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TMI Blog2007 (1) TMI 265X X X X Extracts X X X X X X X X Extracts X X X X ..... licant firm had approached the respondent enquiring about such action. Then the applicant firm was informed by the office of the Official Liquidator that, as per their records, the premises belongs to Nirup Synchrome Limited, which is under liquidation. 3. It is stated that the applicant firm is an unsecured creditor of the said company to the tune of Rs. 29,94,000. The company in discharge of part of its liability has executed a sale deed along with the builder, Deccan Builders, Basheerbagh, Hyderabad, which is the absolute owner. It is stated that though the company under liquidation did not secure any title over the said premises, but, by virtue of agreement of sale dated 10-8-1985 by the company with the builder, the company was also made as vendor No. 2 in the sale deed dated 31-7-2000 executed in favour of the applicant firm. 4. It is stated that the applicant firm has approached the respondent on number of occasions in person and through communications, requesting release of the premises and to hand over the same to the applicant. But, since the same was not complied with, the applicant has come up with the present application. It is stated that the applicant is a b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that the company, in adjustment of its past debt due to the applicant to the tune of Rs. 29,94,000 has executed the above sale deed in its favour along with the absolute owner of the premises, Deccan Builders, Basheerbagh, Hyderabad, pursuant to which the company has delivered the premises to the applicant, is clearly illegal. It is stated that even as per the material papers filed by the applicant, it shows that, as per Form 18, the company had shifted its premises only with effect from 21-7-2000, while the sale deed was executed on 31-7-2000, and till then the registered office of the company was at the above address. But, however, the applicant claims that it was given possession on 19-5-1998, which is clearly not in conformity with the other facts. 8. It is stated that against Nirup Synchrome Limited, as many as five company petitions are filed, viz., CP-Nos. 57/1996, 119/1997, 122/1997, 37/1998, 100/1998 and RCC No. 10/2000. The earliest company petition was filed during the year 1996, and by virtue of section 441 of the Companies Act, the winding up proceedings of the company are deemed to have been commenced with effect from 4-4-1996, on which date the said company p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m. Therefore, the claim made by the applicant is clearly illegal and invalid, and the applicant is not entitled to seek the relief. 10. At the time of hearing, the learned counsel for the applicant while reiterating the averments made in the affidavit, contended that, in view of the pressure created by the applicant firm for repayment of the debt due to it against the company, the company was obligated to execute the sale deed in its favour. Under those circumstances, the sale deed executed in favour of the applicant firm cannot be treated as fraudulent preference of the creditors. The learned counsel also contended that possession of the premises was delivered as early as in the year 1998 itself; therefore, the sale deed that was executed is only in conformity with the delivery of the possession of the property. In fact, the sale deed was executed by the original owner, the builder and the applicant company jointly. As there is an agreement in favour of the company, therefore, he sought for allowing the application. The learned counsel relied upon the following decisions in (1) F.L.E. Holdings Ltd. v. Lloyds Bank Ltd. [1968] 2 Comp. LJ 30 (Ch.D), (2) Smt. Jayanti Bai v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther, the applicant claimed that an amount of Rs. 4,90,000, being the sale consideration, was adjusted against the debt due to the applicant company. After adjustment or before adjustment, the liability was Rs. 29,94,000. But, these figures are not tallying, since, admittedly, in the statement of affairs filed by the ex-directors, the applicant is being shown as creditor to the extent of Rs. 37,31,554.41. Therefore, even the alleged adjustment is also clearly without any evidence or merit. 15. Apart from all the above factual aspects, there are legal hurdles in the way of the applicant. According to the respondent, as per section 536 of the Act, any transfer without the sanction of the liquidator, made after the commencement of the winding up, shall be void. Here, admittedly, since the winding up proceedings have started by filing of the company petition on 4-4-1996, the sale effected on 31-7-2000 is clearly a void transaction, since there is no sanction of either from the liquidator or the court. Further, as per section 531 of the Act, any transfer made by a company within six months before the commencement of its winding up in favour of any of its creditors, would be deemed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mily. But, the bank went to liquidation. Therefore, the depositor claimed to have the amount due from the bank to be set off against the amount payable by the joint family. It was held that as the individual depositor was not liable personally for the amount of overdraft drawn by the other there was no question of mutual dealings, therefore, set off was allowed. But, however, the said transaction was treated as a fraudulent preference in terms of section 531 of the Companies Act. But, since the debtors were not made parties who were affected, the order was reversed. 18. In Eluru Motor Transport Ltd. s case ( supra ), a company owned a number of stage carriages, operating on the various routes in the State. In the year 1953, the financial position of the company was unsound and several of its creditors were pressing for the repayment of dues. One such creditor filed a suit for recovery of Rs. 57,299.43 on the foot of a promissory note. Pending the suit, the said creditor applied for attachment before judgment of all the buses belonging to the company. When that petition was filed, the company came to terms with the respondent and passed a resolution agreeing to sell to the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after commencement of winding up proceedings, can be sanctioned if necessary for general interest of company without causing harm to creditors. It was held that the hands of the court are not fettered under section 433(1) of the Companies Act from exercising its inherent powers. If the transaction is bona fide and it was done in the ordinary course of business without causing any harm to the general body of the creditors, such disposition of properties of the company after commencement of the winding up can be sanctioned if it is necessary in the general interest of the company also. 21. Though the learned counsel for the applicant relied upon the above decisions, the ratio laid down in any of the above decisions would not come to the assistance of the applicant, since on facts it is clear that the sale was effected after the commencement of the winding up order, which is clearly void in terms of section 536 as well as section 531A of the Act. Though it was claimed that the sale deed was executed due to the pressure created by the applicant, there is no such evidence. In fact, the applicant claimed that the sale consideration was adjusted against the amounts due to the appli ..... X X X X Extracts X X X X X X X X Extracts X X X X
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