Director not liable for company debts after resignation. Resignation effective upon communication.

The court found that the applicant, who had resigned as a director before the relevant date, was not liable for the company's unrecovered receivables. The court clarified that a director's resignation is effective upon communication and does not require acceptance or filing with the Registrar. As the applicant had resigned before the relevant date, he was not obligated to file a complete Statement of Affairs. The court allowed the applicant's claim, directing the Provisional Liquidator to submit a fresh status report within eight weeks and scheduled further hearing for 30.04.2014.

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Issues Involved:
1. Liability of ex-directors for company's unrecovered receivables.
2. Whether the applicant was a director at the relevant date under Section 454(8) of the Companies Act, 1956.
3. Obligation to file a complete Statement of Affairs and provide necessary documents to the Official Liquidator.

Detailed Analysis:

1. Liability of Ex-Directors for Company's Unrecovered Receivables:
The principal controversy revolves around whether ex-directors of a company in liquidation can be held accountable for the receivables that the Official Liquidator cannot recover due to lack of requisite information and complete records. The court acknowledged that the Official Liquidator had been unable to recover a sum of Rs. 9.23 lacs because the ex-directors failed to provide necessary information. It was argued that the liability imposed on only two ex-directors was arbitrary, especially when other directors, like Mr. Sugani, who were also involved in the company's affairs, were not held accountable.

2. Whether the Applicant was a Director at the Relevant Date:
The applicant contended that he had resigned as a director on 31.03.2008, well before the appointment of the Provisional Liquidator on 15.01.2010. The court examined whether the resignation needed to be accepted by the company's board or filed with the Registrar of Companies to be effective. It was concluded that a director's resignation is a unilateral act and becomes effective upon communication, unless otherwise specified in the company's Articles of Association. The court found that the applicant had communicated his resignation unequivocally and thus was not a director on the relevant date.

3. Obligation to File a Complete Statement of Affairs:
The court noted that under Section 454 of the Companies Act, 1956, directors on the relevant date are required to file a Statement of Affairs. The applicant argued that he had no control over the company's records post-resignation and thus could not be held liable for the incomplete Statement of Affairs. The court agreed, stating that the applicant had no obligation to ensure the submission of complete records since he had resigned before the relevant date.

Conclusion:
The court concluded that the applicant was not liable to deposit 50% of the Rs. 9.23 lacs as he was not a director on the relevant date. The court emphasized that a director's resignation does not require acceptance by the board or filing with the Registrar to be effective. The Official Liquidator's claim for compensation based on the assumption that the applicant was a director on the relevant date was found to be erroneous. The application was allowed, and the applicant was not required to deposit the sum as previously directed. The Provisional Liquidator was instructed to file a fresh status report within eight weeks.

Directions:
The Provisional Liquidator was directed to file a fresh status report within eight weeks, and the matter was listed for further hearing on 30.04.2014.

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