DEVINDER KISHORE MEHRA Vs. OFFICIAL LIQUIDATOR

JUDGEMENT

(1.) This appeal is directed against an order of the learned Company Judge giving certain directions under Section 454 (2) and (5) of the Companies Act, 1956. In order to appreciate the points involved in the case it would be desirable to briefly set out the salient facts leading to the passing of the order under appeal.

(2.) M/s Sipso Agencies Private Ltd. was incorporated on October 24, 1964. The first directors or the founding directors of the Company were Devinder Kishore Mehra, the appellant, Gaj Raj Singh, respondent No. 2, Dr. (Mrs.) Pushpa Gupta, Mrs. Prem Dulari Kohli, wife of Roshan lal Kohli, respondent No. 4, Smt Nirmal Kumari respondent No. 5 and Srnt. Ved Kumari Ahuja, respondent No. 6. Om Parkash Gupta, respondent No. 3, was appointed Secretary of the company. On December 16. 1965 Roshan lal Kohli was appointed Director in place of his wife Mrs. Kohli. 0m parkash Gupta, respondent No 3, was appointed Directors-cum-Secretary in January, 1966. In December, 1966 certain disputes started between the Directors inrespect of the provisional balance sheet to be submitted by the company to Punjab National Bank The appellant, Devinder Kishore Mehra, is claimed to have refused to sign .it and as a consequence of that, it is claimed, he was ousted from the management of the company and was not even given access to the company's records. In 1968 the appellant moved an application to this court under Section 633 of the Companies Act for being relived of the consequences of diverse defaults which the company arid its officers were making and for which they could be prosecuted. Some of the parties before us were parties to that application. This application was allowed by S.K. Kapur,J. on January 13, 1969 and the applicant was relieved of all consequences of any alleged defaults. On January 14, 1969 the appellant submitted his resignation as Director of the company and informed all the parties concerned including the Registrar of Companies of that fact. The Registrar launched prosecution for various defaults against diverse parties. No prosecution was launched against the appellant. Another application by the appellant under Section 633 of the Companies Act was allowed by this court on November 24, 1969. It is claimed by the appellant that he moved the Central Government June l6, 1969 to take appropriate steps against ths company and the management alleging that no Annual General Meetings were being held by the company. The application was, however not pursued. A winding up petition, C P No. 53 of 1973, was filed in this court on May 25, 1973. winding up order was made on November 6, 1974. The Official Liquidator moved C.A. No. 664 of 1975 in November 1975 praying for direction under Section 454 (2) and (5) of the Companies Act as no statement of affairs was filed by anybody. Notice of this application was given to the appellant and respondents 2 to 6 before us. The appellant filed his reply and affidavit on July 31, 1966 giving all the facts enumerated above and prayed that no directions, at least qua him, should be given. Other parties also filed replies. The order under appeal was passed on August 4, 1976. By this order our brother D. K. Kapur, J. has directed as under:

(3.) The first point which arises for determination is whether an ex-Director like the appellant falls within the ambit of sub-section (2) of Section 454 of the Companies Act. Our brother DK.. Kapur, J, revising an earlier opinion given by him, has held that an order under Section 454 of the Companies Act can be passed in respect of persons who were directors of the Company even more than one year prior to the passing of the winding up order. What led our learned broth-r to revise his opinion was a peculiar circumstance disclosed in this case. It seems that all the respondents in C.A. 664 of 1975 claimed that they had resigned as directors between the years 1965 and 1969 long before the winding up order was passed. Thus, in the case of M/s Sipso Agencies Private Ltd. it appeared tat there was nobody who could be called upon to file a statement of affairs as none was a Director on the relevant date. Analysing Section 454 of the Companies Act, the learned Judge, therefore, came to the conclusion that it could not beenvisaged that nobody could becalled upon in such a situation to file a statement of affairs of the company and so, ex-Directors of a company who resigned even more than one year before the winding up order could be directed to submit a statement of affairs. We are in agreement with the approach of the learned Judge that sub-section (2)of Section 454 speaks of two categories of persons-first, person who are on the relevant date the Directors or other officers of the company and second, such persons other than the first category whom the Official Liquidator, subject to the directions of the court, may call upon to submit and verify the statement of affairs. The second category is comprised of persons, inter alia, mentioned in clause (a). There is no conflict between persons falling in the category under clause (a) of sub-section (2) and clause (d) thereof. The learned Judge, we say with respect, was right in observing that at first sight clause (d) seems to refer to officers of the company which is being wound up but "in fact it refers to person employed by a person which itself is a company being wound up." Therefore, ex-Directors of the company who resigne even more than one year before the winding up order could in appropriate cases be directed to submit a statement of affairs.