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TMI Blog2012 (9) TMI 604X X X X Extracts X X X X X X X X Extracts X X X X ..... of the way following his disputes with Bose after Saha may have invested for the continued operations of the company in liquidation. Sony was a godsend for Bose to neutralise Saha’s lone bid for taking over the company as a going concern and to catapult Bose from a measly supervisor to a businessman with no care to pay for the tools or the space used for the business by virtue of the court largesse. Sarkar was the perfect ally to prey on the gullibility of Sony with the finesse of a dispassionate executioner. In the light of the conduct of those informally running the business of the company in liquidation as it appeared at the interlocutory stage of the present proceedings, the official liquidator has been directed to take possession of the assets of the company in liquidation and they ought now to be in his control. The official liquidator has applied for a direction for the sale of the assets of the company in liquidation. In view of it not being established that Saha made the frivolous bid to scuttle the sale – on the contrary, Saha appears to have been a victim of sorts - of the company and perpetuate its business operations being informally run, the suo motu rule of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver thereof to the rightful persons upon consulting the secured creditors and, for such purpose, the secured creditors will have to bear the expenses therefor; such expenditure will be regarded as liquidation expenses and have priority at the time of disbursement. - CC No. 56 of 2012, CA No. 277 of 2012, CA No. 421 of 2012, CA No. 464 of 2012, CA No. 476 of 2012 - - - Dated:- 14-9-2012 - SANJIB BANERJEE, J. For Rabindranath Saha: Mr Swagata Datta, Adv. For the applicants in: Mr Dhruba Ghosh, Adv., Mr Rajarshee Dutta, Adv., Mr Rajib Mullick, Adv., Mr Kausik Chatterjee, Adv., Mr Shubhankar Nag, Adv., Mr Arik Banerjee, Adv., Mr Shaunak Ghosh, Adv. For the owners of the Sealdah Property: Mr Tilok Kumar Bose, Sr Adv., Ms Ditipriya Bagchi, Adv., Mr Amit Kumar Saha, Adv. For Mr Kaushik Banerjee: Mr Jayanta Mitra, Sr Adv., Mr Anubhav Sinha, Adv., Ms Ahana Sikdar, Adv., Mr Hemanta Das, Adv., Mr Rohit Chowdhury, Adv. For Ashim Sarkar: Mr A. C. Kar, Adv. SANJIB BANERJEE, J. : Some seemingly unsavoury matters have come to light upon the second highest bidder at a court sale of the assets of a company in liquidation alleging that the offer ascribed to him in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctice started with the most pious of intentions and did seem to have the constitutional mandate in the prevailing social context. Oftentimes, the promoters of companies would allow the business of the companies to go to seed and throw the book at the hapless workers clamouring for payment for services rendered. After all, the word limited appearing in the names of all limited liability companies is a warning to all: that the liability of the shareholders of the company is limited to the value of their shareholding therein. The practice that started in this court several decades ago was, in most cases, to allow the workers or employees to continue the business of the company is in liquidation under the ultimate supervision of the official liquidator. It offered some solace to the workers in their being able to sustain themselves with the nominal income generated from the business. In course of time, the practice degenerated to the workers being put up as fronts for some other sponsors to continue the business without having to take over the liability that had been run up by the previous management. There have been several cases of the assets of the companies in liquidation being p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osen to pull the strings from the wings and use at least one employee in the office of the official liquidator as his foot soldier. The order of March 8, 2010 found that the petition under Section 466 of the Act, CP No. 253 of 2009, had ostensibly been filed in aid of CA No. 383 of 2007, which had been made by six applicants including some workers of the company in liquidation along with an alleged wellwisher, invoking Sections 391, 394 and 466 of the Companies Act in the same breath. The order of March 8, 2010 observed that the fact that the petitioners in CP No. 253 of 2009 had tried to link such petition to CA No. 383 of 2007 without there being a complete identity of the parties thereto was, in itself, a fraud on court. Such order went to add that the petitioners who had invoked Section 466 of the Act by way of CP No. 253 of 2009 had not even chosen to seek the permission of the secured creditors or the contributories of the company in liquidation to make a prayer for a permanent stay of the order winding up the company. The order of March 8, 2010 found that the petitioners in CP No. 253 of 2009 were complete strangers to the assets and business of the company in liquidation