Present: 1. Shri S. Balasubramanian, Vice-Chairman.
2. Shri K.K.Balu,
Member.
IN THE MATTER OF COMPANIES ACT, 1956 (1 OF 1956)
AND
IN THE MATTER OF M/S ANDIPALAYAM
COMMON EFFLUENT TREATMENT PLANT PRIVATE LIMITED
PETITIONERS:
2. K. Krishnaswamy
RESPONDENTS:
1. Andipalayam Common Effluent Treatment Plant Private Limited
2. C. Palanisamy
3. a) R. Ravichandran
b) R.
Shanthi
c) S.
Perumal Raj
4. B. Senniappan
5. K.R. Krishnaswamy
6. a) S.M. Dachinamurthy
b) P.G.
Thulasimani
c)
Thilagavathi
d) S.C.
Marasamy
7. R. Selvaraj
8. a) N. Senthilkumar
b) K.T.
Gopalaswamy
c) P.M.
Ayyamuthu Gounder
9. R. Ramu
10. S. Thanaprakash
11. a) A. Ponnuraj
b) A.C.
Chidambaram
c) A.B.
Surendran
12. S. Balasubramanian
13. a) C. Ramaswamy
b) R.
Seethamani
c) P.
Ananthi
14. Shanmugam
15. S. Vijayalakshmi
16. N. Basker
17. a) T.K. Periasamy
b) C.
Palanisamy
c) K.
Vadivel
d) K.
Thangavel
18. a) P.K. Kandasamy
b) K.
Lakshmi
19. a) R. Chinarasu
b) R.
Gurusamy
c) R.
Palanisamy
d) R. Ramu
20. a) M. Manikavasagam
b) M.
Marappa Gounder
c) K.
Subbaiyan
d) A.T.
Kuppuraj
e) M.
Saraswathi
f) N.
Easwaran
g)
Elancheliyan
h)
Selvaraj
i) R.
Senmalar
21. Subramani
PRESENT ON BEHALF OF PARTIES:
1. A.K. Mylsamy, Counsel …… for
Petitioners.
2. R. Vidhya Shankar, Advocate …… for Respondents.
O R D E R
(DATE
OF FINAL HEARING: 08.11.2001)
S.
BALASUBRAMANIAN:
1.
M/s Andipalayam Common
Effluent Treatment Plant Private Limited was incorporated on 29.9.94 with the
main object to establish, acquire, own and develop common effluent treatment
plant, more particularly for treating effluent generated by dyeing units in and
around Tirupur. The project cost was
to be met out of subsidy amount of the government loans from credit agencies
and contribution made by the industrial undertakings on the basis of quantum of
effluent generated by each undertaking.
On the basis of the contribution made by these undertakings, the shares
were to be issued/allotted and till such allotment, the contributions made by
the units were to be kept as share application money. The effluent treatment plant is to cater to the needs of 21
industries and individuals. The
petitioners are the subscribers to the Memorandum and Articles and also first
the directors and they had agreed to subscribe for 1,000 shares each. The first petitioner being the Managing
Director was looking after the implementation of the project. In July, 1997, seven more persons were
co-opted as directors of the Company.
The petitioners have filed this petition alleging that these persons who
were co-opted as directors had failed to acquire qualification shares; that
without being elected as regular directors in the AGM, have continued to be
directors of the Company; that the
authorization for the operation of the bank accounts by the petitioners
has been cancelled; that the first petitioner has been removed as a director;
that they had allotted 11,98,000 shares illegally etc. Accordingly, the petitioners have prayed for
appointment of an administrator and also for restraining the respondents 2 to
10 from acting as directors of the Company and also for declaration that the
allotment of shares is null and void.
2.
During the hearing, the
learned counsel for the petitioners submitted that even though the petitioner
has contributed fully his entire dues to the Company, yet the respondents,
without taking into consideration the amount of about Rs.36 lakhs contributed
by the first petitioner are asking him to contribute further amount on the
ground that the first petitioner has contributed only Rs.7.35 lakhs. Accordingly, the learned counsel submitted
that if the issue relating to his client’s contribution is settled and decided
by the CLB and shares are allotted to that extent, he would not press for any
other relief sought for in the petition.
Accordingly, with the consent of the parties, it was decided to have
accounts of the Company checked to determine the quantum of the contribution of the first petitioner. Since there was huge difference between the
claim of the first petitioner that he had contributed 36.38 lakhs and the claim
of the Company that he had contributed only Rs.7.35 lakhs, the parties agreed
that the contribution made by the first petitioner could be verified by M/s
M.S.Jagannathan & Visvanathan, Chartered Accountants. The Chartered Accountants submitted their
report on 22nd November, 1999 recording therein that the details
given by the first petitioner in regard to his contribution as follows:-
(i) Contribution
by cheques - Rs.12,85,000
(ii) Cash
deposited in the Bank Accounts
on various
dates - Rs.
2,62,500
(iii) Cash paid to
meet Company’s expenses- Rs.12,88,213
(iv) Cash paid
through Mr.Kulandaisamy
for payment
to workers - Rs.
3,02,000
(v) Cash paid to
suppliers after 17.4.98 - Rs.
5,00,000
----------------
Total - Rs.36,38,113
----------------
3.
