1993 (10) TMI 286 - HC - Companies Law

Summary

Issues Involved:
1. Non-compliance with Section 454 of the Companies Act, 1956.
2. Whether the respondent was a director at the relevant date.
3. Obligation of former directors to submit a statement of affairs.
4. Reasonable excuse for non-compliance.

Detailed Analysis:

1. Non-compliance with Section 454 of the Companies Act, 1956:

The petitioner sought to summon and punish the respondent under Section 454(5) of the Companies Act, 1956, for failing to comply with the requirements of Section 454, which mandates filing a statement of affairs of the company. The official liquidator asserted that the respondent, a former director, failed to submit the statement despite being notified.

2. Whether the respondent was a director at the relevant date:

The respondent contended that he resigned as a director effective September 19, 1981, and communicated this to the Registrar of Companies. This resignation was acknowledged on September 26, 1981. The court noted that the official liquidator did not dispute this resignation and failed to categorically state that the respondent was a director on the relevant date, November 17, 1989. Therefore, the court concluded that the respondent was not a director at the relevant date, making him not duty-bound to file the statement within 21 days as required by Section 454(3).

3. Obligation of former directors to submit a statement of affairs:

The court analyzed Section 454(2) and (3) to determine the categories of persons obligated to submit and verify the statement of affairs. It was clarified that the duty to submit the statement applies to current officers on the relevant date and those specified under clauses (a) to (d) of Section 454(2). Clause (a) includes former officers without a time limitation. The court held that former directors could be required to submit the statement only upon a direction from the court or notice from the official liquidator.

4. Reasonable excuse for non-compliance:

The respondent argued that he lacked intimate knowledge of the company's affairs and possession of its assets, books, and papers since his resignation in 1981. The court found no material evidence from the official liquidator to counter the respondent's claims. The court referenced several judgments, including P.M.A. Nambudiripad v. Official Liquidator, which supported the view that former directors could be required to submit the statement only if they had the necessary information and material. The court concluded that the respondent had a reasonable excuse for not filing the statement, as he was not in a position to do so due to his long absence from the company's affairs.

Conclusion:

The court dismissed the company application, holding that the respondent did not commit an offence under Section 454(5) of the Companies Act, 1956, as he had a reasonable excuse for not filing the statement of affairs. The court clarified that this order does not preclude the official liquidator from seeking the respondent's assistance in the winding up of the company, to which the respondent agreed to comply.