2011 (2) TMI 1261 - HC - Companies Law

Winding up - statement of affairs was to be filed as required under section 454 of the Companies Act 1956 ( Co. Act ) which as alleged was not done within prescribed time; as such the Official Liquidator (applicant) has filed complaint through instant application under section 454(5) of Companies Act - Respondent No. 1 submitted that his wife was seriously sick and he could not inspect records lying at factory premises of company-in-liquidation which upon winding up order passed was sealed and only after inspection being permitted he would be able to submit requisite statement of affairs.

Summary

Issues:
1. Failure to file statement of affairs within prescribed time after winding up order.
2. Allegations of non-compliance with statutory provisions under section 454 of the Companies Act.
3. Prosecution under section 454(5) for default in submitting statement of affairs.
4. Defense citing inability to submit statement due to serious illness and sealed factory premises.
5. Examination of witnesses and evidence presented.
6. Interpretation of section 454 of the Companies Act regarding punishment for default.
7. Reasonable excuse for delay in filing statement of affairs.

Analysis:
1. The judgment pertains to a case where a company was ordered to be wound up, and the Official Liquidator was appointed to conduct the proceedings. The issue arose when the ex-Directors of the company failed to file the statement of affairs within the prescribed time after the winding up order was passed.

2. The complainant, the Official Liquidator, filed a complaint under section 454(5) of the Companies Act, alleging non-compliance with the statutory provisions. Despite reminders and notices sent to the ex-Directors, the statement of affairs was not submitted within the specified time frame.

3. The court examined the evidence presented, including witness testimonies, and noted that the ex-Directors cited reasons such as serious illness and sealed factory premises for their inability to submit the statement on time. The defense argued that the winding up order was passed ex parte, and they were not aware of it initially.

4. The court analyzed the provisions of section 454 of the Companies Act, which prescribe punishment for default in filing the statement of affairs. It was observed that the offense is considered continuing until the statement is filed, and the delay in submission should be without a reasonable excuse for liability.

5. Ultimately, the court found that the ex-Directors had shown a reasonable cause for the delay in filing the statement of affairs, considering the circumstances presented. As a result, the complaint was dismissed, and no costs were awarded. The judgment highlighted the importance of proving beyond doubt the absence of a reasonable excuse for non-compliance with statutory requirements.