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2001 DIGILAW 558 (CAL)

ASHIT ROY v. PEERLESS TEA AND INDUSTRIES LTD.

2001-08-31

ARUN KUMAR MITRA, Y.R.MEENA

body2001
ARUN KUMAR MITRA, J. ( 1 ) THESE three appeals are interconnected, therefore we heard and disposed of them by this common order. The common basic facts touching the three appeals are inter alia as follows : these three appeals which have been heard analogously centre round the resultant effect of a winding up petition being C. P. No. 321 of 1987. ( 2 ) ONE Ashit Roy, residing at Millanpally, P. O. Siliguri, District Darjeeling filed an application under Sections 433, 434 and 439 of the Companies Act, 1956, being Company Petition No. 321 of 1987. ( 3 ) IN the said petition it was inter alia stated that M/s. Peerless Tea and Industries Ltd. is a public company limited by shares and was incorporated under the provision of the Companies Act, 1956, in or about 1967. The registered office of the company at 3/1, Mango Lane, Calcutta, and the nominal shareholders' capital is Rs. 7 lakhs and the paid up capital is Rs. 5,35,670. It was averred in the said Company Petition No. 321 of 1987 that between November 30, 1984, and November 30, 1985, at the request of the company, the said Shri Ashit Roy from time to time lent and advanced various sums of money aggregating to a sum of Rs. 66,105 repayable on demand with interest thereon at 18 per cent. per annum. ( 4 ) THE said loans were advanced by Sri Ashit Roy to the company for the purpose of the company's business and was a commercial loan. It was also averred in the said petition in order to secure due repayment and/or as security therefor executed four several demand promissory notes dated November 30, 1984, January 18, 1985, February 22, 1985 and November 30, 1985, executed by the manager and/or director for and on behalf of the said company in favour of the petitioner, and the aggregate sum of Rs. 66,105 was covered in the said four promissory notes. ( 5 ) IT was further stated in the said company petition that the company has failed and neglected to pay the said sum of Rs. 66,105 till date and the petitioner claimed Rs. 88,240. 35 from the company being the amount Rs. 66,105 as principal sum and Rs. 22,135. 35 as interest at 18 per cent. ( 5 ) IT was further stated in the said company petition that the company has failed and neglected to pay the said sum of Rs. 66,105 till date and the petitioner claimed Rs. 88,240. 35 from the company being the amount Rs. 66,105 as principal sum and Rs. 22,135. 35 as interest at 18 per cent. ( 6 ) IT was also averred by Shri Ashit Roy that statutory notice of demand was served on the company and after a lapse of period of 21 days of the statutory notice when the company could not pay the amount, according to the petitioner because it was a commercially insolvent company being unable to pay the debts. Accordingly, Shri Roy the petitioner in the company petition prayed for winding up of M/s. Peerless Tea and Industries Ltd. under the provisions of the Companies Act, 1956. ( 7 ) IN the said company petition on interlocutory applications from time to time, interim orders were passed. On June 4, 1987, Mrs. Manjula Bose J. passed an order the text of which is inter alia as follows :"mr. Sunit Kr. Bhattacharya and Mrs. Chandry Alam, advocates are appointed joint special officer in terms of prayers B and C to act jointly and/or severally at the discretion of the senior special officer will supervise the sale of the tea crops of Salim Hill Estate and maintain a separate account in respect of such sales of the tea crops. The senior special officer be paid 200 gms. and the junior special officer 150 gms. in the first instance. Their final remuneration will be settled later on. Liberty to serve the company both at the registered office also on the manager of Salim Hill Tea Estate, Karshiang. The officer-in-charge Karshiang Police Station is directed to render all assistance to the special officers for the purpose of giving effect to this order. " ( 8 ) ANOTHER interim order was passed by Mrs. Liberty to serve the company both at the registered office also on the manager of Salim Hill Tea Estate, Karshiang. The officer-in-charge Karshiang Police Station is directed to render all assistance to the special officers for the purpose of giving effect to this order. " ( 8 ) ANOTHER interim order was passed by Mrs. Manjula Bose J. on August 27, 1987, and the gist of the said order is inter alia as follows :"it appears that although joint special officers have been appointed they are facing difficulties in running the tea garden for want of funds and as such it is prayed that suitable directions be given by court for arrangement of funds by way of loan from the petitioner and/or any financial institution so that the garden may be run and the special officers out of the said proceeds of the tea crops may repay the loans taken. Mr. Kar appearing for the company opposes the management of the company by the special officers and prays that the order of appointment of the special officers be vacated, and submits that inasmuch as the affidavit-in-opposition has been filed by his client seeking vacating of the said order the application of the petitioner is ready for