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TMI Blog2017 (6) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... ines (India) Ltd. (in liquidation) are concerned, the said Special MPID Court of Session, Greater Bombay or the competent authority whomsoever is in possession thereof are concerned, the same shall be handed over by them to the Official Liquidator within two weeks from the date of communication of this order. It is made clear that MPID Court / competent authority who is in possession of the properties of the directors and/or agents of the said company M/s.Aryarup Tourism Club Resorts Private Limited (In Liquidation) would be entitled to deal with those properties, including the sale thereof for the purpose of discharging the claims of the investors / depositors and are not required to hand over those properties to the Official Liquidator in view of the fact that no such claims are made by the Official Liquidator in respect of those properties till date. The Official Liquidator shall forward the order of adjudication passed on various claims of investors/depositors made so far in respect of the companies in liquidation which are subject matters of this proceedings before the MPID Court to MPID Court / competent authority. He shall also forward the balance claims which are yet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gency towards the advertisement charges to invite the workers/creditors. 3. Insofar as the Official Liquidator Report No. 264 of 2015 is concerned, only prayer (d) by which the Official Liquidator seeks an order against the Special MPID Court of Session, Greater Bombay to transfer/release bail amount of ₹ 60,00,000/- / movable and immovable assets of the aforesaid two Companies in liquidation to the Official Liquidator is pending. Rest of the prayers in the said Report are already granted. 4. Insofar as Official Liquidator Report No. 252 of 2015 is concerned, the Official Liquidator has filed this Report in Company Petition No. 278 of 2014 which is filed against M/s. Aryarup Tourism Club Resorts Pvt. Ltd. (in liquidation) inter alia praying for an order and direction against the Police Inspector, State Crime Investigation Department, Mumbai and/or appropriate authorities to handover properties and money standing in the name of the said Company in liquidation under provisions of 468 of the Companies Act, 1956 read with Rule 234 of Companies (Court) Rules, 1959. 5. By Company Application No. 630 of 2015 the City Group Investments Welfare Association has prayed for an o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. On 4th July 2011 the Economic Offences Wing, Crime Branch, Mumbai forwarded the details of the properties i.e. movable and immovable to the Official Liquidator which properties were attached by the said Economic Offences Wing, Crime Branch, Mumbai in the areas in around Mumbai and Pune including the bank accounts which were in the name of the said M/s. City Limouzines (India) Ltd. (in liquidation). The bank accounts of the sister concern/Companies in various banks namely ABN Amro Bank, DBS, Kotak Mahindra, Standard Chartered, Syndicate Bank, IDBI, Canara Bank, Dena Bank, ICICI Bank, Maharashtra State Co-op Bank, Bombay Mercantile Co-op Bank, State Bank of Patiala and Bank of Baroda who are also seized. 10. It is the case of the Official Liquidator that the Serious Fraud Investigation Office (in short SFIO ) addressed a letter to the Official Liquidator and annexed copy of Investigation Report in respect of the said M/s. City Limouzines (India) Ltd. (in liquidation). The Official Liquidator was informed that the Central Government vide order dated 7th October 2010 had appointed an Inspector to investigate into the affairs of M/s. City Limouzines (India) Ltd. (in liquidation) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any Petition No. 234 of 2010 came to be filed against the M/s. City Limouzines (India) Ltd. (in liquidation) and Company Application No. 583 of 2012 in Company Petition No. 182 of 2012 against the M/s. City Realcom Ltd. (in liquidation), inter alia praying for an order and direction to the Enforcement Directorate, the Official Liquidator and Economic Offences Wing, Crime Branch, Mumbai to file a status report and to direct the Enforcement Directorate to handover the properties of those Companies in liquidation to the Official Liquidator to satisfy the claimants and also to release the payment of the claimants with a fixed frame of time. This Court passed an order on 13th February 2013 in those two Company Applications directing the Official Liquidator to adjudicate the claims of the members of the said Applicant Association within a period of four months from the date of the said order and also permitted the Official Liquidator to appoint a Chartered Accountant for adjudicating upon those claims. This Court directed the Official Liquidator to place a report before this Court within a period of two weeks from the date of the said order in respect of the properties of these Companies ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im on the basis of the photo copies of the documents. The Economic Offence Wing has made a statement in the said affidavit dated 2nd May, 2013 that the said department has no objection to hand over possession of the property and remittance of the entire money lying in the said bank accounts to the Official Liquidator if so directed by this Court on the condition that the claims of the duped investors of this case i.e. (City Limouzines case) be settled on priority basis and also gave no objection for the same. This Court recorded a statement made by the learned Assistant Government Pleader that more than 60,000 to 70,000 complaints from the depositors had been received and 40,000 complaints had been so far adjudicated upon. This Court directed that those complaints will be forwarded to the office of the Official Liquidator who would consider those complaints as well as the claims received by the Official Liquidator and adjudicate / ascertain the same. It was further directed that if the Official Liquidator needs the services from the Chartered Accountants for that purpose, a report may be placed on record. 