9911796707
TMI Blog2010 (2) TMI 597X X X X Extracts X X X X X X X X Extracts X X X X ..... he same. And for good measure, though there was no actual payment and discharge of the loan transactions it is, with impunity, reiterated in the pleadings in relation to this application, though sought to be justified on untenable premises. Insofar as the alleged criminal or civil misconduct of the office of the Registrar of Companies is concerned, in view of the apparent irregularity in the conduct of the concerned Registrar of Companies at the relevant point of time, it would be for the Central Government to take any action as against the said officer if it is so inclined. Accordingly, the present application stands disposed of while directing the Official Liquidator to initiate appropriate proceedings against the concerned respondents. The office of the Registrar of Companies is directed to delete the entries made in the Register of Charges on the basis of two sets of Form Nos. 13 and 17, dated 16-7-1996 and 2-8-1996, respectively, filed on behalf of the respondent-company and registered on 29-10-2001 and 1-11-2001, as the same have been entered contrary to section 141 of the Act. - C.A. NO 1483 OF 2006 AND C.P. NO. 82 OF 2000 - - - Dated:- 24-2-2010 - ANAND BYRAREDDY, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lgaum against the company, it is at that point of time, that the applicant-bank claims to have learnt of the statement of affairs filed before the Official Liquidator, along with an affidavit of respondent No. 4 dated 27-12-2001 and that this has been supplemented by a Joint Affidavit of Concurrence, dated 11-2-2002, filed by respondent Nos. 4 to 9. It is the applicant s case that the above statement of affairs does not disclose the charge created in respect of the assets offered as security for the abovesaid loan transactions with the applicant. On the other hand, it generally declared that all charges created had been satisfied. The applicant therefore sought a search of the records of the Registrar of Companies (hereinafter referred to as "the RoC" for brevity). It was found that the above loan transactions were shown as having been satisfied as on July 10, 1996, in respect of Rs. 250 lakhs and on 29-10-2001, in respect of Rs. 50 lakhs. 6. The applicant had therefore, filed an application before this court in C.A. No. 366 of 2004, seeking a direction to the Union of India to prosecute the respondent-directors of the company in liquidation as well as the Registrar of Companie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 of the Companies Act in favour of the applicant-bank in respect of the charges created under the above loan transactions. The applicant had found on inspection, in the year 2003, that the loans were indicated as having been satisfied in full. True copies of Form No. 17 dated 2-8-1996 and 16-7-1996, had been obtained in this regard. It was also found that, inexplicably, entries in the Register of Charges were however made only as on 29-10-2001 and 1-11-2001, respectively. 9. Shri Naik, would point out that insofar as the explanation put forth by the respondent-director is concerned, it is claimed that the day-to-day management of the company in liquidation was vested with one Vijay V. Kamat, executive director and one Srinivas R. Nayak, whole-time director. It is claimed that these two had, without the knowledge or the authority of the board of directors, fraudulently availed of loans to the extent of Rs. 3 crores from the applicant and had appropriated the same for their personal benefit. The sanctioned loans which were remitted to the account of the company with M/s. Vijaya Bank had been illegally withdrawn with the connivance of the bank officials in respect of which crimin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating to the charges created on 18-3-1996 dated 16-7-1996, only on 1-11-2001. 15. The Registrar of Companies now reports that no records are available at this point of time to ascertain whether notice was issued to the applicant on the filing of the above Form Nos. 13 and 17. 16. It is the opinion of the Registrar of Companies that it is difficult to hold that false particulars have been wilfully furnished in the two sets of Form Nos. 13 and 17 filed. 17. The Registrar of Companies has also expressed that as regards false declarations made in the statement of affairs are concerned, it would be for the Official Liquidator to initiate action. 18. The Registrar of Companies also offers an opinion that the forms filed are only to seek rectification of incorrect and invalid registration of the invalid charge and does not really evidence satisfaction of the loan transactions. 19. Shri Naik contends that the above reasoning and opinions expressed by the Registrar of Companies is misleading and mischievous and ought to be seriously viewed by this court. It is pointed out that the Registrar of Companies has no power to rectify the entries in the Register of Charges even ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the capital funds, which is about Rs. 189 lakhs and hence, there is disbursal of an excess sum of Rs. 111 lakhs, in violation of guidelines. 25. The board of directors had taken further corrective steps in informing the Registrar of Companies of the sordid affair and filed Form Nos. 13 and 17 in respect of the above transactions in order to rectify the invalid registration of the invalid charges. It is only after satisfying himself or the illegal transactions, that the invalid entries have been rectified. 26. It is contended that the present application is not maintainable in law. The appropriate course is to file a complaint before the jurisdictional criminal court on the baseless allegations. 27. It is further contended that as laid down in Deonarayan Prasad Bhadani v. Bank of Baroda Ltd. [1957] 27 Comp. Cas. 223 (Bom.), ultra vires borrowing beyond the power of the company or beyond the powers of the directors, does not have the effect in law of creating a debt and any instrument thus created is void. 28. It is also contended that the funds have not been utilised for the benefit of the company and have been siphoned off for the personal benefit of the erra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mere misuse of funds by the errant directors named above would not efface the charges recorded in terms of section 125 of the Act. 32. This court had directed the Registrar of Companies to hold an enquiry on the basis of the representation to be made by the applicant and to act in accordance with law. 33. As the Registrar of Companies has now filed a report to state, in effect, that no further action is warranted the question that would arise for consideration is whether the facts and circumstances warrant this court to issue directions as prayed for. 34. As can be seen from the tenor of section 621, a court shall take cognizance of any offence against the Act, which is alleged to have been committed by any company or any officer thereof only on the complaint in writing of the Registrar, or of a shareholder of the company or of a person authorised by the Central Government in that behalf. It is not contemplated that such a complaint can also be compelled to be made by this court. Especially so when the Registrar of Companies who was specifically directed to enquire as to whether there was a violation of the law as complained and the Registrar of Companies, in turn, exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. The Registrar of Companies was not competent to receive the said Form Nos. 13 and 17 for purposes of purported rectification of the charges duly registered. The Registrar of Companies in his report, understandably, has down played the gross irregularities (though the present incumbent may not be answerable for the same) for the obvious reason that otherwise he would have the unhappy task of bringing it to the attention of his superiors in order that action may be taken against the person responsible, with possible criminal action. 37. Insofar as the first aspect is concerned, sub-section (2) of section 621 lays down that sub-section (1) will not apply to any action taken by the Liquidator of a company in respect of any offence alleged to have been committed in respect of any of the matters included in Part VII (sections 425 to 560) or in any other provisions of the Act relating to the winding up of companies. There is an obviously false statement made in the statement of affairs filed and endorsed by the deponents of all the affidavits filed in support of the same. And for good measure, though there was no actual payment and discharge of the loan transactions it is, with im ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
