Allowed

Killick Nixon Ltd. v. the Official Liquidator of Geekay Exim (India) Ltd.

Bombay HC14 Oct 2013S/3730/2000

Case brief

AI extract

What is this about?

In an undefended suit for recovery, the High Court of Bombay decreed the plaintiff's claim based on documents showing the sale of mortgaged property to satisfy the defendant's debt, allowing recovery of the proportionate share, with adjustments for post-filing payments and a note on liquidation laws.

What did the court decide?

Suit decreed for the modified principal amount of Rs.80,93,16,781.53/- along with applicable interest, subject to provisions of the Companies Act.

Killick Nixon Ltd. Vs the Official… — Contract and Commercial Disputes | Bombay HC (2013)

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s-3730.00.doc

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ppn 1

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

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SUIT NO.3730 OF 2000

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Killick Nixon Ltd. .. Plaintiff Vs.

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The Official Liquidator of M/s. Geekay Exim India Ltd. .. Defendant

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Mr.Aditya Shiralkar with Nina Kapadia & Sangita Gudhka i/by M/s. Pandya Gandhi & Co. for the plaintiff. Mr. S.A. P. Thomas for the defendant.

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CORAM : N.M. JAMDAR, J. DATE : 14 October 2013

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P.C. :

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. By this suit, the plaintiff prays for a decree of Rs.81,20,06,701.03/- with interest of Rs.4,25,13,556.25/- @ 21% p.a. The total being Rs.85,45,20,257.28 at pendente lite.

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By an order dated 30 October 2007, the Prothonotary and Senior Master has transferred the suit to the list of 'Undefended Suits' as the defendant has not filed written statement. The defendant-company has gone in liquidation on 3 January 2003. As per leave granted by the Company Court on 20 September 2005, the Official Liquidator, Calcutta has been brought on record. The learned counsel for the plaintiff has tendered compilation of documents along with affidavit of evidence. The plaintiff had sought a direction that the witness summons to be issued to ING Vysya Bank Ltd. On 22 March 2013, the Officer of ING Vysya Bank Ltd. was present and sought time of four weeks to file

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ppn 2 s-3730.00.doc

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documents. On 21 June 2013, the Assistant Recovery Manager of ING Vysya Bank Ltd. tendered certified copies of the documents which were taken on record. Witness of the plaintiff is present in the Court.

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The case of the plaintiff from the plaint is as follows. On 26 December 1997, at the request of the defendant and Sabara Impex Ltd. and Viplav Trading Ltd., the plaintiff executed a Deed of Guarantee in favour of Vysya Bank Ltd. On the same date, an equitable mortgage is created in favour of Vyasya Bank Ltd. by the plaintiff in respect of its property situated at Chandivali, Mumbai. On 8 June 1999, the defendant on behalf of itself and Viplav Trading Limited and Sabara Impex Ltd. proposed a One Time Settlement to Vysya Bank Ltd. Under the One Time Settlement, the total liability of the defendant and the said two companies i.e. Viplav Trading Limited and Sabara Impex Ltd. was fixed at Rs. 130.58 crores. It was proposed that for satisfying the liability, part of the property by the plaintiff which was mortgaged and the entire property mortgaged by one Avanti Developers Private Limited would be transferred in favour of Vysya Bank Ltd. It was also proposed that the said owners will have an option of buying back the property on payment of the amounts.

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M/s. Vysya Bank Ltd. by its letter dated 29 June 1999 approved the One Time Settlement. The liability of defendant was fixed at Rs.8195.09 lacs, the liability of Viplav Trading Limited was fixed at Rs.2505.60 lacs and the liability of the Sabara Impex Ltd. was fixed at Rs.2357.15 lacs. The Vysya Bank Ltd. agreed to acquire the property mortgaged by the plaintiff and the said Avanti Developers Private

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ppn 3 s-3730.00.doc

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Limited. Pursuant to the One Time Settlement between the defendant and the two companies and Vysya Bank Ltd., the plaintiff entered into an Indenture of Sale dated 26 April 2000 in respect of 49,911 sq.mtrs. of the property. It was agreed under the Indenture of Sale that the plaintiff will be entitled to buy back the property. Thereafter, the plaintiff called upon the defendant to pay an amount of Rs.81,20.06 lacs with interest @ 21% p.a. vide letter dated 26 April 2000. The plaintiff stated in the said letter that the plaintiff deemed to have paid the liability of the defendant of Rs.81,20,06,701.03/- when they executed a Sale of Indenture with Vysya Bank Ltd. In the affidavit of evidence filed by the plaintiff, it is stated that the original of the notice was with the defendant and a typed copy which was available with the plaintiff was lost during the flood on 26 July 2005. Considering this position, the plaintiff is permitted to place the copy of the letter dated 26 April 2000 on record.

