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2010 (8) TMI 179 - HIGH COURT OF KARNATAKAWinding up - Power of Court to access damages against delinquent directors, etc. - Official Liquidator contends that huge loss is on account of failure of the respondents in mismanaging the affairs of the company in liquidation Held that:- Official Liquidator in support of his contention except the oral interested testimony of PW.1, there is no other evidence on record. As against this oral evidence of PW.1 respondents in addition to their oral evidence produced Ex.R6 to R8. A reading of Ex.R6 to R8 manifestly makes it clear that the respondent-Directors had taken necessary steps to mitigate the losses of the company in liquidation. Despite the efforts made by respondents they have to incur huge losses on account of trade difficulties. Therefore, from the explanation and the documents produced by the respondents it cannot be said that on account of mismanagement of affairs of the company in liquidation by the respondents, losses are caused. Therefore, respondents are not liable to pay the amounts claimed under the head ‘profit and loss account’. Application is partly allowed. The respondents are liable to pay a sum of ₹ 6,53,248 under the head ‘trade debts’ and another sum of ₹ 16,54,372 under the head loans and advances.
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