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TMI Blog2008 (4) TMI 501X X X X Extracts X X X X X X X X Extracts X X X X ..... before the date of winding up order and hence they are not liable for default, if any, committed by the company in liquidation. However, looking to the documents produced before this court and considering the submissions made and facts found, the court holds that the statement of affairs is not filed in time nor it is found to be true and correct and hence the court holds all the three accused guilty for an offence under section 454(5) of the Act for their failure to file true and correct statement of affairs. But for the pendency of other criminal cases pending before the trial court in relation to the transaction of ₹ 50,00,000, the court would have considered the question of imprisonment for commission of default in complying with the requirement of section 454 of the Companies Act, 1956. The court, therefore, confines its order to the extent of imposition of fine of ₹ 10,000 on each of the accused which shall be paid by them to the official liquidator within 30 days from today. Failure to deposit this amount would render them liable to undergo the sentence of one month imprisonment with immediate effect. - CRIMINAL CASE NO. 4 OF 2005 IN C. P. NO. 255 OF 2000 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the statement of affairs filed by the accused and since the same were communicated to the accused, different orders were passed by the court from time to time. In the order dated March 17, 2008, this court has specifically observed that in the statement of affairs, all columns were shown nil except the column of loan and advance against which, the amount of Rs. 50,00,000 was mentioned. Even on the liability side, estimated unsecured balance of claim of creditor, is mentioned as Rs. 50,00,000. In schedule 3 under the head loans and advances, date of advance is shown as September 10, 1998, and advance was made to M/s. Modi Exports. The value of the realisable debt is again shown as nil. After scrutinising the statement of affairs, the official liquidator wrote a letter to one of the directors, namely, Ms. Ilaxi D. Modi, accused No. 1 herein, wherein it is stated that no information has been furnished in the statement of affairs except a transaction of receiving an amount of Rs. 50,00,000 from one Mr. Mohandas Adnani and paying the said amount of Rs. 50,00,000 to a partnership firm of M/s. Modi Exports. All other columns and schedules of the statement of affairs do not contain any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has been paid and from which source and by whom the said amount has been paid by virtue of which, the said letter was issued stating that the amount has been paid and matter is settled between the parties. Since there were several questions which still remain unanswered, the personal presence of all the three accused persons were necessary and, therefore, the court directed them to remain personally present before the official liquidator for recording their statement under rule 130 of the Companies (Court) Rules 1959. Accordingly, all the three accused remained personally present before the official liquidator on March 25, 2008, and their statements under rule 130 of the Companies (Court) Rules, 1959, were recorded by him. How ever, no satisfactory answer was received with regard to the amount of Rs. 50,00,000, which were given by the company to the partnership firm of M/s. Modi Exports. The court, therefore, observed in its order dated March 26, 2008, that pursuant to the directions given by this court in Company Petition No. 110 of 2001, the inspector has submitted his report on May 14, 2002. However, what actions were taken by the Registrar of Companies pursuant to the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th affidavit and indemnity bond and stated that rill the date of filing of the application, no dues towards income-tax, sales tax, central excise, banks and financial institutions or any other Central or State departments/authorities or any local authorities, are outstanding. He has further submitted that after incorporation of the company, the company has not entered into any transactions nor made any business. He has further submitted that accused No. 1 being lady, was not looking after the day-to day business/transactions of the company. Mr. Ninad Raje, accused No. 3 was looking after all the activities of the company. He has further submitted that another director Mr. Ratnakar Munshi, accused No. 2, herein is the close relative of the accused No. 3 and the brother of accused No. 3, i.e ., Mr. Anil Munshi was also associated with the affairs of the company and said Mr. Munshi and Mr. Raje both were looking after the business of the company. He has, therefore, submitted that accused No. 1 has not committed any offence under section 454 of the Companies Act, 1956 and hence she should not be made liable for any action. Mr. Manoj Popat, learned advocate appearing for accused No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng up of the company, wherein notice has been served on him. He, therefore, wrote a letter to the Registrar of Companies intimating that he had already resigned from the company. Accused No. 3 was, therefore, under a bona fide impression that necessary action must have been taken by the Registrar of Companies, more particularly, when there is a departmental circular stating that where a Registrar receives any communication from any director about his resignation, the Registrar should inquire whether the resignation of such director is or is not bona fide and if he finds that such director has bona fide resigned from his directorship of the company, he should not start any prosecution against such director, irrespective of the fact whether such resignation was or was not accepted by the company. However, when accused No. 3 has received a notice dated March 5, 2002, from the Registrar of Companies for investigation under section 237 of the Companies Act, 1956, he came to know that though the resignation has been tendered by him, his name was not deleted from the company. He, therefore, again wrote a letter dated April 5, 2002, to the Registrar of Companies intimating about his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of Rs. 50,00,000 was credited in the company's account by transfer on September 10, 1998, and an amount of Rs. 50,00,000 was debited to the company's account on the same day, i.e ., on September 10, 1998, through clearing leaving a balance of Rs. 5,000 only. These are the only three entries in the company's bank account and there is no further transaction at all. 6.3. Shri Mohandas M. Adnani opened an O. D. account with State Bank of Hyderabad, Maninagar Branch, Ahmedabad on September 10, 1998, being O. D. account No. 775. The very first cheque bearing No. 243001 was issued by Shri Mohandas