Partly allowed

Tuljabhavani Housing Development Private Limited, v. 'N'Square Realities and Developersprivate Limited,.

Bombay HC23 Jul 2013APP/78/2013

Case brief

AI extract

What is this about?

The High Court set aside a winding-up order made against the appellant in its absence. It directed a conditional restoration, requiring the appellant to deposit Rs.51 lakhs within six weeks for the petition to be reheard in the Single Judge's court.

What did the court decide?

Impugned winding-up order set aside conditionally; Appellant directed to deposit Rs.51.00 lakhs with Prothonotary/Senior Master within six weeks for restoration of petition to Single Judge for final d

Tuljabhavani Housing Development Private Limited, Vs… — Company and Corporate | Bombay HC (2013)

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1 of 6 APP.78.2013

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

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APPEAL NO.78 OF 2013 IN

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COMPANY PETITION NO.447 OF 2011 IN NOTICE OF MOTION (L) NO.2539 OF 2012

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Tuljabhavani Housing Development Pvt.Ltd. Appellant

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versus `N' Square Realities and Developers Pvt.Ltd. Respondent

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Mr.R.S.Apte, Sr.Advocate with Mr.Samir Vaidya for Appellant.

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Ms.Jayashri Surti i/by S.Ashwinikumar & Co. for Respondent.

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CORAM : DR.D.Y.CHANDRACHUD AND S.C.GUPTE, JJ.

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DATE : 23 July 2013

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PC :

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Admit. Learned counsel for the Respondent waives service. The appeal is taken up for hearing and final disposal, by consent and on the request of the learned counsel.

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The appeal arises from an order of the learned Single Judge dated 13 July 2012 by which a petition for winding-up has been made absolute as against the Appellant.

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A trust registered under the Bombay Public Trust Act, 1950 was the owner of certain land at Girgaum. The property was put up for

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2 of 6 APP.78.2013

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sale in pursuance of the directions of the Charity Commissioner. The Appellant was initially declared as the highest bidder but was unable to pay the purchase price. During the pendency of the proceedings before the Charity Commissioner under Section 36 of the Bombay Public Trust Act, 1950, an agreement was arrived at between the Appellant and the Respondent on 8 June 2010. The agreement envisaged that the Appellant expected the Charity Commissioner to sanction the sale in favour of the Appellant for a sum of Rs.15.05 crores which should be paid entirely by the Respondent and that the sale would be completed in favour of a nominee of the Respondent. Under Clause-2, a lumpsum consideration of Rs.9.00 crores was fixed in the agreement between the Appellant and the Respondent of which Rs.51.00 lakhs was paid. The balance was required to be paid upon the sale being sanctioned by the Charity Commissioner, as mentioned in Clause-2 and thereafter against registration of the deed of conveyance and entering into of agreements with the individual occupants. Clause-7 of the agreement provided that if the Charity Commissioner invited fresh bids, the Respondent would be at liberty to submit a bid in which event the Appellant would not be entitled to any consideration and the agreement will come to an end. Thereupon the Appellant was to refund the earnest money and the further consideration with interest as stipulated. Clause-10 of the agreement provided as follows :

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"10. The Assignor expects hearing before Charity Commissioner to be complete and sanction for sale in the Assignor's favour within three months from the date hereof. In the event, said sanction is not granted within said time, it shall be at the option of the Purchaser to continue this agreement or put an end to this agreement in which event,

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3 of 6 APP.78.2013

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the Purchaser shall intimate his desire to put an end to this agreement and the Assignor shall forthwith on receipt of such intimation, refund the earnest money of Rs.51,00,000/and such other consideration that may have been received under this agreement and only upon such refund, this agreement shall come to an end and not otherwise."

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It is not in dispute that the Appellant received an amount of Rs.51.00 lakhs by way of earnest. The Charity Commissioner, by an order dated 29 March 2011, dismissed the application under Section 36. The writ petition challenging the order of the Charity Commissioner was dismissed by a learned Single Judge on 4 July 2011. Thereupon a statutory notice was addressed by the advocate for the Respondent to the Appellant making a demand of an amount of Rs.4.06 crores which, according to the Respondent, was paid to the Appellant in pursuance of the agreement. In reply, the appellant denied the claim. Thereupon a petition for winding-up was filed. The petition was admitted by the learned Single Judge by an order dated 7 May 2012.

