National Institute Of Technology ... vs M/S. Koshika Telecom Ltd. And Ors
2012 Latest Caselaw 461 Del

*        IN THE HIGH COURT OF DELHI AT NEW DELHI
%                   CO.APP. NOs. 732/2008 and 341/2009
                                     IN
                            CO.PET.NO. 75/2002
+                               Date of Decision: 23rd January, 2012
       In the matter of :

#      NATIONAL INSTITUTE OF TECHNOLOGY TRUST ...Petitioner

                                     Versus

$      M/S. KOSHIKA TELECOM LTD. AND ORS                ...Respondents

                                  AND

       In the matter of:

       APPLICATION UNDER RULE 9 OF COMPANIES
       (COURT) RULES, 1959 FILED BY NATIONAL
       INSTITUTE OF TECHNOLOGY TRUST       ...Applicant

       Appearance: Mr. Manish Dhir, Advocate for the applicant
                   Mr. Rajiv Bahl, Advocate for O.L.
                   Ms. Shweta Priyadarshini, Advocate for the
                   Secured Creditors(IFCI)

       CORAM:
*      HON'BLE MR. JUSTICE P.K.BHASIN

                                   ORDER

P.K BHASIN,J:

C.A. No. 732/2008 of the Companies Act has been filed by the National Institute of Technology Trust(hereinafter referred to as 'the

applicant Trust') under Rule 9 of the Companies(Court) Rules, 1959 seeking a direction to the Official Liquidator to release the land measuring 30,350 sq. ft. situated at Microware Tower, Hardoi Road, Lucknow, UP from attachment and also to execute a sale deed in respect of this land in favour of the applicant Trust or alternatively the applicant Trust should be granted permission to file a suit for specific performance in respect of the afore-said property.

2. The applicant Trust claims to have entered into an agreement to sell in respect of the above referred piece of land with the Company in liquidation on 30th September, 2002 and also claims to have paid the entire sale consideration of 47 lacs to the Company under liquidation in November, 2002.

3. This application has been opposed by the Official Liquidator and one secured creditor(IFCI) of the Company under liquidation on the ground that the alleged transaction between the applicant Trust and the Company under liquidation is invalid and not enforceable in view of the provisions of Sections 531 and 531-A of the Companies Act.

4. I have heard the counsel for the parties. From the side of applicant Trust written submissions were also filed and the same have also been considered as also various judgments annexed with the written submissions.

5. The winding up petition being CP No. 75/2002 was filed against Koshika Telecom Ltd. by Lord Krishna Bank Ltd. sometime

on 08-02-2002 and then provisional liquidator was appointed by that Court and land in question was attached thereafter by the Official Liquidator(final winding up order was passed on 02-08-2005).

6. Section 531 of the Companies Act reads as under:

"531.Fraudulent preference - (1) Any transfer of property, movable or immovable, delivery of goods, payment, execution or other act relating to property made, taken or done by or against a company within six months before the commencement of its winding up which, had it been made, taken or done by or against an individual within three months before the presentation of an insolvency petition on which he is adjudged insolvent, would be deemed in his insolvency a fraudulent preference, shall, in the event of the company being wound- up, be deemed a fraudulent preference of its creditors and be invalid accordingly:

Provided that, in relation to things made, taken or done before the commencement of this Act, this sub-section shall have effect with the substitution, for the reference to six months, of a reference to three months.

(2) For the purposes of sub-section (1), the presentation of a petition for winding up in the case of a winding up by [the Tribunal], and the passing of a resolution for winding up in the case of a voluntary winding up, shall be deemed to correspond to the act of insolvency in the case of an individual."

7. Section 531-A reads as under:

"531-A. Avoidance of voluntary transfer - Any transfer of property, movable or immovable, or any delivery of goods, made by a company, not being a transfer or delivery made in the ordinary course of its business or in favour of a purchaser or encumbrancer in good faith and for valuable consideration, if made within a period of one year before the presentation of a petition for winding up by [the Tribunal] or the passing of a resolution for voluntary winding up of the company, shall be void against the liquidator."

8. In the present case, as per the applicant Trust's own case, the agreement to sell was executed with the Company under liquidation

after the filing of the winding up petition against it and even the sale consideration is stated to have been paid to it in November, 2002. In view of the provisions of Sections 531 and 531-A of the Companies Act, which have been reproduced above, the transaction between the applicant Trust and the Company under liquidation has to be declared invalid and not enforceable. Just because the applicant Trust claims to be ignorant of the filing of the winding up petition against the Company under liquidation when an agreement to sell was executed that will not validate the transaction in question and none of the judgments relied upon by the applicant Trust is applicable to the facts of this case. Consequently, no relief can be given to the applicant Trust, as has been claimed by it in the present application which is, therefore, dismissed.

9. CO.A. No. 341/2009 was filed by the applicant Trust for stay of the sale of the land in question by the Official Liquidator during the pendency of its application(being CO.A. 732/08). Since Co. A. 732/08 has been dismissed, this application is also liable to be dismissed and accordingly, it is hereby dismissed.

P.K. BHASIN,J

January 23, 2012 sh