OFFICIAL LIQUIDATOR, HIGH COURT, MADRAS Vs. SAMUEL JAMES FREDRICK AND OTHERS (AND CONNECTED APPLICATIONS)

JUDGEMENT

(1.) By this application, the official liquidator has filed a complaint against the respondents who were the ex-directors of the company under liquidation, M/s. Indag Products Ltd., under section 454(5A) of the Companies Act, 1956, for the offence under section 454(1), (2) and (3) for not filing statement of affairs and also for directions under sections 626 of the Companies Act, 1956.

(2.) The order of winding up was passed against the company, M/s. Indag Products Ltd., by this court on Feb. 25, 1997, in C.P. No. 101 of 1994 by appointing the official liquidator. The respondents who were ex-directors and who have to submit the statement of affairs in Form No. 57 of the Companies (Court) Rules, 1959, within 21 days from the date of winding up or from the date of appointment of the provisional liquidator, have failed to submit the same in spite of the letter of the official liquidator dated April 19, 1997. Since the statement of affairs has not been submitted, it is difficult to proceed with the affairs of the company and hence, the official liquidator has filed an application in C.A. No. 2395 of 1997 in C.P. No. 101 of 1994 with a report under section 454 of the Companies Act, 1956 and this court by order dated Aug. 18, 2000, directed the official liquidator to file the prosecution against those who have been served but have not filed any statement. Since the respondents have not filed the statement of affairs, they are liable to be convicted for the offence under section 454(5A) of the Act with imprisonment which may extend to two years or a fine of 1,000 for every day during the default period. The official liquidator in the report has stated that the offence was committed on and from March 18, 1997, which continues till date. In those circumstances, the above application has been filed before this court to take cognizance of the offence committed by the respondents in not filing the statement of affairs.

(3.) By order dated March 1, 2007, this court has exonerated the third respondent who is stated to have not participated in the deliberation as SIPCOT's nominee director, by virtue of the circular issued by the Department of the Company Affairs, Government of India in No. 27/73 dated Sept. 20, 1973, under sections 27, 32A and 42A of the State Financial Corporations Act, 1951. Except the third respondent, the other respondents were directed to appear before the master for evidence. Accordingly, the master has recorded the evidence and also forwarded the evidence so recorded to the court.