S.Muruganadham vs Chicko Foods

S.Muruganadham ...Appellant

Vs.

Chicko Foods ...Respondent

Present: For Appellant: - Advocate

ORDER

20.07.2018─ The appellant, an Ex-Director of the Company in his

individual capacity filed an application under Section 213(b)(i) & (ii) r/w

Section 447 of the Companies Act 2013 against the impugned order dated

1st March 2018 in C.P. No. 17A of 2017, wherein following allegations were

levelled, as noticed by the National Company Law Tribunal ("Tribunal" for

short): -

"The company has availed loans from the R4 bank from

the year 1986 and 1989 and as on date of filing the

petition the cumulative total amount repayable by the

Company to R4 is Rs. 78,29,039/- (page 4 of the

petition). The Company has not submitted any board

resolution to the R4 to borrow money and the R4 has

also failed to adhere with the norms for sanctioning the

loan amount to a defunct company. The R4 bank has

completely ignored all the norms to be followed to sanction loans to a company and also completely

ignored to note the credit worthiness of the company

and the various circulars including master circulars

issued by R6. The Company has availed those loans

on the basis of invalid documents and the R4 bank has

also sanctioned the same without verifying the loan

application and other documents of the Company. M/s

Pondicherry Industrial Promotion Development and

Investment Corporation, Pondicherry (PIPDIC) lent an

amount of Rs. 28,96,637/- to the Company and on

failure of repaying the said amount by the Company,

they have auctioned the properties of the Company and

recovered an amount of Rs. 27,50,000/-. Therefore,

even at the time of loans granted by the R4, the

Company wa a defaulter and the assets were NPA."

2. The Tribunal taking into consideration the fact that the appellant was

appointed as Additional Director on 1st October 1990 and he ceased to be a

Director of the Company as the Company did not convene the AGM during his

period i.e. for the year ending 31st March 1991 and that the 4th Respondent

Bank had obtained the signatures of the appellant in an Agreement of

Guarantee for the loans availed by the Company and subsequently filed a

case in OS No. 37 of 1994 before the Debt Recovery Tribunal (DRT) for recovery

of a sum of Rs. 1,07,23,927 with interest against 1st Respondent to 3rd Respondent and also against the appellant and 11 others the same refused to

entertain the application.

3. Learned counsel for the appellant submitted that the Company has not

followed any norms to avail the loans during the year 1986 - 1989 and thereby

Company committed fraud against the 4th Respondent (Indian Bank). It is also

alleged that the 4th Respondent (Indian Bank) has also not followed due

procedure before sanctioning the loans to the Company which is a failure on

its part.

4. We have taken into consideration the allegation levelled by the

appellant and find that he has raised stale allegations against the Company

for the year 1986-89 after long delay in the year 2017 that too when the

appellant himself was the Director of the Company and during said period had

not raised these issues in the meeting of the AGM on 31st March 1991. In fact,

recovery proceeding in the year 1991-94 against the appellant and 11 others

having initiated by the Bank allegating fraud against the Company, the

appellant moved much thereafter.

5. Apart from the fact that the appellant, Ex-Director is now facing

recovery proceeding filed by the Bank in the provisions of the Debt Recovery

Tribunal Act 1985, we find that no evidence has been brought on record to

suggest that the business of the Company was being conducted with intent to

defraud its creditors or members or any other person.

6. The appeal at the instance of appellant being frivolous, and as the

petition was filed after long delay without explaining the laches after initiation

of recovery proceedings by the Bank, apart from the fact that there is no merit, we dismiss the appeal with cost of Rs. 50,000/- to be paid by the appellant in

favour of the Registrar of Companies, Chennai within two months.

(Justice S.J. Mukhopadhaya) Chairperson

(Justice Bansi Lal Bhat) Member(Judicial) sm/uk