19. It was directed that no distribution of money so deposited may be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistrate, 19th Court, Esplanade, Mumbai requesting to establish a 'lien' on the said amount of ₹ 60,00,000/-. Office of the learned Additional Chief Metropolitan Magistrate, 19th Court, Esplanade, Mumbai informed the Official Liquidator that the said CC/109/PW/2010 had been committed/transferred to the Special MPID Court of Session, Greater Bombay on 20th August 2013 and all the records in respect of the said matter have been transferred to the said Court. The Official Liquidator thereafter, made an Application in the said CC/109/PW/2010 before the Special MPID Court of Session, Greater Bombay. It is the case of the Official Liquidator that the Special MPID Court of Session, Greater Bombay in the said Application orally directed that mere appointment of Official Liquidator would not be sufficient to transfer the assets, etc. and that there has to be a specific order of this Court. The Official Liquidator accordingly, filed Official Liquidator Report No.126 of 2013 dated 18th March 2013 for recovery of movable and immovable assets of the one of the aforesaid Company in liquidation from the Economic Offences Wing, Crime Branch, Mumbai. 23. On 26th November, 2013, thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttle the claims of the investors. On 9th September, 2015, the District Collector at Mumbai City appointed the Resident Deputy Collector, Mumbai City as the competent authority in this matter. It is stated that out of 27 immovable properties, four immovable properties are in the name of those two companies, whereas rest of the 23 properties are in the personal names of the directors of the said companies. The list of such properties is annexed to the said affidavit. 28. Out of total 57 bank accounts, only 11 bank accounts are in the name of City Limouzines (India) Limited and 10 bank accounts are in the name of City Realcom Limited (in liquidation). In paragraph 11 of the said affidavit, it is contended that the Official Liquidator can deal with only the properties of the companies, whereas the competent authority designated under MPID Act can deal with all the properties secured by the police and the investors and settled the claims of the investors. 29. On 14th September, 2016, the Supreme Court passed an order in Special Leave to Appeal (Cri) No.1912 of 2015, which was filed by the City Group Investors Association against the promoters of the respondent. One of the promoter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legaon, Murbad, Thane, Maharashtra. 32. On March, 2016, the State Government issued another notification in respect of the said company and attached some more properties thereby and appointed the Sub Divisional Officer, Solapur1 to be the competent authority. 33. On 17th June, 2016 17th June, 2016, the State Government issued a notification thereby attaching some of the properties of City Limouzines (India) Limited and in the name of its Chairman / Directors. 34. Mr. Engineer, learned counsel appearing for the Official Liquidator in the matter of Aryarup Tourism and Club Resort Private Limited in the Official Liquidator's Report No.252 of 2015/Legal/II invited my attention to the correspondence annexed to various reports and also to various orders passed by this Court from time to time. He submits that the Official Liquidator is only seeking directions against the properties belonging to the company in liquidation at this stage. He placed reliance on section 456 of the Companies Act and submits that on the winding up of the company, the Official Liquidator is empowered to take into his custody or under his control, all the properties, effect and assets of company the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the properties under section 4 of the MPID Act is for protecting the interest of the investors. He submits that under section 7 of the said Act, payment can be made only to the depositors as defined under the said Act. The MPID Act does not consider or contemplate a situation where the financial establishment may be wound up or provides for consequences of winding up. 39. It is submitted by the learned counsel that the competent authority appointed under the MPID Act do not supersede or prevail upon the Companies Act. The MPID Act is totally silent on aspects relating to winding up and therefore if the financial establishment is in winding up then the provisions of the Companies Act, 1956 would apply. 