Karnataka High Court
Official Liquidator Of vs Smt Indulekha Seshadri on 17 February, 2012
Author: A.S.Bopanna
Bench: A.S.Bopanna
IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 1774 DAY OF FEBRUARY 2012 BEFORE THE HON'BLE MR. JUSTICE A.S. BOPANNA - | COMPANY APPLICATION NO. 322 /2007 IN _ COMPANY PETITION NC. 1B1/ 1959, _ Between : Official Liquidator of . M/a Mascot Agro Chemicals Pvt. Limited (in liquidation) oo Attached to High: Court of Karnataka. IV Floor, D& F Wing Kendriya Sadati, Koramangala ~~ Bangalore - 560 34 ~ | cont ... Applicant (By Sri K.S. Mahadevan and 'Sri V. Jayaram, Advs.) And : | 1... Smt. Indulekha Seshadri _ . No:888, West of Chord Road . Bangalore -- 86 Sri KN. Ravinder . No.J.0-1-698, West of Nehru Nagar ' West Maredpalli, Secunderabad Andhra Pradesh -- 500 026 wee Respondents
. (By Sri Sampath Bapat, Adv. for R-2 oO R-1 served) : This Company Application filed by the counsel for the _ applicant under Section 543(1) of the Companies Act, 1956, 2 R/w Rule 260 of the Companies (Court) Rules, 1959 praying to summon respondent Nos. 1 and 2 for the purpose of examination in regard to the matter specified therein and ete.
This application coming on for Arguments, this day, the Court made the following: a The Official Liquidator of. the 'above company in liquidation has filed the instar application under Section 543(1) of the Compares Act, 1956 R/w Rale- 260 of the Company (Court) Rules, 19 959.
2. Respondent - No! " though served is un-represented - "a, Res spondent 'No. 2 having appeared pursuant to the series" notice has filed objections and disputed the claim made in the application. Since the claim, was disputed, the matter was referred for recording ws "the evidence" T he witness on behalf of the applicant was exarnined As PW. and document at Ex.P1 was marked.
_ The second respondent examined himself as R.W.1]1 and he
- "was subjected to cross-examination. Based on the limited os evidence available before this Court, the application is : ~ taken up for hearing.
3. Heard the learned counsel representing the Official Liquidator and the learned counsel representing the second respondent and perused the" application papers.
4. The company in + Hignxdaion viz, M /s Mascot Agro Chemicals Pvt. Limited was ordered tobe wound up by the order of Chis Court dated 17, 04. 2002 passed in Co.P.151/99. The statement of aff airs w as also not filed by the Directors and as such 2 a 'separate proceedings has been initiated against the DiFector 5, The present claim however has been made I based. on the balance sheet as on 31.038. 1997, 7, which was. av ailable on record. In the said balance cheek, two blocks were noticed. First relating to "the fixed assets : and inventories amounting to © 32,29,888.80 ps. and the second block relating to the sundry debtors, cash and bank balances as well as loans on and advances amounting to ¢ 36,41,562.3lps. Therefore, . ; sincé in all a sum of % 68,71,441.11ps was to be realized . for the benefit of the company in liquidation and since the erstwhile directors had not furnished any details with regard to the same or explanation as to nature of the indication in the balance sheet and as to whether subsequently the same still survives to be due: to. the.
recovery of the said amount.
5. The claim against. the respondents has been made based on the namies Indicated. in the balance sheet as Directors. Though three ames have been indicated, Sri S.K. Sheshadri who is indicated as Chairman and Managing Director is stated to be dead and therefore, no claim is made against him and in any event, the first respondent. here is his wife who is indicated to be the _ "erstwhile director of the company in liquidation. The name
- . of the second -respondent is also shown as Managing Divector in the said balance sheet. As already noticed, the first respondent has not responded to the notice issued by this 'Court and in any event, the notice has been held oo : sufficient on the said respondent. Therefore, insofar as the 3 claim raised in the instant application, the same has remained undisputed at the hands of the first respondent.
6. The second respondent on appear ance ce: "file d statement of objection denying the contention. put i forth im - . the application. It is contended that. the : second ; respondent was not at all a director ot the ééipany. 'It is the contention of the second respondent that he was a Promoter and Director "of another company called M/s South India Organic | Cc chemicats, situated at Raichur and late S.K. Sheshadri in. "that "connection was known to the second respondent aide except for having such relationship and further providing certain funds to late S.K. Sheshadri, the second respondent . had nothing to do with the _ company in liquidation. It is also his contention that the a said date: SK. Sheshadri had requested the second respondent to "be a director of the company in liquidation.
Though the second respondent had agreed at the first "instance, the same has not materialized and necessary
-- : particulars had not been filed with the Registrar of . Companies indicating him to be the Director. However, 6 certain understanding was between himself and late S.K. Sheshadri and as such, he had subsequently handed over his resignation to late S.K. Sheshadri and: Biricé the directorship itself had not been registered in the ollce of .
the Registrar of the Companies. the. Alig « of Form 'No: 32 :
was also unnecessary. Though specific contention in 'that regard has not been taken, the gist of the ccintention would indicate to this aspect of the maiter. 7
7. In the Tight of tine ne dispute ¥ raised by the second respondent and - since the claim was to be proved by the Official Liguiaatoh the matter was set down for evidence. One Sri Vasanth amar, who was working as Assistant in the Office of the. ficial Liquidator was examined by filing _ "his evidence by way of affidavit as P.W.1. In the evidence : stated by ihe "witness, the claim as put forth in the application has been reiterated to indicate the claim which an -has been-'made on two points. As noticed, while indicating : "the. facts in the instant case, the total claim at
- 8 88,7 1,441.1 lps. was made with interest and as such, a ' decree has been sought.
