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2008 (3) TMI 470 - HC - Companies LawWinding up resuming the property of the company is illegal and invalid - Held that - Order dated May 16, 2005, passed by the Estate Officer, PUDA-respondent No. 3 resuming the property of the company is illegal and invalid having been passed without leave of the company court and shall be deemed to be void ab initio and non-est in the eyes of law. Respondent No. 3 cannot be permitted to implement the aforesaid order which has no legal existence. As a consequence of the above,direct respondent No. 2 to execute the necessary conveyance deed in favour of the applicant on the basis of the order dated April 20, 2006, passed by the company court. Since the official liquidator has categorically stated in his reply that the property is free hold property and it was only due to inadvertent mistake that it was notified as leasehold property, conveyance shall convey free hold and unencumbered rights to the applicant.
Issues Involved:
1. Execution of the necessary conveyance deed in favor of the applicant. 2. Annulment of the order dated May 16, 2005, passed by the Estate Officer, PUDA, for resumption of the property. Detailed Analysis: 1. Execution of the necessary conveyance deed in favor of the applicant: The applicant, who is the auction purchaser of the property of Punjab Wireless Systems Ltd. (the company in liquidation), requested the execution of the necessary conveyance deed in their favor. The company was ordered to be wound up on February 1, 2001, and the official liquidator was appointed. An advertisement dated March 10, 2006, informed the public about the sale of the company's assets via court auction. The applicant submitted a bid for lot No. 20, including land measuring 10814.45 sq. yards, and deposited Rs. 36 lakhs as earnest money. The applicant was declared the highest bidder with a bid of Rs. 6.90 crores and deposited the balance amount of Rs. 5.54 crores. Despite requests for possession and execution of the sale deed, there were delays, leading to the filing of C.A. No. 451 of 2006. The court directed the official liquidator to proceed with issuing the sale certificate. The official liquidator admitted that the property was freehold and not leasehold as previously notified due to an inadvertent mistake. Therefore, the court directed the official liquidator to execute the conveyance deed, conveying freehold and unencumbered rights to the applicant. 2. Annulment of the order dated May 16, 2005, passed by the Estate Officer, PUDA, for resumption of the property: The applicant sought to annul the order dated May 16, 2005, by the Estate Officer, PUDA, for resumption of the property under Section 45 of the Punjab Regional and Town Planning and Development Act, 1995 (PRTPD Act). The order included forfeiture of the plot's price, interest, and penalty in favor of PUDA. The applicant argued that the order was passed in disregard of Section 446 of the Companies Act, 1956, and should be void ab initio. Section 446 prohibits the institution and continuance of legal proceedings against a company in liquidation without the court's leave. The respondent (PUDA) contended that Section 45 of the PRTPD Act, a special statute, was not controlled by Section 446 of the Companies Act and that the applicant had alternative remedies of appeal and revision under the PRTPD Act. The court examined Section 45 of the PRTPD Act and referenced various judgments, including Kerala State Financial Enterprises Ltd. v. Official Liquidator, High Court of Kerala, and Titan Industries Ltd. v. Punwire Mobile Communication Ltd., to emphasize that the Companies Act, being a central legislation, overrides state laws like the PRTPD Act. The court concluded that even if the Estate Officer had jurisdiction under Section 45 of the PRTPD Act, it could only be exercised with the leave of the company court due to the company's liquidation status. The order dated May 16, 2005, was deemed illegal and invalid for being passed without the company court's leave and thus void ab initio and non-est in law. Consequently, the court directed that the order could not be implemented. Conclusion: The court directed the official liquidator to execute the necessary conveyance deed in favor of the applicant, conveying freehold and unencumbered rights. Additionally, the court annulled the order dated May 16, 2005, by the Estate Officer, PUDA, for resumption of the property, deeming it void ab initio for being passed without the company court's leave. The application was disposed of accordingly.
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