M/S GROVER LEASING LTD. vs M/S RANK SUSPENSION PVT. LTD.
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on: 23 January 2024
Judgment pronounced on: 19 February 2024
+ CO.PET. 128/1994
M/S GROVER LEASING LTD. ….. Petitioner
Through: Mr. Devanshu Chauhan, Mr.
Rishi Kapoor & Ms. Parul
Sharma, Advocates.
versus
M/S RANK SUSPENSION PVT. LTD. ….. Respondent
Through: Ms. Jagniti Bharti, Adv. for
RBI.
Ms. Isha Khanna, Standing
Counsel for OL.
CORAM:
HON’BLE MR. JUSTICE DHARMESH SHARMA
J U D G M E N T
CO.PET. 128/1994 & CO. APPL. 698/2018
1. This judgement shall decide the above noted application dated
28.05.2018, which has been preferred under Rule 9 of the Companies
(Court) Rules, 1959 by the applicant – Shri Rajinder Pal Marwaha,
who claims to be a shareholder of the respondent company which has
since been dissolved, seeking release of funds from the Reserve Bank
of India.
2. Briefly stated, company petition bearing CO.PET. 128/1994
was instituted under Sections 433, 434 and 439 of the Companies Act,
1956 seeking winding up of the respondent company M/s Rank
Suspension Pvt. Ltd. In the course of proceedings, an Official
Liquidator attached to this Court was appointed as the Provisional
Liquidator of the respondent company vide order dated 18.03.2002
and thereafter the company was ordered to be wound up vide order
dated 17.09.2004. From a perusal of the record, it is borne out that
claims were invited by the Official Liquidator in 2013, however no
creditors came forth and on completion of the formalities, the
respondent company was finally dissolved on 04.09.2013 and a sum
of Rs. 70,32,321.50/- was accordingly transferred to the RBI.
3. On behalf of the applicant, it is stated that he was one of the
shareholders of the respondent company and out of a total of 28760
shares of the company, he held 23110 shares in his name – accounting
for 80.35% of the shares; as also 1439 shares in the name of his HUF
that being Rajinder Pal Marwaha HUF” accounting for 05% of the
shares. It is the case of the applicant that he had shifted to Uttar Kashi
in the year 2006 and has since been taking care of abandoned families
who are flood survivors, and was unaware of the notices published in
newspapers by the Official Liquidator. It is further stated that he was
under a bonafide impression that no funds were left available with the
respondent company at the time of its final dissolution on 04.09.2013,
and therefore he did not file any claim before the Official Liquidator.
4. Presently, it is stated on behalf of the applicant that he is
entitled to a sum of Rs. 56,50,470.33/-, equivalent to 80.35% of Rs.
70,32,321.50/- on account of the shares held by him in his name; as
also an amount of Rs. 3,51,616.08/-, on account of the shares held by
him in the name of his HUF, being 05% of the total shares of the
respondent company.
5. Per contra, certain contentions have been raised on behalf of
the Official Liquidator vide OL Report 101/2023 dated 25.10.2023. It
has been stated in the said report that a claim was received from the
applicant on 28.05.2019, seeking release of funds from the RBI.
Thereafter, vide order of this court dated 16.01.2023, notice was
issued to the RBI and the applicant was directed to furnish necessary
documents in support of his claim, evidencing the he was a
shareholder of the company. Pursuant to the same, the applicant filed
an affidavit and the facts stated therein were verified from the annual
returns filed by him in the year 1999, and it is stated that it appears
that he is entitled to 23110 and 1439 shares as claimed by him.
However, it has been stated in the report of the OL that the applicant
failed to produce the share certificates. A justification was provided in
the affidavit filed by the applicant that he had lost the share
certificates in the year 2000, yet he failed to produce any complaint or
FIR lodged in relation to the missing certificates.
