Statutory duty to file statement of affairs arises automatically for directors in liquidation; Rule 124 notice is unnecessary.

A director of a company in liquidation who falls within the first category under Section 454(2) of the Companies Act, 1956 is bound by the statutory duty to submit the statement of affairs, because that obligation arises automatically from the Act itself under Sections 454(2) and 454(3). Rule 124 of the Companies (Court) Rules, 1959 applies to persons whose duty depends on a court direction or requisition by the Official Liquidator, and service of notice under that rule is not a condition precedent for prosecuting such a director under Section 454(5). The plea that the appellant had ceased to be a director was left for proof at trial, and no ground for discharge or quashing was made out.

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Issues: Whether a director of a company in liquidation, who falls within the first category under Section 454(2) of the Companies Act, 1956, can avoid prosecution under Section 454(5) on the ground that no notice under Rule 124 of the Companies (Court) Rules, 1959 was served on him, and whether discharge or quashing of the prosecution was warranted.

Analysis: Section 454(2) creates two categories of persons who may be required to submit the statement of affairs. For directors, managers, secretaries and chief officers holding office on the relevant date, the obligation is automatic and arises from the statute itself under Section 454(2) read with Section 454(3), without dependence on a notice under Rule 124. Rule 124 is directed to the class of persons whose obligation arises only upon a direction of the Court or a requisition by the Official Liquidator. The reference in prior authority to notice did not decide the mandatory character of notice for directors, because the earlier reference concerned only the burden of proving absence of reasonable excuse. The plea that the appellant had ceased to be a director was not examined on merits at this stage, being a matter for evidence in the prosecution.

Conclusion: Service of notice under Rule 124 was not a condition precedent for prosecuting the appellant as a director falling within the first category under Section 454(2), and no ground for discharge or quashing was made out.

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