hearing. Mr. Kar reminds the court that he sought the removal of the special officers, whereupon the court did not accede to his prayer and directed that affidavit be filed before the court with necessary averments so that the court could entertain such a plea. Now that the application is before the court for hearing the same can be heard and disposed of expeditiously. In view, however, of the heavy list before the court and in view of the fact that there is hardly three weeks left before the ensuing vacation commence, it may not be possible for the court to take up the matter before the holidays. The court is of the view that in the interest of the company certain directions are required to be given to the joint special officers for the purpose of running the tea gardens and as such, the court passed the order which reads as under : (a) The joint special officers will take all steps to arrange funds by way of loans from any financial institution. If no loan is forthcoming from any financial institution, the special officers will seek loan from the petitioner to run the garden, which loan will be repaid by the joint special officers out of the sale proceeds of the tea crops; (b) The joint special officers will take all expeditious steps to sell all tea crops through auction at Calcutta including those lying in the garden as also the stock held by M/s. Curritt Moram Co. Ltd. The special officers will maintain separate accounts in respect of such; (c) The joint special officers, for the purpose of managing the affairs of the company will employ, if necessary, a manager, an accountant, a storekeeper, a supervisor and such staff as may be necessary in order to carry on the said business and will first ascertain if any staff available amongst the employees of the company. (If such persons already employed, the employees of the company ). If such persons already employed with the company can take charge of specific duties allotted to them by the joint special officers, their assistance will be utilised before employing new personnel. (d) The joint special officers will have authority to take necessary action for the best interest of the garden. (e) The joint special officers are authorised to take expeditious and necessary steps to realise past or charge dues of the company from its debtors or from the past management and to take such steps for recovering such dues from the debtors or from the past management. They will, accordingly, make a list of all such dues from the records of the company, and will take steps to initiate proceedings for such dues, which requires expeditious prosecution. (f) The joint special officers are authorised to take over the possession of the registered office from the special officer appointed in the matter of Sima Roy v. The Company and they will take inventory of the books, papers, documents and assets lying thereof. (g) The joint special officers will have authority to open a joint banking accounts in a nationalised bank in the name of joint special officers and authorised to operate the said accounts jointly as special officers. (h) The joint special officers will take appropriate steps to sell the tea crops by official auction at the highest price. (i) M/s. Carritt Moram Co. (h) The joint special officers will take appropriate steps to sell the tea crops by official auction at the highest price. (i) M/s. Carritt Moram Co. Pvt. Ltd. is directed not to deal with any tea crops of the company and further directed to forthwith return all stock lying with them and to remit the sale proceeds of crops or stock already sold in respect of any sale which has already taken place, and will forward to the special officers a statement indicating the particulars at the time of such sales. (j) The joint special officers will prepare a statement of the past liabilities of the company including the wages and salary of the workers and out of the sale of the crops realised make suitable provision for payment of the wages and salary to the workers and staff of the company who will have liberty to place their lawful demands before the joint special officers for necessary scrutiny and payment of the same. (k) The joint special officers will have general power to deal with any matter concerning the company and its affairs till such times as they continue to act as such special officers. (l) Prior to taking any further loan as indicated hereinabove from financial institution, the special officers will meet the current liabilities in respect of the loans taken from the petitioner as mentioned in the report of the special officers dated August 20, 1987, wherein it appears a total sum of Rs. 2,81,560. 