TaxTMI 
TaxTMI 
2010 (4) TMI 605
X X X X Extracts X X X X
X X X X Extracts X X X X
....e official liquidator attached to this court was appointed as liquidator of the company under section 449 of the Act. Respondent Nos. 1 to 5 were the directors of the company as on the dates of winding up order and the respondents despite after giving notice as contemplated under section 454(i) of the Act, have not submitted statement of affairs of the company within twenty-one days from the date of winding up and thereby they have committed an offence punishable under section 454(5) of the Act. 3. Respondent Nos. 1, 2, 4 and 5 appeared through counsel and have filed their statement of affairs. Respondent No. 3 though represented by the advocate, but no statement of affairs was filed. 4. Respondent Nos. 4 and 5 have filed statement of affairs, which is produced at exhibit P9. Thereafter the defects were pointed out by the official liquidator as per exhibit P10. The official liquidator had pointed out the defects, for which respondent Nos. 4 and 5 by their reply dated 28-8-2003, produced at exhibit P11, have given their explanation. Respondent No. 2 did not file his statement of affairs within the time stipulated. However, he filed the statement of affairs after this company a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....notice issued by the official liquidator dated 11-8-2003, calling upon respondent Nos. 4 and 5 to comply with the defects pointed out therein. Exhibit P11 is the reply to the same by respondent Nos. 4 and 5. Exhibit P12 is the letter from respondent No. 1 intimating that he has resigned from the position of director, exhibit P13 another notice from the lawyer on behalf of respondent No. 1. Exhibit P14 is the mahazar, exhibit P15 is a letter from respondent No. 2 along with the statement of affairs submitted on 20-11-2007. Exhibit P16 is the letter from the official liquidator to respondent No. 2 to rectify the defects. Exhibit P17 is a letter from the official liquidator to respondent No. 2 again pointing out the defects. 9. Relying on these documents, learned counsel for the official liquidator submitted that, it is mandatory under section 454 of the Act that, the director as on the relevant date should submit the statement of affairs of the company as on the date of winding up of the company and they have failed to comply with the same. In this regard, the official liquidator apart from examining PW 1 has produced relevant documents, such as exhibits P10 and P16 showing that t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y by respondent Nos. 4 and 5 and they have not committed any offence and accordingly having filed such application, without any decision got the same dismissed as not pressed. However, the facts remain that the statement made in the application is not denied. In this context, he relied on the cross examination of PW1, wherein PW1 admits, that he is not aware as to who were in the custody of the books of account and the records when he visited the office of the company. He also admits that Company Application No. 1030 of 2007 has been filed for recovery of 11 crores and further admits "It is true that respondent Nos. 4 and 5 have sent the statement of affairs through post which is received on 14-7-2003, which is already marked as exhibit P9. It is true that in the letter dated 28-6-2003, respondent Nos. 4 and 5 have intimated the transfer of Bangalore Registered Office to Mangalore". As on the date of filing of the complaint, respondent Nos. 4 and 5 had not filed the statement of affairs, the complaint was filed on 10-9-2002. "It is true that after filing the complaint, respondent Nos. 4 and 5 have attended the meeting as called by the official liquidator" and further admits that "i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y by the KSIIDC and under these circumstances the statement of affairs was not filed within the stipulated time. Further as per exhibit P15 statement of affairs has been filed. She further submitted that for the purpose of prosecuting under section 454 of the Act, the annual report of the year 1994-95 has been relied, whereas for the purpose of claim, the annual report of the year 1997-98 has been relied. From the annual report, exhibit P1, she pointed out that even according to the annual report of 1994-95, there were eight directors shown in the list of board of directors. However, only four directors are prosecuted in this application and it is not shown as to why the prosecution has not initiated against other four, in turn respondent No. 5 is added in the list of the respondents in the application even though his name is not shown in the list of directors. She further submitted that, the application under section 454 of the Act, and the proceeding being criminal in nature, the accusation is required to be proved beyond the reasonable doubt. The evidence of PW1 do not explain as to why the statement of affairs filed by respondent Nos. 4 and 5 and respondent No. 2 are not in con....
X X X X Extracts X X X X
X X X X Extracts X X X X
....able of giving the information required; (d )who are or have been within the said year officers of, or in the employment of, a company which is, or within the said year was, an officer of the company to which the statement relates. (3) The statement shall be submitted within twenty-one days from the relevant date, or within such extended time not exceeding three months from that date as the official liquidator or the Tribunal may, for special reasons, appoint. (4) Any person making, or concurring in making, the statement and affidavit required by this section shall be allowed, and shall be paid by the official liquidator or provisional liquidator, as the case may be, out of the assets of the company, such costs and expenses incurred in and about the preparation and making of the statement and affidavit as the official liquidator may consider reasonable, subject to an appeal to the Tribunal. (5) If any person, without reasonable excuse, makes default in complying with any of the requirements of this section, he shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend to one thousand rupees for every day during which th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t pleaded guilty the court by taking all such evidence, as may be produced in support of the prosecution case and after hearing the accused and taking into consideration of all the evidence as produced in the defence and in case the evidence referred under section 254 of the Code is not sufficient, to convict the accused, the court may acquit the accused or if the prosecution proves the accusation, may convict the accused. 16. If the trial is required to be conducted under Chapter 20 of the Code of Criminal Procedure, necessarily the prosecution is required to establish the case against the accused by producing such cogent, clinching and clear evidence. In the light of the provisions of section 254 of the Code and more particularly section 454 of the Act, the evidence in this case shows that respondent No. 5 is additional director under the provisions of section 260 of the Act, the period of additional director is up to the next annual general meeting. Exhibit P2 is the certificate issued in Form No. 32, which disclose the name of the director, but exhibit P2 is dated 19-9-1991, which is absolutely not the relevant date for the purpose of prosecuting the director. The relevant d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erein a request was made by the official liquidator to delete respondent Nos. 4 and 5. As far as respondent No. 5 is concerned, he has stated that he was an additional director. Thus his period comes to an end with the general body meeting. It is also not disputed that the statement of affairs was filed. Further PW1 in the cross-examination admits that respondent No. 1 was not the director of the company from 30-9-1997 and PW1 has relied on Form No. 32. He also admits that the application was filed for deleting the name of respondent Nos. 4 and 5 and subsequently the application was dismissed as not pressed. As against respondent No. 1 is concerned, he has filed statement of affairs though there is delay in filing, however he has explained the delay. Specific case of respondent No. 2 is that the KSIIDC has attached his properties and seized the properties and all books were with KSIIDC and this fact is not denied by PW1. He has admitted that KSIIDC was one of the directors till winding up and it is not seriously disputed by PW1 as regards to the allegations that the records were with KSIIDC. This is also clear from exhibits P11 and P16, the statement of affairs filed by respondent ....