Delhi High Court
C Shanti Anandam vs Jvg Finance on 12 September, 2014
$~1 & 6
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 12th September, 2014
+ CO.APP. 48/2014 & CM Nos.14706-14708/2014
C SHANTI ANANDAM ..... Appellant
Through : Mr. Ashutosh Dubey, Adv.
versus
JVG FINANCE ..... Respondent
Through : Mr. Rajiv Bahl, official
liquidator
+ CO.APP. 49/2014 CM No.14755-14757/2014
S.BJYOTHSNA ..... Appellant
Through : Mr. Ashutosh Dubey, Adv.
versus
J.V.G. FINANCE ;LTD ..... Respondent
Through : Mr. Rajiv Bahl, official
liquidator.
+ CO.APP. 44/2014 & CM Nos.14070-14073/2014
V RAJSHEKHAR REDDY ..... Appellant
Through : Mr. Ashutosh Dubey, Adv.
versus
JVG FINANCE ..... Respondent
Through : Mr. Rajiv Bahl, official
liquidator.
1
+ CO.APP. 45/2014 & CM Nos.14074-14077/2014
UMA SHANKAR SHARMA ..... Appellant
Through : Mr. Ashutosh Dubey, Adv.
versus
JVG FINANCE ..... Respondent
Through : Mr. Rajiv Bahl, official
liquidator.
+ CO.APP. 46/2014 & CM Nos.14080-14083/2014
K.M.PATTAMMAL ..... Appellant
Through : Mr. Ashutosh Dubey, Adv.
versus
J.V.G.FINANCE LTD. ..... Respondent
Through : Mr. Rajiv Bahl, official
liquidator.
+ CO.APP. 47/2014 & CM Nos14092-14095/2014
LAXMI PALLA ..... Appellant
Through : Mr. Ashutosh Dubey, Adv.
versus
Page 1 of 2
JVG FINANCE ..... Respondent
Through : Mr. Rajiv Bahl, official
liquidator.
CORAM:
HON'BLE MS. JUSTICE GITA MITTAL
HON'BLE MR. JUSTICE SUNIL GAUR
2
GITA MITTAL, J. (Oral)
1. These appeals lay a challenge to the orders dated 23rd
August, 2011; 25th August, 2011; 9th September, 2011; and 22nd
November, 2011. By these orders, the learned Company Judge has
dismissed the applications filed by the appellants under Section
536 (2) of the Companies Act praying for acceptance of the sale of
plots of the respondent's company to them. Inasmuch as the
identical question on law and facts are concerned, we are taking up
these appeals together.
2. Notice has been served on the respondent company which is
under liquidation. Mr. Rajiv Bahl, learned Standing Counsel for
the official liquidator who is present in another case listed today,
accepts notice of this case on behalf of the respondent. Copies of
the appeals have been received by Mr. Rajiv Bahl, Standing
Counsel who has been heard in the matter.
3. The respondent before us was the company registered under
the provisions of the Companies Act, 1956 in respect of which
liquidation proceedings under C.P.No.265/1998 are pending. In
these proceedings order dated 5th of June, 1998 was passed by the
learned Company Judge holding that there were sufficient grounds
in the case for appointment of provisional liquidator. Therefore,
the official liquidator attached to the court was appointed as the
provisional liquidator who was directed to take charge of all assets
and properties of the court with books of accounts and other
records.
4. In these bunch of appeals, the appellants claim to have
entered into separate agreements to purchase plot/land which were
owned by the respondent company. It is claimed by the appellants
that these agreements are dated much prior to even filing of the
winding up petition before the passing of the order appointing the
official liquidator as the provisional liquidator of the company.
Payments of amounts detailed in the appeals are claimed to have
been made by the appellants before the filing of the winding up
petition against the respondent.
5. We may note that by the order dated 18th of October, 1997,
the Reserve Bank of India had restrained the official liquidator
from accepting the deposits or alienating any assets except for the
purpose of repayment of deposit.
6. It is urged by the appellant that one Colonel M.J. Ganapati
claiming himself the Project Manager and the Authorized
Representative of the respondent company took further payment
even after the winding up orders were passed and the official
liquidator had been appointed as the provisional liquidator. He
further executed sale deeds in favour of the appellant purporting to
act on behalf of the company.
7. The said Colonel Ganapati concealed the factum of the
pendency of winding up proceedings and the orders passed therein.
The appellant makes a grievance that these properties of the
company were located at Hyderabad and the appellants were
otherwise also not aware of the proceedings or the orders passed by
the learned Company Judge.
8. During the process of liquidation, claims were invited by the
official liquidator resulting in several persons making claims in
respect of large number of transactions relating to land or otherwise
before the official liquidator.
9. A One Man Committee was appointed by the learned
Company Judge to examine the merits of these claims. The
appellants also submitted their claims before the said committee.
The claims of the appellants were rejected even though the validity
of the agreements to sell that they were entered before the date of
filing of the winding up petition was accepted by the One Man
Committee however, the Committee held that the balance
payments were taken after the order passed by the Reserve Bank of
India dated 18th July, 1997 restraining the company in liquidation
from accepting deposits or alienating any assets of the company
except for the purpose of repayments of deposits and after
appointment of provisional liquidator and that the sale deed in
favour of these appellants was bad in law.
