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TMI Blog2013 (3) TMI 239X X X X Extracts X X X X X X X X Extracts X X X X ..... into effect in the year 2000 itself. If so, the prosecution initiated against the petitioners for the non-filing of returns or for any of the violations pertaining to the year 2003 and made mention of in the Inspection Report cannot be sustained. The fact that the petitioners had moved the Company Law Board long prior to the institution of these complaints would make it clear that the resignations were duly submitted to the Company. The Company had no case that the resignations were not accepted. As the petitioners had disassociated themselves from the business of the Company ever since they submitted their resignation in August 2000 as referred to earlier and as such, for the violations of non- compliance noticed in 2003, the criminal liability cannot be saddled upon the petitioners. - Crl.M.C. Nos. 2560 , 2565, 2566, 2567, 2568, 2569, 2570, 2571 and 2574 of 2007 - - - Dated:- 8-10-2012 - MR. N.K. BALAKRISHNAN J. PETITIONER(S):- BY ADVS.SRI.O.RAMACHANDRAN NAMBIAR SRI.GEEN T.MATHEW RESPONDENTS:- BY ADV. SRI.P.PARAMESWARAN NAIR,ASST.SOLICITOR BY PUBLIC PROSECUTOR SMT. JASMINE ORDER The three former directors of the Company M/s. Teak Tex Processing Complex Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e violated the provisions of that Act. 7. In the complaint which is the subject matter of Crl.M.C. No.2569 of 2007 it is alleged that the petitioners have committed the offence under Section 209(3)(b) and Section 211 of the Act. It was stated that during the inspection it was noticed that in the balance sheet of the Company no provision was made for the liability for payment of gratuity to the employees and in the absence of such information the balance-sheet and also profit and loss account cannot be regarded as true disclosure of the state of affairs of the Company and thus the petitioners have committed the offence under that provision. 8. In the complaint, which is the subject matter of Crl.M.C.2570/2007 it is alleged that the petitioners have committed the offence under Sec.211(7) of the Act r/w Schedule VI of that Act. It is alleged that by putting the amount under Suspense Account and by showing non- confirmed amount under Loans and Advances the balance sheet as at 31.3.2003 does not give a true and fair view of the affairs of the company. Thus, according to the complainant, the petitioners, who were the Directors are liable to be punished for the aforesaid offence. 9. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spect of which violations are alleged by the respondent, the obligation was of the directors as on the date when the returns were to be submitted or the balance sheet were to be furnished. In other words, according to the learned counsel, the provision does not mandate that the directors who had submitted their resignations are bound to furnish returns, balance sheet etc. 12. Sec.303(2) of the Act reads : "(2) The company shall, within the periods respectively mentioned in this sub-section, send to the Registrar [a return in duplicate in the prescribed form] containing the particulars specified in the said register and [a notification in duplicate in the prescribed form] of any change among its directors managing directors, managers or secretaries, specifying the date of the change. The period within which the said return is to be sent shall be a period of [thirty] days from the appointment of the first directors of the company and the period within which the said notification of a change is to be sent shall be [thirty] days from the happening thereof;" Similarly, Sec.454(2) of the Act also is relevant in this connection which reads : "(2) The statement shall be submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even after the registered lawyer notice sent to the Company, the Company failed to comply with the petitioner's request, they filed company petition - C.P.No.840/2005 before the Company Law Board, Chennai. While that petition was pending, this Court by order dated 8.12.2005, wound up the Company and so, the petition filed by the petitioners before the Company Law Board was withdrawn by the petitioners. 14. Learned counsel for the respondent submits that nothing was mentioned in the order passed by the Company Law Board that it was dismissed because of the winding up of the Company. The order passed by the Company Law Board shows that the petition was dismissed as withdrawn. But, however, the circumstances pointed out above cannot be lost sight of. 15. In the petition filed before this Court, pursuant to which Annexure-A5 order was passed, this Court noticed the distinction between two classes of persons coming under Sec.454(2) namely; persons who are at the relevant date Director, Manager, Secretary or other Chief Officer of the Company and other persons who are mentioned in clauses (a) to (d) of sub-section (2) of Sec.454 as persons who can be required by the Official Liquidat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted, the petitioners cannot escape from the liability and that, if at all, it is only a matter to be proved at the time of trial; as to whether the resignation was accepted by the Company or whether the petitioners continued to be the Directors even as on the relevant date, namely; 2003, the learned counsel for the respondent submits. 18. But, this submission cannot be sustained at all, the learned counsel for the petitioners submits. The decision in Saumil Dilip Mehta v. State of Maharashtra and others [AIR 2002 Bombay 194] has been relied upon by the petitioners. That was a case where the revenue recovery proceedings were initiated for recovery of the amount due and payable by the Company for the years 1992-1993 to 1998-1999. The petitioner therein contended that he resigned from the post of Director of that Company prior to 3.1.1995 and that was made clear by his letter dated 3.1.1995 which was addressed to the Chairman of that Company. It was argued that since the petitioner therein had already resigned from the post of Director of the said Company, the Recovering Authority was not entitled to attach his personal private property which had no connection with the assets of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tors. It is for the Company Secretary to fill in the forms as prescribed and to give due information and intimation to the Registrar of Companies, as the law requires." It was also held: "When a director has tendered his resignation and the Board of Directors has accepted it and has acted on it, such director cannot be held liable for the liability incurred by the said company after the date of acceptance of his resignation except the liability which has been incurred by him for purchase of shares of the said company and nothing more." 19. Learned counsel for the petitioners submits that the facts of the case dealt with in the decision cited supra are identical to the facts of the case on hand. In the light of the judgment of this Court in Annexure A5, there can be no doubt to hold that the petitioners retired from the directorship of the Company on 11.8.2000 and 16.8.2000 respectively and the resignation letters were submitted by them to the Company. It was not a case developed or thought of by them subsequently after the initiation of these proceedings. Ongoing through Annexure A5, it is clear that the contention raised by the petitioners that they had submitted their r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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