IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD IN THE MATTER OF THE COMPANIES ACT, 1956 AND IN THE MATTER OF M/S TUNGABHADRA INDUSTRIES LIMITED (IN LIQUIDATION) MONDAY, THE FIFTH DAY OF JULY TWO THOUSAND AND TEN PRESENT HON’BLE SRI JUSTICE G.V.SEETHAPATHY COMP.A.No.3 OF 2010 IN R.C.C.No.22 OF 2010 Between:- S.K.Moteka Ex.Factory Manager, M/s Tungabhadra Industries Limited (in liquidation), Hyderabad. …Petitioner A n d Official Liquidator, High Court of A.P., Hyderabad. …Respondent HON’BLE SRI JUSTICE G.V.SEETHAPATHY COMP.A.No.3 OF 2010 IN R.C.C.No.22 OF 2010 ORDER: This appeal is filed under Rule 164 of the Company Court Rules, 1959 for setting aside the order dated 09-04-2008 made in R.C.C.No.22 of 2010 and consequently direct the respondent-Official Liquidator to pay an amount of Rs.1,79,000/- advanced by the appellant to M/s Tungabadra Industries Limited (in liquidation) with interest at 12% per annum. 2. Heard the learned counsel for the appellant and the learned counsel representing the Official Liquidator. Perused the records. 3. It is not disputed that this Court by order dated 09-07-2001 in R.C.C.No.22 of 2000 directed winding up of M/s Tungabadra Industries Limited and appointed the Official Liquidator as its liquidator. By order dated 27-06- 2006 in C.A.No.617 of 2006, this Court directed invitation of claims. Accordingly, notice in Form No.63 was published in newspapers fixing the last date of receipt of claims as 12-09-2006. In response to the said notice, the appellant preferred a claim on 11-09-2006 for a sum of Rs.1,79,000/- and interest towards advance said to have been paid to the company in liquidation for payment of gratuity and VRS amounts to its workmen. The Official Liquidator issued a notice in Form No.68 to the appellant calling upon him to produce evidence. The appellant produced receipts dated 01-08-1996, 28-08-1996, 01-10-1996 and 30-12-1996. The said receipts were found to be contained on the xerox copies of the letter head of the company in liquidation but, however, the name and designation of the person who issued the receipt is not disclosed therein. The Official Liquidator verified the cash book of the company for the year 1996- 97 and found that there were no corresponding entries in the said cash book in respect of the said amounts. The appellant produced advances register showing that an amount of Rs.1,79,000/- was payable to the appellant by the company in liquidation. As the amount register i.e., cash book did not reveal receipt of any such amounts from the appellant, the Official Liquidator did not consider the entries in the subsidiary ledger i.e., advances register. The receipts were also not taken into consideration by the Official Liquidator as they were not issued on the original letter head but on the xerox copies and that too the name of the person who signed them and his designation were not disclosed therein. The Official Liquidator has, therefore, rejected the claim of the appellant. Aggrieved by the same, the present appeal is filed by the appellant. 4. The appellant claims to be a creditor of the company in liquidation. It is not disputed that he was ex- manager of the factory of the company in liquidation. According to him, he lent certain amounts totalling Rs.1,79,000/- to the company in liquidation for meeting its commitment towards payment of gratuity and settlement of VRS claims by its workmen. The appellant seeks to rely upon certain documents purported to be receipts dated 01-08-1996 for a sum of Rs.70,000/-, 28-08-1996 for Rs.95,000/-, 01-10-1996 for Rs.1,000/- and 30-12- 1996 for a sum of Rs.13,000/- said to have been issued on the letter heads of the company in liquidation. Admittedly, the said receipts were not issued on the original letter head papers of the company, but only on xerox copies. It is not disclosed on the receipts as to the name or the designation of the person who received the amounts and issued the receipts on behalf of the company. In the affidavit filed in support of the appeal also, it is not stated as to who passed those receipts. According to the Official Liquidator, a perusal of the cash book for the year 1996-97 did not disclose any entries pertaining to the alleged advance of amounts by the appellant to the company on the respective dates of the receipts. It cannot be disputed that the cash book which is maintained on daily basis and in the regular course of business is the primary document, which should contain necessary entries relating to any amounts received or spent by the company. It is not known to whom the appellant has paid the amounts and from whom he obtained the receipts on the xerox copies of the letter head. As the appellant was none else than a former factory manager of the company, as rightly contended by the learned counsel for the appellant representing the Official Liquidator, the possibility of the appellant getting into custody of letter head papers of the company and making out xerox copies there from, cannot be ruled out. In the affidavit filed in support of the appeal, the appellant has stated that he has no other documents to prove the amount advanced to the company except the receipts issued by the company. Under Section 292 (e) of the Act, resolution of the board is required to be passed before the company can exercise the power to make loans. No such resolution of the board of directors is also forthcoming authorizing the company to receive advances from the appellant. The appellant filed a provisional balance sheet as on 09-07-2001 wherein a sum of Rs.1,79,000/- is shown against the name of the appellant. The said document is only a provisional balance sheet and is not signed by any auditor or other authorized person on behalf of the company. When the alleged advances are not disclosed in the cash book itself, any entry contained in the provisional balance sheet which is, in fact, not signed by any competent person on behalf of the company, is of no avail to the appellant. The appellant has not disclosed as to his source of funds for lending to the company in liquidation. The said amounts were not admittedly lent by way of any cheque or demand draft. According to the appellant, he borrowed money from others by way of hand loans and gave the same to the company again as a hand loan without obtaining any document evidencing the loan transaction, except the receipts. In the absence of any such document evidencing the loan transaction and the alleged receipts not having been duly proved to be genuine and there being no other evidence in support of the appellant’s claim and the cash book of the relevant year not containing any entries pertaining to the alleged advances made by the appellant, it must be held that the claim of the appellant, remains totally unsubstantiated. The order of the Official Liquidator rejecting the claim of the appellant does not, therefore, call for any interference by this Court. 5. In the result, the Company Appeal is dismissed. There shall be no order as to costs. ____________________ G.V.SEETHAPATHY, J 05th July 2010 Lrkm.