1978 (6) TMI 120 - HC - Companies Law

Summary

Issues:
Relief under section 633(2) of the Companies Act for failure to file annual return, liability to file documents, and being proceeded against by the Registrar under section 614A.

Analysis:
The applicant, a director in a company, sought relief under section 633(2) of the Companies Act due to failure to file the annual return for the year 1974. The Registrar of Companies had filed a complaint against him, resulting in a conviction and sentencing him to pay a fine and file the return within two months. The applicant, citing peculiar circumstances of his directorship, argued that he lacked access to company records, meetings were not held, and the managing director had passed away. He contended that he had resigned and was not in a position to comply with the court's direction. The Registrar countered, stating that the applicant had signed previous company documents and failed to inform the Registrar of his resignation. The Registrar argued that the application was not maintainable as the default did not amount to negligence, breach of duty, or misfeasance under section 633(2).

The court analyzed the powers under section 633(2) concerning relief for negligence, breach of duty, misfeasance, or breach of trust. It clarified that the High Court could grant relief if the officer acted honestly and reasonably in the circumstances. However, the court distinguished between defaults covered under section 633(1) and compliance with court directions under section 614A(1). The court held that the High Court could not grant relief under section 633(2) for failure to comply with a court direction as it fell outside the scope of the provision. Referring to a similar case, the court emphasized that relief under section 633(2) did not extend to defaults in complying with court directions.

The court further noted the lack of evidence presented by the applicant during the previous legal proceedings and failure to challenge the court's direction. The applicant's delayed action in responding to the Registrar's threat of further proceedings under section 614A(2) was deemed unreasonable and lacking honesty. Consequently, the court dismissed the application, emphasizing the applicant's failure to act reasonably and honestly in complying with the court's direction. No costs were awarded in the judgment.