Official Liquidator of M/s.Esskay Shipping Private Limited v. Sri Kukkala Venkata Rama Vidya. Sagar
Case at a glance
- Decided
- 30 Jan 2025
- Bench
- B S BHANUMATHI
Provisions considered
- Companies Act, 2013 ss. 454, 454(5A), 456, 468
Judgment
1. Sri Kukkala Venkata Rama Vidya Sagar, Ex-Director of M/s. Esskay Shipping 9-29-10/A, Siripuram, Visakhapatnam -530 003, Andhra Pradesh. Limited, Private Nivas, Gokul Balaji Nagar,
2. Sri Kukkala Mohan Nageswar, Ex-Director of M/s. Esskay Shipping Private Andhra Balaji University, Visakhapatnam -530 003, Andhra Pradesh. 9-29-10/A, Limited, Nagar, Nivas, Gokul ...Respondents Application under Section 456, 468 and 538(1) (b) of the Companies Rules 1959 praying
Act, 1956 read with Rule 9 of the Companies (Court) that the High Court may be pleased to i. ii. III- order notice to the respondents direct the Respondents 1 and 2 to deliver possession of the assets, books and records of the company forthwith to the Official Liquidator order that the cost of this application do come out of the assets of the company Counsel for the Appellant: Sri T V P Sai Vihari Official Liquidator) (Standing Counsel for Counsel for the Respondents: Sri C Raghu The Court made the following: APHC010155302018 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI [3311] (Special Original Jurisdiction) THURSDAY .THE THIRTIETH DAY OF JANUARY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE MS JUSTICE B S BHANUMATHI OLR.No.2 of 2025 IN/AND COMPANY APPLICATION Nos: 203 & 381 of 2018 Between: M/s. Esskay Shipping Private Limited (in Liqn) ...APPELLANT AND Sri Kukkala Venkata Rama Vidya Sagar and Others ...RESPONDENT(S) Counsel for the Appellant: 1 .T V P SAI VIHARI(SC FOR OFFICIAL LIQUIDATOR) Counsel for the Respondent(S):
1.0 RAGHU
2.D VSASIDHAR The Court made the following: 2 OLR.No.2 of 2025 in/and COMPA.Nos.203 & 381 of 2018 COMMON ORDER: A report was filed by the Official Liquidator with the averments as below: A. On 30-08-2017 in CP.No.201 of 2015, this Court ordered the winding up of M/s. Esskay Shipping Private Limited and appointed the Official Liquidator attached to this Court as its Liquidator. B. The Official Liquidator filed C.A.No.203/2018 against the ex- directors for non-filing of the statement of affairs as required under Section 454 (5) & (5A) of the Companies Act, 1956 and also filed C.A.No.381/2018 under Sections 456, 468 and 538 (1) (b) of the Companies Act, 1956. C. The present complaint under Section 454 (5) & (5A) of the Companies Act, 1956 was filed against the ex-directors for non-filing of statement of affairs of the company (in liqn.). Subsequently, the accused No.1 & 2 filed the statement of affairs on 30-11-2018. The said statement of affairs and clarifications has been duly examined by the office of the Official Liquidator and discrepancies / lack of details are pointed out and sought clarifications from the accused vide letter dated 17-01-2019. In response, the accused No.2 i.e. Sri Kukkala Mohan Nageswar vide letter dated 30-04-2019 has submitted point wise information as called for by the office of the Official Liquidator. The said information is not satisfactory and in this regard, the Official Liquidator i 3 OLR.No.2of2025 in/and COMPA.Nos.203 & 381 of 2018 had filed common report dated 18-06-2019 in C.A.Nos.203 & 381 of
2018. As per the directions of this Court, accused No.2 had filed affidavit in response to the common report filed by the Official Liquidator” dated 02-08-2019. After examination of the said affidavit the Official Liquidator has filed another common report dated 15-04- 2024 in C.A.Nos.203 & 381 of 2018. The accused has not filed any reply to the common report of the Official Liquidator dated 15-04-2024, this Court vide docket order dated 11-07-2024 directed to issue NBWs to the accused No.1 & 2. C. The accused No.2 i.e. Sri Kukkala Mohan Nageswar filed I.A.No.1 of 2024 in C.A.No.203 of 2018 before this Court to recall the NBW issued against him by this Court. After hearing the matter, this Court vide order dated 16-10-2024 made in I.A.No.1 of 2024 in C.A.No.203/2018 has recalled the NBWs issued to the accused on the following conditions complied accused/petitioner:-
