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TMI Blog2008 (6) TMI 355X X X X Extracts X X X X X X X X Extracts X X X X ..... t the factory site of Otoklin Plant and Equipments Ltd. at 4, Kandla Free Trade Zone, Gandhidham, Kutch, Gujarat." 2. Thus, the prayer is that the Official Liquidator should pay the above sum with interest or such other sum determined by this Court either from 20-2-2003 or from such other date as this Court deems fit and proper as compensation/damages for the wrongful and illegal removal, misappro-priation and/or theft of the plant and machinery belonging to the appli-cants. The misappropriation/wrongful and illegal removal and/or theft is allegedly from the custody of the Official Liquidator at the factory site more particularly set out in the above prayer. This Company Application was instituted on 6-7-2006. 3. One Huzefa Abbas, Manager, Sales and Marketing of the applicant has filed an affidavit in support of this application. He has contended that the applicants are in business of pipe coating. It is a company based in Saudi Arabia and incorporated under the laws of that country. 4. The affidavit proceeds to state that the claim is lodged on the basis that the applicants had rented to Otoklin Plant and Equipments Ltd., company in liquidation plant and machinery listed as Ann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith ONGC that certain sums would be paid to Al-Qahtani directly by ONGC. 7. Broadly, the understanding between Otoklin and Al-Qahtani was that Al-Qahtani would provide to the Consortium, on a rental basis, the plant and machinery for execution of the contracts with ONGC. This plant and machinery consisted of a Coat and Wrap Plant, and a Concrete Coating Plant, with related equipment and accessories. Other consumable items were also supplied by Al-Qahtani for and at the consideration more particularly set out therein. Al-Qahtani's plant and machinery were to be returned to them on completion of the Contracts, within the stipulated time. 8. On or about January 1994, Al-Qahtani shipped the said plant and machinery to India in accordance with the terms of the First MOU. The plant and machinery was the same for both the SBHT and ICP-Heera Projects, and it was installed at Otoklin's premises situate at Post Box No. 3, Sector VI, Kandla Special Free Trade Zone, Kandla near Gandhidham, Gujarat ('the Factory Premises') . 9. Subsequently, the SBHT Project and ICP-Heera Project were completed. As Al-Qahtani had not received the royalty or the rental amounts and the other dues payable by Ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rders and directions directing the Official Liquidator, High Court, Bombay to return to the applicants the plant and machinery belonging to the applicants and particularised in Schedule I hereto on such terms as this Hon'ble Court deems proper.' (3) In support of the application - the applicants have filed affidavit. The applicants want the plant and machinery in Schedule I back. According to them, they are the owners of the said plant and machinery described in the schedule and that they had leased the said plant and machinery to the company in liquidation before the same went into liquidation. At present the plant and machinery are in the custody of the Liquidator. (4) The Liquidator shall allow the applicants or their authorised representatives to take inspection of the plant and machinery at site at their own cost. The applicants shall take with them an officer of the Liquidator at their own cost. Such inspection shall be completed within a period of three weeks from today. Thereafter, the applicants shall satisfy Liquidator in respect of the ownership of the said plant and machinery claimed by the applicants. The Liquidator shall pass appropriate orders within two weeks ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposit with the liquidator an amount of Rs. 10,000 towards security charges. The liability of the Applicant to pay the security charges, however, shall be finally determined after the liquidator puts in a report for recovery of security charges from various persons including creditors. Company Application No. 32 of 2003 is disposed of." 13. This order is passed on 20-2-2003 and in pursuance thereto the applicants wrote a letter on 10-11-2003 informing the Official Liquidator that they propose to attend the factory premises for dismantling and removing their plant and machinery. They intimated that this process will take approximately 30 days. The Official Liquidator by his letter dated 18-11-2003 purported to claim amount of Rs. 5,84,546 by way of security charges so as to enable his office to take further steps. Thus, the Official Liquidator is accused of delaying the commencement of dismantling and handing over process. 14. It appears that there was some dispute with regard to payment of these charges and ultimately, the Liquidator determined 15-12-2003 onwards as the date on which the process would be undertaken. 15. In para 15 of the affidavit in support of the present Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing held by him on 17-12-2003. They requested him to take immediate steps so as to retrieve the plant and machinery. He addressed two letters one dated 18-12-2003 to the security agency for filing of compliant and another dated 19-12-2003 to Centurion Bank demanding the name and address of the person who dismantled the plant and machinery in the factory premises. 17. The applicants called upon the Official Liquidator by their letter to retrieve the plant and machinery with police assistance and if Centurion Bank had removed it, then, appropriate steps may be taken to return their properties without further loss of time. They requested the Official Liquidator to appraise them of the steps taken by him and to submit the report to this Court seeking further directions in these extraordinary circumstances. 