S.K.KESHOTE, J. - (1.) PETITIONERS filed this petition under Section 633 of the Companies Act, 1956 (for short, 'the Act, 1956') in the matter of notices dated 12th of July, 1999 of the respondent Registrar of Companies, Rajasthan, Jaipur. In the petition the petitioners prayed for grant of following relief, - - '1. To relieve the petitioners under Section 633(2) of the Companies Act from having to comply with the provisions and procedures of the said Act, and other relevant Acts. 2. The petitioners submit that not being directors with any functional responsibility, they cannot be 'officers who are in default' under Section 5 of the Companies Act, in any case. 3. To direct Registrar of Companies, Rajasthan, to desist from instituting or continuing proceedings under the Companies Act against the petitioners, with particular reference to the impugned notices Annexures 1 and 2. 4. To issue such order or directions as the Hon'ble Court may deem proper in their wisdom and experience in the special circumstances of this case, which the petitioners may have failed to mention but merit still. 5. Ad interim orders in terms of prayers 1 to 4. Above may also kindly be passed. 6. Such further order or orders be made and/or directions be given that the Hon'ble Court may deem fit and proper to restrain the non -petitioners from instituting any legal proceedings against the petitioners till the disposal of this petition.'
(2.) THE facts of the case are that M/s. Fancy Stones (India) Limited came to be incorporated under the provisions of the Act, 1956 on October 29, 1979 with its registered office at C -72, Sarojini Marg, 'C' Scheme, Jaipur. The registered address of the Company changed a couple of times within the city of Jaipur, but ultimately it was the same as the place where manufacturing/processing of the company's products was being done at Village Pasoond, near Rajasmand, District Udaipur in Rajasthan. Undisputedly the petitioners accepted the Directorship of the Company. The petitioners averred that though they were the Directors of the Company but main affairs thereof Were being dealt with by other Directors. Shri Ajay Sharma was the Executive Director of the Company. Besides two other Directors, Shri Ramesh Advani, Resident of Ranchi Club Compound, Ranchi, Bihar, was made the Executive Director after sometime, and Shri Ratan Banka, Resident of J.V. Colony, Andheri (East), Mumbai, was also a Director in the same Company. There was one Director from the Rajasthan Industrial Investment Corporation (for short, 'the RIICO'). It is stated that the management of the Company continued till 26th of March, 1988 and thereafter it was taken over by the RIICO. The petitioners have not produced any material on the record that the management of the company had been taken over by the RIICO after 26th of March, 1988. Otherwise also I have my own reservation whether the RIICO could have taken the management of the Company. The RIICO for non -payment of the dues or for some other default, may take possession of the Unit or other property of the Company but not the management of the Company. The Company has made defaults in making the compliance of the provisions of Sections 159, 160, 210 and 220 of the Act, 1956 for the years 1988 to 1998 the respondent, the Registrar of Companies, Rajasthan, Jaipur, sent notices to the petitioners which were received by them on 15 -7 -1999. The petitioners were called upon to show cause as to why action should not be taken for their prosecution for contravention of Section 159/ 160/162/220 and as to why they should not be prosecuted under Section 210(5) of the Act, 1956 for the default in complying with the Section 210(3) of the Act, 1956. The petitioners on receipt of the notices aforestated, instead of showing cause to the respondent, had chosen to file this application under Section 633(2) of the Act, 1956.
(3.) THE learned counsel for the petitioner contended that the petitioners were not the active Directors of the Company and as being not connected with the management of the Company and are completely unaware of the operational aspects of the company's business as well as other day -to -day business and as such they deserves to be granted the benefit of Section 633(2) of the Act, 1956.;