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TMI Blog2020 (5) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, 1956, a winding up of a company by the Court is deemed to have commenced at the time of presentation of the petition for winding up. Sub section 2 of Section 536 confers an enabling power on the Court to direct that a disposition of the property of a company shall not be void, though it was effected after the commencement of the winding up proceedings. This principle is incorporated to protect bonafide transactions carried out and completed in the ordinary course of the current business of a company. Whether the learned Single Judge was right in coming to the conclusion that the applicant was not a bonafide transferee and the application is also barred by law of limitation? - HELD THAT:- Unless and until, the applicant (Lakshmi Narayana Choudhary) established that he is a bonafide transferee under the Deed of transfer of leasehold rights dated 30.01.1997, he cannot be permitted to file a suit against the company in liquidation. The applicant (Lakshmi Narayana Choudhary) has sought leave to institute a suit for recovery of money as well as for mandatory permanent injunction against the company in liquidation. The learned Single Judge has rightly dismissed the leave applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mi Narayana Choudhary (deceased) did not have knowledge about the pendency of winding up petition filed against STEPL, at the time of entering into the deed of transfer of leasehold rights dated 30.01.1997. According to the Appellants, Lakshmi Narayana Choudhary (deceased) parted with a sum of ₹ 30,00,000/- to the respondent Bank on the date of transfer of leasehold rights and therefore, Lakshmi Narayana Choudhary (deceased) cannot be branded as a malafide transferee. It is the case of the Appellants that the company under liquidation as well as its creditors benefitted by the Deed of transfer of leasehold rights dated 30.01.1997 executed in favour of Lakshmi Narayana Choudhary (deceased) and therefore, Lakshmi Narayana Choudhary (deceased) is a bonafide transferee and according to them, the learned Single Judge of this Court ought to have allowed the application seeking for validation of transfer of leasehold rights under section 536(2) of the Companies Act, 1956. 3. However, it is the case of the respondents that Lakshmi Narayana Choudhary (deceased), the alleged transferee under the Deed of transfer of leasehold rights dated 30.01.1997 is not a bonafide transferee an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the subject matter of consideration before the Division Bench in O.S.A.No.222 of 2013 and without establishing their right of interest in the property, they cannot seek leave under section 446(1) of the Companies Act, 1956 to institute a suit against the company under liquidation. 7. Aggrieved by the order of the learned Single Judge dated 19.07.2016 passed in C.A.No.1010 of 2015, OSA.No.75 of 2017 has been filed. 8. Since both the appeals O.S.A.Nos.222 of 2013 and 75 of 2017 arise out of the same subject matter, they are disposed of by this common judgment. 9. Heard Mr.B.Ravi Raja, learned counsel for the Appellants and Mr.S.R.Sundar, learned counsel for the Official Liquidator/first respondent and Mr. C.Mohan, learned counsel appearing for the State Bank of India. 10. Learned counsel for the Appellants submitted that Lakshmi Narayana Choudhary (deceased) is a bonafide transferee under the Deed of transfer of leasehold rights dated 30.01.1997. According to him, a sum of ₹ 30,00,000/- paid to the respondent bank to discharge the dues of the company in liquidation is undisputed. According to him, Henkel Spic India Limited who paid the said sum is a tenant of Laksh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel for the Official Liquidator would submit that the learned Single Judge has rightly rejected the application as Lakshmi Narayana Choudhary (deceased) is not a bonafide transferee and the application filed by him under section 536(2) of the Companies Act is also hoplessly barred by law of limitation. The Official Liquidator referring to Section 441 of the Companies Act 1956 would point out that the winding up of the company relates back to the date of filing of the winding up petition. According to him, since the winding up petition was filed on 16.08.1993, the Deed of transfer of leasehold rights dated 30.01.1997 in favour of Lakshmi Narayana Choudhary is void. 16. The learned counsel for the Official Liquidator further submits that there is no builder's agreement for 1679 sq. ft. which is proportionate to the 167 sq. ft. undivided share of land purchased by Lakshmi Narayana Choudhary on 14.08.1995 and there is a builder's agreement dated 17.04.1997 only for 364 sq. ft of undivided share of land which is the subject matter of Deed of transfer of leasehold rights dated 30.01.1997. According to him, the sale deed dated 14.08.1995 for 167 sq. ft. correspon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the company, made after the commencement of the winding up, shall be void. (2) In the case of a winding up by the Court, any disposition of the property (including actionable claims) of the company, and any transfer of shares in the company or alteration in the status of its members, made after the commencement of the winding up, shall, unless the Court otherwise orders, be void. 20. The effect of section 536(2) of the Companies Act is that where a winding up proceeding is by or subject to the supervision of the Court, any disposition of the property of the company which is made after the commencement of the winding-up is void, unless the Court otherwise orders. 