{"id":252678,"date":"2009-11-27T00:00:00","date_gmt":"2009-11-26T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/official-liquidator-of-ms-vs-mr-t-v-veeraraghavan-on-27-november-2009"},"modified":"2019-01-05T04:20:00","modified_gmt":"2019-01-04T22:50:00","slug":"official-liquidator-of-ms-vs-mr-t-v-veeraraghavan-on-27-november-2009","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/official-liquidator-of-ms-vs-mr-t-v-veeraraghavan-on-27-november-2009","title":{"rendered":"Official Liquidator Of M\/S … vs Mr T V Veeraraghavan on 27 November, 2009"},"content":{"rendered":"
Karnataka High Court<\/div>\n
Official Liquidator Of M\/S … vs Mr T V Veeraraghavan on 27 November, 2009<\/div>\n
Author: B.V.Nagarathna<\/div>\n
IN THE HEGH COURT OF KARNATAKA AT BANGALORE\nDATED THIS THE 277\" DAY OF NOVEMBER, 2009-\n\nBEFORE\n\nTHE HoNjBLE MRSJUSTICE B.V.NAGAR;\u00a7'im\\iA:.L?\"'   O '\n\nC.A. NO.964[20G7. \n\nIn 1 * O'\n\nCo. P. Nos.168\/5601 8: 132T\/1993     \n\nBETWEEN:\n\nOFFICIAL LIQUIDATOR OF  _  \nM\/S LAKSHIVII GENSETS PVTI' LTD '  O'\n{IN LIQGIDATION}   3  ' V\n\nATTACHED TO THE HIGH ._ .\nCOURT OF' KARNATAKA,  _  '\n\n4TH FLOOR D &_1=*. wmo, \n\nKENDRIXIAVTSAOILKN; 9: ;;:, ..\n\nKORAN:!ANGAI;A;'V_.4 H _   _ --\n\nBANGALORE 34. =  T   '  APPLICANT\n\" _   Sff_.'LDeepak, AdV.,)\n\nAND;._   \n\n V.     \n\ns\/o.LAf1*:::._T. R. VISHWANTH IYER,\n\n' - Of ~ No.5,' T F.\u00a2~'li\u00bb'F%* ' WCROSS,\n\n.  1cs?H:'MA1:\\\u00a7',- MALLESHWARAM,\n1 \"w13ANGAji;QRE: 3.\n\ng 2. OO\"$M':iJAirAsHREE VEERARAGHAVAN\n\nW,!.Q~~-T.V.vEERARAGHAvAN,\n\nV \" *a,_R\/AT NO.A5, 14TH 'ACROSS.\n\n'. _ 0'?\" MAIN, MALLESHWARAM.\n' 'BANGALORE 3.\n\n   SRE T MARIRAJAN\n\nNO.55, 1ST MAIN,\nLJOWER PALACE ORCHARD,\nBANGALORE 3.  RESPONDENTS\n\n?\/\n\n\n\n- 2 -\n\nCOMPANY APIPLICATION FILED U\/S 543[1I OF THE\n\nCOMPANIES [COURTI RULES, 1959 PRAYING TO SUMMON THE\n\nRESPONDENTS NO.1 TO 3 IN THE APPLICATION FOR THE\n\nPURPOSE OF EXAMINATION IN REGARD TO THE MATTER\nSPECIFIED THEREIN AND ETC.,.\n\nThis CA having been reserved for Orders on 3.7.2009,\ncoming up for pronouncement of Orders on this\"'*--day.\nNAGARATHNA, J, made the fo11owing:--~   '~\n\nORDER\n<\/pre>\n
This application is \ufb01led by thegAof\ufb01cial.liquid’ato’r:under <\/p>\n
section 54311] of the Cornpanies Act, .. :’i95t3 ‘A.l{herei:i1.afte:tl<\/p>\n
referred to as ‘the Act’] to declare_uthatllt~he resp\u00bbondAent_\u00a7g 1_l\u00a7to  ><\/p>\n
herein are liable to pay to thelIlIIo:Ffici.al liduidator  sum of
\nRs.29,79,612\/- shown   ‘fixed assets’, a<\/p>\n
sum l- .u’nd\u00aber”thelheadiiini\/estments’ and a sum of
\n head ‘current assets, loans<\/p>\n
and advances’ with._}8′?\/5 interest on the said amount.<\/p>\n
 l:’Ti\u20ac’1″e  ao\ufb01lication is said to be on account of<\/p>\n
 the respondents in the management of the<\/p>\n
progierties of.-the company in liquidation.<\/p>\n
I  According to the official liquidator, the company in<\/p>\n
.l  lli.t;tiidation was engaged in the business of trading,<\/p>\n
 “manufacturing, assembling in all types of power control<\/p>\n
systems. gensets and their installation; that the authorized<\/p>\n
capital of the Company was Rs.25,00,000\/- divided into<\/p>\n
1’31<\/p>\n
– 3 –\n<\/p>\n
25,000 equity shares of Rs. 100\/ – and the issue subscribed
\nand paid up capital is Rs.25,00,000\/- divided into 25,000
\nequity shares of Rs.100\/ — each; that by orders dated<\/p>\n
3.10.2002 and 14.2.2005 passed in company vpetitipon<\/p>\n
No. 168 of 2001 and 132 of 1998, the company  <\/p>\n
to be wound up and the official liquidator a\u00a7  0 <\/p>\n
liquidator of the company; that <\/p>\n
up order, the official liquidator issued’. letters. thej<\/p>\n
directors requesting them  oVVe.r””th-e ‘books of
\naccounts and records ofithe  ajpndpto fileustatement of<\/p>\n
