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TMI Blog2004 (6) TMI 332X X X X Extracts X X X X X X X X Extracts X X X X ..... ether this Hon ble Court will be placed to direct the Centurion Bank Limited and its dismantling agent M/s. R.K. Steel Syndicate to make good of the loss of value of the machineries removed from the site at Khandla, Gandhidham at the time of removal of lease machineries to Centurion Bank Limited. ( c )for such other and further directions as this Hon ble Court may deem fit and proper." 2. On 7th January, 2003, after hearing Counsel for the parties, I proceeded to grant directions in terms of reliefs ( a ) and ( b ), however, after that order was dictated in open Court, it was brought to my notice by the Counsel for the Centurion Bank Limited (hereinafter referred to as CBL ) that the machinery which was dismantled and made over to CBL has already been sold. In the light of the said statement, Counsel for the CBL was asked to disclose the details about sale transaction, on affidavit. Consequent thereto, affidavits of CBL as well as M/s. R.K. Steel Syndicate (hereinafter referred to as RKS ) have been filed, so as to disclose the nature of transaction and the steps taken from time to time on the site for dismantling and for removal of the goods in question. The affidavit of M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ises. The seals were in tact which were sealed on locks. All the aforesaid representatives took round inside the factory premises and saw that the machinery items as mentioned in the Manifesto/Export statement No. 4032 dated . . . for the vessel Winco. A copy of the same is attached. Mr. Hazefa Abbas representative of M/s. Al-Qahtani Pipe Coating Terminal Saudi Arabia has specifically and personally verified and identified each and every item as listed in the aforesaid statement No. 4032. We, all the representatives came across with identification marks viz. Serial No. ... as mentioned in the Manifesto on each and every item. Some of the items have the logo of the company marked in plant A.Q.H. in the triangle. In some cases stickers of Al-Qahtani (AQH) are available. All the items as per the Manifesto/statement No. 4032 were found as and where it lies basis except one Hopper. Some of the parts forming structural steel platforms/conveyor extension are available in dismantle condition but have no marking over it. Some of the small pieces from the equipment which formed part of the plant were also found in facility . In addition to containers as per the statement there are s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction to the applicant and inspection was completed within 3 weeks from the date of order, in compliance thereof. Accordingly, after giving the inspection to the applicant viz. Al-Qahtani Pipe Coating Terminal on 20-11-2002 and copy of the minutes drawn at site is annexed as Ex. "A" to these minutes. At the site present were representative of Al-Qahtani Pipe Coating Terminal, applicant, their valuer represented by M/s. Gandhi Associates, representative of Official Liquidator apart from the security provided at the site by the Official Liquidator. Subsequent thereto, the applicant requested to fix meeting in connection with satisfying the claim of ownership of the plant and machinery claimed by the applicant. Shri Rashmikant from Federal Rashmikant submits that on completion of inspection, it was observed that by and large, all their machinery supplied by their client are available at site, except one item i.e. Hopper No. 1974.1 placed Sl. No. 15 of the List Ex. "B". Support of their claim about ownership of the machinery as per the list Ex. "B" they produced the certified copy of various bills leasing certified by Indian Embassy, Saudi Arabia, further supported by Chambe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In this view of the matter, therefore, as the ownership of the Applicant of the Plant and machinery, details of which are in Schedule "I" to the Plaint is now established. The Company Application No. 32 of 2003 is granted in terms of prayer clause (a). Dismantle, removal and transportation of the machineries shall be at the cost of the Applicant. The Official Liquidator shall give certified copies of the documents relating to the machineries that may be found by the liquidator in the record of the company. The Applicant shall also deposit with the liquidator an amount of Rs. 1,00,000 towards security charges. The liability of the Applicant to pay the security charges, however, shall be finally determined after the liquidator puts in a report for recovery of security charges from various persons including creditors, Company Application No. 32 of 2003 is disposed of. 2. So far as Company Application No. 486 of 2002 is concerned, it is filed by ONGC for return of its pipes, 396 in number. Admitted position appears to be that these pipes are owned by ONGC and therefore, the ONGC is entitled to remove the same. The learned Counsel appearing for ONGC points out that an amoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be removed for reasons which need not be elaborated here - except to state that the modalities were being worked out by the Official Liquidator. 