Relief for officer default cannot extend to non compliance with court directions; jurisdictional limits and honest conduct are required.

Section 633(2) relief is confined to defaults arising from company affairs as contemplated by the parent provision and does not extend to relieve an officer from liability for failing to comply with a competent court's direction issued after conviction under the provisions governing filing of returns; consequently the court lacks jurisdiction to grant anticipatory relief against non compliance with such judicial directions. Independently, an applicant must establish that he acted honestly and reasonably; failure to file statutory cessation notices, pleading guilty and offering uncorroborated excuses denied the claim of honest and reasonable conduct, so relief was refused on the merits.

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Issues: (i) Whether the High Court under section 633(2) of the Companies Act, 1956 has jurisdiction to grant relief in respect of a default consisting of non compliance with a Magistrate's direction made under section 614A(1) of the Companies Act, 1956; (ii) Whether the applicant acted honestly and reasonably and is entitled to relief under section 633(2) of the Companies Act, 1956.

Issue (i): Whether section 633(2) empowers the High Court to relieve an officer from liability for failure to comply with a competent court's direction under section 614A(1).

Analysis: The Court examined the scope of section 633(2) as conferring the same power as a court exercising jurisdiction under section 633(1) in proceedings for negligence, default, breach of duty, misfeasance or breach of trust relating to company affairs. It distinguished those statutory defaults from a subsequent default in complying with a judicial direction imposed after conviction and sentencing under section 614A(1), noting that non compliance with such a court direction is not within the classes of defaults contemplated by section 633(1) or (2). The Court followed the reasoning in In re Auto Link Financiers P. Ltd. that subsection (2) does not permit relief against a default in complying with a competent court's direction, and that the High Court lacks jurisdiction to grant such relief in anticipation of proceedings under section 614A(2).

Conclusion: Section 633(2) does not empower the High Court to grant relief against failure to comply with a Magistrate's direction under section 614A(1); the High Court lacks jurisdiction to grant the relief sought on that ground.

Issue (ii): Whether the applicant acted honestly and reasonably and thus merits relief under section 633(2).

Analysis: The Court reviewed the factual assertions and evidence, noting that the applicant did not raise the claimed inability to access books, resignation, or other mitigating circumstances before the Magistrate and that no Form No. 32 notice of cessation was filed with the Registrar as required by section 303(2). The applicant pleaded guilty before the Magistrate and did not seek to challenge the Magistrate's order directing filing of returns. The Court found the applicant's account uncorroborated and concluded that he had not established that he acted honestly and reasonably in failing to comply with the direction.

Conclusion: The applicant has not shown that he acted honestly and reasonably; therefore he is not entitled to relief under section 633(2).

Final Conclusion: The application under section 633(2) is dismissed for lack of jurisdiction to grant relief against non compliance with a court direction under section 614A(1) and, alternatively, on the merits because the applicant has not established honest and reasonable conduct.

Ratio Decidendi: Section 633(2) of the Companies Act, 1956 confers power to relieve officers only in respect of defaults relating to company affairs as contemplated by section 633(1), and does not authorize the High Court to grant relief against a default consisting of non compliance with a competent court's direction given under section 614A(1).

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