KENJI TAMIYA Vs. STATE OF MAHARASTRA

JUDGEMENT

(1.) THIS petition is filed by two directors of Orson Electronics Limited under section 633 (2) of the Companies Act, 1956, for being relieved from any criminal proceedings and/or liability that might be launched or brought or action taken against the petitioners in respect of fefault in complying with the provisions of section 210 and 220 of the Companies Act. The facts giving rise to the filing of the petition are as follows.

(2.) THE petitioners are officers of a company registered in Japan and know as Sony Corporation. Sony Corporation entered into collaboration or joint venture agreement with Chhabria to establish Somtron Company at Hongkong. Holding of Sony Corporation was 40% while that of chhabria 60%. In the year 1979, Orson Electronics Limited was incorporated in Indian company was 76%, while the balance 24% was distributed amongst the shareholders, who are Indian residents. In view of the holding of 76% of Somtron, two directors on the Board of Orson electronics Limited were nominated from time to time by Sony Corporation. Petitioner No. 1 was appointed on the board of Orson Electronics Limited with effect from June 28, 1989. On may 9, 1986, the licence granted by Sony Corporation and the point venture under which somtron Company was established came to an and Soney Corporation ceased to have any holding in Somtron company with effect from June 20, 1986, when the accounts and the claim of sony Corporation were settled in Hong Kong.

(3.) ON November 27, 1987, Shri Bhatia, who was the managing director of Orson Electronics limited, informed petitioner No. 2 about his resignation from the board of directors of Orson electronics Limited. Shri Manu Chhabria, who was controlling Orson Electronics Limited, also informed the petitioners about the resignation of Bhatia and the fact that the statutory auditors, ratan S. Mama and Co. , noticed defects in the accounts for the year ending August 31, 1987, chhabria further informed the petitioners that the board of Orson Electronics Limited had decided to appoint Lovelock and Lewes, a firm of chartered accountants, as it was felt that bhatia and another director, Monitor, who had resigned, were guilty of several manipulations in respect of accounts of Orson Electronics Limited. The petitioners expressed surprise at the affairs of Orson Electronics Ltd. and suggested to Lovelock and Lewes, Price Water house and co. , who are the international chartered accountants and who are the accountants of Somtron and company in Hong Kong, should be advised to investigate and audit the accounts. Shri Chhabria expressed his willingness to co-operate with Price Water house regarding investigation of Orson electronics Limited.