9911796707
TMI Blog1984 (2) TMI 275X X X X Extracts X X X X X X X X Extracts X X X X ..... al, under section 211 (7) of the Companies Act, 1956. The petitioners before this court are two directors of a public limited company, namely, Jagadishpur Co. Ltd. The principal allegation made against the petitioner accused in the petition of complaint was to the effect that as per balance-sheet and profit and loss account for the financial year ending March 31, 1976, and filed in the office of the complainant, it transpired that the accounts of the company have been drawn up on cash basis; and, as such, the said accounts without adjustment of the outstanding receipts/payments did not give a true and fair view of the state of affairs of the company and, as such, infringement of section 211 of the Companies Act was made. The learned Magis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned Magistrate proceeded to hold that it could not be said that there was no prima facie case against the accused at this stage. On that view, he rejected the prayer of the accused for quashing the proceeding. Mr. Deb, the learned advocate for the petitioner, after placing before me the petition of complaint and copies of correspondence, contends that the learned Magistrate should have held that the accused petitioners all along acted honestly and reasonably and for that reason they ought to have been excused by the court and the court would have relieved them wholly or partly from their liability on such terms as the learned Magistrate thought fit in terms of section 633(1) of the Companies Act. Section 633(1) of the Companies A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Magistrate has not given in the impugned order reasons for which he thought the petitioners did not act honestly or reasonably. He contends that it was no case of the petitioners that the complainant had no prima facie case. He contends that when the learned Magistrate took cognisance of the offence after the filing of the complaint and issued process, the conclusion is inescapable that there was a prima facie case against the accused petitioners. Mr. Deb contends that there is nothing in the impugned order to show that the learned Magistrate considered the petition of the accused petitioners, the provisions of section 633 of the Companies Act and the reasons for the applicability or non-applicability of the said section to the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed. If the learned Magistrate held that the accused petitioners acted in an honest and reasonable way and in consideration of the facts and circumstances they ought to be fairly excused, he could record an order relieving them wholly or partly of their liability on such terms as he thought fit. If, on the other hand, the learned Magistrate arrived at a finding that the accused petitioners had not acted reasonably and honestly or that in view of the facts and circumstances of the case, the accused petitioners ought not to be excused, the learned Magistrate could record a finding to that effect. In the present ease, the learned Magistrate does not appear to have recorded a finding positive or negative as discussed above. It should be mention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers had acted honestly and reasonably and if the facts and circumstances justified that the accused be fairly excused. Even if the learned Magistrate arrived at an affirmative finding on the point noted last, it was for him to relieve the accused petitioner wholly or partly from their liability and on such terms as he thought fit. The learned Magistrate does not appear to have considered all these stages and matters contemplated under section 633 of the Companies Act in the order impugned. I am reluctant to quash the proceedings straightaway although I am satisfied that the impugned order is illegal and does not conform to legal requirements. So the revisional application will succeed. The order impugned dated June 27, 1980, is set aside. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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