- (1.) The above appeal has been filed by the lone appellant against the judgment and order dated December 20, 2007 (Official Liquidator v. Samdev Dasgupta, 2008 146 CompCas 119 passed on application made by the official liquidator making a claim under section 543(1) of the Companies Act, 1956. By the impugned judgment and order the appellant has been held to be guilty of committing misfeasance as having occasioned loss to the company by willful act of misappropriation. Therefore by the impugned judgment and order a direction was given to the official liquidator to recover the Sum of Rs. 59,70,423, Rs. 60,16,012, Rs. 2,99,30,589 and Rs. 37 lakhs from the first respondent with interest at the rate of 10 per cent, per annum from the date of the order, and also award cost of the proceedings in favour of the official liquidator assessed as 3,000 G.M. The company, namely, Stiffel Und Schuh (India) Ltd., was directed to be wound up by the order of the court dated July 15, 1999 and the official liquidator being the first respondent herein was appointed as the liquidator of the company. Thereafter the official liquidator approached this court on or about April 26, 2002, for obtaining a direction to appoint an auditor to investigate into the affairs of the company (in liquidation). Accordingly, in terms of the order of this court an auditor was appointed and one M/s. Sashi Agarwal was appointed as auditor and subsequently the said investigating auditor filed a report as to the affairs of the company. Thereafter based on the report of the said investigating auditor the official liquidator filed application on August 26, 2004, against the appellant herein, one Gautam Mitra, 10, Mahendra Road, Calcutta-700 025, Erich Gutmann, Brigitte Stockmann both residents of Austria, one Pramod Kumar Khaitan of 11/11A, Mayfair Road, 5th Floor Block-Q, Calcutta-700 019, one Ranjit Kumar Banerjee of Salt Lake, one Dr. Nitish Kumar Sengupta, Rajendra Nath Sengupta both residents of New Delhi, Subrata Ghosh a resident of Chetla Road, Calcutta, Salil Kumar Gupta resident of Jodhpur Park, Calcutta, Tapas Sengupta resident of Kamal Gandhar, Sarat Ghosh Garden, Sri Purnendu Gupta a resident of New Road, Alipur, Calcutta and one Arindrajit Chowdhury. In the said application the respondents and each of them are described to be persons having power of management and control of the said company at the time of winding up. They and each of them were charged with misapplication, misappropriation and/or retention of large fund of the company as such they had become liable and accountable for a sum of Rs. 7,30,00,470. They were also charged with guilty of misfeasance and breach of trust with the following particulars of charges : (a) The respondents and each of them had written off the stocks amounting to Rs. 2,08,83,446 for the period April 1, 1996 to March 31, 1997, whereas such adjustment in quantity had not been recorded in the stock register, therefore the ex-directors/officers of the company had misappropriated/retained a sum of Rs. 2,08,83,446. (b) The respondents and each of them for the period ending on March 31,1997, on behalf of the company advanced a sum of Rs. 59,70,423 to India Laminating and Packaging Ltd., in which the managing director Samdev Dasgupta (appellant herein) was also a director which was doubtful to be recovered and thereby the respondents have diverted and misappropriated the said amount as such the said respondents and each of them are guilty of misfeasance and breach of trust and are liable to restore the said sum of Rs. 59,70,423 to the till of the company (in liquidation) together with interest at the rate of 24 per cent, per annum. (c) The respondents and each of them have misappropriated a sum of Rs. 2,99,30,589 by debiting the same amount as prior period adjustment in the profit and loss account for the year ended March 31,1997, whereas the corresponding journal entry shows that there was return of goods which was sold in 1994-95 although the sale was 100 per cent, export sale and the value of the goods returned had not been debited in the inventory account and this has resulted in increasing gross profit margin and as such the said respondents and each of them have committed breach of trust and misappropriated the aforesaid amount and is guilty of misfeasance and are liable to restore the said sum of Rs. 2,99,30,589 to the till of the company together with interest at the rate of 24 per cent, per annum. (d) The company had given a total advance of Rs. 40 lakhs to M/s. Loyalka Properties P. Ltd., and accordingly Loyalka Properties P. Ltd., had issued two money receipts dated January 11, 1995 and March 24, 1995, wherein it was stated advance payment for Beliaghata Property, but no further development was observed from the company's end in relation thereto and as such the respondents and each of them have misappropriated and/or misapplied the said amount and as such are guilty of misfeasance and breach of trust and are liable to restore the said amount along with interest at the rate of 24 per cent, per annum to the till of the company (in liquidation). (e) The company in August, 1994 had given an advance of Rs. 15 lakhs to M/s. Sri Satya Sai Properties and Investment P. Ltd., and to M/s. Bhuwalka Trading and Tea Co. P. Ltd., a sum of Rs. 10 lakhs but no further steps were taken by the company to take back the same and as such the respondent and each of them have misappropriated and/or misapplied and/or retained the same amount and are guilty of misfeasance and breach of trust and as such are liable to restore the said amounts aggregating Rs. 25 lakhs along with interest at the rate of 24 per cent, per annum to the till of the company (in liquidation). (f) The company in August, 1994 advanced a sum of Rs. 37 lakhs to M/s. Padmawati Merchantile P. Ltd., but no steps have been taken by the company to receive/recover back the same and it appears from the records maintained in the office of the Registrar of Companies, West Bengal, that there is no such company by the aforesaid name and as such the respondent and each of them have misappropriated and retained the same and are guilty of misfeasance and breach of trust and as such are liable to restore the said amount along with interest at the rate of 24 per cent, per annum to the till of the company (in liquidation). (g) The respondents and each of them have failed and neglected to disclose the expenses incurred for constructing the factory building structure