40. Learned counsel for the Official Liquidator placed reliance on the judgment of this Court in case of Prabhakar Dattatraya Gune Ors. vs.Vishnukant Bapurao Urankar Ors. 2014(1) Bom.C.R. (Cri.) 262 and would submit that MPID Act and the Companies Act operate in separate fields. When the company is facing winding up proceedings, nothing can be done in relation to the properties of the company by MPID Court or by an authority under MPID Act. He relied upon paragrap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p. 43. Learned counsel for the Official Liquidator placed reliance on the judgment of the Supreme Court in case of M. Karunanidhi vs. Union of India Anr. (1979) 3 SCC 431 and in particular paragraph 35 thereof in support of his submission that in order to decide the question of repugnancy, it must be shown that the two enactments contain inconsistent and irreconcilable provisions, and that they cannot stand together or operate in the same field. Where the two statutes occupy a particular field, but there is room or possibility of both the statutes operating in the same field without coming into collision with each other, no repugnancy results. It is submitted that the Companies Act, 1956 and MPID Act operate in two different fields and there is no question of any repugnancy. He submits that since the respondent companies are already wound up, MPID Court has no jurisdiction to pass any order against the properties of those companies. He submits that section 14 of the MPID Act would not be attracted since there is no inconsistency between the Companies Act and MPID Act. Since MPID Act is totally silent on the aspect relating to the winding up and therefore if any financial e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as this Court may direct from other secured and unsecured creditors of the company in liquidation. 48. Insofar as the company City Limouzines (India) Limited (In liquidation) is concerned, it is submitted that the Official Liquidator has received the claims of around 75,000 investors out of which the claims of 32,000 investors have been already adjudicated upon by the Official Liquidator till date. The costs incurred for adjudicating 32,000 claims is ₹ 80,00,000/- till date. Approximately the costs involved for adjudication of the claims received so far is ₹ 1,87,00,000/-. He submits that these claims are required to be adjudicated by the Chartered Accountants from the panel of the Official Liquidator which costs does not include the other administrative expenses such as litigation costs, costs involved in dispatching the adjudicated claims to the parties and other administrative expenses. The total expenditure excluding litigation costs comes to more than ₹ 2,00,00,000/-. 49. The Official Liquidator has till date ascertained only four properties belonging to the company in liquidation, which are worth approximately ₹ 7.00 crores. The Official Liquidat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn the said MPID Act, Supreme Court in another matter in the case of K.K. Bhaskaran vs. State, (2011) 3 SCC 793 has upheld the full bench judgment of the Madras High Court and disagreed with the view taken by this Court. The constitutional validity of the two Acts including the MPID Act has been upheld by the Supreme Court in the said judgment. 53. It is submitted that the competent authority appointed under the MPID Act has power to deal with all the properties of the financial establishments i.e. the company in liquidation in these matters under the provisions of the said MPID Act and to distribute the sale proceeds thereof amongst the investors/depositors. He submits that the Government has already issued an order on 31st December 2014 appointing the competent authority to exercise control over the monies and properties attached by the Government under Section 4 of the MPID Act of the company in liquidation. He invited my attention to the said Government Order dated 31st December 2014 on record. 54. It is submitted by the learned counsel that on reconciliation and on re-verification of the records, the properties of M/s.Aryarup Tourism Club Resorts Pvt. Ltd. (in liquid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate Legislature is referrable to Entries 1, 30 and 31 of List II (the State List) of the Seventh Schedule to the Constitution of India. He submits that these two enactments operate in two different fields. The source of power of the Companies Act, 1956 comes under Article 245 of the Constitution of India whereas the source of the power in respect of the said MPID Act comes under Article 246 of the Constitution. 58. Learned AGP placed reliance on the judgment in the case of Central Bank of India Vs. State of Kerala and others, (2009) 4 SCC 94 and would submit that the Companies Act, 1956 and the said MPID Act are referrable to two separate lists and when there is no conflict between the Central and State legislation, the Central Act and the State Act and while working in its sphere of operation do not conflict with one another, the State Act would have primacy in its field of legislation. He submits that the question of the Companies Act, 1956 overriding the State Statute cannot and does not arise at all. 59. It is submitted by the learned AGP that the Economic Offence Wing (EOW) of the State of Maharashtra has enough infrastructure to handle the claims of various investo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P appearing for the State of Maharashtra in the Company Petition (L) Nos.234 of 2010 and 182 of 2012 and in Official Liquidator's Report No.126 of 2013 filed in the matter of M/s.City Limouzines (India) Ltd. supports the case of the State Government in the Company Petition No.278 of 2014 and the Official Liquidator's Report No.252 of 2015 filed against M/s.Aryarup Tourism Club Resorts Pvt. Ltd. (in liquidation). She invited my attention to the averments made in the affidavit-in-reply filed by Mr.D.Shanmugham, Assistant Director, Directorate of Enforcement, Mumbai dated 4th July, 2013 and submits that an order of confiscation of the properties has already been made under Section 8(5) of the MPID Act and thus all the rights and title in such properties shall vest absolutely in the Central Government free from all encumbrances. 