6. In the meantime, CBL had also sought permission from this Court for removal of items belonging to CBL. By orders dated 27th January, 2003 and 10th April, 2003, CBL was permitted to take away 68 items which were leased by them to company in liquidation (Otoklin). The order dated 27th January, 2003 passed by Justice P.V. Kakade reads thus : "Heard learned Counsel for the parties. Also heard representative of the Official Liquidator. This Chamber Summons is taken out by the plaintiff for directions of this Court to permit the Court Receiver, High Court, Bombay, to take possession of the suit equipment, more particularly described in Exhibit "A" to the plaint and in the schedule. After hearing the parties this court by order dated 3rd June, 2002 directed the Court Receiver to take inventory to ascertain whether the goods are indigenous or imported to meet the arguments advanced on behalf of defendant No. 2 Union of India that customs duty is not paid on the said goods. Consequent upon that the Court Receiver made the inventory and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directed the receiver to take possession thereof. Thereafter, the Receiver went to the site for taking possession but actual possession could not be taken on account of the objection raised by customs authorities regarding the non-payment of the customs duty by the Company. Thereafter, Union of India was joined as defendant No. 2 to the suit. 3. By an order dated 3rd June, 2002, this Court directed the applicant to produce before the receiver originals of true copies of the invoice regarding the title to the leased equipment so that the receiver could ascertain whether the leased equipment was imported or indigenous. By a further order dated 27th January, 2003 passed in Chamber Summons No. 1013/01 in Suit No. 45/98, this Court directed that the Court Receiver shall take possession of the leased equipment as per the inventory list of the technical assistant s report. The Court, however, directed that further steps would be taken after obtaining the necessary directions from the Company Court. Hence, present application has been moved for the directions to the Official Liquidator to hand over the leased equipment to the Court Receiver. 4. From the orders passed by the Court refer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esentative of the Court Receiver along with the representatives of CBL and the said RKS, visited the site on 1st July, 2003. It is apposite to advert to the Minutes drawn on 1st July, 2003, which reads thus: "Kandla Gandhidham Dt. 1-7-2003. Subject : In the matter of M/s. Otoklin Plants Equipments Ltd. (in liqn.). Minutes drawn at the time of handing over movable assets lying at the factory premises situated at above. Pursuant to office order No. 782 of 2003 dated 26-6-2003 we had been i.e., Mr. C.L. Saraiya and Mr. S.M. Shetty of this office to handover movable leased assets belonging to the Centurion Bank to the Court Receiver as per Court s order dated 10-4-2003. We reached to the abovesaid premises at 11.45 A.M. we round following persons present there: (1)Mr. C.L. Saraiya (2)Shri S.M. Shettyrepresentative of O.L. Mumbai. (3)Mahesh Ranerepresentative of Centurion Bank. (4)Shri R. Srinivasan (5)Mr. Mangesh Jogrepresentative of Court Receiver (6)Mr. Rao - valuer appointed by Court Receiver. (7)Mr. Dhiraj Kumar-rep. of C.D. Securities (8)Mr. Rajendra Singh Shamji (9)Mr. U.L. Laijwala-rep. of Bank of Baroda, IBBS Branch, Nariman Point. We informed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... employing 51 trucks between 3rd July, 2003 to 9th August, 2003 (weighing around 650 Tonnes in 48 trucks out of the 51 trucks. Three trucks were not weighed as it carried Air Compressor, Trailer and Godrej Fork Lift Truck as one unit). From the several affidavits filed on record by the parties including the Customs Authority and the Security Agency, it is more than established that till the dismantling process commenced on 3rd July, 2003, goods belonging to both the CBL as well as AQH were lying on the site and constituted the Plant and Machinery of the Company in Liquidation (Otoklin), which was under the control of the Official Liquidator. Moreover, dismantling process commenced only on 3rd July, 2003 and continued till 9th August, 2003 only; and the dismantled goods were immediately removed in phased manner, till 9th August, 2003. The CBL as well as RKS have accepted this position on affidavit, that the dismantled goods have been removed in 48 truck loads from time to time during that period in addition to three trucks carrying complete units of Air Compressor, trailer and Godrej Fork Lift truck i.e., 51 trucks. As mentioned earlier, the position as on 3rd July, 2003 that emer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he representatives