Bombay High Court
Vinod Gurbux Motwani ... vs The Official Liquidator Bombay ... on 23 February, 2021
Bench: K.R. Sriram
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Digitally
signed by
Gauri A.
Gauri A. Gaekwad
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
Gaekwad Date:
2021.02.24 ORDINARY ORIGINAL CIVIL JURISDICTION
17:58:36
+0530
INTERIM APPLICATION NO.1630 OF 2020
WITH
OFFICIAL LIQUIDATOR'S REPORT NO.26 OF 2020
IN
COMPANY PETITION NO.244 OF 2012
Vinod Gurbux Motwani ....Applicant
(Ex-Director)
In the matter between :
Asset Reconstruction Company (India) Ltd. ....Petitioner
V/s.
The Official Liquidator, Bombay High Court,
Liquidator of M/s Sunearth Ceramics Ltd. ....Respondents
----
Mr. Jamshed Ansari for applicant.
Mr. Mahendhar Aithe, Company Prosecutor present.
----
CORAM : K.R.SHRIRAM, J.
DATED : 23rd FEBRUARY 2021
P.C. :
1 No case for ad-interim is made out. First of all, the application
is for modifying an order dated 7 th February 2020. After that, applicant has
not moved for any ad-interim but he says that there is an urgency now
because Official Liquidator has issued auction notice dated 1st February
2021, fixing 2nd March 2021, inviting bid for auction of assets of the
company (in liquidation).
2 According to Mr. Ansari the properties sought to be auctioned
are subject matter of attachment by Special MPID Court under the
provisions of Maharashtra Protection of Interest of Depositors (In Financial
Establishments Act) 1999 and therefore, the properties sought to be
Gauri Gaekwad
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auctioned by the Official Liquidator, is subject matter of custodia legis.
Mr. Ansari states that this legal position is confirmed by DRT, Pune. But in
the bargain, what is forgotten is the MPID Act also is created for protection
of depositors who have given deposit to the company (in liquidation). To
prevent the company from disposing of the assets and defeat the rights of
the depositors, the Act was created. Ofcourse a noble act. At the same time,
the MPID Court, despite passing the order on 19 th August 2006, has not sold
the assets. Therefore, the Official Liquidator taking steps to dispose of the
assets of the company would also be beneficial to the interest of those who
have sought protection under the MPID Act. The sale proceeds will naturally
come into the office of the Official Liquidator at which time the Official
Liquidator will place a report to decide the priorities. To sum up, this sale
will only benefit all the creditors including fixed deposit holders who have
approached the Special MPID Court. I find support for this view in the
matter of Aryarup Tourism Club Resorts P. Ltd. (In Liquidation), In re 1.
Paragraphs 118, 119 and 120 of the said judgment read as under :
118. I am not inclined to accept the submission of the learned
A.G.P. that the competent authority appointed under the MPID Act
has power to deal with the properties of the financial
establishment i.e. the companies in liquidation in these matters
under 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
1. [2017] 203 Comp Cas 220 (Bom)
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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 wound up under the provisions
of the Companies Act, 1956 or that the Official Liquidator cannot
seek any direction in respect of the properties attached by the
competent authority as prayed in the report filed by the Official
Liquidator.
120. In my view since there is no conflict between the Companies
Act, 1956 and the MPID Act and both operates indifferent field, the
Judgment of Supreme Court in case of Central Bank of India Vs.
State of Kerala and others(supra) relied upon by the learned A.G.P.
would not assist his case.
3 In the circumstances, the question of granting any relief in this
application, let alone an ad-interim or interim relief, does not arise.
4 Interim application stands dismissed.
5 Mr. Aithe states that despite the directions given in paragraph 8
of the order dated 21st April 2017, in which also the request of the
ex-directors for two weeks extension to file statement of affairs was granted,
the statement of affairs has not been filed till date.
6 The Official Liquidator is directed to commence appropriate
proceedings under Section 454 of the Companies Act, 1956 against the
ex-directors forthwith.
(K.R. SHRIRAM, J.)
Gauri Gaekwad