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I have heard the learned Counsel for the plaintiff and I have perused the affidavit of evidence along with the documents placed on record. Witness on behalf of the Vysya Bank Ltd. has produced certified copies of documents on record.

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From perusal of the plaint and the documents which are placed on record it is clear that the plaintiff had executed a Deed of Guarantee in favour of Vysya Bank Ltd. at the request of defendant, Sabara Impex Ltd. and Viplav Trading Limited. Thereafter, One Time Settlement has been arrived at between the bank and these three borrowers in which sale of plaintiff's property which was mortgaged was

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s-3730.00.doc

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ppn 4

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proposed. Thereafter, by Indenture of sale, the plaintiff has conveyed the property in the recital of the said Indenture of Sale. The background in which the sale has been executed has been narrated. It is stated therein that the property was sold pursuant to the One Time Settlement. The One Time Settlement has been specifically referred to in the Indenture of Sale. The said document also refers to the sale for consideration of Rs.105 crores which is the amount arrived at for One Time Settlement. The proportionate amount payable by the defendant is Rs.81,20,06,701.03/- and this is the amount which is sought to be recovered by the present suit.

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These documents unquestionably show that the plaintiff had sold the property for satisfaction of the debts incurred by the defendant and the plaintiff is entitled for recovery of these amount. No written statement is filed. The avements made on oath by the plaintiff have gone uncontroverted. In the circumstances, the plaintiff will be entitled to a decree.

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The learned counsel for the plaintiff tenders affidavit dated 20 September 2013 sworn by the plaintiff. It is stated in the affidavit that the dues claimed in the suit are to the tune of Rs. 81,20,06,701.03/-. However, after filing of the suit, the defendant has paid an amount of Rs.26,89,913.50/- to the plaintiff. Details have been given in the affidavit. The learned counsel for the plaintiff states that after adjusting a sum of Rs.26,89,913.50/-, the dues payable are now Rs.80,93,16,781.53/-. The dues claimed by the plaintiff in the suit are accordingly restricted to the above mentioned figure. The learned counsel

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ppn 5 s-3730.00.doc

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for the plaintiff states that by letter dated 3 October 2001, the defendant has acknowledged the dues of the plaintiff. The learned counsel for the plaintiff tenders revised particulars of claim and states that the plaintiff has calculated interest upto the date before filing of the suit @21% p.a. and thereafter @14% p.a. after giving credit to the amounts paid by the defendant after institution of the suit. The learned counsel states that the total interest therefore, works out to Rs.1,54,57,05,079.97/- i.e. total dues of Rs.2,35,50,21,868/-. It is however clarified that as the company is now under liquidation, the dues of the plaintiff will have to be disbursed as per the provisions of the Companies Act and the Official Liquidator will proceed to do so, as per the provisions of the Companies Act.

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The learned counsel for the Official Liquidator submitted that they have received communication dated 3 October 2013 from the Official Liquidator, Calcutta in which certain certificates of Debts Recovery Tribunal, Mumbai and the proceedings for appointment of receiver by this Court have been placed on record. The learned counsel for the plaintiff states that the properties involved in this proceedings are different than the properties involved in the suit which have already been sold by the plaintiff to ING Vysya Bank Ltd. No contrary position is placed on record.

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The suit is accordingly decreed in terms of prayer clause (a) with modification to the principal amount due as stated above, and with the clarification regarding the applicability of the provisions of the Companies Act, 1956.

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After the true copies of the documents are placed on record to the satisfaction of the office, the original documents to be returned to the plaintiffs. Refund of court fees, if any, as per the rules.

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N.M. JAMDAR, J.

Killick Nixon Ltd. v. the Official Liquidator of Geekay Exim (India) Ltd.

Case brief

What is this about?

What did the court decide?

Killick Nixon Ltd. v. the Official Liquidator of Geekay Exim (India) Ltd.

Case brief

What is this about?

What did the court decide?

What the court decided

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