i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eed that it was illegal by endorsing the order of March 8, 2010 to continue indefinitely, if Saha and Bose had not fallen out. The appeal from the order dated March 11, 2010 was dismissed by another order of November 2, 2011, but the appellate court observed after dismissing the appeal that it would be open for the appellant, Saha, to approach afresh to the learned Trial Judge with fresh materials and proposal (since Saha was) willing to buy up the company as going concern upon payment of market price of the same. It is in such light that following Saha s subsequent application, being CA No. 5 of 2012, the company court passed an order for sale of the company as a going concern. The order recorded that such direction was necessary in view of the appellate order of November 2, 2011 that permitted the official liquidator to remain in supervision and allow those running the business of the company to continue it for the purpose of the beneficial winding up of the company in liquidation. The official liquidator had the liabilities of the company ascertained and the company valued for sale as a going concern. The sale was conducted on March 2, 2012 and the entirety of the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Maniktala property was integral to the company carrying on its business which is the principal objective of the sale of a company being conducted as a going concern a basic rent was fixed for the Maniktala property together with conditions for paying the outstanding monthly rents. Both bidders, and counsel representing them in court, were informed by court at every stage and the consent of the bidders and the owners of the Maniktala property obtained before the bidding progressed to the next level. Two of the rooms in the Sealdah property were directed to be disclaimed and the rent for the other three rooms fixed on the basis of the level of bidding with a corresponding direction at every level to pay the outstanding amount. With the bid level going up, the quantum of rent payable in respect of the two properties was also revised with the consent of the bidders, or counsel representing them in court, and the concerned landlords. The direction contained in the order dated March 2, 2012 requiring the official liquidator to disclaim a part of the Sealdah property has been worked out and possession of the two rooms as specified in the relevant order has been made over to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d me to contact the office of the Official Liquidator to get a copy of the Terms Conditions of the Sale. On 1st March, 2012 I appointed Ms. Runu Mukerjee as my advocate to take steps in the matter. 4. On 1st March, 2012 I went to the office of the Office Liquidator where I met one Mr. Ashim Sarkar who is working in the office of the Official Liquidator. Mr. Ashim Sarkar suggested that if I want to purchase the Company as a going concern I should engage Mr. Kaushik Banerjee, Advocate. 5. On 2nd March, 2012 I contacted Mr. Kaushik Banerjee at around 12- 30 p.m. when Mr. Kaushik Banerjee told us that he has no time and asked me to reach Court No.16 at 2 p.m. 6. I went to Court No.16 at 2 p.m. and met Mr. Kaushik Banerjee, Advocate and I instructed him that I am ready to pay the liability of the company in liquidation of Rs.1.62 crores and I am ready to pay at the highest Rs.50 lacs in addition to the said Rs.1.62 crores and I instructed to him that I will not pay anything more than this and he should not raise any bid more than this amount. 7. On 2nd March, 2012 when the matter was called on Mr. Kaushik Banerjee who represented me raised the bid and also agreed to make payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xamined. For most of the proceedings, particularly in course of the oral testimony of the aforesaid three persons, Saha was present in court and keenly followed the matter. Upon there being an insinuation by Sony that Sony may have been used as a pawn to scuttle the sale and to help perpetuate the company in liquidation continuing business under the committee of management, a suo motu rule of contempt was issued against Saha on it appearing to court that Saha may have deliberately made a bid without having the financial backing, to render the sale nugatory and cement his de facto control over the company s assets. This step was taken without the court being mindful of the order dated March 8, 2010 which recorded that Saha and Bose had fallen out. Saha has made over a signed statement in impeccable Bengali and all appearing parties, including Sony, Sarkar and Mr Banerjee, have been afforded an opportunity to deal with the statement. It comes through from the oral evidence of Sony, Sarkar and Mr Banerjee that none of them had an accurate recollection of what transpired in the couple of days preceding March 2, 2012, when the sale was conducted, and the few days thereafter. For a sta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behest of Bose