Dismissed

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

Karnataka HC9 Aug 2024CA/799/2006

Case brief

AI extract

What is this about?

In Company Application No. 799 of 2006, the Official Liquidator sought recovery of Rs. 31,406/- from the respondent based on the statement of affairs. The court dismissed the application, finding the claim devoid of merit due to the absence of supporting documentary evidence despite the respondent denying liability.

What did the court decide?

The application for recovery of Rs. 31,406/- was dismissed as being devoid of merit.

Official Liquidator of M/S Victory Glass & Vs M/S… — Company and Corporate | Karnataka HC (2024)

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NC: 2024:KHC:31972 CA No. 799 of 2006

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

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BEFORE

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THE HON'BLE MR JUSTICE C.M. POONACHA COMPANY APPLICATION NO. 799 OF 2006

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COMPANY PETITION NO.272 OF 2002

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BETWEEN:

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OFFICIAL LIQUIDATOR OF M/S VICTORY GLASS & INDUSTRIES LIMITED(IN LIQN) ATTACHED TO HIGH COURT OF KARNATAKA 4TH FLOOR, KENDRIYASADAN, KORAMANGALA BANGALORE-34

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…APPLICANT

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(BY SMT. KRUTIKA RAGHAVAN.,ADVOCATE FOR OL)

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AND:

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Digitally signed by BHARATHI S Location: HIGH COURT OF KARNATAKA

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M/S SHAW WALLACE & CO LTD., C/O MEHRA BEVERAJES (P) LTD., 54^TH K.M. AGWANPUR VILLAGE, PALWAL, FAIRADABAD DISTRICT HARIYANA

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(BY SRI.RAGHURAM CADAMBI.,ADVOCATE)

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…RESPONDENT

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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.31,406/- WITH INTEREST ON THE SUM OF RS.20,104 AT 6% PER ANNUM FROM THE DATE OF THE APPLICATION I.E. 7.8.2006 TILL THE DATE OF JUDGMENT, THE FUTURE INTEREST AND ETC.

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

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NC: 2024:KHC:31972 CA No. 799 of 2006

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

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ORAL ORDER

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The 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 sum of 31,406/- (20,104/- being an amount due as on 13.06.2003 together with `11.302/- being interest at 18% p.a from 13.06.2003 to 07.06.2006) from the respondent therein.

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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 under Section 454 of the Act of 1956, wherein, it is stated that the respondent is indebted to the company in liquidation in a sum of `1,48,202/as on 13.06.2003. It is further stated that the interest due at

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1 Hereinafter referred to as the ‘Act of 1956’

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2 Hereinafter referred to as ‘Rules 1959’

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NC: 2024:KHC:31972 CA No. 799 of 2006

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18% from 13.06.2003 to 07.08.2006 is 11,302/-. It is further averred that demand notice dated 03.01.2005 and a letter dated 02.05.2005 were issued by the applicant to the respondent and neither the postal acknowledgement card nor the undelivered cover has been received. Hence, the application is filed for recovery of 31,406/-.

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The respondent entered appearance and filed its statement of objections, wherein it is stated that the respondent had merged with one M/s. Mehra Beverages Limited w.e.f. 01.07.2000 and the said company was located at Faridabad, Haryana. That the said company was amalgamated pursuant to the order dated 25.01.2002 passed in company petition No.963/2001 by the Hon’ble High Court of Mumbai and the effective date of transfer was 01.07.2000. That the erstwhile Shaw Wallace Distilleries Ltd.,³ had transactions with the company in liquidation. That the respondent and SWDL are separate and independent companies and there was no privity of contract between the respondent and the company in liquidation. It is further contended that SWDL has also verified its books of accounts as well as the books of accounts of

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3 Hereinafter referred to as ‘SWDL’

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NC: 2024:KHC:31972 CA No. 799 of 2006

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erstwhile M/s. Mehra Beverages Ltd., and it is certified that there is no debt due to the company in liquidation. Hence, the respondent seeks for dismissal of the application.

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To prove its claim the Company paid Assistant in the office of the Official Liquidator⁴ has been examined as PW.1. He has reiterated the averments made in the application claiming a sum of 20,104/- as on 13.6.2003 and interest at 18% from 13.6.2003 to 7.8.2006 in a sum of 11,302/-. Thereby a total sum of `31,406/- is claimed as deposed in the affidavit evidence of PW.1. A copy of the statement of affairs is marked as Ex.P1, the relevant entry at page No.10 of Ex.P1 is marked as Ex.P1(a) and the notices issued by the applicant are marked as Exs.P2 and P3. The Company Secretary of the respondent has been examined as DW.1. Exs.R1 to R6 have been marked in evidence. Both the witnesses have been crossexamined.

