Govt Of India vs M/S Mewar Textiles And Ors
2023 Latest Caselaw 2645 Raj

[2023/RJJD/008285]

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR S.B. Interlocutory Appli. No. 833/2010 in S.B. Company Petition No. 8/2000

Government of India

----Petitioner Versus M/s Mewar Textiles & Ors.

                                                                   ----Respondent


For Petitioner(s)           :     Mr. Vineet Dave
For Respondent(s)           :     Mr. D.K. Meena, Official Liquidator

HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI

Order

Reserved on 29/03/2023 Pronounced on 04/04/2023

1. The instant application has been preferred claiming the

following reliefs:

"(i) the applicant may kindly be permitted to be added as party to the petition;

(ii) the Official Liquidator may be directed to hand over the possession of the entire property auctioned in favour of the applicant and covered by the certificate dated 6.1.2010;

(iii) the State Government may be directed to make necessary entries in the revenue record showing the applicant to be the owner of the land on which the property in question is situated;

(iv) the payment to the workers should be released on the condition of handing over of possession of the part of the property in question which is in their possession;

(v) since the applicant is suffering daily loss to the tune of Rs.4,17,333/-, the applicant may be suitably compensated for the loss of interest suffered by it either from the amount deposited by it to the company or from the person who is

[2023/RJJD/008285] (2 of 6) [COP-8/2000]

responsible for causing delay in handing over the possession;

(vi) any other appropriate order or direction which may be deemed just and proper in the facts and circumstances of the case, may kindly be issued in favour of the applicant;

(vii) costs of the application may kindly be awarded in favour of the applicant."

2. At the outset, it has been brought to the notice of this Court

that the reliefs prayed for herein, except prayer clause (v), have

already been granted to the applicant, and therefore, learned

counsel for the parties confined their arguments to the said prayer

only.

3. As regards prayer clause (v), it is pertinent to note, as

averred in the application, that the property belonging to

respondent no.1 was put to auction in compliance of an order

passed by the learned Debt Recovery Tribunal, Jaipur, in

pursuance to the Recovery Certificate No. 109/2003 in O.A. No.

106/2001. The auction, as informed by the applicant, took place in

the month of December, 2009 and bid, as submitted by applicant-

M/s Geetanjali to the tune of Rs. 1,25,20,00,000/-, was confirmed

by the learned Tribunal; and the applicant deposited the complete

bid on 18.12.2009. The order of confirmation of sale of the

property was issued by Recovery Officer on 06.01.2010. However,

applicant- M/s Geetanjali filed an application which came to be

allowed with a direction to the Official Liquidator to ensure

handing over the complete physical possession of the remaining

part of the auctioned property in question. The possession was

delivered to applicant- M/s Geetanjali on 20.09.2015. Applicant -

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M/s Geetanjali had to secure loans from various entities with

interest, so as to enable it to deposit the bid amount, which is also

reflected in the audited balance sheets.

4. Learned counsel for the applicant submitted that on account

of delay in handing over of the actual physical possession of the

auctioned property, the applicant is suffering heavy monetary

liabilities in the form of loans secured by it from various entities,

and therefore, the applicant deserved to be paid interest upon the

sum of Rs. 125.20 crores from 19.12.2009 to 20.09.2015.

4.1. Learned counsel further submitted that the applicant did not

contravene any of the terms and conditions relating to the

payment of the auction amount, and therefore, is entitled for the

interest upon the aforementioned amount. He also submitted that

the auction amount was turned into FDR's which attracts interest

at the applicable rate of interest from time to time, which clearly

substantiates the claim of the applicant to receive interest on the

amount. He also submitted that since the applicant deposited the

amount of Rs. 125.20/- crores, therefore, it is incurring a loss of

interest to the tune of Rs. 4,17,333/- per day (when calculated at

the rate of 12% per annum), in absence of possession of property

in question.

4.2. In support of his submissions, learned counsel relied upon

the judgments of this Hon'ble Court in the case of Mtm

Employees Staff Consumer Cooperative Society Ltd. Vs The

Official Liquidator and Anr. (S.B. Company Petition No. 3 of

2018) decided on 04.04.2019, Virendra Mal Bhandari Vs.

