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TMI Blog2011 (3) TMI 1482X X X X Extracts X X X X X X X X Extracts X X X X ..... ate there was already a lien in the property. It is submitted that under sections 125 and 126 of the Companies Act, 1956, the charges were already notified and the complainant is deemed to have noticed such charges. The decision relied on by learned senior counsel by the petitioner relates to a suit filed by a bank for recovery of the amount secured by mortgage of the property. In that context, the Bombay High Court held that a purchaser is bound to make all reasonable enquiries as to the title of his vendor and if the company had created a mortgage and such mortgage of charge is registered under section 125 of the Companies Act, 1956, the effect of section 126 of the Act would operate even on subsequent purchaser. Therefore, the deemed pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contract. The resolutions of the company showed that there is no lien over the machinery and the chartered accountant also issued a certificate that there is no lien on this machinery to be sold to the complainant company on which, hire purchase agreement was executed. Accordingly, the complainant company entered into necessary agreement and finance was extended. There were default in payment and therefore, the complainant company invoked the arbitration clause in the agreement and a consent award was passed by an arbitrator. 5. However, during the course of execution proceedings, an application was filed by the directors of the company contending that the said Sree Rajeswari Mills is a sick industry and the machinery cannot be brought fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of dues and the ingredients of the offence under section 420 of the Indian Penal Code, 1860, is not attracted. 8. Learned senior counsel also submitted that the petitioners have not created any false or fabricated document. He relied on a decision reported in (Bank of Baroda v. Official Liquidator of Alpio Finance Ltd. (in liquidation)) [2009] 149 Comp. Cas. 1/[2008] 85 SCL 354 (Bom.) wherein the Bombay High Court has held as follows : "A purchaser is bound to make all reasonable enquiries as to the title of his vendor. This would necessarily involve his ascertaining the title of his vendors/vendor and so on. Once it is obvious that the title of the property vested at some stage in a company any prudent purchaser must enquire whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch held that if the submission that the accused would be entitled to produce materials and documents in proof of his innocence at the stage of framing of charge, was to be accepted, it would be unsettling a law well-settled over a hundred years. It is in that light that the provisions of section 227 of the Code of Criminal Procedure, 1973, would have to be understood and that it only means hearing the submissions of the accused on the records of the case filed by the prosecution and documents submitted therewith and nothing more. The Larger Bench arrived at a definite conclusion that the expression 'hearing the submissions of the accused' cannot mean an opportunity to file material to be granted to the accused and thereby changing the settl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld not be interfered with at this stage. 15. Heard and perused the materials available on record. 16. The respondent is the complainant company who had extended financial assistance by way of hire purchase agreement. The machinery of Sree Rajeswari Mills were sold to the complainant company in order to create a hire purchase contract. As per the system prevailing, the complainant company becomes the owner of the machinery and the said Sree Rajeswari Mills is the hirer. 17. It is alleged that there was default in payment of hire charges and the complainant company invoked the arbitration clause and obtained arbitration award. But while executing the award, they found that the machinery was hypothecated with the IDBI which had the first ..... X X X X Extracts X X X X X X X X Extracts X X X X
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