63. It is submitted that large number of FIRs have been registered against the companies viz. M/s.City Limouzines (India) Ltd. and M/s.City Realcom Ltd. and its Directors. It is submitted that the said two companies appear to have cheated the investors by not honouring the agreements and siphoning off the funds received from them and diverted the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6 of 2010. He submits that in compliance to the said directions, the properties of the companies in liquidation are to be handed over to the official liquidator for satisfaction of claims. He also placed reliance on certain paragraphs of affidavit dated 9th March 2016 filed by Mr.Prabhakar Loke, Senior Inspector stating that the official liquidator can deal with only the properties of the companies whereas the competent authority designated by the Government of Maharashtra under the MPID Act can deal with all the properties secured by police and the investors and settle the claims of investors. 67. It is submitted that if the properties of the companies are not handed over to the official liquidator, the rights of the creditors will be deprived of. He submits that the creditors cannot be directed to prosecute a suit and wait till the outcome of the suit. He submits that the official liquidator has already adjudicated the claims of the applicant association and has already spent about ₹ 2 crores on the process of adjudication and thus transfer of the claims of M/s.Aryarup Tourism Club Resorts Pvt. Ltd. (in liquidation) to MPID jurisdiction will deprive the rights of the cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ited so far in respect of the creditors of M/s.Aryarup Tourism Club Resorts Pvt. Ltd. (in liquidation). It is submitted that merely because the petitioner in the said Company Petition No.278 of 2014 had filed the said company petition merely on the ground of default committed by the company in liquidation in repayment of sum of approximately ₹ 1 lakh, this Court cannot refuse to protect the properties of the company in liquidation on that ground. It is submitted that it is not the case of the State Government that the said company petition was not at all maintainable. Even unsecured creditors could file such petition for winding up of the company under various provisions of the Companies Act, 1956 and ones having satisfied those conditions is entitled to maintain such winding up petition. 72. It is submitted by the learned counsel that though the matter has been adjourned on various dates to enable the Central Government to make a statement whether any further funds would be transferred to the official liquidator towards expenditure on adjudication of claims made by the depositors/investors, no such amount has been transferred to the official liquidator by the Central Gove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dator of the company. Section 450 provides for appointment and powers of provisional liquidator. Under Section 451, the liquidator has to conduct the proceedings in winding up the company and perform such duties in reference thereto as the Court may impose. The acts of a liquidator shall be valid, notwithstanding any defect that may afterwards be discovered in his appointment or qualification. Under Section 453, a receiver shall not be appointed of assets in the hands of a liquidator except by or with the leave of the Tribunal. Under Section 455, the official liquidator is empowered to submit a report before the Tribunal for obtaining various directions. 76. Section 456 (1) of the Companies Act provides that where a winding up order has been made or where a provisional liquidator has been appointed, the liquidator or the provisional liquidator shall take into his custody or under his control, all the properties, effects and actionable claims to which the company is or appears to be entitled. Under Section 456 (1A), the liquidator or the provisional liquidator also may apply to the Chief Presidency Magistrate or the District Magistrate to take possession of the properties within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any shall, on its winding up, be applied in satisfaction of its liabilities pari passu and, subject to such application, shall, unless the articles otherwise provide, be distributed amongst the members according to their rights and interests in the company subject to the provisions of the Companies Act as to preferential payments. 81. Chapter V provides for proof and ranking of claims. All claims shall be admissible to proof against the company as per the provisions of Section 528. Insolvency Rules applies in winding-up of insolvent companies. Section 529A provides for overriding preferential payment. Section 530 provides for preferential payment i.e. priority to certain payments. Section 542 provides for liability of the persons who were carrying on business of the company with intent to defraud creditors of the company or any other persons and are held personally responsible, without any limitation of liability, for all or any of the debts or other liabilities of the company as the Court may direct. 