D.K.Kapur, J. - (1.) NOTICE of this petition under Section 633(2) of the Companies Act, 1956, was issued to the Registrar of Companies. No reply has been filed but objection has been taken orally that this court has no jurisdiction on account of the fact that a complaint had been filed before a Magistrate having jurisdiction even before the present petition is filed in this court. I may mention that the petitioners are directors of M/s. Western U. P. Electric Power & Supply Co. Ltd. and the defaults in respect of which this petition has been moved for relief are in respect of holding the annual general meeting for the period ending 31st March, 1976, and for other consequential defaults. It is unnecessary to deal with the nature of the default in this petition because the sole question for consideration on the petition is whether this court has jurisdiction to deal with this petition even after a complaint has been filed before a Magistrate in respect of the defaults concerning which relief is sought.
(2.) THE objection raised is not at all a new one. It has been dealt with by me in several previous cases but unfortunately they cannot be traced out readily. I am not even aware if they had been reported. It has become necessary in view of the nature of the objection and the arguments addressed before me to deal with this matter in some more detail so as to clarify the legal position and to avoid unnecessary legal proceedings. The power of the court to grant relief in respect of defaults of directors is set out in Section 633, Under Sub -section (1) of this Section the court hearing a case in respect of alleged negligence, default, breach of duty, misfeasance, etc , can relieve the director or other officer of the company if it finds that such negligence, default, breach of duty, misfeasance, breach of trust or other default has resulted, in spite of the officer of the company acting honestly and reasonably having regard to all the circumstances of the case. Thus, if a proceeding of whatsoever nature it might be, has been initiated against a director or other officer of the company concerning defaults committed by that officer in the exercise of his duty, he has as one of the defenses open to him, a right to say that he was acting honestly and reasonably and the default is the result of other circumstances. In such a case the court dealing with the matter can grant relief to the officer concerned.
(3.) IN addition to this power of the court to grant relief there is another power which has been granted to the High Court under Sub -section (2) of this section. This section is to the effect that if a director anticipates that a proceeding might be brought against him or will be brought against him, he can apply to the High Court and say that he was acting reasonably and honestly in the circumstances of the case and he should be relieved of that default. In such a case, the High Court has the same power to grant relief as a court would have if the proceedings in respect of the default were actually being tried.;