6. A notice dated 16.04.2023 was issued by the Official Liquidator
calling upon the applicant to submit all relevant documents and proof,
including the share certificates in original, in furtherance of the claim
made for release of the funds and further vide order of this court dated
02.08.2023, the applicant was directed to appear before the office of
the Official Liquidator. In compliance of the same, Counsel for the
applicant appeared before the office of the Official Liquidator and
submitted certain documents. It has been stated that the applicant only
furnished copies of the Annual Return of the company for the year
ending 31.03.1999 but failed to provide the original Share Certificates
and thus, in absence of the original Share Certificates, the Official
Liquidator cannot confirm the claim of the applicant.
7. At this juncture, it is apposite to note that a Reply Affidavit
dated 19.12.2019 was filed on behalf of the RBI in response to the
present application in compliance with the order of this court dated
22.02.2019. It has been stated therein that the present application is
not maintainable as against the RBI in view of the fact that Punjab
National Bank (PNB) has been designated as the accredited bank for
opening of Official Liquidator Accounts and Company Liquidation
Accounts, as provided for under Sections 552 and 555 of the
Companies Act, 1956. In this regard, reference has been made to
Corrigendum F.No.G-25017(VI)-Adv.Party (DOA) dated March 11,
1977 issued by Controller of Accounts, Ministry of Law, Justice and
Company Affairs. Further, it is stated that per the Companies Liquidation
Accounts Rules, 1965, the definition of Reserve Bank of India, includes
its branches and agencies, and that PNB is an agency bank for handling
Government transactions. Moreover, reliance has been placed on the
Companies (Central Government”s) General Rules and Forms, 1956, per
which all payments subsequent to 01.10.1976 are to be made to PNB as
it is the designated Public Sector Bank for the Department of Company
Affairs. As regards the Company Liquidation Account provided for
under Section 555 of the Companies Act, 1956, the same is to be
maintained with and handled by PNB instead of RBI as per the Draft
Manual of the Functioning of Official Liquidators, dated 27.03.2012.
8. Having heard learned counsels for the rival parties, including
the learned Standing Counsel for the Official Liquidator and on
perusal of the record, it would be expedient to reproduce Section 555
of the Companies Act, 1956 which provides that at the instance of
winding up of a company, any funds remaining with the company on
account of unpaid dividends and undistributed assets are to be paid
into a separate public account of the RBI called the Companies
Liquidation Account. Section 555 of the Companies Act, 1956 reads
as under:
555. UNPAID DIVIDENDS AND UNDISTRIBUTED ASSETS
TO BE PAID INTO THE COMPANIES LIQUIDATION
ACCOUNT
(1) Where any company is being wound up, if the liquidator has in
his hands or under his control any money representing – (a)
dividends payable to any creditor which had remained unpaid for
six months after the date on which they were declared, or (b) assets
refundable to any contributory which have remained undistributed
for six months after the date on which they became refundable, the
liquidator shall forthwith pay the said money into the public
account of India in the Reserve Bank of India in a separate account
to be known as the Companies Liquidation Account.
(2) The liquidator shall, on the dissolution of the company,
similarly pay into the said account any money representing unpaid
dividends or undistributed assets in his hands at the date of
dissolution.
(3) The liquidator shall, when making any payment referred to in
sub-sections (1) and (2), furnish to such officer, as the Central
Government may appoint in this behalf, a statement in the
prescribed form, setting forth, in respect of all sums included in
such payment, the nature of the sums, the names and last known
addresses of the persons entitled to participate therein, the amount
to which each is entitled and the nature of his claim thereto, and
such other particulars as may be prescribed.
(4) The liquidator shall be entitled to a receipt from the Reserve
Bank of India for any money paid to it under subsections (1) and
(2), and such receipt shall be an effectual discharge of the
liquidator in respect thereof. (5) Where the company is being
wound up by the 1 [Tribunal], the liquidator shall make the
payments referred to in sub-sections (1) and (2) by transfer from
the account referred to in section 552.
