S S SAHNI Vs. REGISTRAR OF COMPANIES

JUDGEMENT

(1.) PETITION under Section 633 (2) of the Companies Act, 1956, has been moved by Prestolite of India Ltd. , through its managing director and directors, seeking the following reliefs : (a) That the petitioners be excused and relieved from all proceedings criminal in nature including that of F. I. R. No. 143 of 1981, F. I. R. No. 134 of 1982 and F. I. R. No. 39 of 1983 in respect of the alleged non-deposit of the contributions of the employees' shares and stay further proceedings pending in the court of Miss Raj Rani, Judicial Magistrate 1st Class, Faridabad, in respect of the said FIRs ; (b) stop all other proceedings pending with the Collector, Faridabad, for recovery of employer's shares of provident funds/esi and also stay further proceedings at the hands, of Regional Director, Employees' State Insurance Corporation, for the alleged contravention of the ESI Act and the Scheme framed thereunder and/or any contravention of the Income-tax Act with reference to the tax deducted at source in respect of the company and its employees ; (c) relieve the petitioners from all pending actions which are likely to be converted into criminal prosecutions and/or pass such other orders as may be deemed fit under the facts and circumstances of the case after giving notice to the Registrar of Companies as required under law.

(2.) THE facts briefly stated in the petition are that the company was originally started with the technical collaboration of Prestolite International, Ohio, U. S. A. , in the year 1962 by the Maharaja of Patiala and since then the company has been regularly engaged in the manufacture of electrical automobile and electrical part components. It is a supplier of electrical automobile components to all the manufacturers of automobiles such as : - (i) Hindustan Motors Ltd. ; (ii) Bajaj Auto Ltd. ; (iii) Premier Automobiles Ltd. ; (iv) Mahindra and Mahindra Ltd. ; (v) Automobile Products of India Ltd. ; (vi) Enfield India Ltd. ; (vii) Punjab Motors Tractors Ltd.

(3.) IT is also catering to the requirement of about 1,400 direct demanding officers, the Army base workshops, situated in various parts of the country. It is also registered with the Director-General, Supplies and Disposals, for the annual rate contract. The present market value of the assets of the company including the value of the land and buildings would be approximately Rs. 6. 25 crores. It had taken financial assistance from the Union Bank of India through its branch situate at Faridabad. The company had been doing regular business till 1977. In June, 1977, a theft was detected in the pledged godown of the company under the lock and key of the Union Bank of India and goods worth Rs. 5 lakhs were stolen from there. An F. I. R. was lodged with the local police bearing No. 216 of 1977 and during investigation it was revealed that the then godown keeper of the Union Bank of India was involved along with one foreman of the company, namely, Harnam Singh, and during the course of investigation, the godown keeper and Harnam Singh were arrested. On June 29, 1977, the local police brought Harnam Singh to the factory premises for spot verification and when he was passing through the electro-plating department, he quickly swallowed cyanide and died instantaneously. There was commotion among the workers of the company. They went on a lightning strike. This was followed by a general strike in the entire industrial complex of Faridabad. It was rumoured that the officials of the company had beaten the said Har-nam Singh to death. In the spree of false rumours, a large number of miscreants including outsiders and anti-social elements set the company building on fire and the administrative block of the company got completely damaged on account of the fire. The records were completely burnt. The Government of Haryana appointed a commission of enquiry headed by Mr. Justice C. G. Suri, who held an enquiry into the matter for a period of one year and the workers also attended the hearing and they would not take interest in the production work of the company. The commission ultimately held that Harnam Singh had died on account of taking a poisonous substance in the factory premises and none of the officials of the company were involved or were instrumental in causing his death.