Karnataka High Court
Official Liquidator Of The Mandya ... vs S K Sengupta on 8 March, 2012
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This Company Application is filed by the cou;;5§iV"r;Sra.'£1a¢
applicant under Section 543 of the Companies Act,
Rule 9 and 260 of the Companies (Court) Rules, 'Vl959;v.p"r'ayin_g ' _p
to appoint a Chartered Accountant from the appro_yed"panel _to"=
investigate into the affairs of the con:ipAany.with _th_e"b_ooksf:an'd
records available in the Office of the Official Liquiidator. A
This application coming on 4_ for ai'guinents;"tfhi,s day, the
Court made the following: ~
The instant applicatioiifllf is; filed by "thle Official
Liquidator under Section Companies Act,
1956 R/w Rule (Court) Rules.
1959. The -filed of the company
in Directors of the said
Company, and in that context to
direct 3 to jointly or severally pay
the cporripanya inifliciuidation a sum of Rs.33,63,19,000/--
interest. H lllll H
if the learned counsel for the parties and
A ffperusled Vthpehapplication papers.
The company in liquidation was ordered to be
up by this Court Vide its order dated 20.10.2000
Lfpassed in Co.P.112/94. Thereafter, the erstwhile Directors
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have filed their statement of affairs. In the
the statement of affairs, the realisable
indicated at Rs.43,57,00,000/-. '"S"ubse:quent'iy_, dliriiz the V'
process of winding up, OLR filed
this Court seeking leave of for of thee'
fixed assets of the corripanyAVinu:li.quidation'..__According1y,
the Valuer M / s J ayasulr=,Vra-ai2cdfA}ssociate's_'were appointed
as the Chartered:'AAcco1:intaiit.sV_t0'C:~»t,;alue..j.tlilel property. The
Valuation by this Court
indicated at Rs.9,4l ,81,OOO/A.
In that1._:lvi€'Vl?C;xCif1eial..___Liquidator having noticed the
difference' of -- between the Value of the
realisable assets .inidicate'dV in the statement of affairs and
the yraluation rnad€._bV~the Valuer appointed by this Court,
-» of that the erstwhile Directors viz., the
respon'dentf'_s--_ herein have mis--utilised the said value to
_ their.""be1<iefit§"' Therefore, the instant application has been
iiied_.alle'ging misfeasance by the erstwhile Directors of the
C' . corripany in liquidation.
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4. The respondents on being notified:.~«~~haf»fe__'l'file\:l_
their objection statement. It is conten_d'e-El. V'
realisable assets which were indicatedllin the-i's-t.aternVent of
affairs was based on a Valuation
given by M/s SR. Batliboigand Company,':..;Ciiartered'wit
Accountants. It is theirpconterntiopn that value of
the said assets was only as on the date
of the winding_i1P§ iit case that the
realisable the actual value
and the been determined by
the v2iluer.A1l"by_' wthis Court itself at
Rs.9,41,81..,_o'00/ Rs. l,38,00,000/-- being the
Value of the irninovable properties has to be excluded since
'the has notlvbeen sold and if that value is kept in
'View', 'Vtl1:€5"»_s.a-nfieiwould match the valuation for the purpose
of~.b'ook 'Val'_u_e'~_m"ade by the respondents themselves when
-Vtheyuuwerepfunctioning. Therefore, the allegations made in
':t:h'e'i«application about the difference in the value is
unsustainable. Hence, it is contended that the application
if -isliable to be rejected.
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5. In the light of the rival contentionls;
was set down for evidence. One Sri ;Vasant_h'-__Kurnar;
working as Assistant in the Office of.__t:hez
was examined and his affidvavit'*~.was."te_nd--ere_dR'by"'Way of"
evidence and he was treated as fl, Thedocuiments at
Exhs.Pl to P3 were was also
cross-examined. V On tlae"lfres'pondents, one
Sri S.K. Sengigiplt'-a;1"the=__erstvs/h'ile"f'--Ma,naging Director was
examined his affidavit
evidence'"a1id:inarl{ed at Exhs.Rl and R2.
The als.o'."Cross--exa1nined. In the light of
the evidence *tender'ed»-- parties, it is necessary to
examine as to"'ivhether the contention put forth in the
ibsrequired to be accepted by this Court and as
respondents should be held guilty of
misfeasance3j..~and the amount should be ordered to be
I ' realised from them.
In this regard, the oral evidence need not be
I referred to in detail since the entire valuation is based on
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the documents, which have been marked in evider1_c'eL'*.fl;'lie
statement of affairs filed by the respondents'
marked as Ex.Pl to point out tha'tMin"the-«ysa;i<d:AlV:d»ocu'rn«enti.
the value of the fixed assets
Rs.43,57,00,000/~. The orderldated 17;o4.'2d«33'=p;ésed ind'
C.A.348/2003 is markedly that the
Value ultimately realised including
the immovable' is « l{s.8,33,26,OOO/ ~.
