OFFICIAL LIQUIDATOR OF MILAN CHIT FUND AND FINANCE PRIVATE LIMITED IN LIQUIDATION NEW DELHI Vs. AJIT SINGH BHASIN

JUDGEMENT

(1.) M/S. Milan Chit Fund and Finance (P) Ltd., is a company which was ordered to be wound up by this Court per order of S.K. Kapur J., dated 11th February, 1969. The Official Liquidator filed a complaint datpd 26th April, 1969, under Section 454 (5) and 5(A) of the Companies Act, 1956, against Shri Ajit Singh Bhasin and three others, who were alleged to be directors of the company at the time it went into liquidation. The complainant states that the statement of affairs of the company had to be filed within 21 days of the passing of the winding up order, but no statement ,was filed. It was further stated that the complainant had given a notice dated 15th March, 1969, to the four accused, which had come back undelivered. The case of the Liquidator is that the accused have committed an offence under Section 454 of the Companies Act, 1956, which is a continuing one. The Court ordered summons to issue to the accused. On 27th January, 1970, the pleas of the accused were recorded under Section 242of the Criminal ProcedureCode,1898: The case was then adjourned on various grounds on several occasions either on account of the inability of the Official Liquidator to produce evidence or on account of the absence of the accused. On several occasions warrants had to-be issued to the accused to enforce their presence. On 10th July, 1972, P.N.Khanna J. ordered that a completed statement of affairs may now be filed within 4 weeks from to-day ". This date had been extended to 28th August, 1972, per orders of Rangarajan J. dated 14th August, 1972. On 4th September, 1972, it was stated in Court that the required statement of affairs had been handed over to the official Liquidator. The accused were directed to appear before the Official Liquidator. On 24th October, 1972, the accused were directed to file an affidavit of concurrence. Eventually, the evidence of the complainant was led on 24th May, 1973 and 25th September, 1973. Thereafter, the accused were examined under Section 342 of the Criminal Procedure Code, and finally the statement of Shri Om Parkash Kapoor, accused No. 2 was recordedin defence.

(2.) Before dealing with the evidence led by the complainant, it is necessary to refer to the pleas of the accused. Shri Ajit Singh Bhasin, accused No I stated that he had resigned as a director of the company before the company was wound up on 11th February, 1969. He also stated thit he was unable to prepare the statement of affairs and he had approached the Official Liquidator in this respect and stated that the records were in the ssession of the police and he was not in a position to lay his hands on the records to prepare a statement. He pleaded not guilty as he had nothing to do with the accounts of the company at any si age. Shri 0m Parkash Kapoor, accused No. 2 slated that he had resigned from the directorship of the company in 1965, and had been relieved from the office of the director of the company. He stated that he could not submit the statement of affairs as he had already been relieved from the directorship of the company. He pleaded not guilty. Shri Joginder Singh Kohli, accused No. 3, stated that he was not connected with the accounts of the company and he was himself the petitioner in the winding up case. He denied receipt of the notice of the Official, Liquidator and pleaded not guilty. Shri Kartar Singh Narang, accused No. 4 also stated that he had resigned before the winding up of the company on 11th February, 1969, he also said that he could not file a statement because he had no books with him and. he pleaded not guilty. Thus, three of the accused stated that they were not directors on the date of the winding up order and the 4th accused was the petitioner in that winding up case himself.

(3.) The first witness examined by the complainant was Shri Mahabir Prashad, an Assitant in the office of the Registrar of Companies. He stated that according to him, Shri Ajit Singh Bhasin, Shri Kartar Singh Narang, Shri Joginder Singh Kohli and Shri Om Parkash Kapoor were the directors of the company on 11th February, 1969, as per records available in the office of the Registrar of Companies. He also stated that on 21st April, 1965, Shri 0m Parkash Kapoor had sent a form staling that he had resigned, but the date from which the resignation was effective was not mentioned. This document was not considered by the Registrar of Companies, because of defects. He also stated that Form No. 32 had been received, singed by the Manager of the company showing that Shri 0m Parkash Kapoor had resigned. But this form was not signed by the Managing Director, and the Registrar of Companies had no intimation of the existence of a Manager. In continuation of his examination, he stated that the name of the Manager was not decipherable, but it was presented by Ganga Singh Narula, Manager. He also stated that there was a Form No. 32 sent by Shri Ajit Singh Bhasin; which was signed by him, but was not valid according to the rules. On cross-examination by Mr.R.C.Beri, counsel for accused Nos. 2 and 4, he referred to a number of letters which had been sent to the Registrar of Companies. He referred to a letterdated 13th May, 1965, from Shri Ajit Singh Bhasin, which was sent to the Registrar of Companies and also a notice received on 30th March, 1965. from Shri Gurcharan Singh Bawa, Advocate. He also referred to Form No. 32, dated 21st April, 1965, signed by Shri Ganga Singh Narula. He admitted that the letter dated 12th March, 1965, showed that Shri 0m Parkash Kapoor had resigned from the Managing Directorship and Directorship of the company with effect from 17th February, 1965, and the letter was sent to the Registrar of Companies with a copy to the company. However, a letter from Shri Ajit Singh Bhasin to Ganga Singh Narula (copy to the Registrar) showed that this resignation "could not be accepted without a resolution of the Board of Directors. Some minutes of the meeting of the Board of Directors, dated 9th April. 1965, were also referred to. The counsel for the Official Liquidator objected to the production of these documents and learned counsel for the accused. Shri Ajit Singh Bhasin wanted copies of these documents to be placed on record. I only permitted the originals to be produced. Eventually, the original documents were ordered to be placed on record and marked 'A', 'B', 'C' and 'D' for identification. On cross-examination by Mr. Daijit Singh, counsel for Shri Ajit Singh Bhasin the witness stated that the Registered Office of the company was originally at 55, Gokhie Market Delhi, which was shifted: to K-45, West. Patel Nagar, New Delhi, in 1963. He also referred to Form No. 23, received in May, 1964, by which Shri Kartar Singh Narang, accused No. 4 became Director-in charge of accounts, at a remuneration of Rs. 150.00 per month. Later, the Registered Office of the company was transferred to N-5, Rajouri Garden. This intimation was sent by Shri 0m Parkash Kapoor. On the date of the winding up, the Registered Office of the company was at M-133, Connaught Circus, New Delhi.