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TMI Blog2023 (5) TMI 1165X X X X Extracts X X X X X X X X Extracts X X X X ..... ing reasons for the delay and also proving their ownership over the properties, filed applications for impleadment before the Supreme Court stating that they were ready to settle the dues of the workers, creditors and other statutory dues and that the management was taking necessary actions for revival of the company for the welfare of 947 workmen. Accepting their case that the applicant was a necessary party and was ready to settle the dues of the workmen, creditors and other statutory dues and the management was also taking necessary actions for revival of the company for the welfare of 947 workmen, the Supreme Court allowed the impleadment applications. In the meanwhile, the debts of Tapti Machines Private Limited were later assigned to MTitanium Apartments Private Limited vide the deed of assignment dated 06.01.2012. The motto of justice is to resolve the dispute and give a quietus to the problem once and for all. In the case on hand, when the Official Liquidator was appointed by the Court to resolve the disputes of the secured creditors, borrowers, workmen and the other creditors, peculiarly, the disputes between the creditors and the borrowers have been resolved. Evidently ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent is hereby directed to pay the arrears of rent of the warehouse, after deducting the security expenses incurred for maintaining the properties, including the balance funds available, to the applicant within a period of four weeks from the date of receipt of a copy of this order. Application allowed. - Company Application Nos. 626 of 2017, 298 to 300 of 2021 in Company Petition No.170 of 1995 - - - Dated:- 11-5-2023 - Hon'ble Mr.T.Raja, The Acting Chief Justice And Hon'ble Mr.Justice Sathi Kumar Sukumara Kurup For the Applicant : Mr.B.Dhanaraj for Official Liquidator, Mr.G.Rajagopalan Senior Counsel for Mr.K.Sakthivel For the Respondents : Mr.E.Omprakash Senior Counsel assisted by Mr.P.Elayarajkumar for M/s Ramalingam Associates for R3 ORDER HON'BLE ACTING CHIEF JUSTICE 1.1. Company Application No.626 of 2017 in Company Petition No.170 of 1995 has been taken out by the Official Liquidator, as the liquidator of M/s Deve Sugars Limited (in liquidation), seeking the following reliefs:- (a) To direct the Recovery Officer, DRT, Bangalore to comply with the directions of the Hon'ble Division Bench, High Court, Madras dated 17 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the company in liquidation, because the said properties were given as collateral security for the loans taken by M/s Deve Sugars Limited from the State Bank of Mysore. But these properties are being brought for sale as if they are the properties of M/s Deve Sugars Limited, the company in liquidation. Although Deve Sugars Limited was ordered to be wound up on 16.04.1999 in Company Petition No.170 of 1995 filed by Tapti Machines Private Limited, the Official Liquidator took possession of the assets of Tungbhadra Sugar Works Limited, the applicant herein, which were given as collateral security in the capacity of corporate guarantor for the loans taken by Deve Sugars Limited from the State Bank of Mysore situated at Harige village on 28.09.1999. Later on, the State Bank of Mysore also filed Company Application Nos.1251-1253 of 1999 in the then pending Company Petition No.170 of 1995 and through the said applications, the State Bank of Mysore also sought the leave of the Company Court in the High Court of Madras to pursue the recovery proceedings before the Debts Recovery Tribunal, Bangalore. The Company Court also granted leave on 10.03.2000 subject to the condition that no coercive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ground of availability of alternative remedy under the Recovery of Debts Due to Banks and Financial Institutions Act. Therefore, intra-Court appeals were filed in O.S.A.Nos.59-63,76,77 and 82 of 2009 and the same were allowed by a Division Bench of this Court on 17.09.2009 and the sale confirmed by the Recovery Officer was set aside, on the ground that the Official Liquidator, who was the custodian of the properties, was not consulted while preparing the valuation report of the properties. Again the auction purchaser, M/s Anita International preferred appeal before the Supreme Court in Civil Appeal Nos.6042-6048 of 2011, that were dismissed by the Supreme Court vide order dated 04.07.2016, confirming the order passed by the Division Bench of this Court. It is at this stage, the applicant being a third party filed applications for impleadment. The Hon'ble Supreme Court, considering the fact that the applicant's properties are sought to be dealt with, allowed the impleadment applications. In the impleadment application, the applicant stated (i) that the applicant company was the owner of the properties and the properties belonged to them; (ii) that they were ready to settl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso given consent for withdrawal of the pending claims made by them against the applicant. Secondly, the applicant made one time settlement with the secured creditor, namely, Pegasus Assets Reconstruction Private Limited. Thirdly, the State Bank of Mysore had also assigned the debt of Deve Sugars Limited to Pegasus Assets Reconstruction Private Limited vide assignment deed dated 18.09.2012. Fourthly, the applicant, as a corporate guarantor of the loan availed by Deve Sugars Limited, has settled the dues for a sum of Rs.42.55 crores including interest and has obtained the no dues certificate dated 20.10.2021. Fifthly, Pegasus Assets Reconstruction Private Limited has also issued a letter addressed to the Sub Registrar Office, Shimoga for lifting of the lien created on the lands in question for the loans taken from State Bank of Mysore. Sixthly, Pegasus Assets Reconstruction Private Limited has also issued a letter dated 20.10.2021 for handing over all the title deeds pertaining to the lands in question to the applicant Tungbhadra Sugar Works Limited, as a result the charge against the properties is completely lifted and the possession of the land including the plant and machinery ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s they are the title owner of the properties mortgaged as collateral security to the State Bank of Mysore. 