Dismissed

Official Liquidator of v. M/S Shaw Wallace & Co. Ltd.

Karnataka HC9 Aug 2024CA/792/2006

Case brief

AI extract

What is this about?

Company liquidation applied for a decree against a respondent for trade dues. Due to lack of direct contractual evidence and proof linking transactions to the respondent rather than its licensee, the court dismissed the application for failing the burden of proof.

What did the court decide?

Application dismissed as being devoid of merit due to failure to prove the respondent's liability.

Official Liquidator of Vs M/S Shaw Wallace & Co… — Execution and Attachment | Karnataka HC (2024)

¶1

¶2

NC: 2024:KHC:31971 CA No. 792 of 2006

¶3

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9^TH DAY OF AUGUST, 2024

¶4

BEFORE

¶5

THE HON'BLE MR JUSTICE C.M. POONACHA COMPANY APPLICATION NO. 792 OF 2006

¶6

¶7

COMPANY PETITION NO. 272 OF 2002

¶8

BETWEEN:

¶9

OFFICIAL LIQUIDATOR OF M/S VICTORY GLASS & AND INDUSTRIES LIMITED ATTACHED TO HIGH COURT OF KARNATAKA 4TH FLOOR KENDRIYASADAN KORAMANGALA BANGALORE 34

¶10

…APPLICANT

¶11

(BY SMT KRUTIKA RAGHAVAN.,ADVOCATE FOR OL)

¶12

AND:

¶13

M/S SHAW WALLACE & CO LTD C/O RAINBOW DISTILLERIES LTD., NO.10 WANJRA LAYOUT KAMPTEE ROAD NAGPUR MAHARASHTRA

¶14

Digitally signed by BHARATHI S

¶15

…RESPONDENT

¶16

Location: HIGH (BY SRI. RAGHURAM CADAMBI.,ADVOCATE) COURT OF KARNATAKA

¶17

THIS APPLICATION IS FILED UNDER SECTION 446(2) OF THE COMPANIES ACT, 1956 RULE 9 OF THE COMPANIES(COURT ) RULES, 1959 PRAYING TO GRANT A DECREE IN FAVOUR OF THE APPLICANT AGAINST THE RESPONDENT FOR A SUM OF RS.3,25,628/- WITH INTEREST ON THE SUM OF RS. 2,08,443/- AT 6% PER ANNUM FROM THE DATE OF THE APPLICATION I.E. 3.8.2006 TILL THE DATE OF JUDGMENT, THE FUTURE INTEREST AND ETC.

¶18

THIS APPLICATION, COMING ON FOR FURTHER HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

¶19

¶20

NC: 2024:KHC:31971 CA No. 792 of 2006

¶21

CORAM: HON'BLE MR JUSTICE C.M. POONACHA

¶22

ORAL ORDER

¶23

This present application is filed under Section 446(2)(b) of the Companies Act, 1956¹ and Rule 9 of the Companies (Court) Rules, 1959² by the company in liquidation seeking to claim a sum of 3,25,628/(2,08,443/- being the amount due as on 13.06.2006 together with `1,17,185/- being interest at 18% p.a from 13.06.2003 to 03.06.2006) from the respondent therein.

¶24

The case of the applicant - company in liquidation is that the said company was ordered to be wound up by order dated 13.06.2003 passed by this Court in Company Petition No. 272/2002 (which company petition was filed on 05.12.2002). That the respondent was having trade transactions with the company in liquidation. That as per the statement of affairs filed by the Ex-Directors of the company in liquidation, it is shown that the respondent is indebted to

¶25

the company in liquidation in a sum of `2,08,443/- as on

¶26

1 Hereinafter referred to as the ‘Act, 1956’

¶27

2 Hereinafter referred to as ‘Rules 1959’

¶28

3 - NC: 2024:KHC:31971 CA No. 792 of 2006

¶29

13.06.2003 on account of trade debts. That the respondent is liable to pay interest @ 18% per annum from 13.06.2003 to 03.08.2006 in a sum of 1,17,185/-. Hence, the respondent is due in a total sum of 3,25,628/-. It is the further case of the applicant that notices dated 19.10.2004 and 02.05.2005 have been issued demanding payment of the said amounts which have returned with an endorsement ‘as not claimed’. Hence, the present application is filed.