(6) Where the company is being wound up voluntarily * [by] 2 [the
Tribunal], the liquidator shall, when filing a statement in pursuance
of sub-section (1) of section 551, indicate the sum of money which
is payable to the Reserve Bank of India under sub-sections (1) and
(2) of this section which he has had in his hands or under his
control during the six months preceding the date to which the said
statement is brought down, and shall, within fourteen days of the
date of filing the said statement, pay that sum into the Companies
Liquidation Account.
(7) (a) Any person claiming to be entitled to any money paid into
the Companies Liquidation Account (whether paid in pursuance of
this section or under the provisions of any previous companies law)
may apply to the 1 [Tribunal] for an order for payment thereof, and
the 1 [Tribunal], if satisfied that the person claiming is entitled,
may make an order for the payment to that person of the sum due :
Provided that before making such an order, the 1 [Tribunal] shall
cause a notice to be served on such officer as the Central
Government may appoint in this behalf, calling on the officer to
show cause within one month from the date of the service of the
notice why the order should not be made. (b) Any person claiming
as aforesaid may, instead of applying to the 1 [Tribunal], apply to
the Central Government for an order for payment of the money
claimed ; and the Central Government may, if satisfied whether on
a certificate by the liquidator or the Official Liquidator or
otherwise, that such person is entitled to the whole or any part of
the money claimed and that no application made in pursuance of
clause (a) is pending in the 1 [Tribunal], make an order for the
payment to that person of the sum due to him, after taking such
security from him as it may think fit.
(8) Any money paid into the Companies Liquidation Account in
pursuance of this section, which remains unclaimed thereafter for a
period of fifteen years, shall be transferred to the general revenue
account of the Central Government ; but a claim to any money so
transferred may be preferred under sub-section (7) and shall be
dealt with as if such transfer had not been made, the order, if any,
for payment on the claim being treated as an order for refund of
revenue.
(9) Any liquidator retaining any money which should have been
paid by him into the Companies Liquidation Account under this
section shall – (a) pay interest on the amount retained at the rate of
twelve per cent per annum, and also pay such penalty as may be
determined by the Registrar : Provided that the Central
Government may in any proper case remit either in part or in whole
the amount of interest which the liquidator is required to pay under
this clause ; (b) be liable to pay any expenses occasioned by reason
of his default; and (c) where the winding up is by, 1 [the Tribunal],
also be liable to have all or such part of his remuneration as the 2
[Tribunal] may think just to be disallowed, and to be removed from
his office by this 2 [Tribunal].
9. A careful perusal of the aforesaid provision would show that as
per Clause 7(a) a person may move an application for payment or
refund of any money paid into the Companies Liquidation Account
showing his entitlement to such money or funds. The Court or the
Tribunal, as the case may be, has to be satisfied that such person is
entitled to an order for payment or refund of such amount.
10. In the instant case, first things first, the present application was
filed on 28.05.2018 whereas evidently, the respondent/company had
been finally dissolved on 04.09.2013. The applicant/Shri Rajinder Pal
Marwaha has made the following averments in the instant application:
03. That the Applicant recently appointed an advocate and
inspected the court file whereupon the Applicant became aware
that the official liquidator filed an application dated 30.08.2013
bearing CA No. 1534 of2013 under the provisions of Section 481
of the Companies Act, 1956 for dissolution of the Respondent
Company and to close the books of the Respondent Company after
transferring the available funds to the Reserve Bank of India. It
would not be out of place to mention here that as per the said
application the funds available in the Respondent Company, on
31.07.2013, was to the tune of Rs. 70,32,321.50 (Rupees Seventy
Lakhs Thirty Two Thousand Three Hundred and Twenty One and
Fifty Paisa Only). It was also cited in the said application that since
no contributory have come forward, and therefore the available
funds should be transferred to the Reserve Bank of India.
04. That vide order dated 04.09.2013 this Hon’ble Court was
pleased to allow the aforesaid application dated 30.08.2013 bearing
CA No. 1534 of 2013 and was also pleased to dissolve the
Respondent Company and transferred Rs. 70,32,321.50 to the
Reserve Bank of India.
