JUDGMENT AND ORDER : 1. By way of this company application, the Official Liquidator (hereinafter referred as ‘OL’) has alleged charge against the respondents under Section 454 of the Companies Act, 1956. 2. On 16/01/2004, this Court framed following charges on the respondent as under:- “By not filing the statement of affairs within the stipulated period as provided under the Companies Act, 1956, you have committed offence punishable under Section 454 of the said Act.” The respondent pleaded not guilty and prayed for trial. 3. Before addressing to the facts of the case, it would be appropriate to quote provisions of Section 454 of the Act of 1956 which read as under:- “454 STATEMENT OF AFFAIRS TO BE MADE TO OFFICIAL LIQUIDATOR (1) Where the [Tribunal] has made a winding up order or appointed the Official Liquidator as provisional liquidator, unless the [Tribunal] in its discretion otherwise orders, there shall be made out and submitted to the Official Liquidator a statement as to the affairs of the company in the prescribed form, verified by an affidavit, and containing the following particulars, namely : - (a) the assets of the company, stating separately the cash balance in hand and at the bank, if any, and negotiable securities, if any, held by the company ; (b) its debts and liabilities ; (c) the names, residences and occupations of its creditors, stating separately the amount of secured and unsecured debts ; and in the case of secured debts, particulars of the securities given, whether by the company or an officer thereof, their value and the dates on which they were given ; (d) the debts due to the company and the names, residences and occupations of the persons from whom they are due and the amount likely to be realised on account thereof ; (e) such further or other information as may be prescribed, or as the Official Liquidator may require. (2) The statement shall be submitted and verified by one or more of the persons who are at the relevant date the directors and by the person who is at that date the manager, secretary or other chief officer of the company, or by such of the persons hereinafter in this sub-section mentioned, as the Official Liquidator, subject to the direction of the [Tribunal], may require to submit and verify the statement, that is to say, persons - (a) who are or have been officers of the company ; (b) who have taken part in the formation of the company at any time within one year before the relevant date ; (c) who are in the employment of the company, or have been in the employment of the company within the said year, and are, in the opinion of the Official Liquidator, capable of giving the information required ; (d) who are or have been within the said year officers of, or in the employment of, a company which is, or within the said year was, an officer of the company to which the statement relates. (3) The statement shall be submitted within twenty-one days from the relevant date, or within such extended time not exceeding three months from that date as the Official Liquidator or the [Tribunal] may, for special reasons, appoint. (4) Any person making, or concurring in making, the statement and affidavit required by this section shall be allowed, and shall be paid by the Official Liquidator or provisional liquidator, as the case may be, out of the assets of the company, such costs and expenses incurred in and about the preparation and making of the statement and affidavit as the Official Liquidator may consider reasonable, subject to an appeal to the [Tribunal]. (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 thousand rupees] for every day during which the default continues, or with both (5-A) The [Tribunal] by which the winding up order is made or the provisional liquidator is appointed, may take cognisance of an offence under sub-section (5) upon receiving a complaint of facts constituting such an offence and trying the offence itself in accordance with the procedure laid down in the Code of Criminal Procedure, 1898 (5 of 1898), for the trial of summons cases by magistrates. (6) Any person stating himself in writing to be a creditor or contributory of the company shall be entitled, by himself or by his agent, at all reasonable times, on payment of the prescribed fee, to inspect the statement submitted in pursuance of this section, and to a copy thereof or extract therefrom. (7) Any person untruthfully so stating himself to be a creditor or contributory shall be guilty of an offence under section 182 of the Indian Penal Code (45 of 1860) ; and shall, on the application of the Official Liquidator, be punishable accordingly. (8) In this section, the expression "the relevant date" means, in a case where a provisional liquidator is appointed, the date of his appointment, and in a case where no such appointment is made, the date of the winding up order.” 