¶30

The respondents in its statement of objections has stated that it carries on the business of manufacturing and selling various liquor brands and for the purpose of its business has entered into various tie ups with distilleries throughout the country for manufacture and bottling of their branded products. That one such tie up is of the licensee of the respondent i.e., M/s. Rainbow Distilleries Pvt. Ltd.,³ having its office at Nagpur, Maharashtra. That its licensee procures raw materials for manufacture and accordingly procures bottles, package material, labels and cartons, etc.

¶31

3 Hereinafter referred to as the ‘Rainbow’

¶32

¶33

NC: 2024:KHC:31971 CA No. 792 of 2006

¶34

That Rainbow alone is responsible for payment of the raw materials produced by it.

¶35

It is the further case of the respondent that the

¶36

company in liquidation was one of the suppliers of the packaging material viz., the bottles and that Rainbow transacted independently with the company in liquidation. That the certified statement of account furnished by Rainbow with reference to the company in liquidation for the years 2000-01, 2001-02 and 2002-03 demonstrates that no payment is due to the applicant company. That the said statement of account is maintained in its usual course of business. Hence, it has denied that the respondent is liable to pay any amounts to the applicant.

¶37

The Assistant in the office of the Official Liquidator⁴ has been examined as PW.1. Exs.P1 to P4(a) have been marked in evidence. The company Secretary of the respondent has been examined as DW.1. Exs. R1 to R5 has been marked in evidence. The witnesses have been cross examined.

¶38

4 Hereinafter referred to as the ‘OL’

¶39

¶40

NC: 2024:KHC:31971 CA No. 792 of 2006

¶41

The submissions of learned counsel Smt. Krutika Raghavan for the applicant Official Liquidator and Sri.Raghuram Cadambi for the respondent have been heard.

¶42

The question for consideration is ‘whether the

¶43

applicant has proved that the respondent is liable to pay the amount claimed in the application?’

¶44

It is forthcoming that the basis of the claim of the applicant is the statement of affairs filed by the Ex-Directors of the company in liquidation and the extract of the said statement of affairs discloses that the respondent is due to the company in liquidation in a sum of `2,08,443/- has been marked as Ex.P1. The other notices which have been issued by the applicant to the respondent have also been marked in evidence. DW.1 in his testimony has produced the Agreement entered by the respondent with Rainbow (Ex.R1) and the ledger extract secured from Rainbow (Ex.R2). Eleven delivery challans cum invoices raised by the company in liquidation against Rainbow has been marked as Ex.R3, nine consignment notes raised by the consignor who is the company in liquidation to the consignee, Rainbow are

¶45

¶46

NC: 2024:KHC:31971 CA No. 792 of 2006

¶47

marked as Ex.R4 and the computerised statement of account issued by Punjab National Bank is marked as Ex.R5. The relevant entries in Ex.R5 are marked as R5(a) and R5(k). In the cross examination of DW.1 it is stated that the outstanding amount due was with Rainbow and not with respondent company and there is no contract with the applicant and the respondent. It is further relevant to note that Ex.R1 which is a photocopy of the Agreement has been marked subject to objection and the original of the said MOU has not been produced.

¶48

It is forthcoming from the aforementioned that the applicant was required to demonstrate that the respondent company is due and payable the amounts claimed. However, apart form Ex.P1, no other document is produced. On the contrary, it is the specific defence of the respondent that no amounts are payable by the respondent to the applicant and all the transactions of the applicant were with Rainbow, who was the licensee of the respondent. Notwithstanding the fact that the original of Ex.R1 has not been produced, the burden of proving that the respondent

¶49

¶50

NC: 2024:KHC:31971 CA No. 792 of 2006

¶51

owes the amount claimed in the application is on the applicant who has failed to discharge the said burden. Hence, the question framed for consideration is answered in the Negative.

¶52

In view of the aforementioned, the application is

¶53

dismissed as being devoid of merit.

¶54

Sd/(C.M. POONACHA) JUDGE

¶55

¶56

List No.: 1 Sl No.: 0

Official Liquidator of v. M/S Shaw Wallace & Co. Ltd.

Case brief

What is this about?

What did the court decide?

Official Liquidator of v. M/S Shaw Wallace & Co. Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Kum Keerthana Reddy Vs Sri Krishnamurthy C

Kariyappa M.C. Vs Future General India

Rathnamma Vs Siddegowda

Official Liquidator of M/S Mother Care (India) Ltd. (in Liqn) Vs Sri Prakash Lachman Ahuja

Official Liquidator of M/S Victory Glass and Vs M/S Mc Dowell & Co. Ltd.

Official Liquidator of M/S Victory Glass & Vs M/S Shaw Wallace & Co. Ltd.