ORDER
A.S. Naidu, J.
1. Company Act Case No. 3/67 relates to Orient Weaving Pvt. Ltd. ('O WML' for short). The following were the Board of Directors of the said Company.
(I) Naba Kishore Mohanty (dead),
(II) Bansidhar Mohanty (dead),
(III) Khetramohan Biswal (dead),
(IV) R. P. Nanda,
(V) Harmohan Das, and
(VI) Manmohan Das.
Company Act Case No. 7/68 relates to National Foundry and Rolling Mills Pvt. Ltd. ('NFRL' for short). The following were the Board of Directors of the said Company.
(I) Bansidhar Mohanty (dead),
(II) Khetramohan Biswal (dead),
(III) Uchhabananda Samantaray (dead),
(IV) Baman Charan Das (dead),
(V) Manmoahn Das, and
(VI) R.P. Nanda.
Company Act Case No. 5/92 relates to Utkal Distributors Pvt. Ltd. ('UDPL' for short). The following were the Board of Directors of the said Company.
(I) Bansidhar Mohanty (dead),
(II) Naba Kishore Mohanty (dead),
(III) Khetramohan Biswal (dead), and
(IV) Radhika Prasad Nanda (only director alive).
The facts and points of law involved in all these cases being same as directed by order dated 22-2-1995, all the cases were heard together and are disposed of by this common judgment.
2. In the three Company Act Cases most of the Directors are closely related to each other. This Court while dealing with the Company Act Cases feels it prudent to lift the veil of corporate entity and also the economic realities behind legal facade, as has been observed by the Supreme Court in the case of CIT v. Sri Meenakshi Mills Ltd. : [1967]63ITR609(SC) .
Out of the three, two Companies, namely, M/s. National Foundry & Rolling Mills Pvt. Ltd. and M/s. Orient Weaving Mills Pvt. Ltd. were put to liquidation inconsonance with the orders passed by this Court. After liquidation the movable and immovable assets of the said two companies were sold, the amounts realized were kept in fixed deposits as directed by this Court.
3. M/s. Utkal Distributors Pvt. Ltd. is admittedly a sister concern of the aforesaid two companies. On the basis of an application filed by M/s. Paradip Port Trust seeking liquidation of the said Company, Company Act Case No. 5/92 was initiated. The liabilities of Utkal Distributors Pvt. Ltd. it was submitted, was sufficient to be mitigated from the amounts realized towards sale proceeds of other two companies, i.e., National Foundary & Rolling Mills Pvt. Ltd. and M/s. Orient Weaving Pvt. Ltd. In course of hearing of these three Company Act Cases, petitions were filed by the United Bank of India and Sri Ranjit Kishore Mohanty in Company Act Case No. 3/67 seeking permission to compromise Title Mortgage Suit No. 261/ 69. The terms and conditions of the compromise were that the Official Liquidator would make payment of a sum of Rs. 44,46,000 to the Bank in full and final satisfaction of the dues of the Bank and on such payment, the Bank would abandon its claim in respect of the suits filed by it against M/s. Orient Weaving (P.) Ltd. (T.M.S. No. 261/69) and the First Appeal filed against M/s. Utkal Distributors Pvt. Ltd. i.e., F.A. No. 208/86, arising out of T.M.S. No. 265/69 and the Bank would accept the said sum in full and final satisfaction of all its claims. Another application was filed seeking permission to compromise T.M.S. No. 264/69 relating to M/s. National Foundry & Rolling Mills Pvt. Ltd. The terms of said compromise was that the Official Liquidator would pay Rs. 43 lakhs and the Bank would accept the same in full and final settlement of its claims in T.M.S. No. 264/69 and would release the properties.
4. While the matters stood thus, it was brought to the notice of this Court by filing a memorandum by the Official Liquidator indicating that Paradip Port Trust and some Government Departments have raised certain claims against M/s. Utkal Distributors Pvt. Ltd. At this juncture, Company Act Case No. 5/92 was tagged to the proceedings. This Court called upon the parties to suggest suitable measures to decide the inter se dispute. By order dated 17-1-2003 this Court passed winding up order in Company Act Case No. 5/92 [Paradip Port Trust v. Utkal Distributors (P.) Ltd.] and directed as follows:
(i) That the said company be wound up by this Court under the provisions of the Companies Act, 1956;
(ii) that the Official Liquidator shall cause a sealed copy of this order to be served on the company by pre-paid registered post;
(iii) that the petitioner do advertise within 14 days from today a notice in the prescribed form of the making of this order in one issue each of the New Indian Express and the Daily Samaj and the copies thereof shall be filed in Court.
