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Issues Involved:
1. Legitimacy of the transactions involving the sale of flats owned by the company. 2. Validity of the consent decrees passed by the Bombay High Court. 3. Authorization of Dr. Sukhvir Singh to enter into sale agreements on behalf of the company. 4. Compliance with legal procedures for suits filed after the appointment of the provisional liquidator. 5. Authenticity of the payments made by the purported purchasers. Detailed Analysis: 1. Legitimacy of the Transactions: The ex-management of the company alleged that the suits filed in the Bombay High Court were false and collusive, with plaintiffs colluding with Dr. Sukhvir Singh, who misrepresented himself as the Vice-Chairman of the company. The intervenors claimed to have purchased the flats for valid consideration, supported by agreements signed by Dr. Sukhvir Singh. However, discrepancies in the dates of board meetings and proposals cast doubt on the authenticity of these transactions. The court noted that the payment of Rs. 30 lakhs in cash by each purchaser further questioned the legitimacy of these transactions. 2. Validity of the Consent Decrees: The court observed that the consent decrees were obtained without notice to the Official Liquidator, which was mandatory after the appointment of the provisional liquidator on 5th June 1998. The proceedings in the suits were deemed impermissible as they were initiated without the leave of the court, rendering the decrees void and non-binding on the Official Liquidator or the company. The court emphasized that such decrees could be set aside on legal grounds, referencing the Supreme Court's ruling in Sudarsan Chits (I) Ltd. v. G. Sukumaran Pillai. 3. Authorization of Dr. Sukhvir Singh: The intervenors argued that Dr. Sukhvir Singh was duly authorized by a Board Resolution dated 3rd January 1997 to enter into the sale agreements. However, the court found inconsistencies in the documents, such as the board allegedly accepting proposals before they were submitted, which indicated possible fabrication. The court directed the Official Liquidator to file minutes of the board meetings to verify the authenticity of the authorization. 4. Compliance with Legal Procedures: The court highlighted that under Section 446 of the Companies Act, no suit or legal proceeding could be commenced or continued against the company after the appointment of the provisional liquidator without the court's leave. The intervenors filed their suits and obtained decrees after the provisional liquidator's appointment, violating this provision. The court noted that the Bombay High Court was not informed about the liquidation proceedings, making the suits and decrees collusive and void. 5. Authenticity of Payments: The court questioned the payment of the entire consideration in cash, which was not accounted for in the company's records. The intervenors were directed to file income-tax returns for the relevant period and affidavits stating the source of the Rs. 30 lakhs. Their failure to comply led the court to draw an adverse inference against them, suggesting that the transactions were not genuine. Conclusion: The court set aside the consent decrees dated 21st January 2000, 4th January 2000, and 31st December 1999. The intervenors were given the option to file claims under Section 446(2) of the Companies Act, which would be referred to a One Man Committee for determination. The court directed the Official Liquidator to take immediate possession of the flats, as the transactions appeared prima facie non-genuine. Restoration of possession would be considered only if the intervenors could provide necessary documentary evidence proving their claims.
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