KAREDLA SURYANARAYAN Vs. SRI RAM DASS MOTOR TRANSPORT PVT LTD

JUDGEMENT

(1.) THE petitioners in C. P. No. 15 of 1994 in the matter of Sri Ram Das Motors Limited (company) filed under Section 397/398 of the Companies Act, 1956, have filed this application, C. A. No. 65 of 1996, seeking various reliefs,, inter alia, the appointment of an administrator to manage the affairs of the company. Later, through another application, C. A. No. 67 of 1997, the petitioners have sought for amendment to the said application, viz., 65 of 1996.

(2.) Dr. Debi Prasad Pal, senior advocate, appearing for the petitioners, even though the application contains various allegations, restricted his arguments on the following two allegations only for the prayer for the appointment of an administrator.

(3.) THE second allegation, as advanced by him, relates to the alleged siphoning off of funds by diversion of various automobile parts manufactured by the company without accounting for the same in the books of the company. Reading out from the annual report of the company for the year 1994-95, he pointed out the discrepancies in the figures of certain items of automobile parts, like kingpin, pistonpins, tierod pins etc. Reading out from the figures, he pointed out that there is a huge difference between the opening stock plus production minus sales plus closing stock. According to him, the difference which is very substantial in number, obviously had been diverted without being accounted for and the sale value thereof has been siphoned off by the second respondent. THE value of such unaccounted and diverted items would run into crores of rupees which is a clear case of misappropriation of company funds, which, unless checked through the appointment of an administrator, would prejudicially affect the interest of the company and its shareholders.