Allowed

Sri Bharat Narang v. Official Liquidator of

Karnataka HC15 Dec 2023CA/365/2023

Case brief

AI extract

What is this about?

This application sought condonation of delay in filing the affidavit of concurrence of the statement of affairs by a third respondent in liquidation proceedings. The court condensed the delay and discharged the third respondent, directing payment of costs.

What did the court decide?

Allowed CA No. 365/2023; disposed of CA No. 1182/2002 against third respondent; directed respondent to pay Rs. 5,000 costs.

Sri Bharat Narang Vs Official Liquidator of — Company and Corporate | Karnataka HC (2023)

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NC: 2023:KHC:47070 CA No. 365 of 2023 IN CA No.1182 of 2002 IN COP No.22 of 1998

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IN THE HIGH COURT OF KARNATAKA AT BENGALURU

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DATED THIS THE 15^TH DAY OF DECEMBER, 2023

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BEFORE

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THE HON'BLE MR JUSTICE C.M. POONACHA COMPANY APPLICATION NO.365 OF 2023

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COMPANY APPLICATION NO. 1182 OF 2002

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COMPANY PETITION NO.22 OF 1998

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BETWEEN:

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SRI BHARAT NARANG AGED ABOUT 67 YEARS, S/O LATE OMPRAKASH NARANG, R/AT NO.9, KUMARA PARK WEST, NORTH PARK ROAD, BENGALURU 560001

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…APPLICANT

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Digitally signed by BHARATHI S Location: HIGH COURT OF KARNATAKA

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(BY SRI ABHINAV R, ADVOCATE)

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AND:

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OFFICIAL LIQUIDATOR OF KEONICS PENTA SEMICONDUCTOR LIMITED (IN LIQUIDATION), ATTACHED TO THE HIGH COURT OF KARNATAKA, IV FLOOR, D AND F WING, KENDRIYA SADAN, KORAMANGALA, BENGALURU 560034 …RESPONDENT

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(BY SRI KRUTIKA RAGHAVAN, ADVOCATE)

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THIS COMPANY APPLICATION IS FILED UNDER SECTION 454 OF THE COMPANIES ACT, 1956 R/W RULE 9 OF THE COMPANIES

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NC: 2023:KHC:47070 CA No. 365 of 2023 IN CA No.1182 of 2002 IN COP No.22 of 1998

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RULES PRAYING TO CONDONE THE DELAY, IF ANY, IN FILING THE AFFIDAVIT OF CONCURRENCE OF STATEMENT OF AFFAIRS IN THE ABOVE CASE IN THE INTEREST OF JUSTICE AND EQUITY.

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THIS APPLICATION, COMING ON FOR ARGUMENTS, THIS DAY, THE COURT MADE THE FOLLOWING:

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ORDER

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The present application is filed under Section 454(5)(5A) of the Companies Act, 1956 (hereinafter referred to as ‘the Act’)

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Heard the counsel for the applicant – Official Liquidator and the counsel for the third respondent.

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This Court after hearing the counsel for the applicant and the third respondent vide order dated 8.12.2023 ordered as follows:

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“2. It is submitted by learned counsel for the Applicant that the third respondent was notified to file his statement of affairs in accordance with Section 454(5) of the Companies Act, 1956 on 04.08.2002 and the affidavit of compliance was filed on 07.07.2010. Hence, there having been a delay of 1630 days, same is required to be considered.

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3. Learned counsel for the respondent No.3 submits that the applicant had initiated proceedings in CC.No.549/2007 under Section 538(1)(C) of the Companies Act, 1956 before the Special Court (Economic offences Bengaluru) and in the said proceedings the third accused made an application under Section 245 of Cr.P.C., which was allowed and the respondent No.3 was discharged from the said proceedings. Hence, the third

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3 - NC: 2023:KHC:47070 CA No. 365 of 2023 IN CA No.1182 of 2002 IN COP No.22 of 1998

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respondent is required to be discharged in the present proceedings also.

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4. It is further forthcoming that CA.44/2005 that was filed Under Section 454 of Companies Act, 1956 against another ex-director namely V.S.Canade was considered along with CA.1269/2006 and CA.911/2005 filed by V.S.Canade and this Court vide order dated 09.04.2012 has disposed of the said application in view of the order dated 17.08.2010 passed in CC No.37/2008, whether the said V.S.Canade was discharged by the Special Court(Economic Offences Bengaluru).

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5. At this stage, learned counsel appearing for respondent No.3 seeks for a short accommodation to take instructions and to file suitable application.”

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Consequent to the said order dated 8.12.2023, the third respondent has filed CA No.365/2023 to condone the delay, if any, in filing the affidavit of concurrence of the Statement of affairs.

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The learned counsel for the Official Liquidator opposing the same submits that although the third respondent was discharged vide order dated 21.2.2007 passed in CA No.162/2007, subsequently vide order dated 23.6.2009 passed in CA No.1324/2007 proceedings under Section 454(2) of the

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Act against the third respondent was permitted to be continued. That if the delay is calculated from the said date,

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NC: 2023:KHC:47070 CA No. 365 of 2023 IN CA No.1182 of 2002 IN COP No.22 of 1998

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there is a delay of about 360 days in the third respondent filing

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the affidavit of compliance.

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Responding to the same, learned counsel for the third respondent submits that as detailed in the affidavit accompanying the application, this Court vide orders dated 26.5.2010 and 16.6.2010 had adjourned the matter to enable the copies to be furnished by the Official Liquidator consequent to an undertaking given and hence, it is submitted that it is only after receipt of the copies, necessary affidavit could be filed and hence, there is no delay in the hands of the third respondent.

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Learned counsel for the Official Liquidator submits

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that there is no obligation on the part of the Official Liquidator to furnish the copies. In any event, it is pointed out that vide order dated 26.5.2010, time was extended on payment of cost of `2,000/- for filing the statement of affairs by the third respondent, which cost has not been paid. However, it is not in dispute that thereafter the affidavit of compliance by the third respondent has been filed.

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5 - NC: 2023:KHC:47070 CA No. 365 of 2023 IN CA No.1182 of 2002 IN COP No.22 of 1998

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The specific contention is that by order dated 22.7.2014 passed in CC No.549/2007, the third respondent has been discharged in the proceedings initiated by the Official Liquidator under Section 538 (1)(c) of the Act. The same having been favourably considered while passing the order dated 9.4.2012 in CA No.44/2005, the same benefit will have to be afforded to the third respondent in the present case also.

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Having regard to the delay, notwithstanding the assertion of the applicant that there is a delay of about 360 days and the contention of the third respondent that in view of the fact that the documents were not furnished by the Official Liquidator, there is no delay, in view of the fact that vide order dated 26.5.2010 cost of 2,000/- was imposed on the third respondent, which as is forthcoming from the records has not been paid, and the fact that the affidavit of compliance has been filed after a lapse of some time, it is expedient that the present proceedings be closed by discharging the third respondent subject to the third respondent paying cost of 5,000/- within two weeks to the Estate and Establishment Fund.

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6 - NC: 2023:KHC:47070 CA No. 365 of 2023 IN CA No.1182 of 2002 IN COP No.22 of 1998

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Accordingly, CA.No.365/2023 is allowed.

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Consequently, CA No.1182/2002 is disposed of as against third respondent.

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SD/JUDGE

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List No.: Sl No.:

Sri Bharat Narang v. Official Liquidator of

Case brief

What is this about?

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Sri Bharat Narang v. Official Liquidator of

Case brief

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