An Officer of a company cannot seek absolute exemption for any breach or violation of provisions of the Companies Act, 1956.

 

In a recent judgment, the High Court of Rajasthan has dismissed a petition under sub-section (2) of Section 633 of the Companies Act, 1956, seeking direction to relieve officers of a company from prosecution for any alleged default or breach of provisions of the Companies Act, 1956 if any having been committed during the period prior to taking over the management of the company. As such in the case, there were no proceedings pending or any such proceedings were contemplated by the Registrar of Companies. An important case decided by the High Court of Rajasthan was
'Sharad Kumar Singh and Others v. Office of Registrar of Companies' [2011] 107 SCL 24 (Raj.)

Conclusion

On introspection of section 633 of the Companies Act, 1956 following proposition is being emerged. From a bare reading of section 633 of the Act, it emerges that under section 633(1) of Companies Act, 1956 if any proceedings arises out of negligence, default, breach of trust and duty, misfeasance and it appears to the Court that an officer has acted reasonably in the facts and circumstances of the case, he may fairly be relieved partly or wholly from his liability. However, at the same time, under sub-section (2) of section 633 of Companies Act,1956 without there being any proceedings if officer of a Company has reason to apprehend that proceedings might be brought against him in respect of any negligence, default, breach of duty, misfeasance or breach of trust, he may apply to the High Court for relief. It is pertinent to note that in the aforementioned case, as such, no proceedings are pending against the petitioners.