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TMI Blog2005 (8) TMI 378X X X X Extracts X X X X X X X X Extracts X X X X ..... Paid Staff Salary Reserve Funds A/c." and for making payment of the security expenses bills for the month of December, 2003 onwards. 2. The O.L. has submitted in his report that Calico Mills and 1 lakh, a 100 per cent subsidiary company of Calico Mills were ordered to be put in his charge and he was appointed as Provisional Liquidator vide an order dated 20-4-1998/22-4-1998. Thereafter vide order dated 15-7-1998, the Company was ordered to be wound up and he was appointed as Liquidator of the Company. Pursuant to the aforesaid winding up order, the O.L. had taken over possession of the assets and properties of the Company located at Ahmedabad, Baroda and Mumbai and deployed security guards at all the locations to safeguard the assets of the Company. He has filed a compliance report before this Court and since he did not have money in the Company s Account to defray the security expenses of safeguarding the assets of the Company, this Court vide order dated 15-7-1998 directed ICICI to deposit a sum of Rs. 5 lakhs with the O.L. provisionally and has further directed to all the Secured Creditors of the company to deposit Rs.2 lakhs every month with him, sharing amongst them ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs.1,32,38,600 from the sale proceeds of the assets of the Company, to the Company Paid Staff Salary Reserve Funds Account towards reimbursement of security expenses from the said account, no unitwise expenses details were provided. Similarly, no unit-wise break-up was provided for unpaid security expenses. It is further stated that even unpaid amount was not shown in the OLR. It is further stated that the O.L. has not disclosed the facts of theft, which was taken place at Vadodara unit and due to which huge loss has caused to the Company in liquidation. It is stated that a theft had taken place at Vadodara unit of Company in liquidation on 15-6-2003 and in this connection police had arrested three security Watchmen and offence CR No.32 of 2003 has been registered. The said matter was discussed in Sale Committee meeting of 19-7-2003 and it was decided to take reinventory and work out the losses due to theft. It is, therefore, stated in the said affidavit that amount of losses due to theft be first worked out and thereafter order for payment of security charges for Vadodara unit may be passed. The Court therefore passed an order on 19-7-2004 directing the O.L. to place on record as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o stated that he wrote a letter to the Jawaharnagar Police Station requesting them to forward the progress made with regard to the criminal case No. I 52 of 2003. He has further submitted that the valuer vide his letter dated 26-12-2004 has submitted a list of items found missing on comparing the inventory taken in 1999 and reinventory done in 2003. The valuer however, informed that the assets were not valued on the earlier occasion and therefore it was not possible for them to ascertain the value of the assets which were missing. He further stated that he had convened a meeting of the Sale Committee on 17-7-2003, wherein it was decided to call upon explanation of the security agency posted at the Baroda Unit of the Company and was also called to submit the details with regard to guards posted at the said premises with their full address. The security agency, namely, Industrial Personnel Security Services had forwarded the details vide its letter dated 23-12-2004 which are attached alongwith the said report. Based on this report, the Court has passed further order on 14-2-2005 directing the O.L. to place the valuation report which shows the value of the items including the mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ein he has stated that pursuant to the direction issued by this Court on 11-3-2005 and 4-4-2005 a meeting of Sale Committee was held on 7-4-2005 wherein it was suggested that Mr. T.V. Singh - partner of the security agency should give a Bank guarantee of a Nationalised Bank for an appropriate amount so that recoveries can be made from him for loss arising due to thefts at the Unit. Only on furnishing such Bank guarantee, the Sale Committee may consider to continue the said security agency at Baroda Unit. However, the said suggestion was not acceptable to Mr. T.V. Singh and hence the Sale Committee has taken a decision to remove the said security agency from the Baroda Unit of the Company with effect from 12-4-2005. He has further stated that the Sale Committee has decided not to make any payment to the said security agency and it should be removed from all the Companies wherever the said security agency was deployed by the O.L. It is further stated that the Sale Committee has also taken a decision not to make any payment to the said security agency in respect of all the Companies/Units wherever this security agency was deployed by him. It is further stated in the report that in pla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the Company in liquidation. Not only this, the said fact has not been disclosed before the Court and the Court was not made aware about it till the affidavit in reply was filed on behalf of the respondent No.8 - Union on 21-6-2004. Despite the fact that three security guards were involved and arrested by the Police, the security agency, namely - Industrial Personnel Security Services continued till 12-4-2005. The payment of security charges to this security agency was stated to have been made to the tune of Rs. 35,05,470 up to May, 2003 and because of the incidence of theft, no payment was made since June, 2003. But for the connivance or collusion of the security agency with the O.L. and/or persons from his office, these things would not have happened. 11. One more startling thing is that looking to the quantum or volume of missing items, theft could not have taken place in a day, i.e., On 15-6-2003. It must have been a continuous process and that too, in the presence of security guards. From the reinventory report of the valuer, Shri Rajendra R. Shah dated 26-12-2004, as many as 106 items were not found while comparing with the first inventory report. The value of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assets of the Company in liquidation and thereafter in the assets disposal process, many drawbacks and shortcomings either intentional or otherwise, found now-a-days in the various functions of the O.L., could have been avoided. 12. The Court is, therefore, of the view that various issues discussed hereinabove more particularly, deployment of the security agency, involvement of security guards in commission of theft, role of office of the O.L. in deployment of security agency and not taking proper and adequate steps in safeguarding the assets of the Company - are required to be closely scrutinised and proper inquiry and investigation is necessitated in the matter. The Court could have ordered to hold separate inquiry. However, the Court has already directed the Central Government to investigate the affairs of the office of the O.L. over the period of last 10 years while passing an order in OLR No. 61 of 2005 on 18-7-2005. These issues can also be looked into while undertaking such inquiry. Hence no separate order of inquiry is made in the present application. A writ of this order shall, therefore, be sent to the same authority forthwith. 13. As far as the prayer made in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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