I.P.MUKERJI, J. - (1.) THE Company Jamshedpur Cement Ltd. was wound up by this Court on 14th January, 2003. THE Official Liquidator attached to this Court is in possession of all its assets and other properties.
(2.) AS is routine in winding up proceedings, an order was made by this Court on 31st August, 2007 appointing a Chartered Accountant to investigate the affairs of this Company under Section 543 of the Companies Act, 1956 (hereafter "the Act"). The Court was in contemplation of starting misfeasance proceedings against the directors and other officers of the Company. It would be guided, in ordering initiation of those proceedings by the report of the auditor to be filed after investigation was complete. Mr. P.K. Chatterjee who was appointed as auditor submitted his report on 6th December, 2007. On examination of the report, this Court ordered misfeasance proceedings to be started. They were accordingly started and the misfeasance application came to be numbered as C.A. 14 of 2007. This application had ten respondents, all directors or responsible officers of the Company. It appears that the statement of affairs was filed by the second, third, sixth and ninth respondents. Further to leave granted by this Court in the misfeasance application, points of claim were filed implicating the respondents jointly. They were accused of misapplication and misappropriation of the funds of the Company aggregating to Rs.1, 52, 07, 388/-.
(3.) FOUR respondent former directors of the Company have made separate applications to the Court to absolve them from all the charges of misappropriation and misapplication made against them by the Official Liquidator. They are the second respondent who has made the application C.A. 467/2008, the sixth respondent who has made the application C.A. 466/2008, the ninth respondent who has made the application C.A. 468/2008 and the tenth respondent who has made the application C.A. 645/2009. All these applications were in the nature of demurrer. At the time of consideration of those applications I felt that the points raised therein, by themselves, could not absolve the applicant directors of their liability. The four applications had to be decided on affidavits. After affidavits were complete these four applications were to be considered along with the misfeasance application. C.A. 645 of 20094 First, I will deal with the application of the tenth respondent. This application is numbered as C.A. 645 of 2009. There is little or no dispute about the facts. This respondent joined the company as a non-executive director on 12th February, 1999. According to him, the purpose of his induction was to maintain 'liaison' between the company, State Bank of India and other financial institutions. He was posted at Patna. Then in less than two months of his joining the company, an application was made by it to the Board for Industrial and Financial Reconstruction for declaring the company sick. On 17th September, 2001 he resigned as director. He says that the reason for such resignation was that the negotiations for arriving at a settlement between the company and the financial institutions failed.;