7. Mr.B.Dhanaraj, learned counsel representing the Official Liquidator, in support of the reliefs sought for in Company Application No.626 of 2017, opposing the prayers sought for by the applicant in Company Application Nos.298 to 300 of 2021, relying upon the status report, argued that by an order dated 16.04.1999 made in C.P.Nos.170 of 1995 and 35 of 1997, M/s Deve Sugars Limited was wound up and the Official Liquidator was appointed as the liquidator of the said company. In compliance with the said order, the Official Liquidator took possession of the assets consisting of plant and machinery belonging to the company in liquidation situated at the factory premises of the company at Harige village, Shimoga Taluk, Karnataka State on 28.09.1999 and thereupon appointed the Tungbhadra Sugar Works Mazdoor Sangha, the ex-workers union to safeguard the assets of the company in liquidation and their payment to be made out from the godown rent collected from the Central Ware Housing Corporation, Bangalore. The learned counsel further submitted that the exdirectors of the company in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te of Tamil Nadu and as per the bank statement that were filed before the Debts Recovery Tribunal, there were no transfers made to Deve Sugars Limited by Tungbhadra Sugar Works Limited. Hence, Section 536 does not apply in the said scenario. Again Mr.Rajagopalan submitted that even as per the status report dated 27.02.2023, the ex-directors of the company have not filed the statement of affairs as required under Section 454 of the Companies Act, 1956 from the date of winding up of the company and they have not responded to the notice issued by the Official Liquidator. Therefore, impleading them at this stage is irrelevant, when they themselves did not show any response to the notice given by the Official Liquidator. In any event, the statement of affairs to be filed by the ex-directors of the company in liquidation does not concern the present applications, inasmuch as liquidation proceedings of the company have no nexus with the present applications seeking for release of the properties belonging to the applicant. 9. Heard the learned counsel appearing for the parties. 10. It is not in dispute that Deve Sugars Limited was ordered to be wound up on 16.04.1999 in Company Petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s set aside. When the auction purchaser-Anita International preferred appeals before the Supreme Court in C.A.Nos.6042- 6048 of 2011 aggrieved by the said order, the same were dismissed by the Supreme Court on 04.07.2016 upholding the order passed by the Division Bench. 11. It is relevant to mention herein that when the applicant Tungbhadra Sugar Works Limited, being a third party, was not impleaded as a party respondent in the proceedings before the Supreme Court, the applicant, giving reasons for the delay and also proving their ownership over the properties, filed applications for impleadment before the Supreme Court stating that they were ready to settle the dues of the workers, creditors and other statutory dues and that the management was taking necessary actions for revival of the company for the welfare of 947 workmen. Accepting their case that the applicant was a necessary party and was ready to settle the dues of the workmen, creditors and other statutory dues and the management was also taking necessary actions for revival of the company for the welfare of 947 workmen, the Supreme Court allowed the impleadment applications. In the meanwhile, the debts of Tapti Machine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... crores including interest and also obtained the no dues certificate dated 20.10.2021 from Pegasus Assets Reconstruction Private Limited. The relevant portion of the no dues certificate dated 20.10.2021 issued by Pegasus Assets Reconstruction Private Limited is reproduced below:- We have received the entire OTS amount of Rs.42.55 crores (Rupees Forty Two crore and fifty five lakhs only) as full and final payment against credit facilities granted to the borrower, M/s Deve Sugars Limited (in Liquidation) by the Assignor Bank (State Bank of Mysore). We confirm that the borrower and Guarantor do not owe us any further dues in respect of the credit facilities availed by M/s Deve Sugars Limited in favour of Pegasus Assets Reconstruction Pvt.Ltd, acting in its capacity as the trustee of Pegasus Group Seventeen Trust I by State Bank of Mysore vide Assignment Agreement dated 18.09.2012. Pursuant thereto, they have also handed over all the title documents as per the list attached thereto from Serial Nos.(i) to (xxi) on 20.10.2021 to the applicant. 12.4. Fourthly, Pegasus Assets Reconstruction Private Limited has also addressed a letter on 20.10.2021 to the Sub Registrar, Shim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... em. Secondly, the evidence with regard to the settlement of disputes of the workmen also has been enclosed showing that the claims and the dues payable to the workmen also have been settled and the workmen have also reached a settlement before the Assistant Labour Commissioner, Mangalore. But the only objection raised by the Official Liquidator shows that these settlements have not been effected through him. It is true that the Official Liquidator has been appointed to resolve the disputes. But when the problems have been resolved and all the parties have filed their documents settling their dispute, we are able to see some lack of coordination from the Official Liquidator, therefore, the parties have themselves settled the disputes amicably. This has to be welcomed. Let us not delve into the reasons why the Official Liquidator has not cooperated to settle the dispute. But the fact remains that the problems have been resolved. The rules or procedures are the handmaids of justice and not the mistress of the justice. Therefore, when the rules are framed to advance the cause of justice, in the case on hand, when the parties have settled their disputes, let us not sit on the hyper-tech ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Pegasus Assets Reconstruction Private Limited and on receipt of the entire moneys, they have also returned the title deeds of the properties. (ii) Since the charge against the company has been completely lifted, the applicant, Tungbhadra Sugar Works Limited is entitled to the possession of the land including the plant and machinery morefully described in the Schedule to the Judge's summons. (iii) The first respondent, Official Liquidator is, accordingly, directed to handover the possession of the land, building, plant and machinery morefully described in the Schedule to the Judge's summons to the applicant, Tungbhadra Sugar Works Limited. Consequently, an injunction order is granted restraining the first respondent from in any manner interfering with the right of enjoyment of the applicant to the schedule mentioned properties. (iv) Since the workmen's dues have also been settled by the applicant, as indicated above, the first respondent is hereby directed to pay the arrears of rent of the warehouse, after deducting the security expenses incurred for maintaining the properties, including the balance funds available, to the applicant within a period of four ..... X X X X Extracts X X X X X X X X Extracts X X X X
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