w w w . L a w y e r S e r v i c e s . i n



Simplex Infrastructures Ltd. & Banwari Lal Bajoria & Others v/s The Registrar of Companies, West Bengal


Company & Directors' Information:- SIMPLEX INFRASTRUCTURES LIMITED [Active] CIN = L45209WB1924PLC004969

Company & Directors' Information:- C K INFRASTRUCTURES LIMITED [Active] CIN = U70200DL1997PLC089706

Company & Directors' Information:- D B INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U04520MP2006PTC018493

Company & Directors' Information:- R S INFRASTRUCTURES LIMITED [Active] CIN = U45201PB1997PLC020316

Company & Directors' Information:- K R INFRASTRUCTURES LIMITED [Active] CIN = U73100TG1992PLC013995

Company & Directors' Information:- I M B INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U70102DL2009PTC195079

Company & Directors' Information:- Y K M INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45202CH2006PTC029960

Company & Directors' Information:- R 3 INFRASTRUCTURES LIMITED [Active] CIN = U45400DL2014PLC268953

Company & Directors' Information:- P G M INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U01119AP2007PTC054326

Company & Directors' Information:- N H INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45209CH2010PTC032243

Company & Directors' Information:- Y D INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U70102UP2009PTC037603

Company & Directors' Information:- C 4 INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45201MH2013PTC242843

Company & Directors' Information:- B S V R INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45209TG2009PTC064901

Company & Directors' Information:- V AND K INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45200TG2001PTC036581

Company & Directors' Information:- J L INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45200TN2008PTC066965

Company & Directors' Information:- T & C INFRASTRUCTURES PRIVATE LIMITED [Strike Off] CIN = U70102TG2008PTC060995

Company & Directors' Information:- U R C INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45200TG2008PTC058894

Company & Directors' Information:- R V A INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U70102UP2013PTC056289

Company & Directors' Information:- S R G INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U74110DL2005PTC134967

Company & Directors' Information:- S R G INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U70101DL2005PTC134967

Company & Directors' Information:- N. C. R. INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45400UP2008PTC034623

Company & Directors' Information:- P T INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U51909DL2007PTC159635

Company & Directors' Information:- S. L. INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45203PB2007PTC031300

Company & Directors' Information:- V C H INFRASTRUCTURES PRIVATE LIMITED [Under Process of Striking Off] CIN = U45203KL2011PTC028762

Company & Directors' Information:- P A INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45208TN2009PTC071929

Company & Directors' Information:- A E K INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45309TN2009PTC071702

Company & Directors' Information:- K G N INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U74200DL2007PTC167982

Company & Directors' Information:- M A M INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U70109KA2012PTC062160

Company & Directors' Information:- P N INFRASTRUCTURES PRIVATE LIMITED [Strike Off] CIN = U45201OR2010PTC012647

Company & Directors' Information:- R S INFRASTRUCTURES INDIA PRIVATE LIMITED [Strike Off] CIN = U45206TN2013PTC091533

Company & Directors' Information:- J S K INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45200MH2005PTC156097

Company & Directors' Information:- S A INFRASTRUCTURES PRIVATE LIMITED [Strike Off] CIN = U45400WB2013PTC192691

Company & Directors' Information:- L & W INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45200DL2008PTC182372

Company & Directors' Information:- K R R INFRASTRUCTURES PRIVATE LIMITED [Strike Off] CIN = U70102TG2008PTC061194

Company & Directors' Information:- INFRASTRUCTURES PRIVATE LIMITED [Under Process of Striking Off] CIN = U45200JH2007PTC012792

Company & Directors' Information:- S AND A INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45206UR2012PTC000345

Company & Directors' Information:- J & K INFRASTRUCTURES LIMITED [Active] CIN = U40101JK2009PLC003034

Company & Directors' Information:- V. J. S. INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U74999UP2008PTC035636

Company & Directors' Information:- K R M INFRASTRUCTURES (INDIA) PRIVATE LIMITED [Strike Off] CIN = U45209TG2011PTC073850

Company & Directors' Information:- M D INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45201CH2001PTC024224

Company & Directors' Information:- V K INFRASTRUCTURES PRIVATE LIMITED [Strike Off] CIN = U45400UP2008PTC034415

Company & Directors' Information:- K Y INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45201DL2004PTC127815

Company & Directors' Information:- A K C INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45200KL2010PTC025716

Company & Directors' Information:- D N D INFRASTRUCTURES PRIVATE LIMITED [Strike Off] CIN = U45203PN2008PTC133243

