RABINDRA CHAMRIA AND ORS., ETC., ETC. versus REGISTRAR OF COMPANIES WEST BENGAL AND ORS., ETC., ETC.

Citation: [1991] SUPP. 2 S.C.R. 338 · Decided: 19-11-1991 · Supreme Court of India · Bench: RANGANATH MISRA · Disposal: Dismissed

Judgment (excerpt)

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RABINDRA CHAMRIA AND ORS., ETC., ETC. 
v. . 
REGISTRAR OF COMPANIES 
WEST BENGAL AND ORS., ETC., ETC. 
NOVEMBER 19, 1991 
[RANGANATH MISRA, CJ., KULDIP SINGH 
ANDS. MOHAN, JJ.] 
Companies Act, 1956: 
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Section 633-Scope of-Power of Court to grant relief from liability 
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for default, negligence etc.-Whether relief could be granted for liability 
under Employees' Provident Funds and Miscellaneous Funds Act, 1952-Ex-
pression "any proceeding "-Meaning of 
Employees' Provident Funds and Miscellaneous Provisions Act, 1952: 
Sections 14 and 14-A-Defau/tin payment of Provident Fund dues-
Relief from liability-Grant of-Section 633 of Companies Act, 1956--
Applfcability of 
Industrial Disputes Act, 1947: 
Section 32-0ffence by a Company-Relief from liability-Section 
· 633 ojCompanies Act, 1956--Applicability of 
· The appellants in Civil Appeal No:30l2of1990 were Directors 
of a Company, which was owning a Jute mill. Due to lock out-and 
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strike in the Jute industry, the Company defaulted in the payment 
of the provident fund dues. The appellants applied under Section 
633 of the Companies Act, 1956 for being relieved of liability for 
delayed as well as non-payment of the provident fund and other 
ancillary dues. A Single Judge of the High Court passed a consent 
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order, allowing the outstanding provident' fund dues to be-paid in 
. inonthly instalments of Rs.50,000 each until the entire liability was 
paid off. As the Provident Fund authorities accepted this course, 
summons were not served on the Registrar of Companies, since 
what was sought to be recovered were the dues under the Provident 
Fund Act. The Single Judge also granted an injunction restraining 
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the respondents from initiating any criminal proceedings against 
338 
RABINDRA CHAMRIA v. REGISTRAR OF COMPANIES 
339 
·the appellants or any of them for non-payment or delayed· payment 
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of the provident fund. 
On appeal by the Regional Provident Fund Commissioner, the 
Division Bench held that any proceed'ing referred to in section 633 
of the Act would mean· only under the provisions of the Act, and 
that section 633 . of the Act had no application in respect of any B 
liability under any other Act. Hence the appeal. 
Applications claiming relief under section 633 were dismissed 
in the connected cases also, resulting in the appeals, and. Special 
Leave Petition, being flied before'this Court. 
On behalf of the appellants in Civil Appeal No. 3012 of 1990, it 
was contended that section 633 was very wide in its amplitude and 
there was,no justification to restrict its application to on~y proceed-
ings arising under the Act, that when proceedings were taken in 
relation to breach of trust, which was an offence under Indian Penal 
Code, against an officer of a company, it would be open to him to 
plead before the concerned Magistrate that he bad acted honestly 
and .reasonably, and if the Court came to the conclusion that he 
should fairly be excused it would relieve him; that under sub-sec-
tion (2), it was an anticipatory action, and the High Court also 
exercised a ·simililr power as it was exercising power under sub-
section (1)~ and if it was restricted only in respect of any liability 
under the Com_panies Act, then the protection extended under sec-
tion 633 was last, and that similarly, under section 32 of the Indus-
trial Disputes Act, which dealt with offences by Companies under 
that Act the burden was upon the person concerned to prove that 
the offences were committed without bis knowledge or consent and, 
but for that proof, the statute deemed him to be guilty; therefore, if 
protection was not afforded against such a sweeping provision, the 
entire purpose of Section 633 would be rendered nugatory. 
On behalf of the appellants in one of the connected appeals it 
was contended that the definition of "Court" contemplated with 
respect to any matter relating to a company, and that the Court 
having respective.jurisdiction as provided under Section 201) was 
with respect to any offence under the Act, the Court of a first class 
Magistrate or, as the case may be, a Presidency Magistrate having 
jurisdiction to try such offence, tliat this section would show that 
where like the appellants they were not working directors, they 
could not be subject to prosecution and that was where Section 633 
stepped in and afforded p~otection, even if it were a liability arising 
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340 
SUPREME COURT REPORTS 
(-1991) SUPP. 2 ~C.R. 
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