82. Section 543 provides for powers of the Court to assess damages against delinquent directors, etc. Under Section 543 (1) (b). The Tribunal is empowered to pass an appropriate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 4 of the MPID Act reads thus :- 4. Attachment of properties on default of return of deposits :- (1) Notwithstanding anything contained in any other law for the time being in force - (i) where upon complaints received from the depositors or otherwise, the Government is satisfied that any Financial Establishment has failed ,- (a) to return the deposit after maturity or on demand by the depositor; or (b) to pay interest or other assured benefit; or (c) to provide the service promised against such deposit; or (ii) where the Government has reason to believe that any Financial Establishment is acting in the calculated manner detrimental to the interests of the depositors with an intention to defraud them; and if the Government is satisfied that such Financial Establishment is not likely to return the deposits or make payment of interest or other benefits assured or to provide the services against which the deposit is received, the Government may, in order to protect the interest or depositors of such Financial Establishment, after recording reasons in writing, issue an order by publishing it in the Official Gazette, attaching the money or the prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The State of Maharashtra has framed the rules viz., the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Rules, 1999. It is not in dispute that the State of Maharashtra has already constituted designated court in this State by exercising powers under section 6 of the MPID Act. The State Government has also appointed the competent authority under section 5 of the said MPID Act. 88. A perusal of the definition of 'Financial Establishment' under section 2(d) of the said MPID Act, indicates that even an individual who accepts deposit under any scheme or arrangement or in any other manner is included in the definition of financial establishment. The definition of financial establishment however excludes a corporation or a co-operative society owned or controlled by any State Government or the Central Government or a banking company. 89. Full Bench of this court in case of Vijay Puljal vs. State of Maharashtra and others, (2005) 5 Bom.C.R.481 had declared the said Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999 as ultra vires on various grounds. Supreme Court in case of K.K. Baskaran vs. State, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l be deemed to be subject to a pari passu charge in favour of the workmen to the extent of the workmen s portion. It is held that where a company is in liquidation, a statutory charge is created in favour of workmen in respect of their dues over the security of every secured creditor and the said charge is pari passu with that of the secured creditor. It is held that the workmen of the company in winding up acquire the standing of secured creditors on and from the date of the winding up order or where provisional liquidator is appointed, from the date of such appointment and they become entitled to distribution of sale proceeds in the ratio as explained in the illustration appended to section 529(3)(c) of the Companies Act. It is held that once the company is in wound up, the only competent authority to determine the workmen s dues and quantify workmen s portion is the liquidator. The liquidator has the responsibility and competence to determine the workmen s dues where the debtor company is in liquidation. 92. The Division Bench of this court in case of Prabhakar Dattatraya Gune Ors. (supra) has construed the provisions of the Companies Act, 1956 and also the provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mic Offences Wing, Crime Branch, Mumbai in respect of M/s.City Limouzines (India) Ltd. (in liquidation). It is thus clear beyond reasonable doubt that all three companies referred to aforesaid are already wound up by a separate orders passed by this court and the Official Liquidator is already appointed in respect of the aforesaid three companies. The MPID Court appointed under section 6 of the MPID Act or the competent authority appointed under section 5 of the MPID Act, thus cannot pass any orders dealing with the properties of the aforesaid three companies in liquidation which are in custody and control of this court. 96. Under section 456 of the Companies Act, where the winding up order has been made or where a provisional liquidator has been appointed the liquidator or the provisional liquidator, as the case may be, he shall take into his custody or under his control, all the property, effects and actionable claims to which the company is or appears to be entitled. All the properties and effects of the company shall be deemed to be in custody of the court or the NCLT as the case may be as from the date of the order and the winding up of the company. 97. Under section 468 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up a company shall operate in favour of all the creditors and of all the contributories of the company as if it had been made on the joint petition of a creditor and of a contributory. The liquidator or the provisional liquidator as the case may be is bound to take into his custody or under his control all the properties effect or executable claim to which the company is or appears to be entitled. It is not in dispute that the competent authority has attached some of the properties not only of the company in liquidation but also of their directors and agents. 101. Insofar as the submission of the learned A.G.P. that in view of the notification dated 1st March,2016 issued by the State Government exercising powers conferred under section 4(1), 5(1) and section 8 of the MPID Act, thereby attaching the properties of the M/s.Aryarup Tourism Club Resorts Pvt. Ltd. (in liquidation) and in case of M/s.City Limouzines (India) Ltd. (in liquidation) and the said notification not having been challenged by the Official Liquidator or by the petitioner, the same have binding effect on the Official Liquidator as well as the petitioners is concerned, a perusal of the section 4 of the MPID Act in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner and thus no such properties which are attached by the State Government under those two notifications can be ordered to be dealt with by the company court. 