Official Liquidator vs Ved Parkash Gupta and Others

M.S. Liberhan, J.—The company was ordered to be wound up on May 22, 1990. The statement of affairs of the company was filed on May 2, 1991. The official liquidator has sought the prosecution of the directors of the company u/s 454(5) of the Companies Act for their non-filing the statement of affairs of the company within the statutory period of limitation of 21 days from the date of winding up order.

The charge sheet was read out to the respondents and they have denied the same.

I have gone through the oral evidence as well as the documents produced on record by the parties. Reading the statements of CW-1, V.K. Verma, and RW-2, Jia Lal, as well as a perusal of the notice dated May 25, 1990, for filing the statement of affairs of the company, it emerges that the notice, exhibit P-1, was served on the directors of the respondent-company. The respondents have denied the receipt of notice, but the statement of CW-1, V.K. Verma, official liquidator, who proved the signatures of the respondents on the A.D., receipts, exhibits CW-1/2 to CW-1/6, with regard to the receipt of registered envelopes, amply establishes the receipt of the aforesaid notices. Moreover, the signatures on the receipts have not been denied by the respondents. No other evidence has been led, except mere denial by the respondent of the receipt of notices. No other document said to have been received by post under the said A.D. receipts was produced nor any evidence was led to prove the receipt of any other document under the postal receipts produced and proved by the petitioners. It would be reasonable to infer beyond doubt that notices were served on the respondents with respect to the filing of the statement of affairs of the company on May 25, 1990. The respondents themselves have proved exhibit R-1. The documents shown in the said inventory were handed over to the official liquidator at Chandigarh, on December 20, 1990. Exhibit R-3 is another list of books of record handed over by one Jia Lal (RW-2) on March 7, 1991. Undisputedly some statement of affairs of the company was filed on May 2, 1991. It is only on March 7, 1991, that the said Jia Lal informed the official liquidator that one car owned by the company worth about Rs. 75,000 was forcibly taken away by the Punjab Concast Steel Ltd., Focal Point, Ludhiana, in the year 1988. Though the car is owned by the company, no steps are taken by the directors to recover back the same nor was it intimated to the official liquidator. There is no dispute that the statement of affairs of the company was not filed till May 2, 1991. The only argument advanced by learned counsel for the respondents is that it is a case of delayed filing of the statement of affairs of the company. In defence, it was put forth that the official liquidator did not supply the prescribed forms nor any notice was issued by him. It was further stated by the respondents that the official liquidator sealed the office, including the account books. It is only on making available the account books by the official liquidator to the respondents that the balance-sheet was drawn probably in December, 1990, and filed. It was stated that the winding up order was not in the knowledge of the directors. No inventory was prepared at the time the official liquidator sealed the premises.

I find no force in the submissions made by learned counsel for the respondents for the reason that notice for winding up was served before the winding up order was passed- Notice of the winding up order was published in the newspaper as well as in the Official Gazette. In the said circumstances, lack of knowledge of the directors cannot be accepted. Be that as it may, as observed above, the directors were served with the notices dated May 25, 1990, with respect to the filing of the statement of affairs of the company. Even according to the respondents themselves, i.e., Ved Parkash Gupta, managing director, and Jia Lal, director, they handed over the documents, vide annexure R-l on December 20, 1990, which again was an incomplete record. At any rate, there is no denying the fact that on December 20, 1990, the respondents had the knowledge about the appointment of the official liquidator. A reading of Section 454 of the Companies Act as well as Rule 125 of the Companies (Court) Rules, 1959, shows that it is nowhere provided that it is the duty of the official liquidator to serve a notice with respect to the filing of the statement of affairs of the company. It has been statutorily made incumbent on the directors to file the statement of affairs of the company within 21 days of the appointment of the official liquidator or within the extended time which would not be more than three months, though extension of time could be granted for reasons to be recorded in writing. The court never fixed the date within which the statement of affairs of the company could have been filed. The respondents were statutorily liable to file the statement of affairs of the company within 21 days from the date of appointment of the official liquidator which was the terminus quo for the purpose of filing the statement of affairs of the company. The said period was never extended nor anybody applied for it. The court did not fix any period within which the statement of affairs of the company can be filed. The respondents took no steps in spite of service of notice for filing the statements of affairs of the company, apart from the fact that they had the knowledge about the winding up of the company and they did produce the account books before the official liquidator. The respondents never applied to the official liquidator for any information. Though mark "X" is not admissible in evidence not having been properly proved on record under the Evidence Act yet the documents having been produced by the respondents, may be read to corroborate the inference that the records were in fact produced before the official liquidator in December, 1990, particularly, when on March 7, 1991, the respondents brought to the notice of the official liquidator that since the premises were locked and sealed by the official liquidator and there were no goods or records lying therein, it was unnecessary to pay the rent of the premises.

In my considered view, the respondents had the knowledge of liquidation proceedings as well as the order of winding up on May 22, 1990. Lastly, in view of the observations made in the earlier part of the judgment it would be reasonable to infer that they did have knowledge of the winding up order on December 20, 1990. I may venture to state that in spite of their knowledge they have not filed the statement of affairs of the company till May, 1991. Further, they never sought any extension of time. Taking a most lenient view in favour of the respondents, I am of the considered opinion that the respondents have failed to file the statement of affairs of the company within 21 days from the date of order of winding up or at least within the maximum period of extension, i.e., three months, even by calculating the period from December 20, 1990, till May, 1991. The ends of justice would be amply met if a punishment of Rs. 100 per day is imposed upon the respondents for the remaining period for not filing the statement of affairs of the company. Consequently, I hold the respondents guilty for not filing the statement of affairs of the company within the statutory time. No plausible defence for filing the belated statement of affairs of the company was offered. I, therefore, award a punishment of Rs. 100 per day totalling Rs. 13,200 to each of the directors of the respondent-company.

The company petition is disposed of accordingly.