2013 (3) TMI 239

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....11(7). Sec.211(1) says that every balance-sheet of a company shall give a true and fair view of the state of affairs of the company as at the end of the financial year. According to the complainant, petitioners are bound to furnish the same but as they failed to furnish the same they are liable to be punished under Section 211(7) of the Act. 4. In the complaint which is the subject matter of Crl.M.C.No. 2566 of 2007, it is alleged that the petitioners have violated Section 297 of the Act which provides that approval of the Board of Directors of the Company is required in respect of contracts entered into by the company in which its directors are interested. Further in case of a company having paid up capital of Rs.1 Crore and above previous approval of the Central Government is required in respect of contracts in which directors are interested. It is alleged that in respect of transaction entered into by the Company, the consent of Board of Directors was not obtained and that the approval of the Central Government was also not obtained by the Company.   5. In the complaint which is the subject matter of Crl.M.C. 2567 of 2007, the offence alleged is under Section 193(1....

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....the offences under Sec.217(4) r/w Sec.217(5) of the Act. It was alleged that on a perusal of the Balance Sheet of the Company as at 30.10.2003, which was annexed to the Inspection Report, it was observed that the Balance Sheet was not signed by the persons as required under Sec.217(4) of the Act. 11. Learned counsel for the petitioners submits that petitioners 2 and 3 resigned from the directorship of the company on 11.8.2000 and the first petitioner resigned from the directorship from 16.8.2000. It is also submitted by the learned counsel that the resignation was forwarded to the Company and it was accepted by the Company. But the learned counsel for the respondent would submit that the factum of acceptance of resignation was not intimated to the Registrar of Companies in Form No.32 and as such, it cannot be said that the petitioners were not the Directors of the Company and hence, they cannot wriggle out of the liability. In this connection, the learned counsel for the petitioners has relied upon Annexure A5 order passed by this Court in Co. Appl. Nos.227, 228 and 229 of 2006 in C.P.No.28/2005. Referring to the relevant portion of Annexure A5 order, the learned counsel for the....

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....r before the relevant date; (c) who are in the employment of the company, or have been in the employment of the company within the said year, and are, in the opinion of the Official Liquidator, capable 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." On going through these provisions, there can be no doubt that the liability is upon the persons who are at the relevant date the Directors. The words "is" and "are" employed in the aforesaid Section indicate only the present tense; that the obligation is upon persons who "are" the Directors. The Company is bound to submit the required information regarding the resignation. But, that duty is cast only upon the Company. Though the duty is on the Company, it has to be carried out through its Secretary. True, the Directors also can furnish the required information to the Registrar of Companies, but the primary duty is upon the Company and that has to be done by the Secretary of the Company. For the omission on the part of the Secretary, the Directors w....

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....e learned counsel. If there is nothing in the Articles of Association providing for formal acceptance of resignation, then, once a Director tendered his resignation, it must be deemed to have been accepted. It was also observed by this Court in Annexure A5:   "In the instant case also I find from the Articles of Association that there is no provision for any formal acceptance of resignation of Directors by the Board of Directors. To this extent the above decision of the Madras High Court also support the argument of the learned counsel for the applicants. The principles laid down by the Madras High Court in the aforesaid two decisions and the general principles emerging from the other decisions cited at the Bar by the learned counsel for the applicants in my opinion will justify the grant of these applications.   The fact that the applicants have tendered their resignations and had disassociated themselves from the business of the Company in liquidation with effect from the date of their resignation is not in dispute cannot be ignored."   16. In the light of the finding entered by this Court in Annexure A5, the learned counsel for the petitioners submits tha....

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....pany can resign unilaterally and that too by writing a letter to the chairman of the said company or its secretary and whether it is necessary for such a director to fill up Form No.32 and is obliged to give a notice or intimation to that effect to the Registrar of Companies.   The other question was whether that particular director was obliged to give such information to the Registrar of Companies and whether he cannot retire without complying with the said requirements. It was held that the director of a public limited company or private limited company can tender his resignation unilaterally and without filling in Form 32 and without sending a notice to the Registrar of Companies. It was further held that filling in of the said Form and giving intimation and information to the Registrar of Companies is the duty of the Company Secretary and not of an individual director. It was held: "It is clear that the filling in the said form and giving due intimation and information to the Registrar of Companies is the duty of the Company Secretary and not of an individual director. Suffice it to say that what he has to do is to send in writing a letter informing either the Chairm....