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TMI Blog2013 (5) TMI 1075X X X X Extracts X X X X X X X X Extracts X X X X ..... KSSPL filed Company Application No. 1334 of 2008 for payment of its bills for providing security services at the factory premises of ICL situated at 25 KM, Rohtak, Jind Road, Haryana for a period of five years, i.e., from August 2003 to August 2008. In the said application, the Court passed the following order on 27th August 2009: "Co. Appl. No. 1334 of 2008 in C.P. No. 222 of 1999 This is an application moved by M/s. Keshav Security Services Pvt. Ltd. for payment in respect of security services provided at the factory premises for the company in liquidation situated at 25 KM, Rohtak, Jind Road, Haryana. Arguments heard. Since this is a claim pertaining to a period of more than five years, i.e., from August, 2003 to August, 2008, the Official Liquidator is directed to ascertain the full particulars of the services stated to have been provided by the Applicant, after determining the number of staff deployed from time to time and their proper identification. The Official Liquidator may also verify the requisite details of the ESI provident fund etc. in this regard. At the same time, Mr. I.C. Singhal, ex-Managing Director of the company, who is present in Court, states that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot be locked and sealed. The security guards of KSSPL neither produced any identity cards nor any attendance register for verification. Despite a letter addressed to KSSPL by the OL on 27th November 2009 no information regarding security staff deployed at the factory premises of ICL was furnished. The team deputed by the OL found the following items at the factory site which were verified by Mr. I.C. Singhal, a former Director: "1. Glaze Preparation Department (i) Blungers (Concrete on steel pillar) (ii) Glaze tank 2. Glabe Fixing and Storage Department (i) Kiln & Consumable Ceramic Roller (Incomplete) (ii) Roller Kiln Glaze FAB 3. Utility Services (i) Oil storage and one tank and supply system underground (CC Steels) (ii) Vertical dryer and accessories." 5. The OL's team confirmed that the following items were missing from the factory site: "A. Weighing Department (i) Weighing scale B. Ship Preparation Department (i) Drum mill including accessories (steel) (ii) Slurry sieves (iii) Ship house platform (fully damaged) C. Spray Drying Unit (i) Dryer unit (ii) Take off conveyor on steel from D. Pressing & Drying Department (i) Hydranlic Press ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valuer, the SHO, Police Station Julana, District Jind (Haryana), Mr. I.C. Singhal, ex-director and secured creditors, i.e., IFCI, ICICI, IDBI, Central Bank of India ('CBI'), State Bank of India ('SBI') to be present during the site visit. The aforementioned persons along with the officials of the OL visited the factory site on 6th February 2010. Inter alia the minutes of the site visit recorded that the two Liquidation Assistants (LAs) attached to the OL visited the factory site and met 16 persons including the guards, two former directors, Mr. I.C. Singhal and Mr. S.K. Goyal, Mr. Ramphal, Inspector, Police Station, Julana. The minutes further recorded as under: "After that we found that factory was open condition no seal was lying there in the main gate of the premises. We start the proceeding at about 12.00 am. Sh. B.L. Chadha has carried out the inspection of the missing items and verifying in items as per valuation report of Shri R.P. Gupta, valuer. After carried out the inspection by valuer in presence of above said persons and informed the report in this regard will be sent to the Official Liquidator's office within two weeks." 9. M/s. Chadha & Associates submitted a repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our valuation report except one photograph of Churners with the machine whereas our photographs shows only the machine." 11. Since the report dated 23rd February 2010 was not very clear Mr. Chadha was asked to furnish list of missing items along with the values. By a letter dated 19th March 2010 Mr. Chadha submitted a list of missing items along with their values. The list of such items read as under: "1. Drum mill including ACC (Steel) 3 Nos. 12,78,000.00 2. Slurry sieves 2 Nos. 56,800.00 3. Dryer unit 1 Nos. 13,00,000.00 4. Take off conveyour on steel Steel frames 1 Nos. 85,200.00 5. Hydraulic press & vertical dryer and ACC 2 Nos. 21,00,000.00 6. Rail tracks scrap not visible 45,440.00 7. LPG storage steel tank called Bullets 50,000.00 8. Glazing line & storage car system (steel incom) 3 Nos. 50,00,000.00 Total 99,15,440.00 12. In the above circumstances, the OL submitted Report No. 115 of 2010 in which the order passed by the Court on 31st January 2012 converting the report into an application. The said order reads as under: "Report No. 115 of 2010 in Co. Pet. No. 222 of 1999 Since substantive prayers have been made in the present report, Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... further