21. Under Section 441 (2) of the Companies Act, 1956, a winding up of a company by the Court is deemed to have commenced at the time of presentation of the petition for winding up. Sub section 2 of Section 536 confers an enabling power on the Court to direct that a disposition of the property of a company shall not be void, though it was effected after the commencement of the winding up proceedings. This principle is incorporated to protect bonafide transactions carried out and completed in the ordinary course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f) On 25.07.2000, the Official Liquidator admittedly wrote a letter to the applicant, calling upon him to hand over the property within ten days. The Official Liquidator again wrote another letter on 17.01.2001; (h) On 30.08.2004, the Debts Recovery Tribunal passed a final order leading to the issue of a certificate of recovery in DRC.No.148 of 2004 on 01.11.2004; (i) On 05.01.2007, the Recovery Officer of Debts Recovery Tribunal ordered the attachment of the property in question; (j) In 2009, the Bank came up with an application in Comp.A.No.1445 of 2009 before the learned Single Judge of this Court seeking permission to sell the property through the Debts Recovery Tribunal, in pursuance of the certificate of recovery issued by the Debts Recovery Tribunal. During the pendency of the said application, Mr.Lakshmi Narayana Choudhary (deceased), the applicant in C.A.No.125 of 2011 came up with an application in Comp.A.No.1694 of 2009 seeking to implead himself as a party to the application Comp.A.No.1445 of 2009. That impleading application was allowed on 26.11.2009 and the applicant came on record and objected to the sale; (k) On 26.11.2009, the learned Single Judge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... asehold rights dated 30.01.1997 in his favour. Admittedly, the Deed of transfer of leasehold rights was entered into, subsequent to the filing of the winding up petition and subsequent to the passing of the order dated 23.04.1996 directing the company in liquidation not to sell its assets without obtaining the permission of the Court. 26. The consideration disclosed in the Deed of transfer of leasehold rights is ₹ 2,68,080.21, but it is the contention of Lakshmi Narayana Choudhary (deceased), applicant that only at his request, the sum of ₹ 30,00,000/- was paid to the bank by M/s.Henkel Spic India Limited towards discharge of the loan is unbelievable. The consideration of the lease under the Deed of transfer dated 30.01.1997 is only a sum of ₹ 2,68,080.21 whereas the amount paid to the respondent bank towards discharge of the loan is ₹ 30,00,000/-. A bonafide transferee would not have paid to the bank a sum much in excess of the consideration for the grant of lease under the Deed of transfer dated 30.01.1997. There are several inconsistencies in the contentions raised by the Appellants who are the legal representatives of the deceased Lakshmi Narayana Cho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lease from 01.04.1996 itself, eventhough the consideration was paid only on the date of the lease i.e., on 30.01.1997. Even the builder's agreement discloses that the consideration for the same is only ₹ 7,44,088/-. Therefore, the total consideration for acquiring the leasehold rights and putting up a construction is only around ₹ 10,00,000/- (₹ 2,68,080.21, the consideration for the Deed of transfer and ₹ 7,44,080/- the consideration for builders agreement). However, it is the case of the Appellants that Lakshmi Narayana Choudhary (deceased) paid a sum of ₹ 30,00,000/- to the respondent Bank to discharge the loan of the company in liquidation which is highly imaginary and unbelievable. There are several inconsistances in the contentions raised by the Appellants and the learned Single Judge has rightly come to the conclusion that the Deed of transfer of leasehold rights dated 30.01.1997 in favour of Lakshmi Narayana Choudhary (deceased) is not a bonafide transfer. 29. Insofar as the alleged discrepencies claimed by the Appellants are concerned, the said claim is untenable as the applicant in application No.125 of 2011 is not a bonafide trans ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case on hand, the application has been filed after a lapse of almost 14 years from the date of Deed of transfer dated 30.01.1997. 33. The learned Single Judge has considered all these aspects and only thereafter has come to the right conclusion that the application filed under Section 536(2) of the Companies Act, 1956 is hopelessly barred by the law of limitation. The decisions relied upon by the learned Official Liquidator squarely supports the contention of the respondents. 34. Unless and until, the applicant (Lakshmi Narayana Choudhary) established that he is a bonafide transferee under the Deed of transfer of leasehold rights dated 30.01.1997, he cannot be permitted to file a suit against the company in liquidation. The applicant (Lakshmi Narayana Choudhary) has sought leave to institute a suit for recovery of money as well as for mandatory permanent injunction against the company in liquidation. The learned Single Judge has rightly dismissed the leave application in C.A.No.1010 of 2015 filed under Section 446 (1) of the Companies Act, 1956. As observed earlier, the applicant (Lakshmi Narayana Choudhary) is not a bonafide transferee and therefore, he cannot be permi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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