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COMA/425/2009 30/ 30 ORDER
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
COMPANY
APPLICATION No.425 of 2009
In
OFFICIAL
LIQUDATOR REPORT No.20 of 2007
===================================================
MANIBHADRA
SALES CORPORATION - Applicant(s)
Versus
OL
OF MOTOROL (INDIA) LTD & 4 - Respondent(s)
===================================================
Appearance
:
MR NAVIN PAHWA for MRS
SANGEETA N PAHWA for the Applicant
OFFICIAL
LIQUIDATOR for Respondent(s) : 1,
MR JS YADAV for Respondent(s) :
1,
MSBALARTHACKER for Respondent(s) : 2,
NOTICE SERVED for
Respondent(s) : 3,
NOTICE UNSERVED for Respondent(s) : 4,
MR
RAJESH P MANKAD for Respondent(s) :
5,
===================================================
WITH
OFFICIAL
LIQUDATOR REPORT No.6 of 2010
In
COMPANY
PETITION No.29 of 1997
===================================================
OL
OF MOTOROL(INDIA) LTD. - Applicant(s)
Versus
BANK
OF BARODA & 5 - Respondent(s)
===================================================
Appearance
:
OFFICIAL LIQUIDATOR for Applicant(s) : 1,MR JS YADAV for
Applicant(s) : 1,
NOTICE SERVED BY DS for Respondent(s) : 1 - 4,
6,
MR RAJESH P MANKAD for Respondent(s) :
5,
===================================================
WITH
COMPANY
APPLICATION No.494 of 2009
In
OFFICIAL
LIQUDATOR REPORT No.20 of 2007
===================================================
SARVAIYA
EXPORTS LIMITED & 1 - Applicant(s)
Versus
OL
OF MOTOROL (INDIA) LTD - Respondent(s)
===================================================
Appearance
:
MR NAVIN K PAHWA for Applicant(s) : 1 - 2.
OFFICIAL
LIQUIDATOR for Respondent(s) : 1,
MR JS YADAV for Respondent(s) :
1,
===================================================
CORAM
:
HONOURABLE
MR.JUSTICE D.A.MEHTA
Date
: 08-09.02.2010
COMMON
ORAL ORDER
ORDER
IN COMPANY APPLICATION No.425 of 2009
Both
these matters have been heard together as they involve the same
subject matter, namely, plant and machinery which is claimed by the
applicant of Company Application No.425 of 2009 to have been
purchased at the auction held by the sale committee as confirmed by
the Company Court vide order dated 05.08.2008 made in Official
Liquidator Report No.20 of 2007, whereas the stand of the Official
Liquidator is that the said property was never put up for
sale and hence, there is no question of such a sale being confirmed
by the Company Court. Official Liquidator Report No.6 of 2010 has
been preferred for putting up the disputed property for sale.
DATED:
09.02.2010
The
Company (in liquidation) was ordered to be wound up vide order dated
19.08.1999 made in Company Petition No.29 of 1997. Pursuant thereto
the Company Court directed constitution of a sale committee to put
up properties of Company (in liquidation) for sale. One of the
properties so put up for sale was described as Lot No.B-4 being
building/civil construction, plant and machineries and all other
movables, (except records), situated at Plot No.10, Revenue Survey
No.73, Village Duniya, Taluka Halol, Dist. Panchmahals. The upset
price was fixed at Rs.55,00,000/- on the basis of valuation report
showing value to be Rs.53,48,000/-. At the inter se bidding
before the sale committee the applicant herein emerged the highest
bidder at Rs.1.50 crores. Official Liquidator therefore, approached
the Company Court with Official Liquidator Report No.20 of 2007 and
vide order dated 05.08.2008 the sale was confirmed for a sum of
Rs.1.50 crores in favour of the the present applicant.