Company & Directors' Information:- G V R INFRASTRUCTURES INDIA PRIVATE LIMITED [Strike Off] CIN = U45209AP2008PTC059504

Company & Directors' Information:- K & K INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U74120KA2006PTC040900

Company & Directors' Information:- A & G INFRASTRUCTURES PRIVATE LIMITED [Strike Off] CIN = U31900PB2012PTC036358

Company & Directors' Information:- Y R INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45201RJ2015PTC047298

Company & Directors' Information:- U D INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45400MH2010PTC203382

Company & Directors' Information:- J W INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U74120MH2015PTC268554

Company & Directors' Information:- G AND G INFRASTRUCTURES PRIVATE LIMITED [Strike Off] CIN = U45200MH2004PTC147316

Company & Directors' Information:- A. N. Y. INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45206MH2013PTC243735

Company & Directors' Information:- J V S M S INFRASTRUCTURES PRIVATE LIMITED [Strike Off] CIN = U45200TG2010PTC070371

Company & Directors' Information:- K S V V INFRASTRUCTURES PRIVATE LIMITED [Strike Off] CIN = U45209TG2010PTC069359

Company & Directors' Information:- A V R INFRASTRUCTURES PRIVATE LIMITED [Strike Off] CIN = U45400DL2009PTC186399

Company & Directors' Information:- A P S INFRASTRUCTURES PRIVATE LIMITED [Strike Off] CIN = U70109DL2013PTC248564

Company & Directors' Information:- R R INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U70109DL2006PTC150324

Company & Directors' Information:- S D P INFRASTRUCTURES PRIVATE LIMITED [Strike Off] CIN = U45200HR2013PTC048666

Company & Directors' Information:- B P K INFRASTRUCTURES PRIVATE LIMITED [Active] CIN = U45203KA2009PTC049331

Company & Directors' Information:- T M R INFRASTRUCTURES PRIVATE LIMITED [Strike Off] CIN = U45400TG2007PTC054647

Company & Directors' Information:- SIMPLEX (INDIA) LIMITED [Dissolved] CIN = U99999MH1946PTC005414

    C.P. 215 of 2012 & C.A. 516 of 2012

    Decided On, 10 June 2013

    At, High Court of Judicature at Calcutta

    By, THE HONOURABLE MR. JUSTICE HARISH TANDON

    For the Petitioners: Ms. M. Bhutoria, Advocate. For the Respondent: Utpal Maitra, Advocate.



Judgment Text

Harish Tandon, J.

The petitioners being the officers and/or directors of Simplex Infrastructures Ltd. have taken out the instant application under Section 363 of the Companies Act, 1956 for an excuse of any liability apprehended on the basis of the four show cause notices issued by the Registrar of Companies, West Bengal, on the alleged violation of Section 211 of the said Act.

Although, the aforesaid show cause notices contains various violations but the parties before this Court have restricted their submissions on the alleged offence committed by the Company for non-disclosing the fluctuation in the rates of the foreign currency in respect of the transaction in profit and loss account. The alleged violation has originated from the auditor’s report appended to the annual report for the year 2009, 2010 to the effect that the fluctuation loss in the foreign exchange currency has not been provided as required under Accounting Standard-11. In the directors’ report, it is clarified that the exchange fluctuation pertaining to a foreign currency loan is fully hedged by derivative contracts and, therefore, the loss or gain because of the fluctuation in the exchange rates of the foreign currency is notional and, therefore, not provided in the profit and loss account.

Since, the argument is advanced on the sole offence as indicated above, I do not delve to go into the nitty-gritty and/or geniunity of the other offences indicated in the aforesaid show cause notices as the same appears to have been waived and/or abandoned by the respondent.

The first show cause notice was issued alleging that the auditor’s report points out that the exchange fluctuation loss pertaining to the foreign currency loan having not provided in the profit and loss account contravenes the provision of Section 211 (3A) of the Companies Act. The other violation indicated therein relates to non-disclosure of the advances received for the work in progress have not been shown under the separate heads and nondisclosure of the cancelable and non-cancelable operating leases in the annual report for the said year. The Company duly replied the said show cause notice and contended that the Companies have entered into a derivative contract pertaining to the fluctuation in foreign currency rates and is, therefore, fully hedged. The loss or the profit is mere notional. The board of directors opined that same could not be provided in the profit and loss account. So far as the other violation and/or contravention is concerned. The Company took the stand that since no rent was received, therefore, the disclosure is not required to be made whereas the minimum lease payment, which the company received, has been duly reflected in Schedule 19 of the accounts.