Mewar Taxtile Mills Ltd. (S.B. Company Petition No. 2 of

[2023/RJJD/008285] (4 of 6) [COP-8/2000]

2018) decided on 04.04.2019, and M/s Chunni Lal Vs The

Official Liquidator. (S.B. Company Petition No. 9 of 2020)

decided on 09.09.2020.

4.2.1 He further relied upon the following judgments:

(a) Hans Raj Banga Vs. Ram Chander Aggarwal, (2005) 4 SCC

572;

(b) Motors & Investment Ltd. Vs. New Bank of India & ors.,

(1997) 11 SCC 271;

(c) State of U.P. Vs. Jaswant Sugar Mills Ltd., (2014) 16 SCC 760;

(d) Sovintorg (India) Ltd. Vs. State Bank of India, New Delhi,

(1999) 6 SCC 406;

(e) Hindi Pracharak Prakashan & Anr. Vs. M/s. G.K. Brothers &

Ors., 1993 Supp.(1) SCC 419; and

(f) Kesari Vanaspati Products Ltd. Vs. IDBI, (2010) 102 SCL 225

(Raj.).

5. On the other hand, learned counsel appearing on behalf of

the non-applicants, while opposing the aforesaid submissions

made on behalf of the applicant, submitted that in respect of

identification, title deed and demarcation of the land auctioned by

the learned Debt Recovery Tribunal, the Official Liquidator has

approached the concerned authorities to clarify the position of law

in regard thereto, and for the time taken in such an exercise,

which is procedural, no individual can be held responsible.

5.1. Learned counsel further submitted that it was the duty of the

applicant-auction purchaser to have purchased the land after

thorough inspection of documents and measurement of land, but

did not undertake such an exercise; however, the Official

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Liquidator took all the necessary steps and handed over the

possession of the property in question to the applicant.

5.2. Learned counsel however, submitted that the Official

Liquidator gave the symbolic and actual possession to the auction

purchaser on 02.03.2010 and 12.06.2013 respectively; the

remaining possession of the land occupied by the

Workmen/Employees of respondent no.1-M/s. Mewar Textile was

handed over to the auction purchaser on 09.09.2015 and

19.09.2015, in pursuance of the directions of a Division Bench of

this Hon'ble Court in D.B. Special Appeal No. 22/2013, as per

possession memo dated 20.09.2012. He further submitted that

there is no provision in the previous Company Law, i.e. Companies

Act, 1956 and the Rules made thereunder, applicable in the

present case, regarding payment of interest, as claimed by the

applicant herein.

6. Heard learned counsel for the parties as well as perused the

record of the case, alongwith the judgments cited at the Bar.

7. This Court observes that the auction in question took place in

the month of December, 2009, and the bid of applicant-M/s

Geetanjali to the tune of Rs. 1,25,20,00,000/-, was confirmed by

the Tribunal in favour of the applicant. The complete bid amount

was deposited by the applicant on 18.12.2009. Thereafter,

applicant-M/s Geetanjali has been impleaded as party in the

company petition vide order dated 27.01.2010 passed by this

Hon'ble Court. The complete physical possession of the property in

question was handed over to the applicant-M/s Geetanjali on

20.09.2015.

[2023/RJJD/008285] (6 of 6) [COP-8/2000]

8. This Court further observes that the applicant-M/s Geetanjali

raised a claim for payment of interest on the complete bid amount

from 19.12.2009 to 20.09.2015. The Official Liquidator has

approached the learned Tribunal, but completion of the procedural

formalities in regard to handing over the possession of the

property took a long period, for which no one can be held

responsible.

9. This Court also observes that the Companies Act, 1956 has

been enacted by the Parliament (and the Rules were framed

thereunder) with an object to deal with all the matters pertaining

to Companies, viz. formation, remedy, authorities, and other

related matters; but the Companies Act, 1956 and the Rules did

not have any provision for interest on the amount, as claimed in

the present application. Therefore, the claim of applicant-M/s

Geetanjali for interest on the amount in question does not deserve

acceptance, on count of no provision contained in the previous

enactment i.e. Companies Act, 1956 and the Rules framed

thereunder.

10. The judgments cited at the Bar by learned counsel for the

applicant do not render any assistance to the case of the applicant

in this application.

11. Thus, this Court is not inclined to entertain the instant

application and the same is hereby dismissed.

(DR.PUSHPENDRA SINGH BHATI), J.

SKant/-

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