Before
the applicant could be put in possession of the property in question
one Sahara Packaging Pvt. Ltd. (Sahara Packaging) preferred
Company Application No.455 of 2008 pursuant to connected application
being Company Application No.34 of 2007. In Company Application
No.455 of 2008 following order dated 17.10.2008 came to be made by
the Court:
5. In
view of aforesaid, it is hereby ordered, without prejudice to the
rights and contentions of the parties and as observed earlier, that
the parties shall see that Company Application No.34 of 2007 is
heard and decided at the earliest and they are directed to cooperate
with the hearing of the said Application. Opponent no.8-Auction
Purchaser be returned the amount of Rs.1.45 crores, out of the
amount of Rs.1.50 crore paid, in view of the complexity from the
amount of sale consideration paid by it. The Official Liquidator
shall retain the remaining amount of Rs.5 lakhs at present as part
of consideration against sale. If the applicant of Company
Application No.34 of 2007 succeeds, opponent no.8 can be permitted
to back out from the bid and its commitment to pay the amount of
sale consideration. Further, opponent no.8 can get its amount of
Rs.5 lakhs of the company back, retained and lying with the Official
Liquidator. If the present applicant and applicant of Company
Application No.34 of 2007 ultimately fails in the proceedings,
opponent no.8 can pay the amount of Rs.1.45 crores to the Official
Liquidator as amount of consideration within a reasonable period of
time, not exceeding 30 days from the date of outcome of Company
Application No.34 of 2007 and can claim the property as purchased by
it. The Official Liquidator or any secured creditor may not be
permitted to carry out a fresh auction only on the ground of efflux
of time or any other ground whatsoever.
6. If
the present applicant and applicant of Company Application No.34 of
2007 fails in the proceedings of Company Application No.34 of 2007
and opponent no.8-Auction Purchaser-Manibhadra Corporation is not
inclined to continue with its claim of purchase of properties as a
successful bidder, it may be liable to pay the costs to the Company
in liquidation to the maximum of Rs.5 lakhs. The recovery of costs
or loss shall not exceed the amount of Rs.5 lakhs i.e. equal to the
entire sum of Rs.5 lakhs, and the same can be confiscated if this
Court so orders. It will be open for the Court to return this amount
after hearing the parties and in other background.
Subsequent
thereto after hearing all the parties even Company Application No.34
of 2007 came to be rejected vide judgment rendered on
23.07.2009-06.08.2009. The claim made on the basis of alleged
purchase of a part of plant and machinery by Sahara Packaging was
rejected by this Court.
Thereafter,
on 05.11.2009 the applicant was put in possession of the property in
question. However, it appears that a part of plant and machinery was
not handed over to the applicant. Hence, in the minutes recorded on
05.11.2009 following endorsement came to be made by the petitioner:
I
took pussession of plant and machinery with a objection regarding
the machineries of sahara packaging is lying in side the premise.
Subsequent
thereto on 12.11.2009 the applicant wrote to the Official Liquidator
to hand over possession of the entire property comprising of Lot
No.B-4. Admittedly, the liquidator did not respond to the said
communication.
In
the backdrop of the aforesaid facts and circumstances of the case
learned advocate for the applicant submitted that as per the
description in salient features of the assets, which were put up for
sale, offer had been invited for plant and machineries and all other
movables (except records) and hence, there was no question of any
part of plant and machineries not forming part of Lot No.B-4. The
use of the phrase all other movables was emphasised in
support. That in fact no such stand had been adopted by the
liquidator at any stage prior to the point of time of filing reply
to this application. It was further submitted that against an upset
price of Rs.55,00,000/- when a purchaser is ready and willing to
offer a sum of Rs.1.50 crores that would itself indicate that the
applicant had made a consolidated bid for all the movable assets
described in Lot No.B-4 and part of plant and machineries could not
be segregated or kept out of the said lot. Learned advocate,
therefore, submitted that the applicant was entitled to possession
of the entire property described in Lot No.B-4 and necessary
direction in this regard be issued to the Official Liquidator of the
Company (in liquidation).
As
against that learned advocate appearing for the Official Liquidator
submitted that the two sets of plant and machineries were separate,
were lying at separate place though in the same compound, and from
inception the intention of the liquidator and the sale committee was
not to include the said lot of machineries in the property put up
for sale. That this fact could be borne out from two separate
valuation reports which had been obtained by the liquidator as
placed on record of Official Liquidator Report No.6 of 2010. In fact
in Official Liquidator Report No.6 of 2010 the liquidator had moved
the Court for permission to put up the said separate assets for
sale. It was further submitted that once valuation had been carried
out separately for both the sets of plant and machineries there was
no question of treating both the sets as part of one lot as
contended by the applicant. An incidental submission was that the
applicant had approached the Court belatedly and had not raised any
objection when the possession had been handed over. That the
application was an afterthought having been filed only after
rejection of Company Application No.34 of 2007 and therefore
deserved to be rejected.