The petitioner execute a Rs.1,00,000/- (Rupees one lakh only) for his appearance before Court and before office Official Liquidator, as and when required, for the purpose of furnishing the information as per law. / 4 OLR.No.2 of 2025 in/and COMPA.Nos.203 & 381 of 2018
The petitioner shall appear before the office of the Official Liquidator on 25-10-2024 and thereafter on every Friday for four (04) weeks. A copy of the proceeding sheet dated 16-10-2024 (Annexure- A”) downloaded from the website of this High Court was enclosed with the report. D. The Official Liquidator conducted overall five number of meetings with Sri Kukkala Mohan Nageswar, ex-director of the company (in liqn.) on various dates and the details are as follows: (i). meeting: On 25-10-2024, Sri K. Mohan Nageswar, ex director attended the meeting with Official Liquidator. During the meeting, it was discussed about the defects pointed out in the statement of affairs (filed on 30-11-2018) by the Official Liquidator vide letters dated 01-01-2019 and 17-01-2019 as well as reports dated 18-06-2019 and 15-04-2024 filed before this Court and also discussed with regard to the submission of books of accounts of the company (in liqn.) to the Official Liquidator.
The accused No.2 informed that, pursuant to the orders of this Court he has appeared before the Official Liquidator on 25-10-2024 but, has not brought any related papers / documents with regard to the statement of affairs and he has undertaken to provide all the f 5 OLR.No.2 of 2025 in/and COMPA.Nos.203 & 381 of 2018 details / information as sought by the Official Liquidator on the next date of meeting and requested to provide the copies of reports filed by the Official Liquidator before this Court and hence, the reports dated 18-06-2019 and 15-04-2024 have been provided to Sri Kukkala Mohan Nageswar, accused No.2 for compliance. A copy of minutes of the meeting dated 25-10-2024 (Annexure-“B”) was enclosed with the report, (ii). 2”^^ meeting: On 08-11-2024, Sri.K. Mohan Nageswar, ex- director attended the meeting with Official Liquidator. During the meeting, the accused No.2 had furnished information only with regard to discrepancies mentioned in Para No.5 (i) and (vii) of OLR dated 18-06^2019 and clarifications for the remaining discrepancies, he requested for some more time.
At the request of the accused No.2, the next date of meeting was fixed on 22- 11-2024 (Friday). A copy of minutes of the meeting dated 08-11- 2024 was enclosed as Annexure-“C”. (iii). 3'^^' meeting: On 22-11-2024, Sri.K. Mohan Nageswar, ex director of the company (in liqn.) attended the meeting in the office of Official Liquidator. During the meeting, the accused No.2 furnished the remaining information with regard to discrepancies mentioned in Para No.5 (ii), (iii), (iv), (v) and (vi) of OLR dated 18- 06-2019 and the accused has also furnished information about 6 OLR.No.2 of 2025 in/and COMPA.Nos.203 & 381 of 2018 misappropriation of funds to an amount of Rs.72,99,999/- as per OLR dated 15-04-2024. The accused No.2 has further informed with regard to movable assets of the company (in liqn.) that, the company (in liqn.) had certain trucks and loaders for executing the contract works and all the equipment is hypothecated to the banks and due to non-repayment of the loans, the banks seized the equipment and sold the same and the sale proceeds were adjusted against their loans.
