Directors ordered to file statement of affairs within two months or face penal proceedings

The court directed the ex-directors to prepare and file the statement of affairs within two months based on the available records and books. Failure to comply would result in the official liquidator's report being treated as a complaint under section 454(5A) of the Companies Act, 1956, leading to penal proceedings. Further orders would be contingent on compliance with this directive.

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Issues Involved:
1. Whether the official liquidator should file a criminal complaint under section 454(5A) of the Companies Act, 1956, against the ex-directors for non-compliance with section 454(1) of the Act.
2. The obligations of ex-directors under section 454(2)(a) of the Companies Act, 1956.
3. The legal implications of the ex-directors' claim that they were only nominal directors and not actively involved in the company's affairs.
4. The adequacy of the records and books available for preparing the statement of affairs.
5. The jurisdiction and timing for calling for a statement of affairs under section 454(3) of the Act.

Detailed Analysis:

1. Filing of Criminal Complaint:
The official liquidator sought directions on whether to file a criminal complaint under section 454(5A) of the Companies Act, 1956, against the ex-directors for failing to comply with section 454(1) of the Act. The court noted that the ex-directors were required to submit a statement of affairs within 21 days from the winding-up order or within an extended period not exceeding three months. Notices were issued to the ex-directors, but they either did not respond or denied their obligation, claiming they were no longer directors.

2. Obligations under Section 454(2)(a):
The court examined the plain language of section 454(2)(a), which imposes an obligation on ex-directors to submit a statement of affairs. The court referenced rulings from other High Courts, including the Delhi High Court and Calcutta High Court, which held that ex-directors are required to file the statement of affairs even if they ceased to be directors more than one year before the winding-up order. The court agreed with these rulings and emphasized that ex-directors must demonstrate their incapacity to file the statement rather than merely claiming they were not directors at the relevant time.

3. Nominal Directors Claim:
The ex-directors claimed they were only nominal directors and not actively involved in the company's affairs. The court rejected this argument, stating that the Companies Act does not recognize the concept of nominal directors. All directors have equal duties, responsibilities, and obligations under the law. The court noted that the ex-directors' affidavits were vague and did not provide clear information about their involvement in the company's affairs or the managing director's departure.

4. Adequacy of Records and Books:
The court reviewed the list of books and records provided by the ex-directors and concluded that there was sufficient material to prepare a statement of affairs. The court emphasized that the ex-directors had not made any attempt to prepare the statement from the available records. The court directed the ex-directors to prepare and file the statement of affairs within two months, failing which the official liquidator's report would be treated as a complaint under section 454(5A).

5. Jurisdiction and Timing under Section 454(3):
The court addressed the argument that section 454(3) barred calling for a statement of affairs at this stage. The court referenced a ruling from the Calcutta High Court, which held that the winding-up court has the power to allow the delinquent person to file a statement of affairs even after the trial has commenced. The court concluded that the ex-directors were liable to file the statement of affairs and directed them to do so within two months.

Conclusion:
The court directed the ex-directors to prepare and file the statement of affairs within two months based on the available records and books. If they failed to comply, the official liquidator's report would be treated as a complaint under section 454(5A) of the Companies Act, 1956, and penal proceedings would commence. The court also noted that further orders would be made based on compliance or non-compliance with this direction.

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