or, to do Bose a favour by ensuring that the sale was scuttled and the business of the company was continued in terms of the appellate order of November 2, 2011 for an indefinite period. Sarkar has admitted to having a telephone conversation with Bose on February 29, 2012. The timing of the call matches with Sony s assertion that he was at the manufacturing facility of the company in liquidation in Maniktala on that day when Bose informed him of the imminent sale of the company; and, on Sony showing interest in the matter and seeking further information, Bose made a call to give Sony the details of how to make a bid therefor. Sarkar appears to have put Sony up to the altar as the sacrificial lamb to sabotage the sale and prolong Bose s de facto control of the business of the company, now that Saha was out of the way following his disputes with Bose after Saha may have invested for the continued operations of the company in liquidation. Sony was a godsend for Bose to neutralise Saha s lone bid for taking over the company as a going concern and to catapult Bose from a measly supervisor to a businessman with no care to pay for the tools or the space used for the busine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... either Saha nor Sony seems to be a person of any great wealth who would not miss a sum of Rs.5 lakh if the initial deposits are forfeited. Both look to be resourceful enough to garner substantial amounts for business purposes, but neither may have any substantial bank balance or cash in hand that one would associate with a Rs.5 crore bidder. Though the order of March 2, 2012 mandates that the initial deposits of the defaulters would be forfeited, such direction is not written in stone that it cannot be undone if appropriate circumstances are cited. Sony has applied for return of the money. Saha has also pleaded for the refund without having formally applied therefor. Both have expressed considerable regret for the inconvenience and embarrassment caused by what they now perceive was foolish conduct on their part. They maintain that they did not attempt to deceive court and their motives were not dishonourable. As to whether the amounts deposited by Saha and Sony may be returned to them in full or in part would depend on the assessment of the damage that they may have caused. The official liquidator reports that the expenses for conducting the sale have been defrayed by Saha since ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n respect of the Maniktala property. The applicants in CA No. 476 of 2012 are the Mullicks and the applicants in CA No. 464 of 2012 are members of a family by the name of Popli. The Poplis claim to have purchased a part of the Mullicks Maniktala property and assert that the company in liquidation is a tenant in respect of a portion of the Maniktala property that belongs to them. The Mullicks have filed a supplementary affidavit in lieu of title-deeds and though the Poplis have produced a deed of conveyance, it may be unwise to hand over the valuable Maniktala property to persons who have chosen to be represented in court when other possible claimants may not be aware of the proceedings. The several matters, being CC No. 56 of 2012, CA No. 277 of 2012, CA No. 421 of 2012, CA No. 464 of 2012, and, CA No. 476 of 2012, are disposed of with the following directions: i) In view of it not being established that Saha made the frivolous bid to scuttle the sale on the contrary, Saha appears to have been a victim of sorts - of the company and perpetuate its business operations being informally run, the suo motu rule of contempt issued against him stands discharged and he is honourably ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or will ensure that all movables are removed from the three rooms in the Sealdah property that continue to be held by the company in liquidation within a reasonable time of the conclusion of the sale. The official liquidator will thereafter make over possession of the three remaining rooms to the owners of the Sealdah property. The order of March 2, 2012 insofar as it dealt with CA No. 169 of 2012 is modified accordingly. vii) The official liquidator will cause the assets of the company in liquidation to be removed from the Maniktala property within reasonable time of the conclusion of the sale. The official liquidator will immediately thereafter engage security guards in consultation with the applicants in CA No. 464 of 2012 and CA No. 476 of 2012, who will be liable to bear the expenses therefor in proportion to the extent of their lands rented to the company in liquidation, to protect the Maniktala property from any encroacher or trespasser. It will be open to the applicants in CA No. 464 of 2012 and CA No. 476 of 2012 to obtain any order from an appropriate forum for taking over possession of the Maniktala property whereupon, the official liquidator will cease to be in posses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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