TaxTMI 
TaxTMI 
2008 (4) TMI 511
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....dge's summons; (III)To appear in miscellaneous application filed in counter claim in Original Application No. 278 of 2002 and to suitably defend the company in liquidation in the said proceedings; (IV)To represent the company in liquidation in Suit No. 434 of 2003, pending before the Bombay High Court and to suitably defend the company in liquidation in the said proceedings. (C)Your Lordships may be pleased to start the contempt proceedings against the official liquidator and other responsible officers of the office of the official liquidator for making the contempt of the orders passed by this Hon'ble court in Company Application No. 285 of 2006 and in Company Application No. 97 of 2006. (D)Your Lordships may be pleased to make responsible the official liquidator and the Government of India, Ministry of Corporate Affairs, New Delhi, to compensate the losses incurred to the company in liquidation due to the negligent and lackluster approach of the official liquidator towards the various affairs of the company in liquidation. 2. The court has issued notice to the official liquidator on 8-2-2008. The court has also granted leave to the applicant to join ICICI Bank Ltd., as party....
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....the property of the company in liquidation and since no application has been moved by the official liquidator seeking assistance, the prayer for permission to represent the company in various proceedings cannot be granted. Accordingly, the said company application came to be rejected vide order dated 1-8-2006. 7. Mr. Mardia has further submitted that he has moved an application to the official liquidator under the Right to Information Act, 2005 and in reply to the said application given on 22-5-2007, the official liquidator had, inter alia, given details of the 21 legal cases out of which, 2 cases at Mumbai, namely, O.A. No. 278 of 2002 pending before DRT, Mumbai and Civil Suit No. 434 of 2003 have been entrusted to M/s. Rajesh Shah and Co., advocates. In spite of this neither the official liquidator nor any of his appointed advocates appeared in any of the proceedings and some of the proceedings against/by the company have been disposed of in absence of the official liquidator. He has, therefore, submitted that non-appearance by the official liquidator or in the absence of any representation on his behalf has ultimately resulted into dismissal of the cases which adversely affecte....
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....that he wrote several letters to the official liquidator, inter alia, calling upon him to represent the company in liquidation in various proceedings. By letter dated 31-1-2008, a specific attention of the official liquidator was drawn to the miscellaneous application preferred by ICICI Bank Ltd., and the official liquidator was requested to represent the company at the hearing scheduled on 4-2-2008. However, he did not remain present at the said hearing. The applicant had personally attended the hearing where the applicant's locus standi was protested by counsel appearing for ICICI Bank Ltd., in view of the appointment of the official liquidator. However, on applicant's request, the DRT in the interest of the company in liquidation has adjourned the matter. 9. Mr. Mardia has further submitted that the official liquidator of the company in liquidation has also remained totally negligent towards the debenture trustee Suit No. 434 of 2003 filed before the Bombay High Court by ICICI Bank Ltd., and consequent possession of around 95 per cent of the properties of the company in liquidation held by the court receiver on behalf of ICICI Bank Ltd. He has further submitted that the said ca....
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....umber of such cases specifically noted by the court. He has invited the court's attention to the order dated 12-8-2005, passed by this Court in the case of Official Liquidator of Ahmedabad Mfrs. & Calico Print Mills Co. Ltd., In re [2006] 67 SCL 306 , wherein it is observed that the official liquidator as well as the security personnel deployed by him have totally failed to protect and safeguard the properties of the company in liquidation. The court, therefore, took the view that the official liquidator is neither competent to take care of the properties of the company in liquidation nor he had any desire to take any effective steps. The court further observed that his office might be involved in allowing such thefts, pilferages or similar such things. The court was at pains to point out that this was not the solitary case. In many of the company in liquidation, similar such things are happening day in and day out. He has also invited the court's attention to the order dated 26-4-2006, passed by this court in the case of Official Liquidator of Jay Agrochem Ltd. v. Bank of Baroda, wherein it is observed that the court has been finding various complaints against the official liquida....
