Directors and Secretary Must File Company's Statement of Affairs Despite Resignation

The court rejected the objections raised by the directors and the secretary regarding their obligation to file the statement of affairs for the company. It directed the directors and the secretary to submit the statement of affairs to the official liquidator within six weeks, warning of legal consequences for non-compliance. The court held that even after resignation, they were still obligated to provide the statement as former officers of the company under Section 454 of the Companies Act, 1956. The court also ruled that provisions in the company's articles of association allowing resignation by notice were not valid under the Act.

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Issues Involved:
1. Non-filing of the statement of affairs of a company.
2. Liability of directors and the secretary to submit the statement of affairs.
3. Effect of resignation of directors on their liability.
4. Applicability of the company's articles of association under the Companies Act, 1956.
5. Interpretation of Section 454 of the Companies Act, 1956.

Issue-wise Analysis:

1. Non-filing of the Statement of Affairs of a Company:
The case concerns the non-filing of the statement of affairs of Messrs Bihar Investment Trust Ltd., which was wound up by an order of the court on August 27, 1974. The official liquidator reported that no statement of affairs was filed by any of the persons mentioned in Section 454 of the Companies Act, 1956. Notices were issued to the directors and the secretary, who denied their obligation to file the statement.

2. Liability of Directors and the Secretary to Submit the Statement of Affairs:
The official liquidator identified four persons liable to submit the statement: three directors (collectively referred to as the "Aroras") and the secretary, Ambika Prasad Verma. The directors claimed they had resigned in 1966, while Verma argued that he was merely a name-lender as the secretary and the actual business was controlled by the directors.

3. Effect of Resignation of Directors on Their Liability:
The directors argued that their resignation was effective upon giving notice as per the company's articles of association. However, they admitted having no proof of acceptance of their resignation by the company. The court noted that the relevant provision in the articles of association (Article 94(f)) allowing resignation by notice was not saved by Section 645 of the Companies Act, 1956, as the new Act did not provide for such a provision.

4. Applicability of the Company's Articles of Association under the Companies Act, 1956:
The court examined whether Article 94(f) of the company's articles of association, which allowed directors to vacate office by notice, was valid under the Companies Act, 1956. It was held that the 1956 Act did not permit companies to add grounds for vacating office beyond those specified in Section 283. Therefore, the provision in the articles of association was not saved by Section 645 of the 1956 Act.

5. Interpretation of Section 454 of the Companies Act, 1956:
Section 454(2) requires the statement of affairs to be submitted by persons who are directors, managers, secretaries, or other chief officers on the relevant date. The court held that even if the directors and the secretary had resigned, they were still covered under the category of persons who have been officers of the company, as per Section 454(2)(a). The purpose of Section 454 is to ensure speedy administration in winding up and to enable the liquidator to get apprised of all relevant facts.

Conclusion:
The court rejected the objections raised by the directors and the secretary regarding their obligation to file the statement of affairs. It directed the Aroras and Ambika Prasad Verma to file the statement of affairs, either jointly or singly, verified by any or more of them, to the official liquidator within six weeks, failing which the consequences under the law would follow.

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