The second show cause notice reiterates the first violation and/or contravention as contained in the first show cause notice relating to a non-disclosure of the exchange rate fluctuation loss as reported in the auditor’s report. The Company in reply to the same took the same stand as it took in reply to a first show cause notice and plead for an excuse of any criminal liability if there be any for alleged violation in this regard. The third and four show cause notice is the repetition of the first violation as indicated in the firstshow cause notice.

The present application is taken out under Section 333 of the Companies Act for an excuse from any apprehended proceeding to be initiated for the alleged violation and/or contravention indicated in the aforesaid show cause notices. Before dealing with the respective stands of the parties, it would be profitable to quote the provisions of Section 633 of Companies Act which is extracted below:

'S.633. Power of Court to grant relief in certain cases.-

(1) If in any proceeding for negligence, default, breach of duty, misfeasance or breach of trust against an officer of a company, it appears to the Court hearing the case that he is or may be liable in respect of the negligence, default, breach of duty, misfeasance or breach of trust, but that he has acted honestly and reasonably, and that having regard to all the circumstances of the case, including those connected with his appointment, he ought fairly to be excused, the Court may relieve him, either wholly or partly, from his liability on such terms as it may think fit.'

The aforesaid provision appears to be comprehensive and includes the partners, directors or any persons of the company from being excused from apprehended proceeding which might be brought against him/them in respect of any negligence, default, breach of duty, misfeasance or breach of trust provided he has acted honestly and reasonably with regard to the attending circumstances of the case.

The sheet anchor of the argument of the respondent is that although, the power exercised by the Court under Section 633 (2) of the said Act is discretionary but the same should be exercised with great caution and circumspect, more particularly, when the applicants have shown that they have acted honestly or reasonably as held by the Madras High Court in case of Farouk Irani & anr. – Vs- Board for Industrial & Financial Reconstruction reported in Volume-110 (2002) Company Cases 64.

The petitioner should have shown to have acted in the manner in which a man of affairs with reasonable care and circumspection which could reasonably be expected to act in the facts and circumstances of the case. There should not be any element of deception in their conduct. To avail of the relief under the aforesaid provisions, it is to be seen that the person concerned has acted honestly and reasonably and having regard to all the circumstances of the affairs, he ought to be fairly excused.

The Company in reply to first, second and third show cause notices have disclosed the circumstances in which the profit or loss because of the fluctuation in the foreign exchange rates is not provided in the profit and loss account being hedged by derivative contract. The validity of the derivative contracts are well-recognized in commercial transaction. It is not a case where the account does not reflect the transaction made by the Company in foreign exchange. The Company in the account have reflected the aforesaid transactions and the board of directors have also opined as to why the fluctuation in the foreign exchange rates has not been provided in the profit and loss account. The respondent has taken a shelter under the Accounting Standard-11 which was in vogue during the relevant period to contend that the same has been contravened with the dishonest intention. None of the show cause notices contains specific allegation of dishonest intent. The Division Bench of this Court in case of Bhagwati Foods P. Ltd., Basudeo Gupta & Ors. –Vs- Registrar of Companies, West Bengal reported in(2008) 143 Company Cases 531 held that the show cause notice should not only contain the exact offence but there must be a specific allegation of dishonest intent in these words:

'A person seeking to be excused under Section 633 (1) or (2) of the Companies Act, 1956, from penal liability for contravention of any of the provisions of the Companies Act, 1956, is required to satisfy the Court that he acted honestly, reasonably and that having regard to the entire circumstances of the case, he ought fairly to be excused. The learned Single Judge was apparently not convinced that the appellants had acted honestly and reasonably.

It is imperative that, a notice to show cause against proposed penal action, which involves punishment of imprisonment, should be specific and unambiguous. The exact offence has to be stated. Absence of any specific allegation of dishonest intent in the show cause notice, would give rise to presumption of innocence.'

My endeavour has failed to find out any such specific allegations in any of the aforesaid show cause notices containing the specific allegation of dishonest intent. The technical default, if it does not affect any person or opposed to the public policy, can be excused under Section 6

Please Login To View The Full Judgment!

33 (2) of the Companies Act. As indicated earlier, the negligence cannot be attributed in the facts of the present case with any dishonest intent. The board of directors have clarified in the accounts why the loss for fluctuation in the exchange rates of the foreign currency is not provided in the profit and loss account and this Court, therefore, is of the view that even if, there is any technical violation under Section 211 of the Companies Act, the petitioners are entitled to relief by way of being excused under Section 633 (2) of the said Act. The application is thus allowed. The petitioners are absolved of all liabilities in respect of the aforesaid show cause notices. However, there shall be no order as to costs. Urgent photostat certified copy of this judgment, if applied for, be supplied to the parties subject to compliance of all requisite formalities.
O R