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TMI Blog2025 (4) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... , while the applicant in the interim application is praying for validating the said sale agreement. This Court is called upon to exercise power under Section 536 (2) of the Companies Act, 1956, to dispose of the present proceedings. 2. The Company Petition bearing No. 358 of 2016, was filed by the petitioner-Zhejiang Medicines & Health Products Import and Export Co. Ltd., for winding up of the company M/s. Desmo Exports Limited (hereinafter referred to as the company in liquidation). The said company petition was filed on 17th March 2016. It was admitted on 16th October 2017 and it was allowed on 26th April 2018, whereby the said company was directed to be wound up and the official liquidator of this Court was appointed as a liquidator on the said company in liquidation. 3. It is the case of the applicant-J. B. Dyechem Private Limited that the aforementioned sale agreement dated 29th May 2017 was executed by the company in liquidation in favour of the said applicant. While referring to the background facts, the applicant asserts that a secured creditor of the company in liquidation i.e. ICICI Bank had issued a credit arrangement letter, whereby total outstanding amount as on 29th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ver to the official liquidator and this Court as per the photographs, as and when called to do so. 6. In February 2019, the applicant filed Company Application No. 82 of 2019, praying for quashing and setting aside of the appointment of the official liquidator and a direction to the official liquidator to handover quite, vacant and peaceful possession of the subject property. In August 2019, the official liquidator filed the aforesaid OLR No. 133 of 2019, seeking a declaration that the aforesaid sale agreement dated 29th May 2017 did not bind it and prayed for other ancillary reliefs. In January 2022, the applicant filed Interim Application (Lodging) No. 4664 of 2022, seeking permission from this Court to pay necessary stamp duty as required under the law and to register the document as per law by completing all formalities, specifically stipulating that the said application was being made without prejudice to the rights and contentions of the parties. 7. Thereafter, in April 2023, the applicant file instant Interim Application (Lodging) No. 12558 of 2023, praying for validation of the aforesaid sale agreement dated 29th May 2017. It is relevant to note that on 6th July 2023, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yable to the aforesaid secured creditor along with interest upto date will become due and the official liquidator will have to satisfy the same, thereby imposing an unnecessary and heavy burden on the liquidation process. It was submitted that such an option would inure to the benefit of none and therefore, this Court may consider allowing the application and dismissing the OLR. 11. In support of the aforesaid contention the learned counsel for the applicant relied upon judgment of the Supreme Court in the case of Pankaj Mehra & Anr. v/s. State of Maharashtra & Ors., (2000) 2 SCC 756, Judgment of the Madras High Court in the case of B.I.F.R. v/s. The Chairman-cum-Managing Director, M/s. Shree Uma Parameswari Mills Ltd. & Ors., (2013) 2 LW 675 and the judgments of this Court in the cases of Maharashtra State Financial Corporation & Anr. v/s. The Official Liquidator, High Court, Mumbai & Anr, 2012(5) ALL MR 54, Helbon Engineers Pvt. Ltd. (Applicant), Jayantilal A. Shah (Petitioner) v/s. Ferral Anant Machinery Manufacturers Pvt. Ltd. & Anr. (Respondents), 2024 SCC OnLine Bom 1646 and Board of Industrial and Financial Reconstruction & Ors. v/s. Hindustan Transmission Products Ltd., (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reliance on Section 53A of the Transfer of Property Act, to contend that that the applicant stood protected under the doctrine of part performance, as it was put in possession of the said property in furtherance of the aforesaid sale agreement dated 29th May 2017, emphasizing that the applicant continued to be in possession of the property, having paid the entire agreed consideration. 14. It was further submitted that the objection raised on behalf of the official liquidator on the ground of suppression of alleged nexus between the applicant and the company in liquidation, was without any substance. It was submitted that even if all the allegations levelled on behalf of the official liquidator are to be accepted, no such nexus is made out on facts and that therefore, the said contention deserves to be rejected. 