05. That it would not be out of place to mention here that the
Applicant was not aware about the notices issued in the news
papers as claimed in the application dated 30.08.2013 bearing CA
No. 1534 of2013 since the Applicant shifted to Uttar Kashi
sometime in the year 2006 and the Applicant is now taking care of
three abandoned families who are survivors of flood which took
place in the year 2013. If the Applicant would have been aware
about the notices issued in the news papers the Applicant would
have definitely approached the Official Liquidator. The Applicant
was under bona-fide belief that there was nothing left in the
Respondent Company as against the fact that there were funds, to
the tune of Rs. 70,32,321.50 (Rupees Seventy Lakhs Thirty Two
Thousand Three Hundred and Twenty One and Fifty Paisa Only),
available in the Respondent Company at the time of dissolution of
the Respondent Company on 04.09.2013 and the same was
transferred to the Reserve Bank of India in the absence of claim by
the shareholders.
11. The averments, on the face of it, are completely misleading and
false, in view of that fact that during the course of the winding up
proceedings, his presence in person as well as through counsel has
been recorded by this Court on 29.08.2006, 01.11.2006, 01.12.2006
and 06.03.2007. Furthermore, vide order dated 29.08.2006, it was
found that the applicant had appropriated funds to the tune of
Rs.7,30,000/- of the company (in liquidation) without any authority,
from its account and had failed to appear, despite notices issued by the
Official Liquidator and this Court. It appears that Bailable Warrants
were also ordered to be issued, thereby ensuring and procuring his
appearance before this Court and even an attachment order was passed
in respect of his bank account to the extent of Rs.7,30,000/-, which
was eventually realised by the Official Liquidator. Thus, it cannot be
said that the applicant was unaware of the proceedings.
12. All said and done, the applicant was one of the Ex-directors of
the respondent company, who did not appear regularly during the
winding-up proceedings and failed to produce relevant documents to
the satisfaction of the Official Liquidator, deliberately concealing
material facts and properties from the Official Liquidator. The
applicant has miserably failed to substantiate that he is entitled to
23110 shares of the company in his name as also 1439 shares in the
name of his HUF, as claimed by him. He has not even cared to enjoin
the other shareholders in the proceedings arising out of his
application.
13. The crux of the matter is that in the face of the fact that the
applicant has failed to substantiate his claim, I find no infirmity or
perversity in the report of the Official Liquidator since it is evident
that it is not possible to process his claim. It was for the applicant to
produce sufficient material before the Official Liquidator, which he
has been unable to do. The supposed certified copy of the Annual
Report dated 09.09.1999 which suggests that he is holding such shares
is one which is only signed by him. However, the report is snagged
where the details and signatures of other directors, promoters or
shareholders are required and various relevant places are left in blank
columns. The same has not even been signed by the other shareholder
namely, Shri Satender Lal Marwaha
14. No other record has been brought forth by the applicant which
may suggest an inference that he was a shareholder in the company.
He has failed to provide share certificates which are the prima facie
evidence of the title of a person to such shares, as provided for under
Section 84 of the Companies Act, 1956 or Section 46 of the
Companies Act, 2013. No evidentiary proof has been provided in the
nature of the Register of Members in terms of Section 150 of the
Companies Act, 1956 or Section 88 of the 2013 Act. The applicant has
not placed any legitimate documents on the record which suggest that
he had earned some dividends from the shares claimed by him nor any
such documents have been brought to the fore that would identify the
shares as his assets.
15. In view of the foregoing discussion, the relief claimed by the
applicant seeking release of an amount of Rs. 56,50,470.33 towards
his alleged shareholding as also an amount of Rs. 3,51,616.08/- on
account of the shares held by him in the name of his HUF, cannot be
entertained.
16. Therefore, the said application is dismissed. Nothing survives in
the present company petition and the same is disposed of.
17. The next date of hearing already fixed in the matter i.e.
02.05.2024 stands cancelled.
DHARMESH SHARMA, J.
FEBRUARY 19, 2024
sm/ck