2014 (9) TMI 1290 - HC - Companies Law

Dismissal of applications filed by the appellants under Section 536(2) of the Companies Act praying for acceptance of the sale of plots of the respondent s company to them - Section 536(2) of the Companies Act - HELD THAT - The report of the Serious Fraud Investigation Office has been placed before the learned Single Judge but has yet to be considered by the court. The Income Tax Authority as yet to submit their report on consideration of the matter. Interests of justice merit that the claims of these appellants be also placed with the claims of the other persons in the previously decided appeals who are identically placed as the present appellants deserve to be considered afresh by the learned Company Judge in the light of the observations made here. Undoubtedly there is delay in not only filing the appeal but also in refiling. The appellant has given sufficient explanation seeking condonation of the delay of the applications filed in this regard. For the view we have taken based on the orders passed on 6th of September 2012 and 17th of December 2012 it is inclined to accept the explanation tendered by the appellants firstly in filing the appeals and thereafter in refiling the same as well. The delay in filing the appeals as well as the refiling the same is hereby condoned - the impugned orders dated 23rd August 2011; 25th August 2011; 9th September 2011; and 22nd November 2011 are hereby set aside and quashed - the cases are remanded to the learned Company Judge for deciding on merit afresh - Appeal allowed.

Summary

Issues:
Challenges to orders dismissing applications under Section 536(2) of the Companies Act for acceptance of sale of plots, validity of agreements to purchase plots, receipt of payments, appointment of provisional liquidator, actions of Colonel Ganapati, rejection of claims by One Man Committee, rejection of applications by learned Company Judge, delay in filing appeals, consideration of new facts by Serious Fraud Investigation Office and Income Tax Department.

Analysis:

The judgment involves appeals challenging orders dismissing applications under Section 536(2) of the Companies Act seeking validation of the sale of plots owned by a company under liquidation. The appellants claimed to have entered into agreements to purchase plots before the appointment of the provisional liquidator. The One Man Committee rejected their claims, stating that payments were taken after certain restrictions were imposed, rendering the sale deeds invalid. The appellants argued that they were bona fide purchasers unaware of the restrictions and had paid the entire consideration. Several other similarly situated persons had also approached the court with similar claims. The Division Bench set aside the orders of the learned Company Judge rejecting these applications.

Colonel Ganapati, claiming to act on behalf of the company, received payments and executed sale deeds after the appointment of the provisional liquidator, concealing the winding-up proceedings' status. The One Man Committee accepted the validity of agreements and part payments made before the winding-up petition but rejected the balance payments taken later. The appellants sought validation of their approvals under Section 536(2) of the Companies Act, claiming they were bona fide purchasers and willing to pay the balance consideration. The court noted delays in filing and refiling appeals, but considering the peculiar circumstances and previous judgments, condoned the delays and set aside the impugned orders.

The court remanded the cases to the learned Company Judge for fresh consideration, taking into account new facts presented by the Serious Fraud Investigation Office and the Income Tax Department's attachment order. The appellants were directed to appear before the Single Judge for further proceedings. The judgment emphasized the need for a fresh examination of the appellants' claims in light of observations made, including the actions of Colonel Ganapati, the validity of agreements, and the willingness of the appellants to pay the balance consideration. The court highlighted the importance of considering all relevant matters and ensuring justice for the appellants and other similarly situated individuals.