9911796707
TMI Blog2013 (9) TMI 317X X X X Extracts X X X X X X X X Extracts X X X X ..... nt- company also by means of an appropriate execution application as and when he choose to do so. It was nothing but a self-serving attempt found to be made as a pure afterthought to wriggle out of the lawful commitments made and retrace the position in which the Directors of the company have allowed themselves to be landed in - On the other hand, the terms as well as the tenure of the above proceedings make clear the dominant intention and purpose of them to be merely an undertaking given by a third party to the proceedings to the Court to abide by a particular course of action if the judgment-debtor failed to satisfy the decree - the undertaking as well as the consent decree only enabled the Custodian to initiate execution proceedings against the properties in question of the appellant- company and it was only in the event of such sale, the question of coming into existence any document which would require compulsory registration under Section 17 of the Act would arise and not at this stage - In substance and effect what has been undertaken to the Court was to preserve the properties intact for being proceeded against in a given eventuality and deliver peaceful possession of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Singh, the Director of M/s Ganga Automobiles Limited are present in Court and their statements may be recorded Let their statements be recorded.\ Sd/ February 2, 1998. Anil Dev Singh, J The statement of Mr. G.Sagar Suri, Chairman, Al/s Delhi Automobiles Limited, and Mr. Mukhinder Singh, Directors of M/s Ganga Automobiles Limited, have been recorded The undertakings given by them are accepted In case the property No. 1, Sikandara Road, New Delhi is not sold within a period of three and-half months and the amounts which are due to the creditors who are before this Court are not paid off or any other favourable arrangement securing the monies of the creditors is not reached within the above said period from today, the property No. 1, Sikandara Road, New Delhi will be deemed to have been attached and will be sold under the supervision of the Court .. 3. On 03.02.1998, Mr. G.S. Suri sought to withdraw the statement he had made the previous day on the ground that he had made it (the statement) without authority from the Board of Directors of DAL, the company which owned the suit property. The Court directed that that the request to withdraw the undertaking recorded in the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 07.2009, the order of injunction passed in respect to C.S. (O.S.) 2182/2006 directing status quo was continued till further orders. 7. By application, C.A. 2382 of 2010, the Official Liquidator sought directions to DAL to hand over possession of the suit property. He also submitted that before any orders were made, he would try to regain the possession of that property. The Court then re-notified the case for 27.01.2011, further stating that the consequence of Mr. G.S. Suri‟s dishonouring the undertaking made by him to the Court would also be considered. Later, a fresh application, C.A. No.127/2011, was moved by the Official Liquidator seeking directions to the police for providing aid in taking possession of the suit property. DAL resisted the application on the ground that there was no Court order directing the sale of the property, and placed the title deed of the property on record. 8. On 04.02.2011, the Appellants filed an application, C.A. 192/2011, under Rule 9 of the Company Court Rules for appropriate orders to recall the order of attachment and seek confirmation of the sale agreement. This application was withdrawn when the Single Judge allowed the Appellants to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r valuable consideration without notice of the pending proceedings and, therefore, their rights and interests ought to have been protected especially when the learned Single Judge was cognizant of those said facts. Significantly, Counsel stressed that it was brought to notice of the learned Single Judge that there existed a restraint order against alienation or encumbrance or parting with the possession of the suit property till disposal of the suit by a learned Single Judge of this Court. It was submitted in this regard that a contract for conveyance of immovable property (like the two agreements in question here with DAL, in respect of the suit property) entered into before the attachment order, cannot be considered binding upon the bona fide purchaser, on whom such order would act in an oppressive manner. Learned senior counsel contended, on the strength of the decisions reported as Vannarakkal Kallalathil Sreedharan v Chandramaath Balakrishnan Anr. 1990 (3) SCC 291; Rajender Singh v Ramdhar Singh 2001 (6) SCC 213 and Kancherla Lakshminarayana v Mattaparthi Syamala Ors 2008 CO. APP.26/11 CO. APPL. 27-29/11 Page 8 (14) SCC 258, that a contract of sale entered into before at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is context, it was submitted that Section 433 of the Companies Act entitles a creditor to realize the valid debts of the company; GAL‟s winding up proceedings could not confer jurisdiction over DAL‟s property. 