M. Adnani on September 10, 1998, in favour of Ilaxi Modi Exports P. Ltd. for an amount of Rs. 50,00,000. A copy of the said cheque as collected, is annexed with this report as annexure F. As seen from back side of the cheque, it was deposited by Ilaxi Modi in the bank account of Ilaxi Modi Exports P. Ltd. on September 10, 1998, and the account of the company was credited by Rs. 50,00,000 by transfer on September 10, 1998 itself. These facts indicate beyond doubt that an amount of Rs. 50,00,000 has been received by the company from Shri Mohandas M. Adnani. The receipt of this amount has als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the Syndicate Bank on September 9, 1998, where the Modi Exports is having the bank account, but was deposited in Syndicate Bank on September 10, 1998, after depositing the cheque issued by Shri Mohandas Adnani, on September 10,1998, in the company's account with State Bank of Hydrabad. From these facts it is crystal clear that the amount of Rs. 50,00,000 received by the company from Shri Mohandas Adnani, on September 10, 1998, was transferred to a partnership firm Modi Exports, on very same day. 6.6. The investigation revealed that Modi Exports is a partnership firm constituted by two partners, namely, Smt. Ilaxi D. Modi and Shri Ratnakar M. Munshi as per the deed of partnership executed on May 21,1998. A copy of the said partnership deed dated May 21,1998, is annexed to this report and marked as annexure I. The Modi Exports is having a bank account in Syndicate Bank, Navrangpura Branch, Ahmedabad, being the current account No. 1219. As per the statement of account of Modi Exports with Syndicate Bank, there was a credit balance of Rs. 440 only as on September 5, 1998 and an amount of Rs. 50,00,000 is credited in Modi Exports' account on September 10, 1998, by clearing. This amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... September 11, 1998, by issuing a self cheque being cheque No. 298527. This cheque is written by Shri Ninad Raje and is signed by Ms. Ilaxi Modi as partner of Modi Exports, On back side of the cheque also Ms. Ilaxi Modi has signed as partner of Modi Exports and Shri Ninad Raje has also signed twice, in token of having received Rs. 15,00,000 in cash from the bank. These facts show that the amount of Rs. 15,00,000 is misappropriated by Ilaxi Modi and Ninad Raje who have acted in unison with each other. However, in their statements recorded before the inspector, Ilaxi Modi alleged that money is taken away by Ninad Raje as she handed over signed cheque book to him and Shri Ninad Raje has alleged that he wrote the cheque at the instructions of Ilaxi Modi, collected the money from the bank at the instructions of Ilaxi Modi, and handed over the cash of Rs. 15,00,000 to Ilaxi Modi. Their statements are per se false. 7.2. Again on the same day, another cheque No. 298532 is written by Shri Ninad Raje on September 11, 1998, for Rs. 6,00,000 in the name of Labh Construction and Industries Ltd. This cheque is also signed by Ilaxi Modi. On specific questions neither Ilaxi Modi nor Shri Ninad Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e company and Modi Exports also and he was silently but actively and deeply involved in the affairs of the company and Modi Exports. This point is elaborately dealt with separately in this report hereafter. 7.6. On September 18,1998, a cheque bearing No. 298538 is issued for an amount of Rs. 80,500 in favour of Raje Financial Consultancy Services, the proprietary concern of Shri Ninad Raje. This cheque is written by Shri Ninad Raje and signed by Ilaxi Modi as partner of Modi Exports. In respect of this cheque, on asking specific question, Daxi Modi stated that she does not know anything as she had given signed blank cheque book to Shri Ninad Raje, whereas Shri Ninad Raje stated that he received this payment from Modi Exports towards fee for rendering professional services. 8. Involvement of Shri Anil Munshi in siphoning off the funds. 8.1. As discussed in paragraph 7.5 above, an amount of Rs. 23,16,500 was transferred from Modi Exports' account vide cheque No. 298537 dated September 12, 1998, to Shri Anil Munshi's account. On further verification of bank records, it is found that Shri Anil Munshi is also having a savings account in Syndicate Bank, Navrangpura, Ahmedabad being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one disclosed anything about Inland Realities and Finstock P. Ltd. or the purpose of making payment of Rs. 1,00,000. 8.4. On September 25, 1998, Shri Anil Munshi issued a cheque of Rs. 86,500 in favour of Shruti Raje (the wife of Shri Ninad Raje), being cheque No. 15469. This cheque is also debited from his account on September 25,1998, leaving a balance of Rs. 894 only and the account is dead since then. Shri Ninad Raje stated that his wife received this money because she had given loan to Shri Anil Munshi. 8.5. Shri Ninad Raje in his statement has stated that the registered office of Ilaxi Modi Exports P. Ltd. and the place of business and the office of Shri Anil Munshi was same. Ilaxi Modi, the principal promoter director of the company and Shri Anil Munshi used to sit together at the same office and had jointly undertaken development of properties. Shri Anil Munshi also in his statement has admitted that Shri Ninad Raje was managing funds for him and he in fact borrowed some funds from Shri Ninad Raje. Shri Anil Munshi has further con firmed in his statement that he received finance from Inland Realities and Finstock P. Ltd. through Shri Ninad Raje. From the reply of questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the limited purpose of deciding the issue as to whether the statement of affairs filed by the accused is correct or not. The company has borrowed the amount from one Mr. Mohandas M. Adnani, who has stated in writing that the settlement was arrived at and he had not to recover any amount either from the company or any of its directors or officers. It is not in dispute that the amount has been transferred by the company (in liquidation) to the partnership firm and there is no corresponding entry to that effect that the partnership firm has repaid the said amount to the company. Thus, the company still remains as a creditor of the partnership firm in the eye of law and since the company is in liquidation, the official liquidator is entitled to recover the said amount from the partnership firm by resorting to the pro visions of section 477 of the Companies Act, 1956. The court is not convinced with the submissions of learned counsel appearing for respondents Nos. 1 and 3 that they have resigned as directors much before the date of winding up order and hence they are not liable for default, if any, committed by the company in liquidation. As a matter of fact, so far as trans action of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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