2022 (9) TMI 65 - HC - Companies Law

Revival of company under liquidation - Section 454 of the Companies Act, 1956 - HELD THAT - There could not have been much variation in the position of the assets, since the winding up petition was filed in and about August 2016 under Section 433 of the Act and accordingly, the petition was admitted on 31.08.2016 - the Company Court appointed the OL as the provisional liquidator, and directed the directors of the company-in-liquidation to file the statement of affairs, within twenty-one days from the said date. The onus, as regards the affairs of the company-in-liquidation, at that point in time, was put on the appellant. The appellant, clearly, tarried and did not show enough alacrity to file a revival scheme - this state of affairs continued to operate, even after the appellant had obtained an order dated 31.01.2018, whereby the OL was directed to grant the appellant, access to the records of the company-in-liquidation. Demand of interest - HELD THAT - The amount deposited by the appellant was not a debt owed to him. Therefore, no case for payment of interest was made out having regard to the parameters. Even in equity, the appellant in this case would not be entitled to interest, as he failed to present a scheme before the learned company judge, with the result that the liquidation proceedings of the company were considerably delayed. In any event, there was no bar in the appellant approaching the Court at an earlier date for refund of the money deposited by him. Therefore, it cannot even be said that the appellant was deprived of the use of money, and thus should be compensated by way of interest. The complete information was not available for filing a scheme, appears to be a ruse for explaining the lack of alacrity and keenness - appeal dismissed.

Summary

Issues:
1. Condonation of delay in filing the appeal.
2. Refund of deposited amount without interest in a company-in-liquidation case.

Analysis:
1. The appeal involved seeking condonation of delay in filing against an order directing the refund of a deposited amount in a company-in-liquidation case. The appellant expressed dissatisfaction with the order for not granting interest on the refunded amount. The appellant argued impediments by the Official Liquidator (OL) in obtaining necessary information for presenting a revival scheme before the company court.

2. The appellant, a former director and shareholder in the company-in-liquidation, claimed lack of access to relevant information hindering the scheme submission. The OL contended that the appellant had the obligation to provide the statement of affairs under the Companies Act, and the asset valuation was publicly available. The OL highlighted the appellant's delay in filing a revival scheme despite opportunities and court directions.

3. The court observed the appellant's ownership in the company-in-liquidation and the lack of urgency in submitting a revival scheme. The court emphasized the appellant's responsibility in the affairs of the company and the delay in taking necessary actions for revival. The court discussed the criteria for awarding interest, emphasizing that the appellant failed to establish grounds for interest payment, both legally and equitably.

4. The court rejected the appellant's argument of insufficient information as a pretext for delay and lack of interest in advancing the revival scheme. The judgment emphasized the appellant's contribution to the delay in liquidation proceedings and the absence of compelling reasons for interest payment. Ultimately, the court dismissed the appeal, upholding the decision of the Learned Single Judge to deny interest on the refunded amount.

5. The judgment concluded that the appellant's lack of prompt action and diligence in submitting the revival scheme precluded the grant of interest. The court found no justification to interfere with the discretion exercised by the Learned Single Judge. Consequently, the appeal was dismissed, and pending applications were closed.