16. It was lastly urged that Taneja or DAL should not be driven to substantial proceedings in the form of a title or declaratory suit. Learned senior counsel submitted that the nullity of an order without jurisdiction can be successfully set up at any stage, even in unconnected or collateral proceedings. Learned counsel relied on the decision reported as Chiranjilal Shrilal Goenka v Jasjit Singh 1993 (2) SCC 507. 17. Learned counsel for the DAL, Shri Girdhar Govind, adopted the arguments made on behalf of Taneja and further added that the learned Single Judge did not give opportunity to the parties to address as to the true effect of the previous orders. The impugned order seriously prejudiced the entitlements of DAL, and consequently Taneja, inasmuch as the title which was acquired by the latter as an innocent third party purchaser was seriously prejudiced without adequate hearing. Counsel submitted that a reading of the orders of 02.02.1998, 03.02.1998 and 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bench, which granted liberty to DAL to seek review. The company mistakenly sought review of the order; an amendment application too was filed. They were, however, dismissed for want of diligence. Counsel stressed that these developments are irrelevant and the actual express terms of the orders in question amply clarify that there was no attachment or encumbrance upon the suit property. Respondents contentions 22. It is argued on behalf of the Official Liquidator that the order dated 04.04.2011 merely directed physical possession to be taken of the property. The order which actually directed the attachment of the property was the one dated 02.02.1998, which had attained finality. The application filed by the Appellants for review of the order dated 02.02.1998 were dismissed for non-prosecution, as were the applications filed for revival of the application. The appeal against the order had been disposed off without any relief to the appellants. 23. Mr. Bahl, learned counsel for the Official Liquidator, submitted that the present appeals are not maintainable as the appellants are, in effect, challenging the order dated 02.02.1998 since the order dated 04.04.2011 is ancillary to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vices v Manjula Agrawal 2005 (5) SCC 30 by the appellant, that in the absence of any specific authority to the Chairman by the Board of Directors to act for and on behalf of the Company, the assurance given by him to the respondents would not create a binding legal obligation between the parties, as the exercise was beyond the Articles and Memorandum of the company, will also not apply for the simple reason that the agreement to sell relied on by Taneja itself was unenforceable. In a decision of a 3 judge bench of the Supreme Court in Suraj Lamp Industries Pvt Ltd. v State of Haryana, (2012) 1 SCC 656 it was held, in the context of the validity of SA/GPA/Will transactions, that Section 54 of the Transfer of Property Act makes it clear that a contract of sale by itself does not create an equitable interest in the property. Similarly, it was held in Narandas Karsondas v S.A. Kamtam and Anr., (1977) 3 SCC 247, that ownership of a property only passes on the execution of conveyance. The obligation that arises out of a contract of sale does not amount to an interest or easement therein. Thus transfer of immovable property by way of sale can only be by way of a sale deed, which is stam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the property. 28. Counsel relied on Western Press Pvt. Ltd. v. The Custodian 2000 (8) SCALE 159. There, a consent decree was obtained by the parties by misleading the Court and assuring the existence of certain facts. While recording the consent decree, the parties had undertaken that in the event that sale of the property owned by Western Press was sanctioned by the Court, the parties would hand over possession of the property to the purchaser. In the execution proceedings, Western Press claimed that it was not a party to the proceedings, was not given notice, was not a judgment- debtor or a surety and that the undertaking given on its behalf was unauthorised. However, the Court held that this would not be a ground for allowing the execution proceedings of the consent decree to be questioned on the basis of different facts that have been withheld from the court. A factor that was instrumental in this decision was the fact that Western Press, the appellant company and the judgement debtor company were both controlled by the same family. Analysis Findings 29. This Court is called upon to decide the correctness of the view of the learned Company judge, in the impugned order, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bruary 3, 1998. Anil Dev Singh, J. On the next date of hearing, i.e. 20.02.1998, the Court made the following order: Present: Ms. Kajal Chandra, Mr. A.K. Sikri, Mr. Amitabh Narayan, Ms. Anjali Sharma, Mr. Rajeev Nanda, Mr. P.K. Mittal, Mr. Rana Ranjit Singh, Advocates, for the petitioner in their respective petitions. Mr. Ravinder Sethi, Sr. Advocate with Mr. D.R. Mahajan and Ms Kamlesh Mahan, for the respondent. C.P. Nos. 161/ 97 C.A. 384/ 97 C.A. 279/ 98: (with C.Ps 320/ 96, 99/ 97, 100/ 97, 101/ 97, 110/ 97, 120/ 97, 140/ 97, 157 /97, 163/ 97, 164/ 97, 167/ 97, 293/ 97, 366/ 98, 404/ 97 CCP 21/ 97), CCP 17/ 97, CCP 4/98, CP 65/ 97, 249/ 97. Learned Counsel for the respondent states that he is conscious of the fact that the respondent had given an undertaking in certain cases, to make the payment to the petitioners within a particular period of time and the same could not be carried into effects because of financial difficulties which are being faced by the respondent. He further states that he is also conscious of the fact that the Chairman of M/s. Delhi Automobiles on 2nd February, 1998, had made a statement in this court that he had authority to state on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he company will be deemed to have been wound up, the order dated 2nd February, 12998 be modified. Having regard to the statement of Mr. Sethi, learned counsel for the respondent, the following lines of the order dated February 2, 1998, will not have effect till the next date: "In case the property No.1, Sikandra Road, New Delhi is not sold within a period of three and half months and the amounts which are due to the creditors, who are before this Court are not paid off or any other favourable arrangements securing the monies of the creditors is not reached within the above said period from today, the property No.1, Sikandra Road, New Delhi will be deemed to have been attached and will be sold under the supervision of the Court." List the matter on 21st May, 1998. A copy of this order be placed in the files of the connected matters. Sd/- February 20, 1998 Anil Dev Singh, J. 31. On the next date of hearing in the winding up petition, i.e 22.5.1998, the Court made the following order: Mr Kapil Sibal, learned senior counsel appearing for the respondent, states that at this stage without insisting for the variation of the order dated February 20, 1998, his client will ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Mr. Sibal, learned counsel for the respondent, states that Mr. Mukhinder Singh owns twenty-seven acres of land at Dabala Kalan, Fazilka, District Ferozepur. He submits that Mr. Mukhinder Singh is a non-functioning Director and his personal properties cannot be subject of a restraint order in these proceedings. This position is disputed by the learned counsel for the petitioners. The parties may address their arguments on this aspect of the matter on the next date. However, till the next date Mr. Mukhinder Singh is restrained from selling the above said property. Having regard to the submissions of the learned counsel for the parties, I am of the view that the order dated February 20, 1998 needs no variation. It is clarified that the statements and undertakings made by the learned counsel for the respondent apply to the petitions which have been filed before February 20, 1998. List the matter on July 16, 1998. In the meanwhile, it will be open to the learned counsel for the parties to submit the names of the Chartered Accountants. A copy of this order be kept in the concerned matters. Sd/- Anil Dev Singh, J. May 22, 1998 32. On 18.08.1998, the Company judge, in an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .1, Sikandara Road, New Delhi was kept in abeyance till 21st May, 1998. Mr. Kapil Sibal, Senior Advocate appearing for the respondent company without insisting on the variation of the order dated 20th February, 1998 made a statement that his client would deposit a sum of Rs.610 lakhs for being disbursed to the petitioners......................... 33. The Court, very pertinently, stated that GAL failed to honour the commitment made by it, as recorded in the order dated 18.08.1998: ..............(In)Pursuance to the statement of counsel for the respondent company and the undertaking given by Mr. Mukhinder Singh, Director of the respondent company, this Court ordered Liquidator not to take over the assets of the company till the next date. At the same time this court made it clear that the Official Liquidator would not cease to be the Liquidator of the company. The respondent company failed to adhere to the schedule of payment given to this Court on 22nd May, 1998. Thus the breach has been committed by the respondent as well as by its Director in adhering to the schedule of payment. The order of restraining the Official Liquidator from taking possession was kept in abeyance ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Liquidator. Registrar is directed to draw up notification and formal order as prescribed under the rules. XXXXXX XXXXXX XXXXXX Counsel for the petitioners contend that in view of the order passed on 20th February, 1998, the property bearing No.1, Sikandara Road, New Delhi which was attached to be sold under the supervision of this Court, be ordered to be sold. To this, Mr. Girdhar Govind states that he would like to address arguments. According to him his review application has yet not been disposed of. On his request, adjourned to 10th September, 1998. 