Case: M/S.Bharat Coking Coal Ltd Vs. New Govindpur Pvt.Ltd

to urge so as to allow this appeal. In the circumstances, Sri Mallick had to fairly concede that order of the court below cannot be set aside for the aforesaid reasons and points replied by the learned counsel for the respondents." 24. The auditor appointed by the appellant company itself could not be satisfied regarding the correctness of the account and the auditor statement of account failed in support of the claim of the Central Government. The auditor appointed by the appellant company itself could not be satisfied regarding the correctness of the account and the auditor statement of account filed in support of the claim of the Central Government was not accepted by any of the courts because there were certain baseless entries and hence the claim was rejected/dismissed by all the courts after due consideration of all the arguments advanced on behalf of the appellant. In the instant case, the mines have been nationalized in the year 1972 and if the respondent is made to pay the amount demanded after 26 years, the respondent will suffer immeasurable loss. The claim, in our opinion, cannot be admitted and the amounts cannot be relied upon because of the following specified defects and discrepancies:-- "(a) claimed amount could not be stated correctly at any time.(b) Salary and wages could not be proved at least to the extent of Rs. 2,35,800.00.(c) Bonus amount could not be approved and paid without any basis.(d) Income tax paid on colliery income amounting to Rs. 81,967.00 could not be proved was not paid for the management purpose.(e) Sales tax payment could not be proved.(f) National defence fund to the extent of Rs. 6500/- wrongly claimed.(g) Contractors payment to the extent of Rs. 3,54,594/- could not be proved fully.(h) Interest of Rs. 76,414 wrongly claimed.(i) Head Office and Group Office expenses to the extent of Rs.56,453.000 cannot be proved and also not required in connection with the management of the collieries and not authorized by law.(j) Excess debit of Rs. 10,000/- in plant and machinery.(k) Excessive claim in respect of stores.(l) Discrepancies of stock of coal.(m) Sales realization could not be proved nor accounted fully and wrongly adjusted.(n) Advance of Rs.2,34,594/- paid after 1.5.1992 and wrongly claimed as Central Government advance and last of all the doubtful nature of entry regarding cash balance." 25. The Lala & Company Chartered Accountants, Dhanbad, who are the auditors submitted their audit report and of statement of accounts under Section 22(6) of the Act, 1972 in regard to the respondent companies. It is seen from the report that the statement of accounts which were submitted to them were subsequently revised with necessary changes of error found during the course of their audit report. It is also observed in para (4) of the report which reads as follows: "We, are not fully satisfied with the maintenance of books of account. The statement is prepared, out of cash book transaction in rough sheets. No proper ledgering is done. The statement is complied from rough sheets.So far as the question of maintenance of stock account is concerned no day-to-day raising and dispatches account are maintained. No such books are maintained to verify the day-to-day manufacture and dispatches of coke." 26. It is also observed under the capital statement of accounts that the Cashier or Manager has not signed the cash books on 16.10.1971 to confirm the balance on 16.10.1971. 27. When asked to explain why the custodian did not take over cash in hand of Rs. 64,800.04 on 17.10.1971 instead of cash of Rs. 288.78 only on 18.10.1971, the statement of accounts are revised by showing cash in hand as on 18.10.1971 at Rs. 288.78 which remark in the bottom. The difference of actual cash in hand of Rs. 64,800.04 and Rs. 288.78 which comes to Rs. 64,511.26 are adjusted by omitting the payments from the items of payments under the following heads: Auditors Report on 1.7.1973 28. In our opinion, this adjustment is not fair and we are not satisfied with the transaction and recommend for investigation of the entire transaction of this opening cash balance taken over. 29. Several other serious infirmities have also been pointed out by the auditors in their report in regard to C.W.P.F. Accounts, sales realisation, sales tax realisation, L.D.C.C. salary and wages, bonus account, royalty account etc. In the conclusion, it is mentioned that the result of physical takings on 17.10.1971 have not been shown to the auditors and the physical takings as on 30.4.1972 are differing with book figures as shown in this statement. 30. Thus, it is clear that the accounts statement in relation to the period of management by the appellant is not correct and the procedure prescribed under Section 22 of the Act, 1972 has not been allowed at all. We, therefore, hold that the claim made by the appellant in its entirety is not maintainable and the order by the Commissioner of payment is self-explanatory which has been based on cogent reasoning covering all aspects of the matter. Likewise, the Appellate Court and the High Court in revision has rightly dismissed the claim of the appellant holding the appellant has failed to file required paper and proof to substantiate the claim. The appellant has also failed to comply the provisions of the Nationalisation Act, in particular, Section 22 and Section 23 sub clause (4), (6) & (7) of the Nationalisation Act in the matter of filing of the proof in support of the claim. Although auditors check of account as per insertion of Section 21(8) of the Nationalisation Act shall be the proof of the claim unless contrary is proved but the facts remains the auditor statement of account also did not support the case of the appellant and rather it goes in favour of the respondent in view of the fact that the respondent had proved the contrary to the entries and the court has also considered it and accordingly rejected the claim of the appellant after thorough examination and discussion.