Winding-up Order Requires Directors to File Statement of Affairs: Modi Carpets Limited Case

The High Court ordered the winding-up of Modi Carpets Limited, appointing the Official Liquidator as Liquidator. The ex-directors were required to file the Statement of Affairs within 21 days post the winding-up order. Despite notices and opportunities, some directors failed to comply, leading to penal proceedings. The Court held B.K. Modi liable to file the Statement of Affairs, even after his resignation, as he was considered an 'officer' under the Companies Act. However, B.K. Modi was discharged from liability due to the eventual filing by another officer, while another director was exempted.

---

---

Issues Involved:
1. Winding-up order and appointment of Official Liquidator.
2. Filing of Statement of Affairs under Section 454 of the Companies Act, 1956.
3. Non-compliance and penalties under Section 454(5) of the Companies Act, 1956.
4. Resignation of Directors and their liability to file the Statement of Affairs.
5. Exemption of certain directors from liability.

Issue-wise Detailed Analysis:

1. Winding-up Order and Appointment of Official Liquidator:
The company, Modi Carpets Limited, was ordered to be wound up by the High Court of Allahabad on 21-12-1993, based on the recommendation of the Board for Industrial and Financial Reconstruction (BIFR). The Official Liquidator attached to the Court was appointed as the Liquidator of the company.

2. Filing of Statement of Affairs under Section 454 of the Companies Act, 1956:
The Official Liquidator filed Company Application No. 4 of 1998 under Section 454 of the Companies Act, 1956, to compel the ex-directors of the company to file the 'Statement of Affairs' within 21 days from the date of the winding-up order, as required by law. Notices were issued to the ex-directors, but the Statement of Affairs was not filed, leading to the application for penal proceedings.

3. Non-compliance and Penalties under Section 454(5) of the Companies Act, 1956:
The Court issued notices to the ex-directors to show cause why penal proceedings should not be initiated against them for non-compliance with Section 454(5). Despite repeated notices and opportunities, the Statement of Affairs was not filed timely, and the Court considered the implications of this non-compliance.

4. Resignation of Directors and Their Liability to File the Statement of Affairs:
One of the ex-directors, B.K. Modi, claimed to have resigned on 7-2-1992, prior to the winding-up order. He argued that he should not be held liable for filing the Statement of Affairs. The Court examined the resignation letter and Form 32 filed with the Registrar of Companies, which indicated that the Board of Directors had requested B.K. Modi to continue as a director. The Court concluded that even if B.K. Modi had resigned, he could still be required to submit the Statement of Affairs as an 'officer' of the company under Section 454(2)(a) read with Section 2(30) of the Companies Act, 1956.

5. Exemption of Certain Directors from Liability:
The Court exempted Shailendra Swaroop, an alternate director, from liability as he ceased to be a director on 26-5-1992, before the winding-up order. However, the Court did not exempt B.K. Modi, despite his resignation claim, as the Statement of Affairs was eventually filed by Sapan Kumar Bandhopadhyaya, Manager (Accounts). The Court considered whether B.K. Modi's failure to file the Statement of Affairs was 'without reasonable excuse' and concluded that given the circumstances, his failure was not without reasonable excuse, and he was discharged from liability.

Conclusion and Orders:
The Court discharged B.K. Modi from his liability to file and verify the Statement of Affairs under Section 454 of the Companies Act, 1956, considering the facts and circumstances, including his resignation and the eventual filing of the Statement of Affairs by another officer. The applications by B.K. Modi were disposed of accordingly, and the Court refrained from expressing any opinion on the liability of S.K. Modi as it was not part of the present order.

---