1991 (10) TMI 229 - HC - Companies Law

Issues Involved:

1. Validity of the notice served.
2. Proper verification and authorization of the petition.
3. Validity of the resolution authorizing the petition.
4. Non-joinder of necessary parties.
5. Alleged moratorium granted by the petitioners.
6. Compliance with terms and conditions of the deeds.
7. Proper payment of court fees.
8. Personal liability of the second respondent.
9. Validity of the mortgage of the second respondent's property.
10. Compliance with Section 125 of the Companies Act.

Issue-wise Detailed Analysis:

1. Validity of the Notice Served:
The petitioners contended that the notice dated 5th January 1975 was served on the second respondent, who was the managing director of the first respondent company. The respondents argued that the notice was not served at the registered office of the company and that the second respondent was no longer the managing director at the time of service. The court held that the notice was valid as the second respondent continued to be the managing director and had accepted the notice on behalf of the company. The court concluded that the notice was properly served and the petition was maintainable.

2. Proper Verification and Authorization of the Petition:
The respondents argued that the petition was not properly verified and filed by an authorized officer. The court held that the petition could not be dismissed on the ground of improper verification and that the petitioners had passed a valid resolution authorizing the managing director to act under sections 29 and 31 of the State Financial Corporations Act. The petition was thus found to be properly verified and authorized.

3. Validity of the Resolution Authorizing the Petition:
The respondents contended that no valid resolution was passed by the board of directors of the petitioners authorizing the filing of the petition. The court found that a circular resolution dated 3rd January 1975 authorized the managing director to take necessary steps, and the petition was filed pursuant to this valid resolution.

4. Non-joinder of Necessary Parties:
The respondents argued that the petition was not maintainable due to the non-joinder of the Bank of Maharashtra and the Maharashtra State Small Scale Industries Development Corporation, who had a second charge on some of the properties. The court held that these entities were neither necessary nor proper parties to the petition under sections 31 and 32 of the State Financial Corporations Act. The issue was answered in the negative.

5. Alleged Moratorium Granted by the Petitioners:
The respondents claimed that the petitioners had granted a moratorium for the repayment of the loans. The court found that the letter dated 30th March 1973 only rescheduled the payments and did not amount to a moratorium. The respondents had failed to make payments even under the rescheduled terms, and thus, the petitioners were entitled to call back the entire loan.

6. Compliance with Terms and Conditions of the Deeds:
The court found that the respondents had failed and neglected to comply with the terms and conditions of the mortgage deed, the deed of further charge, and the second deed of further charge and additional security. The respondents had not made the required payments, and thus, the petitioners were entitled to take action under section 31 of the State Financial Corporations Act.

7. Proper Payment of Court Fees:
The respondents argued that the petition was not maintainable due to improper payment of court fees. The court held that a petition under section 31 is not a plaint as contemplated by the Bombay Court Fees Act and that the petitioners had paid the maximum court fee of Rs. 15,000. The issue was answered in the negative.

8. Personal Liability of the Second Respondent:
The second respondent claimed that he had been released from all liabilities and that his personal properties were to be released. The court found no evidence to support this claim and held that the second respondent was personally liable under the mortgage deeds.

9. Validity of the Mortgage of the Second Respondent's Property:
The second respondent argued that the property at Deccan Gymkhana, Pune, was joint Hindu family property and could not be attached. The court found no evidence to support this claim and held that the property was validly mortgaged.

10. Compliance with Section 125 of the Companies Act:
The official liquidator argued that the mortgages and charges were void under section 125 of the Companies Act due to non-compliance with the registration requirements. The court held that the certificates issued by the Registrar under section 132 of the Companies Act were conclusive evidence that the requirements as to registration had been complied with. The court found that the charges were valid and enforceable.

Conclusion:
The court made the petition absolute in terms of prayer (a), allowing the petitioners to take necessary steps to recover their dues by selling the mortgaged properties. The petitioners were directed to give prior intimation to the official liquidator of all steps taken for the sale of the property and to comply with the provisions of section 529 of the Companies Act. The interim order of attachment dated 8th January 1975 was to continue until the claim of the petitioners was fully satisfied. There was no order as to costs of the petition.

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