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TMI Blog2012 (11) TMI 486X X X X Extracts X X X X X X X X Extracts X X X X ..... rcial Private Limited being CA No. 24 of 2009 and a similar application by Deccan Traders being C.A. No. 136 of 2009 respectively. 2. Appeal No.249 and 250 of 2011 would represent the grievance of ARC as against the judgment and order dated July 15, 2011 passed by His Lordship confirming the sale in favour of Gourinandan at the instance of Sylvan (APO No.250 of 2011) and Deccan (APO No.249 of 2011) respectively. 3. On March 11, 1985 Rishra Steel Limited (hereinafter referred to as the company in liquidation) was incorporated. Allahabad Bank was secured creditor having charge over the current assets. Due to serious labour problem the factory unit was closed down on August 16, 1987. ARC Holding Limited (hereinafter referred to as ARC) was subsequently incorporated in June 19, 1988 to purchase ninety nine per cent shareholding in Rishra Steel Limited and the ARC became holding company of the Rishra Steel in June 1989. A creditor filed a winding up petition claiming rupees one lac ninety one thousand two hundred fifty two on June 4, 1990. The learned company Judge passed an order of winding up. Thus the assets came in possession of the official liquidator by virtue of the order of wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich the factory would situate, was covered under a proceeding initiated under the Estate Acquisition Act. The Official Liquidator and/or the State should clarify that the property belonged to the company in liquidation free from encumbrance. His Lordship directed notice to be given to the State to appear before him and ultimately dismissed the application of Gourinandan by observing that the order of sale would require no further clarification. Pertaining to note, the query of the similar nature was earlier made by few intending bidders before His Lordship when His Lordship made it clear that the property was being sold "as is where is" basis. The present appeals would include an appeal of Gourinandan against the order of dismissal. ARC's appeals would relate to sale of assets and denial of giving opportunities to revive the company. Contentions- ARC : Mr. Ratnanko Banerjee: (i) Allahabad Bank could not have surreptitiously entered into negotiation and thereby assigned debt in favour of Deccan Traders and Calcutta Securities after having entered into a Memorandum of Understanding with ARC. (ii) The learned Company Judge was not taken in confidence while direction f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Liquidator opposed the appeals. Opposing the appeal of Gourinandan he contended, the property was sold on "as is where is" basis. The purchaser must have satisfied himself about the marketability of the land in question. He was also conversant with the prevalent laws of the land as to whether the provisions of the Land ceiling Act or Land Reforms Act would have any application. On the issue of notice under section 6(3) of the Estate Acquisition Act Mr. Ghosh contended that such notice was bad in absence of appropriate leave being obtained by the State under Section 446 of the Act of 1956. Uptill date State did not proceed any further and could not have proceeded in absence of leave being obtained. Hence the plea raised by the purchaser was nothing but a ploy to avoid forfeiture. He referred to the prayer of the purchaser before the learned Judge for extension of time to make payment. He prayed for dismissal of the appeal. Sylvan Mr. Jisnu Saha 8. Mr. Jishnu Saha, learned counsel appearing for Sylvan contended, he invested money for about ten months when he was running the show as per the order of the Court. He would be happy if money was refunded back by the Official Liquida ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of State of West Bengal v. Ratnagiri Engineering (P.) Ltd. [2009] 4 SCC 453. State Mr. Pratik Prakash Banerjee 12. Mr. Pratik Prakash Banerjee, learned Junior Standing Counsel appearing for the State contended that the proceedings under the West Bengal Land Reforms Act, could be governed by the appropriate Tribunal set up for the said purpose. The learned company Judge did not have any jurisdiction to entertain any dispute pertaining to the land. He contended, Section 6(3) of the West Bengal Estates Acquisition Act, 1953 as amended, would empower the State to call back any excess land not used for the purpose it was meant. He however, lastly contended that State was interested to see that the industry was revived. If the purchaser would revive the industry that would generate employment, the State would not create any impediment. Gourinandan In Reply Mr. Sandip Mal 13. Mr. Sandip Mal, learned counsel for the purchaser while replying, distinguished the decision cited by Mr. Kar in the case of Ratnagiri Engineering (P.) Ltd. (Supra) to say, it was no longer a good law. 14. On the submission of ARC, Mr. Mal contended that the prayer for forfeiture was contrary to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hird-party interest in the property in question. He prayed for leave to intervene in the matter for being added as a party to protect and safeguard his interest in the suit pending before the civil court. 18. Mr. Bhattacharya filed written notes of argument, giving details as to the contribution made by Gourinandan in purchasing the subject property. In the written notes, it was contended that the said auction bid was a benami transaction. However, he was interested to protect his suit that was pending before the Barasat Court. Our View Appeals of ARC 19. Let us first deal with the four appeals filed by ARC on the issue. We have considered the rival contentions. We fully agree with Mr. Banerjee when he criticised the Official Liquidator in permitting the sale to be conducted by the learned Single Judge not being the regular Company Court. We would deal with the issue little later. Let us first consider the real grievance of the ARC. ARC claimed, they were major shareholders. They all along wanted to revive the company. We would find, three attempts failed when the scheme propounded by ARC could not succeed. The company is still in liquidation, for beneficial winding up Official ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sequently, it was directed to be sold "as is where is" basis. Accordingly, assets were sold. We do not find any scope to interfere. Mr. Banerjee strenuously contended that he was entitled to a notice as per the earlier order dated July 25, 2007. We find, ARC was represented before His Lordship when Deccan and Sylvan were heard on their applications. We feel, the learned Judge should have given a hearing to ARC. In any event, such defect is cured by us by giving a full-fledged hearing to ARC on merits. If we summarise his contention, we would find that his main grievance was against the Allahabad Bank who surreptitiously assigned the debt in favour of Deccan. He tried to show connivance between Deccan, Sylvan and Bank. Even if he was correct that would not change the situation. They would only be entitled to as a shareholder to protect the interest of the company in liquidation and its shareholders by overseeing disbursement of the sale proceeds. That stage has not come as yet. 23. In those two appeals being APO 204 and APO 205; both against the order dated April 20, 2011 and his subsequent appeals being APO No.249 and APO 250; both against the order of confirmation of the sale dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neering (P.) Ltd. (supra) would be of no assistance to Gourinandan that would decide the question of payment of statutory outgoings which the company in liquidation was supposed to pay. Such question would not be germane, at least in the present proceeding before us. The learned Junior Standing Counsel rightly contended, the land revenue issue would be strictly within the domain of Land Tribunal or any other appropriate forum dealing with such situation. Neither the Company Court nor the Court of Appeal in extension of the company jurisdiction, would be competent to deal with the same. The learned Judge rightly declined to interfere. So do we. Result 26. These appeals fail and are all dismissed without any order as to costs. Before We Part With 27. Before we part with all humanity and with deepest regard we have for His Lordship, may we add few words pertaining to the conduct of sale. His Lordship was never assigned the company jurisdiction. Few matters were specially assigned to His Lordship that included two applications by Deccan and Sylvan, inter alia, praying for sale of assets of the company in liquidation and a direction upon the Official Liquidator to pay off their dues ..... X X X X Extracts X X X X X X X X Extracts X X X X
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