The accused No.2 has furnished the details of immovable property of the company (in liqn.) as detailed below: Particulars of Asset (immovable/ movable/ plant & machineries/ investments/ other assets) 261.65 square- yards site & building at Door No. 25-12-49, Godavari Street, Visakhapatnam SI. No. 1 2 (Immovable/ movable/plant & machinery/ investments or Assets) Whether Present Name of the free hold status of Bank/creditor Assets with address mortgaged Immovable Mortgaged Collateral Security to Bank who has taken over the possession IDBI Bank, Specialized Corporate Branch, #30-15- 35, Ground Floor, Near Saraswati Park, Dabagardens, Visakhapatnam- 530020, Andhra Pradesh. IDBI Bank, Specialized Corporate Branch, #30-15- 35, Ground 420 square yards vacant site at S.N0.9/2A1, Chinnawaltair, Visakhapatnam Immovable Mortgaged Collateral Security to Bank 7 OLR.No.2 of 2025 in/and COMPA.Nos.203 & 381 of 2018 3 4 5 6 Flat at Thambu Chetty Street, Chennai, Door No.336, Parrys, Chennai-600001.
Immovable Mortgaged Collateral Security to Bank 1500 square yards vacant site situated in Sy.No.188/3A, Desapathrunipalem, Visakhapatnam Immovable Mortgaged Collateral Security to Bank 1670 square yards vacant site situated in Sy.No.188/3A, Desapathrunipalem Visakhapatnam. Immovable Mortgaged Collateral Security to Bank 1670 square yards vacant site situated in Sy.No.188/3A, Desapathrunipalem, Visakhapatnam. Immovable Mortgaged Collateral Security to Bank Floor, Near Saraswati Park, Dabagardens, Visakhapatnam- 530020, Andhra Pradesh. IDBI Bank, Specialized Corporate Branch, #30-15- 35, Ground Floor Near Saraswati Park, Dabagardens, Visakhapatnam- 530020, Andhra Pradesh. IDBI Bank, Specialized Corporate Branch, #30-15- 35, Ground Floor, Near Saraswati Park, Dabagardens, Visakhapatnam- 530020, Andhra Pradesh. IDBI Bank, Specialized Corporate Branch, #30-15- 35, Ground Floor, Near Saraswati Park, Dabagardens, Visakhapatnam- 530020, Andhra Pradesh.
IDBI Bank, Specialized Corporate Branch, #30-15- 35, Ground Floor, 8 OLR.No.2 of 2025 in/and COMPA.Nos.203 & 381 of 2018 Near Saraswati Park, Dabagardens, Visakhapatnam- 530020, Andhra Pradesh. The accused No.2 further stated that, except the properties mentioned in the above table at SI.Nos. 1 to 6, there are no other assets in the name of the company (in liqn.). With regard to the books & records of the company (in liqn.), the accused No.2 has stated that, he is having only files pertaining to the company (in liqn.) and the same will be handed over to this office on the next meeting. At the request of the accused No.2, the next date of meeting was fixed on 06-12-2024 (Friday). A copy of minutes of the meeting dated 22-11-2024 (Annexure -“D”) was enclosed to the report, (iv). 4**^ meeting: On 06-12-2024, Sri.K. Mohan Nageswar, ex director of the company (in liqn.) attended the meeting in the office of Official Liquidator.
During the meeting, the accused No.2 furnished information regard major Bank transactions that took place the wound up of the company (in liqn.) i.e. on 30-08-2017, the entry wise statement about the withdrawal of funds from the bank account of the company (in 1 9 OLR.No.2 of 2025 in/and COMPA.Nos,203 & 381 of 2018 liqn.) and informed that, the funds are utilized for payment towards service providers, vendors, director’s salaries and other incidental expenses for the company (in liqn.). The accused No.2 has further stated that, the funds are not misappropriated by the ex-directors, but these payments are released towards company expenses which are incurred to carry on the business and he has handed over four (4) of the company (in liqn.). For verification of the files and for entry wise statement clarifications to be given by the accused No.2, the next date of meeting was fixed on 11-12-2024.
A copy of minutes of the meeting dated 06- 12-2024 (Annexure-“E”) was enclosed to the report. (v). 5^*^ meeting: That, on 11-12-2024, the accused No.2 was present in office of the Official Liquidator and participated in the meeting conducted by the Official Liquidator. During the meeting. it was discussed about the submission of documents / information by the ex-director with regard to misappropriation of funds of Rs.77,99,999/- as well as records of the company (in liqn.), since the accused No.2 has already submitted clarifications with regard to defects pointed out in OLR dated 18-06-2019 in the earlier meetings. 10 OLR.No.2 of 2025 in/and COIVlPA.Nos.203 & 381 of 2018 With regard to misappropriation of funds of Rs.77,99,999/-, the accused No.2 stated that the company was operational and executing the contract for the client and the client transferred the amount to the company’s bank account and the company made payments to various service vendors for completing the job work and he further stated that, in addition to the service provider payments, the company has made other payments like legal charges, statutory payments, vendors payment, director’s salaries and other incidental expenses.
