IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 24.02.2011 Coram THE HON'BLE MRS. JUSTICE R.BANUMATHI AND THE HON'BLE MR. JUSTICE M.M.SUNDRESH O.S.A.No.203 of 2010 Tamil Nadu Agro Industries Development Corporation Ltd., Agro House, industrial Estate, Guindy, Chennai-32 rep. by its Managing Director. .. Appellant Vs 1.The Official Liquidator, High Court, Madras As Liquidator of Dutch Rama Agro Foods Ltd. (in liquidation) now at Corporate Bhavan, 2nd Floor, No.29, Rajaji Salai, Chennai-600 001. 2.The Registrar of Companies, No.26, Haddows Road, Sastri Bhavan, Tamil Nadu, Chennai-6 (2nd Respondent impleaded as party vide order of the Court dt. 14.2.2011 in M.P.No.2/2010) .. Respondents. Appeals preferred against the order of this Court in Company Application No.2106 of 2008 in C.P.No.39 of 2001 dated 22.8.2008 For Appellant .. Mr.C.Venkatesalu For Respondents .. Mr.S.R.Sundar for R1 Ms.K.Latha Parimala Vadana for R2 JUDGMENT R.BANUMATHI,J Challenge in this intra Court Appeal is the order of learned single Judge dated 22.8.2008 in Company Application No.2106 of 2008 in C.P.No.39 of 2001, whereby the learned single Judge declined to direct the Official Liquidator to process the claim of the appellant for Rs.40,00,000/- invested in M/s.Dutch Rama Agro Foods without insisting on production of the original share certificates. 2. The Appellant – Tamilnadu Agro Industries Development Corporation Limited was then jointly owned by Union of India and Government of Tamil Nadu registered under the Companies Act. Main https://hcservices.ecourts.gov.in/hcservices/ objects of the appellant is to grow, raise, cultivate and deal in all types of mush rooms and mush room products and their by-products and also to carry on business of the farming in all its branches including dairy farming, fruit farming, vegetable farming, fish farming, etc., The Managing Director of M/s.Dutch Rama Agro Foods Limited (in short, Rama Agro Foods") approached the appellant stating that it is processing and canning white button mushrooms and that it has to commence production . Believing the representation and the assurance made by the Managing Director of the said Company, the appellant paid Rs.40,00,000/- by Cheque bearing NO.046618 dated 8.5.1996 and the said Dutch Rama Agro Food Products issued 4,00,000 equity share certificates. Contrary to its assurance, the said Company did not commence business of button mushroom product. After issuing statutory notice, the appellant Company filed winding up petition under Sections 433, 437 and 439 of the Companies Act. By an order dated 3.7.2002 in C.P.No.39 of 2001, Rama Agro Foods was ordered to be wound up and the Official Liquidator was appointed as the liquidator of the said Company with directions to take charge of all the assets and effects of the company in liquidation. The appellant Company filed affidavit of claim and affidavit of proof of debt dated 7.2.2007 before the Official Liquidator claiming a total amount of Rs.97,79, 455/- as due and payable from and out of the assets of Rama Agro Foods. The Official Liquidator has stated that the claim affidavit should have been filed on or before 6.12.2006. Hence, the appellant filed C.A.No.2553 of 2007 and by order dated 29.7.2007, the said application was allowed condoning the delay in filing the claim affidavit before the Official Liquidator. The Official Liquidator also scrutinised the details of claim affidavit and other claims and is said to have admitted that Rs.40,00,000/- invested in Rama Agro Foods by the appellant would be payable at Official Liquidator's Office on 27.2.2008. 3. Case of Appellant is that by the orders of Government of Tamil Nadu, the entire operations and functions of Tamil Nadu Agro Industries Development Corporation was closed and entire staff and employees were retrenched with effect from 26.3.2002. According to the Appellant, case bundles numbering more than 60,000 were dumped in three rooms of the appellant Corporation and the original share certificates are not immediately traceable. Therefore, the appellant Corporation filed C.A.No.2106 of 2008 to direct the Official Liquidator to process the claim of the appellant for Rs.40,00,000/- on the basis of available records and books of accounts seized from the office of Rama Agro Foods without insisting on production of the original share certificates and to direct the Official Liquidator to pay Rs.40,00,000/- to the appellant. 