LAWS(TLNG)-2023-6-58

R.N.GUPTA Vs. SRI GOPAL ROY AGRAWAL

Decided On June 13, 2023
R.N.GUPTA Appellant
V/S
Sri Gopal Roy Agrawal Respondents

JUDGEMENT

(1.) The present Appeal has been directed against the judgment and decree passed in O.S.No.1202 of 1988, dtd. 16/12/1998 by the First Senior Civil Judge, City Civil Court, Hyderabad.

(2.) The Appellant (PW.1) herein Sri R.N.Gupta is the present owner of the company named M/s. Gopal Roller Floor Mills Pvt. Ltd. The said private limited company was originally owned and managed by the respondents herein, Sri Gopal Roy Agarwal and others, who were 100% shareholders holding 7000 equity shares of face value of ? 100/- each. The appellant had approached the respondents, following which the parties first entered into a tentative agreement (Ex.A1) dtd. 3/8/1985, purporting to transfer 100% equity shares subject to the finalization of the accounts of the company up to 31/7/1985. As per the tentative agreement, the appellant while taking over the company agreed to purchase liabilities to the extent of ? 35,00,000/-, which was reflected in the balance sheet prepared by the first auditor (DW.2- Nandakishore Agarwal). Moreover, as per the terms and conditions in the tentative agreement, the respondents assured that in case the liabilities exceed over ? 35 lakhs, they will take responsibility and reimburse the amount over and above ? 35 lakhs. Consequently, the parties entered into a Final Agreement (Ex.A2) dtd. 20/3/1986, where after the appellant became the director of the board and the ownership and management of the company was vested in him.

(3.) After assuming ownership of the company, the appellant conducted fresh financial audit by appointing a new auditor (P.W.2). Upon auditing of the finances of the company, it was alleged that the liabilities as on 1/8/1985 stood at ? 52,65,000/- and not ? 35,00,000/- as per the agreement between the parties and reflected in the balance sheet. The appellant also contended that he incurred losses to tune of ? 17,65,000/- as the defendants had failed to discharge all their debts properly and were in arrears of income tax returns. The appellant further alleged that the defendants have illegally withdrawn and have not discharged debts from their accounts in APSFC and A.P. Mahesh Co-operative Bank on the account of Poonam trading company. The appellant has cited more liabilities of such nature and relied on indemnity clause of the agreement, where the respondents agreed to indemnify the appellant in case of excess liabilities. The appellant thus filed O.S.No.1202 of 1988 in the Court of First Senior Civil Judge, City Civil Court at Hyderabad for recovery of ? 38,99,840/- together with a future interest of 18% from the date of the suit and till the realization and for costs of the suit.