34. What is immediately apparent from the series of orders, quoted above, (dated 02.02.1998, 03.02.1998, 20.02.1998, 22.05.1998 and 18.08.1998) is that: (a) Shri G.S. Suri unequivocally stated that DAL would commit the suit property, i.e. No. 1 Sikandra Road and sell it; the proceeds were to be used to liquidate GAL‟s outstanding liabilities; (b) On 03.02.1998, Shri G.S. Suri sought to resile from the undertaking, stating that he did not have the authorization to commit the suit property in the manner that he did previously. However, the Court did not relieve the undertaking. (c) Subsequently, a review petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... narrated earlier, which establishes beyond any controversy that its efforts to have the attachment vacated were fruitless, (resulting in consequent finality to that aspect) even otherwise, it can no longer contend that its director, Shri Suri had no authority to make the statement. A near identical situation had arisen before the Supreme Court, in Western Press (supra); the Court repelled a similar argument on behalf of the third party in the following terms: learned senior counsel appearing for the appellant, strenuously contended, while reiterating the stand taken before the Special Court, that the appellant is an utter third party to the proceedings before the Special Court it being neither a notified party nor claiming through any of the parties and, as a fact, also not having been arrayed as one such, its properties cannot be made liable for the recovery of the dues in question. It is also further contended that neither the appellant gave any undertaking nor it stood as surety for the realisation of the amount secured in the minutes of the order dated 5.7.95 and, therefore, cannot be said to have encumbered its property by any specific thing in writing and the undertaki ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant- company also by means of an appropriate execution application as and when he choose to do so. The plea of lack of authority in Milan B. Dalal to bind the appellant needs mention only to be rejected even for the simple reason that the Directors of the appellant-company, who allowed Milan B. Dalal a free hand as Chairman of the appellant- company to deal with the matter, cannot be permitted to blow hot and cold as it suits them. Equally untenable is the pretended mistake of fact which, in our view, is nothing but a self-serving attempt found to be made as a pure afterthought to wriggle out of the lawful commitments made and retrace the position in which the Directors of the company have allowed themselves to be landed in ..On the other hand, the terms as well as the tenure of the above proceedings make clear the dominant intention and purpose of them to be merely an undertaking given by a third party to the proceedings to the Court to abide by a particular course of action if the judgment-debtor fails to satisfy the decree. Even in cases of such default by the judgment-debtor in this case, the undertaking as well as the consent decree only enables the Custodian to initiate exec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred against it. 40. M/s Poysha Oxygen Pvt. Ltd. and Goyal MG Gases Pvt Ltd have sought impleadment under Order 1, Rule 10 CPC read with Rule 101 of the Companies (Court) Rules, 1959 in Company Appeal 27/2011. The Applicants are creditors of GAL, and had initiated arbitral proceedings which had resulted in an award being passed against GAL on 31.07.2000. This arbitral award was not challenged by GAL and had attained the status of a decree. In a judgment dated 30.07.2009, the award was modified by the High Court in O.M.P. 126-127/2001, which made the award-cum-decree executable not only against GAL but also against the guarantors of the loans taken by it. The guarantors have challenged the judgment, but not the award. During the pendency of the arbitral proceedings, the order for winding up had been made by the Court in C.P. 161/1997. The applicants are seeking to be substituted in place of Rocksmelt or impleaded as a petitioner in C.P. 161/1997, since the latter claimed withdrawal of their petition. It is contended that winding up proceedings once admitted are for the benefit of all the creditors. 41. This Court is of the opinion that since the application of Rocksmelt has no ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
