Bombay High Court
Vrajlal Talakshi Gala vs Orient Realtors Private Ltd. & Ors on 29 October, 2012
Bench: Anoop V.Mohta
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMPANY APPLICATION (L) NO. 31 OF 2012
IN
COMPANY APPEAL (L) NO. 27 OF 2012
Vrajlal Talakshi Gala ......Applicant.
(Orig. Appellant)
Vs.
Orient Realtors Private Ltd. & Ors. ......Respondents.
(Orig. Respondents)
Magnetic Properties Pvt. Ltd.& Anr. .....Proposed
Respondents.
Mr. Arif Y. Bookwala, Senior Counsel a/w Mr. Cyrus Ardeshir, Mr. C.D.
Mehta and Ms. Faiza Dhanani i/by M/s. Dhruve Liladhar & Co. for the
Applicant.
Ms. Usha Rahi i/by M/s. Mayur Narendra and Co. for Respondent
Nos. 1 and 2.
Mr. Ravi Kadam, Seniolr Counsel a/w Mr. Z.A. Jariwala i/by M/s.
Thakore Jariwala & Associates for proposed Respondent (Magnetic
Properties Pvt. Ltd.).
Ms. R.A. Dada, Senior Counsel a/w Ms. M. Dada i/by K.K. Associates
for proposed Respondent. (M/s. Dishan Read Estate Pvt. Ltd.)
CORAM :- ANOOP V. MOHTA, J.
RESERVED ON :- 11 OCTOBER 2012.
PRONOUNCED ON :- 29 OCTOBER 2012.
P.C.:-
The Applicant has taken out this Application for the following
reliefs in pending Appeal (Lodging) No. 27 of 2012 under Section 10F
of the Companies Act, 1956.
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2 The basic prayers are as under:-
"(a) that without prejudice to the earlier ad-interim and
interim orders passed herein, this Hon'ble Court be
pleased to grant leave to the Applicant/Appellant to
amend the Company Appeal and all pending
Company Applications therein in terms of Schedule-I
annexed hereto;
(b) that pending the hearing and final disposal of the
present Appeal, Court Receiver, High Court, Bombay
or some other fit and proper person be appointed as a
Receiver of the property known as "Kemps Shoppe"
situated at Kemps Corner with all powers under
Order 40 Rule 1 of Code of Civil Procedure, 1908
with further directions to forthwith take possession
including by taking forcible possession and lock and
seal the said property;
(c) that the pending the hearing and final disposal of the
Company Appeal, the Respondent Nos.1 to 4 and
proposed Respondent Nos.1 and 2, be restrained by
an order and injunction of this Hon'ble Court from in
any manner dealing with, disposing off, alienating,
encumbering, transferring or occupying the said
premises and/or the immovable property/properties,
belonging to the Respondent No.1 Company, which is
Kemps Shoppe situated at Kemps Corner;
(d) that pending the hearing and final disposal of the
Company Appeal, the Respondent Nos.1 to 4 and
proposed Respondent Nos.1 and 2, be restrained by
an order and injunction of this Hon'ble Court, from
in any manner taking any further steps in pursuance
of the Supplementary Deed of Conveyance allegedly
executed on 30th March, 2012 by and under which
the Proposed Respondent No.1 is claiming rights in
the said property and any such document purportedly
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executed by and between the proposed Respondent
Nos.1 and 2 under which the proposed Respondent
No.2 is claiming rights in the said property."
Schedule-I provides the averments for joining of Respondent
Nos. 18 and 19 (Purchasers) in Appeal and injunction order against
them referring to the property in question of the Company.
3 The relevant facts are as under:-
On 28 April 2008, an interim order passed by the Hon'ble
Company Law Board restraining the Respondents from dealing with
the fixed assets of the Company. In February 2010, an Application
filed by the Applicant/Appellant for further reliefs as the Respondents
put up a banner for sale/lease of the premises. On 4 March 2010, an
order passed by the Hon'ble Company Law Board rejecting the
application. In April, 2010, Appeal under Section 10F, filed by the
Applicant/Appellant. On 16 August 2010, an order passed in the
Appeal by this Hon'ble Court confirming the order dated 28 April
2008 and restraining the Respondents from creating any third party
rights.
4 On 15 September 2010, the Hon'ble Company Law Board
dismissed the matter. On 23 September 2010, the Applicant/Appellant
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filed an application for restoration of the Petition, a copy of the same
served on the Respondents' Advocates on 23 September 2010. The
Hon'ble Company Law Board placed the matter for final hearing. On
20 October 2010, order passed by the Hon'ble Company Law Board
that the Application for restoration be heard along with the main
Petition on 1 December 2010.
5 On 17 November 2010, Respondent No. 2, on behalf of
Respondent No.1, purportedly entered into a Deed of Conveyance
with the Proposed Respondents. On 1 December 2010, final hearing
of Application for restoration and the main Petition was heard in part.
On 2 February 2011, the matter was heard and kept part-heard and
listed on 24 March 2011 and the final hearing of the Petition was
concluded. The matter was reserved for orders.
6 On 19 July 2011, by an order passed by the Hon'ble Company
Law Board restoring the Company Petition on file and so also interim
order. On 22 February 2012, the matter was listed for final hearing.
However, the Hon'ble Member had directed the parties to only file
written submissions in the matter and reserved for orders.