4. Brief facts which need to be noted are that on 12/08/1994, M/s Kalyan Sundram Cement Industries Ltd. (hereinafter referred as ‘Company in Liquidation’) was directed to be wound up by this Court. The winding up order was passed in view of the fact that the Company in liquidation had already been declared sick by the BIFR in October, 1989 and recommendation was made by the BIFR vide its order dated 14/06/1990. The OL, after passing of the order dated 12/08/1994, was appointed as Liquidator of the Company in liquidation and in terms of the aforesaid provisions of Section 454 of the Act of 1956, the statement of affairs of the Company in liquidation were required to be filed by its Managing Director. 5. The OL, after passing of the order dated 12/08/1994, was appointed as Liquidator of the Company in liquidation and in terms of the aforesaid provisions of Section 454 of the Act of 1956, the statement of affairs of the Company in liquidation were required to be filed by its Managing Director. 5. The Managing Director was having full knowledge about the aforesaid facts relating to the Company in liquidation having been recommended for winding up by the BIFR as stated above and as a matter of fact, the recommendation was challenged by preferring an appeal which too was dismissed on 21/07/1993. Thus, the winding up order was fait-accompli. However, the Managing Director did not prepare the statement of affairs although all the documents were in his possession relating to the Company in liquidation. 6. On 24/01/1995, notice was sent by the OL to the Managing Director to file statement of affairs. He replied vide his letter dated 20/02/1995 assuring to provide the statement of affairs. On 14/06/1995 the respondent-Mr. Sanjay K. Modi was asked to give his statement in terms of Rule 130 of the Companies (Court) Rules by the OL but he took an excuse that the books of accounts and other papers were in possession of Rajasthan Financial Corporation (hereinafter referred as ‘RFC’). He admitted that the balance sheet of the Company in liquidation was prepared in the year 1991 and assured the OL that he shall the balance sheet immediately. He also stated that the books of accounts were lying at the factory premises at Banswara but they can be obtained with the help of the RFC who had taken over assets of the Company in liquidation. It was admitted by him that one Mr. S.K. Wadia was Provisional Director of the Company in liquidation and had no role to play in the daily operations of the Company and he was handling day-to-day affairs of the Company. 7. The OL obtained record from the RFC on 22/12/1998 but since the statement of affairs had not been filed, he was empowered to take action under Section 457(1) of the Act of 1956 and accordingly, the present company application has been filed on 19/09/1996. 7. The OL obtained record from the RFC on 22/12/1998 but since the statement of affairs had not been filed, he was empowered to take action under Section 457(1) of the Act of 1956 and accordingly, the present company application has been filed on 19/09/1996. Lastly, the Court directed the respondent to file statement of affairs on 16/05/1999 within a period of three months and the same was ultimately filed on 05/08/1999 by the respondent but it was found to be defective as it did not reflect the assets and liabilities on the date of filing of the winding up petition and only referred to the balance sheets as on 31/03/1989. The affidavit in support of the aforesaid averments has been filed by the OL. The respondent no.-1-Managing Director of the Company in liquidation has also filed his affidavit wherein he admits that the RFC took over the assets of the Company in liquidation on 03/01/1994. 