IMPORTANT POINT
The Official Liquidator must prove absence of reasonable excuse for non-compliance with statutory obligations; failure to do so results in dismissal of complaints.

ORDER :

HARISANKAR V.MENON, J.

These two connected cases are with reference to the affairs of M/s.Pact Rubberwood and Allied Products Limited, the Company under liquidation. MFCA No.3 of 2021 is filed by the Official Liquidator under Section 543 of the Companies Act, 1956, (hereinafter referred to as the ’Act’) read with Rule 260 of Companies (Court) Rules, 1959(hereinafter referred to as ’Rules’), alleging misfeasance on the part of the respondents therein in as many as seven instances. Criminal Complaint No.2 of 2021 is again filed by the Official Liquidator under Section 454(5) read with Section 454(5A) on account of the alleged failure of the respondents to comply with the requirements under Section 454(1), (2), (3), and (8) of the Act, to file the statement of affairs of the Company.

2. Separate counter affidavits have been filed on behalf of the respondents in the Misfeasance Application and the Criminal Complaint.

3. I have heard Sri.K.Moni, the learned counsel for the Official Liquidator and Sri.Santhosh Mathew, the learned senior counsel instructed by Sri.Kurian Mathew for the respondents.

4. Sri.Santhosh Mathew, the learned senior counsel, would contend that the Misfeasance Application and the Criminal Complaint referred to above have to be rejected at the threshold, even without the need to adduce evidence, insofar as no offence warranting invocation of the provisions are made out. He would also rely on various judgments in support of the afore contention.

5. Per contra, Sri.Moni, the learned Standing Counsel for the Official Liquidator, would contend that the question of closing the applications presented by the Official Liquidator is not arising without adducing evidence. He would also rely on some judgments in support of the afore proposition.

6. Insofar as the Misfeasance Application is filed on the basis of the Statement of Affairs presented by the respondents herein and the Criminal Complaint is with reference to the delay in filing of Statement of Affairs, I propose to take up the Criminal Complaint for consideration at first.

7. The Criminal Complaint, as already noticed, is filed by the Official Liquidator pointing out that the accused were the Directors of the Company under liquidation, which was ordered to be wound up as per order dated 23.11.2016 in C.P. No.7 of 2013. The complaint further proceeds to state that under Section 454 of the Act, the accused were liable to furnish a Statement of Affairs within 21 days of the winding-up order, which was not done by them. The complaint states that show cause notices issued to the accused herein were returned with the postal endorsement “addressee left”. It is in the afore circumstances, the Criminal Complaint was filed seeking the accused to be summoned and punished under Section 454(5)and (5A) of the Act.

8. A counter affidavit has been filed on behalf of the accused.

9. Sri.Santhosh Mathew, the learned senior counsel, would point out that the management could not access the factory premises for a considerably long period of time and hence, a Statement of Affairs was prepared and was submitted before the Official Liquidator as seen from Ext.R1(d) produced along with I.A.No.1 of 2024. The fact that such a Statement of Affairs was presented is also admitted in Report No.36 dated 30.05.2024 filed on behalf of the Official Liquidator. In the said report, it is noticed that the Statement of Affairs presented as above was defective and hence cannot be accepted. The report again states that the same was sought to be sent back to the Ex-manging Director, and the same was returned with the endorsement “unclaimed”. The report concludes by seeking permission of this Court to return the same to the counsel for the Ex-manging Director of the Company. It is noticed that as per the order dated 25.07.2024 in Report No.36 of 2024 referred to above, the submission made on behalf of the former Directors seeking six months’ time is seen recorded. Later, a revised Statement of Affairs has a