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]23. We have perused the grounds taken in SLP which, in our opinion have no merit because the management of Coking Coal Mines in India was taken over by the Central Government under the provisions of the Ordinance promulgated by the President of India known as Coking Coal Mines (Emergency Provisions) Ordinance on or from 17th day of October, 1971. Subsequently it was converted into an Act according to which the management of the mines were taken over but the ownership remained vested with the erstwhile owners till 30.4.1972. It is seen from the records that during the period of management i.e. from 17.10.1971 to 30.4.1972, this coal mine earned large profits and received huge accounts from sale proceeds from transactions prior to 17.10.1971 and from other sectors but could not and did not proper accounts of receipts and payments by keeping proper statements. Such statement of accounts were statutorily required to be audited by a qualified auditor in terms of Section 22 of the Coking Coal Mines (Nationalization) Act, 1972 (36 of 1972) by the enforcement of which the Coking Coal Mines were nationalized on and from 1.5.1972 and all the rights, title and interests of the erstwhile owners of the coking coal mines vested with the Central Governmentto a Government company i.e. BBCL. On the basis of the statement of accounts, the BCCL was authorized to prefer the claim under Section 25 of the Act because such audited statements of account is conclusive proof of the claim unless contrary is proved. The fact remains that thehas failed to prove the contra as required under Section 22(8) of thethe instant case, the mines have been nationalized in the year 1972 and if the respondent is made to pay the amount demanded after 26 years, the respondent will suffer immeasurable loss. The claim, in our opinion, cannot be admitted and the amounts cannot be relied upon because of the following specified defects andclaimed amount could not be stated correctly at any time.(b) Salary and wages could not be proved at least to the extent of Rs. 2,35,800.00.(c) Bonus amount could not be approved and paid without any basis.(d) Income tax paid on colliery income amounting to Rs. 81,967.00 could not be proved was not paid for the management purpose.(e) Sales tax payment could not be proved.(f) National defence fund to the extent of Rs. 6500/wrongly claimed.(g) Contractors payment to the extent of Rs. 3,54,594/could not be proved fully.(h) Interest of Rs. 76,414 wrongly claimed.(i) Head Office and Group Office expenses to the extent of Rs.56,453.000 cannot be proved and also not required in connection with the management of the collieries and not authorized by law.(j) Excess debit of Rs. 10,000/in plant and machinery.(k) Excessive claim in respect of stores.(l) Discrepancies of stock of coal.(m) Sales realization could not be proved nor accounted fully and wrongly adjusted.(n) Advance of Rs.2,34,594/paid after 1.5.1992 and wrongly claimed as Central Government advance and last of all the doubtful nature of entry regarding cashour opinion, this adjustment is not fair and we are not satisfied with the transaction and recommend for investigation of the entire transaction of this opening cash balance taken over.Thus, it is clear that the accounts statement in relation to the period of management by the appellant is not correct and the procedure prescribed under Section 22 of the Act, 1972 has not been allowed at all. We, therefore, hold that the claim made by the appellant in its entirety is not maintainable and the order by the Commissioner of payment iswhich has been based on cogent reasoning covering all aspects of the matter. Likewise, the Appellate Court and the High Court in revision has rightly dismissed the claim of the appellant holding the appellant has failed to file required paper and proof to substantiate the claim. The appellant has also failed to comply the provisions of the Nationalisation Act, in particular, Section 22 and Section 23 sub clause (4), (6) & (7) of the Nationalisation Act in the matter of filing of the proof in support of the claim. Although auditors check of account as per insertion of Section 21(8) of the Nationalisation Act shall be the proof of the claim unless contrary is proved but the facts remains the auditor statement of account also did not support the case of the appellant and rather it goes in favour of the respondent in view of the fact that the respondent had proved the contrary to the entries and the court has also considered it and accordingly rejected the claim of the appellant after thorough examination and discussion.