2012 (6) TMI 399 - HC - Companies Law

Winding up applicant booked plot before the date of appointment of Provisional Liquidator - Applicant made payments of Rs. 31,100 with JVG Finance and Rs. 3,00,910 with JVG Projects - One Man Committee has found that the claimant has deposited only a sum of Rs. 61,290 towards the sale consideration and other charges whereas the applicant claimed that it had additionally deposited a sum of Rs. 1,00,580 in cash Held that - Sale Deed dated 14-7-1998 has been executed only after appointment of Provisional Liquidator and injunction order dated 5-6-1998. The sale is void under section 537(1)(b) of the Act. applicant-claimant is not entitled to allotment of Plot. However, the applicant is entitled to simple interest at the rate of 4 per cent per annum on Rs. 61,290 the amount deposited with the respondent company from the date of its deposit. Application is dismissed

Issues Involved:
1. Delay in filing Co. Appl. 1633/2011.
2. Validity of the sale deed executed after the appointment of the Provisional Liquidator.
3. Claimant's entitlement to the plot and refund of deposited amount.

Detailed Analysis:

1. Delay in Filing Co. Appl. 1633/2011:
The court condoned the delay in filing Co. Appl. 1633/2011, disposing of the application accordingly.

2. Validity of the Sale Deed Executed After the Appointment of the Provisional Liquidator:
The application was filed under section 536(2) of the Companies Act, 1956, following the 132nd Report by the One Man Committee. The applicant had booked and was allotted a plot in 1995, making payments before the Provisional Liquidator's appointment on 5-6-1998. The Committee found discrepancies in the payments claimed by the applicant and those recorded. The sale deed was executed by an alleged representative of JVG Finance Limited after the Provisional Liquidator's appointment, rendering it void under sections 536(2) and 537(1)(b) of the Companies Act, 1956. The court emphasized that any disposition of property after the commencement of winding up is void unless ordered otherwise by the court.

The court noted that the sale deed was executed without the leave of the court and thus was void. It was also highlighted that the One Man Committee rejected the applicant's claim, stating that the sale deed executed on 4-7-1998 was invalid. The court reiterated that the sale deed was executed to defeat the rights of the creditors and that the assets of a company in liquidation cannot be disposed of at the company's pleasure.

3. Claimant's Entitlement to the Plot and Refund of Deposited Amount:
The court upheld the One Man Committee's decision that the claimant was not entitled to the plot but was entitled to a refund of Rs. 61,290 with interest. The court cited several judgments supporting the principle that any sale deed executed in violation of a court order is a nullity. The sale deed dated 14-7-1998 was executed after the appointment of the Provisional Liquidator and the injunction order dated 5-6-1998, making it void under section 537(1)(b) of the Act.

The court dismissed the application, permanently restraining the applicant from selling, parting with possession, or encumbering the plot based on the impugned sale deed. However, the applicant was entitled to simple interest at 4% per annum on the amount deposited with the respondent company.

Conclusion:
The court concluded that the sale deed executed after the appointment of the Provisional Liquidator was void, the claimant was not entitled to the plot, but was entitled to a refund with interest. The application was dismissed, and the claimant was restrained from dealing with the plot based on the invalid sale deed.

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