The accused No.2 further stated that, he has not misappropriated the funds and he incurred expenses to carry out the business of the company (in liqn.) and he requested the Official Liquidator to close the matter in this regard. With regard to records of the company (in liqn.), the company (in liqn.) is having three offices such as registered office at Visakhapatnam and branch offices at Kakinada & Chennai and the office of the Official Liquidator has taken possession of books & records of the company (in liqn.) situated at Chennai branch through IDBI, secured creditor. Hence, the Official Liquidator has sought clarification from the accused No.2 with regard to books and records of the company (in liqn.) situated at Visakhapatnam & Kakinada offices. In this regard, the accused No.2 stated that. 11 OLR.No.2 of 2025 in/and COMPA.Nos.203 & 381 of 2018 the books and records of the company (in liqn.) situated at registered office, Visakhapatnam, been shifted residence which is situated at H.No.9-29-10/A, Gokul Nivas, Balaji Nagar, Siripuram Junction, Visakhapatnam-530003 and the same was seized by APSFC along with the books & records of the company (in liqn.).
He further stated that, the branch office of Kakinada located Pallamraju Nagar, Kakinada, East Godavari District, which was owned by accused No.1 and the same was hypothecated to IDBI Bank and the said bank has taken possession of the property along with furniture & fixtures. books & records and subsequently, IDBI has sold the branch office of company at Kakinada and handed over the possession to the purchaser and hence, there is no chance to trace out the books & records of the company (in liqn.) situated in Kakinada branch. The accused No.2 further stated that, as on date he does not have any other books & records of the company (in liqn.) assured that he would co-operate with the Official Liquidator for the liquidation proceedings of the company (in liqn.) as and when required and submit available information. He requested the Official Liquidator to file necessary report before the High Court for closure of the Applications i.e.
C.A.No.203/2018 & 381/2018. I 12 OLR.No.2 of 2025 in/and COMPA.Nos.203 & 381 of 2018 In this regard, recorded minutes of the meeting on 11-12-2024 (Annexure - “F”) (original) was enclosed to the petition. E. The details of above meetings with Sri Kukkala Mohan Nageswar, ex-director of the company (in liqn.) and action on the part of the Official Liquidator are as follows:- Query of O/o. Official Liquidator pointed out in para No.5 (i) to (vii) Common Report dated 18-06- 2019 misappropriation fund as pointed out in the Common Report 15-04- of OL dated 2024 on the SOA to the ex-directors. Para No.5(i); Furnish the address of Bank where the balance of Rs. 1,746/- Union Bank India was shown in SOA. Para No.5 (ii): As regards Marketable Securities Summary) (Group Rs.32,18,108.16 ps. in the SOA and no supporting documents addresses parties given in the SOA. Reply of ex-MD along with supporting documents Action on the part of Official Liquidator The ex-director submitted the required /information in the meeting held on 08-11- 2024. details This office has initiated action realize same from the Union Bank of India.
The ex-director vide his letter This office has initiated action to realize the term deposits held in the Axis Bank, if any as informed by the ex director. dated 22/11/2024 submitted details received from deposit Axis Bank Ltd., George Town Branch, & MVP Chennai Colony Branch, Visakhapatnam amount Rs.2,07,340/-. Also submitted the dividend warrant No.00246591 05-07-2016 received Union Bank India ID No.0338499. client Further, he stated that he put his efforts to gather additional Sl. No.