In
light of the controversy brought before the Court it was found
necessary to peruse the original record of Official Liquidator
Report No.20 of 2007 as well as Company Application No.34 of 2007 to
ascertain whether the liquidator or the sale committee had recorded
anything in relation to the property in question when sanction was
sought for confirming the sale in favour of the highest bidder.
Accordingly, the Court had called for papers of Official Liquidator
Report No.20 of 2007 as well as Company Application No.34 of 2007.
A
plain reading of the report of the Official Liquidator as appearing
in Official Liquidator Report No.20 of 2007 would indicate that at
no place there is any averment indicating to the Company Court that
the property comprised of Lot No.B-4 is only a part of the property
of the Company (in liquidation) lying (situated) at the same
premise. The record of Official Liquidator Report No.20 of 2007 also
does not indicate that two separate valuation reports had been
obtained by the liquidator in relation to the property put up for
sale and the property in dispute which, according to the liquidator,
had been separately valued. In fact no valuation report in relation
to the property comprised of Lot No.B-4 is available on record of
Official Liquidator Report No.20 of 2007.
In
these circumstances, there is nothing to indicate that the Company
Court, who confirmed the sale of Lot No.B-4 on 05.08.2008 in favour
of the applicant, was ever informed, in any manner whatsoever, that
there were assets other than assets put up for sale and situated at
the premises in question, namely, Plot No.10, Revenue Survey No.73,
Village Duniya, Taluka Halol, Dist. Panchmahals. Not only that, even
the Minutes of Meeting of the sale committee, which are available on
record of Official Liquidator Report No.20 of 2007, do not indicate
any such segregation of plant and machineries as is sought to be
contended by the liquidator today.
Company
Application No.34 of 2007 was preferred by Sahara Packaging seeking
possession of the disputed property on the ground that the said
company had purchased the said property before the company was
ordered to be wound up and hence, by virtue of provisions of Section
536(2) of the Companies Act, 1956, the said sale was required to be
validated. When one goes through the record of the said proceedings
it becomes clear that even before Company Application No.34 of 2007
was preferred the said applicant, namely, Sahara Packaging had
approached the Company Court with an earlier application being
Company Application No.556 of 2006 which was permitted to be
withdrawn by the Company Court vide order dated 20.11.2006 to enable
the said applicant to prefer an application as required by
provisions of Section 536(2) of the Act. The said order which is
available on record of Company Application No.34 of 2007 indicates
that learned advocate appearing for the Official Liquidator in the
present proceedings was also representing the Official Liquidator in
the said proceedings but attention of Court was not invited to the
fact that there was either any separate valuation made by treating
the property in dispute as property of the Company (in liquidation)
or that the said property did not belong to Sahara Packaging.
Even
thereafter, when one considers the reply filed by the liquidator in
Company Application No.34 of 2007 at no place has the liquidator
adopted a stand that the property over which Sahara Packaging is
making a claim was either not forming part of the plant and
machinery of the Company (in liquidation) situated at Plot No.10 at
Halol, or that the said property was treated as a distinct property,
distinct from the property described in Lot No.B-4. This aspect has
to be appreciated in context of the fact that Sahara Packaging had
also joined Bank of Baroda, a secured creditor as one of the
respondents in the said proceedings and along with the
affidavit-in-reply filed by Bank of Baroda, the relevant Form which
registered charge contained description of all the machineries,
including the plant and machinery in dispute, was placed on record
to show existing charge of Bank of Baroda by treating the said
properties as properties of the Company (in liquidation).