lying and situated at P-15, Kasba Industrial Estate, Phase-I, Kolkata-700 078, although constructed at the cost of the company to the tune of Rs. 60,16,012 and the said respondents and each of them are therefore guilty of misfeasance and as such are liable to restore the said sum of Rs. 60,16,012 to the till of the company together with interest at the rate of 24 per cent. per annum. It appears from the records that none of the respondents except the appellant herein has filed statement of defence by swearing an affidavit dated December 13, 2004 and thereafter on inspection of the documents being taken filed another affidavit through his constituted attorney, namely, one Sripati Dutta. In these two affidavits the charges of misapplication and further misfeasance have been denied specifically and each and every particulars of charges have been explained in the first affidavit of defence in the manner as follows : (a) The company at the relevant point of time had received a very substantial export order for footwear after the goods having an export value of Rs. 5.40 crores had been containerised and were lying in the Calcutta Port for exportation and after the export documents had to be sent to the bankers for necessary process, it transpires that the import of the United States of America had gone into liquidation. Accordingly it refused to accept the goods. Inasmuch as the containerised goods had been lying at the Calcutta Port for quite some time, in order to save further demurrage on the same the goods had to be ultimately taken back by the company. Since the profit in respect of the said goods have been booked in the company's account in the year 1994-95, the company was compelled to pass a reverse entry showing a sum of Rs. 2,99,30,589 as prior period adjustment towards profit of the exports. The statutory auditors did not find any reason to object to such reverse entry and as such made no comment in their report with regard thereto. Accordingly the official liquidator cannot possibly contend that the said sum of Rs. 2,08,83,446 or the said sum of Rs. 2,99,30,589 has been misappropriated/retained by him and as such the question of restoring the said sums to the till of the company also does not and cannot arise. (b) In due compliance of the provision of section 370 of the Companies Act, 1956 and on obtaining requisite authorisation of its members a loan for a sum of Rs. 59,70,423 was given by the company to M/s. India Laminating and Packaging Ltd., to make construction at P-15, Kasba Industrial Estate, Kolkata on the understanding that the registered office and the factory of the company would be housed there. It was further understood that the said loan amount would be paid back by India Laminating and Packaging Ltd., to the company by adjustments against the rent and other charges payable by the company for such occupation and in respect of leather goods manufacturing machinery of India Laminating and Packaging Ltd., which it had allowed the company to use. In the process, the said loan of Rs. 59,70,423 stood reduced to Rs. 52,85,846 in the financial year 1997-98 as will appear from the annual report of the said report. (c) The advance of Rs. 40 lakhs was given by the company to Loyalka Properties P. Ltd., for a purchase of the factory premises at Beliaghata in the year 1994-95. Later on, it was, however, decided by the company to house a registered office and factory at P-15, Kasba Industrial Estate upon getting an office and factory building constructed thereat through India Laminating and Packaging Ltd., for which advance of the said sum of Rs. 59,70,423 was made to it. In the circumstances, the company obtained refund of sum of Rs. 40 lakhs from the said Loyalka Properties P. Ltd., which was thereafter given a loan to India Laminating and Packaging Ltd., and formed part of the said sum of Rs. 59,70,423. (d) In the affidavit the appellant also says he has no recollection of any advance of Rs. 15 lakhs having been given to Sri Satya Sai Properties and Investment P. Ltd., or an advance of Rs. 10 lakhs having been given to Bhuwalka Trading and Tea Co. P. Ltd. It was thus denied that the sum of Rs. 25 lakhs or any portion thereof having been misappropriated, misapplied or retained by him. (e) In the affidavit the appellant explained that the loan amount of Rs. 37 lakhs were given as the Padmawati Mercantiles P. Ltd., were the promoters of the Ballygunge A.C. Market and office space at the said complex was bought by India Laminating and Packaging Ltd., by obtaining a loan of Rs. 37 lakhs from the company and about Rs. 60 lakhs from SBI Home Finance Ltd. The said sum of Rs. 37 lakhs was as such paid by the company directly to the said Padmawati Mercantiles P. Ltd., on behalf of the India Laminating and Packaging Ltd. It was agreed that the said office space of India Laminating and Packaging Ltd., would also be used by the company and the said sum of Rs. 37 lakhs paid by the company would be adjusted against the rents payable to it to India Laminating and Packaging P. Ltd., on account of rent therefor. While a portion of the said sum was thus adjusted as rent in respect of the office premises at Ballygunge A.C. Market, a portion thereof was adjusted against machinery rent payable by the company to India Laminating and Packaging Ltd. The adjustment of the balance outstanding loan could not be done in view of liquidation of the company. In the circumstances, there could be no question of the company recovering back the said sum of Rs. 37 lakhs from the said Padmawati Mercantiles P. Ltd. (f) In the affidavit it has been explained as far as the expenses of Rs. 60,16,012 alleged to have been incurred for constructing the factory building structure lying and situated at P-15, Kasba Industrial Estate, is concerned it includes the sum of Rs. 59,70,423 which has already been explained, was paid by the company to India Laminating and Packaging Ltd., but the construction of the said factory and the office premises at P-15, Kasba Industrial Estate on the understanding the same would be adjusted against the rent payable by the company to India Laminating and Packaging Ltd., for the use of the same and for use of certain machinery for India Laminating and Packaging Ltd.
(2.) There has been no affidavit filed by the official liquidator to deny and dispute the statement of defence made out as quoted hereinabove.
(3.) Thereafter the learned trial judge decided to dispose of the matter on witness action.;