NARSHIMHA JANARDHAN KAMATH Vs. REGISTRAR OF COMPANIES

JUDGEMENT

(1.) The Petitioners who are all officers of the Petitioner No. 13 have approached this Court by way of this Petition under section 633(2) of the Companies Act, 1956 ('the Act'). A show-cause notice dated 24-8-1992 was issued to the Petitioner herein under section 113(1) of the Companies Act as to why they should not be prosecuted as contemplated in sub-section (2) of section 113 of the Act. The Petitioners by their reply dated 18-9-1992 showed cause. It was their contention that the company had been duly transferring the shares within 60 days of its lodgement to the company in compliance with the provisions of section 113. It is further averred that the Stock Holding Corporation of India Ltd. (SHCIL) had informed the company about the appointment of Skypak Financial Services (P.) Ltd. as the authorised agent for collection of share certificates and debenture certificates on its behalf SHCIL does not accept delivery of the securities directly. It is pointed out that the delay was on account of the failure on the part of the financial institution to collect the Securities even though intimation for collection of the Securities was conveyed to them as per their instructions within 60 days as contemplated under section 113. In respect of the show-cause notice apprehending that prosecution may be launched, the Petitioners have approached this Court.

(2.) On 8-10-1992 this Court was pleased to grant ad interim injunction in terms of prayer clause (b) of the petition. On 7-8-1997 the petition was admitted and the ad interim relief granted was continued pending the hearing and final disposal of the petition. On a perusal of the fact as disclosed in the petition, the petitioners have violated the provisions of section 113. The prayer of the Petitioners, however, is that they be granted relief under the provisions of section 633(2) by relieving each of them from criminal liability. The facts as set out in the petition and as shown in the reply to the show cause notice, disclose that the Petitioners had acted honestly and reasonably. In a similar situation which arose in the case of Bank of Deccan Ltd. In re (1960) 30 Comp. Cas. 284 , a Single Judge of the Kerala High Court took the view that the Company Court could exercise such jurisdiction under sub-section (2) of section 633. I am in respectful agreement with the said Judgment. In that light of the matter, the following order : Petition allowed in terms of prayer clause (a), which reads as under: