9911796707
TMI Blog2008 (6) TMI 354X X X X Extracts X X X X X X X X Extracts X X X X ..... anded over to them and report compliance not later than eight weeks from today. The Official Liquidator shall forthwith initiate action to determine the market rent to be recovered from the applicant in respect of 3rd floor premises and M/s. Videocon Appliances Limited in respect of 5th floor premises with effect from 13-6-1997 till they are dispossessed and then shall recover the determined amount from the applicant as well as M/s. Videocon Appliances Limited while providing adjustment to them towards the amount already paid by them from time to time towards monthly rent in terms of the agreement or the Court’s order, as the case may be, as also to exclude the period during which the premises on 3rd floor remained sealed between 13-4-1999 till 15-10-1999. The applicant as well as its associate company M/s. Videocon Appliances Limited are directed to forthwith deposit the original copies of all the agreements appended to the Application, affidavit in support of the application as well as further affidavit of Shri Bharat More dated 3-12-2007 and produced along with the affidavits filed on behalf of the Official Liquidator, in this Court within eight weeks from today. On deposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out and leased the said premises to the applicant with effect from the date of Rent Note ( i.e., 13-6-1997) on terms and conditions mentioned therein. The monthly rent was fixed at Rs. 2,500. The tenure of the lease was fixed as 11 months. It is noted that the applicant had paid a sum of Rs. 27,500 towards advance of 11 months rent to the Company. It is also provided that the said premises have been granted to the applicant for its office use and the applicant were to be entitled to sub-lease or assign the said premises to any body and the Company had no objection for the same. The other term in the said agreement which needs to be adverted to is that of actual possession of the premises was handed over to the applicant and the applicant was occupying it as office premises. The Rent Note was executed at Mumbai. The 11 months term of lease deed was to expire on 12-5-1998. 5. Significantly, it is noticed that supplementary lease agreement was executed on 20 rupees stamp paper on 14-1-1998 reiterating the terms specified in the earlier agreement and extending the lease for further period on same terms and conditions. 6. The above noted Company Petition eventually came to be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat even the said premises were given to the applicant along with furnitures and fixtures as per Annexure-I. In the said premises, one Shri P. Haridasan of the applicant herein was found present. The representatives of the Official Liquidator directed him to take care of furniture and fixtures lying therein under his superdari. Even said Shri P. Haridasan assured to produce agreement which would indicate that the lease in favour of the applicant was subsisting. The Official Liquidator thereafter issued letter to the applicant in relation to the said premises No. 33 calling upon to hand over possession of the said premises to the Official Liquidator without fail. Similar letter was sent to M/s. Videocon Appliances Limited in respect of premises Nos. 51, 52. The Official Liquidator sent another letter on 1-4-1999 to the applicant herein as well as M/s. Videocon International Limited to deliver possession of the respective premises. Eventually, the Official Liquidator sealed the said premises No. 33 on 13-4-1999. The applicant herein thereafter made representation to the Official Liquidator to remove seal forthwith as the same was put behind the back of the applicant and without any p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Company (Videocon Appliances Limited) gave reply to the Official Liquidator expressing inability to hand over possession of the respective premises and claimed that they were protected by law and can be dispossessed only by taking recourse to action under sections 12 and 13 of the Bombay Rent Act. It is stated that on 13-3-1999 when the premises were closed, the persons claiming to be representatives of Official Liquidator visited the site and unauthorisedly sealed the premises which were used by the applicant as accounts section. It is asserted that day-to-day account books, important files, computer, fixtures, furniture and net-work cables installed in the said premises were suddenly sealed which has caused irreparable loss, harm and injury to the applicant in its day-to-day working. It is also stated that belonging to the staff of the applicant were also locked up in the premises and the staff was stranded outside. That no access was possible even to the day-to-day account books and other important files, thereby applicant failed in fulfilling its statutory obligations-in absence of office record and files. The applicant asserts that the sealing of the said premises was totally ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he time of visit to the site for taking over possession of the premises. Besides the Rent Note and supplementary Agreement relied by the petitioner, the Official Liquidator has also placed on record similar rent note and supplementary agreement executed in favour of the associate Company of the applicant (Videocon Appliances Limited) by the company on same date to lease out premises of the Company in Liquida-tion on the 5th floor being room Nos. 51 and 52. 15. Besides reply of the Official Liquidator, even the petitioners have opposed the present application by filing affidavit of Deepak Hemendrakumar Sheth dated 11-10-1999. In substance, the petitioners have disputed the claim of the applicant. According to the petitioners, the documents pressed into service by the applicant purportedly executed by the Company in Liquidation are in any case void, illegal and bad in law. The petitioners have asserted that the Advocates for the applicants have not even bothered to give inspection of the concerned documents. While referring to the copies of documents placed on record by the applicant, the petitioners have commented that the said documents are antedated and fabricated. At any rate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany to satisfy the dues of the stakeholders in the Company. 17. Significantly, the applicant filed further affidavit on 3-12-2007 sworn by Shri Bharat More, Manager (Legal) of the applicant Company. In this affidavit, the applicant has disclosed entirely new facts which are not even referred to in the original application or the documents on the basis of which the applicant has set up claim in respect of the said premises. The case now made out by the applicant is that on 7-11-1994, the applicant had entered into sponsorship agreement with the Company in Liquidation whereby the applicant and its group companies had agreed to purchase equity shares of the Company in Liquidation of the value of Rs. 4,37,50,000 and agreement to that effect was also executed between the applicant and the Company in Liquidation providing for terms and conditions of such sponsorship. By the said agreement, the applicant and its group companies were to pay the amount of over Rs. 4.37 crores to the Company and which was to be recovered by them by selling equity shares after the same were got listed on the stock exchange by the Company. It is then stated that as the Company failed to honour its obligat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lenged the locus of Shri Bharat More to file further affidavit. In that, he has no personal knowledge of the facts which were unfolded in 1994. The petitioners have denied the claim of applicant of having paid any amount to the Company in Liquidation. It is then stated that assuming that the applicant has paid such amount, its status would at best be one of unsecured creditor. Such payment cannot be the basis to enter into purported lease deed and/or rent note which is the case originally made out. The petitioners have asserted that the transaction in favour of the applicant is not bona fide and is in collusion so as to thwart, the rights of the creditors. 19. The Official Liquidator has also filed further affidavit dated 10-12-2007 challenging the new case made out by the applicant for the first time after eight years of pendency of the application. According to the Official Liquidator, the applicant has not come to the Court with clean hands. Additionally, the Official Liquidator asserts that even if the agreement now pressed into service were to be looked into, the same was in favour of Videocon Leasing and Industrial Finance Limited and not the applicant Company. In any c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany or alteration in the status of its members, made after the commencement of the winding up, shall unless the Tribunal otherwise orders, be void." The expression commencement of the winding up is no more res integra . In the present case, the Company Petition was presented on 29-10-1996/28-11-1996. Going by the said dates, the winding up action commenced therefrom. The order of winding up of the said Company Petition was eventually passed on 12-1-1999. Whereas, the applicant claims right on the basis of rent note dated 13-6-1997, which right was continued in favour of the applicant under supplementary agreement dated 14-1-1998, both these transactions have been entered into by the Company in Liquidation during the pendency of winding up petition. Naturally, therefore, such a transaction is void unless the Court otherwise orders. 22. The next question is, whether the subject transaction deserves to be validated by the Court. The parameter on the basis of which the Court would exercise such a discretion has been expounded in catena of decisions. Before considering facts of the present case, it would be apposite to refer to the decision on which reliance was placed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Significantly, this aspect is no where pleaded in the application under consideration. Moreso, if we were to look at the agreement in question, even the said agreement no where (even remotely) suggests that the same was executed by the parties without the knowledge of the winding up proceedings or for that matter, the transaction was for the benefit of and in the interest of the Company or for keeping the Company going or keeping the things going generally. In the absence of such pleading, there is no need to examine any other aspect as the jurisdictional fact to exercise discretion in favour of the applicant so as to validate the transaction is completely lacking. Thus understood, the application will have to be thrown out on this sole ground. 24. I would, however, proceed to analyse the documents on the basis of which the applicant claims right to remain in possession of the suit premises. That right is claimed on the basis of a rent note dated 13-6-1997. The rent note gives the description of the premises as office room No. 33 on the 3rd floor admeasuring 431 square feet. It is then stated that the Company in Liquidation is the owner of 806 equity shares of Rs. 10 each and 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssitating the Company in liquidation to enter into such transaction during the pendency of winding up action and in spite of its knowledge. So much so that such a transaction can neither be said to be in the interest of Company nor for keeping the Company going or keeping the things going generally. No such case is made out in the pleadings of the applicant or for that matter in the subject documents itself. If so, the question of validating such a transaction does not arise. 25. Besides, I find force in the stand taken on behalf of the petitioners and the Official Liquidator that the documents pressed into service by the applicant seem to be fabricated. This is so, because the applicant is relying on the rent note dated 13-6-1997 which is executed on 20 rupees stamp paper bearing No. 3421, dated 11-6-1997. The said stamp is, however, issued in the name of Videocon Leasing and Industrial Finance Limited and not in the name of the applicant herein. Besides, the Official Liquidator has placed on record agreements pertaining to the premises on 5th floor which were made available to the Official Liquidator. Significantly, rent note of the same date viz., 13-6-1997 executed in fav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dation was to receive any other consideration irrespective of the fact that the premises are located in a prime locality in Fort area in Mumbai and admeasuring about 431 sq. ft. Taking over all view of the matter, there can be no doubt that the transaction was not in good faith. As the threshold entry of the applicant is tainted, the fact that the applicant continued to remain in possession on account of subsequent supplementary agreement will be of no avail to the applicant. 27. Let us turn to the supplementary agreement on which the applicant relies. This agreement is again on 20 rupees stamp paper which is issued at Ahmednagar bearing serial Number 949, dated 14-1-1998. The supple-mentary agreement is also admittedly executed on 14-1-1998 at Mumbai which is over six hours travelling distance by road from Ahmednagar. Besides, the stamp paper is issued in the name of Advocate S.B. Pallod of Ahmednagar and not in the name of Videocon International Limited in whose favour the agreement was executed by the Company in liquidation. On the same date, another agreement is executed by the Company in liquidation in favour of the associate Company of the applicant being Videocon Applian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Leasing and Industrial Finance Limited and the Company in liquidation dated 13-6-1997 executed on 20 rupees stamp paper bearing serial number 3421, dated 11-6-1997 issued in the name of Videocon Leasing and Industrial Finance Limited. I am at a loss to understand as to how stamp papers bearing same serial number issued at Ahmednagar on the same day have been used for executing separate agreements between the separate parties. Be that as it may, the agreement records the fact that there was agreement between Videocon Leasing and Industrial Finance Limited and the Company in liquidation dated 9-11-1994, whereunder the said Videocon Leasing and Industrial Finance Limited had agreed to act as sponsorer of the subscription of the Company in liquidation on terms referred to therein. 29. We shall revert back to the efficacy of sponsorship agreement a little latter. The agreement under reference records that the Company in liquidation accepted its liability to pay Rs. 1.33 crores which was receivable by Videocon Leasing and Industrial Finance Limited under the sponsorship agreement. Clause 3 of the agreement under consideration refers to the fact, which is also mentioned in the rent n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustrial Finance Limited) was free to pursue claim for specific performance of the said agreement and specified interest on the outstanding dues. Clause IX of the sponsorship agreement also provides that disputes or differences between the parties are to be resolved by way of arbitration. Admittedly, it is not the case of the applicant that Videocon Leasing and Industrial Finance Limited has chosen to proceed against the Company in liquidation due to default committed by the Company in liquidation as per the terms and conditions of the sponsorship. The fact that large amount was payable to Videocon Leasing and Industrial Finance Limited can be no basis to assume that under the sponsorship agreement or otherwise the Company was liable and bound to create tenancy in favour of any of its associate companies such as, the applicant and Videocon Appliances Limited. For our purpose, what is relevant to note is that the applicant as well as Videocon Appliances Limited are claiming possession of the respective premises under rent note dated 13-6-1997 and not either under the sponsorship agreement or the agreement simultaneously executed on 13-6-1997 about which reference is made for the firs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the applicant and Videocon Appliances Limited were inducted as lessees in the respective premises. If the agreements now produced were to be kept in mind, the Company in liquidation has agreed to transfer the respective premises in favour of the applicant and Videocon Appliances Limited. Obviously, such inconsistent documents have been articulated so as to defeat the legitimate claim of other stakeholders of the Company in liquidation and also to evade the provisions of law. For, if the case of applicant and Videocon Appliances Limited was that they were put in possession of the suit premises on account of the other agreement and not rent note agreement, obviously that would be a case of agreement to sell coupled with possession requiring compulsory registration under the provisions of the Bombay Stamp Act, 1958. Presumably, to avoid such liability, in anticipation that the transaction if not validated by the Court, the stamp duty so paid would be totally wasted, the applicant and associate companies were advised to execute such inconsistent documents and take advantage on all fronts of such dubious deeds. 35. Suffice it to observe that entry of the applicant and Videocon Appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany going concern or keeping the things going generally. As a result, the said arrangement cannot be validated by the Courts. 37. Before proceeding further, I shall now refer to the reported decisions pressed into service at the time of arguments. Reliance was placed on the observations in the case of Globe Financiers (P.) Ltd. ( supra ). However, in that case, the High Court was called upon to consider the question as to whether or not a company in liquidation could, in view of the provisions of Delhi Rent Control Act, 1958, sell or otherwise transfer its tenancy rights without consent of landlord. Exposition in the said decision, therefore, will have to be considered in the context of the said background. The issue that arises in our case is, however, whether the transaction in question ought to be validated by the Court. That aspect has been considered elaborately in the earlier part of this order. Suffice it to observe that this decision is of no avail to the applicant. 38. Learned counsel for the applicant has relied on the decision of our High Court in Dinesh s case ( supra ). Once again, this decision has no relevance to the issue that is required to be address ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icial Liquidator ( supra ). It will have to be kept in mind that insofar as premises on 3rd floor possessed by the applicant were sealed by the Official Liquidator on 13-4-1999. The applicant has been put in possession on 15-10-1999, only pursuant to the Court s order dated 13-9-1999, which is obviously without prejudice to the rights and contentions of parties and keeping all questions open as noted in the order itself. 41. That takes me to the nature of order that is required to be passed in the fact situation of the present case. For the reasons already recorded, the application will have to be dismissed. At the same time, the Official Liquidator will have to be directed to take back possession of the subject premises and the furniture, fixtures and fittings on the 3rd floor of the building forthwith and to sell the said property in auction so as to derive best returns to facilitate settlement of claims of all the stakeholders of the Company in accordance with established procedure and norms. 42. In the present case, although Videocon Appliances Limited is not party to the application nor a formal report is submitted by the Official Liquida-tor (except mentioning that r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be appropriate to direct the applicant to deposit all the abovereferred original documents (Agree-ments) in this Court within four weeks from today. On depositing the said documents (Agreements), the same shall stand impounded and for- warded to the Deputy Inspector General of Registration and Deputy Controller of Stamps, Old Custom House, Mantralaya, Mumbai-32 to proceed against the concerned party in respect of the said documents in accordance with law. 46. Accordingly, I proceed to pass the following order : ( i )Application is dismissed with costs quantified at Rs. 10,000 to be paid by the applicant to the Official Liquidator who, in turn, shall credit the said amount to the account of the Company in liquidation, Costs to be paid within four weeks from today. ( ii )The Official Liquidator shall forthwith take steps to take over possession of the premises being room No. 33 on the 3rd floor from the applicant along with fittings, furniture and fixtures in the same condition in which it was handed over to the applicant. That shall be done not later than eight weeks from today. ( iii )The Official Liquidator shall forthwith initiate action to take over possession of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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