IN THE HEGH COURT OF KARNATAKA AT BANGALORE
DATED THIS THE 277" DAY OF NOVEMBER, 2009-
BEFORE
THE HoNjBLE MRSJUSTICE B.V.NAGAR;§'im\iA:.L?"' O '
C.A. NO.964[20G7.
In 1 * O'
Co. P. Nos.168/5601 8: 132T/1993
BETWEEN:
OFFICIAL LIQUIDATOR OF _
M/S LAKSHIVII GENSETS PVTI' LTD ' O'
{IN LIQGIDATION} 3 ' V
ATTACHED TO THE HIGH ._ .
COURT OF' KARNATAKA, _ '
4TH FLOOR D &_1=*. wmo,
KENDRIXIAVTSAOILKN; 9: ;;:, ..
KORAN:!ANGAI;A;'V_.4 H _ _ --
BANGALORE 34. = T ' APPLICANT
" _ Sff_.'LDeepak, AdV.,)
AND;._
V.
s/o.LAf1*:::._T. R. VISHWANTH IYER,
' - Of ~ No.5,' T F.¢~'li»'F%* ' WCROSS,
. 1cs?H:'MA1:\§',- MALLESHWARAM,
1 "w13ANGAji;QRE: 3.
g 2. OO"$M':iJAirAsHREE VEERARAGHAVAN
W,!.Q~~-T.V.vEERARAGHAvAN,
V " *a,_R/AT NO.A5, 14TH 'ACROSS.
'. _ 0'?" MAIN, MALLESHWARAM.
' 'BANGALORE 3.
SRE T MARIRAJAN
NO.55, 1ST MAIN,
LJOWER PALACE ORCHARD,
BANGALORE 3. RESPONDENTS
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COMPANY APIPLICATION FILED U/S 543[1I OF THE
COMPANIES [COURTI RULES, 1959 PRAYING TO SUMMON THE
RESPONDENTS NO.1 TO 3 IN THE APPLICATION FOR THE
PURPOSE OF EXAMINATION IN REGARD TO THE MATTER
SPECIFIED THEREIN AND ETC.,.
This CA having been reserved for Orders on 3.7.2009,
coming up for pronouncement of Orders on this"'*--day.
NAGARATHNA, J, made the fo11owing:--~ '~
ORDER
This application is filed by thegAofficial.liquid’ato’r:under
section 54311] of the Cornpanies Act, .. :’i95t3 ‘A.l{herei:i1.afte:tl
referred to as ‘the Act’] to declare_uthatllt~he resp»ondAent_§g 1_l§to >
herein are liable to pay to thelIlIIo:Ffici.al liduidator sum of
Rs.29,79,612/- shown ‘fixed assets’, a
sum l- .u’nd«er”thelheadiiini/estments’ and a sum of
head ‘current assets, loans
and advances’ with._}8′?/5 interest on the said amount.
l:’Ti€’1″e aofilication is said to be on account of
the respondents in the management of the
progierties of.-the company in liquidation.
I According to the official liquidator, the company in
.l lli.t;tiidation was engaged in the business of trading,
“manufacturing, assembling in all types of power control
systems. gensets and their installation; that the authorized
capital of the Company was Rs.25,00,000/- divided into
1’31
– 3 –
25,000 equity shares of Rs. 100/ – and the issue subscribed
and paid up capital is Rs.25,00,000/- divided into 25,000
equity shares of Rs.100/ — each; that by orders dated
3.10.2002 and 14.2.2005 passed in company vpetitipon
No. 168 of 2001 and 132 of 1998, the company
to be wound up and the official liquidator a§ 0
liquidator of the company; that
up order, the official liquidator issued’. letters. thej
directors requesting them oVVe.r””th-e ‘books of
accounts and records ofithe ajpndpto fileustatement of
affairs as per section 454 of? not been done
and in:’réls;peegiQ£ under section 454[5} of
the Actxhas«_beenVV ,-company application N0.215 of
2003 _which=. is pend1–,:_igV’before this court; that another
under se-cézion 538{1] of the Act for not delivering
the? ;:accounts of the company numbered as CA
No.2″1A4 of was disposed of by this court with a direction
to present the same before the jurisdictional magistrate
A “:*:Qurt.pand the same is pending in the said court.
