9911796707
TMI Blog2008 (1) TMI 612X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under section 468 of Companies Act, 1956, (Companies Act, for brevity), seeking a direction to respondents to deliver possession of debtors' ledger for 1995-1996 and other books of account and records of the company to the applicant. The application is filed by Official Liquidator (OL) attached to this Court acting as liquidator of M/s. Safe Pack Polymers Ltd., (in liquidation). First respondent is Ex-Managing Director and respondents 2 and 3 are former Directors of the company. 2. The affidavit filed by OL in support of Judges summons shows that applicant company was directed to be wound up by order dated 29-4-1999 in C.P. No. 69 of 1997. OL attached to this Court was appointed as liquidator. He issued notices dated 15-5-1999 under sections 454 and 455 of Companies Act to respondents requiring them to file Statement of Affairs (SoA), deliver assets, books of account and records of the company. Later he took possession of the assets and records available at the premises of company situated at Nalgonda as well as Hayathnagar. During the verification of SoA under the head 'Trade debtors', it was noticed that M/s. The Waterbase Limited has to pay an amount of Rs. 3,24,000 to the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely. First respondent addressed a letter on 19-8-1999 to OL informing that some books are with their auditor for preparation of SoA and requested time for submission of books. On 12-10-1999 first respondent submitted SoA vide letter dated 30-9-1999 inter alia informing that the records had been destroyed by militant labour and workers which only shows that first respondent failed to deliver possession of the records though they were with auditor. On 19-8-1999 representative of first respondent handed over only properties and stocks. Whatever available records in the custody of OL have been verified and found that debtor ledger for 1995-1996 is not available therein. Along with report three documents referred therein have been annexed. 6. Learned Counsel for OL submits that initially first respondent informed that the records are with auditors for preparation of SoA. Subsequently by submitting SoA with letter dated 30-9-1999 first respondent informed that many of the records have been destroyed by militant labour and that when the records were handed over by representative of first respondent the ledger for 1995-1996 was not handed over and therefore first respondent and other resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of the records to deliver forthwith to the liquidator. 9. In case persons having custody of books of account/records failed to deliver possession to liquidator, what is the course open to liquidator. Section 468 of Companies Act confers general power on Company Court in cases of winding up by Court. The same reads as below. "468. Delivery of property to liquidator.--The Court may, at any time after making a winding up order, require any contributory for the time being on the list of contributories, and any trustee, receiver, banker, agent, officer or other employee of the company, to pay, deliver, surrender or transfer forthwith, or within such time as the Court directs, to the liquidator, any money, property or books and papers in his custody or under his control to which the company is prima facie entitled." [Emphasis supplied] 10. An analysis of the above provision would show that contributories of a company and officer or employee of company can be directed to pay, deliver, surrender or transfer forthwith to OL any money. They may be directed to deliver property or books of account to which a company is prima facie entitled to the liquidator. The words 'at any time afte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs' ledger showing the above transaction was not submitted by the management of company. Taking cue therefrom the present application is moved. Therefore three years after taking possession of assets and records of the company from the representative of first respondent during the course of hearing, C.A. No. 614 of 2001, liquidator realized that the debtors' ledger for 1995-1996 was not handed over. The case of liquidator is that said ledger is very much available with the respondents but they are not willing to handover the same. This is however strongly refuted by learned Counsel for respondents. 12. In support of plea that first respondent is withholding debtors' ledger for 1995-1996, learned Counsel for OL placed reliance on three documents. First one is letter dated 19-8-1999 addressed by first respondent informing OL that the books of account have been submitted to auditors for preparation of SoA and that he would submit same as soon as the process of preparation of SoA is completed. In this letter nowhere first respondent admits that debtors' ledger for 1995-1996 was also handed over to the auditors. Therefore this document is of no help nor it proves allegation of OL that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were destroyed either by militant labour or workers. 15. The third document is report of the two Senior Estate Assistants in the office of OL stating that they have taken possession of the premises by locking and sealing the factory and that Sri Venumadhava Varma who is authorized by first respondent to hand over properties of the company. This is also does not in any manner help the liquidator. 16. Section 468 of Companies Act requires contributory and officer/employee of the company to handover the records to which the company prima facie entitled to, which means only records that are available. Indeed, section 456(1) of the Companies Act also empowers OL to take custody of records to which company is entitled and any other document or effects. If the records are not available for any reason either because of act of God or because they were destroyed in fire by no stretch of imagination it can be held that the company in praesenti would be prima facie entitled to such records. When the records are destroyed for whatever reason directing the contributory or officer or employee of the company or former director to hand over books of account and debtors' ledger would amount to a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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