18. The Official Liquidator addressed a letter to the inspector of police, Kandla Police Station in the State of Gujarat requesting them to investi-gate into the matter and retrieve the plant and machinery and equipments. It is alleged that all these matters are an afterthought and covering up of the actions and conduct of the Official Liquidator The applicants brought certain rele ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FIR. The said fact is mentioned by the Official Liquidator in his report dated 22-4-2004. Pursuant to this report an order was passed on 28-4-2005 by this Court recording that special Inspector of Gandhidham Police Station has taken no steps or action on the complaint filed by the Official Liquidator and therefore, the said Deputy Commissioner was directed to investigate into the matter and file necessary report within four weeks. Even the inquiry was ordered into the conduct of the employees of the Official Liquidator's office. In addition, Registar General of this Court was directed to conduct inquiry against employees of office of Court Receiver and submit compliance report. 22. The applicants then placed reliance upon a valuation report prepared by one J.B. Goda Surveyors Pvt. Ltd. Copy of this valuation report is annexed to the Company Application in support (Exhibit BB). In para 33 of the affidavit in support, once again the applicants referred to the investigations and request that the police authorities be directed to conduct an immediate investigation against those responsible at the earliest. Further, the request is that compensation be paid as computed in prayer (a) on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ood faith and under orders passed by this Hon'ble Court and thus cannot be made liable under the Act. Without prejudice to the above, it is submitted that the cause of action if any, is against all the officers concerned at the relevant time viz., that of the officer of the Court Receiver, Customs Authority and also all other concerned. As the applicants have failed to specify and seek appropriate reliefs against the concerned officers, the application as filed be rejected with costs." 24. The sum and substance of the objection of the Official Liquidator is that the applicant as well as Centurion Bank of Punjab Ltd. are claiming to be the owners of the missing items. There is a dispute regarding ownership of goods which are allegedly missing. Therefore, evidence will have to be led for arriving at the conclusion as to who is the owner of the goods. Thus, only after ownership of the goods is determined, an application can be made to quantify the loss of the concerned party. It is also alleged that the applicants have not furnished proof of the machineries imported by them. The Official Liquidator has denied that valuation of the assets was not done at the time of taking inventory a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epot, Kurla (W), Mumbai 400 078. (5) Crack Detective Network Ltd., 2, Welfare Chamber, 1st Floor, Sector 17, Vashi, Navi Mumbai 400 703. (6) Dy. Commissioner of Customs Office of the Development Commissioner, Kandla Special Economic Zone, Ministry of Commerce & Industry, Gandhidham, Kutch 370 230." Therefore, some of them have filed their affidavits in reply. One Mahesh Murty, Deputy Manager of Centurion Bank has in the affidavit while placing reliance upon the order passed on 21-6-2004 by this Court has also denied that the applicants entire plant and equipment have been removed and misappropriated during the period 1-7-2003 to 9-8-2003. The deponent has specifically contended that no order be passed against the Centurion Bank of payment of compensation for the alleged illegal acts as it is in no way responsible for the same. Even the security agency has filed an affidavit. The final affidavit dealing with the above allegations has been filed by the applicants in this Court on 19-3-2008. The applicants deal with the affidavit of Centurion Bank and placed their own interpretation on para 12 of order dated 21-6-2004 passed by this Court in the earlier Company Application. They ur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nership can be re-opened. That objection must be therefore overruled straightway. 29. That apart, Mr. Diwan has contended that the contention that the present application is not maintainable is manifestly fallacious and contrary to the provisions of the Companies Act, 1956 ('Act'). The respondent No. 1 is an officer of the Court. The said plant and machinery were under the custody of respondent No. 1 pursuant to the directions of this Hon'ble Court. Admittedly, this Hon'ble Court had, by its order dated 20-2-2003, directed the respondent No. 1 to permit the applicants to remove the said plant and machinery from the factory premises. Admittedly, more than 70 per cent of the said plant and machinery has been unlawfully removed from the factory site while in the custody of respondent No. 1. The respondent No. 1 has till date failed to comply with the said order dated 20-2-2003. In the circumstances, this Hon'ble Court has jurisdiction under the provisions of the Act to direct the respondent No. 1 to make good the loss caused to the applicants by its gross negligence and dereliction of statutory duty. The applicant then pointed out the relevant provisions of the Act on which it relies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... report dated 2-1-2004 reads as under :- "(14) That the Official Liquidator submits that the Security Guards engaged at the site and the representative of Official Liquidator deputed at the time of giving delivery of leased machines to Centurion Bank Limited made a statement that the machineries belonging to M/s. Al-Qahtani Pipe Coating Terminal were lifted by the Centurion Bank Limited and/or their dismantling agent M/s. R.K. Steel Syndicate and as such they are liable to make good of the loss of the value of machineries removed from the site." On a bare perusal of the said prayer (b ) and the said paragraph No. 14 of the said report dated 2-1-2004 shows that the directions issued by this Hon'ble Court in its said order dated 21-6-2004 was in light of the said report dated 2-1-2004 made by the respondent No. 1 seeking directions from this Hon'ble Court to order the respondent Nos. 3 and 4 who are third parties, with whom the applicants have no privity, to compensate the applicants for the acts of the respondent No. 1. However, the present application has been made by the applicants seeking compensation from the respondent No. 1 alone and not from some other third party. In the ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmitted by the office of the Official Liquidator as in the instance case, it will send wrong signals to the public at large rendering their faith in the justice system and indeed its reputation, in grave jeopardy. 