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TMI Blog2009 (6) TMI 588X X X X Extracts X X X X X X X X Extracts X X X X ..... one Vittal S. Candade seeking according to the applicant, Sri Rao (H. V.), one of the ex-directors died on November 22, 2000, Sri Savoor Rao Krishna is represented by a counsel and that by order dated February 21, 2007, proceedings against the respondent herein were dropped and by an order dated August 17, 2006, the complaint against another ex-director Sri Subramanian (R. D.) was dismissed. The proceedings in C. A. No. 1182 of 2002 is now continued against Sri Savoor Rao Krishna and against Sri Vittal S. Candade in C.A. No. 44 of 2005 as that they have not filed the statement of affairs. 3. According to the official liquidator, the respondent herein was a director of the company and was actively associated with the day-to-day activities and under the circumstances that he is the right person to whom the direction could be issued under section 454 of the Act to file the statement of affairs showing the assets and liabilities of the company so as to enable the official liquidator to carry out the liquidation proceedings effectively. 4. In response to this application, the respondent herein filed a statement of objection stating that on February 21, 2007, the respondent herein who ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that in case this court comes to the conclusion that the application is maintainable, no sufficient evidence or material has been produced so as to seek a direction against the respondent to file the statement of affairs in terms of section 454(2). 8. Having heard counsel on both sides, the points that arise for my consideration are as follows : "(i) Whether an application under section 454(2) is maintainable when the same is filed against a person who is deleted in an earlier proceeding initiated under section 454(5) of the Companies Act ? (ii) If the answer to point No. 1 is in the affirmative, whether the official liquidator has placed sufficient material on record to seek a direction to the respondent herein under section 454(2) of the Act ?" 9. From the material on record, it is not in dispute that the respondent resigned on March 1, 2002 and the winding up order was passed on September 4, 2002 and that possession of the assets of the company in liquidation was taken on January 13, 2003 and mahazar was drawn up in that regard on June 3, 2003. That C.A. No. 1182 of 2002 was filed by the official liquidator in which the present respondent was also arrayed as responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted to the official liquidator a statement as to the affairs of the company in the prescribed form, verified by an affidavit, and containing the following particulars, namely :- (a)the assets of the company, stating 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 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 hereinafte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... copy thereof or extract therefrom. (7) Any person untruthfully so stating himself to be a creditor or contributory shall be guilty of an offence under section 182 of the Indian Penal Code, 1860 (45 of 1860), and shall, on the application of the official liquidator, be punishable accordingly. (8) In this section, the expression 'the relevant date' means, in a case where a provisional liquidator is appointed, the date of his appointment, and in a case where no such appointment is made, the date of the winding up order." 12. A perusal of the said section makes it apparent that section 454(1) casts a statutory duty to file a statement of affairs of the company in the prescribed format containing the particulars mentioned in the said sub-section by the directors and by any person who is a manager, secretary or other chief officer of the company on the relevant date which is stated in section 454(2). The relevant date is explained in section 454(8) of the Act to mean in a case where a provisional liquidator is appointed, the date of his appointment, and in a case where no such appointment was made, the date of the winding up order is made. The nature of information to be furnished is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... way of filing a statement of affairs from even the ex-directors or employees of the company. This is clear from the fact that under section 454(2) the word "or" before the words "by such of the persons hereinafter in this sub-section mentioned" clearly differentiate between the mandatory requirement of the directors, manager, secretary or other chief officer of the company on the relevant date to submit the statement of affairs and the officers who are mentioned in clauses (a) to (d) of the said sub-section who can be directed to file the statement of affairs. It would also be relevant to note that sub-section 2(30) of the Act defines officer of the company to include even a director. 14. Reference to the rules pertaining to filing of statement of affairs under the Companies (Court) Rules, 1959, would reveal that under rule 124 when a notice is issued by the official liquidator requiring any person to submit and verify the statement of affairs of the company under section 454(2) the same is in Form No. 55. But when the official liquidator applies by summons to the court for an order directing any person who in his opinion is liable to furnish the statement of affairs, and under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is regard, it is of relevance to refer to the citations placed by learned counsel for the respondent. In the case of Mother Care (India) Ltd. v. Prof. Ramaswamy P. Aiyar ILR 2004 Karn 1081 ; [2004] 51 SCL 243 , this court was dealing with the fact of resignation of a director in a proceeding initiated under section 454(5) and (5A) of the Act and in paragraph 13 of the said judgment it is enunciated as follows (page 249 of 51 SCL) : "13. A reading of section 454(2) of the Act makes it very clear that the statement of affairs to be made by the official liquidator under section 454(1) is to be submitted and verified by one or more of the persons who are at the relevant date the directors. Therefore, the relevant date would be the date on which the winding up order is made and it is persons who are on that date directors and who are in charge of the company and its affairs who are expected to furnish the particulars mentioned in section 454(1) and if a person has ceased to be a director on that relevant date, there is no obligation cast upon him to furnish the aforesaid particulars contemplated under section 454(1). Even if a person is not a director on the aforesaid relevant date in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... But if a director has resigned and proved to the satisfaction of the court that on the relevant date he had no obligation to comply with section 454(1), then no action could be taken under section 454(5) or (5A) of the Act. While adverting to the decision of this court in the case of Official Liquidator, High Court, Allahabad v. B.K. Modi [2008] 141 Comp. Cas. 438 (All.), it has been held that even if a person has been a director of the company at any point of time and he has ceased to be so on the relevant date, i.e., the date of winding up order or within one year prior to the relevant date, such a person can be held responsible for not submitting and verifying the statement of affairs in view of the provisions of section 454(2)(a) read with section 2(30) of the Companies Act, 1956, though he is absolved of his responsibility under section 454(1) of the Act. Therefore, in view of the aforesaid decisions, it is held that the application filed under section 454(2) of the Act is maintainable and hence, point No. 1 is answered in favour of the applicant. 20. As far as point No. 2 is concerned, it is the contention of learned counsel for the respondent that no sufficient material ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsequent to his resignation he had nothing to do with the affairs of the company, then he ought not to have taken part in any of its proceedings post-winding up order being made by this court. On the other hand, the material furnished would make it evident that he participated in the proceeding initiated by the official liquidator subsequent to the winding up order and particularly annexure C makes clear the intention of the respondent herein to be present on June 2, 2003 and on account of the reasons mentioned therein, he could not personally be present and had therefore, sent his representative. The said letter would indicate that the respondent herein was a key person amongst the other directors of the company who were also present and that though he contended that he had no statutory duty as per section 454(1) on account of his resignation, but in view of his participation in the post-winding up proceeding which is evident from the said material, other directors not being there, the direction sought to the respondent to furnish the statement of affairs in terms of section 454(2) of the Act, in my view, is in accordance with the requirement of the said provision in the context o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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