80 between June 14, 1987, and August 14, 1987, on account of wages, salary, excise duty, ration, fuel, carrier, insurance, maintenance and running of the factory at the garden has been advanced by the petitioner. The said loan will be returned out of the sale proceeds of the tea crops and after the said loan account has been fully paid, the special officers will have authority to take further advance as indicated in this order for the purpose of running the garden. The joint special officers will be entitled to a monthly remuneration of 30 gms. Each at the moment and their final remuneration will be decided later on, to be paid out of the funds of the company. Mr. Kar prays for stay of operation of this order till September 7, 1987. The prayer for stay is allowed till September 7, 1987. Each at the moment and their final remuneration will be decided later on, to be paid out of the funds of the company. Mr. Kar prays for stay of operation of this order till September 7, 1987. The prayer for stay is allowed till September 7, 1987. " ( 9 ) ULTIMATELY, the said Company Petition No. 321 of 1987 came up for hearing and Hon'ble Justice Umesh Chandra Banerjee on February 26, 1990, passed an order that in these state of facts, it is, therefore, ordered that the company in terms of the submissions of Mr. Mitter, is directed to pay a sum of Rs. 66,105 on account of the principal and a further sum of Rs. 11,070 on account of interest at the rate of 9 per cent. per annum aggregating to Rs. 77,175. Mr. Mitter appearing for the company produces three several bankers cheques for sums of Rs. 66,105, Rs. 5,000 and Rs. 3,000, in cash in court today. The said sums were offered to the petitioning creditor's advocate-on-record in court today but Mr. Mukherjee appearing for the petitioning creditor submitted that his instructions are to pray for a stay of operation of this order and as much, he is not in a position to accept the same. The company is directed to send the said sum to the petitioning creditor through postal agencies either by way of cash or banker's cheques or pay order by tomorrow. The company is further directed to pay interest at the rate of 9 per cent. on the above noted sum of Rs. 66,105 from June 1, 1987, till February 28, 1990, and shall send a further sum on account of such interest along with the earlier payment in terms of this order. ( 10 ) THE special officers appointed herein shall stand discharged forthwith and the directors shall take over possession of all books, papers, documents and assets of the company. ( 11 ) IT has been stated that the joint special officers have been deducting their monthly remuneration in terms of the earlier order from the sale proceeds in their hand. In the event, however, any remuneration has not been paid or withdrawn by the joint special officers, the company shall pay their remuneration, if any outstanding as of date. ( 11 ) IT has been stated that the joint special officers have been deducting their monthly remuneration in terms of the earlier order from the sale proceeds in their hand. In the event, however, any remuneration has not been paid or withdrawn by the joint special officers, the company shall pay their remuneration, if any outstanding as of date. ( 12 ) THE special officers are directed to file their accounts within a period of two weeks in the department with copies thereof to the company and the petitioning creditor. Each of the parties will be at liberty to take step or steps in accordance with law on the filing of such accounts. As regards the dues of the petitioning creditor on account of loan and advance said to have been given to the special officers, leave is given to the petitioning creditor to mention the matter before this court after four weeks upon notice to the company. ( 13 ) THE company will be at liberty to carry on business in the usual course without the assistance of the special officers. The joint special officers are directed to act forthwith on a signed copy of the operative portion of this dictated order. "save as above all interim orders are vacated. This matter will appear in the list four weeks hence as 'for orders'. Mr. Mukherjee, appearing for the petitioning creditor, prays for stay of operation of this order but considering the facts and circumstances of the matter in issue such a prayer for stay is refused. " ( 14 ) NO appeal was preferred against the earlier interim order passed in the said company petition and ultimately the instant appeal being Appeal No. 93 of 1999 has been preferred against the said order dated February 26, 1990, passed by Hon'ble Justice U. C. Banerjee in Company Petition No. 321 of 1987. " ( 14 ) NO appeal was preferred against the earlier interim order passed in the said company petition and ultimately the instant appeal being Appeal No. 93 of 1999 has been preferred against the said order dated February 26, 1990, passed by Hon'ble Justice U. C. Banerjee in Company Petition No. 321 of 1987. ( 15 ) SUBSEQUENTLY, another order passed by the Hon'ble Justice U. C. Banerjee in the said Company Petition No. 321 of 1987 on March 2, 1990, the text of the order dated March 2, 1990, is inter alia as follows :"it is clarified that in the second line of the second paragraph of page 2 of the operative portion of the order dated February 26, 1990, instead of word 'director' it should be read as : 'company or the chief executive officer of the company who has filed the warrant of attorney on behalf of the company'. " ( 16 ) THE joint special officers are directed to deliver possession forthwith and preferably in the course of the day. The advocate-on-record for the company shall accompany the chief executive officer of the company at the time of taking over possession including the books, papers and documents. This special officer shall part with books, papers and documents and do all