IN THE HIGH COURT OF GUJARAT
K.A. PUJ, J.
Hemal A. Kanuga - Petitioner
Versus
Registrar of Companies - Respondent
Company Petition Nos. 4 and 18 of 2008
Decided On : 11-01-2008
Companies Act, 1956 - Section 633 - Challenge made in this group of 15 petitions is against the purported show-cause notice dated 28.11.2007 issued by the respondent i.e. Registrar of Companies, Gujarat to the Officers and/or Directors of Suzlon Energy Limited alleging violation of the provisions contained in different Sections of the Companies Act, 1956. The petitioners have sought excuse in respect of any offence, if committed, by the petitioners, by invoking the provisions contained in Section 633(2) of the Act. The petitioners are apprehending that the respondent may prosecute the petitioners for the alleged violation of the provisions contained in different Sections of the Act- Held, petitioners have taken all due care and caution in complying with the provisions of the Act and even if there may be minor lapses, those are required to be condoned. For such minor lapses and defaults of technical nature to prosecute the Company's highest ranking Officers is not just and proper. To prosecute a person is of a serious consequence. If there is no basic foundation, the person cannot be compelled to pass through the gamut of such turmoils. If at the initial stage, the Court is prima facie satisfied that the prosecution may not ultimately sustain, the Court would certainly show its indulgence so as to meet with the ends of justice or to prevent the abuse of the process of law. The Court, therefore, restrains the Registrar of Companies from launching prosecution for the alleged offences and further restrains him from proceeding further pursuant to the impugned notices challenged in all these petitions. - Petitions disposed of.
JUDGMENT :
K.A. PUJ, J.
1. Challenge made in this group of 15 petitions is against the purported show-cause notice dated 28.11.2007 issued by the respondent i.e. Registrar of Companies, Gujarat to the Officers and/or Directors of Suzlon Energy Limited alleging violation of the provisions contained in different Sections of the Companies Act, 1956. The petitioners have sought excuse in respect of any offence, if committed, by the petitioners, by invoking the provisions contained in Section 633(2) of the Act. The petitioners are apprehending that the respondent may prosecute the petitioners for the alleged violation of the provisions contained in different Sections of the Act.
2. It is the case of the petitioners that the Company's balance sheet at the end of every financial year duly records the true and fair financial position. The profit and loss account of the said Company at the end of every financial year duly records the true and fair profit and loss position of the Company for such period. On instructions of Ministry of Corporate Affairs, the office of Regional Director under Section 209A of the Companies Act, 1956 had ordered inspection of the Books of Accounts and other records etc. of the Company. The Company duly provided free and fair inspection of the books of accounts and other records to the Regional Director. After completion of the said inspection, the Regional Director on 12.09.2007 issued a letter to the Company alleging that various irregularities of the violation of the provisions of the Act were noticed and the Company was requested to furnish explanation / reply within 10 days as to why proceedings should not be launched against it for the alleged violations of the said Act. The Company, vide its letter dated 25.09.2007 replied to all queries raise by the Regional Director where from contention of the petitioners, that they have acted honestly, reasonably, bona fide and diligently and had not violated any of the provisions of law.
3. It is also the case of the petitioners that since the Company had issued adequate replies to the queries raised by the Regional Director, the Company and the petitioners were under bona fide belief that the Regional Director had dropped the matter. However, in November 2007, the respondent issued 15 show-cause notices against the Company and the petitioners alleging violation of different Sections of the Act. The Company tendered its reply to each of such notices. The petitioners were, therefore, of the view that they ought fairly to be excused of any criminal liability in respect of any alleged violation in this regard and should be relieved of any penal consequences of different Sections of the Act in respect of which show-cause notices were issued.
4. On 08.01.2008, after hearing learned Senior Counsel Mr. S.N. Soparkar for Nanavati Associates for the petitioners and after considering the facts stated and averments made in the petitions as well as after considering the nature of alleged offences and explanation tendered by the Company, the Court has issued notice making it returnable on 11.01.2008 and granted ad-interim relief to the effect that if the respondent has not filed prosecution by this time, he must stay his hands till the returnable date.
5. Today, Mr. Harin Rawal, learned Assistant Solicitor General appears for the respondent and filed affidavit-in-reply. He raised preliminary issues against the maintainability of petitions and against granting of ad-interim relief. The Court, therefore, considers the preliminary issue first before deciding the matter for admission as well as granting of interim relief on merits.
6. Mr. Rawal has submitted that under Section 633(3) of the Act, no Court shall grant any relief to any officer under Sub-section (1) or Sub-section (2) unless it has, by notice served in the manner specified by it, required the Registrar and such other p
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