4. The Official Liquidator has filed the report stating that as per the direction of the Court in C.P.No.39 of 2001 (3.7.2002), the Official Liquidator has taken possession of the movable and immovable assets situated in Meyyur village, Madurantakam Taluk on 16.8.2002 and subsequently the same was sold and a sum of RS.4,55,00,000/- was realised. Based on the statement of affairs and other information furnished by Ex.Directors of the Company in liquidation, the Official Liquidator filed an application in C.A.No.1552 of 2007 in C.P.No.39 of 2001 to pay dividend at 100 paise in a rupee as the return of capital to the contributories. By the https://hcservices.ecourts.gov.in/hcservices/ order dated 27.2.2008, Court directed the Official Liquidator to declare and pay the dividend at 100 paise in a rupee to the contributories amounting to Rs.3,74,77,470/- and to open a special dividend account with Punjab National Bank, N.S.C.Bose Road, Chennai for the purpose of dividend payment. The Official Liquidator has declared and paid the dividend at 100 paise in a rupee to those contributories who have produced the original shares based on the list of contributories submitted by the Directors of the Company in liquidation. The Official Liquidator has paid a total amount of Rs.3,04,95,210/- to those contributories, who have submitted Form No.141 of the Companies (Court) Rules, 1959 along with the original share certificates. 5. On application filed by the Official Liquidator in C.A.No.684 of 2009 in C.P.No.39 of 2001, the Court permitted the Official Liquidator to declare and pay further return of capital at the rate of 20 paise in a rupee to the contributaries to the extent of Rs.74,95,494/- subject to T.D.S. Deductions at the rate of 17.50%. The Official Liquidator has declared and paid further return of capital of Rs.47,09,677/- to those contributories who have submitted form No.141 after deducting TDS from the special dividend account that was opened with the Punjab National Bank, N.S.C.Bose Road, Chennai. In the report filed by the Official Liquidator, it is stated that the unclaimed/undistributed amount has been transferred and remitted into the Companies Liquidation Account in Punjab National Bank, Mount Road Branch, Chennai-2. 6. The Appellant filed the application – C.A.No.2106 of 2008 to direct the Official Liquidator to process its claim for Rs.40 lakhs invested with Rama Agro Foods on the basis of available records and books of accounts seized from the office of Rama Agro Foods without insisting on production of the original share certificates and to direct the Official Liquidator to pay a sum of Rs.40,00,000/- to the appellant. By the order dated 22.8.2008, the learned single Judge dismissed the said application on the ground that the original share certificates have not been filed and that it is open to the appellant to place its claim before the Official Liquidator as and when the original share certificates are traced. Being aggrieved with the said order dismissing its application, the appellant Corporation has filed this appeal. 7. The contention of the appellant is that the appellant Corporation has closed its entire activities with effect from 26.3.2002 as per G.O.Ms.No.339 dated 28.11.2001 and all its employees and Officers were retrenched and the Corporation is functioning with a skeleton staff and that they are not in a position to trace out the original share certificates from the godown and while so the learned single Judge was not right in directing the appellant to trace the original share certificates from the godown. According to the appellant, inspite of the best efforts made by the appellant, the original share certificates could not be traced. Further case of appellant is that as per Rule 4(3) of the Companies (Issue of Share Certificate) Rules 1960, the learned single Judge ought to have issued directions applying the said rule by effecting paper publication of the loss of original share certificates issued by Rama Agro Foods in the name of the appellant and executing the Indemnity https://hcservices.ecourts.gov.in/hcservices/ Bond for Rs.40,00,000/- in favour of the respondent and the Court ought to have directed the respondent to pay the amount of Rs.40,00,000/-. 