TMI Blog2011 (6) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... . Manohar Ponraj for the Respondent. JUDGMENT 1. This petition under section 633(2) of the Companies Act, 1956, read with rules 11(a)(23) of the Companies (Court) Rules, 1959, has been filed by the directors of M/s. Auberge Hotels P. Ltd., for quashing the proceedings initiated against the directors for the alleged contravention of section 628 of the Companies Act, 1956, in pursuance to show-cause notice No. DN/884/ 209A/628/2010 dated November 16, 2010, issued by the respondent. 2. The petitioners are the directors of M/s. Auberge Hotels P. Ltd., engaged in the business of a hotel. Sri Dilip Kapur is the managing director of the company. The other two directors are also his family members. 3. The company filed a balance-sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Name Dilip Kapur Dwarknath Kapur Date of signing of balance-sheet 02-09-2009 (II) DIN or income- 01944844 Pre-fill Designation Director tax PAN Name Jaqeline Christiane Kapur Date of signing of balance-sheet 02-09-2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rectors. 6. Learned counsel for the petitioners challenged the notice and subsequent proceedings thereto, primarily on the ground, that the allegation even if we take to be correct on their face value, it does not constitute an offence under section 633 of the Companies Act. 7. It is contended that in order to attract the provisions of section 633, false material particulars should be with regard to contents in the balance-sheet, so that the third party be not misled with regard to status of the company. 8. Furthermore, false information so disclosed should be as such which should be known to the directors, who sign the balance-sheet. The purpose of using the word "knowing it to be false" in the section clearly shows that there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o misdeclaration that would attract the penalty under section 628 of the Act. I do not see any false or mis-leading statement having been made. Notwithstanding the show-cause notice not having relied on the second limb of section 628 inasmuch as the same has been urged, I take that into consideration. In the context of the report, there is no material concealment of information by such statement. In any event, the directors report is contained in reports which detailed the financial position of the company and any one interested could have skipped over the pages to come to the schedule to the balance-sheet in order to ascertain the financial status of the company . . . Upon an application being filed under section 633(2) of the Act, the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontention of learned counsel for the respondent that in this case, admittedly information given in Form No. 23AC is misleading and not correct, as it has been mentioned that the balance-sheet has been signed by four directors, whereas it is signed by two directors only. 15. On consideration, I find force in the contention raised by learned counsel for the petitioners. 16. The reading of section 628 shows that the directors of the company, can be prosecuted for misleading statement in the balance-sheet, but typo-graphical error cannot be a ground to prosecute. Admittedly, under section 220 of the Act, balance-sheet is not required to be signed by all the directors. In the absence of any allegation of mis-statement or concealment of f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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