IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) WEDNESDAY, THE EIGHTEENTH DAY OF JUNE TWO THOUSAND AND EIGHT PRESENT THE HON'BLE MR JUSTICE V.ESWARAIAH WRIT PETITION No.15588 of 2002 Between: M/s. Devangere Monarch Finlease Limited Rep. by its Secretary Mr. Laxmi Kanth Depositors Association, a Regd. Association Situate at 1704, Mothi Layout, K.T.J. Nagar Devangere ..... PETITIONER AND 1State of Andhra Pradesh Rep. by its Principal Secretary Home Department Secretariat Hyderabad 2M/S. Monarch Finlease Limited Rep. by the Official Liquidator, High Court of A.P. Office at 7-9, 1st Floor, Sairam Comples Opp: Bus Terminal, Dilsukhnagar, Hyderabad 3K. Naganna S/o. Venkata Swamy Plot No. 28, Road No. 2, Arunodaya Nagar Colony Nagole, L.B. Nagar Ranga Reddy District 4Sri. Prabhulingayya S/o. Shanthaveerayya Veeresh Nilaya Vijaya Nagar Extn., Hubli Karnataka State 5Sri Ashok M. Pai S/o. A.Das Pai Anujith Vijay Nagar Main Road Shimoga Karnataka State 6Sri. B.S. Bhat S/o. Govind Bhat Branch Office 163/B, 2nd Floor, Vijayaranga Layout, Tata Silk Farm Off: Kanakapur, Main Road, Basavangudi Bangalore 7K.S. Shastry S/o. K. Narayana Shastry Branch Off: D.No. 1 & 2, C Block, Revamlar Complex Court Circle, Hubli Karnataka State 8Union of India Rep. by its Secretary Ministry of Personal & Grievances Department of Personnal and Training New Delhi R8 impleaded as per court order in WPMP 21863/02(4.12.02) 9Central Bureau of Investigation Rep. by its Director New Delhi R9 is impleaded as per court order inWPMP21863/02(4.12.02) .....RESPONDENT(S) Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court may be pleased to issue any appropriate Writ, order or direction preferably a writ in the nature of Mandamus, directing the 1st respondent to have the affairs of the 2nd respondent company and also personnel affairs of the 3rd respondent and his family concerns investigation by CB CID by an officer of the rank of Superintendent of police above the trace out the properties made by the 3rd respondents by siphoning of the funds of the 2nd respondent company and submit a report before this Hon'ble Court and consequently direct the 3rd respondent not to alienate, transfer pr sell or deal in any manner all the properties laying in his name and in the names of his family members and to pass Counsel for the Petitioner:MR.P.VENUGOPAL Counsel for the Respondent No.: GP FOR HOME The Court made the following : THE HON'BLE MR JUSTICE V.ESWARAIAH WRIT PETITION No.15588 of 2002 . ORDER: It is the case of the petitioner’s-association that its members invested certain amounts in the 2nd respondent company, which is a public limited company. The 3rd respondent was appointed as Chairman and Managing Director of the Company on 09-11-1995. Apart from the 2nd respondent company, the 3rd respondent had floated several other sister companies. The 2nd respondent company had mobilized crores of rupees from various branches. The 3rd respondent diverted all the funds deposited in the second respondent company to various family concerns and group companies, which are managed by him. After siphoning of the monies, the 3rd respondent resigned from the management of the company with effect from 30-09-2000 and, thereafter, respondents 6 and 7 continued in the company with the assistance of respondents 4 and 5, and that the 6th respondent also resigned from the management of the company with effect from 10-10-1999. It is stated that respondents 4 and 5 filed Company Petition No.173 of 2001 before this court on 17-08-2001 for winding up of the 2nd respondent company, as the company is unable to pay debts to its depositors. Questioning the action of the management of the 2nd respondent company and the fraud committed by the 3rd respondent, the present writ petition is filed seeking a Writ of Mandamus to direct the 1st respondent to conduct CBCID enquiry in respect of the affairs of the 2nd respondent company and the personal affairs of the 3rd respondent and his family concerns and also to trace out the properties of the 3rd respondent, which are said to have acquired with the funds of the 2nd respondent company and submit a report before this court, and consequently, to direct the 3rd respondent not to alienate his properties. The 9th respondent-Central Bureau of Investigation represented by the Superintendent of Police filed a counter stating that the case does not involve any interstate investigation or complicated issues of law and, therefore, the competent agency of the Government of Andhra Pradesh may be directed to look into the allegations. The 1st respondent filed a counter stating that winding up application has been filed and Liquidator was appointed by this Court in Company Petition No.173 of 2001 in respect of the affairs of the 2nd respondent company on 17-08-2001, as it was unable to pay back the deposits. Under the Companies Act, there is a statutory prohibition under Section 58 AAA of the Companies Act for taking cognizance of any offence committed by the company with or arising out of acceptance of deposits under Section 58 A or Section 58 AA of the Act. Further, in the absence of any specific complaint by the Central Government or any officer authorized by the Central Government, the petitioner is not entitled for any relief as sought for. In view of the aforesaid facts and circumstances of the case, I am of the opinion that the petitioner is not entitled for any relief, as the remedy is available under the relevant provisions of the Companies Act. However, if there is any allegation with regard to commission of any cognizable offence, it is always open for the petitioner to file a complaint before the concerned and seek appropriate relief in accordance with law. Accordingly, the writ petition is dismissed. There shall be no order as to costs. ___________ 18-06-2008 Prv ..... REGISTRAR // TRUE COPY // SECTION OFFICER To 1.2CCs to 2.2CD copies Form-NIC-OGS/WP{MSN}