2. / 13 OLR.No.2 of 2025 in/and COMPA.Nos.203 & 381 of 2018 Late 22/11/2024 information collect documents pertaining to the balance amounts but could not get any information. letter The ex-director informed transactions were accounted before the financial year 2013-14 during Nageswara K. Rao managing director and these amounts were being carried forwarded the subsequent financial year/s. The details business person payments were made are not available with him and it almost more than 10 years being unrecoverable. The ex-director vide his letter entities payments 22/11/2024 regarding informed that, Rs. 1,89,779/- of Trade Debtors, communicate debtors payments to the company. He never got any response or reply from any of the debtors and he got to understand that most of the debtors are either not operational or have shut Hence, down their business. receivables In view of the statement of ex director, no action is required from the office of the Official Liquidator in respect of recovery of Loans & Advances. statement director, no action required office Official Liquidator in respect of recovery Trade Debtors. recoverable. t
Para No.5 (iii); As regards the Loans & Advances, observed Rs.1.63 Crores was various persons/parties. However, accused No.2 furnished addresses mentioned amount in the column estimated to realize. Para No.5 (iv): As regards the Trade (estimated Debtors realizable values) Rs.17,39,40,933.16p in the statement of s. affairs accused No.2. No supporting documents were filed and on which payment received etc., further ledger books minutes were also not handed Liquidator. absence office of the Liquidator realize Official In same, Official is unable amount.
I 14 OLR.No.2 of 2025 in/and COMPA.Nos.203 & 381 of 2018 The property is in the name of Sri Kukkala Nageswara Rao (Late) and not in the name of the Company (in liqn.) and hence no action is required from the office of the Official Liquidator. property said property is The ex-director informed that name of Late K. Nageswara Rao, hypothecated with IDBI Bank and is in physical possession of the bank and furnished the details of the property. He further informed that he had property impossible original sale deeds and the copies of the property are in (IDBI hypothecated Bank). extract All details information. custody The ex-director has informed In view of the vide letter dated 22/11/2024 that the details mentioned are
Para No.5 (v): As regards the free Assets, No.2 accused furnished the address details Kakinada Branch only and not furnished the details of fixed and movable assets i.e. office furniture, The accused is to inform details and movable assets i.e. office furniture situated at Kakinada Branch furnish the copy of
company property. Para No.5 (vi): As regards investments not investments but are TDS marketable securities Rs.69,08,307.08ps. the statement of accused No.2, observed that details affairs addresses supporting documents provided, accused is to account The M/s. receivables customers Esskay Shipping Private Limited (in liquidation). The same will be adjusted against the Income Tax liability of the company years. required no action Hence, from the office of the Official Liquidator in this regard. respective regard The ex-director furnished the original Appeal No. 171 of 2017 filed the AP VAT Appellate Visakhapatnam, Tribunal, Andhra Pradesh. No.171 for the same. Para No.5 (vii): regards As Appeal 2017 with AP VAT Appellate Tribunal, Visakhapatnam accused No.2 furnished copy of Appeal.
t statement of ex director, no action is required from the office of the Official Liquidator in respect of Investments and other than marketable securities. It is an appeal against the order of Appellate Deputy Commissioner (CT), Visakhapatnam. Appeal No.VSPA/AT/141/201 3-14 dated 10-07-
per OLR As (viii) dated 15/04/2024. misappropriation Rs.72,99,999.19 ps. 15 OLR.No.2 of 2025 in/and COMPA.Nos.203 & 381 of 2018 stated The ex-director the company was operational and executing the contract for client client company transferred the amount to the company’s bank account and payments to various service vendors for completing the He further stated job work. that, in addition to the service provider company has made other payments like legal charges, statutory payments, vendors. Director’s salaries and other incidental expenses and this regard he has furnished the statement on transaction payments, After perusal of the statement provided by the ex-director, it is observed that an amount of Rs.10.10 lakhs has been paid by the company to Sri K. Mohan Nageswar, ex-director. After perusal of the statement provided by the ex-director of the company (in liqn.), all expenses made by the ex-directors appears to be made to\A/ards business expenses. office 06- Official Liquidator on He further stated 12-2024. that, misappropriated and he incurred expenses to carry out the business of the company (in Official requested Liquidator to close the matter in this regard. liqn.) and F. For realisation of the balance amount lying in the bank, the Official Liquidator addressed a letter dated 26-11-2024 to the Union Bank of India, Visakhapatnam, with a request to close the account of the company (in liqn.) and send the balance amount to the office of the Official Liquidator. With regard to the marketable securities, the Official Liquidator has addressed letters dated 26-11-2024 to the concerned banks to close the term deposits and send the amount lying in the said ( I 16 OLR.No.2 of 2025 in/and COMPA.Nos.203 & 381 of 2018 accounts along with interest to the office of the Official Liquidator. The realisation of balance amount in the banks and marketable securities are under process. Copy of the said letters dated 26-11-2024 addressed to various banks (Annexure - “G”) were enclosed to the report.
