1996 (1) TMI 344 - HC - Companies Law

Summary

Issues Involved:
1. Non-filing of the statement of affairs by ex-directors under Section 454 of the Companies Act, 1956.
2. Liability of Surya Partap Singh as a director.
3. Liability of Pardip Kumar Gupta as a director.
4. Liability of Mukta Devi as a director.

Detailed Analysis:

1. Non-filing of the Statement of Affairs by Ex-Directors under Section 454 of the Companies Act, 1956:
The official liquidator filed a criminal complaint under Section 454(5) of the Companies Act, 1956, against the ex-directors for failing to file the statement of affairs of the company in liquidation. Notices were issued to the ex-directors on May 15, 1990, and May 18, 1990, but they did not comply even after four months. The complaint alleged that the ex-directors knowingly and willfully flouted the provisions of Section 454, thereby committing an offense punishable under Section 454(5).

2. Liability of Surya Partap Singh as a Director:
Surya Partap Singh contended that he resigned as a director on June 10, 1988, and his resignation was registered with the Registrar of Companies on July 4, 1988. Evidence from Har Parshad, PW-1, corroborated this claim. The court noted that the official liquidator failed to prove that Surya Partap Singh was a director at the time of the winding-up order or within one year prior. The court also observed that the inventory prepared by Haryana Financial Corporation on July 27, 1988, did not list the books of account, indicating they were not in Surya Partap Singh's possession. Consequently, the court held that the prosecution did not establish that Surya Partap Singh was liable to file the statement of affairs, leading to his acquittal.

3. Liability of Pardip Kumar Gupta as a Director:
Pardip Kumar Gupta argued that he was never a director of the company and had not consented to such an appointment. He signed documents on behalf of his mother, who was a director, due to her illness. Evidence showed that he signed the inventory as a guarantor, not as a director. The court found no proof that Pardip Kumar Gupta was ever a director or in possession of the company's records. The court emphasized that the prosecution failed to prove the absence of reasonable excuse on his part. Therefore, Pardip Kumar Gupta was acquitted of the charges.

4. Liability of Mukta Devi as a Director:
Mukta Devi admitted to being a director but claimed she was not involved in the company's day-to-day affairs, being primarily a housewife. The court noted that she did not provide evidence of a reasonable excuse for not filing the statement of affairs. The court held that as a director, she was obliged to file the statement or justify her failure to do so. The prosecution successfully established the absence of reasonable excuse on her part. Consequently, Mukta Devi was found guilty under Section 454(5) and ordered to pay a fine of Rs. 40,000, with a default sentence of four months' simple imprisonment.

Conclusion:
The court acquitted Surya Partap Singh and Pardip Kumar Gupta due to insufficient evidence proving their liability to file the statement of affairs. Mukta Devi was convicted and fined for failing to file the statement of affairs without a reasonable excuse.