Madhya Pradesh High Court
M.P State Industrial Development ... vs Npa Infraestate Pvt Ltd Through Its ... on 29 April, 2025
Author: Vivek Rusia
Bench: Vivek Rusia
NEUTRAL CITATION NO. 2025:MPHC-IND:11209
-1- COMA-01-2025
IN THE HIGH COURT OF MADHYA PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE VIVEK RUSIA
&
HON'BLE SHRI JUSTICE GAJENDRA SINGH
COMPANY APPEAL No. 1 of 2025
M.P STATE INDUSTRIAL DEVELOPMENT CORPN.
Versus
NPA INFRAESTATE PVT LTD THROUGH ITS DIRECTOR SHRI
SANJAY AGARWAL AND OTHERS
Appearance:
Ms. Bhakti Vyas - Advocate for the appellant.
Vijay Kumar Asudani, learned counsel for the respondent No.1.
Reserved on : 15.04.2025
Delivered on : 29.04.2025
ORDER
Per: Justice Vivek Rusia
The appellant : Madhya Pradesh State Industrial Development
Corporation (hereinafter referred as "MPSIDC") has filed this appeal
under Section 483 of the Companies Act, 1956 challenging the order
dated 14.10.2024, whereby the Company Judge has allowed an
application filed by the respondent No.1 and granted permission to file
civil suit.
The facts of the case in short are as under:
02. Deutsche Bank has filed a company petition against M/s Alpine
Industries Ltd. (hereinafter referred to as "the company in liquidation")
before this High Court which is registered and pending as Company
Petition No.25/1998. The MPSIDC had extended financial facility to the
tune of Rs.28.45 crores to "the company in liquidation". Since there was
a default in repayment, MPSIDC under the provisions of the State
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Financial Corporation Act, 1951 (hereinafter referred to as "Act of
1951") took over the possession of Pithampur unit and Mangalia Plant
of "the company in liquidation" on 17.04.2004.
03. The MPSIDC had entered into a tripartite agreement dated
15.01.2014 with M/s NPA Infraestate Pvt. Ltd. and "the company in
liquidation" for the sale of the Pithampur plant and land. The MPSIDC
handed over the limited possession to M/s NPA Infraestate Pvt. Ltd. for
which MPSIDC received Rs.9.08 crores from M/s NPA Infraestate Pvt.
Ltd. Since the complete sale consideration was not paid, the MPSIDC
has terminated the tripartite agreement vide letter dated 27.05.2017 and
took back the possession of Pithampur plant of "company in
liquidation" on 01.06.2017. According to the MPSIDC, Shri Satish
Bhandari, the Promoter of "the company in liquidation" has illegally
removed the plant and machinery of the Pithampur plant and sold it for
which the FIR at crime No.339/2017 was lodged at Police Station
Sector-1 Pithampur on 10.10.2017.
04. The Company Judge passed an order of winding up of "the
company in liquidation" on 08.02.2017. The Official Liquidator vide
letter dated 26.05.2017 took over the possession of Pithampur and
Mangalia plant and the Company Judge passed an order of winding up
of "the company in liquidation" on 08.02.2017 in pursuant to the
winding up order dated 08.02.2017.
05. In a company petition, M/s NPA Infraestate Pvt. Ltd. has filed
an application under Section 446 of the Companies Act, 1956 read with
Section 279-280 of the Companies Act, 2013 seeking permission to file
a civil suit against MPSIDC as well as "the company in liquidation" for
recovery of Rs.14.08 crores, which was paid in pursuant to the tripartite
agreement. In the said application, the notices were issued to MPSIDC
as the same was not a party in the company petition. After the
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appearance, of the MPSIDC, a reply to oppose the application was filed
in a company petition. After hearing the learned counsel for the parties,
the learned Company Judge, vide order dated 14.10.2024, has allowed
the application by granting permission to M/s NPA Infraestate Pvt. Ltd.
to file a civil suit. Hence, this company appeal before the Division
Bench of this Court.