In
the aforesaid facts and circumstances of the case it is apparent
that at no point of time any distinction was drawn in so far as
plant and machineries of the Halol Unit are concerned, either by the
secured creditor or the company before the winding up proceedings,
and by the liquidator after the commencement of winding up
proceedings. It is only at a later stage, after Sahara Packaging had
approached the Company Court claiming to be owner of the property in
dispute, that the liquidator has adopted the stand that the said
property did not form part of the property described in Lot No.B-4.
In
this context it is necessary to note that the contention raised on
behalf of liquidator that the property was put up for sale on AS
IS WHERE IS AND WHATEVER THERE IS basis. Admittedly, the property
in dispute was part and parcel of the plant and machinery lying at
the same premises and, therefore, it is not possible to say that the
said property was not forming part of the properties comprising Lot
No.B-4. Similarly, merely because the property in dispute was lying
slightly away from the property for which the possession had been
handed over, though on the same plot of land, it would not be a
factor to hold that the said property was not put up for sale, more
particularly when one considers the description of the property put
up for sale in Lot No.B-4. At no place does the record indicate,
either in the Minutes of the Meeting of the sale committee, or the
report tendered by the Official Liquidator seeking confirmation of
sale, or in the collateral proceedings of Company Application No.34
of 2007 that there was a distinct set of machineries which was not
put up for sale as canvassed by learned advocate in the present
proceedings.
In
the reply filed by the Official Liquidator on 03.12.2009 in Company
Application No.425 of 2009 following averments appear in Paragraph
No.2:
.
. . The Plant & Machineries claimed by M/s. Sahara Packaging (P)
Ltd. was excluded in sale of Lot No.B-4 i.e. Building / Civil
Construction, plant & machineries and all other movables, since
the dispute of ownership of the said machineries was then pending in
Company Application No.34 of 2007 filed by M/s. Sahara Packaging (P)
Ltd. claiming the ownership of the said machineries. . . .
However,
there is no evidence in support of the aforesaid averment. In the
property put up for sale by the sale committee one does not find any
clarification that the particular property was excluded from Lot
No.B-4. In absence of any cogent evidence in this regard it is not
possible to accept the stand adopted by the liquidator in these
proceedings at such a belated stage. Factually also this is an
incorrect proposition as following facts show.
The
Minutes of Meeting of the sale committee held on 05.12.2006 record
decision of sale committee to issue proclamation of sale by grouping
the assets of the Company (in liquidation) in different lots. Lot
No.B-4 does not indicate any bifurcation. Nor do the minutes
indicate that at the time of inspection of the properties to be
conducted on 23.12.2006 different sets of properties should be
indicated by appropriate means, like placing a board at the site,
or a notice. The first time precursor of Company Application No.34
of 2007 was disposed of on 20.11.2006. As already noted at that
stage also no such stand (of property being separate) was taken by
the liquidator. Company Application No.34 of 2007 was preferred on
12.01.2007, whereas Official Liquidator Report No.20 of 2007 was
preferred on 23.01.2007. As noted in none of those proceedings any
such segregation is pointed out. Hence, the averment in Paragraph
No.2 of reply filed on 03.12.2009 by the Official Liquidator in
Company Application No.425 of 2009 is factually incorrect.
It
is an accepted position between the parties, that after the judgment
was rendered in Company Application No.34 of 2007 the Official
Liquidator called upon the applicant to make payment of Rs.1.45
crores which had been returned by the Official Liquidator pursuant
to order dated 17.10.2008 made in Company Application No.455 of
2008. The applicant has made payment of the said sum of Rs.1.45
crores on 20.10.2009. Thus, as of today the liquidator has already
received the full sale consideration of Rs.1.50 crores considering
that the amount of Rs.5,00,000/- was permitted to be retained by the
Official Liquidator by the Court vide order dated 17.10.2008.
In
these circumstances, Company Application No.425 of 2009 is required
to be allowed, subject to the following directions.
The
Official Liquidator of Motorol (India) Limited, Company (in
liquidation), is hereby directed to hand over possession of the
remaining properties comprising Lot No.B-4, situated at Halol plant
of the company in liquidation at Plot No.10, Revenue Survey No.73,
Village Duniya, Taluka Halol, Dist. Panchmahals within a period of
ten working days from 10.02.2010. The applicant shall cart away the
machineries within a period of five days from the date of being
handed over possession (as agreed by the learned
advocate of the applicant). Thereafter the applicant
shall forthwith give written intimation to the
Official Liquidator that entire plant and machinery
has been removed from the land in
question.
