Director who had resigned from Co. in year 1995 wasn’t liable for non-filing of financials for F.Y. 2008-09, 2009-10

Case Details: Sachidanand Chitala v. Registrar of Companies [2022] 145 taxmann.com 58 (HC-Madhya Pradesh)

Judiciary and Counsel Details

• • Anand Pathak, J.
  • Sameer Kumar Shrivastava, Adv. for the Petitioner. 
  • Praveen Kumar Newaskar for the Respondent.

Facts of the Case

In the instant case, a petition under Section 482 of the Code of Criminal Procedure, 1973 was filed by the petitioner challenging the prosecution lodged by the Registrar of the Companies for alleged violation of different provisions of the Companies Act, 1956/Companies Act, 2013. The petitioner was earlier one of the Directors of a Company till 1995.

Later, In the year 2011, a complaint was filed by the respondent with the allegations that the Company and its Directors, including the present petitioner, were guilty of the offence as the company had not submitted its balance sheet and profit and loss account.

The notice in question referred to 2008-2009 and 2009-2010, where certain non-compliances under Section 162 of the Act 1956 were noticed. Therefore, proceedings under Section 220 of the Act 1956 were initiated.

Thereafter, when the petitioner as accused appeared before the Trial Court, then moved an application under Section 239 of the Code of Criminal Procedure, 1973 for discharge. It was the contention of the petitioner in the said application that he resigned in the year 1995 as referred above, and in support of submissions, he filed a certified copy of acceptance of resignation by the Registrar of the Companies.

High Court Held

The Hon’ble High Court, while considering the submissions and going through the documents appended thereto as well as the reply filed by the respondent, it appeared that the petitioner made out his case for interference. High Court was of the view that once he had resigned in the year 1995, then he could not be fastened with any liability for the period of 2008-2009 and 2009-2010.

Resultantly, the petition was allowed and impugned order dated 28th of May, 2022, as well as the proceedings pending before the Trial Court in Criminal Cases, so far as it relates to the petitioner only, had been quashed. For the rest of the accused, the trial may proceed in accordance with the law.