& wd
8. The balance sheet which was made the basis in the claim application was marked as Ex.P1 and the block based on which the claim has been raised has beets subjected to cross-examination | on behalf of the second . respondent. In_ this regard, the tenor of the "cross:
examination is to indicate that "the witness without verifying the records in the oifice of 'the Registrar of the Companies to. establish that he was 'a Director has raised the claim and therefore; the clair against respondent No.2 is not sustainable. "The witness 'has admitted that except the document at EXPL he does not have any other document to show 'that the second respondent was a "Director ef the company in liquidation.
on The 'second respondent has thereafter examined » himseif as R.W.1. A perusal of the evidence tendered by the said witness would indicate that he has explicitly oe stated that he was the promoter and director of M/s South > India Organic Chemicals and it is in that connection, he had acquaintance with late S.K. Sheshadri. Though late S.K. Sheshadri has requested him to be the Director of the company in liquidation, the same had not been registered in the office of the Registrar of companies. . However - insofar as the understanding between. himself and late SK. - Sheshadri, he had tendered his- resignation to distance himself from Late Sheshadi: and the company in liquidation as far back as in the year 1992 and he has no knowledge whatsoever about the subsequent activities of the company. nor the winding 'up. order passed by this Court. It is no doubt irue that :n the cross-examination, the manner in which it has been recorded would indicate as if the second respondent had admitted that he was a director of the company in liquidation from the year 1976-
- "77 and he had thereafter resigned in the year 1992. What is also tobe tloticed is that in the objections as well as in . the -evideiiee of the second respondent, he has clearly "stated 'that he is not a party to the balance sheet which
- had been filed and his signature has not been affixed to the said document. Further, in the cross-examination, he 9 has also stated that since he was not aware of any details with regard to the company or filing of the balance sheet as at Ex.Pl, he has not taken any action against late S.K. Sheshadri.
10. In the light of the contentions urged ang the :
evidence tendered in the instant application, insofar as s the first respondent Smt. Indulekha Seshadhi is concerned, it is to be stated at the oiitset that the claim raised in the application has not been denied. cin any case, the document at EX, PL 'contains the 'signature of Smt. Indulekha. Seshad rh wherein th the amount as claimed by the applicant is "indicated as due to be recovered by the company." Therefore, to the said extent, the claim in any o. Case would have to be accepted. However, the question for 7 . cqitsideration would be as to whether the second respondent could be held liable for the amount claimed in ~ the instant case.
'LL. In this regard, from the contention and the . evidence discussed above, it is seen that the only basis in 10 the claim is the document at Ex.P1 viz., balance sheet as of March 1997. At the outset, the same would indicate that though the name of the second respondent has been indicated, the same does not contain the signature of the - second respondent while the 'signatures: of late SK. Sheshadri and Smt. Indulekha 'Seshadri is manifest, Hence, when the second respondent had "faised a contention that officialiy he wach: net become sivcctor of the company in liquidation, the said document alone is not sufficient to. establish the clara agains the second respondent. His to doubt ty rue, as noticed, the second respondent 'in hise evidenie e, we, thore particularly 4 in the cross -- examination had oe he was a director of the company sitice 1976-77. However, the same cannot be read in isolation inasmuch as a categorical contention had been raised ove the second respondent both in the objection statement as well as in his examination-in-chief that he os had nothing to do with the company in liquidation in its official capacity as a director, though there were negotiations between himself and late S.K. Sheshadri i where, late S.K. Sheshadri had requested the second respondent to be a director, but such action had mot been materialized inasmuch as the same has not been reported to the Registrar of companies and the name of the second 7 respondent was never indicated" in the re records. as: ab director. Therefore, in that context, ¢ even "assuming for a moment that the second respondent has conte vended that he had resigned subsequently in the, year 1992, "tHe same can be attributed only insofar Ws as | 'negotiations which were between himeetf aad late S.K. Sheshadri and not as an official resignation "whieh was! required to be filed before the Registrar of Companies, when it is not established that the second | respondent was' indicated as a director in the documents of the Registrar of Companies. The only "document (Ex.P-1) relied does not contain his signature.
"12. Therefore, even though the instant proceedings
-is summary in nature, when a definite contention has been = taken by the second respondent that he was not a Director and the applicant had not discharged the initial burden of : showing that the second respondent was a Director of the 12 company as on the date of winding up or at any point earlier to the same, the claim made against the. second respondent cannot be accepted.
the sum of % 68,71,411.1 Ips. with interest at 9% p.a. from 17.04.2002 till the date of recovery. _ The application against the second respondent-Sri KN. Ravinder stands dismissed. .. -
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