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When the petition came up for final hearing on 13 July 2012, the advocate appearing on behalf of the Appellant was not present. The learned Single Judge made the petition absolute. During the course of the judgment, the learned Single Judge has recorded that at the stage of admission, the advocate appearing on behalf of the Appellant had on instructions of a director stated that an amount of Rs.1.56 crores had been received by the company, which the company was not ready to deposit. On these grounds, the petition has been made absolute, and the company has been ordered to be wound-up.

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4 of 6 APP.78.2013

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An affidavit-in-reply had been filed by the appellant to the company petition for winding-up. In paragraph 7 of the reply the defense was that the Respondent had in fact incorporated a new company by the name of Tuljabhavani Realty Private Limited for the purpose of developing real estate and the Respondent had inducted directors who are either associated with it or related and money was paid to the new company so formed. The defense of the Appellant, therefore, was that save and except for an amount of Rs.51.00 lakhs which was paid as and by way of “token and goodwill”, the rest had not been received by the Appellant but had been paid to the newly formed company which was floated by the Respondent. Consequently the Appellant does not deny the receipt of the amount of Rs.51.00 lakhs. The Appellant has disputed the receipt of any further amount.

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On this state of record we find considerable merit in the contention of the learned senior counsel appearing on behalf of the Appellant that the defence to the petition requires consideration by the Company Court and hence the petition should be restored to the file of the learned Single Judge for a decision afresh by setting aside the impugned order, directing the winding-up of the company. Our reasons are as follows - The advocate appearing on behalf of the Appellant was admittedly not present before the learned Single Judge when the order of winding-up was passed. In the absence of the advocate, the learned Single Judge has relied upon a statement which was made by the advocate on the instructions of a director at the time of the admission of the petition on 7 May 2012. Without making a

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5 of 6 APP.78.2013

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final observation of fact on the defence raised, we are of the view that the defence requires evaluation by the Company Judge. The defence, particularly in paragraph 7, has remained to be properly evaluated. During the course of the hearing, the learned senior counsel appearing on behalf of the Appellant has stated before the Court that the Appellant is ready and willing to deposit Rs.51.00 lakhs with the Prothonotary and Senior Master to establish its bona fides, within a period of four weeks from today. We are of the view that the ends of justice would be subserved if a conditional order is passed by which, conditional on the Appellant depositing an amount of Rs.51.00 lakhs with the Prothonotary and Senior Master within a period of six weeks from today, the impugned order of the learned Single Judge dated 13 July 2012 should stand set aside and the company petition would stand restored to the file of the learned Single Judge for hearing and final disposal.

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8. Accordingly, the following order is passed :

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(i) The Appellant shall on or before 3 September 2013 deposit an amount of Rs.51.00 lakhs with the Prothonotary and Senior Master in terms of the statement made before the Court by the learned senior counsel;

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(ii) Conditional on the aforesaid payment being made, the impugned order of the learned Single Judge dated 13 July 2012 shall stand set aside and the company petition shall stand restored to the file of the learned Single Judge for hearing and final disposal;

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6 of 6 APP.78.2013

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(iii) In the event that the amount as directed in Clause(i) above is deposited, the amount shall be invested by the Prothonotary and Senior Master in a nationalized bank initially for a period of six months and to abide thereafter by such orders as may be passed by the learned Company Judge;

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(iv) In the event that the Appellant fails to deposit the amount as directed in Clause(i) above or any part thereof within the stipulated period, the Appellant shall lose the benefit of this order and the order of the learned Company Judge directing winding-up of the company shall stand;

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The appeal is disposed of in the above terms. There shall be no order as to costs.

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In view of the disposal of the appeal, Notice of Motion (Lodging) No.2539 of 2012 does not survive and shall stand disposed of as such.

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(DR.D.Y.CHANDRACHUD, J.)

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MST

Tuljabhavani Housing Development Private Limited, v. 'N'Square Realities and Developersprivate Limited,.

Case brief

What is this about?

What did the court decide?

Tuljabhavani Housing Development Private Limited, v. 'N'Square Realities and Developersprivate Limited,.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

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