9911796707
TMI Blog2013 (4) TMI 335X X X X Extracts X X X X X X X X Extracts X X X X ..... eing present in this application hence, application stands rejected. - Co. Application No. 1876 of 2007,Co. Petition No. 205 of 2001 - - - Dated:- 24-1-2013 - Aravind Kumar, J. For the Applicant V. Jayaram. For the Respondent Smt. Nalina Mayegowda. ORDER:- 1. This application is filed by Official Liquidator under Section 543(1) of the Companies Act, 1956 read with Rule 260 of the Company (Court) Rules, 1959, contending inter alia that the Directors (respondents herein) of the Company (in liquidation) did not handover the Investments' namely the Share Certificates as noted in the Audited Balance Sheet duly signed by the Ex-Directors in Schedule ₹ 4' worth Rs.3,66,04,620/- and as such they are liable to make good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs by communication dated 07.04.2003. On receipt of the same, the 2nd respondent herein by communication dated 02.05.2003 is said to have complied with the discrepancies pointed out by the Official Liquidator in respect of the Statement of Affairs filed. The office copy of this communication from the 2nd respondent herein is appended to the Statement of objections filed by the 1st respondent herein as Document No.2. A perusal of the same would indicate that it has been duly acknowledged by the office of the Official Liquidator on 02.05.2003 itself. It would be appropriate to extract the relevant paragraph of the said communication which reads as under since same has a direct bearing on the defence raised: "The original National Savings Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver of these original Share Certificates, the Official Liquidator has not been able to recover the said amount and thereby it has resulted in causing loss to the shareholders and respondents being Ex- Directors were discharging their duty as Directors in fiduciary position and having acted against the shareholders, thereby they have committed 'Breach of Trust' and as such the respondents would be liable to pay the said amount to the Official Liquidator. Said contention requires to be examined with utmost circumspection for the following reasons: Breach of Trust refers to something, which the Officer or a Director of a Company has done wrongly by misapplying or retaining in his own hand any monies of the Company or by which the Company's p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d against as Joint tort-feasors unless it is proved to be as such. There cannot be any order against the Director's enmass for all the acts of misfeasance without specific finding against each individual for his responsibility and for particular act of misfeasance. If it is proved by the Official Liquidator that Directors had taken no steps to recover the monies due to the Company, then burden shifts on the Directors to produce evidence and to establish contrary and further establish that they are not liable to pay the said amount. Misfeasance proceedings may also be taken against the Ex-Director in relation to a 'breach of trust' of the creditors when the company becomes insolvent. 6. Keeping these principles in mind, when the facts on h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f filing of statement of particulars. The Official Liquidator also have been notified that the company still carries the equity shares in the Company and the original of the same are available with the Company, which would be handed over on instructions from the Official Liquidator. At this juncture itself, it would be appropriate to know the very plea put forward by the Official Liquidator in the application in question particularly at paragraph 6 which reads as under: "........Ex-Directors have rectified the defects in statement of affairs except non-delivery of investments other than marketable securities." The pleadings and the records would not indicate about Official Liquidator either rejecting the explanation given by the Ex-Dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uct of the business of a Company would not come within the four corners of misappropriation or retention of the Companies property or any act amounting to misfeasance and breach of trust in relation to the Company or its property. Even in the present application Official Liquidator does not state what was the value of these shares as on the date of winding up order was passed or even as on the date of filing of statement of particulars by ex-directors so as to arrive at a conclusion that on account of such non-handing over of shares certificates it has resulted in financial loss to the company (in liquidation) which otherwise would not have occurred. 9. For the reasons aforesaid, I am of the considered view that none of these ingredients ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
