HARYANA ELECTRO STEEL LTD Vs. JAGDISH GUPTA

JUDGEMENT

(1.) THIS is a criminal complaint filed under Sub -section (5) of Section 454 of the Companies Act, 1956 (for short, 'the Act'), by the official liquidator against Sarvshri Jagdish Gupta, Pardeep Gupta, Kuldeep Parkash and P. C. Giya, who were managing the affairs of Haryana Electro Steel Ltd. (now in liquidation and hereinafter called 'the company').

(2.) BY an order passed by this court on January 16, 1986, in C. P. No. 36 of 1985, Haryana Electro Steel Limited (for short, 'the company') was ordered to be wound up and the official liquidator was appointed as its liquidator. He took charge of the company including its factory on February 9, 1986, and sealed the premises but without preparing any inventory. On a petition filed by the ex -management of the company, the winding up proceedings were stayed on March 4, 1986, upon some conditions which are not fulfilled and consequently the stay order was vacated on March 11, 1988. In other words, the proceedings for winding up remained stayed for almost two years and it is not in dispute that the official liquidator did not hand over the possession of the company to the ex -management though he did not proceed with the winding up. During the -period when the stay order was operative, the Haryana Financial Corporation (hereinafter called 'the corporation'), which was a secured creditor of the company, exercising its powers under Section 29 of the State Financial Corporation Act broke open the locks of the company premises and took possession of the factory and office and all other assets lying therein. The Corporation, however, prepared an inventory of the machinery installed in the factory premises which is exhibit DW -4/1 on the record.

(3.) THE prosecution, in support of its case, produced the official liquidator as CW -1 and Shri H. S. Jassi, junior technical assistant in the office of the Registrar of Companies, New Delhi, as CW -2. From the statements made by these two witnesses, it is clear that the official liquidator took charge of the company on February 9, 1986, and did not prepare any inventory and that the corporation sold the property of the company by public auction on July 24, 1989, and subsequently on September 5, 1989. It is also clear that the official liquidator had no knowledge as to whether the corporation had taken possession of the premises including the registered office of the company. CW -1 admitted that Shri Pardeep Gupta had filed an affidavit dated February 7, 198K, stating that he was not in possession of any of the assets or account books of the company. He further admitted that he had received a letter dated August 7, 1989, from Kuldeep Parkash informing the former that the latter had resigned as director of the company on December 28, 1983, i.e., much prior to the date of winding up order. Exhibit CW -1/2 is a copy of that letter and he proved the same. The record of the company was summoned from the junior technical assistant working in the office of the Registrar of Companies, New Delhi, and he produced two Forms 32, which are exhibits CW -2/I and CW -2/2. These forms were submitted by the company to the Registrar of Companies showing Sarvshri Jagdish Gupta, Kuldeep Parkash and Pardeep Gupta as first directors as named in the articles of association. He also stated on the basis of the annual return dated March 31, 1981, that accused Nos. 1 to 3 were the directors of the company as on that date. There isno other Form 32 pertaining to the company on the record of the Registrar of Companies and the last annual return filed is up to the period ending March 31, 1981.