Held that respondents as ex-directors are jointly and severally liable to repay disclosed funds. Ordered payment of principal with interest at 12% until petition filing and 6% thereafter.
Respondents jointly and severally liable to pay Rs. 19,24,000 with interest at 12% pa. till 7.4.2010 and 6% pa. thereafter.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 13TH DAY OF DECEMBER, 2023
BEFORE
THE HON’BLE MR. JUSTICE C.M. POONACHA
COMPANY APPLICATION NO.215 OF 2010
IN
COMPANY PETITION NO.19 OF 2004
BETWEEN
OFFICIAL LIQUIDATOR OF M/S.SREE CHARANA PROPERTIES PVT LTD (IN LIQUIDATION) ATTACHED TO HIGH COURT OF KARNATAKA, CORPORATE BHAVAN, NO.26-27, 12TH FLOOR, RAHEJA TOWERS, M G ROAD, BANGALORE 560001
...APPLICANT
(BY SRI JAGADEESH , ADVOCATE FOR OL)
AND
NO.17 , RAMACHANDRA APARTMENTS, 1ST CROSS, 3RD MAIN, V S R LAYOUT, MATHIKERE,
…RESPONDENTS
(SERVICE TO R1 IS HELD SUFFICIENT V/O DTD 26.5.2010 SERVICE TO R2 IS HELD SUFFICIENT V/O DTD 10.6.2011)
2
THIS COMPANY APPLICATION IS FILED UNDER SECTION 543(1) OF THE COMPANIES ACT 1956 R/W 260 OF THE COMPANIES (COURT) RULES 1959 PRAYING TO SUMMON THE RESPONDENTS NO.1 AND 2 FOR THE PURPOSE OF EXAMINATION IN REGARD TO THE MATTER SPECIFIED THEREIN AND ETC.
THIS APPLICATION HAVING BEEN HEARD AND RESERVED FOR ORDERS ON 22.11.2023 COMING ON FOR 'PRONOUNCEMENT OF ORDER' THIS DAY, THE COURT MADE THE FOLLOWING:-
ORDER
The present application is filed under Section 543(1) of the
Companies Act, 1956 (hereinafter referred to as ‘the Act’) read with Companies (Court) Rules, 1959 (hereinafter referred to as ‘the Rules’).
Court was appointed as the liquidator of the company in liquidation. That the company in liquidation was engaged in the business of investments and real estate, etc., and the respondents were the directors/officers of the company as on the date of the winding up. That CA No.1050/2005 was filed for non filing of the statement of affairs as required under Section 454 of the Act and after compliance of the same, the said proceedings were disposed of vide order dated 10.4.2008.
3
to the proceedings initiated for submission of books and records of the company in liquidation, one of the ex-directors handed over few books and records on 14.8.2007. From the said records, the ex-directors have disclosed that they have received advances from the customers for site bookings in a sum of 14,59,000/and a further sum of 4,65,000/- towards the share application money, pending allotment. Hence, the present proceedings are initiated for recovery of the said amounts.
sufficient.
has been examined as PW.1. Ex.P1 has been marked which is the balance sheet as on 8.4.2005. PW.1 has deposed with regard to the two claims in the present proceedings i.e., a sum of 14,59,000/- as regards advances from the customers for site bookings and a sum of 4,65,000/- with regard to the share application money, pending allotment and the said aspect is forthcoming from the balance sheet – Ex.P1. The testimony of PW.1. has remained unchallenged.
4
from the date of the order of winding up.
ORDER
i) The company application is allowed; ii) The respondent Nos.1 and 2 are jointly and severally liable to pay the applicant a sum of `19,24,000/together with interest at 12% pa., from 8.4.2005 till the date of petition ie., 7.4.2010 and subsequently, from 7.4.2010 up to the date of payment at 6% pa.
Sd/JUDGE
nd/-
2 issues framed by the court
Whether respondents as ex-directors are liable to repay unallotted share application money and customer advances disclosed in balance sheet.
What interest rate applies to sums owed in commercial liquidation proceedings.
2 provisions across 2 enactments
Official Liquidator of M/s. Sree Charana Properties Pvt Ltd (In Liquidation)
Sri K Ashok Kumar
P Venkateswaralu
C.M. Poonacha
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
