Official Liquidator Of M/S Vidarbha Phasphat v. Shri Mahabir Prasad Golyan

1-CAL-73-2002

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

NAGPUR BENCH, NAGPUR.

COMPANY APPLICATION NO. 73 OF 2002 IN COMPANY PETITION NO. 2 OF 1996 (In the matter of Vidarbha Phosphate & Fertilizers Ltd. (In Liqn.)) __________________________________________________________________________ Office Notes, Office Memoranda of Coram, appearances, Court's orders of directions Court's or Judge's orders.

and Registrar's Orders.

Dr. Anjan De, Counsel for the Official Liquidator with Ms. U.P. Parmar, Official Liquidator.

Ms Radhika Bajaj, Counsel for respondent no.6. Shri S.Y. Deopujari, Counsel for respondent no.9. Shri A.V. Muley, Counsel for LRs of respondent no.15. CORAM : ANIL L. PANSARE, J.

SEPTEMBER 27, 2024 In Narayan V/s Offcial Liquidator of Maharashtra Asbestos Private Ltd., the Division Bench of this Court in Company Appeal No. 13/2008 has discharged the appellant therein by setting aside the order passed by the Company Court. The Court held that the active engagement in the administration or management of the affairs of the Company is required prior to making declaration under section 543 of the Companies Act, 1956 (for short "Act of 1956"). 2] In Official Liquidator, High Court Madras V/s Gautam Dhiraj Mal Ranka & others [2007 SCC OnLine Mad. 888], the High Court of Madras has discharged the ex-directors on the ground that charges of misfeasance and nonfeasance were made without pinpointing a specific act of dishonesty and misappropriation and were general in nature.

3] In Security and Finance Private Limited V/s B. K. Bedi and others [1990 SCC OnLine Del. 102], the High Court of Delhi has discharged the ex-directors on the ground of absence of specific allegations. The Court held that when the allegations are not specific and details of fraud are not given, then the Court cannot indulge in

1-CAL-73-2002 the fishing or roving enquiry. The enquiry is to be confined to the purpose with which the business of the Company had been carried on and the persons, who were knowingly parties to that act. There has to be positive and specific evidence and pleadings in respect of the individual director.

4] The learned Counsel for the Official Liquidator submits that the proceedings under Sections 543 of the Act of 1956, are not maintainable inasmuch as the investigation report filed by the Chartered Accountant does not disclose the individual acts done by the exdirectors and, therefore, specific liability cannot be ascertained in terms of the provisions under Section 543 of the Act of 1956.

5] So far as proceedings under Section 542 of the Act of 1956 is concerned, it is not the case of the Official Liquidator that the ex-directors have, pending winding-up petition, carried on business of Company with an intent to defraud the creditors or other persons and, therefore, proceedings under Section 542 of the Act of 1956 are not maintainable.

6] In view thereof, Company Application No.

73/2002 is disposed of. All other pending applications are also disposed of.

COMPANY PETITION NO. 2 OF 1996 7] The Official Liquidator shall submit present status of assets and liabilities of the Company under liquidation for further consideration.

8] Stand over to 4/10/2024.

(JUDGE) Sumit