Company
Application No.425 of 2009 stands allowed accordingly in the
aforesaid terms with no order as to costs.
ORDER
IN OFFICIAL LIQUIDATOR REPORT NO.6 OF 2010
The
Official Liquidator has prayed for following reliefs:
This
Hon’ble Court may be pleased to permit the
Official Liquidator to fix up the Upset Price and EMD as
stated in para-7 herein above, and the
Official Liquidator may also be permitted to invite offers
for purchase of assets of the company as per lots described in
para-7 of this report by publishing advertisement in Indian Express
in English Script in Baroda Edition and Gujarat Samachar in Gujarati
Script in Baroda and Ahmedabad Edition on 09.02.2010.
Such
other and further orders and directions, as this Hon’ble Court may
consider just and appropriate may also be passed.
The
properties in question have been described in Paragraph No.7 of the
report. In light of the order of even date made in Company
Application No.425 of 2009, the properties described in Lot ‘C’
which is as under cannot be put up for sale and hence, shall stand
excluded for the purposes of issuance of advertisement and receipt
of offers for the purpose of sale:
‘C- Halol
Plant at Plot No.10, R.S. No.73, Village-Duniya, Tal. Halol.’
Lot
No.
Description
Upset
Price
(Rs.)
EMD
(Rs.)
C
Plant
& Machineries claimed by Sahara Packaging Pvt. Ltd.
10
Lacs
1
Lacs
Accordingly,
the Official Liquidator is directed to put up properties described
in Lot Nos.A, B and D for sale subject to rescheduling the programme
for sale of assets as under:
Date
of Advertisement
:
04.03.2010
Date
of Issue of Tender Forms
:
04.03.2010
Date
of Inspection of the properties
:
Gametha
Plant
on
18.03.2010
Wind
Mill at Rajkot
18.03.2010
Motorol
House
on
19.03.2010
Between
11:30 a.m. and 4:30 p.m.
Last
date of receipt of tender
:
30.03.2010
upto
4:00 p.m.
Date
of auction
:
30.03.2010
at 5:00 p.m.
The
report stands disposed of accordingly.
ORDER
IN COMPANY APPLICATION No.494 of 2009
This
application seeks following reliefs:
That
this Hon’ble Court may be pleased to direct the Official
Liquidator to forthwith handover possession of land forming
part of Lot B-1 and B-2 aggregating to B-3 situate at R.S. No.73,
Village: Duniya, Tal. Halol, Dist. Panchmahal, in the interest of
justice and equity;
That
this Hon’ble Court may be pleased to direct Official
Liquidator to pay interest on such rate as may be deemed
appropriate to the applicants on the amount of Rs.4 Crores
proportionately for not handing over possession of the properties
comprising of Lot B-1 and B-2 aggregating to B-3 situate at R.S.
No.73, Village: Duniya, Tal. Halol, Dist. Panchmahal and also for
utilizing the amount of Rs.4 Crores of the applicants without
handing over possession of the properties, in the interest of
justice and equity;
That
this Hon’ble Court may be pleased to grant such other and further
reliefs as may be deemed fit and proper by this Hon’ble Court, in
the interest;
Heard
learned advocates appearing
for the respective parties. It is common ground between the parties
that properties in the form of land forming part
of Lot Nos.B-1 and B-2 comprised in the aggregate in Lot No.B-3 are
of Plot Nos.10 and 8, Revenue Survey No.73, Village Duniya, Taluka
Halol, Dist. Panchmahals. The dispute today pertains only to a part
of land, namely, land of Lot No.B-1.
In
light of the pending dispute in relation to the movable properties
lying over the said parcel of land liquidator could not hand over
possession of the property in question in the present application.
Today by a separate order rendered in Company Application No.425 of
2009 the Official Liquidator has been directed to hand over
possession of the movable properties within a period of ten working
days from 10.02.2010. Providing for a period of five days from the
date of handing over possession for carting away said movable
machineries, the Official Liquidator is directed to hand over
possession of the land in question within a period of two working
days after the applicant of Company Application No.425 of 2009,
Manibhadra Sales Corporation, gives in writing that the entire plant
and machinery has been removed from the land in question.
