M/S Engineering Udyog & General ... vs Berry Sons India Ltd.
2012 Latest Caselaw 1123 Del

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* IN THE HIGH COURT OF DELHI AT NEW DELHI

+      CO.PET. 294/2006

M/S ENGINEERING UDYOG
& GENERAL KAMGAR
UNION (REGD.)                        ..... Petitioner
                  Through            Mr. L.B. Rai, Advocate.

                    versus

BERRY SONS INDIA LTD.                ..... Respondent
                  Through            Mr. Kanwal Chaudhary,
                                     Advocate with Ms. Gunjan
                                     Chowksey, Advocate for
                                     Official Liquidator.
                                     Mr. Dinesh Garg, Advocate
                                     with Ms. Rachna Agrawal,
                                     Advocates for Applicants in
                                     Co. Appl.311/2009.
                                     Mr. Vikas Mahajan, Advocate
                                     for R-3/Mr. Ashwani Kumar
                                     Berry.

%                             Date of Decision: 17th February, 2012

CORAM:
HON'BLE MR. JUSTICE MANMOHAN


                             JUDGMENT

MANMOHAN, J : (Oral)

Co. Appls.311/2009 & 907/2009 in Co. Pet. 294/2006

While application being Co. Appl. No. 311/2009 has been

filed by the purchaser of property bearing No. K-78, Hauz Khas

Enclave, New Delhi, seeking release of the property from the

Official Liquidator, Co. Appl. No. 907/2009 has been filed by the

workmen of the respondent company for release to themselves Rs.

60 lacs deposited with the Official Liquidator by the purchaser as

well as former Directors of the company.

Mr. L.B. Rai, learned counsel appearing for workmen states

that by virtue of a Compromise Deed dated 19 th September, 2004,

two Directors of the respondent company namely, Mr. Ajay Kumar

Berry and Mr. Ashwani Berry had agreed to pay a sum of Rs. 60 lacs

to the workmen from the sale proceeds of the aforesaid property. Mr.

Rai, learned counsel has drawn this Court's attention to paragraph 1

of the aforesaid Compromise Deed which reads as under:-

"1. Both the parties have agreed that the management has to pay the workers towards gratuity and Service Compensation and arrears of salary and also towards all sorts of liability at Rs.60,00,000/- (Sixty Lakhs). It has been agreed that Rs. 60,00,000/- will be payable to the worker from Management towards full and final settlement of their claim. And it was further agreed that

the said Rs. 60,00,000/- (Rs. Sixty Lakhs) will be paid within Sixty days from the date of this Compromise. In the above liability of Rs. 60,00,000/- (Rs. Sixty Lakhs) Sh. Ajay Berry will be liable to pay Rs. 35,00,000/- (Rs. Thirty Five Lakhs) and Ashwini Berry will be liable to pay Rs. 25,00,000/- (Rs. Twenty Five Lakhs) which will be paid after recovering from the property of Ajay Berry and Aswini Berry i.e. K-78, First Floor, Hauz Khas, Delhi."

Mr. Rai, learned counsel has also drawn this Court's attention

to the order passed by this Court on 25th May, 2009. Since

considerable emphasis has been laid on the said order by Mr. Rai,

the said order is reproduced hereinbelow:-

"1. This application has been filed by Anurag Sharma and his wife Smt. Poonam Sharma claiming to have purchased the property no. K-78, Hauz Khas Enclave pursuant to two sale deeds both dated 7th July, 2008 for the total sum of Rs. 8 crores executed in their favour by Mr. Ashwani Berry. It has been pointed out that the property was owned by Sh. S.S. Berry who expired leaving behind four heirs, two sons namely Sh. Ashwani Berry and Sh. Ajay Berry and two daughters namely Ms. Geeta Suri and Ms. Kavita Kataria. The other sisters and brother of Sh. Ashwani Berry relinquished their shares in favour of Sh. Ashwani Berry who executed the aforenoticed two sale deeds.

2. On a prima facie consideration of the matter, it would appear that the property was never transferred in the name of the company. However Ms. Manisha Tyagi appearing for the official liquidator has pointed out that the ex-directors of the company are yet to appear and

facilitate the enquiry being undertaken which would include all matters relating to the subject property. It has also been pointed out that an industrial plot of the company has been sold shortly before the filing of the present winding up petition in the year 2006 which plot was owned by the company.

3. The enquiry of the official liquidator so far as the property which is the subject matter of this application is concerned, is still not completely over.

4. It has been claimed that a settlement has been arrived at and signed both by Sh. Ashwani Berry and Sh. Ajay Berry wherein it was agreed by them on behalf of the company that upon sale of the first floor, they would pay an amount of Rs.60 lakhs. The official liquidator is also examining the legal consequences of this settlement and the effect it would have on the plea raised by the applicants.