9 The instant application has been filed based on the
audited balance sheet as on 31.3.1999 obtained from the
Registrar of companies, Bangalore and as per the same, a
sum of Rs.2,40,39,27’5.32/– with interest at 18% per annum
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from 3.10.2002 till the date of realization is due to the
official liquidator from the respondents 1 to 3 on the ground
of the said respondents being guilty of misfeasanccléllland
breach of trust in respect of the company in liq2;”it’iation.V5
fact, the entire application is based on the..f,AactVv the”
balance sheet dated 31.3.1999 dis(::losesptij?.alt.pp Fijfiedi
Rs.29,79.812/~ and investments inlinllcirira \Zi1{9as:Vl5atra.”at
Rs.200/ — and current assets} .,:loa_r1s *ad\2/ances of
Rs.2, 10,59/163.32/– ha\iIje’*V-not handed oi/er to the
official liquidator and in respectliof of affairs
have not been i’iled”also 8_:jI”1€l’; ther’eiore___the application has
been “the said amount at 18%
interest.’L V
5. This xc’oi:1r’t ordere_d’notices on respondents 1 to 3 who
._v’ha\te5¥renT1’ained and have been placed ex parte by
‘o::¢:i’er. dated 1.2008.
6′; A . -.thIe’circumstances, the question that arises for
‘V my consideration in this application is as to whether the
it 1’ .,oi’fic–ial litluidator has made out a case Within the provision of
543 of the Act so as to be entitled to claim an
Warnount of Rs.2,40,39,275.32/– with interest at 18% per
annum from 3.10.2002 till realization. “””°’/7
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7. At the outset, it has to be noted that the entire claim is
based on the balance sheet filed as on 31.3.1999 and the
application is made in the year 2007. Company Application
No.21-4 of 2003 has been disposed of by V.
31.8.2006 with a direction to prosecute the sanded
jurisdictional magistrate. As far I-as” “cornpany f”app1ica{:ofi–,
No.215 of 2003 is concerned, from the ._
that the same was also dismiss,efci~V.Iibertyl to i’:1é”a fresh 9′
application by order dated steps have been
taken thereafter.
8. “l’helleVide,nce:lo’f the office of the official
liquidator 9′ has . ,by way of an affidavit in
exan1i_nation’«.in Vch.ief~–,_iJVherein, the certified copy of the
“V.__bala_rrce_._3Asi1eet dated—«3l.3.1999 submitted along with the
lapplirtpation been marked and with regard to the
aforesaidl anfsoiints it is stated that the ex–directors have
misappliedhand retained the same and therefore are liable to
9′ l..:faccou’ntllfor the said monies and properties, being guilty of
rhisfeasance in relation to the company in liquidation.
W§3lXhibit.P1 which incorporates the balance sheet, no doubt
mentions about the fixed assets, investments and current
assets, loans and advances. The said balance sheet which is
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no doubt certified by the chartered accountants has not been
corroborated by any other independent evidence. In faiitlno
material other than the balance sheet of the
relied upon by the official liquidator to make..O1it».a for’
misfeasance. Although the respondents
parts and there is no counter filedon. their-‘l.l.beha{lf V’
neither has the witness on the” oftieial lllligulidator
been cross examined, on the
applicant/ official liquidaton a case of
rnisfeasance. Tltetlmere mentioned in
the balance”. mean that the said
amountshave. respondents 1 to 3. No
material”.has_ by the applicant to show
as to whatlhappened touthe said assets. In fact, CA No.215
~._of ?;:§}3l€J3,p_.,tAT:1led by the——–ap’plicant under section 454 of the Act
has’ ‘a.ls’o._beVe’nplconcluded on account of non–service on the
filo effective steps were taken to serve the
respondents 1 to 3 herein in company application No. 215 of
A lffand therefore reserving liberty, the said application has
‘ been dismissed.
In the absence of there being any material on record as
to what happened to the fixed assets, investments, current/ii?
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assets, loans and advances mentioned in the balance sheet
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after 31.3.1999, it cannot be held that the respondents are
guilty of misfeasance or breach of trust Vis-a–vis company in
liquidation. The mention of the said amount in the balance
sheet dated 31.3.1999 cannot be the sole basis for holding
that the said assets have been misutilized.i..__lby:”lthe* V.
respondents in the absence of there being
that effect. It is Wei} settled in law”and’by
pronouncements that in order tolfirnalge out; acase “of
misfeasance and breach of tru.s–trby the of the
company in liquidation, Itliere has concreteevidence to
that effect and further the llzqurdien’ applicant which
has to be effectively.’ V
10. Inllvthe i.nstar1t’._cas_e;~.reliance placed solely on the
balance sheet! dai:ed”v. 1.999 per se cannot prove
‘ “=mis’feasance. V of the “” “respondents vis-a–vis assets of the
The application is filed in the year
2C)07llllwhereals balance sheet is of the year $999. It is the
lgduty ofvtlze applicant to produce evidence as to what has
“:f:happ’ened to the assets of the company during the
9 interregnum. In the absence of such material being placed
on record, it cannot be held that the respondents are guilty
of misfeasance or breach of trust with regard to the assets of
the company in liquidation.
11. For the aforesaid reasons, the company app1icati_0_r__1 is
iiable to be dismissed and is accordingly dismissed. – ‘
Sd/__ F _
AN/~