2009 (12) TMI 1013 - HC - Companies Law

Summary

Issues Involved:
1. Application for permission to transfer properties.
2. Application for interim injunction to restrain alienation of assets.
3. Application for direction not to place agenda for transferring assets in AGM.

Detailed Analysis:

1. Application for Permission to Transfer Properties (C.A. No. 1000 of 2009):
- Applicant's Case: K. Periasamy Gounder entered into a Memorandum of Understanding (MOU) with Kothari Industrial Corporation Ltd. (the Company) to discharge secured loans in exchange for transferring properties in Trichy, Coimbatore, and Mumbai. Payments totaling Rs. 9.37 crores were made towards one-time settlements with several banks.
- Respondent's Case: The Company confirmed the facts and claimed no legal impediment to selling its properties. Kotak Mahindra Bank (the petitioning creditor) opposed, citing ongoing proceedings under the SARFAESI Act and a prohibitive order by the Debt Recovery Tribunal (DRT).
- Court's Findings: The properties in question were encumbered to the State Bank of India and other banks. The Company failed to disclose ongoing injunctions and status quo orders. The transaction was found to lack bona fides and honesty, aiming to outwit creditors like the State Bank of India and ICICI Bank. The Company also did not seek prior approval from the Court before entering into the MOU.
- Decision: The application was dismissed due to lack of bona fides and the intention to outwit creditors.

2. Application for Interim Injunction to Restrain Alienation of Assets (C.A. No. 1740 of 2009):
- Applicant's Case: Kotak Mahindra Bank sought an injunction to prevent the Company from alienating shares of Glenworth Estate Ltd. and Adderley Estate Ltd., which were transferred to wholly-owned subsidiaries and then to third parties.
- Respondent's Case: The Company claimed the transfers were completed in 2005, making the application infructuous.
- Court's Findings: The Company suppressed material facts and violated status quo orders. The transfer deeds were executed and presented for registration, claiming exemption from stamp duty based on subsidiary status, which ceased shortly after the transfers.
- Decision: The application for injunction was not granted, but the Company was directed to furnish full particulars of the transactions and file certified copies of the transfer deeds.

3. Application for Direction Not to Place Agenda for Transferring Assets in AGM (C.A. No. 1741 of 2009):
- Applicant's Case: Kotak Mahindra Bank sought a direction to prevent the Company from placing any agenda before the AGM regarding the transfer of assets.
- Respondent's Case: The Company stated that the statutory notices for the AGM had already been issued and there was no agenda for transferring assets.
- Court's Findings: The Company's statement was recorded.
- Decision: The application was closed based on the Company's statement.

Conclusion:
- C.A. No. 1000 of 2009: Dismissed due to lack of bona fides and intention to outwit creditors.
- C.A. No. 1740 of 2009: Disposed of with directions to furnish transaction details and file certified copies of transfer deeds.
- C.A. No. 1741 of 2009: Closed, recording the Company's statement that there was no agenda for transferring assets in the AGM.