S.N. Gupta vs Deputy Director General Of ...
2001 Latest Caselaw 832 Bom

JUDGMENT

J.G. Chitre, J.

1. Mr. Milind Yasudeo vehemently submitted that the order which has .been assailed by this Petition, which is at Page No. 18 of the Writ Petition, shows that when the notices were returned with the remark, "Company closed and return to sender", it was the duty of Respondents Nos. 1 and 3 to issue a public notice, but that has not been done. It is his submission that

the petitioner has submitted the resignation of the post of director and that has been accepted by the board of directors and therefore, the petitioner does not have concern whatsoever with the affairs and liability of company under liquidation. He submitted that without giving the opportunity of hearing, the personal property of the petitioner is being sold in execution of RRC which is being executed by respondent No. 2 at the behest of respondents Nos. 3 and 4. Mr. Vasudeo submitted that if this RRC is permitted to be executed, the personal property of the petitioner could be sold for less value and it would be causing irreparable loss to him. He submitted that the writ of Mandamus be granted after staying the execution of the said RRC.

2. Dr. Bathija submitted that the respondents 1 and 3 did their best, but they could not hear the petitioner because the petitioner was not found. He submitted that the petitioner has to blame himself for this calamity.

3. Mrs. Kajale submitted that the respondent No. 2 is executing the said RRC as directed by respondent No. 4 and for respondents Nos. 1 and 3. She submitted that the said respondents have taken appropriate course for the purpose of executing the said RRC. Both Dr. Bathija and Mrs. Kajale submitted that this Writ Petition be dismissed.

4. We think it proper to decide this Petition finally at this admission stage, for avoiding delay in the process and in the interest of justice.

5. We issue Rule returnable forthwith with the consent of the parties and proceed further in deciding the Petition finally.

6. When the winding-up proceeding starts and the Official Liquidator stands appointed, it becomes necessary for due recovering claimants and recovering authorities to issue notice or notices to such Official Liquidator and such directors against whom the RRC is to be executed. At that time, question arises whether such person stands to be functioning as director or whether he has ceased to be a director on account of legal consequential actions or on tendering of his resignation on his own accord. This phenomenon comes in picture when the personal and private property of such director is to be either attached or to be put to auction for executing such RRC. When the director ceases to be a director by legal process otherwise than tendering the resignation by such director, the Secretary of the Company has to fill-in Form No. 32 and to send appropriate information to the Registrar of Companies. When the director tenders his resignation, and such resignation has been accepted by passing appropriate resolution in the meeting of the Board of Directors, may be ordinary or extraordinary, it is the duty of the Company Secretary to fill-in form No. 32 and give appropriate information to the Registrar of Companies. The recovering claimants and the executing authorities executing the RRC need not be informed by such director or directors as the case may be, because, as the need be, it is the duty of Company Secretary or Official Liquidator to do so. Before winding up process it is the duty of Company Secretary and after it, it is the duty of Official Liquidator. It is their duty to send notice or notices to such directors and to give such information to such director and directors to place his or their submissions appropriately before them in respect of the claim preferred or the RRC to be executed, By passing this process, such claiming claimants and executing authorities cannot either attach or put to auction the personal and private

properties of such Directors, who have resigned. In respect of the assets included in the books of accounts of the Company, such notices are to be given to the Official Liquidator. But the rule of prudence is that in both the cases, notice has to be given to the director in whose name the property stands in his personal capacity, private capacity or in the books of accounts of the company.

7. If the concerned property is in the name of Kith and Kin of such director, the claiming authority or recovering authority is to be extremely cautious. The notice or notices, as the case may be are to be, issued to such persons and they are to be heard on the point. Without that, neither their property can be attached or auctioned, as it is in present case.

8. Therefore, the order dated 19th January, 2001 issued on 18th April, 2001 passed by the Government of India, Ministry of Commerce, Office of the Joint Director General of Foreign Trade, New Marine Line, Churchgate, Mumbai-400020 stands set-aside.

9. In the interest of justice, we hereby direct that the respondents Nos. 1 and 3 should issue notices to all the directors for the purpose of recovery of the amount, for which, the said RRC has been issued. After giving opportunity to all the directors or concerned directors, and after hearing them, appropriate orders be passed in accordance with the provisions of relevant law.

10. The respondent Nos. 1 to 3 should firstly issue notice to Official Liquidator, who would furnish necessary information to them for enabling them to follow further process in accordance with law.

11. It is made clear that the petitioner is entitled to put all legal contentions before respondents Nos. 1 and 3.

12. Petition disposed of with no order as to costs.

13. All concerned to act on the ordinary copy of this order, duly authenticated by the Court Associate.