TECHNICAL CONSULTANCY HOUSE PRIVATE LTD Vs. KULDIP RAJ NARANG

JUDGEMENT

(1.) M /s Technical Consultancy House (P.) Ltd., the company, was ordered to be wound up by order dated October 20, 1978 (O.P. No. 74 of 1977). This was on a creditor's petition filed under section 439(1)(b) of the Companies Act, 1956 (for short "the Act"), on the ground that the company was unable to pay its debts (section 433(e)). The company was incorporated on November 24, 1971, and was established with the object of providing technical consultancy to companies. The company had various other objects also.

(2.) ON making of the winding -up order, the statement of affairs was to be filed as required under section 454 of the Act. This was not done within the prescribed time and the official liquidator, therefore, as a complainant, filed the present complaint under section 454(5) of the Act. This sub - section (5) is as under : - "(5) If any person, without reasonable excuse, makes default in complying with any of the requirements of this section, he shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend to one hundred rupees for every day during which the default continues, or with both."

(3.) THERE are three accused. The case against accused No, 2 was separated and the present complaint, therefore, proceeded only against accused No. 1, Kuldip Raj Narang, and accused No. 3 Mokan Singh. In the complaint, it is mentioned that on the passing of the winding -up order, the complainant came to be in charge of the affairs of the company and that he caused the registered office of the company and the records of the company maintained in the office of the Registrar of Companies, Delhi, to be inspected. A visit to the company's registered office at 3, Cavalry Lines, Delhi, showed that those premises were used by "The Narang Group of Industries" which appeared to be the proprietary concern of Kuldip Raj Narang as the head. Am inspection of the records in the office of the Registrar of Companies showed that accused Nos. 1, 2 and 3 were the directors of the company at the relevant date. The complainant called upon the accused to submit the statement of affairs as required and for this purpose he sent notices dated November 18, 1978, and January 25, 1979, addressed to all the accused. In his reply dated January 25, 1979, addressed to all the accused. In his reply dated November 29, 1978 (exhibit OW 3/1), accused, Kuldip Raj Narang, said that he was on the board of the company but for the last about two years he had not received any notice calling the board meeting and as such he had not attended any meeting of the board held during that period. It was also mentioned that he was out of India for about 11 months and that when he came back in March, '978, he could not find any trace of the office of the company. He further said that he was not in possession of any money, property, books of accounts or any other paper or document of the company. He said he understood that all the books of account and other documents were in the possession of A. P. Sehgal, a director of the company who had since expired. Narang, therefore, said that he was not in a position to submit the statement of affairs as required in the notice of the complainant. Narang was summoned to appear before the complainant and his statement under rule 130 of the Companies (Court) Rules, 1959 (for short "the Rules"), was recorded. This statement, however, did not advance matters as far as the complainant was concerned. Narang was unable to say where the records were or who were the former employees or the auditors of the company or in which bank the company had an account. It is further mentioned in the complaint that it appeared that some time in 1975, accused T. P. S. Randhawa, A. P. Sehgal and Mokan Singh, were inducted into the board of directors of the company. A. P. Sehgal is stated to have died and the notices sent to the other two accused, Randhawa and Mokan Singh, were returned respectively with the postal remarks "left India" and "out of station". The complainant also issued a show -cause notice to the directors before filing the complaint and only Narang acknowledged the same but failed to comply with that. The complainant, therefore, says that the accused failed, without reasonable excuse, to file a statement of affairs as required and that the complainant is unable to carry on the liquidation proceeding. He says it was the duty of the former directors to file the statement of affairs and having failed to do so, they are guilty of an offence punishable under section 454(5) of the Act.