Though the Sri H.S. Seshagiri is
markedyilatpv relates to the immovable
propertyllarid in the relevant document to
be taken. note, would be the valuation of
and Associates, which is produced at
with the application, the same is
_ accordin-,gly'vt'aken note of.
AA A perusal of the said documents in the
Cblacllilglround of the oral evidence stated by the witnesses,
doubt, indicates that the statement of affairs would
show that the Value of the fixexg/assets as declared by the
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Directors was in a sum of Rs.43,57,00,000/-. However, to
ascertain the correctness of the same, the '.eVide~nce
tendered by the respondents and the docume_n§ts
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also requires to be noticed. In this,.r_egard',"'th:e'v ,\l/alu'at1ovn"
report dated 31.05.1997 madeV7.by;'_"Ni/so»._lBatlibo:ie._',A.and
Company has been marked as_v'Ex.Rll."- A specifi{_:"refe--ren(:e».i'
to the details furnished. in "as.Apin.dicated in
Section III would and reserve
price of all thepasisiplevts regard, the
book Value as ix'/allue as on the said
date has 1l--l«."'perifisal of the same would
indicatelthat tlielybeen indicated with regard to
the fixed assets" in 'Va is-uni "of Rs.4l,56,00,000/-- and for the
...£.1
ll"-same__.'as;s.ets as on" uiat day, the book value has been
"Rs.l3,59,45,198/--. This by itself and on
the face indicate that the book value as on that
'day wasejnuch lower than indicated in the very report of
it s Batliboi and Company.
8. Keeping this in View, the document at Ex.R2
needs to be perused. The said document is the balance
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sheet drawn up by M / s Hariharan Narayan
Chartered Accountants on 20.10.2000 i.e.,_
winding up order. In the said doc;uAm'e'nt_,'--«th€: of'
fixed assets has been indicated
the said valuation made as da"te__of "v{fi'r1'ding up-0'
order with regard to the Valuye..lx¢jf..thepA pr.op'erty_.i§s kept in
View, the Valuation by this
Court, M/s H. on which
the instant_ indicate that the
Value is__ --, From the said
amount; _ the immovable property is
excluded,"t_heValiueiiotfixed assets would be in a sum
of llNo doubt there is a marginal
ivariatilon--tinwyithe yal'ue-"as assessed by the Valuer appointed
'Coujrtiiafter the date of winding up and the Value
indiclatedl balance sheet as on the date of winding
Iup. what is to be noticed is that ultimately, the
0' ll..jfiXed'~...assets which were sold in auction as permitted by
":Court, the value fetched is in a sum of
00 Rs:.8,33,26,000/--. The said Value in fact is marginally
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higher than the book value which has been indicated by
the Valuer and reflected in the balance sheet as on the date
of winding up order.
9. Therefore, if these aspects are keptin
documents would disclose that thezbiactufaljjvualue'of
assets is the one which has been realised in 1the.procé;ss'lof"'as
the winding up and as confirrn'ed_V'.vi11_theauctionfpermitted
by this Court. Insofahfas' thatfhas been
made, the reference of P.W.l
would such valuation
is which had been
filed and thereafizerfinol"independent investigation is made
at the end "0f__4tlie illiquidator.
Thereforlelfin the background of the above and
"tliref_1fact that the entire claim in the instant
apnlicatiorifiiisil based on the declaration made in the
Vfstatemeiit; of affairs which was on the basis of the
a._ir'e_alis--aible Value indicated in Ex.Rl and in that regard, if
if the View taken by this Court in the case of the Official
it Liquidator, Bangalore Batteries (P) Ltd. (In
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Liquidation) --~vs- N.S. Gopal (2010) 103 SCL
is noticed, it would be clear that the proceeci:ing*s_fti1n£1e_r
Section 543 cannot be initiatedMrnerely'"b§§€d..,1p1'1_
realisable value of the assets indica_ted_-.--a .. 3 4'
11. In the instant case';'~vs.in'~ianyhevent, jhizheaxtaliilationll
got done by this Court prior 1' sa'le_ of assets
has been realised and ilrnorle-._.than the book
Valuewhich has .b'e.e_n balance sheet as on
the date of same, there is no
other pleading.' to the Inisfeasance
having been indulgedVby,:th.e_'_erstwhile Directors.
T _herefo"r.e,"thej-.pra$Ie~i'llVmade in the application is liable
1.-'Vto bel}'re_iec'te_d. ZXcco.r.dingly, the application is dismissed.
N'o.co'sts;' V' _
Sd/-*
JUDGE
.
