9911796707
TMI Blog2006 (12) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... oner to take appropriate steps upon receipt of a further show-cause notice. 2. The second show-cause notice has prompted the petitioner to seek to be excused for any offence that he may have committed or for being exonerated if there was no offence. Section 633(2) of the Act empowers the High Court to entertain an application by an officer of a Company who has reason to apprehend that any proceeding may be brought against him in respect of negligence, default, breach of duty, misfeasance or breach of trust. The apprehension in this case was based on notices dated December 31, 2004 that charged the petitioner with the violation of the provisions of section 628 read with section 211 on one count, and with the violation of section 628 on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontinues to remain fully eroded". 7. The notice mentions that such statement was false/misleading , though it has also been urged before me that such statement amounted to a mis-representation that would come within the mischief of clause ( b ) of section 628 of the said Act. 8. The explanation given by the Company and adopted by this Director/petitioner was that all material facts had been disclosed in the balance-sheet and in the composite papers of which the Directors Report was only a part. Reliance was placed, in the reply to the relevant original notice to show cause, on the schedule appended to the balance-sheet and the notes on accounts to indicate that the basis of the charge of falsity was unfounded. 9. In claiming t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of profits no dividend could be issued. Thereafter, the operations of the company have been detailed and in such details the financial position of the company has been mentioned. 11. From the matters referred to under the heading Operations and from the summary of the financial results of the two years, it is evident that the company has been suffering losses. 12. It is in this context that the Directors found it prudent to mention that the net worth of the Company could have been improved by infusion of funds but in view of the statutory restrictions on the promoter Company, SBI Capital Markets Limited, fresh capital could not be infused. The sentence does not make out that the erosion is due to non-infusion of capital. What it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t him and the petition was not entertained. In this case, the petition has been founded on the subsequent show-cause notice which clearly puts the petitioner on notice that upon his explanation not being found satisfactory, he would be proceeded against in accordance with law. 15. The apprehension, therefore, in this case is not unreal. 16. Upon an application being filed under section 633(2) of the Act, the High Court assumes the power and jurisdiction as the Court before which the proceedings threatened to be instituted may have been brought. In such a case, the Criminal Court would have the jurisdiction to acquit the accused, to exonerate the accused or to find him guilty and to sentence him. Section 633(2) does not merely give t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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