affairs as per section 454 of? not been done<\/p>\n
and in:’r\u00e9ls;peegiQ\u00a3  under section 454[5} of<\/p>\n
the Actxhas\u00ab_beenVV ,-company application N0.215 of<\/p>\n
2003 _which=. is pend1–,:_igV’before this court; that another<\/p>\n
  under se-c\u00e9zion 538{1] of the Act for not delivering<\/p>\n
the?  ;:accounts of the company numbered as CA<\/p>\n
No.2″1A4 of  was disposed of by this court with a direction<\/p>\n
to present the same before the jurisdictional magistrate<\/p>\n
A “:*:Qurt.pand the same is pending in the said court.<\/p>\n
9   The instant application has been filed based on the<\/p>\n
 audited balance sheet as on 31.3.1999 obtained from the<\/p>\n
Registrar of companies, Bangalore and as per the same, a<\/p>\n
sum of Rs.2,40,39,27’5.32\/– with interest at 18% per annum
\n5\u00bb<\/p>\n
_ 4 _
\nfrom 3.10.2002 till the date of realization is due to the
\nofficial liquidator from the respondents 1 to 3 on the ground<\/p>\n
of the said respondents being guilty of misfeasanccl\u00e9llland<\/p>\n
breach of trust in respect of the company in liq2;”it’iation.V5<\/p>\n
fact, the entire application is based on the..f,AactVv  the”  <\/p>\n
balance sheet dated 31.3.1999 dis(::losesptij?.alt.pp Fij\ufb01edi <\/p>\n
Rs.29,79.812\/~ and investments inlinllcirira \\Zi1{9as:Vl5atra.”at <\/p>\n
Rs.200\/ — and current assets} .,:loa_r1s  *ad\\2\/ances of
\nRs.2, 10,59\/163.32\/– ha\\iIje’*V-not handed oi\/er to the
\nofficial liquidator and in respectliof  of affairs<\/p>\n
have not been i’iled”also 8_:jI”1\u20acl’; ther’eiore___the application has<\/p>\n
been  “the said amount at 18%
\ninterest.’L  V<\/p>\n
5. This xc’oi:1r’t ordere_d’notices on respondents 1 to 3 who<\/p>\n
 ._v’ha\\te5\u00a5renT1’ained  and have been placed ex parte by<\/p>\n
 ‘o::\u00a2:i’er. dated   1.2008.\n<\/p>\n
6′; A . -.thIe’circumstances, the question that arises for<\/p>\n
‘V my consideration in this application is as to whether the<\/p>\n
it 1’ .,oi’fic–ial litluidator has made out a case Within the provision of<\/p>\n
  543 of the Act so as to be entitled to claim an<\/p>\n
 Warnount of Rs.2,40,39,275.32\/– with interest at 18% per<\/p>\n
annum from 3.10.2002 till realization. “””\u00b0’\/7<\/p>\n
-5-<\/span><\/p>\n
7. At the outset, it has to be noted that the entire claim is
\nbased on the balance sheet \ufb01led as on 31.3.1999 and the<\/p>\n
application is made in the year 2007. Company Application<\/p>\n
No.21-4 of 2003 has been disposed of by V.<\/p>\n
31.8.2006 with a direction to prosecute the sanded  <\/p>\n
jurisdictional magistrate. As far I-as” “cornpany f”app1ica{:o\ufb01–,<\/p>\n
No.215 of 2003 is concerned, from the  ._<\/p>\n
that the same was also dismiss,efci~V.Iibertyl to i’:1\u00e9”a fresh 9′<\/p>\n
application by order dated  steps have been<\/p>\n
taken thereafter.\n<\/p>\n
8. “l’helleVide,nce:lo’f  the of\ufb01ce of the of\ufb01cial
\nliquidator 9′ has .    ,by way of an affidavit in<\/p>\n
exan1i_nation’\u00ab.in Vch.ief~–,_iJVherein, the certi\ufb01ed copy of the<\/p>\n
“V.__bala_rrce_._3Asi1eet dated—\u00ab3l.3.1999 submitted along with the<\/p>\n
 lapplirtpation been marked and with regard to the<\/p>\n
aforesaidl anfsoiints it is stated that the ex–directors have<\/p>\n
 misappliedhand retained the same and therefore are liable to<\/p>\n
9′ l..:faccou’ntllfor the said monies and properties, being guilty of<\/p>\n
 rhisfeasance in relation to the company in liquidation.<\/p>\n
 W\u00a73lXhibit.P1 which incorporates the balance sheet, no doubt<\/p>\n
mentions about the fixed assets, investments and current<\/p>\n
assets, loans and advances. The said balance sheet which is<\/p>\n
6\u00bb:\n<\/p>\n
,.r,-\u00bb<\/p>\n
-5…\n<\/p>\n
no doubt certified by the chartered accountants has not been<\/p>\n
corroborated by any other independent evidence. In faiitlno<\/p>\n