103. In my view since all the three companies are already wound up by this court under the provisions of Companies Act, 1956, the Official Liquidator only can deal with those properties under directions of this court and has to realize the monies by sale of those assets of the companies in liquidation and then to pay over the proceeds under the provisions of section 529, 529-A and 530 and other provisions of the Companies Act, 1956. Under the provisions of the Companies Act, 1956, the unsecured creditors would be entitled to receive the amounts that may be found due and payable only after preferential payment to secured creditors as set out in aforesaid provisions of the Companies Act, 1956 are made. 104. A perusal of the provisions of the said MPID Act clearly indicates that the competent authority or the MPID Court as the case may be cannot adjudicate upon the claims if any, made by the secured or other unsecured creditors, workmen or other preferential creditors referred in section 530 of the Companies Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceeds are allowed to be distributed through the competent authority only amongst the depositors, the same would be in teeth of the provisions of the Companies Act, 1956 and the secured creditors and the workmen, preferential creditors having statutory dues would be totally deprived of their legitimate claims against the company in liquidation whereas the depositors under the provisions of the MPID Act would exclusively be benefited under the provisions of the said MPID Act which would result in great mischief. This court thus cannot accept the interpretation as sought to be placed by the competent authority under the provisions of the said MPID Act. 107. On the other hand the Official Liquidator has not made any claim as on date in respect of the properties of the directors and agent of the company in liquidation which are attached by the State Government by issuing notification under section 4(1) of the MPID Act. The depositors who have lodged their claims with the authority under the MPID Act and also lodged their claims with the Official Liquidator, they may also receive some amount after payment of all the other secured and preferential creditors are made by the Official ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etent authority appointed under the MPID Act and the MPID Court does not supersede or prevail upon the powers of the Official Liquidator or of the Company Court under the provisions of the Companies Act. MPID Act is totally silent on the aspect relating to the winding up and thus if the financial establishment as defined under the provisions of the MPID Act is in winding up, then the provisions of the Companies Act, 1956 would apply to such financial establishment. The MPID Act cannot take away the powers under the Companies Act. In my view the provisions of the MPID Act and the Companies Act will have to be construed harmoniously by holding that on winding up of such companies which are financial establishment as defined under the provisions of the MPID Act, assets of such wound up companies would vest in the Official Liquidator and all the creditors including the depositors/investors can lodge their claims before the Official Liquidator. The MPID Act does not contemplate a situation of winding up of the financial establishment and for adjudication of the claims of other creditors and distribution of dividend to those creditors. The creditors other than depositors who only fall wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... properties of the companies in liquidation and also of its directors or agents. In my view, in these circumstances it would be more appropriate if the claims which are received by the Official Liquidator from the investors/depositors so far and the claims which are already adjudicated upon the Official Liquidator out of such claims received from such investors/depositors, such claims with adjudication orders or without adjudication can be transmitted to the competent authority appointed under the provisions of MPID Act with a clarification that those claims which are adjudicated upon by the Official Liquidator need not be adjudicated upon again by the competent authority. 115. Insofar as remaining claims received from such investors/depositors which are not yet adjudicated upon by the Official Liquidator can be adjudicated upon by the competent authority under the MPID Act. The competent authority or MPID Court who is empowered to adjudicate upon such claims can be allowed to incur expenses required to be incurred if any, out of the amounts lying with such competent authority which are attached from the accounts of the directors and agents of the companies in liquidation. 