No liability on ex-Managing Director.

Judgment.- The revision petitioner is the same in both these petitions. He was tried in two different cases under section 220 of the Companies Act and section 159 read with section 162 of the said Act separately and convicted thereunder and sentenced to pay a fine of Rs. 50 in each of those cases.

2. The revision petitioner was accused-2 in both the cases, accused-1 being a firm, namely, Blue Valley Dairies Private Limited. A complaint was filed by the Assistant Registrar of Companies, Madras, under sections 220 and 159 read with section 162 of the Companies Act on the allegation that accused-1 firm and the revision petitioner (accused-2), the Managing Director of that firm had failed to submit the balance-sheet of the Company for the year, 1953 in spite of service of notice and that the Company further failed to submit the annual return for the year, 1968, which should have been submitted on or before 7th February, 1969.

3. When the substance of the complaint was read out to the petitioner (accused-2), he stated that he had resigned his directorship and, therefore, he was not liable.

4. Blue Valley Dairies Private Limited was registered under the Companies Act on 19th June, 1967. The main object of the Company was to establish and run Dairy, Agricultural and Livestock Farms and to carry on business in the manufacture and distribution of Cream, Butter, Ghee, Condensed Milk etc., and do all those things necessary for the purpose of developing and improving dairy. By the Articles of Association, there were four Directors. The petitioner who was a technical expert was appointed as Managing Director of the said Company at the meeting of the Directors of the Company held on 7th July, 1967.

5. The Assistant Registrar of Companies had issued notices to the Company and its Directors intimating that the Annual General Body Meeting of the Company ought to have been held at the latest on 9th December, 1968 and the balance-sheet and profit and loss account laid before that meeting and filed in his (Assistant Registrar’s) office before: 8th January, 1969 and that till 28th January, 1969, the same had not been done and asking for an explanation as to why the Company had failed to submit the prescribed annual return on or before 7th February, 1969 before him. The notices had been returned unserved. So far as the petitioner is concerned, the endorsement made on the notice was: “refused”. Again, several notices were sent. The Assistant Registrar came to know that the Company was closed and the petitioner had left the Company.

6. The petitioner does not dispute that he was appointed Managing Director; but, however, he would say that he had sent Exhibit P-13 a letter to the complainant, namely, the Assistant Registrar, on 17th January, 1968 itself stating that he had resigned his office with immediate effect and that, therefore, he was not liable for the filing of the returns. It is not in dispute that the petitioner had sent a letter of resignation on 17th January, 1968. P.W. 1 admitted that the Assistant Registrar by his letter Exhibit P-14 addressed to the Chairman, Board of Directors asked him whether the resignation of the petitioner had been accepted by the Board and if so, it should be notified to the office in Form 32 with the requisite filing fee. P.W. 1 stated that to this letter, there was no reply from the Chairman of the Company.

7. The learned Magistrate proceeded on the footing that the resignation should have been accepted by the Board for a valid resignation and since this was not done, the revision petitioner continued to hold the office and, therefore, he would be liable for failure to submit the return as provided under the law.

8. The only point that arises for consideration is whether Exhibit P-13 the letter of resignation sent by the petitioner on 17th January, 1968 would itself constitute a valid resignation without its acceptance by the Board. It may be noted here that the Company was incorporated in June, 1967 and the letter

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