2013 (1) TMI 1028 - HC - Indian Laws

Summary

Issues Involved:
1. Whether the Official Liquidator discharged his obligation of proving that the failure to submit the statement of affairs of the company was without reasonable excuse.
2. Whether the appellant's failure to submit the statement of affairs was without reasonable excuse.
3. Whether the burden of proof lies on the appellant or the Official Liquidator to prove the absence of reasonable excuse.

Summary:

Issue 1: Obligation of Official Liquidator
The Court examined whether the Official Liquidator had fulfilled his duty to prove that the appellant's failure to submit the statement of affairs was without reasonable excuse as stipulated u/s 454(2) of the Companies Act. The Court noted that the Official Liquidator's evidence, provided by a Junior Technical Assistant, did not demonstrate that the appellant failed to submit the statement without reasonable excuse. The learned Single Judge also doubted whether the Official Liquidator had discharged his obligation of proving the offence.

Issue 2: Reasonable Excuse for Failure
The appellant contended that he was not given possession of the necessary documents by the second respondent, which hindered his ability to submit the statement of affairs. The second respondent, however, claimed to have handed over all relevant documents. The Court found that the appellant was not in possession of all the documents required to prepare the statement of affairs, as evidenced by the fact that the second respondent eventually submitted the statement after a warrant was issued against him. This supported the appellant's claim of having a reasonable excuse for the delay.

Issue 3: Burden of Proof
The Court discussed the legal principle that the burden to prove the absence of reasonable excuse lies initially on the Official Liquidator. The jurisprudence of criminal law places the burden on the prosecution to prove the case, not on the accused to prove innocence. The Court concluded that the Official Liquidator failed to prove that the appellant's default was without reasonable excuse, and thus, the appellant should be acquitted.

Conclusion:
The Court set aside the order dated 6 February 2009 in C.A. No. 1081 of 2004 in C.P. No. 101 of 1994, acquitting the appellant of the offence. The Official Liquidator was directed to refund the fine amount paid by the appellant. The intra-court appeal was allowed, and the connected MP was closed with no costs.