of rules 7 and 9 of the Companies (Court) Rules, 1959. Analysis: The judgment pertains to a petition filed by the directors of a company seeking exoneration of a default under section 220 of the Companies Act, 1956. The petitioners were unable to comply with the provision due to the seizure of the company's books by the police, leading to their prosecution and conviction. The initial petition was disposed of by Khanna J., who allowed three months for compliance. The subsequent petition sought a further extension of time, citing various grounds such as delay in book return, personal bereavement, and operational challenges within the company. The Registrar pointed out deficiencies in the filing of the balance-sheet and profit and loss account, which were subsequently rectified. The petitioners justified their request for an extension based on the mentioned grounds. Regarding the competence of the court to extend the time fixed under section 633, a key contention arose. The Registrar argued that rules 7 and 9 of the Companies (Court) Rules, 1959, did not confer jurisdiction on the court to extend the time granted. However, the petitioners relied on these rules and also hinted at the court's inherent power to extend time. The court analyzed the relevant provisions, highlighting the powers granted under section 633 to relieve officers of the company from liability on defaults. Rule 7 of the Companies (Court) Rules empowers the court to extend or abridge time for acts or proceedings, while Rule 9 saves the court's inherent powers. The court delved into the legislative framework and the scope of rule-making authority under section 643, emphasizing the need for a consistent interpretation of the rules in light of statutory provisions. Ultimately, the court found that section 633 itself bestowed powers upon the High Court to extend the time fixed for redeeming defaults. Drawing parallels to a historical legal precedent, the court reasoned that fresh orders could be made regarding time extensions, aligning with the spirit of the law. The judgment concluded by granting the extension of time by another three months from the initial deadline, without imposing costs on either party. The decision underscored the court's authority to grant relief against defaults and emphasized the overarching objective of facilitating compliance with statutory requirements within the corporate framework.
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