THAKUR DAN SINGH BIST Vs. REGISTRAR OF COMPANIES

JUDGEMENT

(1.) The Bist Industrial Corporation is a limited company of which the three applicants are directors. The applicants Nos. 1 and 2 are also partners in the firm Messrs, D. S. Bist and Sons, who are managing agents of the company for 15 years. The Registrar of Companies, Uttar Pradesh, granted a commencement certificate to the company of the applicant on the 23rd of November, 1957. The company had been registered on the 20th of March, 1957. On the 26th of March, 1957 the applicants on behalf of the company borrowed a sum of Rs. 20,00,000/- from the Government. In the application the applicants have set out the circumstances in which the amount was borrowed before the certificate of commencement was issued and their case is that in borrowing the amount as they did, they acted honestly and reasonably. They Conceded, however, that they committed a technical breach of Section 149 of the Companies Act and were on that account liable to be prosecuted and fined under Sub-section (6) of that section. Apprehending such a prosecution they have made the present application under Section 633 of the Companies Act of 1956 praying that they may be relieved in respect of the breach of the provisions of Section 149(1) of the Act.

(2.) Notice was issued to the Registrar of Companies. He has not filed any counter-affidavit, but on his behalf the learned Junior Standing Counsel has appeared and has raised the point that the application is not maintainable under Section 633 of the Companies Act and this Court has therefore no jurisdiction to grant relief to the applicants as claimed by them.

(3.) For the purpose of this application therefore we may assume without deciding that 1. the applicants have in borrowing the sum of Rs. 20,00,000/- before the issue of the certificate of commencement committed a breach of Sub-section (1) of Section 149 of the Companies Act, and 2. their allegation that they have acted hodestly and reasonably in that connection is correct.