TaxTMI 
TaxTMI 
1989 (8) TMI 274
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....tion are as follows. The company was incorporated on October 15, 1982, as a private limited company and converted into a public limited company on May 5, 1986. Apart from the petitioner, the other directors of the company are: (1) Manohar Chhabria, (2) K. N. Malhotra, (3) A. V. Karnik and (4) S. S. Vaidya. Chhabria is mostly residing at Dubai, while the petitioner, Malhotra, and Karnik are residing at New Delhi and Shri Vaidya is a practising solicitor in Bombay. The company manufactures televisions and commercial production was started in September, 1986. The company belongs to the Orson group of companies and the entire production of the company is for Orson Electronics Limited, which is also a public limited company. The directors of ....
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....extend to six months or with fine which may extend to one thousand rupees, or with both. Section 220 of the Companies Act provides that after the balance-sheet and the profit and loss account have been laid before the company at the annual general meeting, three copies of balance-sheet and profit and loss account should be filed with the Registrar of Companies within 30 days from the date on which the same were laid before the annual general meeting. The section further prescribes that failure to do so would render the company and every officer of the company liable to punishment On March 14, 1989, i.e., prior to the date of the scheduled meeting, the present petition was filed under section 633 of the Companies Act claiming that the pet....
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....by independent chartered accountants and prepare balance-sheet only after the investigation report was received. Criminal complaint was filed against Bhatia with the police after interim investigation report disclosed fraud to the tune of Rs. 5.94 crores. It is then claimed that M/s. Lovelock and Lewes, the firm of chartered accountants, which was appointed to carry out investigation into the affairs of Orson, have not yet submitted final report. It is then claimed that it was also decided to ascertain the accuracy of accounts of Nihon Electronics Limited and the directors felt that unless proper accounts have been prepared and the misdeeds of Bhatia are corrected, final balance-sheet and profit and loss account cannot be prepared before th....
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....ty arising out of the default, negligence or breach of duty, but in my judgment this power should be very sparingly used and the officers of the company cannot as a matter of right claim that civil or criminal proceedings should not be instituted against them for the default. On the facts and circumstances of the present case, I am not inclined to exercise my powers and relieve the petitioner and other directors of proceedings which they apprehend would be adopted by the Registrar of Companies. The contention that the balance-sheet and profit and loss account could not be completed because Bhatia and Monteiro had mismanaged the accounts cannot be accepted merely because a complaint has been lodged by the company with the police against thos....