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Auto Link Finance Pvt. Ltd. Vs. the Registrar of Companies - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtDelhi High Court
Decided On
Case NumberCivil Petition No. 89 of 1968
Judge
Reported in[1971]41CompCas63(Delhi); ILR1970Delhi573
ActsCompanies Act, 1913 - Sections 633(2)
AppellantAuto Link Finance Pvt. Ltd.
RespondentThe Registrar of Companies
Advocates: Daljit Singh and; J.N. Kaul, Advs
Excerpt:
companies act (1933) - section 633(2) -- applicability of -- jurisdiction of high court to grant relief under sub-section (2), in respect of the non-compliance with, direction of a magistrate made wider section 614 a(1).; the petitioner were proceeded against in the court of a magistrate for certain offences under the companies act, 1965 and were convicted and sentenced. in exercise of the power granted by section 614-a(1), the magistrate granted two month's time to the petitioners and the other directors to file the documents. upon their default in complying with the direction the petitioners, apprehending the institution of proceedings against them under sub-section (2) of section 614-a (which provides that any officer or other employee of the company who fails to comply with an order..........on behalf of the registrar of companies it has been urged that this court has no jurisdiction to grant relief under section 633(2) of the said act, section 633(2) of the act empowers the court to grant relief in certain cases of negligence, default, breach of duty, misfeasance or breach of trust against an officer of a company. section 2(11) of the act defines the court with reference to any offence under the act. the court means the court of the magistrate of the first class or, as the case may be, a presidency magistrate, having jurisdiction to try such offence and with respect to any matter relating to a company (other than any offence against this act), the court having jurisdiction under this act with respect to that matter relating to that company as provided in section 10......
Judgment:

S.N. Andley, J.

(1) This petition has been filed by two of the ex-Directors of Messers Auto Link Financiers Private Ltd. under section 633(2) of the Companies Act, 1955 praying that they may not be prosecuted under section 614-A (2) of the said Act for their failure to comply with the directions of the Sub Divisional Magistrate, Darya Ganj, Delhi.

(2) It appears that the company had failed to comply with the requirements of sections 159, 166, 210 and 220 of the said Act for the years 1965, 1966 and 1967 and its Directors were prosecuted for not filing the balance-sheets as at November 30, 1965. The trial was in the Court of Miss K. Roy, Magistrate 1st Class,. New Delhi. The petitioners, Along with the other Directors of the company were convicted by the order of the said Magistrate on September 11, 1968 and each of the Directors was fined Rs. 100.00. The Magistrate made a further order that the Directors of the said company will file the documents required within two months from the date of announcement of the said order. This direction was made under section 614-A(2) of the Act. The petitioners committed a default in complying with the aforesaid direction and thereupon filed the present petition. The reasons given in the petition for non-compliance are that the records of the company had been seized by the Police in October, 1965 and that since the petitioners had ceased to be Directors of the company on October 23, 1966 by operation of law, they could not comply with this direction as they had ceased to have any access to the company or its records. The petitioners averred that they had acted honestly and reasonably and that having regard to all the circumstances of the case they ought to be excused from the liability consequent upon the aforesaid direction in the order of the Magistrate.

(3) Notice of this petition was served on the Registrar of Companies. It was denied that the petitioners had acted reasonably and honestly.

(4) On behalf of the Registrar of Companies it has been urged that this Court has no jurisdiction to grant relief under section 633(2) of the said Act, Section 633(2) of the Act empowers the Court to grant relief in certain cases of negligence, default, breach of duty, misfeasance or breach of trust against an officer of a company. Section 2(11) of the Act defines the Court with reference to any offence under the Act. The Court means the Court of the Magistrate of the First Class or, as the case may be, a Presidency Magistrate, having jurisdiction to try such offence and with respect to any matter relating to a company (other than any offence against this Act), the Court having jurisdiction under this Act with respect to that matter relating to that company as provided in section 10. Primarily, thereforee, with respect to negligence, default, breach of duty, misfeasance or breach of trust by an officer of a company, the Court is a Criminal Court and that is the Court which is referred to in sub-section (1) of section 633 of the Act which has the jurisdiction to grant relief in the cases mentioned. However, if any such officer against whom proceedings have not been instituted in a Criminal Court has reason to apprehend that any proceedings might be brought against him may also apply for relief and in the case of such apprehension, the Court will be the High Court having jurisdiction. It is, thereforee, clear that the High Court will not have any jurisdiction to grant relief under sub-section (2) of section 633 of the Act if proceedings have been instituted in a Criminal Court under sub-section (1) of this section. This proposition is brought out by the cases reported in Air 1956 Ori 205 in re. Orissa Jute and Cotton Mills Ltd. and others and 1940 (2) AER 237 in re: Gilt Edge Safety Glass Ltd.

(5) In the present case, the petitioners were proceeded against in the Court of the Magistrate for certain offences and were convicted and sentenced. In exercise of the power granted by section 614-A(1), the Magistrate granted two months' time to the petitioners and the other Directors to file the documents. Upon their default in complying with the direction, the petitioners are apprehending the institution of proceedings against them under sub-section (2) of section 614-A which provides that any officer or other employee of the company who fails to comply with an order of the Court under sub-section (1) shall be punishable with imprisonment for a term which may extend to six months, or with fine or with both. They, thereforee, say that they are entitled to file this petition under sub-section (2) of section 633 of the Act.

(6) In my opinion, they cannot do so. Relief can be granted by the High Court under sub-section (2) of section 633 if there is negligence etc. in relation to the affairs of the company. Subsection (2) of section 633 does not empower the High Court to grant relief against a default in the compliance of a direction of a competent Court, in this case the Court of the Magistrate which has been given under section 614-A(1). In terms, such a default does not appear to me to be comprehended within the scope of sub-section (2) of section 633.

(7) There is, to my mind, another aspect to the matter. If the High Court is not possessed of jurisdiction to grant relief under sub-section (2) of section 633 after the institution of criminal proceedings, I fail to see on what principle the High Court will have such jurisdiction after the termination of the criminal proceedings in respect of the defaults which were the subject matter of the criminal proceedings.

(8) For these reasons, I am of the view that this petition is incompetent and this court has no jurisdiction to grant the reliefs sought for under sub-section (2) of section 633 of the Act. In view of this conclusion, I do not find it necessary to determine the question as to whether the petitioners acted reasonably or honestly in not complying with the direction given by the Magistrate within the time limited by it. This petition will, thereforee, stand dismissed, but, in the circumstances, I leave the parties to bear their respective costs.


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