5. This application has been filed for the reason that pursuant to the order dated 21st October, 2008, appointing the official liquidator attached to this Court as the liquidator of the company, the official liquidator of the company, the official liquidator has taken symbolic possession of the property. It is stated that therefore upon completion of the construction work which was to be undertaken by the applicants has been interdicted. Mr. Dinesh Garg appearing for the applicant has submitted that apart from the amount of Rs.8 crores which was paid as consideration to Mr. Ashwani Berry, the applicants have settled several liabilities which were owing by the company and the sellers of the property.

Be that as it may, in order to balance equities, the sealing by the official liquidator would require to be modified.

Accordingly, the following directions are issued:-

(i) Subject to the applicant depositing an amount of Rs.60 lakhs with the official liquidator, the official liquidator shall remove its symbolic possession and sealing of the property bearing no. K-78, Hauz Khas Enclave, New Delhi. The amount when deposited with the official liquidator shall be kept in a fixed deposit receipt initially for a period of six months which shall be kept renewed till further orders of this Court. The deposit shall be retained in this court till settlement of claims by the official liquidator and unless present orders are modified by any order prior thereto.

It is stated that the amount shall be deposited without prejudice to the rights and contentions of the applicant within two weeks. Let the same be so done.

(ii) The applicants shall place on record any transaction which are undertaken in respect of the subject property or any portion thereof. The same shall be subject to the orders of this court.

(iii) The applicant shall furnish the complete details and particulars of sh. Ashwani Berry and Sh. Ajay Berry within two weeks from today. Notice shall issue thereupon at such address for the service of Sh. Ashwani Berry and Sh. Ajay Berri, returnable on 31st July, 2009.

List on 31st July, 2009."

In view of the aforesaid, Mr. Rai submits that either the

aforesaid amount should be released to the workmen by this Court or

the aforesaid property should not be unconditionally released to the

purchaser.

Mr. Vikas Mahajan, learned counsel appearing for respondent

No.3-Mr. Ashwani Berry, states that the Settlement Agreement dated

19th September, 2004 relied upon by the workmen is a forged and

fabricated document inasmuch as it is purportedly signed by Mr.

Ashwani Berry who was not a Director of the respondent company

on 19th September, 2004 as he had resigned from the Directorship on

11th December, 2002.

Mr. Dinesh Garg, learned counsel appearing for the purchaser

states that the reliance upon this Court's order dated 25th May, 2009

is mis-conceived on facts inasmuch as the said interim order had

been passed as the issue of ownership of the aforesaid property at

that stage was in dispute and an inquiry of the Official Liquidator on

the said aspect was pending.

Mr. Kanwal Chaudhary, learned counsel for Official

Liquidator submits that on a detailed inquiry conducted by the

Official Liquidator, it has been found that the aforesaid property

does not belong to the respondent company as it was owned by the

father of Mr. Ashwani Berry in his individual capacity.

In rejoinder, Mr. L.B. Rai, learned counsel submits that

former Directors are estopped from challenging the authenticity and

validity of the Compromise Agreement as the Provisional Liquidator

had been appointed on that basis and the said order has attained

finality.

Having heard the parties at length, this Court is of the view

that the aforesaid property is not owned by the respondent company.

In fact, the Official Liquidator, after conducting a detailed inquiry,

has submitted a comprehensive report dated 29th July, 2009. The

relevant portion of the said report is reproduced hereinebelow:-

"12. That it is also relevant to mention here that in respect of investigation as to the ownership of the property situated at K-78, Hauz Khas Enclave, New Delhi an official was deputed to collect the relevant documents from the office of Sub-Registrar, New Delhi. The Sub-Registrar has provided certified copies of following documents:

i. Sale Deed executed on 22.06.1961 by DLF Housing & Construction (P) Ltd. In favour of Sh. P.K. Lahari, Plot No. 78, Block-K, Hauz Khas Enclave, New Delhi, Area Admeasuring (595 sq. yard).

ii. Sale deed executed on 18.08.1964 between with Sh. P.K. Berry and S.S. Berry duly executed on 25.8.1964 for plot No. 78, Block-K, Hauz Khas Enclave, New Delhi, Area Admeasuring (595 sq. yard).

iii. Relinquishment Deed by Sh. Ajay Berry in favour of Sh.Ashwani Berry after death of Sh. Shanti Swarup Berry (Sh. S.S. Berry) and Smt. Krishna Berry W/o of Sh. Shanti Swarup Berry executed on 25.04.2008.

iv. Relinquishment deed by Mrs. Kavita Kataria daughter of Late Sh. S.S. Berry in favour of Sh. Ashwani Berry.

v. Relinquishment deed by Smt. Geeta Berry daughter of Late Sh. S.S. Berry in favour of Sh. Ashwani Berry.

vi. Copy of Sale deed executed by Sh. Ashwani Berry in favour of Mrs. Poonam Sharma Second Floor, with Terrace Area 498.3 sq.mt. (596 sq. yard). The photocopies of all the said documents are enclosed and marked as Annexure-H.

