2007 (12) TMI 543 - HC - Companies Law

Summary

Issues Involved: Official Liquidator filing criminal case u/s 454 of Companies Act, 1956 for default u/s 454(5) against accused Nos. 1 to 4, seeking process issuance, statement of affairs submission, and appearance for recording statements.

Summary:
1. The Official Liquidator filed a criminal case u/s 454 of the Companies Act, 1956, requesting the Court to take cognizance of the default committed u/s 454(5) and issue process against accused Nos. 1 to 4. The accused were also directed to submit the Statement of Affairs and appear for recording statements. Process was served, and the accused responded citing inadvertence, stress, old age, and health issues for the delay.

2. Accused Nos. 1 & 3 filed detailed affidavits explaining the delay in filing the statement of affairs due to various reasons. The statement was eventually filed with some defects highlighted by the Official Liquidator, leading to further queries and replies exchanged between the parties.

3. After addressing the defects in the statement of affairs, the matter proceeded to final hearing. The Official Liquidator emphasized the delay of 384 days in filing the statement of affairs, seeking penalties for the accused. The defense argued that the delay was justified due to lack of access to records and health issues of the accused.

4. The Court, after hearing both sides, acknowledged the late filing but noted that the statement of affairs had been submitted and defects rectified. Considering the explanations and circumstances, the Court decided not to pass a harsh sentence. Instead, the accused were fined Rs. 2,500 each, to be paid to the Official Liquidator within four weeks, absolving them from further liability and disposing of the case.