Learned
advocates have also been heard on the aspect of interest that the
applicant would be entitled to on the sum paid for Plot No.10. It is
an admitted position that the amount of Rs.4 crores was paid by the
applicant pursuant to order dated 05.08.2008 for the property
falling within Lot Nos.B-1 and B-2, consolidated Lot No.B-3. The
land comprised in Lot No.B-1 admeasures 21,300 sq. mtrs., whereas
the land comprised in Lot No.B-2 admeasures 69,594.12 sq. mtrs.
Admittedly land described in Lot No.B-2 was handed over on
29.08.2008 to the applicant. In these circumstances, the sum of Rs.4
crores shall have to be bifurcated into proportionate components in
the ratio of the land falling within Lot No.B-1 and Lot No.B-2. The
said ratio works out at 23.43% for Lot No.B-1 and 76.57% for Lot
No.B-2. The sum of Rs.4 crores will, therefore, have to be divided
into the same ratio. Therefore, the applicant would be entitled to
interest only on the sum of Rs.93,73,556/- (Rupees Ninety Three lacs
Seventy Three Thousand Five Hundred Fifty Six only).
Thereafter,
one will have to consider period for which the applicant would be
entitled to interest. The facts reveal that after being denied
possession of property falling within Lot No.B-1, the applicant did
not approach the Company Court either for return of the
proportionate sale consideration, or for being granted possession,
or for any interest on the proportionate amount so retained. Only
after the litigation in relation to the movable property lying on
the said plot of land was over vide judgment rendered on
23.07.2009-06.08.2009 in Company Application No.34 of 2007 and
cognate matters that the applicant approached the Official
Liquidator vide communication dated 12.11.2009. It is also necessary
to note that in the aforesaid group of matters, heard and decided
alongwith Company Application No.34 of 2007, Company Application
No.79 of 2009 had been preferred by the present applicant seeking
return of the amount of sale consideration. After hearing learned
advocate for the applicant the said request was turned down. Only
relief that was granted was to call back the amount of Rs.4 crores
from the Protho Notary and Senior Court Master, Bombay High Court of
Suit No.686 of 1998. Thus, the right, if any, to claim interest
accrued for the first time only on 06.08.2009 when the Court
pronounced the judgment.
The
contention raised on behalf of the applicant that the Official
Liquidator had enjoyed the use of the fund without possession being
handed over would have merited acceptance provided the applicant had
been vigilant about his own right since inception. In fact even the
present application has been preferred only on 17.12.2009. In the
circumstances, the applicant would not be entitled to any interest
prior to the said point of time.
However,
at the same time it is required to be borne in mind that despite
judgment rendered on 23.07.2009-06.08.2009 in Company Application
No.34 of 2007 and cognate matters liquidator did not take any steps
to hand over possession within a reasonable time. At the same time
the liquidator also failed to point out to the Company Court when he
was directed to hand over possession of plot of land No.10 vide
order dated 05.08.2008 within a period of ten days from the date of
receipt of full sale consideration that such possession could not
have been handed over as certain machineries were lying on the same
parcel of land which did not form part of the properties put up for
sale. Hence, to the said extent even the liquidator has been
negligent in discharge of his duties.
Therefore,
if one balances the equities the applicant may become entitled to
interest w.e.f. 01.09.2009 on sum of Rs.93,73,556/-
(Rupees Ninety Three lacs Seventy Three Thousand Five Hundred Fifty
Six only) @ 5% p.a. for the period commencing from
01.09.2009 and ending on 31.01.2010.
Learned
advocate has stated that relevant details of applicant’s bank
account shall be furnished within a couple of days. The
Official Liquidator shall thereupon ensure electronic
transfer of funds of interest amount within five working days from
the date of receipt of such details.
Accordingly,
this Company Application is partly allowed in the aforesaid terms
with no order as to costs.
Sd/-
[D. A.
MEHTA, J]
***
Bhavesh*
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