11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the provisions of the said MPID Act and to distribute the sale proceeds of the companies in liquidation amongst the investors. There is no merit in the submission of the learned A.G.P. that the only such competent authority is empowered to administer the monies and properties in the interest of the depositors under Rule 5(1) of the said rules by attaching and selling the properties standing in the name of the companies in liquidation who were financial establishment under the provisions of the said MPID Act. 119. In my view, the Official Liquidator acts as trustee and custodian of all such properties and assets of companies in liquidation and is empowered to deal with such properties of the companies in liquidation for the purpose of distribution of the proceeds of those properties amongst the creditors in accordance with the provisions of the Companies Act, 1956 and under supervision of this court. There is no merit in the submission of the learned A.G.P. that in view of section 6(1) of the MPID Act, no other court than the designated court shall have jurisdiction in respect of the properties of the financial establishment though such financial establishment are already wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s made by the Official Liquidator till date. 124. Insofar as the claims in respect of the creditors of M/s.Aryarup Tourism Club Resorts Pvt. Ltd. (in liquidation) not invited so far by the Official Liquidator is concerned, the Official Liquidator is ready and willing to invite the claims in respect of the creditors of the said company within such time as may be granted by this court. 125. I shall now consider the prayers/directions sought by the Official Liquidator in various reports and also the prayers sought by the City Group Investors Welfare Association, Hyderabad. 126. Insofar as prayer clause (b) of the Company Application No.630 of 2015 is concerned, this court by an order dated 22nd December, 2015 recorded the statement of the Official Liquidator that he had not been able to raise funds by disposing of the assets because all the assets have been attached by the Economic Offence Wing. This court accordingly directed the Official Liquidator to write to the Economic Offence Wing to release the properties which they have attached, so that the assets can be sold to pay off the creditors. The said order passed by this court on 22nd December,2015 has not been impugned by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 130. The Enforcement Directorate and the Economic Offences Wing, Crime Branch, Mumbai shall also handover the details of the bank accounts of M/s.City Limouzines (India) Ltd., (in liquidation) to the Official Liquidator and shall also remit the entire money lying in the said accounts to the Official Liquidator with accrued interest if any, within two weeks from the date of the communication of this order passed by this court. 131. The Official Liquidator may invite the claims of investors/depositors of M/s.City Limouzines (India) Ltd., and M/s.City Realcom Ltd. (in liquidation) in terms of Rule 148 of the Company (Court) Rules, 1959 within four weeks from the date of this order, if not invited so far. The Official Liquidator is permitted to make payments to M/s. Admire Publicity Private Limited towards the advertisement charges for inviting claims for workers/creditors of the company in liquidation out of the common fund on the condition that the same will be reimbursed along with interest at the rate of 12% per annum as and when the sale proceeds are received upon the sale of the company in liquidation or from the funds of the company in liquidation available with the Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at no such claims are made by the Official Liquidator in respect of those properties till date. 135. For the reasons recorded aforesaid, I pass the following order :- (a) OLR No.252 of 2015 is made absolute in terms of prayer clause (a). The properties and the monies standing in the name of the said company shall be handed over by the Police Inspector, State Crime Investigation Department, Mumbai or the competent authority appointed by the State Government who is in possession of the said properties to the Official Liquidator within two weeks from the date of communication of this order. (b) OLR No.264 of 2015 is made absolute in terms of prayer clauses (a) to (d). The Special MPID Court of Session, Greater Bombay is directed to transfer the bail amount of ₹ 60 lacs to the Official Liquidator within two weeks from the date of communication of this order. (c) Insofar as moveable and immoveable assets of the company i.e. M/s.City Limouzines (India) Ltd. (in liquidation) are concerned, the said Special MPID Court of Session, Greater Bombay or the competent authority whomsoever is in possession thereof are concerned, the same shall be handed over by them to the O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s whose claims are adjudicated upon on pro-rata basis. If the claims of all the investors/depositors whose claims are adjudicated upon are not fully satisfied, those claims can be conveyed to the Official Liquidator. The Official Liquidator shall submit a report for declaration of dividend to all the creditors in respect of the payment proposed to be made including the unpaid amount to investors/depositors in accordance with the provisions of the Companies Act, 1956. The priority of the claims shall be considered by the Official Liquidator as per provisions of sections 529, 529A and 530 of the Companies Act, 1956 and in accordance with the views expressed in this judgment. The MPID Court/competent authority would be at liberty to convey the balance claims of the investors/depositors left outstanding after distributing the amounts realised from sale of the four properties of the ex-directors pursuant to the order of the Supreme Court and the other properties of the ex-directors and the agents which are attached so far and may be attached in future. The Official Liquidator shall consider those balance claims while distributing dividend in accordance with provisions of law and as dire ..... X X X X Extracts X X X X X X X X Extracts X X X X
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