13. That on examination above documents obtained from Sub-Registrar office in respect of property bearing No. K-78, Hauz Khas Enclave, New Delhi it is noticed that the above said property was originally by M/s. DLF Housing and Construction Pvt. Ltd. to Shri P.K. Lahiri on 22.06.1961. Shri P.K. Lahari sold the same to Sh. S.S. Berry on 18.08.1964 much before the company in liquidation come into existence. Then after the death of Sh. Shanti Swarup Berry and Mrs. Krishna Berry, Shri Ajay Berry, Mrs. Kavita Kataria and Mrs. Geeta Suri relinquish their rights in the above said property though Relinquishment Deed in favour their brother Shri Ashwani Kumar Berry. Sh. Ashwani Kumar Berry through two different Sale Deeds sold Basement Floor, Ground Floor and First Floor to Sh. Anurag Sharma and Second Floor with Terrace to Mrs. Poonam Sharma."

From the aforesaid report, it is clear beyond doubt that the

said property is not the company's property and, therefore, this Court

has no jurisdiction to deal with the said property or to impose any

restrictions on its transfer. Consequently, CA 311/2009 is allowed.

As far as the workmen's application for release of Rs. 60 lacs

is concerned, this Court is of the view that it has no jurisdiction to

enforce an alleged personal agreement between the former Directors

and the workmen insofar as it pertains to personal property of the

Directors.

However, the workmen are granted liberty to file appropriate

proceeding in accordance with law for enforcement of their rights

arising out of the alleged Compromise Deed dated 19th September,

2004.

The rights and contentions of all the parties with regard to

legality and validity of the aforesaid Compromise Deed are left open

and the appropriate forum shall decide the same without being

influenced by any observations made by this Court.

Keeping in view the aforesaid conclusion, the amount of

Rs.60 lacs deposited by the purchaser as well as Mr. Ashwani Berry

is directed to be released.

However, as the workmen have stated that they would file

appropriate proceedings in a Court of competent jurisdiction within a

period of four weeks, this Court directs the Official Liquidator to

release the amount of Rs. 60 lacs with accrued interest to the

entity/individual who has deposited the amount only after a period of

six weeks i.e. only after 30th March, 2012.

With the aforesaid observations, CA 907/2009 stands disposed

of.

Co. Appl. 1308/2010 in Co. Pet. 294/2006

Present application has been filed by the Official Liquidator

for cancellation of documents mentioned in its para 6 as well as for

possession of premises bearing No. C-80, MIDC Waluj Industrial

Area, Aurangabad, Maharashtra.

Service report filed by the Official Liquidator shows that

respondents No.1 and 2, the alleged purchasers of the aforesaid

property have been served. However, none has entered appearance

on their behalf.

Mr. Kanwal Chaudhary, learned counsel for Official

Liquidator points out that an Agreement to Sell dated 02nd

December, 2007 was executed by Mr. Ajay Berry on behalf of the

respondent company during the pendency of the present petition.

This Court is of the view that as the Provisional Liquidator has

already been appointed, it is of utmost importance that the aforesaid

property is secured.

Consequently, it is directed that status quo with respect to the

aforesaid property shall be maintained and no third party rights shall

be created till further orders. Moreover, no further title deed shall be

executed by the former Directors or by any Power of Attorney

holder on their behalf or on behalf of the company till further orders.

Issue fresh notice to respondents No. 3 to 6 by all modes

including dasti, returnable for 19th July, 2012.

Co. Appl. 908/2009 in Co. Pet. 294/2006

Let a fresh status report be filed by the Official Liquidator

before the next date of hearing.

List on 19th July, 2012.

Co. Pet. 294/2006

In the present case, the Provisional Liquidator had been

appointed on 21st October, 2008.

Despite publication of citations, no objection has been

received.

Consequently, the respondent is directed to be finally wound

up and the Official Liquidator attached to this Court is appointed as

the Final Liquidator.

Let fresh citations be published in 'The Statesman' (English

edition) and 'Veer Arjun' (Hindi edition) as well as in 'Delhi

Gazette'.

Let a fresh status report be filed by the Official Liquidator

before the next date of hearing.

List the matter on 19th July, 2012.

MANMOHAN, J.

FEBRUARY 17, 2012 js