35. In support of the above contentions, Mr. Diwan relies upon following decisions : "(1) Augustine Meenattoo v. Mathai Mathai [1954] 26 Comp. Cas. 51. (2) Amba Tannin v. Official Liquidator [1975] 45 Comp. Cas. 457 (Bom.). (3) Maharashtra State Financial Corpn. v. Official Liquidator AIR 1993 Bom. 392. (4) Nilesh Lalit Parekh, In re 2002 (1) Bom. C.R. 357. (5) Sudarshan Chits (I) Ltd. v. O. Sukumaran Pillai [1984] 4 SCC 657. (6) Meghal Homes (P.) Ltd. v. Shree Niwas Girni K.K. Samiti [2007] 7 SCC 753. (7) Smt. Basavva Kom Dyamangouda Patil v. State of Mysore [1977] 4 SCC 358. (8) Intercontinental Agencies (P.) Ltd. v. Amin Chan Khanna [1980] 3 SCC 103. (9) ONGC v. Association of Natural Gas Consuming Industries [2001] 6 SCC 627." 36. Mr. Samdani, learned senior counsel appearing for the Official Liquidator while reiterating the statements in the affidavit in reply, submi-tted that this application is not maintainable. He submits that the applicant is fully awa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w of the same. Such a course, if permitted, would result in miscarriage of justice and would mean that the liquidator alone is called upon to answer the allegations. 38. Mr. Samdani was at pains to point out that in the application itself the applicant alleges that there is a collision between third parties/those who removed plant and machinery and the Official Liquidator. That is specifically alleged in paragraphs 22 and 26 of the affidavit in support. That allegation is again reiterated in para 34 is the contention of Mr. Samdani. In his submission therefore, such an application should not be entertained and must be dismissed. 39. Since Mr. Diwan restricted his submissions only as far as to the Official Liquidator (respondent No. 1) Mr. Milind Vasudeo appearing for Centurion Bank and other respondents did not address the Court. Suffice it to state that they have not admitted the allegations. They have relied upon their affidavits and Centurion Bank's case is that the articles which were lying at the site or at least some of them are securities of the Centurion Bank. It has instituted a civil suit and applied for interlocutory reliefs. The Court Receiver, High Court was appointe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the materials/movables in the orders. Considering all this, the learned Judge referred to the developments at site, the availability of the goods till 3-7-2003 and their movement from that day till 9-8-2003. In paragraph 11A the learned Judge refers to the Report of security guards and whether the third parties were involved in the acts complained of by the present applicant. All arguments of the present applicant were before the learned Judge, canvassed as they were in details. It is in such circumstances that the learned Judge observed as under : "(12) Be that as it may, the question is whether it is possible for this Court to issue directions in terms of relief (b) prayed by the Official Liquidator. As is seen from the record, the substantial part of the plant and machinery (almost 70 per cent) belonging to AQH has been allegedly dismantled and the left over machinery on the site has been rendered either in damaged condition or useless. It is also seen from the record that all the dismantled goods have already been removed from the site by the representatives of CBL and RKS on the pretext that the same belonged to CBL. It is stated on behalf of the RKS has sold the dismantle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as Official Liquidator and even for that matter, the Customs Authorities have not discharged the role that was expected of them to ensure that the items belonging to AQH which/were imported items and were in the custody of the Official Liquidator, were unaffected in any manner during the process of dismantling of goods belonging to CBL or for that matter, the possibility of the goods belonging to AQH being removed from the site under the pretext of removing the dismantled goods of CBL. Indeed, the present situation has occurred and is the making of the concerned Officials of the Court Receiver, Official Liquidator and the Customs Officials. The laxity of the Officials and perhaps because of their connivance, not only the imported items belonging to AQH are clandestinely removed from the site but that has also resulted in loss to the public exchequer in the form of customs duty etc. This is a serious matter and it is necessary for the concerned higher authorities to examine the cause of such lapses and to take appropriate corrective action against the concerned Officers including taking steps for recovery of the revenue. That be done as expeditiously as possible and compliance repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation No. 604 of 2002) and the order dated 10-4-2003 passed thereon. Thus, the applicant had notice of the fact that Official Liquidator has been directed to return the leased equipment of the Bank. Reliance is placed by Official Liquidator on the letter dated 27-6-2003. All this material was placed before this Court when it passed an order dated 21-6-2004. Hence, Mr. Diwan's usual vehemence apart, the applicant will have to establish its case as set up in the affidavit-in-support by complete evidence. There is no question of the applicant being allowed to circumvent the order by piecemeal or part adjudication as suggested by Mr. Diwan. If evidence has to be led by bringing in all parties and proving the case against each of them, then, obviously civil suit is the remedy. Even this application is summary remedy in the sense spoken of by brother Khanwilkar. Therefore and when the applicants have themselves impleaded all parties, then, this Court cannot by pass the competent Civil Court. More so, when some of the parties are not within the territorial jurisdiction of this Court. It is for this reason that this Court made the observations in para 13 and thereafter in 14 as well. In m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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