This Court also directed the Official Liquidator to appoint a Valuer in respect of the assets of the Company. After prolong hearing which continued on several dates, this Court was satisfied that the matter can be amicably settled among the parties in view of the fact that the assets in the hand of the Official Liquidator would be sufficient to clear up the liabilities with regard to the other companies. By consent of the parties this Court by order dated 17-9-2004 appointed Mr. Jagannath Das, Senior Advocate as Amicus Curiae to assist this Court in carving out the amounts payable to each shareholder vis-a-vis the amount payable to the creditors of the aforesaid companies. Parties were directed to serve copies of the petitions and relevant documents to Mr. Das. Pursuant to the said order parties appeared and after examining the documents including the certified accounts prepared by M/s. Rowe and Pal, Chartered Accountants, and hearing learned Counsel for the parties Mr. Das submitted a report to this Court on 20-9-2005. The relevant portions of the said report reads as follows:
The dues payable to all the creditors of M/s. U.D.P.L. have been specified in detail vide Page 64 of the Paper Book and has been computed at Rs. 43,01,884 vide page 66 of the paper Book.
The liability of M/s. U.D.P.L. in respect of ail the creditors has been computed to be : Rs. 43,01,884.00For payment to the creditors, it is Proposed as under : (i) M/s. UDPDL has shares in Rs. 19,17,469.00M/s. NFRL to the tune of :(ii) Out of the given up shares in M/s. NFEL (Excluding the share Money of M/s. UDPL) to be paid Out of Rs. 24,23,767.00 is : Rs. 08,69,806.00(iii) Out of Rs. 42,20,553.00 in M/s. OWML anamount to be paid to the creditors : Rs. 15,14,609.00--------------------Total: Rs. 43,01,884.00--------------------The residual surplus :(i) Available from M/s. NFRL after the proposedpayment to the creditors - as aforesaid is : Rs. 15,53,961.00(ii) Similarly after the proposed payment ofRs. 15,14,609 out of the given up Share Money in M/s. OWML as stated above, is : Rs. 27,05,944.00These amounts are to be proportionately distributed according to number of shares held by the shareholders who had given up their respective shares for payment to the creditors which are available in each of the said two companies, i.e. M/s. NFRL & M/s. OWML respectively.
The total amount falling to the shares of each of the shareholders in each of the said two companies are indicated in the table below:--------------------------------------------------------------------------------Name of the Share in Share in Total of bothshareholders Residual OWMLSurplus in NFRL--------------------------------------------------------------------------------Laxmipriya Rs. 3,45,324.67 Nil Rs. 3,45,324.67MohantyNabakishore Rs. 9,61,975.86 Nil Rs. 9,61,975.86MohantyRanjit Mohanty Rs. 49,332.10 Rs. 6,58,202.59 Rs. 7,07,534.69Sujit Mohanty Rs. 49,332.10 Rs. 6,58,202.59 Rs. 7,07,534.69Asit Mohanty Rs. 49,332.10 Rs. 6,58,202.59 Rs. 7,07,534.69Biswajit Rs. 49,332.10 Rs. 6,58,202.59 Rs. 7,07,534.69MohantyRadhika P. Nanda Rs. 49,332.10 Rs. 73,133.62 Rs. 1,22,465.72--------------------------------------------------------------------------------
5. After submission of the report by Mr. Das the matter was listed in Bench and this Court heard the parties. The counsel appearing for all the parties agreed to the distribution of assets as per the suggestions made by Mr. Das in his report and the report was accepted by consent of the parties.
6. It appears that as per the previous orders of this Court, substantial amounts have been paid to the creditors like Bank, Paradip Port, etc. After payment of all the admitted dues as would be evident from the report a sum of Rs. 43,01,884 remains surplus. The said amount as agreed to by the parties has to be distributed proportionately among the shareholders and apportionment of the shares should be personally made as has been indicated in the report. All the three Company Act Cases are pending for quite some time before this Court. As a matter of fact, most of the shareholders have expired, but then litigations have been thrust on their legal heirs and successors, who are constrained to prosecute the same willy nilly. Taking into consideration all these facts, this Court finds that it would be just, proper and equitable if the surplus amounts are distributed among the existing shareholders as per the suggestions made by Mr. Das in his report. For the said purpose this Court feels that it would be appropriate to appoint Mr. Das, who rendered a valuable service to the Court, as Receiver for distribution of the amount as per his report. This Court is conscious of the provision of Section 453 of the Companies Act, 1956, but then the said section clearly provides that a Receiver can be appointed with the leave of the Court. This Court feels, for the reasons assigned above that it is a fit case where the inherent powers of the Court should be exercised and a Receiver should be appointed for distribution of the assets in consonance with rules 232 and 234 of the Companies (Court) Rules, 1959 and directs accordingly. Consequent upon appointment of Sri Jagannath Das, Sr. Advocate, as Receiver, this Court directs that the entire surplus amount available with the liquidator in respect of the aforesaid Companies shall be made available to Sri Das. All the parties shall appear before Sri Das and after proportionately apportioning the amount in consonance with the shares as indicated in the report, shall hand over respective amounts to each of the shareholders/parties. It is made clear that before receiving the amount the parties shall execute indemnity bond each undertaking to refund any such amount paid to them in the event any other claim/dispute arises at a subsequent stage. The entire exercise shall be completed as expeditiously as possible preferably within a period of one month. The Banks are directed to return the Title deeds laying in deposit with them to concern parties or their legal heirs. It is needless to say that a further sum of Rs. 10,000 (Rupees ten thousand) shall be paid to Sri Das to mitigate the labour put by him.
With the aforesaid observations all the three cases are disposed of.