V P NANDA Vs. REGISTRAR OF COMPANIES DELHI

JUDGEMENT

(1.) The present petition under Section 633 (2) of the companies Act) 1956 has been moved by Shri V.P. Nanda, who became a voluntary liquidator of M/s Shri Chatarsal Films Finance Limited in January, 1958, when that company went into voluntary winding up as a result of a petition a resolution of the members of the company. As the winding up was not completed within three years, this later had to be treated as a creditors winding up. The fact of the matter is that winding up is even now not complete though precious little remains to be done would be clear from the facts appearing below, as per the statements in the present petition, the liabilities of the company were about at the commencement of the winding up and the assets were about Rs. 3,300.00 . The losses accounted to Rs. 87,000.00 approximately. It is said that out of the assets, machinery worth Rs. 2,900.00 was attached by the landlord of the Novelty Cinema. Khurja against rent and later this as, set was sold. There were thus no assets for all practical purposes except that Rs. 3,425.00 were available as uncalled capital. The voluntary l9iquidator filed some statements of counts; but they were mainly defective and treated as such by a Registrar of companies. The petitioner was prosecuted and has been fined a sum of Rs. 900.00 in various prosecutions. Now, a number of prosecutions are still pending regarding subsequent defaults in filing the statement of accounts.

(2.) The legal position of a voluntary Liquidator regarding the obligation to file statement of accounts is contained in section 551 of the companies Act, 1956. The provisions of this Section have been varied to some extent by Rule 327 of the Companies (Court) Rules 1959, which prescribes the period for which a Liquidator has to file account. He has to file accounts after one year and thereafter has to file accounts at six monthly intervals. If he defaults in filing these accounts, he is liable to be prosecuted under Section 551 (4) of the Act. The fine may extend to Rs. 500.00 for every day during which the default continues. As is apparent from the facts of this case, this was almost a defunct company, but still the petitioner was voluntary Liquidator, has defaulted in filing the statement of accounts and he is facing prosecutions for this.

(3.) It is now necessary to see what is the explaination of the petitioner for the defaults. According to him, no assets and no money and in fact no documents of the company came into his hands. No claim was made to him for the return of any amount owed by the company and the only creditor, M/s. Columbia Films Finance Limited has itself gone into liquidation, but it has not made any claim on the Liquidator, being entirely without funds, the voluntary Liquidator has been unable to have any accounts prepared. In fact, there is nothing for which accounts had to be prepared as there is no account, other than the account which originally existed. It is stressed by the petitoner that this obligation to go on filing accounts is an unending matter and he cannot voluntarily bring this dissolution to an end, because he has no material on which to proceed.