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TMI Blog1983 (8) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 of the petition. The price charged from each of petitioners Nos. 1, 2 and 4 was Rs. 3,000, and from petitioners Nos. 3 and 5, Rs. 4,000 each. Another plot was sold to petitioner No. 6 for Rs. 6,000. Five of these sales were in 1968, and the sixth in favour of petitioner No. 3 in 1970. These plots were described in the sale deeds as forming part of khasra No. 476 of that village. It was further represented in the sale deed as under : "That the vendor assures the vendee that they are the absolute owners of the land and the plot is free from all encumbrances whatsoever. The vendor further assures the vendee that in the event of any flaw in the title of the vendor, the property sold shall pass out from the ownership or possession of the vendee, the vendor shall be held responsible to Compensate the vendee in all respects. That the vendor has put the vendee into actual physical possession of the plot of land. That the vendee shall take all steps to get his name mutated in the revenue records and do the necessary expanses himself to which the vendor shall have no objection." The case of the petitioners is that the respondent company had been assuring transfer of land in their ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e maintainability of the winding-up petition. Firstly, it is urged that the claim is based upon damages for breach of warranty of title, and the same cannot be treated as "debt" within the meaning of section 433(1)( e )or section 434 of the Companies Act. In any case, it is pointed out that the claim for damages is manifestly barred by limitation as the sale deeds were executed in 1968 or 1970, while the present petition has been brought in 1982. No specific particulars besides, it is urged, have been given in the petition with regard to misrepresentation, fraud, etc . In any case, they are denied, and it is asserted that the petitioners fully knew the existence of the colony, and purchased land with knowledge of its existence, location and other details. As such, the rule of "buyers beware" was applicable. The present petition is stated to be in reality an exercise for putting pressure upon the company to pay disputed claims and scandalise it by abuse of the process of the court. On merits, it is stated that the company had purchased land measuring 105 bighas in the area, out of which about 60 bighas were mutuated in its favour, and the rest could not be done because of the cei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent has denied that any letter was received from the petitioners demanding proof of their title or the plans. Along with this winding-up petition, the petitioners applied for appointment of provisional liquidator in order to take possession of the records and assets of the company. This was allowed by Wad J. on March 31, 1982, after taking note that prima facie circumstances existed for winding-up of the company as large scale public deception appeared to have been enacted, and over rupees ten lakhs collected from various purchasers of plots without giving them the plots. The company, it was noted, itself did not own the said land or any colony, and as such had no substratum. All through, the attempt of the company appeared to have been to keep on promising and dodging the purchasers. It was also taken note that the company had not specifically refuted that in fact there was no colony which was being developed. This fact was rather admitted then by the company's counsel. The company later moved a petition under rule 9 of the Companies (Court) Rules, 1959 and section 151, CPC, and sought that the appointment of the provisional liquidator be vacated. This, however, was dismiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Chawla J. further took note of the two company judges having already prima facie found that the company perpetrated fraud. He was also of the same prima facie impression. Before proceeding further, it may also be mentioned that the Registrar of Companies who was given notice of the winding up petition, has submitted a report in which he has also mentioned that various complaints have been received from the persons to whom plots have been sold or amounts for their sale obtained. The directors were, therefore, summoned under section 209A(5), but they have not complied. It has also been reported that the balance-sheet filed from the very beginning showed that the company has not made any substantial profit, and was always running in losses. Reference may as well be made here to C. A. No. 136 of 1983, which the plot holders association of the Vijay Park has moved under section 466(3) of the Companies Act, seeking the transfer of the suit which is pending in Ghaziabad, to this court. A copy of the plaint of that suit has been attached which shows that the respondent company has started effecting resale of the plots of the so-called Vijay Park colony to some other persons who a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate in the purchaser, the law in India does not recognise any such estate. Section 54 of the Transfer of Property Act in specific terms provides that a contract for sale does not, of itself, create any interest in or charge on such property. Such contract is merely a document creating a right to obtain another document in the form of a sale deed to be registered in accordance with law. In other words, a contract for sale is a right created in personam and not in estate. No privity in estate can be deduced therefrom which can bind the estate, as is the position in cases of mortgage, charge or lease. of course, such personal right created against the vendor to obtain specific performance can ultimately bind any subsequent transferee who obtains transfer of the property with notice of the agreement of sale. (See Ram Baran Prasad v. Ram Mohit Hazra, AIR 1967 SC 744 and Jiwan Dass Rawal v. Narain Dass, AIR 1981 Delhi 291). The shelter now sought to be taken by the respondent on the rule of "buyers beware" is further of no avail as when title itself did not exist, the company could not represent that it was the absolute owner. The company has next admitted that till this day it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hose agents and acquaintances were and how the company had authorised them, have not been clarified. I am, therefore, inclined to accept the petitioners' case that annexure P-9 dated August 1, 1980, was delivered to a representative of the company at its office. In this, the documents of the ownership and the plans showing the development of plots had been sought. Another significant fact to be noted is that although the respondent company claims to have obtained an agreement to sell in its favour from the previous owners on March 20, 1968, it had effected sales in favour of three of the petitioners on February 1, 1968. There was thus not even a semblance of interest in the company's favour. No affidavit of the so-called previous owners who had executed the agreement to sell has besides been filed, nor is it shown that they held the title. While it has not been challenged that amounts totalling over rupees ten lakhs have been collected from the persons to whom plots were sold, these amounts are not reflected in the profit and loss accounts and balance-sheets. The value of stock-in-trade is shown as Rs. 4,936 and the development charges as Rs. 16,050 only. Advances to land owner ..... X X X X Extracts X X X X X X X X Extracts X X X X
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