9911796707
TMI Blog1979 (5) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... arkash Gupta, respondent No. 3, was appointed secretary of the company. On December 16, 1965, Roshan Lal Kohli was appointed director in place of his wife, Mrs. Kohli. Om Parkash Gupta, respondent No. 3, was appointed director- cum -secretary in January, 1966. In December, 1966, certain disputes started among the directors in respect of the provisional balance-sheet to be submitted by the company to the Punjab National Bank. The appeallant, Devinder Kishore Mehra, is claimed to have refused to sign it and as a consequence of that, it is claimed, he was ousted from the management of the company and was not even given access to the company's records. In 1968, the appellant moved an application in this court, under section 633 of the Companies Act for being relieved of the consequences of diverse defaults which the company and its officers were making and for which they could be prosecuted. Some of the parties before us were parties to that application. This application was allowed by S.K. Kapur J. on January 13, 1969, and the applicant was relieved of all consequences of any alleged defaults. On January 14, 1969, the appellant submitted his resignation as director of the company and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting separately the cash balance in hand and at the bank, if any, and the negotiable securities, if any, held by the company; ( b )its debts and liabilities; ( c )the names, residences and occupations of its creditors, stating separately the amount of secured and unsecured debts; and in the case of secured debts, particulars of the securities given, whether by the company or an officer thereof, their value and the dates on which they were given; ( d )the debts due to the company and the names, residences and occupations of the persons from whom they are due and the amount likely to be realised on account thereof; ( e )such further or other information as may be prescribed, or as the official liquidator may require. (2) The statement shall be submitted and verified by one or more of the persons who are at the relevant date the directors and by the person who is at that date the manager, secretary or other chief officer of the company, or by such of the persons hereinafter in this sub-section mentioned, as the official liquidator, subject to the direction of the court, may require to submit and verify the statement, that is to say, persons ( a )who are or have been offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e negligence, default, breach of duty, misfeasance or breach of trust, but that he has acted honestly and reasonably, and that having regard to all the circumstances of the case, including those connected with his appointment, he ought fairly to be excused, the court may relieve him, either wholly or partly, from his liability on such terms as it may think fit: Provided that in a criminal proceeding under this sub-section, the court shall have no power to grant relief from any civil liability which may attach to an officer in respect of such negligence, default, breach of duty, misfeasance or breach of trust. (2) Where any such officer has reason to apprehend that any proceeding will or might be brought against him in respect of any negligence, default, breach of duty, misfeasance or breach of trust, he may apply to the High Court for relief and the High Court on such application shall have the same power to relieve him as it would have had if it had been a court before which a proceeding against that officer for negligence, default, breach of duty, misfeasance or breach of trust had been brought under sub-section (1). (3) No court shall grant any relief to any officer under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wound up". Therefore, ex-directors of the company who resigned even more than one year before the winding-up order could, in appropriate cases, be directed to submit a statement of affairs. The next contention on behalf of the appellant is that the official liquidator can only require such other persons to submit a statement of affairs, subject to the directions of the court, as are in a position to give relevant information. This postulates that the court would apply its mind and decide in each case whether such direction should be given. It is not contemplated that the court would give direction to the official liquidator to require any and every person to file a statement of affairs merely as an academic exercise. The purpose of getting the statement of affairs is to enable effective and proper winding up of the company. The court is not required to give a direction which in effect would be infructuous. We are in entire agreement with this submission. Indeed, our learned brother has noticed that the appellant was not in a position to know anything about the affairs of the company ever since he was ousted from the management, way back in December, 1966. He had ceased to have a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... having filed copy of the balance-sheet as at December 31, 1966, with the Registrar of Companies and all other defaults in respect of the year 1967-68. As already noticed, the appellant had resigned from the directorship on January 14, 1969. The winding-up order was made by Rangarajan J. in C.P. No. 53 of 1973. The fact that the appellant had been exonerated twice and had ceased to be a director was noticed by Rangarajan J. In these circumstances, it is inconceivable that the appellant should be saddled with the responsibility of filing the statement of affairs. Indeed, we are of the view that, despite knowing the incapacity or incapability of the appellant which has even been noticed in the order under appeal, directing him to file the statement of affairs virtually amounts to negativing the earlier orders of exoneration. The court should see who is capable of filing a statement of affairs if the exercise is to have any meaning. That some one may be in a likely position to file the statement of affairs would not be the proper approach. It is not in dispute and indeed it is noticed in the order under appeal that there is a great deal of controversy as to who was in possession of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of affairs is to be filed by persons in a position to do so and not by persons who are or were directors or officers in name or have never had opportunity to know the affairs of the company. It is for this reason that the official liquidator is to obtain the directions of the court before calling upon anyone to file the statement of affairs. No doubt, in the present case, the parties are throwing the responsibility on each other. All the same on a full enquiry it can be found out at this stage as to who is really the person concerned who should be called upon to file a statement of affairs. Once a person is directed to file a statement of affairs under section 454 of the Companies Act, an onerous responsibility falls upon him with penal consequences in case of default. So, even on principles of natural justice, each person sought to be made responsible should be heard, his individual case considered and a decision given whether he should be called upon to file the statement of affairs. Making a general order applicable to each and every one who at any point of time may have been connected with the management of the company will serve no useful purpose. It has been urged that e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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