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2015 (4) TMI 24 - HC - Companies LawApplication under Section 633(2) of the Companies Act to grant relief - Notice issued to company under section 209(1), 209(3)(b), 217(3), 292(1)(e) and 297 of the 1956 Act - Another notice issued under Section 295 & 299 of the Companies Act - Held that:- Section 295 of the Companies Act specifically foists a duty on the Directors not to grant loan without taking necessary steps, while Section 299 of the Companies Act makes it mandatory on the Directors to disclose his interest. There is no doubt that on basis of the first and second set of show-cause notice instruction to launch prosecution has been issued. Even on receipt of the communication dated 20th February 2009 the basis of the instructions has not been sought for by the applicants herein. In the affidavit filed by the Central Government it has been stated that permission has been sought to withdraw the prosecutions directed. For violation of Sections 295 and Section 299 of the 1956 Act the Central Government can impose either a fine or direct imprisonment of six months. Section 299 also postulates imposition of fine, therefore, the period of limitation would not exceed one year. As the show-cause has not been issued within one year of the offence, if any nor has any application been filed under Section 190 of the Code of Criminal Procedure within the time specified above entitles the petitioners to being excused under Section 633(2) of the 1956 Act for show-cause notices dated 2nd February, 2009 and 13th February, 2009. By the letter dated 20th February, 2009 the petitioners have been informed that instructions have been given to launch prosecution pursuant to the show-cause notices issued under Section 209(1), 209(3)(b), 217(3), and 292(1)(e) of the 1956 Act. That the said letter has been received by the petitioners is an admitted fact but in spite of receipt no copy of letter dated 2nd December, 2008 has been sought by the petitioners, therefore, in respect of the said communication dated 20th February, 2009 the petitioner is not entitled to any order. - Application disposed of.
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