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TMI Blog2001 (11) TMI 957X X X X Extracts X X X X X X X X Extracts X X X X ..... se of the proceedings on an application made to the Company Law Board under section 397 or 398, it appears that any person who has taken part in the promotion or formation of the company, or any past or present director, managing agent, secretaries and treasurers, manager or officer of the company ( a )has misapplied, or retained, or become liable or accountable for, any money or property of the company; or ( b )has been guilty of any misfeasance or breach of trust in relation to the company. The Company Law Board, may, on the application of any creditor or member, examine into the conduct of such person, director, managing agent, secretaries and treasurers, manager or officer aforesaid, and compel him to repay or restore the money or property or any part thereof respectively, with interest at such rate as the (Company Law Board) thinks just or to contribute such sum to the assets of the company by way of compensation in respect of the misapplication, retainer, misfeasance or breach of trust as the Company Law Board thinks just." 4. Before I deal with the facts of the case, it would be necessary to deal with the power of the court under section 543. 5. This court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest income thereon Rs. 23,919. But said National Saving Certificate has not been delivered to the Official Liquidator for realisation. The respondent simply stated that no certificate are traced in his custody. By not delivering the National Saving Certificate to the Official Liquidator, the respondent is liable and accountable for the property of the company to the extent of Rs. 79,069. ( b )As the books of accounts, i.e., Debtors Ledger for the year 1989-90 Debit balance recoverable from Shivmoni Co., Bangalore was Rs. 2,177.45. As per the records of the company directors of the company at relevant time were invested in Shivmoni Co., Bangalore which was liable to repay the outstanding amount. By not making recovery, the directors of the company acted against the interest of the company, its body of creditors and contributories. They rendered themselves liable to reimburse the amount of Rs. 2,177.45 with interest. ( c )That the ex-director of the company/respondent herein had furnished in the statement of affairs, a sum of Rs. 20,78,813 as Trade Debtors. Since the Ex-Director of the company has not taken proper steps to realise the said amount, the Official Liquidator h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1,82,593.17 remains unrealisable. A copy of names and addresses and account numbers of the banks is enclosed as Annexure B to this application. ( e )That the company (in liquidation) had made loans and advances to the extent of Rs. 39,49,903 to the various Government Authorities such as Sales Tax, Telephone Telex, Karnataka Electricity Board etc. including Rs. 2,177.45 showed at para 7( b ). A statement is enclosed as annexure. A copy of the loans and advances is enclosed with this application and marked as Annexure C . The Official Liquidator had issued notices to the above said authorities on 3-3-1998 to refund the deposit amount made by the company (in liquidation) with the Official Liquidator. In reply the telephone department informed vide letter dated 8-10-1998 that all the telephones were found to have been closed long back and an amount of Rs. 17,494 is due from the company (in liquidation) to their department. The other Government Departments, viz., Sales Tax and Karnataka Electricity Board have not responded to the notices issued by Official Liquidator and thereby the entire amount of loans and advances could not be realised from them till date. 8. The Offici ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been associated with the company as a professional for the past several years, the directors felt that it would be in the interest of the company to appoint him as a director. Sri A. Murali holds office only upto the date of this annual general meeting. A notice has been received from a member under section 257 of the Companies Act, 1956 signifying his intention to propose the name of Sri A. Murali for appointment as a director of the company at the annual general meeting. The directors recommend the appointment in the best interests of the company." 13. It is clear from the records of the company that the company was referred to the BIFR in the year 1987 and thereafter no transaction took place, more so, pursuant to the respondent becoming a director of the company. The respondent became a director of the company as stated earlier on 17-9-1990. The company petition was admitted in the year 1994 and the company was wound up by this Court on 8-9-1995. 14. Unfortunately both Mr. Moni Bose and Mr. T. Shamanna died after the company was wound up. After the company was wound up, the Official Liquidator seized the unit and took over all the records in their custody. The responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 47 of 1987 right up to the order of winding up on 8-9-1995, there is absolutely no transaction by the company. When such is the position, it is nothing but an abuse of the process of the Court to file this application calling upon the respondent to make good the said sum of Rs. 55,150 with interest. There are no averments in the application which could implicate the respondent. When there are no averments and when it is the admitted case that the said investment in the NSC was done before the company was declared sick by the BIFR on 20-8-1990 and when there was no transaction after 1990 and no withdrawals of any amount by the officers of the company, it would be clearly a fit case where this Court has power to dismiss the application in limine as held by this Court in the case of Chamundi Chemicals Fertilisers Ltd. ( supra ). 19. The learned Official Liquidator fairly submits that after the company was placed before the BIFR, right till the year of winding passed by this Court, there was no transaction by the company, i.e., from 20-8-1990 till 8-9-1995. The respondent was co-opted as a director on 17-9-1990 and ceased to be a director on 8-9-1995 on the company being ..... X X X X Extracts X X X X X X X X Extracts X X X X
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