2019 (7) TMI 1359 - HC - Companies Law

Winding up - Misappropriation of funds of the company - HELD THAT - Admittedly, inasmuch as there being no other assets available with Mr.D.Subramaniam who was the person alleged to have misappropriated the funds of the company in liquidation, and there being no possibility of recovering any further amounts, in the facts of the present case, the company application is closed, with a direction to the Official Liquidator to take necessary steps to complete the liquidation process expeditiously.

Summary

Issues: Misappropriation of funds by respondents, liability for amount due, auction of property, completion of liquidation process

Misappropriation of funds by respondents:
The Official Liquidator filed a Company Application seeking a declaration that the respondents were guilty of misappropriating company funds. The Chartered Accountants appointed by the Court verified the company's books and reported a discrepancy of ?25,96,225, holding the respondents accountable for the same. Despite a counter affidavit disputing the Auditor's report, the respondents agreed to hand over property title deeds and provided a 'No Objection' for selling the property to offset the misappropriated amount. The auction of the property resulted in a sale for ?24,50,000, and the property was registered in the name of the auction purchaser.

Liability for amount due:
The Court acknowledged that Mr. D. Subramaniam, the individual accused of misappropriation, had no other recoverable assets. Consequently, with no further possibility of recovering additional amounts, the Company Application was closed. The Official Liquidator was directed to take necessary steps to expedite the liquidation process.

Auction of property:
Following the permission granted by the Court, a house property was auctioned, and the proceeds were used to offset the misappropriated funds. The property was registered in the name of the auction purchaser, and the sale was confirmed by the Court.

Completion of liquidation process:
Given the lack of other recoverable assets and the completion of the auction process, the Court closed the Company Application. No costs were awarded, and any pending miscellaneous petitions were also closed. The Official Liquidator was instructed to finalize the liquidation process promptly.