Allowed

O L v. Ravindra Kumar Saxena

Rajasthan HC22 Feb 2019COAP/39/2004

Case brief

AI extract

What is this about?

This Court dismissed a company application for prosecution under Section 454 of the Companies Act, 1956 filed by the Official Liquidator against directors who failed to file a statement of affairs. The Court held that the delay was due to the Official Liquidator's failure to retrieve police-held records, absolving the directors of liability.

What did the court decide?

Company application dismissed; Respondents/Directors discharged and acquitted.

O L Vs Ravindra Kumar Saxena — Company and Corporate | Rajasthan HC (2019)

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HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR

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S.B. Company Application No. 39/2004

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¶4

S.B. Company Petition No.1/1994

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Official Liquidator of M/s Rajasthan Jeevan Nidhi Sanchaya Aarthik Prabandh Limited (In Provisional Liquidation). B-75-A, Rajendra Marg, Bapur Nagar, Jaipur.

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----Applicant.

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Versus

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Ravindra Kumar Saxena son of Shri Rajendra Kumar Saxena, resident of Purana Ghat, Khaniya, Agra Road, Jaipur-Alternate-F49, Gandhi Nagar, Jaipur.

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Shri Surendra Kumar Chauhan son of Shri Tikam Singh, resident of 16, Sindhi Colony, Adarsh Nagar, Jaipur.

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Shri Radheshyam Akar son of Shri S.N. Akar, resident of 3665, M.S.B. Ka Rasta, Johari Bazar, Jaipur-Alternate-22, Shiv Marg, Nandpuri, 22 Godown, Jaipur.

¶11

----Respondent No.1, 2 and 3.

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For Petitioner(s)	: Ms. Sonal Singh, Adv. for Official Liquidator.
For Respondent(s)	: Mr. R.K. Agrawal, Senior Advocate with
	Mr. Mamoon Khalid, Adv. Mr. Ashish Tiwari, Adv. Mr. Abhishek Sharma, Adv.

¶13

HON'BLE MR. JUSTICE SANJEEV PRAKASH SHARMA

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Judgment

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Reserved on :- 24/01/2019 Pronouncement on :- 22/02/2019

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The company petition for winding up was filed after special resolution passed by the company M/s Rajasthan Jeevan Nidhi Sanchaya Aarthik Prabandh Limited requesting the Court to wind up the company. Company was wound up and Provisional

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(2 of 4)

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[COAP-39/2004]

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Liquidator was appointed vide order dated 08.07.1994. On 05.10.1994, the Ex-Directors/Officers of the company were issued notices by the Official Liquidator to submit statements of affairs. In spite of the notices having been sent on 05.10.1994 and 24.10.1994 by the Official Liquidator, statement of affairs were not filed nor any application for extension of time was sought and therefore, the Official Liquidator preferred this present application for prosecution of respondents on 25.08.2004 under Section 454 of the Companies Act, 1956 to try the respondent Directors for offence committed thereunder and punish them.

¶20

Notices were issued of the application and the respondents were summoned. Counsel appeared for the respondents and it was contended the petition is time barred in terms of Section 468 of CrPC as punishment of the offence is of two years. This Court vide order dated 11.03.2010 after examining the various provisions, held that the offence under Section 454 (5) of the Companies Act, 1956 is a continuous offence and the application was held to be maintainable and would not be hit by Section 468 CrPC and therefore the respondent accused was put on trial. Statements of the prosecution witnesses were recorded and documents were exhibited on behalf of the prosecution, whereafter statement of Directors and documents in support of their defence were also produced.

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The case of the respondents in defence is that while it is true that the statement of affairs was not filed within 21 days as provided under Section 454 of the Companies Act, however, it is on account of reasonable excuse. The reason coming forward is that a complaint was filed against the Director of the Company in the Police Station Ashok Nagar, Jaipur and the Investigation

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(3 of 4)

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[COAP-39/2004]

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Officer had put lock on the room of the Director and the accounts section. The employees of the company also have put lock on their rooms and the registered office of the company has been locked by the Police and the Directors did not have access to the registered office. In these circumstances, the meeting of the Board of Directors was held on 18.12.1993 and it was resolved to present petition to the High Court for winding up of the Company. In the company petition itself Directors had mentioned of the registered office having been put under lock and key and therefore, it was impossible to file the statements of affairs in absence of record.

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The said fact was verified by pursuing the company petition No.1/1994 and Court finds that the contention of the respondent directors is correct. It is noticed that the Official Liquidator who was appointed by the Court as the provisionally Liquidator of the company, did not take any steps for obtaining record from the Police Station Ashok Nagar, Jaipur.

¶26

Thus, this Court finds that the Directors were prevented from submitting the statements of affairs hence in absence of the record there was no question for the Directors to have filed statements of affairs. This fact was known to the Official Liquidator at the relevant time but he has not taken any steps in this regard. The action of the then Official Liquidator is found to be not in consonance with the provisions of the Companies Act and he has failed to perform his duty under the act of 1956, which has resulted in the petition remaining pending since long. It appears that the petition for initiating Section 454 proceedings against the respondents has been filed by the Official Liquidator after ten years of the passing of the order in order to save his own skin.

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(4 of 4)

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[COAP-39/2004]

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It has come on record from the documents which have been exhibited that time and again the Official Liquidator was asked by the Directors to obtain the documents which were lying with the Police Station at various places. Exhibit D-6 is a letter dated 06.10.2006 written by Ravindra Kumar Saxena but the Official Liquidator did not take steps. The Official Liquidator in his statement has failed to give satisfactory reply. The action of then Official Liquidator is deprecated.

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Keeping in view aforesaid facts, I find that this company application moved under Section 454 deserves to be dismissed and the respondent Directors are entitled for acquittal from the charge under Section 454 of the Companies Act.

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Accordingly, company application is dismissed. Respondent/Directors are discharged.

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(SANJEEV PRAKASH SHARMA),J

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M. Sharma/24

O L v. Ravindra Kumar Saxena

Case brief

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O L v. Ravindra Kumar Saxena

Case brief

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