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2023 (12) TMI 1256 - HC - Companies LawDirection for investigation into the affairs of the company - reference the matter of SFIO on the request of the official liquidator - Application filed by an Ex-Director of the Company in liquidation to recall the order passed by this Court - Money Laundering - diversion of funds - HELD THAT:- It is not denied by the Official Liquidator that it has a panel of Chartered Accountants through whom the inspection and inquiries may be ordered. The sole purpose for which the Official Liquidator has sought for referring the matter to the SFIO was for detection of diversion of assets/funds of the company in liquidation. It is not denied by the Official Liquidator that the balance sheet, other books of account and documents are in possession of the official liquidator as well as the statement of affairs filed by the ex-Director on behalf of the company in liquidation. Learned counsel for the applicant is right in saying that there was no material in the Official Liquidator’s report to demonstrate that there was any intention of the Ex-Director to defraud the creditors, members or any other person or that the management of the company was guilty of fraud and misfeasance or other misconduct towards the company or towards any of its members and, therefore, referring the matter to the SFIO is uncalled for. As a matter of fact, the allegation against the company in liquidation by the Official Liquidator regarding a web of intrigue employed by the company and other groups of companies for defrauding the investors and creditors and diversion of funds of the company, could have been substantiated by the specific references to the entries made in the balance sheet and other books of account of the company in liquidation, which has not been done. To insinuate that the office of the Official Liquidator does not have the capacity or ability to detect diversion of funds of the company in liquidation, is not acceptable given the fact that a panel of Chartered Accounts is admittedly available to assist the Official Liquidator in discharge of its duties. The provisions of the Act, 1956 and the Act, 2013 though, do not prohibit investigation to be initiated where the company has passed a special resolution for voluntary winding up or where other proceeding for winding of a company are pending before the Tribunal, however, the same may not applicable in the case of the company in liquidation, inasmuch as the winding up order of the company in liquidation was passed by the Court much prior to the report of the Official Liquidator filed before this Court seeking investigation by the SFIO. It is not the case of the Official Liquidator that the powers conferred on it by virtue of the aforesaid provisions are inadequate for purpose of detection of the irregularities like the allegation of diversion of funds, etc. that caused it to move this Court for referring the matter to the SFIO. It should not appear to the Court that the Official Liquidator seeks referral of the matter to the SFIO for the reason that it finds itself inadequate to exercise the powers conferred on the Official Liquidator by the aforesaid sections of the Act. The order dated 13.12.2019 is recalled and the Recall Application No.235 of 2020 is hereby allowed.
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