9911796707
TMI Blog1997 (2) TMI 432X X X X Extracts X X X X X X X X Extracts X X X X ..... and interim direction was granted not to launch prosecution as proposed in the show-cause notice issued by the second respondent. The petitioner states in his petition as follows: The company was carrying on business in manufacture of cotton textiles, chemicals and rayon. Due to numerous problems, a lock-out was declared by the company on April 26, 1985 and the company remained closed and did not reopen till April 16, 1994. The company approached the Board for Industrial and Financial Reconstruction (BIFR) and pursuant to the order passed by the appellate authority, a new management was constituted and a new managing director was appointed, and the lock-out was lifted on April 16, 1994. The Company Law Board issued earlier an order under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner submitted his resignation to the board of directors on December 23, 1987. But the decision of the acceptance of his resignation was postponed by the board of directors, for one reason or the other, and the resignation was not accepted till 1994, when there was a change in the management of the company pursuant to the order of the AAIFR. The resignation was communicated to the Registrar of Companies in Form No.-32 on February 17, 1994. Thereafter, the petitioner received a notice from Registrar of Companies on February 16, 1996 wherein it is alleged that for the years ending on March 31, 1991, and March 31, 1993, the accounts were not cost audited which was in violation of the orders of the Company Law Board and the petitioner was direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 224 and with the previous approval of the Central Government.... Sub-section (11) : If default is made in complying with the provisions of this section, the company shall be liable to be punished with fine which may extend to Rs. 5,000 and every officer of the company who is in default, shall be liable to be punished with imprisonment for a term which may extend to three years or with fine which may extend to Rs. 5,000 or with both." It is contended by S. Ravi, learned counsel for the petitioner, that as the company was under lock-out from April 26, 1985, to April 16, 1994, there was no production and the matter was also pending during this period before BIFR and hence the question of cost audit for chemicals for the year ending wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not legal. As far as the alternate year 1992-93 is concerned, it was included in the earlier notice issued by the first respondent on January 7, 1991. No doubt, the company in its reply dated January 30, 1991 has referred only to the year 1990-91. But the reasons that are applicable for exemption for the year 1990-91 apply equally to the year 1992-93 and hence no action can be taken for default for the year 1992-93. As far as the year 1993-94 is concerned, no doubt, the company ought to have replied to the notice issued by the first respondent on April 17, 1993. Mr. Ravi contended that as the company was under the impression that the first respondent was satisfied with the explanation given on January 30, 1991, no formal reply was given ..... X X X X Extracts X X X X X X X X Extracts X X X X
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