things required to be done to divest themselves of their duties on identification of the record of the company. ( 17 ) THE joint special officer since discharged in terms of the order passed on February 26, 1990, shall be entitled to obtain necessary inspection of the books, papers and documents at the officer of the advocate-on-record or the company on prior appointment. ( 18 ) THE joint special officer, however, would also be at liberty to appoint a person for the purpose of inspection of accounts at the garden itself, the expenses of which, however, shall be borne by the company. This order is passed to facilitate the joint special officer to file accounts in terms of the earlier order. ( 19 ) THE order dated February 26, 1990, is modified to the extent as indicated above. "let this be incorporated in the order dated February 26, 1990. This order is passed to facilitate the joint special officer to file accounts in terms of the earlier order. ( 19 ) THE order dated February 26, 1990, is modified to the extent as indicated above. "let this be incorporated in the order dated February 26, 1990. " ( 20 ) SHRI Ashit Roy, the petitioner in the company petition preferred appeal being Appeal No. 130 of 1990 against the aforementioned order dated March 2, 1990 (one of the three appeals herein which are heard today ). ( 21 ) NOW in the said Company Petition No. 321 of 1987 on behalf of the Peerless Tea and Industries Ltd. Company Application No. 163 of 1990 was filed (hereinafter referred to as the said company application ). In the said application the applicant-company stated inter alia that "by order June 4, 1987, the joint special officers were directed to initiate and make an inventory of the assets and properties of the applicant-company and also its statutory books and to take possession of the sale including Salim Hill Tea Estate and to supervise over the tea crops and to sell the same and no authority was given to the joint special officer to borrow money from anywhere. In the said company application it was also averred by the applicant-company that the joint special officers without any order from this hon'ble court borrowed money from the petitioner-petitioning creditor who is not authorised to lend any money to the joint special officer. The joint special officer submitted the report on August 20, 1987, and it appears from the report that the joint special officer wanted to take loan from the petitioning creditor and wanted to repay the same out of the sale-proceeds as tea crops and also wanted to direct management and control of the affairs of the company and to carry on business as such. ( 22 ) IN the said application the applicant-company also averred that no document is forthwith coming to show that loan from financial institutions was prayed for and/or refused. The joint special officer submitted to the learned judge taking company matters on February 23, 1990, that they had made verbal request to certain institutions for loans and written application was not made. The joint special officer submitted to the learned judge taking company matters on February 23, 1990, that they had made verbal request to certain institutions for loans and written application was not made. ( 23 ) IT was averred in the said company application that the joint special officer had been receiving funds for the running of the Salim Hill Tea Estate for the petitioning creditor and no money was deposited in the account of the joint special officer, nor were they receiving the money directly from the petitioning creditor. The joint special officers on February 23, 1990, submitted before the court that payments were made in cash at the garden but none of the special officers could ascertain what amount of rupees was actually received or paid. In the said company application the applicant-company made so many allegations regarding the accounts against the joint special officers as well as said Shri Ashit Roy. The amount was in fact offered but that was rejected and recorded in the judgment dated February 26, 1990, thereafter the amount as directed by this hon'ble court by registered post to the petitioning creditors on the envelope came back with the reflect "untraced". ( 24 ) THE applicant-company averred that the joint special officer had shown a loss of Rs. 14 lakhs approximately during the period of running of the said tea garden by the joint special officer. According to the applicant-company the said period was a very good period for tea industries and the said tea garden was found to be in profit. On behalf of the company it was averred that the company reserved the right to take up appropriate steps and submitted by the joint special officer are scrutinised in the said application, the applicant-company was prayed for by Shri Roy of all the transactions he had with the company. In fact, in the said application the applicant-company challenged the accounts rendered by the joint special officer as well as the claim made by Shri Ashit Roy. The said Company Application No. 163 of 1990 filed by the applicant-company in Company Petition No. 321 of 1987 was disposed of by order dated June 19, 1992, by the Hon'ble Justice P. K. Mazumdar. In the said order Justice Mazumdar finally observed :"i do not see any