of CBL and RKS along with the workers employed by RKS were on the site during July and August, 2003 and in fact, carried out dismantling work and have removed all the dismantled goods during this period by employing 51 trucks. It was suggested by CBL and RKS that the possibility of ONGC having subsequently removed the goods belonging to AQH cannot be ruled out. However, that suggestion, to my mind, cannot be sustained, for more than one reason. Inasmuch as by order dated 20th February, 2003, ONGC was permitted to take away the 396 pipes lying on the site. The said pipes were kept far away from the place where the plant and machinery was situated. Besides, there is nothing to even remotely suggest that the agencies of ONGC had engaged in the dismantling of the plant and machinery, without which it was not possible to remove the same as one single unit because of its sheer size and weight. Moreover, it is seen from the record that ONGC employed transport agency, who has transported 367 pipes during 19th August, 2003 till 24th November, 2003 out of the 396 pipes. Each of the truck which carried the pipes were issued tranship permits, and the same have been duly regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion, for that matter, AQH, have been dealt with in any manner by them. Interestingly, it is conceded before this Court that the goods purportedly belonging to CBL were dismantled by RKS under the supervision and instructions of the representative of CBL; and sold on the site as scrap to M/s. Deepak Steel and Pankaj Traders of Rajkot, who in turn, were expected to take away the same as scrap items. Notices were issued to the proprietors of the said firms, but in spite of notices, they have neither appeared before this Court, nor filed any reply controverting the serious allegations. At any rate, it is not the case of CBL or RKS that the representatives of M/s. Deepak Steel or Pankaj Traders might have carried the goods other than the scrap items sold to them. To my mind, from the totality of circumstances which has come on record, there is substance in the stand that the goods belonging to AQH have been dismantled during the process of dismantling the goods belonging to CBL. It has come on record that the dismantling process was carried out continuously for almost 17 days by 47 workers and the workers were althroughout on the site. There is nothing to show that dismantling was carr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been rendered either in damaged condition or useless. It is also seen from the record that all the dismantled goods have already been removed from the site by the representatives of CBL and RKS on the pretext that the same belonged to CBL. It is stated on behalf of the RKS that in fact RKS has sold the dismantled goods in the form of scrap to the two dealers named earlier, who in turn, promptly took away the goods from the site. Since the goods have changed its original form and also changed hands, it is not possible for this Court to issue direction to CBL and its dismantling agent RKS to bring back the goods, so as to restore status quo ante. Therefore, the question is whether in this summary proceedings, it is possible for this Court to direct the CBL and its dismantling agent RKS, who worked on the site together for dismantling and removal of the goods, to pay the value of the goods belonging to AQH, which have been taken away and to make good the loss or damage caused to the left over items of AQH. This, to my mind, cannot be answered in the present proceedings. For, the affidavits which have come on record indicate that both sides have claimed ownership with regard to some ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stoms duty, etc. This is a serious matter and it is necessary for the concerned higher authorities to examine the cause of such lapses and to take appropriate corrective action against the concerned Officers including taking steps for recovery of the revenue. That be done as expeditiously as possible, and compliance report be submitted to this Court within six months from the receipt of writ of this Court. 15. Copy of this order be forwarded to the Secretary, Ministry of Company Affairs and Regional Director. Copy of this order be also forwarded to the appropriate Authority of the High Court, who will examine the nature of action to be taken against the concerned Officers of the Court Receiver; because in my opinion, without the laxity or collusion of the Officers of the Court Receiver and the Official Liquidator, the present situation would not have arisen. It is obvious that they have failed to discharge their duty diligently, which was expected of them. Whether it be a case of laxity, or collusion of the Officials, in either case, it is a serious matter. As mentioned earlier, what is more concerning is that if the goods belonging to AQH, which were admittedly imported goods, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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