Company Law Board
N. Balasubramanian vs Vegab Communications Private Limited, ... on 6 June, 2006
Equivalent citations: [2007]137COMPCAS602(CLB), [2006]72SCL242(CLB)
ORDER
K.K. Balu, Vice Chairman
1. This is petition is tiled under Section 614(1) of the Companies Act 1956 ("the Act") seeking directions against M/s. Vagab Communication Private Limited ("the Company") and its director to file From No. 32 with the Registrar of Companies. Karnataka. Bangalore ("the ROC"), the third respondent herein, intimating the resignation of the petitioner as director of the Company with effect from 20.02.1995.
2. According to Shri A. Ravichandran, Practicing Chartered Accountant, the petitioner was the first director of the Company, but had resigned from the office of director with effect from 20.02.1995 as borne out by his letter of resignation dated 20.02.1995 addressed to the Company. Despite acknowledging receipt of the letter of resignation, the Company failed to tile Form No. 32 notifying the change in the constitution of the board of directors of the Company, However the ROC issued a show cause notices dated 05.02.2004 and 01.07.2005, consequent upon the default of the Company to convene the annual general meeting for the year 2004, file the annual return for the year 2004, balance sheet as at 31.03.2004 and lay balance sheet along with profit and loss account before the annual general meeting as required under sections 166. 159, 220 and 210 of the Act. The petitioner, now comes to know that the respondent Nos. 1 and 2 failed to file Form No. 32 with the ROC, even after the resignation of the petitioner from the office of director as early as on 20.02.1995 and therefore, they may be directed to tile the requisite form, as prayed in the company petition.
3. The respondent Nos. 1 & 2 neither appeared nor opposed the company petition, inspite of the opportunities afforded to them. The notices sent to these respondents for the hearings held on 30.12.2005, 23.01.2006. 14.02.2006, 06.03.2006, 05.04.2006, 12.04.2006. 05.05.2006, and finally on 17.05.2006 are returned unserved, with postal remarks "no such addressee or no such person". It is relevant to observe that copies of the company petition sent by the petitioner in favour of the respondent Nos. 1 & 2 have also been returned unserved. Thus, the respondent Nos. 1 & 2 are quite unaware of the present proceedings.
4. The ROC in his report dated 17.01.2006 reported, among other things, that the petitioner and the second respondent are the present directors of the company . The Company has not filed Form No. 32 in respect of the resignation of the petitioner and therefore, the question of taking Form No. 32 on record does not arise, which resulted in issue of show cause notices calling upon the petitioner to comply with the statutory requirements. Consequent upon the resignation of the petitioner, number of directors stands reduced below the statutory limit of two directors. By virtue of section 254, subscribers to the memorandum, who are individuals, shall be deemed to be the directors of the company, until the directors are duly appointed in accordance with section 255. For want of any fresh appointment, the petitioner is continuing directors of the Company. The ROC in his second report dated 03.05.2006 reported that the computer record maintained at his office discloses receipt of three Form Nos. 32 on various dates i.e. 31.05.1995, 09.08.1996 and 09.08.1996 respectively, apart from two Form Nos. 2 filed on 25.04.1996 and 04.10.1996. However, these Forms are not available inspite of the best efforts made by the office of the ROC and therefore, no comments could be made about the contents of the Form Nos. 32 and 2.
5. I have heard the arguments advanced on behalf of the petitioner. The petitioner had reportedly resigned from the office of director of the Company with effect from 20.02.1995, but approached the CLB invoking the provisions of section 614 after a delay of more than a decade. The respondent Nos. 1 & 2 remained exparte, inspite of affording adequate opportunities by the Bench. Though, the provisions of section 614 do not specify any time limit to make an application before the Company Law Board so as to direct the company and any officer to make good the default in making the return, yet the petitioner is duty bound to explain the long delay in initiating the present proceedings. The belated action of the petitioner, pursuant to the show cause notice dated 01.07.2005 issued by the ROC, in my considered view, is not just and sufficient to exercise the powers vested in section 614. In absence of any justifiable ground, I am not inclined to go to rescue of the petitioner, notwithstanding the fact that the respondents 1 & 2 remained ex-parte. Accordingly, the company petition is dismissed on account of laches on the part of the petitioner, in due enforcement of his rights under section 614 and in the light of the reports of the ROC. Ordered accordingly. No order as to costs.