10. The appellants thereafter approached the learned Company
Judge by filing the application under Section 536(2) of the
Companies Act seeking validation of the approval in their favour.
The appellants have urged that they were the bonafide purchasers
without knowledge of the passing of the order dated 18th of
October, 1997 of the Reserved Bank of India or the order dated 5 th
of June, 1998 of the learned Company Judge appointing the
provisional liquidator. They also claimed that they have paid entire
consideration of the plot in question in terms of the agreement to
sell which was unauthorisedly entered into by the respondent
company and hence the present case was a fit case for passing of
the order under Section 536(2) of the Companies Act.
11. We are informed that apart from the appellants there were
several other persons who were identically situated who had been
also directed by Mr. Ganpati to part with the remaining part of the
sale consideration for the lands. Their claims were also rejected by
the One Man Committee and they had also approached the learned
Company Judge by way of filing an application under Section
536(2) of the Companies Act. Some of these applications were
rejected by the learned Company Judge by order passed on 23 rd
August, 2011 and 9th September, 2011 compelling these persons to
file the appeals before the Division Bench of this court including
the Company Appeal Nos.15/2012; 16/2012; 17/2012; 18/2012;
19/2012; 21/2012; 22/2012; 36/2012; 37/2012; 38/2012; 39/2012;
40/2012; 41/2012; 46/2012; 47/2012; 48/2012; 49/2012; 50/2012;
53/2012; 54/2012; 55/2012; 56/2012; 103-112/2012.
These appeals were considered by the Division Bench and
by the order dated 6th of September, 2012, the orders of the learned
Company Judge rejecting their applications under Section 536(2)
of the Companies Act came to be set aside.
12. Mr. Ashutosh Dubey, learned counsel for the appellant has
also placed before us a subsequent order dated 17th December,
2012 passed on Co.App.Nos.103, 104, 105, 106, 107, 108, 109,
110, 111, 112 all of 2012 raising an identical challenge wherein
also similar appeals of the appellants were also accepted.
13. Mr. Rajiv Bahl, learned counsel has pointed out certain new
facts which were placed before the Appellate Bench. It was
pointed out by Mr. Rajiv Bahl that the Income Tax Department had
passed an order of attachment dated 14 th September, 1998, soon
after the appointment of the official liquidator but before execution
of the sale deed. Mr. Bahl, learned counsel has also pointed out to
this court that the learned Company Judge had referred the matter
to the Serious Fraud Investigation Office, report whereof was
awaited which shall have a serious bearing on the outcome of the
application.
14. There can be no dispute with regard to the fact that receipt of
the part sale consideration by Colonel Ganapati, was without any
authority of law. The sale deed was executed by him after passing
of the order of the Reserve Bank of India as well as after
appointment of the provisional liquidator. The One Man
Committee had however accepted the validity of the agreements to
sell as well as receipt of the part payment by the company prior to
the filing of the widing up petition.
In this background, even if the receipt of the consideration
by Colonel Ganapati and the execution of the sale deed was
invalid, the learned Company Judge would be required to examine
the question as to whether the appellants were the bonafide
purchaser of the property in question or not.
15. It is submitted by Mr. Dubey, learned counsel for the
appellant, that without prejudice to the rights and contentions that
they have validly paid sale consideration, in order to obviate any
further delay and for reasons of expediency, the appellants are
willing to make payment of the balance consideration afresh to the
account of the company with the official liquidator.
16. This offer also deserves to be considered before the learned
Company Judge. We are informed that the cases of the appellants
which came to be decided on 6th of September, 2012 and 17th of
December, 2012 are still pending consideration before the learned
Single Judge.
17. The report of the Serious Fraud Investigation Office has
been placed before the learned Single Judge but has yet to be
considered by the court. The Income Tax Authority as yet to
submit their report on consideration of the matter. Interests of
justice merit that the claims of these appellants be also placed with
the claims of the other persons in the previously decided appeals
who are identically placed as the present appellants deserve to be
considered afresh by the learned Company Judge in the light of the
observations made by us herebefore.
18. Undoubtedly, there is delay in not only filing the appeal but
also in refiling. The appellant has given sufficient explanation
seeking condonation of the delay of the applications filed in this
regard. For the view we have taken based on the orders passed on
6th of September, 2012 and 17th of December, 2012, we are inclined
to accept the explanation tendered by the appellants, firstly, in
filing the appeals and thereafter, in refiling the same as well.
19. The view has been taken in the peculiar facts and
circumstances which have been set out in detail above.
20. In view of the above, we direct as follows:
(i) the delay in filing the appeals as well as the refiling the same
is hereby condoned.
(ii) the impugned orders dated 23rd August, 2011; 25th August,
2011; 9th September, 2011; and 22nd November, 2011 are hereby
set aside and quashed.
(iii) the cases are remanded to the learned Company Judge for
deciding on merit afresh in the light of the observations made by us
in this order as well as taking into consideration the attachment by
the Income Tax Department and the findings returned by SFIO in
its report.
(iv) it shall be open for the Company Judge to also consider any
other matter which is placed by the party concerned before it.
(v) the appellant shall appear before the learned Single Judge on
the 19th of December, 2014 when similar cases are stated to be
listed.
These appeals and applications are allowed in the above
terms.
GITA MITTAL
(JUDGE)
SUNIL GAUR
(JUDGE)
SEPTEMBER 12, 2014
mk