06. Ms Bhakti Vyas, learned counsel appearing for the appellant
submitted that the learned Company Judge had wrongly passed an order
under Section 446 of the Companies Act, 1956 for granting permission
to file a suit against the MPSIDC because the permission can be granted
to file a suit only against "the company in liquidation". Since the
MPSIDC is not a "company in liquidation" and also not a party in the
company petition, therefore, the suit cannot be filed with prior
permission in the company petition. Hence, the impugned order is liable
to be set aside.
07. Shri Vijay Kumar Asudani, learned counsel for respondent No.1
/ NPA Infraestate Pvt. Ltd. argued to oppose this appeal that after the
permission granted by the Company Judge, the civil suit has already
been filed. Learned counsel further argued that the MPSIDC had
knowledge about the pendency of the company petition before this
Court and despite that, the answering respondent was kept in the dark
and lured to enter into a tripartite agreement to get money Rs.26.30
crores. The answering respondent has no remedy but to file a civil suit
to recover the amount of Rs.9.08 crores with interest as the agreement
has been terminated unilaterally.
08. Learned counsel appearing for the appellant again submitted
that now the order of winding up has been passed and the „company-in-
liquidation‟ is in control of the Official Liquidator, therefore, respondent
No.1 is required to submit its claim before the Official Liquidator and
NEUTRAL CITATION NO. 2025:MPHC-IND:11209
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same shall be considered in accordance with the provisions of the
Companies Act and the Rules.
09. In reply, Shri Asudani, learned counsel for respondent No.1
submitted that at present the petitioner is only entitled to get the money
decree in its favour and against the MPSIDC and "the company in
liquidation" and, after obtaining the decree, the same shall be submitted
before the Official Liquidator for realization of the money. In support of
the contention, learned counsel has placed reliance on the judgment
passed by the Hon'ble Apex Court in the case of Rajasthan State
Financial Corpn. and another v/s Official Liquidator and another
reported in 2005(8) SCC 190.
Appreciations and Conclusion
10. The only legal issue which has been raised by learned counsel
appearing for the appellant is that the permission under Section 446 of
the Companies Act, 1956 can be granted against "the company in
liquidation". It is not in dispute that the NPA Infraestate Pvt. Ltd.,
MPSIDC and the ex-directors of the „company-in-liquidation‟ had
entered into a tripartite agreement and by virtue of the said agreement
NPA Infraestate Pvt. Ltd. paid the amount to the tune of Rs.15 crores to
the MPSIDC. The MPSIDC took possession of "the company in
liquidation" by virtue of the provisions of Section 29(5) of the Act of
1951. Section 29(5) of the said Act provides that the financial
corporation shall be deemed to be the owner of such concern, for the
purposes of suits by or against the concern if the action has been taken
against the industrial concern under provisions of sub-section (1).
Therefore, the Company Judge has rightly held that the NPA Infraestate
Pvt. Ltd. has only remedy left to file a civil suit against the MPSIDC
and others to get back their money. The MPSIDC has virtually stepped
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into the shoes of "the company in liquidation".
11. Even otherwise, Shri Asudani, learned counsel has rightly
submitted that at present, the NPA Infraestate Pvt. Ltd. will get the
money decree from the civil Court and after obtaining the decree, the
claim will be submitted before the Official Liquidator for the
distribution of money. For the sake of arguments if it is held that no
permission is required from the Company Judge before filing the suit
against the MPSIDC even then the NPA Infraestate Pvt. Ltd being
plaintiff dominus litius can add the MPSIDC as co-defendant in the suit.
12. The Hon'ble Apex Court in the case of Rajasthan State
Financial Corpn. and another (supra) has held that if the Financial
Corporation acting under Section 29 of the SFC Act seeks to sell or
otherwise transfer the assets of a debtor "company in liquidation", the
said power could be exercised by it only after obtaining the appropriate
permission from the Company Court. Even for the sale of the properties
of the debtor under the Recovery of Debts and Bankruptcy Act, 1993,
the Hon‟ble Apex Court has held that same could be done only after
notice to the Official Liquidator. In the suit, "the company in
liquidation" will be represented by the Official Liquidator.
13. In view of the above, we do not find any ground to interfere in
the matter. Accordingly, this Company Appeal stands dismissed.
(VIVEK RUSIA) (GAJENDRA SINGH)
JUDGE JUDGE
Divyansh