8. In the aforesaid background, counsel for the OL submits that the stipulated period as provided under the Act of 1956 was only 21 days. However, the respondent no.1 failed to submit the statement of affairs. Not only this, he did not submit the statement of affairs even after notice was given to him by the OL as noted above. Learned counsel for the OL points out that the Managing Director was having full knowledge of the Company in liquidation being recommended for winding up and that the appeal against the said recommendation had already been rejected on 21/07/1993 but he deliberately did not keep the record relating to the Company in possession and has left the record at the factory premises which was in violation of Section 209 of the Act of 1956. Further he points out that the RFC had only taken over assets on 03/01/1994 i.e. almost after four months of the dismissal of the appeal. Moreover, even though notice was given to him, the said Managing Director did not file statement of affairs nor he took any steps for collecting the books of accounts from his Banswara factory premises. It is only after the OL himself took steps to obtain the record from the RFC which was received on 22/12/1998 during pendency of 454 application that the statement of affairs was ultimately filed on 05/08/1999 which are also defective. It is only after the OL himself took steps to obtain the record from the RFC which was received on 22/12/1998 during pendency of 454 application that the statement of affairs was ultimately filed on 05/08/1999 which are also defective. The statement of affairs was incomplete and information has been withheld from the OL and that is mainly because the Managing Director had oblique motives and purposes. In the statement made under Section 130 of the Companies (Court) Rules, the respondent has stated that the balance-sheets of Company in liquidation had been prepared upto the year 1991 but the statement of accounts which were submitted were defective and only reflected as per the balance-sheets of the year 1989. The entries were also incomplete. Learned counsel submits that even from the statement of Mr. Sanjay Modi and his cross-examination, it is clear that he is guilty within terms of Section 454(5) of the Act of 1956 and he deserves to be punished severally for it. 9. Per-contra, learned counsel for the respondent, in his submission, reiterated what has been stated in the affidavit of Mr. Sanjay Modi. Learned counsel submits that the delay in filing the statement of affairs was mainly on account of the RFC having taken over the assets of the Company in liquidation on 03/01/1993. The respondent informed of the said taking over to the OL on 05/01/1999 and that the assets and records were lying with the RFC. It was his submission that he could not locate the balance-sheets after the year ending 31/03/1989. Whatever record was made available by the RFC, the respondent filed his statement of affairs on the said basis. It is his submission that no inventory of assets or list of records was prepared or handed over to him at the time of taking over of the factory. Further, he submits that some minor records were lying at the respondent’s premises at Mumbai but non of these records remain in existence due to Mumbai blast at Century Bhawan, Mumbai on 12/03/1993 as the whole building was badly damaged and had supplied newspaper report to prove. Learned counsel relies on the following judgments:- (i) (1974) 44 Camp Cas 499 Official Liquidator of Security and Finance Pvt. Ltd. Vs. B.K. Bedi etc. (ii) (1998) 94 Comp Cas 679 Official Liquidator Vs. Learned counsel relies on the following judgments:- (i) (1974) 44 Camp Cas 499 Official Liquidator of Security and Finance Pvt. Ltd. Vs. B.K. Bedi etc. (ii) (1998) 94 Comp Cas 679 Official Liquidator Vs. Surjit Singh (iii) 1999 (98) CampCas 62 Official Liquidator, Auto Electricals (India) Pvt. Ltd. Vs. P.R. Mehta & ors. (iv) ILR (1974) 1 Delhi Official Liquidator of Security and Finance Pvt. Ltd. Vs. B.K. Bedi etc. (v) Patwanta Sahib Cement Works (P) Ltd. (In liquidation) Vs. Anil Saini & ors. (vi) Haryana Electro Steel Ltd. (In liquidation) Vs. Jagdish Gupta & ors. (vii) Official Liquidator R.S. Motors P. Ltd. Vs. Jagjit Singh Sawhney and anr. (viii) (2013) 176 Camp Cas 547 (Mad.) P.V. R.S. Manikumar Vs. Official Liquidator, High Court, Madras & ors. (ix) Official Liquidator of Asup Synthetics & Chemicals Vs. M.K. Jain (x) OL Vs. KC Taparia & ors, order dt.19/09/2017, passed by Raj. High Court in Co. Application No.145/2010. 10. I have considered the submissions of learned counsel for the parties and examined the record. 11. On behalf of the applicant, the OL filed his affidavit and got himself examined. In support of his submission, he placed on record Exhibits-A to J while the respondent Sanjay Modi filed his affidavit and was cross-examined on 14/03/2009. 