8. Earlier, by the order dated 30.6.2010 the Bench has directed the Managing Director of the appellant Corporation to file additional affidavit as to the status of functioning of appellant Corporation and in the mean time to effect paper publication in two dailies having circulation all over Tamil Nadu - in one issue of English daily "Indian Express" and in another issue of Tamil daily "Dinakaran" setting out the particulars of share certificates and declaring that the appellant Corporation is the owner of 4,00,000 equity shares of Dutch Ram Agro Foods. In pursuance to the order of the Court, the appellant Corporation has effected paper publication to the effect that the appellant Corporation is the owner of 4,00,000 equity shares [3049828 to 3449827]. The Managing Director of the Appellant Corporation has also filed additional affidavit stating that the appellant Corporation is functioning with two skeleton staffs appointed on contract basis and having bank transaction in account No.10565627401 operating with State Bank of India, Commercial Branch, Guindy. In the additional affidavit, the appellant Corporation has also undertaken to indemnify the respondent Official Liquidator in the event there are third party claims by reason of payment of claim to the appellant due to the loss of original share certificates. 9. In the report of the Official Liquidator, it is stated that as per Sec.555 of Companies Act, 1956, Official Liquidator has transferred and remitted on 10.03.2010 the unclaimed/undistributed amount of Rs.69,82,260/- towards first return of capital to the contributories and another amount of Rs.14,74,101/- towards further return of capital to the contributories after deducting TDS, into the Companies liquidation Account in Punjab National Bank, Mount Road Branch, Chennai-2. The Official Liquidator has also sent statement in Form No.159 containing particulars of unclaimed/undistributed amount to the contributories of the company in liquidation to the Registrar of Companies, Tamil Nadu, Shastri Bhavan, No.26, Haddows Road, Chennai-6. 10. In our order dated 14.02.2011 in M.P.No.2 of 2010, we have ordered impleading of Registrar of Companies, Tamil Nadu as 2nd Respondent in the proceedings. M.p.No.3 of 2010 has been filed to permit the Appellant to include further claim of Rs.6,60,000/-. 11. We have perused Form No.159 dated 10.03.2010 filed by the Official Liquidator before the Registrar of Companies towards the first return of capital at the rate of 100 paise in a rupee to the contributories. In the said Form No.159, the name of Appellant is stated in Serial No.1 as per the said statement of unclaimed dividend or undistributed amount of Rs.40,00,000/- is payable to the Appellant. Appellant-Corporation has also filed M.P.No.3 of 2010 to permit the Appellant to include further claim of Rs.6,60,000/- in respect of second return of the capital as per the subsequent declaration dated 09.06.2009 in addition to the claim of Rs.40,00,000/- . In Form No.159 filed by the Official Liquidator in respect of further return of capital at the rate of 20 paise in a https://hcservices.ecourts.gov.in/hcservices/ rupee to the contributories, amount of Rs.6,60,000/- is stated to be payable to the Appellant. Learned counsel appearing for Official Liquidator as well as the counsel appearing for 2nd Respondent- Registrar of Companies submitted that since paper publication as to the missing of share certificates has been effected, it is for the Appellant-Corporation to move the Registrar of Companies claiming the amount of Rs.40,00,000/- plus Rs.6,60,000/-. The said statement is recorded. 12. Appellant-Corporation is directed to file its claim before the Registrar of Companies-2nd Respondent/Central Government (in lieu of its four lakhs shares - Distinctive No.3049828 to 3449827 which are not traceable for which paper publication has been effected as per the order of the Court) claiming Rs.40,00,000/- towards first return of capital at the rate of 100 paise in a rupee and Rs.6,60,000/- towards further return of capital at the rate of 20 paise in a rupee to the contributories before the Registrar of Companies/2nd Respondent. On such claim filed by the Appellant- Corporation, the 2nd Respondent/Central Government is directed to process the claim without insisting for original shares after getting Indemnity Bond and usual undertaking as expeditiously as possible. The Appellant is a Public Sector Undertaking and having regard to the fact that the public money is involved, the above order is passed. The above order shall not be quoted as a precedent. 13. For reporting compliance, the appeal is directed to be listed after eight weeks. Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar usk/bbr To 1. The Sub Assistant Registrar, (Original Side), High Court, Madras. 2.Ms.K.Latha Parimala Vadana, Deputy Registrar of Companies, The Registrar of Companies,26, Haddows Road, Shastri Bhavan,Chennai-600 006. 1 cc To Mr.S.R.Sundar Official Liquidator, Advocate, SR.13417 2 cc To Mr.C.Venkatesalu, Advocate, SR.13352 Judgment in O.S.A.No.203 of 2010 PA (CO) RH (28.2.11) https://hcservices.ecourts.gov.in/hcservices/