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Judgment
H.N. Nagamohan Das, J.—This application is filed u/s 543(1) of the Companies Act to declare that respondents are liable to pay a sum of Rs. 6,58,542 with interest at the rate of 18 per cent p.a.
This court vide order dated 21-1-1999 in Co.P.No. 74/1995 passed an order to wind up the company in liquidation. The respondents are the Directors of the company in liquidation. After the order of winding up respondents filed statement of affairs. Though the Official Liquidator pointed out certain defects in the statement of affairs, the respondents failed to rectify the same. The Official Liquidator on the basis of the balance sheet as on 31-3-2000 noticed that on account of negligence, failure and misapplication of funds on the part of the respondents, the company in liquidation suffered loss to an extent of Rs. 6,58,542 and therefore he is before this court u/s 543(1) of the Companies Act.
The second respondent entered appearance and filed statement of objections inter alia contending that there is no negligence on their part, they have not personally gained anything and further contended that as the Directors of the company in liquidation they worked to the greatest advantage of the company in liquidation.
The Official Liquidator examined one witness and produced certain documents. The second respondent examined himself as RW. 1 and produced certain documents. Heard arguments on both the side and perused the application papers.
The claim of the Official Liquidator is under the following heads :
Rs.
(i) Value of vehicles
3,08,334.00
(ii) Cash and Bank Balance
187.00
(iii) Fixed Deposit
41,800.00
(iv) Sundry Debtors outstanding
36,238.00
(v) Loans & Advances
2,71,983.00
Insofar as the value of the vehicles, the respondents contend that in course of time, the value of the vehicles was depreciated and as on 1-4-2000 the written down value stood at Rs. 21,580. Learned counsel for the Official Liquidator submits that respondents have deposited this amount of Rs. 21,580. Therefore the claim of Official Liquidator under this head is liable to be rejected.
So also a sum of Rs. 187 under the head ''Cash and bank balance'' was also deposited by the respondents and therefore the claim under this head is liable to be rejected.
The claim of Rs. 41,800 under the head ''Fixed deposit'' was a bank guarantee furnished by the company in liquidation to the KEB at Bidar for supply of electricity. On 3-4-2004, the bank issued an endorsement stating that the bank guarantee is not in force. The KEB revoked the bank guarantee and the bank has deposited this money to the KEB. The KEB adjusted this amount of Rs. 41,800 towards electrical power consumption charges. Therefore, the claim of the Official Liquidator under this head is liable to be rejected.
The last claim of the Official Liquidator for a sum of Rs. 2,71,983 is in respect of debts, loans and advances. These amounts are payable to the company in liquidation. There is no pleading and evidence to show that as on the date of winding up order on 21-1-1999, these debts are time-barred and the same had happened due to the negligence and failure on the part of the respondent-Directors. In the absence of any such pleading and evidence, it is not possible to accept the claim of the Official Liquidator under this head. That apart it is seen from the record that to an extent of Rs. 1,96,802 was deposited by the company with the following statutory authorities:
Deposit with Telephone Deptt., Bidar
Rs. 6,175.00
Deposit with KEB, Bidar
Rs. 1,78,627.00
Deposit with Department of Telecommunication
Rs. 10,000.00
Deposit in NSC, submitted to Commercial Tax Deptt.
Rs. 2,000.00
Learned counsel for the Official Liquidator has not seriously disputed the above deposits made by the company in liquidation to the various statutory authorities. In the circumstances, and for the reasons stated above, the application is hereby dismissed.