9911796707
TMI Blog1978 (4) TMI 161X X X X Extracts X X X X X X X X Extracts X X X X ..... 3,300. The losses amounted to Rs. 87,000 approximately. It is said that out of the assets, machinery worth Rs. 2,900 was attached by the landlord of the Novelty Cinema, Khurja, against rent and later this asset was sold. There were thus no assets for all practical purposes except that Rs. 3,425 were available as uncalled capital. The voluntary liquidator filed some statements of accounts, but they were mainly defective and treated as such by the Registrar of Companies. The petitioner was prosecuted and has been fined a sum of Rs. 900 in various prosecutions. Now, a number of prosecutions are still pending regarding subsequent defaults in filing the statement of accounts. The legal position of a voluntary liquidator regarding the obligation to file statement of accounts is contained in section 551 of the Companies Act, 1956. The provisions of this section have been varied to some extent by rule 327 of the Companies (Court) Rules, 1959, which prescribes the period for which a liquidator has to file accounts. He has to file accounts after one year and thereafter has to file accounts at six monthly intervals. If he defaults in filing these accounts, he is liable to be prosecuted unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) thereof, which refer to this question. The said provision reads : "(3) Within one week after the date of the meetings, or if the meetings are not held on the same date, after the date of the later meeting, the liquidator shall send to the Registrar and the official liquidator a copy each of the account and shall make a return to each of them of the holding of the meetings and of the date or dates on which they were held. If the copy is not so sent or the return is not so made, the liquidator shall be punishable with fine which may extend to fifty rupees for every day during which the default continues. (4) If a quorum (which for the purposes of this section shall be two persons) is not present at either of such meetings, the liquidator shall, in lieu of the return referred to in sub-section (3), make a return that the meeting was duly called and that no quorum was present thereat. Upon such a return being made within one week after the date fixed for the meeting, the provisions of sub-section (3) as to the making of the return shall, in respect of that meeting, be deemed to have been complied with." Under sub-section (3), it would appear that when such a meeting is held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that in fact no return was sent under sub-section (4), and, therefore, the provisions of section 509 have not become applicable. This means that, strictly speaking, the liquidation was continuing and there had to be compliance with section 551(4) read with section 327 of the Companies Act, 1956. This brings me to the question whether the petitioner is entitled to relief under section 633 of the Companies Act, 1956, on account of having acted reasonably and also there is a subsidiary question whether a voluntary liquidator can be granted relief under this provision. As clearly appears on the reading of the section, relief may be granted to officers of a company. The definition of "officer" as given in section 2(30) on a plain reading does not include a liquidator. However, there are some decisions which are reported showing that the relief has been granted to liquidators under this very section. I have been referred to In re Muktsar Electric Supply Co. Ltd. ( In Liquidation ) [1966] 36 Comp. Cas.144 (Punj.), Om Prakash Khaitan v. Shree Keshariya Investment Ltd. [1978] 48 Comp. Cas.85 (Delhi) and Official Liquidators, Baroda Batteries Ltd. v. Registrar of Companies, Gujar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his could lead to very serious malpractice and injustice to various shareholders and creditors. Therefore, possibly, the Registrar has acted correctly in not declaring the company defunct. Of course, if the facts now brought to my notice in this petition had been brought to the notice of the Registrar of Companies he might have been inclined to declare the company as defunct and then the voluntary liquidator would have been absolved of the difficulties that he now faces due to the peculiar facts of this case. Now, turning to what relief can be granted to the petitioner: the question to be first analysed is whether the petitioner has acted reasonably and with due diligence, etc., i.e ., has he complied with the necessary requirements entitling him to relief? As at present advised, the only default that I can see is the failure by him to fully comprehend the meaning of section 509 of the Act. As pointed out, till he advertised the holding of the final meeting, he had proceeded with the winding-up as far as he could go; he then called a meeting to bring about dissolution. For some unknown reason, the members of the company did not choose to attend, so he was compelled by circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
