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TMI Blog1975 (5) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... of the company who, according to him, were liable to submit the said statement. He has stated in his report that he issued registered letters to all the four persons aforesaid, but could not succeed in obtaining any information and has, accordingly, prayed for an appropriate order against the aforesaid persons. The three directors mentioned in the report are, ( i ) Vishnu narain Arora, ( ii ) Lakshmi Narain Arora and ( iii ) Bhagwar narain Arora (hereafter collectively referred to as the "Aroras"), while the fourth person is Ambika Prasad Verma, the secretary. On receipt of this report, notices were issued by this court to all the aforesaid persons and all of them in their "show-cause" filed in this court have denied their obligation to comply with the requirement of filing the statement of affairs under section 454 of the Act. Broadly speaking, the stand of the aforesaid three directors is that they had resigned from their office as far back as on September 10, 1966, by a joint letter (exhibit 1/a) sent by registered post to the company and, therefore, they ceased to be the directors of the company on the relevant date and were not liable to submit the statement of affairs. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity to his appointment as manager, in order to obviate any technical objection, he was designated by the directors as the secretary of the company, which post did not require any such sanction from any authority. According to the evidence of the Aroras, it was this Ambika Prasad Verma who was looking after the affairs of the company and holding the records in his custody and was also responsible for filing all the returns and complying with other provisions of the Act and the rules. According to their further evidence, when they had resigned, the company had already stopped its business some time in 1964 and they had left all the books of account and other properties in the office premises itself under the charge and custody of Shri Verma and thereafter they had no manner of concern with any affairs of the company, much less with its documents and affairs. Evidence has been adduced that in some of the criminal cases filed against the three directors by the Registrar of Companies for non-compliance with certain provisions of the Companies Act, Ambika Prasad Verma was also a co-accused on account of his being a responsible officer of the company and had pleaded guilty, vide axhibits ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 94, clause ( f ), than Mr. Chuni Lal appearing for the Aroras contended that by virtue of mere serving of the notice in writing by this clients, their offices will be deemed to be ipso facto vacated by them. In the 1913 Act, section 86-I, which corresponds to section 283 of the 1956 Act, prescribed various conditions and circumstances under which the office of a director of a company would fall vacant. Sub-section (2) of section 86-I provided that it was open to a company to provide by its articles that the office of a director shall be vacated on grounds other than those specified in that section. It is not disputed that in clause ( f ) of article 94 of the company, such provision was made in the articles in pursuance of the said power under section 86-I of the 1913 Act. However, in section 283 of the 1956 Act, no such power has been given to a company and the conditions on which the office of a director is deemed to become vacant have been all made statutory. Provision like clause ( f ) of the tendering of resignation by a director of a company is not to be found as one of the grounds or circumstances on which the office of a director has to fall vacant. A questions was canvass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sted the intention of the legislature that it wanted to limit the conditions and circumstances under which the office of a director of a company was to fall vacant, subject, however, to the addition of the further grounds mentioned in section 314. An such provision like that contained in clause ( f ) of article 94 could not be made by the company under the scheme of the 1956 Act, the said provision in my opinion is not saved under the saving provision contained in section 645 of the 1956 Act. The power to remove a director in certain circumstances has, however, been contemplated by a new provision contained in section 284 of the 1956 Act. According to the provisions of sections 252 of the 1956 Act, every public company is to have at least three directors, and every other company is to have at least two directors and they are to retire by rotation according to the provisions contained in sections 255 and 256 of Act. As it appears from article 87 of the articles of association of the company in question, the minimum number of directors was not to be less then three. It appears the evidence of Vishnu Narain Arora, witness No. 1 for the ex-directors, that he along with his two brothers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntained in article 94( f ) of the article of association by application of section 6 of the General Clauses Act and contended that the right which was available to the Aroras could not be taken away by mere repel of the said Act. He also placed reliance upon a decision of the supreme Court in State of Punjab v. Mohar singh Pratap singh , AIR 1955 SC 84. The contention of Mr. Chuni Lal is also fallacious and cannot be accepted. Section 6 of the General Clauses Act does not intend that even when an Act is repealed and the new legislation manifests an intention incompatible with or contrary to the provision of section under the new provision, still the old provisions must have their way and would prevail notwithstanding that a contrary intention is expressly manifested in the repealing provision of the new statute. The case relied upon by Mr. Chuni Lal is itself an authority for the proposition and clearly says that whenever there is a repeal of an enactment, the consequences laid down in section 6 of the General Clauses Act will follow, unless, as the section itself says, a different intention appears. I have already pointed out above that the saving provisions contained in sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the secretary, they were certainly covered within the mischief of clause ( a ) of sub-section (2) of section 454 of the 1956 Act. In my opinion, it is only to cover the contingency like such cases that the legislature in its wisdom has already provided for a direction by the court to comply with this mandatory provision of filing statement of affairs by persons other than those mentioned in section 545 and in its fold has tried to embrace various other classes of persons who could be made responsible for submitting the statement in question. The very object of section 454 is to facilitate speedy administration in winding up and to enable the liquidator to get himself apprised without delay of all the relevant facts, relating to the affairs of the company. Ample power, therefore, have been bestowed upon the court to give adequate directions to various classes or categories of persons, otherwise the winding-up order passed by a court may stand frustrated. I would, accordingly, reject all the objections raised on behalf of the four objectors regarding their obligation to file the statement of affairs of the company. I would, therefore, direct ( i ) Shri Vishnu Narain Arora, ( ii ..... X X X X Extracts X X X X X X X X Extracts X X X X
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