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TMI Blog2004 (7) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... tlement - O.S.A. NOS. 175 TO 177 OF 2003 - - - Dated:- 26-7-2004 - Judge(s) : P. D. DINAKARAN., N. KANNADASAN. JUDGMENT The judgment of the court was delivered by P.D. Dinakaran J. - Heard all the parties. These appeals are directed against the order dated February 10, 2003, made in C.A. Nos. 1443 to 1445 of 2002 in C.P. No. 233 of 1999, in the matter of RPS Benefit Fund Limited (in liquidation), healing the wound of the depositors. Behind these appeals, there is a painful history of the sufferings of the innocent depositors, who invested their hard earned money with RPS Benefit Fund Limited, a financial company in liquidation. During the course of winding up proceedings of RPS Benefit Fund Limited in C.P. Nos. 233 to 238 of 1999, this court, by order dated July 20, 1999, appointed Mr. G. Masilamani, learned senior counsel as the chairman of the Inspecting Committee, assisted by his team of officers, who unearthed various misfeasance and malfeasance relating to the siphoning off the funds of RPS Benefit Fund Limited by P.G. Saranyan and his wife, Rajalakshmi, the appellants in the above appeals. The Investigating Committee found that the appellants herein have siph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mount paid by Hatsun Agro Products Limited towards the purchase of 81 per cent, of shares in Ajith Dairy Industries Ltd. shall be repaid to the depositors subject to the payment of capital gain tax in respect of the sale, as per the subsequent order of this court dated February 14, 2003, made in C.A. No. 18 of 2003 in C.P. Nos. 233 to 238 of 1999. But, by a further order dated March 25, 2004, it was modified to the effect that the capital gains liability was not really required to be made, as the same is beyond the scope of the order dated August 10, 2000. Out of the said sale consideration, viz., by sale of 81 per cent, of shares of the appellants in Ajith Dairy Industries Ltd. to Hatsun Agro Products Limited by order dated August 10, 2000, 20 per cent, of the principal amount deposited by the depositors was disbursed by an order of this court dated March 1, 2002, and another 20 per cent, of the principal amount was disbursed by another order dated January 23, 2003. Even though there are some more funds still available out of the said sale of 81 per cent, of shares of the appellants in Ajith Dairy Industries Ltd. to Hatsun Agro Products Limited and by the sale of movable and i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve months next before that date ; . . ." In fact, the Income-tax Officer also contended that the said capital gains tax payable by the appellants herein shall be paid out of the sale proceeds of the shares lying in credit with the liquidator to the Income-tax Department on preferential basis, as per section 530(1)(a) of the Companies Act, referred to above. But the administrator appointed by this court in the matters of RPS Benefit Fund Limited, objected to the same contending that section 530(1)(a) of the Companies Act is not attracted in the instant case, in view of the fact that Ajith Dairy Industries Ltd. got floated by siphoning off the funds of RPS Benefit Fund Limited, which were invested by the innocent depositors, whose interests are well protected by the order of this court dated September 29, 2000 and March 25, 2004, which were never challenged. After considering the rival contentions, the learned single judge, in his order dated February 10, 2003, dismissed all the CAs. holding that section 530 of the Companies Act was not attracted for the disbursement of the sale consideration of 81 per cent, of the shares of the appellants in Ajith Dairy Industries Ltd. Hence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siphoned off and diverted from that of RPS Benefit Fund Limited, which were invested by the innocent depositors, committing malfeasance, viz., an act which is positively unlawful, and misfeasance, viz., a lawful act of incorporating Ajith Dairy Industries Ltd. in an unlawful manner, while managing the affairs of RPS Benefit Fund Limited. Since 81 per cent, of shares of the appellants in Ajith Dairy Industries Ltd. was sold by an order of this court dated August 10, 2000, to Hatsun Agro Products Limited, with the consent of the appellants themselves, for a specific purpose, viz., the sale consideration was meant for repayment of funds to the innocent depositors, as per the order dated September 29, 2000, as reinforced by another order dated March 25, 2004, in our considered opinion, the said funds cannot be diverted for any other purpose, as rightly contended by Mr. G. Masilamani, learned senior counsel, and therefore, the funds lying with the official liquidator are not the funds available by winding up of RPS Benefit Fund Limited, but it is the sale consideration of 81 per cent, of shares of the appellants in Ajith Dairy Industries Ltd. and, therefore, section 530 of the Companies ..... X X X X Extracts X X X X X X X X Extracts X X X X
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