After going through the accounts and details furnished by the
petitioners and the Company, the Chartered Accountants came to the conclusion
that there was very clear evidence to cheque payments by the petitioners to the
extent of Rs.12,85,000, cash payment to the extent of Rs.3,00,000 and cash
deposit in Company Account of Rs.2,62,500 totalling to 18,47,500. In regard to other payments they have
expressed their inability to certify the same for want of relevant documents.
4. Since
this Bench found that the amount certified by these auditors was on the basis
of non-availability of vouchers, receipts etc., it was decided to work back
from the project cost and find out what could have been the contribution of the
petitioners. Accordingly, the same Chartered Accountants were asked to work out
the probable amount of contribution made by the petitioners from the project
cost. Accordingly, they submitted
another report dated 19.07.2001. As per
this report, the petitioners had furnished a certificate from V.Sivananda
Prabhu, Chartered Accountant, indicating the cost of the project as on 10.11.98
as 227.55 lakhs and also a letter written by the Company on 9.5.99 indicating
the project cost as 328.74 lakhs and that the Company had furnished a statement
of the project cost at Rs.2,71,00,226/-.
After going through all these reports, the Chartered Accountants
concluded that the project cost could be taken as Rs.2,26,44,060/-, which is
also stated as subject to certain addition and deletion. In other words, this report is not
conclusive as to the extent of the project cost.
5. According
to the petitioners, they have contributed Rs.36 lakhs, while according to the
Company, they had contributed only Rs.7.35 lakhs as against their due
contribution of Rs.28.91 lakhs (as per para 9 of the Counter). The Chartered Accountants appointed by us
have verified the various details furnished by the petitioner and came to the
conclusion that the petitioners have established their contribution to the
extent of only Rs.18,47,500/-. In view
of the differences, our attempts to compute the contribution made by the
petitioners either from the accounts of the Company or from the project cost
have not succeeded. Therefore, on the
basis of materials available, we have to form an opinion as to what could have
been the contribution by the petitioners.
It is an admitted fact that the Company wrote a letter to the
Environment Ministry of the Government of India on 9.5.99, wherein, it had
given full details, under various heads, of the amount spent so far on the
project of Rs.300.06 lakhs and also bills pending to the extent of Rs.26.68
lakhs. These figures are also
corroborated by the Company at paragraph 8 of the counter filed by them. In the memo filed on 8.11.2001, the
petitioners have estimated, giving various details, the cost of the project as
Rs.3,09,26,000/-. In counter to this
memo the respondents have submitted that even without certain adjustments as
observed by the auditors, the project cost could be only Rs.2,70,46,600 as
against the total amount received towards of the cost of the project of
Rs.2,92,95,000 (excluding contribution by the petitioners) and as such they
have alleged that the petitioner has siphoned of over Rs.22 lakhs. It is a peculiar case wherein, instead of
quantifying the project cost as per the books of accounts maintained in the
Company, the parties have made their own assessment of the cost, to substantiate
their respective stands. We find contradictions
in the stand of the respondents.
Originally it was submitted that the petitioners had contributed only
Rs.7,35,000/-, in their written submissions the respondents have stated that
the contribution made by the petitioners could be taken as Rs.12.85 lakhs being
the amount paid by cheques. But now
they take a stand that the petitioners had not contributed any money but have
siphoned of Rs.22 lakhs. The Chartered
Accountants appointed by us have certified that the petitioners produced
documents to substantiate their contribution to the extent of Rs.18,47,500/- as
against their claim of contribution of Rs.36.38 lakhs. Thus, there is no substance in the stand of
the respondents that the petitioner has siphoned of any money or that they have
not made any contribution. Since the
Company has taken a stand with the Government of India that the Company had
incurred a sum of Rs.326 lakhs and as per the written submissions filed by the
respondents dated 20.11.2001 that the total money received from the
shareholders and subsidies from the State and Central Governments was of the
order of 2,92,95,000 (excluding the contribution by the petitioners), the
difference between the receipt and project cost comes to roughly Rs.34 lakhs
which according to us should be taken as contribution by the petitioner. While coming to this conclusion, we have
also noted that under the heading “Share Application Money” in the audited
balance sheet as on 31st March, 1998, the following entries appear:
S.S.Textiles Processing-Rs.5,79,837;
Shri Raja-ganapathy Processing-Rs.6,32,358; Ganagadurga
Processing-Rs.6,73,660; Gemini Dyeing-Rs.6,33,268, totaling to Rs.25.17 lakhs.
Since these accounts have been audited, the petitioners’ contribution cannot be
taken anything less than Rs.25.17 lakhs.
We also find that in respect of all the above units, the petitioner has
furnished further details of investment after 31st March, 1998 as
certified by the auditors of these units,
showing a cumulative investment of these four units to the extent of
Rs.36.38 lakhs. Since this amount is
found to be more than the contribution due from the petitioners of
Rs.28,91,000, we feel it equitable to both the sides to conclude that the
petitioners have paid their entire dues and no refund would be due to the
petitioners on account of any excess payment made. Accordingly we hold so.
The Company will issue shares to the total extent of Rs.28,91,000 within
one month from the date of this order.
6. We
have not considered other allegations in the petition in view of the
submissions of the Counsel for the petitioners as noted in paragraph 2 ante.
7. Petition is
disposed of in the above terms with no order as to cost.
(K.K. BALU) (S. BALASUBRAMANIAN)
Dated this the 14th day of March, 2002