02. Except taking the report of the Official Liquidator on record as prayed, no further information is required in respect of statement of affairs, at this stage;
03. In the circumstances explained above, the Official Liquidator f ( sought the following reliefs: i) to take on record report containing clarifications given by the ex-director i.e. Sri Kukkala Mohan Nageswar with regard to the discrepancies pointed out in the Common Report of the Official Liquidator dated 18-06-2019 and 15-04-2024 in C.A.Nos.203 & 381 of 2018 relating to the statement of affairs and other Assets of the company (in liqn.) ii) direct ex-directors provide information/assistance as and when required by the Official Liquidator if any in future in respect of adjudication claims liquidation proceedings of the company (in liqn.).
04. Accordingly, as prayed, the report was taken on record with a direction to the ex-directors to provide information/assistance as and 17 OLR.No.2 of 2025 in/and COMPA.Nos.203 & 381 of 2018 # when required by the Official Liquidator, if any, in future in respect of adjudication of claims and other liquidation proceedings of the company (in liqn.).
05. With above direction, the Company Applications are closed. No order as to costs. Interim orders granted earlier, if any, shall stand vacated. Pending interlocutory applications, if any, shall stand closed. //TRUE COPY// Sd/- S.V.S.R.MURTHY JOINT REGISTRAR r ^ To, SECTION OFFICER . The Official Liquidator, M/s. Esskay Shipping Private Limited (in liqn) Bandlaguda Office Thattiannaram Village, Hayathnagar Mandal, Ranga Reddy District Telangana State Pin Code-500 680. Corporate Bhawan, Nagole, Floor, 1
2. The Registrar of Companies, Ministry of Corporate Affairs, Government Of Bandlaguda Thattiannaram Village, Hayathnagar Mandal, Ranga Reddy District Telangana State Pin Code-500 680 Corporate Bhawan. Nagole. Floor, India. 2 3
4. Floor, Nagole, Bhawan, Corporate
3. The Regional Director, South Eastern Region, Ministry of Corporate Affairs, Bandlaguda, Thattiannaram Village, Hayathnagar Mandal, Ranga Reddy District Telangana State Pin Code-500 680. Sri Kukkala Venkata Rama Vidya Sagar, Ex-Director of M/s Esskay Balaji Nagar 9-29-10/A, Shipping Siripuram, Visakhapatnam -530 003, Andhra Pradesh. Sri Kukkala Mohan Nageswar. Ex-Director of M/s. Esskay Shipping Balaji Private University, Visakhapatnam -530 003, Andhra Pradesh. Sri. T V P Sai Vihari 9-29-10/A, Limited, Limited, Private Nagar, Nivas, Gokul Nivas. Gokul
6. One CC to Andhra (Standing Counsel for Official
5. Liquidator) [OPUC]
7. One CC to Sri D V Sasidhar, Advocate [OPUC] 8. One CC to Sri. C Raghu, Advocate [OPUC]
Three CD Copies Stu HIGH COURT DATED:30/01/2025 COMMON ORDER Of 2018 COMPA.Nos.203 and 381 5 2 0 MAR 2025 ^ Co ^ . Current Section . 4£^spatcv'^^ CLOSING THE COMPANY APPLICATIONS
Questions this judgment answers
Which statutory provisions did this judgment involve?
Companies Act, 2013 — ss. 454, 454(5A), 456, 468.
Which court decided this case, and when?
Andhra Pradesh High Court, on 30 Jan 2025. The bench was B S BHANUMATHI.
Precedent status how later indexed judgments have treated this case
No known negative treatment found in the Courts & Cases corpus.
This is a result about the indexed corpus, not a finding that the judgment remains good law. Coverage may be incomplete.