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Judgment
R.M. Doshit, J.—This group of Appeals have been preferred by the Registrar of Companies, Gujarat State u/s 483 of the Companies Act, 1956 (hereinafter referred to as ''the Act'') against the judgment and order dated 11th January, 2008 passed by the learned Company Judge pending the above Company Petitions No. 4/2008 to 18/2008.
By impugned order, the learned Company Judge has rejected the preliminary objection raised by the appellant against the grant of ad-interim relief in exercise of power conferred by Sub-section (2) of Section 633 of the Act and has, pending the Company Petitions, confirmed the ad-interim relief.
Subject matter of dispute are the show-cause notices dated 28th November, 2007 issued upon the respondent Company, its Managing Director, Directors, Company Secretary, etc. for alleged violation of Section 303(1) of the Act. The respondents, the Company, its Managing Director, Directors, Company Secretary, etc., feeling apprehensive of the criminal prosecution and imminent arrest, have filed the above Company Petitions u/s 633(2) of the Act. According to the respondents, they have always acted honestly and reasonably. Each respondent, therefore, be excused of any criminal liability and be relieved of the alleged default complained of by the Registrar of Companies. The learned Company Judge has entertained the Company Petitions. Pending the Company Petitions, the respondents were granted ad-interim relief which has since been confirmed by the impugned judgment and order dated 11th January, 2008.
Feeling aggrieved, the Registrar of Companies has preferred the present set of Appeals.
Learned Assistant Solicitor General of India Mr. Raval has appeared for the Registrar of Companies. He has reiterated the preliminary objection raised before the learned Company Judge. He has submitted that Sub-section(3) of Section 633 of the Act enjoins the Court to serve to the Registrar of Companies a notice in the manners specified to show-cause why such relief should not be granted. He has submitted that Rule 27 of the Company Court Rules provides for the form and manner in which such notice is required to be issued. He has submitted that in absence of such notice the Hon''ble Court had no authority or jurisdiction to grant ad-interim relief in favour of the respondents. He has also made extensive submissions on the substantive merits as to how the respondents have conducted themselves in contravention of law and that they are answerable for such contraventions. He has submitted that the show-cause notice issued by the Registrar of Companies is self-explanatory. In view of the nature of defaults committed by the respondents, the grant of interim protection pending the petitions is unjustified.
The Appeals are contested by Mr. Soparkar. He has submitted that the impugned order does not amount to ''case decided''. The present Appeals are, therefore, not maintainable. He has also taken us through the record. In the submission of Mr. Soparkar the inquiries made by the Registrar of Companies were satisfactorily explained. Any minor defect or lapse detected has been rectified. The Registrar of Companies, therefore, had no occasion to initiate proceedings u/s 303 of the Act. The respondents, therefore, were justified in approaching the High Court u/s 633 of the Act. The learned Company Judge was, on the facts of the case, justified in granting interim protection to the respondents.
As recorded hereinabove, the present proceedings arise from the notice to show-cause issued by the Registrar of Companies. We are informed that the said notices have been duly replied by the respondents on 26th December, 2007. We are of the opinion that the ends of justice shall be met if the Registrar of Companies is allowed to proceed further with the action initiated u/s 303 of the Act and the respondents are, for certain specified period, protected against any action intended to be taken against them.
In above view of the matter, without examining the validity of the impugned order dated 11th January, 2008 made by the learned Company Judge pending the above Company Petitions, is quashed and set-aside. The Registrar of Companies will be at liberty to proceed further with the impugned show-cause notices issued on 28th November, 2007. The decision that may be taken by the Registrar of Companies after considering the reply/ies submitted by the respondents will be communicated to the concerned respondent. If the Registrar of Companies is of the opinion that any legal action u/s 303(3) of the Act is required to be taken against any of the respondents, such action will not be initiated for a period of three weeks from the date of communication of such decision to the concerned respondent.
This order is made without prejudice to the rights and contentions raised by the parties in the Company Petitions. In the event, the Registrar of Companies makes order adverse to the Company or any of its officers, the Company and such officers will be at liberty to challenge the same in appropriate proceeding.
Subject to the above directions, the Appeals, the Civil Application and the Company Petitions stand disposed of.