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TMI Blog2003 (6) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... sional liquidator. Though the company challenged the above order by filing MFA Nos. 1250, 1265 and 1266 of 1999, all those appeals were dismissed. The company had diverted Rs. 7.67 crores to another sister company, M/s. St. Mary s Properties Ltd., by unlawful means and violating the provisions of law and the standing orders of the Reserve Bank of India. The scheme formulated by this court was being defeated by the company especially by its managing director Sri Bobby Varghese by all means. All directions issued by this court had been flouted in one way or the other. 2. The statement of accounts furnished by the company itself revealed that there was gold security worth more than Rs. 2 crores with the company as on March 26, 1999. The statement filed by the company on July 3, 2000, revealed receipt of money including interest and the release of gold for Rs. 1,29,20,039. Yet there was gold security worth more than Rs. 1 crore with the company. Repeated directions were given by this court to the company especially to its managing director to furnish the books of account, registers and the securities including the gold to the official liquidator who was already appointed as the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Several claims had been made before this court by the official liquida-tor on the basis of the list of debtors furnished by the company and the available registers produced before the court by the official liquidator were found to be forged and fabricated and those registers did not disclose any earlier transaction and in many cases there was only one entry. In many cases receipts issued by the company, including those issued by the managing director, were produced. But the registers did not disclose the entry of the amounts covered by those receipts. In fact those amounts had been misappropriated by the directors of the company. In many cases though the loan was sanctioned for a higher amount, the entire money was not paid, but some amount had been withheld and entries had been made in the registers as payments made in cash. As per the rules all payments should be made through cheques and cash payment was not permitted. Yet several entries were there showing cash payments which, in fact, were disputed by the borrowers. This court in many such claims had observed that the registers were forged and fabricated and this court found it difficult to adjudicate the claims properly and f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the police had made attempt to recover the records, books of account, registers, etc., they also could not recover the same. Now the official liquidator ap- pointed by this court is not in a position to know who are the creditors of the company, what are the amounts due to those creditors, what is the amount due to the company, who are those debtors, what are the assets of the company and which are the securities retained by the company. All these can be ascertained only if all the relevant registers, books of account and records maintained in the regular course of business of the company are made available to the official liquidator. Then only he can proceed, in pursuance to the order of winding up passed by this Court, collect the money and disburse the same to the thousands of depositors. 8. Learned counsel for the official liquidator submitted that some of the depositors had already committed suicide due to the paucity of money for meeting their livelihood. It was further submitted that many of the depositors were pensioners who had deposited with the company the entire amount received towards retirement benefits and they are finding it difficult to pull on their day-to-da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers regarding the investigation of the cases in respect of the companies, i.e. , St. Mary s Finance Ltd. and the sister companies shall be under the jurisdiction of the company court and all matters including bail matters shall be placed before the company court as, otherwise, the entire proceedings initiated in accordance with law would become a mockery. The Registry shall post all bail matters in respect of all cases relating to St. Mary s Finance Ltd. and the sister companies before the company court and no criminal courts and sessions courts shall have jurisdiction to deal with any bail matters relating to those cases." The above order passed by this court is fully in accordance with section 446 of the Companies Act which empowers this Court to transfer all cases or proceedings pending before all courts to the company court. Section 446 of the Companies Act reads : "446. (1) When a winding up order has been made or the official liquidator has been appointed as provisional liquidator, no suit or other legal proceeding shall be commenced, or if pending at the date of the winding up order, shall be proceeded with, against the company, except by leave of the court and subject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the company. The prosecution sought to be launched by the official liquidator on behalf of the company is a proceeding by the company against the acts of the office bearers. There are offences against the Act in which the official liquidator has to launch the prosecution proceedings. In appropriate cases, the High Court may exercise jurisdiction in entertaining or transferring the said proceedings to do complete justice between the parties, especially when the company has been ordered to be wound up. Rule 9 of the Companies (Court) Rules, 1959, also provides that nothing in the rules shall be deemed to limit or otherwise affect the inherent powers of the court to give such direction or pass such orders as may be necessary for the ends of justice or to prevent the abuse of the process of the court. Therefore, the High Court can exercise jurisdiction in suits and proceedings, including criminal proceedings in appropriate cases, by or against the company filed by the official liquidator." (p. 858) 11. I am in agreement with the above approach. Crime No. 258 of 2002 was registered at the instance of the official liquidator. The above order dated March 25, 2003, had been passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h law and recover the books of account. I regret to say that at the initial stage the police did not take it so seriously. But at present they have realised the gravity of the offence and misery of the depositors and are rising up to the occasion to lead a proper investigation and to recover the registers and books of account. 13. The genuineness of some of the claims put forward by some of the alleged depositors had been doubted by the official liquidator as no proper registers are there to ascertain whether they were actual depositors. When all the records are with the directors, they are in a position to create bogus claims in the name of men of their confidence or choice and make claim before the company court or before the official liquidator. We do not know how many such bogus or false claims had been created by this time. If the directors are at large, there is every possibility of creating such bogus claims defeating the interests of the real depositors. In the above circumstances, it has become imperative without any other alternative to cancel the bail and to keep them in judicial custody till they produce the registers and books and account. When this matter was bein ..... X X X X Extracts X X X X X X X X Extracts X X X X
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