9911796707
TMI Blog2002 (10) TMI 684X X X X Extracts X X X X X X X X Extracts X X X X ..... herein (IDBI), which is effectually void against the liquidator and any creditor of the second respondent-company and consequently direct the third respondent to hand over the title deeds of the said property to the applicant. In Company Application No. 404 of 2002, the very same applicant has prayed for leave to institute an appropriate suit against the official liquidator for the company in liquidation in respect of the security by way of a charge created in favour of the applicant herein over the immovable properties of the second respondent-company measuring to an extent of 42 acres and 50 cents located at Ulandai and Kilai villages in Sriperumbudur Taluk, Chengalpattu District. The case of the appellant is briefly stated hereunder : According to them, the applicant is a secured creditor of the second respondent-company and the second respondent-company had executed two hire-purchase agreements on July 29, 1997, and March 2, 1998, respectively in favour of the applicant herein. In terms of the agreements, various items of plant and machinery were given to the second respondent's company on hire basis. The second respondent herein had been irregular in payment of instalmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p petition is pending against the company before this court, and the second respondent failed to obtain permission from this court to complete the mortgage formalities in favour of this respondent to file a charge with Registrar of Companies. The original title deeds were deposited with them as surety for financial assistance and the third respondent has lien over the said title deeds of the immovable property in question until the third respondent's dues are cleared. Further, the declaration sought for is to be rejected for the reason that the applicant's charge over the immovable property created by the second respondent is subsequent to presentation of the winding up petition and therefore, it cannot be treated as a validly created charge. In the circumstances, the relief sought for by the applicant and the connected reliefs have to be rejected. Heard the learned senior counsel for the applicant as well as the respondents. The only point for consideration is, "Whether the charge created by the second respondent in favour of the applicant and registered with the Registrar of Companies on August 16, 2000, is the only valid and exclusive charge in respect of the immovable pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s conferred thereby, be void against the liquidator and any creditor of the company, unless the prescribed particulars of the charge, together with the instrument, if any, by which the charge is created or evidence, or a copy thereof verified in the prescribed manner, are filed with the Registrar for registration in the manner required by this Act within (thirty) days after the date of its creation." It is clear that unless the charge together with instrument by which the charge is created is verified in the prescribed manner and filed with the Registrar for registration in the manner required within 30 days after the date of its creation, the charge is to be void against the liquidator and the creditors of the company in liquidation. I have already referred to the admitted factual position, that the second respondent had created a second charge in respect of the immovable properties at Ulandai and Kilai villages in Sriperumbudur Taluk, but subsequent to the first charge with the third respondent IDBI and after filing of the winding up petition, the said charge has been registered with the Registrar of Companies in accordance with the statutory provisions that too, after complian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for 20 months and then moved when liquidation was imminent. Followed in Victoria Housing Estates Ltd. v. Ashpurton Estates Ltd. [1982] 3 All ER 665 (CA) where the court further observed that when a chargee discovers that, by mistake, he is unregistered, he should apply without delay for an extension of time if he desires to register; and the court, when asked to exercise its discretion, should look askance at a chargee who deliberately defers his application in order to see which course would be to his best advantage. See also Krishna Silicate and Glass Works Ltd., In re [1975] Tax LR 1253 (Cal), Victoria Housing Estates Ltd. v. Ashpurton Estates Ltd. [1982] 3 All ER 665 (CA) ; [1983] Ch 110, In re Resinoid and Mica Products Ltd. [1982] 3 All ER 677 (CA) ; [1983] Ch. 132. A very exceptional case will have to be made out to justify the court in making an order for rectification, after a company has gone into liquidation and the rights of unsecured creditor in the liquidation had crystallised. Mechanisations (Eaglescliffe) Ltd., In re [1965] 35 Comp Cas 478 (Ch D); [1966] Ch. 20." Before considering the above aspect, it is to be noted that section 531(1) of the Comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a petition for the winding up of a company and the date of the order for its compulsory winding up a debenture was issued by the company to secure to the debenture holder the repayment of 1200 advanced to enable the company to pay wages due to the staff. A summons was taken out by the debenture holder for an order validating his debenture, notwithstanding the provisions of section 205(2) of the Companies (Consolidation) Act, 1908. The debenture holder was, at the time of issue of the debenture, aware that the petition for the winding up of the company had been presented. It was held that notwithstanding his knowledge of the presentation of the petition, he was entitled to a declaration that the debenture was valid. It is not disputed that section 205 is similar to section 536 of the Indian Companies Act. A similar conclusion has been arrived at in In re Steane's (Bournemouth) Ltd. [1950] 1 All ER 21 (Ch D). In re Clifton Place Garage Ltd. [1969] 3 All ER 892 (Ch D), it is held that where a disposition of a company's property is made after the commencement of the winding up of that company, the court should make an order under section 227 of the Companies Act, 1948, valida ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ood faith and honest intention aimed at the best interest of the company. The omission to indicate any special guiding principles in the matter of discretion to be exercised by the court, makes it clear that it is not left entirely at large, but controlled only by general principles which apply to every kind of judicial discretion." In the case of Sidhpur Mills Co. Ltd., In re [1987] 1 Comp LJ 71 , the Gujarat High Court has held that, the court has an absolute discretion so as to validate the transaction after presentation of the winding up petition. It is further held that the discretion is to be exercised on recognised principles which guide the exercise of judicial discretion generally with particular attention to the interest of the company. The court can validate such impugned transaction in those bona fide cases which demand protection of equitable considerations. In the case of J . Sen Gupta (Pvt.) Ltd., In re [1962] 32 Comp Cas 876 , the Calcutta High Court has held that, under section 536 of the Companies Act the court has an absolute discretion to validate a transfer of the company's assets made after the commencement of the winding up and in its discretion th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eeds relating to the immovable property at Sriperumbudur with third respondent, in the absence of registration of charge before the Registrar of Companies in terms of section 125 of the Companies Act, 1956,1 am of the view that deposit of deeds and documents was merely ancillary. In this regard, it is relevant to refer the case of Molton Finance Ltd., In re [1968] 38 Comp Cas 833 (CA); [1968] Ch 325. In that case, a firm of stockbrokers lent 15,000 to a company. In order to secure repayment the company gave to the stockbrokers sub-charges on the properties and deposited deeds and documents with them "to the intent that the same may be equitably charged with the repayment" of the 15,000. The charges created were not registered under section 95(1) of the Companies Act, 1948. The company went into liquidation. On a summons by the liquidator claiming, inter alia , that the deposits of the deeds and documents were void as against him for want of registration under section 95 of the Act of 1948, and their delivery up by the stockbrokers, it was contended for the latter that they had a valid common law lien on the documents. On an appeal by the stockbrokers from Pennycuick, who uph ..... X X X X Extracts X X X X X X X X Extracts X X X X
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