theft of plant and machinery. He informed the Court that the security guards of KSSPL had been forcibly evicted by Mr. Surat Singh Malik from the Jind premises of the company and the OL had no longer in the possession of the said premises. The Court then required SP, Jind, Haryana and Mr. Surat Singh Malik to remain present in Court on the next date of hearing. On the next date, i.e., 29th September 2011 while the Court noted that Mr. Ashok Kumar, SP, Jind, Haryana, Mr. Surat Singh Malik as well as Mr. D.K. Sharma, Managing Director of KSSPL were personally present in Court, SP Jind was directed to ensure that adequate police would deploy and possession of the said 15.3 acres of land stated to be forcibly occupied by Mr. Surat Singh Malik was directed to be restored to the OL. 16. At the hearing of 5th October 2011 the Court took note of status report by way of affidavit dated 1st October 2011. It was stated therein inter alia that an FIR No. 153 dated 29th September 2011 had been registered at Police Station Julana under Sections 379, 447, 323, 34 IPC arising out of a complaint against ICL dated 27th April 2011 some2013:DHC:2882 Co. Appl. No. 220 of 2012 in Co. Pet. No. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... office of the Official Liquidator on 22nd March 2012, the secured creditors had agreed to pay to the contractor Subhash Chander, the amount to be spent by him on fencing of the aforenoted immovable property of the company (in liquidation); further submission being that 80% of the amount has been paid to the Contractor and he will commence the fencing work within one week. Let the status report to the said effect be filed and a copy thereof shall be furnished to the counsel for the Official Liquidator." 19. As regards Company Application No. 220 of 2012, the Court noted that none was present on behalf of KSSPL and accordingly, adjourned the case to 10th October 2012. On the subsequent date, the Court noted that the report had been filed by IDBI through its Valuer, Mr. S.K. Ahuja, who has estimated the value of the property at Jind, Haryana at Rs. 642.12 lakhs which was Rs. 282.88 lakhs less when as compared to the value as per the valuation report submitted by M/s. Accurate Surveyors (P) Ltd., i.e., Rs. 925 lakhs. Accordingly, the valuation report of M/s. Accurate Surveyors (P) Ltd. was accepted and the OL was permitted to proceed with the sale of the property. 20. On 5th Novemb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns have been countered by Mr. Mayank Goel, learned counsel for the OL. It is pointed out that at the time of deployment of the security guards the representative of the KSSPL had inspected the entire premises along with secured creditors of the company. It is further pointed out that valuation done by M/s. S.K. Ahuja & Associates was only tiles and boxes but not of the land and machinery, land and building. A reference is made to the report of M/s. R.P. Gupta & Associates on 27th April 2009 in which the value of the assets of the company was placed at Rs. 1,22,54,640. It is submitted that KSSPL was aware of the fact of theft since 2003 why did it choose to intimate the OL only on 27th January 2004. 24. There are three issues to be considered by the Court. The first is whether in fact a considerable part of the plant and machinery and equipment found at site in 2003 when possession was taken over by the OL and KSSPL was engaged to provide security services have since gone missing? The second is the explanation for the items found missing from the factory premises and who should be held responsible for it. The third is, if KSSPL is held liable, the amount that it should be asked to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Associates, the OL and M/s. Chadha & Associates. Merely because some of the equipments were found incomplete even in 2003 does not explain how many of the items were found missing when inventories were taken at different stages thereafter. The main task of any security agency is to ensure that the assets of the company in liquidation are not pilfered. The very purpose of deploying KSSPL in 2003 at the factory premises has been defeated by the wanton neglect of its duties by KSSPL. This is a case of grave dereliction of duty and gross negligence on the part of KSSPL. 27. In view of the above conclusion, the question of the OL having to settle any of the bills of KSSPL simply does not arise. The next question that arises is the amount that KSSPL should be asked to pay for the assets of ICL that have gone missing since they took over the responsibility of providing security at the factory premises. The value of the missing assets as determined by M/s. Chadha & Associates is Rs. 99,15,440. Accounting for the fact that in 2003 some of the items were incomplete, and that they must have depreciated in value over the years, the Court considers it appropriate to direct KSSPL to pay to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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