JAMNA DATWANI Vs. OFFICIAL LIQUIDATOR

JUDGEMENT

(1.) THIS appeal is preferred against the order dated 2 nd December, 2010 passed by Learned Company Judge in Crl. O.(CO) No.4/2006 (in CP No.263/1997) filed by the Official Liquidator under Section 454 of the Companies Act, for prosecution of eight Directors of M/s.Metlex Ceramics Ltd. (in liquidation) on the ground that no Statement of Affairs had been filed by any of these Directors inspite of the company being ordered to be wound up as far back as on 21st July, 2004. The appellant herein had appeared in those proceedings. Her statement was recorded by the Official Liquidator. Thereafter the matter was heard. The contention of the appellant was that she is a housewife and was not participating in the affairs of the company; her husband who was mainly looking after the affairs of the company had suffered a stroke and because of which he was paralyzed and confined to bed; in his absence she was made to sign certain papers; otherwise she was not concerned with the running of the company (in liquidation). The Learned Company Judge after examining the matter has by the impugned order found that as per the appellants own admission she had been signing documents of the company and this prima facie showed that she was looking after the affairs of the company. With respect to the plea of the appellant in her statement recorded before the Official Liquidator as well as the Court that the affairs of the company were looked after by Manager, Chartered Accountants etc. and she did not know them and that she signed the documents without reading those documents, the Learned Company Judge has stated that this is her defence which has to be established and examined in trial. Though the Learned Company Judge by the impugned order found a case for proceeding against the appellant but still gave another opportunity to the appellant. Though the appellant has not filed any subsequent order but the counsel informs that upon the appellant failing to avail opportunity by filing Statement of Affairs, she has been ordered to be proceeded against.

(2.) THE admitted position which prevails today is that the company was ordered to be wound up on 21st July, 2004. Almost 7 years have passed but the statement of affairs has not been filed so far. Learned Company Judge has recorded dismal state of affairs which are delaying the process of winding up. We had directed the Official Liquidator to file the report about the status of other Directors of the company. THE Official Liquidator has filed the report stating as under:-

(3.) IN so far as present appeal is concerned, we find that prima facie there is material to proceed against the appellant under the aforesaid provision. Mr. Makkar, Learned counsel for the appellant has relied upon the Full Bench judgment of this Court in M/s Security & Finance Pvt. Ltd. v. B.K. Bedi 10 (1974) DLT 181 and Division Bench judgment in Devindar Kishore Mehra v. Official Liquidator 16 (1979) DLT 150 and on the basis of these judgments his submission is that there should be some evidence on record before the Learned Company Judge decides to proceed against a person under Section 454(5) of the Companies Act. These judgments are discussed at length by the Learned Company Judge in the impugned order. The Learned Company Judge has also referred to and has distinguished those judgments.