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....46 of the Companies Act, 1956, to continue with the debenture trustee Suit No. 434 of 2003 pending before the Bombay High Court. As per the order dated 1-8-2006, passed by this court, it was represented by the official liquidator in the said case that it is not possible for him to appear in the proceedings there and defend the suit. However, if permitted, he would like to continue the services of the two advocates appointed by the company. This court has accordingly permitted the official liquidator. However, the said case was never defended by the official liquidator nor any one on his behalf. He has, therefore, constrained to file the present application before this court. He has strongly urged that as a promoter/shareholder and ex-chairman and managing director of the company in liquidation and as also in his capacity as guarantor of the company in liquidation, he is interested in representing the case of the company. However, permission prayed for in this regard was earlier denied by this court. This court having found that the official liquidator being custodian of the properties of the company in liquidation, would represent the company. However, representation was not made a....
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....ilar prayers are made in that application. While rejecting the said application, this court in its order dated 1-8-2006, has observed that the official liquidator is the custodian of the property of the company in liquidation once the order of winding up is passed and will exercise the powers as enumerated under section 457 of the Companies Act, 1956. The official liquidator has not moved any application seeking any assistance of the applicant and, therefore, the applicant cannot be permitted to associate or assist in any manner to the official liquidator. The court further observed that it is open for the applicant to appraise the official liquidator about the affairs of the company or any assistance, if sought for by the official liquidator with regard to the pending proceedings. He has, therefore, submitted that more or less similar prayers are made in the present application and once this court having rejected these prayers by a reasoned order, no indulgence should be shown by the court and no relief can be granted as prayed for in the present application. 14. Mr. Thakore, while reiterating more or less the same submissions has further submitted that upon winding up of a compa....
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....omoter and director, who is essentially responsible for the present state of affairs of the company can be permitted to pursue or defend the litigation of the company. Even if it is assumed that such application is maintainable, in that case, even looking to the facts and circumstances of the case and the manner of management of the company by the applicant, is sufficient to persuade this court not to exercise any such discretion in favour of the applicant. 15. Mr. Thakore has further submitted that there are certain litigations being faced by the company where the promoters, including the applicant herein are guarantors and it is not unlikely that the interest of the company and the interest of the guarantors as promoters, including the applicant, may be at divergence, which also is a reason enough not to permit the applicant to step into the shoes of the official liquidator. The applicant and the other persons have obligation to file statement of affairs within the stipulated period. No such statement of affairs has yet been filed, which sufficiently demonstrates the attitude and approach of the promoters/applicant. Failure to comply with statutorily obligations itself disentitl....
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....intended that the assets should be realised as quickly as possible, and when the official liquidator files a suit against a debtor of the banking company, all he is doing is to attempt to realise part of the assets to the company. He has, therefore, submitted that except the official liquidator, nobody else can be permitted to proceed further with any of the litigations of the company in liquidation where the official liquidator is the only person to initiate and/or to defend such proceedings. 19. Ms. Amee Yajnik, learned advocate appearing for the official liquidator, though objected to the prayer for taking action against the official liquidator for contempt of court's orders invited the applicant's offer to render assistance to the official liquidator in pending litigations filed by or against the company where applicant's own exclusive interest is not involved and that too, at his own costs and consequences. She has also submitted that respondent No. 2-bank has no right to object to this application as in many cases, bank and their officials are parties. She has, therefore, submitted that necessary directions may be issued in the best interest of the company in liquidation. 2....
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....interest of property of the company in liquidation, the applicant's interest being promoter, shareholder or guarantor, may have been protected. But, this fact, by itself is not enough to make him disentitled to claim such relief. There is no reason for the court to doubt the bona fides of the applicant. 22. Respondent No. 2-bank is not holding the brief of the official liquidator. Respondent No. 2-bank being an interested party to the proceedings will always see to it that the proceedings against them shall remain unrepresented or not properly represented. The instances quoted by the applicant in the present application have undoubtedly proved that respondent No. 2-bank got easy walk over only because there was either no representation at all or there was no proper and effective representation. The official liquidator cannot solely be blamed for this situation. He is attached to this court. The cases filed by or against the company in liquidation at distant places, advocates engaged by him may have lost interest in the matters because of inadequate materials, inadequate fees or untimely payment. If such is the state of affairs of the companies in liquidation, one must gracefully a....