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TMI Blog2013 (5) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... idator arrives at the conclusion that the deeds and acts of ex-directors was of such nature which was not expected of a prudent person and thereby it has resulted in non-recovery of the said amount, fault cannot be laid on the door steps of the ex-directors. For the reasons aforesaid, point Nos.(i) and (ii) hereinabove is to be answered against the applicant-official liquidator and in favour of respondents - ex-directors of the company. Dismissed. - C. O. P. No. 138 of 2000,C.A. No. 752 of 2007 - - - Dated:- 21-1-2013 - Aravind Kumar, J. For the Applicant V. Jayaram. For the Respondent Rajeshwar and S. Rajendra. ORDER:- This application by the Official Liquidator is filed under Section 543 of Companies Act, 1956 alleging that respondents being Directors of the company M/s. Zenith Power Constructions (I) Limited (company in liquidation) have abused their fiduciary position, committed breach of trust by non-furnishing the books of account for completing winding up proceedings and on account of such omissions and commissions committed by respondents-1 to 3, it has resulted in loss being caused to the company (in liquidation) under the following heads: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d been advanced and their whereabouts being not known to the official liquidator which is attributable solely to the Ex-Directors of the company, respondents-directors have to make good the said loss occasioned to the erstwhile company to the extent of Rs. 12,88,742/- with interest thereon at 18% p.a. He would also draw attention of the Court to the evidence of R.W. 1 wherein it has been admitted in his cross-examination dated 14.12.2010 that official liquidator had issued several notices seeking particulars of the sundry debtors and in view of the same, adverse inference has to be drawn that they have not produced the said details and as such, respondents holding the post of Directors of the erstwhile company in fiduciary capacity and as trustees of the company in liquidation, they have to be made answerable to the claimants and render themselves liable to make good the loss sustained by the company and body of contributories. It is also contended that they have not discharged their obligation in protecting interest of the company as well as its contributories and thus committed acts of misfeasance namely, committed breach of trust in relation to the company. 6. Per contra, Sri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and respondent No.2 cannot be held responsible. He would also submit that respondent No.1 has filed statement of particulars and he has also filed the said particulars based on the records and there is no suppression of facts from the official liquidator and there is no act of misfeasance and any amount due to the erstwhile company cannot be recovered from respondent Nos. 1 to 3 particularly as there is no wilful act attributable to any of the Directors of the erstwhile company. 8. Having heard the learned Advocates appearing for the parties and on perusal of the depositions, exhibits and after considering arguments advanced by respective learned Advocates, I am of the considered view that following points would arise for consideration: 1. "Whether Official Liquidator has been able to establish that there is any wilful suppression of materials which has resulted in non-recovery of amounts due to the company in liquidation? 2. If so, whether such acts amounts to misfeasance and amount so not recovered by the Official Liquidator is required to be recovered from the respondent-Directors? 3. What order?" 9. Company in question undisputedly came to be wound up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r recovery of amounts due to the company. Keeping the provisions of the Act in mind in the above referred background, when facts on hand are required to be examined. 11. At the outset, claim of respondent No.2 is required to be examined namely as to whether respondent No.2 can be construed as to have committed wilful breach of trust which as a director he was holding in a fiduciary benefit of assets of the company. As already noticed herein, second respondent claims to have tendered his resignation to the directorship of the company on 17.12.2001. On submission of such letter of resignation, Board of Directors admittedly and undisputedly took up the same for consideration in its Board meeting held on 29.10.2002. However, a copy of the said letter was also forwarded to the creditor namely bankers who in turn did not approve or accept resignation letter tendered by respondent No.2 on the ground that guarantee to the loan borrowed was not in the capacity of being a co-director of the company. Assigning this reason, resignation letter was not accepted by Board of Directors of the company in liquidation. In fact, letter also came to be submitted by respondent No.2 to ROC which is duly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e initiated recovery proceedings for recovery from them. It is specifically contended that all the requisite information sought for by Official liquidator was furnished. Admittedly, official liquidator has recovered a sum of Rs. 4,93,492/- from the sundry debtors. The said recovery is based on the very same list furnished along with the statement of particulars by respondents-1 and 3 apart from furnishing other details as sought for. When the O.L was able to recover this amount, no answer is forthcoming from the pleadings for not initiating proceedings against other sundry debtors. Contention raised in the application that it was on account of details not being furnished by the respondents-1 and 3 is too far fetched and cannot be accepted. In fact, major debtors of the erstwhile company are: (1) Andhra Pradesh Technological Services Limited (APTS) Rs. 16,55,530/- (2) National Informatics Centre New Delhi Rs. 9,62,500/- (3) A.P. Pollution Control Board, Hyderabad Rs. 1,33,452/- Total: Rs. 27,51,482/- Total amount claimed to be due from the sundry debtors is Rs. 37,22,034/-, sum total of three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neral. Until and unless acts of each of the director is established, this Court would not be justified in holding the acts of misfeasance against the ex-directors. There is no specific charge against any individual director. Allegations of negligence have been made enmass against ex-directors and official liquidator cannot proceed against the ex-directors for misfeasance or breach of trust resulting in the alleged loss caused to the company. From the pleadings, it is clear that allegations made against ex-directors are enmass and on this ground alone application is liable to be dismissed. Hence, contention raised by the official liquidator in the application cannot be accepted. 14. Now turning to the second issue namely, as to whether ex-directors of the company in liquidation have not furnished information with regard to the loans and advances said to have been made by the erstwhile company in a sum of Rs. 12,88,742/- by examining said contention with reference to pleading and evidence available on record, it would emerge that as per the statements of particulars furnished by the first respondent after company was ordered to be wound up, it has been stated in Schedule III to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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