12. A look at the affidavit of Mr. Sanjay Modi shows that he has taken two contrary stands. First, after he has mentioned that the record was taken over by the Rajasthan Financial Corporation knowing fully well that there was no financial record relating to the books of account lying with the Rajasthan Financial Corporation; secondly, in the affidavit, a stand has been taken that no books of accounts and financial records were available at the administrative office of the Company at Mumbai and some minor records, which might have been lying at the administrative office at Mumbai prior to 1993 too were lost on account of Mumbai blast in the Century Bhawan on 12/03/1993. It is seen that in his statement (Exhibit E) under Section 130 of the Companies (Court) Rules, he stated that the assets of the Company have been shown in the assets of the Company upto the year 1991 and the balance-sheet of the Company was also prepared in 1991 and shall be furnished whereas he has submitted the statement of affairs on the basis of the balance-sheet of 1989. No reason has come forward in his affidavit. The stand taken in affidavit regarding the Mumbai blast and the records having been destroyed from Mumbai office, is also an afterthought and an excuse as the same was not original statement under Section 130. The accused has admitted that he had given a statement on 14/06/1995 before OL. In cross-examination, of-course, he has mentioned of taking two months in stead of one month in submitting the statement of affairs. He also admits that in the Mumbai Blast, he had not lodged any FIR nor he set up any claim before the Government nor he submitted insurance claim. 13. This Court finds that apart from above facts, it is also apparent that the respondent No.1-Mr. Sanjay Modi was having full knowledge of the order passed by the BIFR in October, 1989 and on 14/06/1990 of winding up of the Company. The formal order of winding up was passed by this Court was in continuation of what was already ordered on 14/06/1990. Thus, he being the Managing Director and in full know of his duties and responsibilities towards the Company and that he was required to keep the entire record relating to the finances of the Company and affairs of the Company, he ought to have submitted the statement of affairs of the Company within the stipulated period. Even when the Rajasthan Financial Corporation took over the assets of the Company, he could have asked the OL to use his office and direct the Rajasthan Financial Corporation to make available the record, if any, for the purpose of submitting of the statement of affairs. However, there has been a deliberate attempt on his part not to submit the statement of affairs. 14. Having gone through the judgments relied upon by learned counsel for the respondent, this Court finds that the provisions of Section 454 of the Act of 1956 are mandatory in nature. The reasons for not filing the statement of affairs are to be looked into in each and every case to found out whether the concerned Director is liable to be prosecuted and punished. Each case is based on facts relevant to the said case and a general rule cannot be applied. The reasons for not filing the statement of affairs are to be looked into in each and every case to found out whether the concerned Director is liable to be prosecuted and punished. Each case is based on facts relevant to the said case and a general rule cannot be applied. While this Court is respectfully agreed with the judgment passed by the coordinate Bench as well as by this Court in cases, as noted above but this Court finds that the facts of the present case are distinguishable to the facts as noted in the aforesaid judgments. The present case is a glaring example of conduct of the respondent who dodged in submitting the statement of affairs and has put wrongful excuse of the assets having been taken over by the RFC. 15. As noted above, no documentary proof that the record was damaged on account of Mumbai blast is placed on record. There is no FIR registered by the respondent and as noted, the balance-sheets have been withheld and the statement of affairs as envisaged has not been filed resulting in the OL finding it difficult to get the creditors amount realized. 16. Having noted above, this Court finds that the respondent- Sanjay Modi is guilty of not performing his duties in submitting the statement of affairs of the Company and no plausible reasonable excuse can be said to be have been made out in not filing the complete and adequate statement of affairs. A deliberate attempt to withhold information of the Company is clearly made out which amounts to offence within the terms of Section 454 of the Act of 1956 and he is, therefore, liable to punished within terms of Section 454(5) of the Act of 1956. 17. Before passing the order on sentence, let the accused respondent (Sanjay Modi) remain present before the Court for hearing on sentence under Section 454(5) of the Act of 1956 on the next date. 18. List on 22/02/2018 for hearing for passing sentence against respondent-accused (Sanjay Modi).