15. On the question of alleged delay on the part of the applicant in filing the application, reliance was placed on judgment of this Court in the case of Rathnam P. V. v/s. Premier Automobiles Limited & Ors., 2012 SCC OnLine Bom 260, to contend that validation of the sale can be granted at any time. On the basis of the aforesaid submission, the learned counsel for the appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit arrangement letter dated 29th September 2016 and the document annexed thereto, show the land and factory shed valued at Rs. 3.10 crores and the plant and machinery valued separately at Rs. 1 crore, bringing the aggregate to Rs.4.10 crores, under the subject sale agreement dated 29th May 2017, the applicant paid an amount of only Rs. 3.10 crores for the land, factory, as well as the plant and machinery, thereby showing that the transaction cannot be said to be bona fide and in the interest of the company in liquidation. 19. On the question of applicability of Section 55 (6) (b) of the Transfer of Property Act and the applicant's claim of having a charge over the subject property, it was submitted that the said provision would not inure to the benefit of the applicant, as the subject transaction has not been completed due to the default of the applicant itself. By placing reliance upon judgments in the cases of Income-tax Officer, Hundi Circle I, Madras v/s. K. A. Govindaswamy & Ors. (Madras High Court), 1977 SCC OnLine Mad 84, Nirala Properties Pvt. Ltd. v/s. Circular Investment Trust Pvt. Ltd. & Ors. (Calcutta High Court), 1992 SCC OnLine Cal 265 and judgment of the Supreme C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x department of Rs. 66,77,163/- and the other pertains to the claim of a Chinese Company for USD 431000. It was submitted that this Court may consider the said aspect of the matter while disposing of the OLR and the application. 23. Having considered the rival submissions, this Court is called upon to decide as to in what manner the OLR and the application are to be disposed of and while doing so, pronouncing upon the aforesaid specific issues arising out of the rival submissions. 24. It would be appropriate to first take up the objection raised on behalf of the official liquidator with regard to the subject document i.e. the sale agreement dated 29th May 2017 itself being an incomplete and inchoate document, incapable of validation under Section 536 (2) of the Companies Act. The said issue actually goes to the root of the matter. The official liquidator has contended that the sale agreement dated 29th May 2017, being inadequately stamped and not being registered are both factors fatal to the prayer made on behalf of the applicant. In this context, it is necessary to peruse the subject document itself i.e. the sale agreement dated 29th May 2017. It is admittedly signed and execut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... utely clear from the above quoted paragraph of the instant application, particularly the portion on which emphasis has been supplied, that the applicant has made false statement in the present application about the company in liquidation being under the obligation to pay the stamp duty and registration charges. On this ground alone, the instant application, bearing Interim Application (Lodging) No. 12558 of 2023, deserves to be dismissed. More so, when the affidavits sworn in support of the earlier applications i.e. Company Application No. 82 of 2019 and Interim Application (Lodging) No. 4664 of 2022, were sworn by the same individual who has sworn affidavit and signed the verification in support of the instant Interim Application (Lodging) No. 12558 of 2023, being a Director of the applicant company. 28. Apart from this, the sale agreement dated 29th May 2017, in the above quoted portion, records that the registration of the agreement was deferred on account of deficiency of documents and necessary permissions from the MIDC. It is an admitted position that till date, the deficiency has continued and NOC or permissions from MIDC are not available and they still appear to be "in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 31. Reliance placed on behalf of the applicant on the judgments of this Court in the cases of Maharashtra State Financial Corporation & Anr. v/s. The Official Liquidator, High Court, Mumbai & Anr (supra) and Helbon Engineers Pvt. Ltd. (Applicant), Jayantilal A. Shah (Petitioner) v/s. Ferral Anant Machinery Manufacturers Pvt. Ltd. & Anr. (Respondents) (supra) is also misplaced. The said judgments, in which this Court validated the subject transactions, are distinguishable on facts. In the case of Maharashtra State Financial Corporation & Anr. v/s. The Official Liquidator, High Court, Mumbai & Anr (supra), this Court specifically recorded that the subject sale deed was lodged for registration, it was duly registered and the registering authorities did not find anything objectionable as regards the valuation of the property under the registered sale deed. It was also found on facts that after the land was transferred on the basis of such registered sale deed, the order of winding up was passed with appointment of official liquidator after more than a year. In the case of Helbon Engineers Pvt. Ltd. (Applicant), Jayantilal A. Shah (Petitioner) v/s. Ferral Anant Machinery Manufacturers P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of