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TMI Blog2002 (11) TMI 682X X X X Extracts X X X X X X X X Extracts X X X X ..... ional liquidator had gone to the registered office of the company at Nedumchalil Building, Mullassery Canal Road, Kochi, and locked and sealed the office in pursuance of his order of appointment and on 28-10-1999, the above office was inspected, in the presence of the representatives of the first accused and others and at that time the current records, registers and securities of the company were not available in the office, that though the first accused had undertaken to produce the current records, registers, valuable securities and other documents before the Official Liquidator, the accused did not care to produce the same. It was further alleged that the accused failed to submit the statement of affairs within the statutory period of twenty one days from the date of appointment of the provisional liquidator and even after the issue of notice demanding the accused to submit the statement of affairs, and thereby they failed to furnish the statement of affairs without any reasonable excuse and committed the offence under section 454(5) of the Act. 3. When the accused appeared, the substance of accusation were read and explained to them and they pleaded not guilty to the above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and directed him to take over the entire assets, records and securities of the company, and to function in the same office of the company as it was functioning and to carry on the business of the company without receiving fresh deposits from depositors until the company was wound up as per the provisions of the Act. An agent was allowed to be appointed to assist the provisional liquidator and, accordingly, Advocate Sri C. Khalid was appointed as the agent. The provisional liquidator was allowed to release the gold pledged with the company on receipt of the principal amount advanced with the interest thereon. The first accused was directed to give all assistance and co-operation to the provisional liquidator. 5. On 21-10-1999, the provisional liquidator proceeded to the registered office of the company at Nedumchalil Building, Mullasery Canal Road, Kochi, and the above office was got locked and sealed in the presence of the first accused. The accused had not informed the Official Liquidator that they had shifted their registered office of the company to St. Mary s Castle or elsewhere. When the registered office was opened on 25-10-1999 in the presence of the representatives of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant to note that all the current records, accounts, registers, securities including gold and other documents were not furnished by the managing director to the provisional liquidator. The provisional liquidator is bound by law to take all securities, books of account and other assets of the company from the possession of the former directors. Though the first accused had undertaken to produce the current records, registers and other securities before the Official Liquidator, he had not complied with the above assurance. Likewise, he did not furnish the statement of affairs in time even after the demand made by the provisional liquidator. Accordingly, the agent of the Official Liquidator filed report [Exh. P3] before this Court on 24-11-1999 stating that the accused had not produced the statement of affairs as well as the current records, registers and securities of the company before the official liquidator. It was specifically mentioned that on 4-11-1999, the accused had informed the provisional liquidator that he would not hand over the current records and securities as he had filed an appeal before the Division Bench of this Court challenging the earlier order of the Company Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cs. He did not produce the computer extract of the above accounts. Later, on the basis of the incomplete statement of affairs furnished by the first accused, the liquidator preferred certain claims and notice also had been issued to the debtors. In many of the cases, notice could not be served as the addresses were not correct, they contended repayment of the amount and in many of such cases, they produced the receipts issued by the emplo-yees of the company. But, those repayments were not at all entered in the registers produced before Court and those registers were created only for the purpose of producing the same before the provisional liquidator for a formal legal compliance and those were not the original registers maintained by the company. This Court had the occasion to consider the genuineness of the above registers and found that those were not genu- ine and maintained in the regular course of the business, but forged for the purpose of producing before the provisional liquidator. Though this Court had prohibited the company from making any transactions, the company violated the order and collected money from several debtors and discharged its liabilities to certain credi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... violation of law and the order of this Court. In fact, he did not produce proper receipts or records for the discharge of those liabilities also. This Court had already directed an investigation of the matter by the crime branch and they were directed to file statements in every fortnight regarding the progress of the investigation. The police reports would reveal that the contention of discharge of liabilities of some of the creditors as stated by the first accused was not true or real. The first accused wilfully abstained from producing the genuine records of the company before the provisional liquidator as he was sure that his fraud would be disclosed, if those records were produced. It was a case where nearly Rs. 18 crores had been collec ted from thousands of depositors and no reliable documents were produced before the provisional liquidator to consider their claims and this Court also was not in a position to afford any effective relief to them. The interests of the depositors are still in peril. The fate of the depositors to get back their money is even now uncertain. This Court is not certain whether they will get back at least a portion of the deposit amount in view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed why the statement of affairs was rejected. It was further argued that sufficient time also was not granted for filing the statement of affairs and request for time was rejected. The statement of affairs did not conform to the requirements as contemplated by law. The details to be furnished by the directors were not furnished, but the statement contained the wrong endorsement not applicable , though the directors had to furnish the details. The names and addresses of debtors and creditors were incomplete and inaccurate. The details of securities were not furnished. Those defects were already intimated to the first accused who filed the statement of affairs. 12. From the very inception of the proceedings, the first accused was violating the orders of this Court and collecting the money from debtors and discharging the liabilities of creditors of his choice. The scheme formulated by the Court had to be implemented to safeguard the interest of creditors. The grant of further time for filing the statement of affairs would be adverse to the interest of thousands of depositors who invested nearly Rs. 18 crores. Money had been diverted ignoring the law and the directions of Reserv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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