merits in the allegation regarding the accounts maintained by the special officers. This is a misconceived application. In the said order Justice Mazumdar finally observed :"i do not see any merits in the allegation regarding the accounts maintained by the special officers. This is a misconceived application. It also appears that the applicant-company has made certain reckless and serious allegations against the joint special officers without ascertaining in any manner the allegations made against the said joint special officers, the officers of court. " ( 25 ) CHALLENGING the said order dated July 19, 1992, passed by the Hon'ble Justice P. K. Mazumdar in Company Application No. 163 of 1990 filed in Company Petition No. 321 of 1987 the Peerless Tea and Industries Ltd. preferred an appeal on July 29, 1992, being Appeal No. 587 of 1992 (one of the three appeals mentioned hereinabove ). ( 26 ) WHEN disposing of Company Petition No. 321 of 1987 by Hon'ble Mr, Justice U. C. Banerjee on February 26, 1990, it was submitted on behalf of the company that the company is desirous of making payment of the dues of the petitioning creditor so far as the principal is concerned. As regards payment of interest Mr. Mitter on behalf of the company left it to the court for fixation of the rate of interest and submitted that the company is also willing to pay the interest to be fixed by the court so that the matter can be disposed of at the concluding and passed an order which is inter alia as follows :"on these state of facts it is therefore ordered that the company, in terms of the submissions of Mr. Mitter, a sum of Rs. 66,105 on account of the principal and further sum of Rs. 11,070 on account of interest at 9 per cent. per annum aggregating Rs. 77,175. Mr. Mitter appearing for the company produces three several banker's cheques for sums of Rs. 66,105, Rs. 5,000 and Rs. 3,000 in cash in court today. The said sums were offered to the petitioning creditor and the advocate in court today, Mr. Mukherjee appearing for the creditor submitted a stay of operation and as such, she is not in a position to accept the same. The company is directed to send the said sum to the petitioning creditor through postal agencies either by way of cash or banker's cheques or pay order by tomorrow. The company is further directed to pay interest at 9 per cent. The company is directed to send the said sum to the petitioning creditor through postal agencies either by way of cash or banker's cheques or pay order by tomorrow. The company is further directed to pay interest at 9 per cent. per annum on the above noted sum of Rs. 66,105 from June 1, 1987, till February 28, 1990, and shall send a further sum on account of such interest along with the earlier payment in terms of this order. " ( 27 ) HIS Lordship Justice Banerjee by that order also discharged the special officer and directed delivery of possession to the directors all books, papers and documents, of the company. ( 28 ) AGAINST the said order Shri Ashit Roy preferred Appeal No. 93 of 1990. On the other hand, the Peerless Tea and Industries Ltd. preferred appeal being Appeal No. 587 of 1992 challenging the judgment of Hon'ble Justice P. K. Mazumdar. ( 29 ) IT, therefore, appears from the facts and circumstances of the case that Shri Ashit Roy filed a winding up petition for non-payment of Rs. 66,105 to him by the Peerless Tea and Industries Ltd. In the meantime by virtue of different orders joint special officers are appointed in respect of Salim Tea Estate. The said joint special official took loan from Shri Ashit Roy for running the tea estate of the company and according to the company this taking of loan is illegal. The company by filing Application No. 163 of 1990 in the said Company Petition No. 321 of 1987 challenged the accounts submitted by the joint special officer and this application has been dismissed by Hon'ble Mr. Justice P. K. Mazumdar and against that Appeal No. 587 of 1992 has been preferred. ( 30 ) IT, therefore, clearly appears that Shri Ashit Roy did not accept the amount in terms of the judgment delivered in the winding up petition. It also appears that the company did not accept and on the other hand challenged the accounts submitted by the joint special officer on different grounds. ( 30 ) IT, therefore, clearly appears that Shri Ashit Roy did not accept the amount in terms of the judgment delivered in the winding up petition. It also appears that the company did not accept and on the other hand challenged the accounts submitted by the joint special officer on different grounds. In the above view of the matters all three appeals relate to the money claim and counter claim by both the parties and also the facts are disputed by the parties, which cannot be decided only on the basis of the affidavits without taking evidence in court and without proving the fact in the court of law. ( 31 ) THE entire dispute by and between the parties can only be settled through evidence before the civil court. As a result, all the three appeals are dismissed. All interim orders shall stand vacated. The parties are at liberty to move the appropriate forum in accordance with law. In the circumstances, there will however be no order as to costs. Stay prayed for is refused.