validation, for the fact that it is found to be incomplete and inchoate and secondly, the official liquidator would take appropriate steps in the process of liquidation, in the interest of the company in liquidation and its creditors, in accordance with law and under the supervision of this Court. It is to be examined as to whether the subject transaction i.e. sale agreement dated 29th May 2017, on its own can qualify as having been executed bona fide from the angle of adequacy of consideration. The applicant itself has placed reliance on a valuation report filed along with the application. The said valuation report of a Government approved valuer, states fair market value at Rs. 4,12,76,000/- and distress value at Rs. 3,50,85,000/-. The credit arrangement letter dated 29th September 2016 issued by the aforesaid secured creditor-ICICI Bank along with its annexure, is relevant in this context. The annexure to the said document refers to the subject property and its release upon payment of value, specifically recording the value of the land and factory shed at Rs. 3.10 crores and the valuation of the plant and machinery at Rs. 1 crore. Thus, the total value shown by the secured cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he possession was also taken by the applicant. It is a matter of record that the applicant failed to satisfy the obligation cast upon it, as per the above quoted clause 2 of the terms and conditions of the sale agreement dated 29th May 2017, by failing to pay the charges towards stamp duty and registration charges, as also obtaining necessary permissions and documents from the MIDC for registration of the document, thereby showing its default. In such a situation, the applicant cannot claim shelter under Section 55 (6) (b) of the Transfer of Property Act. This is not a case where, even according to the applicant, the agreement was executed and the conveyance was to be executed subsequently, rather it is the case of the applicant itself that the subject sale agreement dated 29th May 2017 conveyed the property to the applicant as a transferee and possession was also taken by the applicant on the same date i.e. 29th May 2017. 38. It is also to be appreciated that the said sale agreement dated 29th May 2017 itself was executed after commencement of the winding up process and hence, in the form and at the stage it was executed, it was a void document. The Madras High Court in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gistered on or after such commencement, then, they shall have no effect for the purposes of the said section 53A." 41. The Supreme Court in the case of Ameer Minhaj v/s Dierdre Elizabeth (Wright) Issar & Ors. (supra), referring to Section 17(1A) of the Registration Act, held as follows : "10. On a plain reading of this provision, it is amply clear that the document containing contract to transfer the right, title or interest in an immovable property for consideration is required to be registered, if the party wants to rely on the same for the purposes of Section 53-A of the 1882 Act to protect its possession over the stated property. If it is not a registered document, the only consequence provided in this provision is to declare that such document shall have no effect for the purposes of the said Section 53-A of the 1882 Act. The issue, in our opinion, is no more res integra." 42. Thus, the aforesaid contention raised on behalf of the applicant is without any substance and it is rejected. 43. The official liquidator also alleged suppression on the part of the applicant, as it was claimed that there was nexus between the management of the applicant and the former management of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny petition for winding up of the said company i.e. M/s. Desmo Exports Limited had been filed and it was pending when the subject sale agreement dated 29th May 2017 was executed. In any case, this Court has already rejected the substantial contentions raised in the present matter on behalf of the applicant and accepted those of the official liquidator herein above. 46. As regards delay and laches on the part of the applicant, this Court is not inclined to hold against the applicant on that score. It is indeed observed in paragraph 33 of the judgment of this Court in the case of Rathnam P. V. v/s. Premier Automobiles Limited & Ors. (supra) that dispossession of the property of the company, during the interregnum period between the date of presentation of winding up petition and date of passing of the winding up order can be validated at any time, although the applicant would have to give explanation for any unreasonable delay in filing such application under Section 536 (2) of the Companies Act. In the facts of the present case, delay and laches in itself cannot be held to be a ground to hold against the applicant. 47. Nonetheless, since this Court has rejected the substantial con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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