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TMI Blog2009 (7) TMI 784X X X X Extracts X X X X X X X X Extracts X X X X ..... s is an application by way of judges summons filed by the official liquidator acting as liquidator of M/s. Garvee Granites Ltd. (in liquidation). In the application filed under section 468 of the Companies Act, 1956, read with rule 9 of the Companies (Court) Rules, 1959 ( the Rules ), the liquidator prayed this court to direct the respondent to remit an amount of Rs. 80,76,906 with interest at 12 per cent per annum to the credit of the company in liquidation. 2. An affidavit is filed by the official liquidator in support of the application with the following allegations and averments. By an order dated 20-9-2001, in R.C.C. No. 6 of 2001 this court directed winding up of M/s. Garvee Granites Ltd. The official liquidator attached to this court was appointed as liquidator under section 449 of the Companies Act. The liquidator filed C.A. No. 32 of 2006 under section 477 of the Companies Act to summon the respondent, who is the ex-managing director, and examine him with regard to details of the quarry lands owned by the company in liquidation. The ex-managing director appeared before the court and furnished details of land owned by the company situated in different villages of Khamm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /B of Beerolu village. That the value of illegally mined granite is Rs. 80,76,906 is denied. During the examination of respondent under section 477 of the Companies Act the liquidator has not questioned the alleged illegal mining or enjoyment or possession of the properties by the respondent. Therefore, the present application for direction of payment is not maintainable. There is no material on record to show that the respondent is liable to pay the amount. The respondent has not misappropriated any amounts, and having filed a similar application earlier, it is not open to the official liquidator to file another application. 4. Learned counsel for the official liquidator and learned counsel for the respondent made their submissions reiterating their position as disclosed in the pleadings. A reference to these submissions is made at the appropriate place. 5. The basis for the present application under section 468 of the Companies Act is the report of the Assistant Director, Mines and Geology submitted to the official liquidator vide letter dated 16-3-2007. Some reliance is also placed on the statement of affairs by the respondent. The thrust of the argument of learned cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Companies Act. 9. In Liquidator, Janda Rubber Works Ltd. v. Collector of Bombay Deputy Custodian of Evacuee Property [1950] 20 Comp. Cas. 141 (East Punjab) AIR 1950 EP 204, the liquidator of M/s. Janda Rubber Works Ltd. (in voluntary liquidation), which was the owner of M/s. Universal Rubber Works, made an application to the company court under sections 216 and 222 of the Indian Companies Act, 1913, for a direction to the custodian of evacuee property to remove his seal and not to take possession of the properties of the company. The application was opposed by the Collector of Bombay, who was also the Deputy Custodian, challenging the jurisdiction of the company court to pass such an order. He also claimed that Universal Rubber Works belonged to Mr. and Mrs. Thomas Janda, the two directors of the company and not to the company itself. It was contended for the Custodian that the Bombay Evacuee (Administration of Property) Act, 1949, bars the jurisdiction of the court to interfere with anything done under the said Act and that in case of dispute as to ownership of the property, the Indian Companies Act has no power to adjudicate upon the dispute. The Division Bench of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the principles emerging from section 468 of the Companies Act as above, the point for consideration is whether the respondent can be said to be in the custody of Rs. 80,76,906. The answer must be in favour of the respondent and against the official liquidator for the reasons that follow. 12. The official liquidator filed Company Application No. 32 of 2005 under section 477(2) of the Companies Act, 1956, to summon Sri Dantuluri Raju, the respondent herein, to examine him as regards the details of quarry lands owned by the company in liquidation, as to their extent, location, survey numbers, etc., to direct the respondent to deliver possession of quarry lands and to direct him to account for profits made out of quarry lands and reimburse the loss that is sustained by the company in view of the transfer/alienation by the respondent subsequent to commencement of liquidation proceedings. This court issued summons on 9-2-2005. In obedience thereto, the respondent appeared before this court and he was examined by the court on 30-10-2007. During the course of examination, information was elicited from him regarding the public issue of 28,800 equity shares, the land owned by the comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ls furnished at page 16 of the prospectus. Reading together it cannot be said that the company or its officials played any fraud or resorted to misrepresentation in revealing the actual land purchased. From the prospectus nothing would fall to support the case of the liquidator. 14. Coming to the report of the Assistant Director, Mines and Geology it must be mentioned that the lands were inspected by the Assistant Director, Mines and Geology on 7-3-2007 and 14-3-2007, along with the surveyor from the office of the Tahsildar, Tirumalayapalem. During the inspection he found that in respect of survey No. 13 of Gudurupadu one K. Prabhakar obtained quarry lease and in respect of land in survey No. 389/B of Beerolu Village M/s. Unique Enterprises were quarrying after obtaining lease from the Department of Mines and Geology. The rest of the lands in survey Nos. 16/A and 16/C of Gudurupadu, survey No. 404 of Kachirajugudem Village and survey No. 35/A of Arekodu village, there was illegal mining of black granite mineral. On enquiries the Assistant Director, Mines and Geology found that quarrying was done seven years prior to date of inspection. From these the Assistant Director, Mines a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the land in survey No. 13 leased out to K. Prabhakar. Similarly, for the period from 2002-03 to 2006-07 Sri E. Anjaneyulu, proprietor of M/s. Unique Enterprises in whose favour quarry lease was given, worked the quarry and black granite of the value of Rs. 5,44,644 was extracted from the land in survey No. 389/B of Beerolu village. Except these two items, in all other lands there was illegal quarrying. In the absence of any clinching evidence to show that it is the company or the respondent as its managing director who resorted to illegal mining and extracted black granite of considerable value, it is not possible to draw any inference that the respondent is liable for the amount claimed. Therefore, the application under section 468 of the Companies Act is not maintainable. However, if the liquidator is able to get the information regarding those persons who illegally conducted mining operations in the lands belonging to the company in liquidation, it is always open to the liquidator to file appropriate application against those persons and claim the money. 16. This company application is devoid of any merit, and the same is accordingly dismissed. - - TaxTMI - TMITax - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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