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2014 (3) TMI 166 - KARNATAKA HIGH COURTValidity of proceedings initiated - Proceedings initiated much after offense committed - Held that:- The other Directors were named as Accused Nos.1 to 3 even though they had retired from the Directorship and stood discharged by orders of this court. It is alleged in the complaint that there was a notice dated 27.11.2002 to the present applicants to produce books, records and papers and all properties of the company in liquidation and that though the notice was acknowledged, there is failure to comply and therefore, were said to have committed an offence punishable under Section 538(1)(c) of the Act. Therefore, the complaint is silent of the subsequent events and subsequent orders passed by this Court which were clearly overlooked in alleging that the present applicants had not complied with the directions issued. Company having stopped its activity in the year 1997, the present applicants being residents of Mumbai, were not in the know of the affairs of the company and in spite of this having got to the attention of the respondents time and again, the present proceedings initiated are unjust and would result in punishing the applicants for no fault of theirs. In any event, even if there was a default in production of all the books and records as claimed by the respondents, in the absence of any further action being taken expeditiously, the prosecution having been launched much after there was alleged non-compliance, the applicants were in a position where they would not be able to comply having regard to the sheer lapse of time and the applicants not being in possession of any such documents or records - Decided in favour of appellants.
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