- (1.) This is another application under Section 633(2) of the Companies Act, 1956 (hereafter, "the Act"). It is made by three persons. The first is the Managing Director of the Company, Hindustan National Glass and Industries Ltd. The second is its Chairman. The third is the Joint Managing Director. They are the first, second and third petitioners respectively in this application. They seek an order from this Court relieving them from the alleged offence with which they are charged by the show cause notice dated 14th July, 2010 issued by the Assistant Registrar of Companies, West Bengal.
(2.) Two usual points are taken. The first is that the alleged offence has become time barred and no Court can take cognizance of it. The second is that considering the show cause and the answer given to it, it is possible for the Court to hold that the petitioners had acted reasonably and honestly and that they should be let off under Section 633(2).
(3.) It appears that the office of the Regional Director had conducted an inspection under Section 209A of the Companies Act, of the books, papers, other documents and records of the Company. The date of inspection is not available from the records. But, on 22nd December, 2008 that office wrote a letter to the Company with copies inter alia, to the petitioners. In Item No. 5 of the subjects mentioned in that letter it was alleged that the Board of Directors of the Company at a meeting held on 16th May, 2006 had decided to buy 10, 000 equity shares of Rs. 10 each of a Company M/s. H.N.G. Float Glass Ltd. The shares were purchased. A sum of Rs. 30 crores was advanced to M/s. H.N.G. Float Glass Ltd. by the Company as application money for shares. Subsequently, further sums were advanced. Rs. 3.50 crores was refunded to the Company by M/s. H.N.G. Float Glass Ltd. and 42, 000, 000 equity shares of that Company were issued and allotted to this Company. According to the Central Government the said amount paid by the Company to M/s. H.N.G. Float Glass Ltd. was loan and advance. Now according to them the Directors of the Company were holding 30% of the paid up share capital of the other Company and for advancing money permission of the Central Government was required, which was not obtained. Therefore, there was violation of Section 295 (1) (d) of the Act. In the letter dated 22nd December, 2008 other alleged violations by the Company were also alleged.;