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The submissions of learned counsel Smt.Krutika Raghavan for the applicant and learned counsel Sri. Raghuram Cadambi for the respondent have been heard. The question that arises for consideration is “ Whether the applicant proves

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4 Hereinafter referred to as ‘OL’

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NC: 2024:KHC:31972 CA No. 799 of 2006

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that the respondent is liable to pay the applicant a sum of ` 31,406/-?”

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The applicant has averred in the application that the respondent is indebted to the applicant a sum of 1,48,202/- as on 13.6.2003 on account of trade debtors at para 3 of its application. At para 4, it is further stated that the applicant is entitled to recover a sum of 1,48,202/-. However, in the details of the amount mentioned in the said para, it is stated that the amount due as on 13.6.2003 is a sum of 20,104/and a sum of 11,302/- is claimed towards interest at 18% from 13.6.2003 to 7.8.2006. Hence, the total sum claimed is `31,406/-.

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At paras 3 and 4 of the affidavit by way of

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evidence of PW.1 the amount due as on 13.6.2003 is mentioned as 20,104/- and interest of a sum of 11,302/- is claimed. Thereby a cumulative sum of 31,406/- is claimed. Ex.P1 is the extract of the statement of affairs and Ex.P1(a) is the entry, wherein a debit balance of 20,104/- is shown in respect of the respondent – company. In the crossexamination, PW.1 admits that he has not produced any

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NC: 2024:KHC:31972 CA No. 799 of 2006

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supporting documents such as ledger extract, invoices etc., and that no investigation about the affairs of the company have been made after filing of the statement of affairs.

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It is forthcoming that in the statement of objections that the respondent company has denied that it is due any amounts to the applicant – company in liquidation . However, it is further stated that SWDL and its subsidiary M/s Mehra Beverages Ltd., have transacted with the company in liquidation and no amounts were due from the said companies also.

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DW.1 has deposed that no amount is due from either the respondent or SWDL. It is further stated that M/s. Mehra Beverages Ltd., got amalgamated/merged with SWDL and the effective transfer date was 1.7.2000. The original Memorandum of Association⁵ and Articles of Association⁶ are marked as Ex.R1. The certified copy of the order dated 7.8.2006 passed by the High Court of Bombay in COP.No.178/2006 is marked as Ex.R2 and a copy of the order dated 23.6.2006 passed in COP.No.51/2006 passed by this

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5 Hereinafter referred to as ‘MOA’

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6 Hereinafter referred to as ‘AOA’

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NC: 2024:KHC:31972 CA No. 799 of 2006

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Court is marked as Ex.R3. Ex.R4 is the ledger account of M/s Mehra Beverages and Ex.R5 is the computerized ledger, which shows that no amounts are due in favour of the company in liquidation. Ex.R6 is the delivery challan, invoices raised by the company in liquidation in faovur of M/s Mehra Beverages. The relevant entry in Ex.R5 is marked as Ex.R5(a).

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DW.1 in his cross-examination has stated that the notice sent by the applicant was sent to SWDL c/o M/s Mehra Beverages Ltd., at Palwal in Haryana and that the said M/s Mehra Beverages with whom the applicant company was having transactions was the subsidiary of the SWDL. DW.1 states that outstanding amount was due with M/s Mehra Beverages and not with the respondent and there was no privity of contract between the applicant and the respondent.

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It is forthcoming that even the amount which the applicant has transacted with M/s Mehra Beverages is shown to have been paid as is forthcoming from Ex.R4, R5 and R5(a).

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The present claim is filed only on the basis of the extract of the statement of accounts - Ex.P1. The respondent having denied its liability and PW.1 having admitted that no

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NC: 2024:KHC:31972 CA No. 799 of 2006

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supporting documents such as ledger extract, invoices, etc., having been produced, the applicant has failed in demonstrating that the respondent is due and liable to pay the amounts claimed in the application as also the interest. Hence, the question framed for consideration is answered in the negative.

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In view of the aforementioned, the application is dismissed as being devoid of merit.

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Sd/(C.M. POONACHA) JUDGE

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List No.: 1 Sl No.: 0

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

Case brief

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

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