Dismissed

Laxman Yeswant Prabhudesai and Ors. --a v. the Official Liquidator, High Court, of Aminex Alkalies Limited and Ors. (in Liqn.)

Bombay HC30 Jul 2009CA/593/2008

Case brief

AI extract

What is this about?

Applicants seeking to remove attachment and return possession of suit property. Court held applicants were not bona fide purchasers as the company had no title to transfer shares, rendering the purchase void. Company application dismissed.

What did the court decide?

Application dismissed with no orders as to costs.

What the court decided

Laxman Yeswant Prabhudesai and Ors. --a Vs the Official… — Company and Corporate | Bombay HC (2009)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

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jmi

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COMPANY APPLICATION NO.593 OF 2008

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COMPANY PETITION NO.731 OF 1998.

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NRC Limited. .. Petitioner.

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And

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Shri Laxman Yeswant Prabhudesai & Ors. ..Applicants.

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vs.

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Mr. Mohammed Pasha Hussain & Ors. .. Respondents.

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Mr. Atul Rajadhyakhsa, Senior Advocate, a/w. Mr. Akhilesh Dubey, i/b. M. Tripathi & Co., for Applicants. Mr. B.B. Tiwari, for Respondent Nos. 2 to 5. Mr. A.Z. Mookhtiar, for Respondent Nos. 8 to 10. Mr. V.P. Sawant, Official Liquidator.

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CORAM : S.J.KATHAWALLA, J. DATE : 30TH JULY 2009.

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P.C.

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This application is taken out by the applicants for setting

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aside the ex-parte order dated 21st April 2007 passed in company

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application no.3 of 2007 and also to direct the official liquidator, High

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Court, Bombay to forthwith remove the attachment of plot no.R-34,

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situated at MIDC, Tran Thane, Creek Industrial Area, Village

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Tetavali, Thane District (the suit property) and return the possession

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thereof to the applicants.

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The facts in the matter are briefly set out hereunder :-

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On 8th December 1998, company petition no.731 of 1998

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was admitted and the provisional liquidator was appointed inter-alia

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of the assets of Aminex Alkalies Ltd. (the company). On 26th April 1999, the company was ultimately wound up.

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It appears that after the petition was admitted on 8th December 1998, the Directors of the company on 15th December 1998

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assigned the suit property in favour of its sister concern namely M/s.

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Aminex Holdings & Investments (a partnership firm formed by the Ex-Directors of the company). Thereafter, on 18th December 1998, M/s. Aminex Holdings & Investments assigned the suit property to

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Anwar Merchant and Ismail Merchant. On 15th February 1999,

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Anwar, Ismail and Shamir Merchant, respondent nos. 8, 9 and 10 (the

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Merchants) incorporated a company by the name of Arsh International Chemicals Pvt. Ltd. (Arsh International) and thereafter,

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the suit property was brought in by the Merchants as an asset of the

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said Arsh International. The assignment of the suit property by the company to its sister concern M/s. Aminex Holdings and Investments was assailed by the official liquidator. By an order dated 21st April

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2007 this Court [Coram : Dr. D.Y. Chandrachud, J.] has set aside the said assignment dated 18th December 1998 by Aminex Holdings and

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Investments in favour of the Merchants.

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In view of the aforesaid order dated 21st April 2007, the Merchants on and from 21st April 2007 seized to have any right, title

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and or interest in and over the suit property either under the said deed of assignment dated 18th December 1998 or otherwise.

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By and under the Memorandum of Understanding dated

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1st July 2007, the Merchants transferred their shareholding in Arsh

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International to the applicants. According to the applicants, the Merchants misrepresented to the applicants that the suit property was

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an asset of the Arsh International. According to the applicants, they

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have paid a sum of over a crores of rupees to the erstwhile Directors

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of Arsh International i.e. the Merchants (respondent nos. 8, 9 and 10)

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between 8th May 2007 to 29th May 2007. Thereafter, in September

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2007, the official liquidator took the possession of the suit property from the applicants. The applicants have thereafter moved this application on March 2008.

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The learned Senior Counsel appearing for the applicants has submitted that the official liquidator, after passing of the order dated 8th December 1998 appointing him as provisional liquidator ought to have taken possession of the assets of the company. However, he did not do so for a period of 9 years despite an application made to this Court by one of the creditors and specific directions passed therein directing the liquidator to take possession of the same. He submits that the applicants are bonafide purchasers of the suit property and that the order passed by this Court dated 21st

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April 2007 is an ex-parte order which deserves to be set aside. He submits that being a bonafide purchaser of the suit property, the official liquidator should forthwith return the possession of the suit

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premises to the applicants.

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In my view, the submissions of the learned Senior

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Counsel appearing for the applicants cannot be accepted. Firstly, when the order dated 21st April 2007 was passed by this Court, the

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suit property was admittedly not taken over by the applicants. Therefore, the order dated 21st April 2007 cannot be termed as an exparte order by the applicants. Again, by the said order dated 21st April

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2007 the alleged rights created by M/s. Aminex Holdings & Investments, sister concern of the company, in favour of the Merchants were set aside. Therefore, the purported memorandum of understanding executed by the Merchants in favour of the applicants wrongly representing to the applicants that the joint property is an asset of Arsh International is of no consequence since the Merchants

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themselves or Arsh International had no right, title and/or interest in the suit property on 1st July 2007 and the question of transferring the suit property in favour of the applicants as an asset of Arsh International would not arise. The said property had seized to be an

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asset of the Merchants/ Arsh International by an order passed by this

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Court dated 21st April 2007. A person or a company which has no

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right in a property cannot transfer the same in favour of any one else. The question therefore of the applicants becoming owners of the suit property as a consequence of them having purchased the shares of Arsh International does not arise. The applicants therefore cannot term/style themselves as purchasers or bonafide purchasers of the suit property and the suit property cannot be said to have vested in the applicants since the Merchants and/ or Arsh International had no right over it when the shares of Arsh International were purchased by the applicants from the Merchants on 1st July 2007.

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As regards, the submissions pertaining to the negligence

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on the part of the official liquidator in taking possession of the suit

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property, the applicants are always at liberty to take out appropriate

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proceedings and seek necessary reliefs against the parties who according to them have been negligent, including the official liquidator.

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For the aforestated reasons, the company application is

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dismissed with no orders as to costs. Needless to add that this order

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will not preclude the applicants from taking out appropriate

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proceedings under the law, as advised.

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[ S.J.KATHAWALLA, J. ]

Laxman Yeswant Prabhudesai and Ors. --a v. the Official Liquidator, High Court, of Aminex Alkalies Limited and Ors. (in Liqn.)

Case brief

What is this about?

What did the court decide?

What the court decided

Laxman Yeswant Prabhudesai and Ors. --a v. the Official Liquidator, High Court, of Aminex Alkalies Limited and Ors. (in Liqn.)

Case brief

What is this about?

What did the court decide?

What the court decided

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Case details

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