SATISH BATRA Vs. REGISTRAR OF COMPANIES

JUDGEMENT

(1.) This is a petition under Section 633(2) of the Companies Act, 1956 read with Rule 9 of the Companies (Court) Rules, 1959, seeking an order excusing the petitioner from any liability for default as specified in Section 628 and 629A of the Companies Act, 1956 and seeking an order excusing the petitioners from any criminal liability and or prosecution.

(2.) The petitioners are the Directors of Vimal Plast (I) Pvt. Ltd. and in an inspection under Section 209 of the Companies Act, 1956, it was observed that the Company has accepted huge amounts from Directors, shareholders, corporate bodies (Companies) and from public ever year since 1999 and no resolution of the Board at any point of time authorizing the management to receive the application money, was passed.

(3.) For various breaches committed, the show cause notice categorically spelt out that allotment of shares in a company could be done by the Directors in accordance with the provisions of the Companies Act and in accordance with the Article of Association of the Company and not by the Managing Director as the Managing Director was not authorized by Board Resolution to receive the application money for allotment of shares.