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TMI Blog2001 (12) TMI 802X X X X Extracts X X X X X X X X Extracts X X X X ..... criminal complaints, to prosecute the petitioners herein in respect of the alleged violations under section 628 of the Act, in pursuance of the show-cause notice of the first respondent herein in No. 6423/CI/209A/628/2001, dated 27-7-2001, on such terms and conditions as this Court may deem fit. 2. The petitioners case is that the first petitioner is the managing director of the first leasing Co. of India Ltd. and the second petitioner was formerly the company secretary of the said company between 4-10-1994 and 15-11-2001. The books of account and registers of first leasing Co. of India, hereinafter called the company , were made under section 209A of the Act and the inspection report was submitted on 1-5-2000. According to the report ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... technical or venial breach of provision, and the mere acts of inadvertence not being deliberate or dishonest or misconceived, no prosecution could be launched or continued and, therefore, the petitioners should be relieved by orders of this Court. 5. Heard Mr. Arvind Dattar, the learned counsel, for Mr. R. Senthil Kumar. The learned counsel addressed arguments elaborately, besides relying upon the decision of the Apex Court in Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26. The Apex Court held that in the absence of mala fides or deliberate defiance of law or the fact that the petitioner was guilty of conduct contumacious or dishonest or acted in conscious disregard of its obligation, no criminal action could be initiat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apital of First India Asset Management Co. Ltd. in violation of section 211. (9) Violation of the provisions of section 217, read with the Companies (Particulars of Employees) Rules, 1975. (10) Appointment of Mrs. Farah Bakshy, daughter of Mr. Farouk Irani, managing director, as assistant manager marketing on a gross salary of Rs. 6,000 (increased to Rs. 9,000) and sanction of consumer loan of Rs. 70,000 at 17.50 per cent per annum on 30-3-1996), in violation of section 292 of the Act. (11) Loans and advances include assets due from managing director to the tune of Rs. 8,15,850. (12) Annual return made as on 4-5-1998 and 7-5-1999, by furnishing incorrect information regarding indebtedness of the company. (13) Violation of Part I, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any material particular, knowing it to be false; or ( b )which omits any material fact, knowing it to be material; he shall, save as otherwise expressly provided in this Act, be punishable with imprisonment for a term which may extend to two years, and shall also be liable to fine. Whereas it was observed from the records of the company under section 209A of the Act that the annual returns for the years 1997, 1998 and 1999 signed by the managing director and the company secretary, contain a statement under Part VII with regard to the company s indebtedness, which is false in material particulars, attracting the provisions of section 628 of the Act." 9. To the said show-cause notice, explanation has been submitted by the first appli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ible, the very show-cause notice already issued read with inspection report, with respect to which the company and its directors were called upon to state its objectives, would show that this is not a fit case where this court would be justified in entertaining the application under section 633. 14. Though an application could be maintained even at the stage of apprehension of any criminal proceedings, yet this Court has to come to the conclusion that there is prima facie material that offence has been made out and a direction should be given. 15. Under section 633(2), this Court has the power to grant relief as a trial court, provided the conditions laid down under section 633(1) are satisfied and the offence/s being, ( a )the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duty in respect of the duties prescribed under the provisions of the Act. Unless this Court comes to the conclusion that the applicants have acted honestly or reasonably, this Court will not be justified in going to the rescue of the applicants. The only other alternative open to the applicants is to contest the proceedings before the judicial magistrate before whom the complaint is instituted. 18. The material question for consideration is whether the applicants have acted honestly or in good faith or whether the applicants have any justifiable reason to escape from liability, in such cases, criminal intention is irrelevant as has been held by this Court in Amara Pictures (P.) Ltd., In re [1970] 40 Comp. Cas. 130 . 19. On a consi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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