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7 On 30 March 2012, Respondent No. 2 on behalf of Respondent
No. 1 entered into a Supplementary Deed of Conveyance to the Deed
of Conveyance dated 30 November 2011. On 25 May 2012, the
impugned order has been passed by the Hon'ble Member at Chennai.
8 On 29 May 2012, the Respondent purportedly disposed off the
only asset of the Company by Deed of Conveyance registered on 29
May 2012. From 30 May 2012 to 3 Jun3 2012, the Hon'ble Member
was not available. On 4 June 2012, the stay Application mentioned
before the Member, after notice. None appeared on behalf of the
Respondent. On 5 June 2012, once again, despite notice, none
appeared on behalf of the Respondent. On 6 June 2012, despite
notice, none appeared on behalf of the Respondent. Therefore, the
Member stayed order dated 25 May 2012.
9 In June 2012, Section 10F Appeal filed before this Hon'ble
Court. On 15 June 2012, stay granted to the operation of order dated
25 May 2012. On 6 July 2012, the Appeal admitted and pending the
final hearing and disposal of the Appeal, stayed the operation of order
dated 25 May 2012.
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10 Section 10F of the Companies Act reads as under:-
"10F. Appeals against the order of the Company Law
Board. : - Any person aggrieved by any decision or order of
the Company Law Board made before the commencement of
the Companies (Second Amendment Act, 2002) may file an
appeal to the High Court within sixty days from the date of
communication of the decision or order of the Company Law
Board to him on any question of law arising out of such
order:
Provided that the High Court may, if it is satisfied that
the appellant was prevented by sufficient cause from filing
the appeal within the said period, allow it to be filed within a
further period not exceeding sixty days."
11 The Supreme Court in V.S.Krishnan v. Westfort Hi-tech
Hospital Ltd 1 has observed about the Section as under:-
"16. It is clear that Section 10-F permits an appeal to
the High Court from an order of the Company Law Board
only on a question of law i.e. the Company Law Board is
the final authority on facts unless such findings are
perverse, based on no evidence or are otherwise arbitrary.
Therefore, the jurisdiction of the appellate Court under
Section 10-F is restricted to the question as to whether on
1 2008 (8) 3 SCC 363
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the facts as noticed by the Company Law Board and as
placed before it, an inference could reasonably be arrived
at that such conduct was against probity and good
conduct or was mala fide or for a collateral purpose or
was burdensome, harsh or wrongful. The only other basis
on which the appellate Court would interfere under
Section 10-F was if such conclusion was (a) against law
or (b) arose from consideration of irrelevant material or
(c) omission to construe (sic consider) relevant
materials."
12 In view of the above it is necessary to note in the present case an
ad-interim order dated 28 April 2008 got vacated as Company
Application itself was dismissed on 15 September 2010 for default.
On 17 November 2010, Respondent No. 2 on behalf of Respondent
No.1, entered into a Deed of Conveyance with proposed Respondents.
The main matter got restored on 19 July 2011 along with the interim
order. The supplemental Deed of Conveyance dated 30 March 2012
was entered into to the Deed of Conveyance dated 30 November
2011. The basic allegations, therefore, are that the Respondent is
alleged to have disposed of the only asset of the company on 29 May
2012, inspite above situation.
13 Admittedly no such steps and/or application for such reliefs
claimed and/or filed before the Company Law Board at the relevant
time referring to deed of conveyance and the supplementary deed in
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question were taken. These new facts and circumstances, in view of
the above events, just cannot be gone into for the first time in this
application pending the final hearing of Section 10F appeal against
the rejection of the petition under Section 397 of the Companies Act.
The issue of transfer of assets of the company in the present case
needs detailed enquiry and trial. The transfer is whether bona fide or
illegal and/or its effect on the transactions and existing transfer of
possession, therefore, unless decided by the basic forum, there is no
question of adjudicating the same for the first time in this appeal, by
permitting the Appellant to join proposed Respondents in such
fashion. The scheme and purpose of Section 10F is quite limited.
14 The "aggrieved person" though can challenge the order passed
by the CLB that itself is in no way sufficient or entitle them to bring
these new facts first time in the appeal with prayer to add those
proposed Respondents as parties. In my view, it is impermissible. The
remedy is elsewhere.
15 The authorities, so cited in view of the above admitted position
are of no assistance to grant prayer so made. There cannot be debate
on law but issue is its applicability on given facts and circumstances.
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Therefore, there is no question of appointment of any receiver unless
validity of the transactions is decided finally by the competent Court /
Tribunal. These factual issues cannot be gone into and/or adjudicated
in Section 10F appeal basically at this stage of the proceedings and at
the instance of the Appellant. The joining of proposed party and
prayer for reliefs so made against the Respondents, therefore, also
cannot be granted for the same reasons. However, liberty is granted
to take out appropriate application and / or steps in accordance with
law. All points are kept open.
16 Resultantly, the Application so filed is rejected. No order as to
costs.
17 The learned counsel appearing for the Applicant prays to
continue the status quo already granted / passed on 12 August 2012
and which has been in force till date. Counsel appearing for the
proposed Respondents have opposed this application. However,
considering the fact that the status quo has been in force since August
2012, I am inclined to continue it till 26 November 2012.
( ANOOP V. MOHTA, J. )