material other than the balance sheet of the  <\/p>\n
relied upon by the official liquidator to make..O1it\u00bb.a  for’<\/p>\n
misfeasance. Although the respondents<\/p>\n
parts and there is no counter filedon. their-‘l.l.beha{lf  V’<\/p>\n
neither has the witness on  the” oftieial lllligulidator
\nbeen cross examined,   on the
\napplicant\/ official liquidaton   a case of
\nrnisfeasance. Tltetlmere  mentioned in
\nthe balance”.    mean that the said
\namountshave. respondents 1 to 3. No
\nmaterial”.has_  by the applicant to show<\/p>\n
as to whatlhappened touthe said assets. In fact, CA No.215<\/p>\n
 ~._of ?;:\u00a7}3l\u20acJ3,p_.,tAT:1led by the——–ap’plicant under section 454 of the Act<\/p>\n
 has’ ‘a.ls’o._beVe’nplconcluded on account of non–service on the<\/p>\n
 filo effective steps were taken to serve the<\/p>\n
respondents 1 to 3 herein in company application No. 215 of<\/p>\n
A lffand therefore reserving liberty, the said application has<\/p>\n
‘  been dismissed.\n<\/p>\n
 In the absence of there being any material on record as<\/p>\n
to what happened to the fixed assets, investments, current\/ii?<\/p>\n
9<\/span><\/p>\n
assets, loans and advances mentioned in the balance sheet<\/p>\n
3%\u00bb<\/p>\n
MM 7 _<\/p>\n
after 31.3.1999, it cannot be held that the respondents are
\nguilty of misfeasance or breach of trust Vis-a–vis company in
\nliquidation. The mention of the said amount in the balance<\/p>\n
sheet dated 31.3.1999 cannot be the sole basis for holding<\/p>\n
that the said assets have been misutilized.i..__lby:”lthe* V.<\/p>\n
respondents in the absence of there being   <\/p>\n
that effect. It is Wei} settled in law”and’by <\/p>\n
pronouncements that in order tol\ufb01rnalge out; acase “of<\/p>\n
misfeasance and breach of tru.s–trby the  of the
\ncompany in liquidation, Itliere has concreteevidence to<\/p>\n
that effect and further the llzqurdien’  applicant which<\/p>\n
has to be  effectively.’  V\n<\/p>\n
10. Inllvthe i.nstar1t’._cas_e;~.reliance placed solely on the<\/p>\n
balance sheet! dai:ed”v. 1.999 per se cannot prove<\/p>\n
‘ “=mis’feasance. V of the “” “respondents vis-a–vis assets of the<\/p>\n
  The application is filed in the year<\/p>\n
2C)07llllwhereals  balance sheet is of the year $999. It is the<\/p>\n
lgduty ofvtlze applicant to produce evidence as to what has<\/p>\n
“:f:happ’ened to the assets of the company during the<\/p>\n
9  interregnum. In the absence of such material being placed<\/p>\n
 on record, it cannot be held that the respondents are guilty<\/p>\n
of misfeasance or breach of trust with regard to the assets of<\/p>\n
the company in liquidation.\n<\/p>\n
\n
11. For the aforesaid reasons, the company app1icati_0_r__1 is<\/p>\n
iiable to be dismissed and is accordingly dismissed. – ‘  <\/p>\n
Sd\/__     F    _<\/p>\n
AN\/~<\/p>\n","protected":false},"excerpt":{"rendered":"
Karnataka High Court Official Liquidator Of M\/S … vs Mr T V Veeraraghavan on 27 November, 2009 Author: B.V.Nagarathna IN THE HEGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 277″ DAY OF NOVEMBER, 2009- BEFORE THE HoNjBLE MRSJUSTICE B.V.NAGAR;\u00a7’im\\iA:.L?”‘ O ‘ C.A. NO.964[20G7. In 1 * O’ Co. P. Nos.168\/5601 8: 132T\/1993 BETWEEN: OFFICIAL […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,20],"tags":[],"class_list":["post-252678","post","type-post","status-publish","format-standard","hentry","category-high-court","category-karnataka-high-court"],"yoast_head":"\nOfficial Liquidator Of M\/S ... vs Mr T V Veeraraghavan on 27 November, 2009 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/official-liquidator-of-ms-vs-mr-t-v-veeraraghavan-on-27-november-2009\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Official Liquidator Of M\/S ... vs Mr T V Veeraraghavan on 27 November, 2009 - 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