Disposed

Lakhvinder Atmasingh Randhawa v. Vaidehi Akash Housing Pvt. Limited

Bombay HC14 Jul 2014APP/571/2013

Case brief

AI extract

What is this about?

High Court disposed of appeal against order rejecting application for provisional liquidator. Court held deposit benefited general creditors, not appellant, but refused liquidator appointment to protect company business. Directed company to file accounts and obtain court leave before disposing assets or terminating contracts.

What did the court decide?

Appeal disposed of; respondent directed to file annual accounts and not dispose assets without court leave.

Lakhvinder Atmasingh Randhawa Vs Vaidehi Akash Housing… — Company and Corporate | Bombay HC (2014)

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

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APPEAL NO.571 OF 2013 IN COMPANY APPLICATION NO.458 OF 2012 WITH COMPANY APPLICATION NO.369 OF 2013 IN COMPANY PETITION NO.400 OF 2010

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WITH

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NOTICE OF MOTION NO.16 OF 2014 IN APPEAL NO.571 OF 2013 IN

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COMPANY APPLICATION NO.458 OF 2012 WITH COMPANY APPLICATION NO.369 OF 2013 IN COMPANY PETITION NO.400 OF 2010

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Lakhvinder A. Randhawa V/s.

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Vaidehi Akash Housing Pvt. Ltd.

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...Appellant

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...Respondent

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Mr.Vishal Kanade with Mr.Vinod Sharma for the Appellant.

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Mr.S.C. Naidu with Mr.Amol D. Joshi for the Respondent.

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CORAM : S.J. VAZIFDAR & A.K. MENON, JJ. DATE : 14TH JULY, 2014.

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P.C. :-

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1. The appeal is admitted and heard finally.

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The appellant had filed a petition seeking winding up of the respondent company inter-alia on the ground that it is unable to pay its debts. According to the respondent, an amount of Rs.50.00 lacs was due to it. This appeal is against the order of the learned Judge rejecting the company application for appointment of a Provisional Liquidator.

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An order dated 08.02.2012 was passed with the consent of the parties. Clauses 1, 3, 4 and 7 thereof, read as under :-

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i) Learned Advocate for the Respondent company on instructions of Mr.G.S.Phondekar, Director of Respondent Co. agrees to deposit an amount of Rs.50 lacs with the Prothonotary and Senior Master of this Court within 12 weeks from the date of this order.

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iii) Within two weeks from the date of deposit of the said amount of Rs.50 lacs by the Respondent Company, the Petitioner shall file a suit before this Court pertaining to the subject matter of this petition. The Petitioner shall also forthwith inform the Advocate for the Respondent Company and forward a complete copy of the plaint in the suit to the Respondent Company.

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iv) Upon filing of the said suit, the Prothonotary & Senior Master shall transfer the said amount of Rs.50 lacs to the suit account and shall invest the said amount in a Nationalized Bank for a period of one year at a time. However, the direction to invest the said amount would be subject to any adinterim/interim orders passed by this Court in the suit filed by the Petitioner.

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vii) In the event of the Respondent Company failing to deposit an amount of Rs.50 lacs within 12 weeks from today, the Company Petition shall revive,

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without reference to this Court. The entire amount claimed by the Petitioner shall become due and payable to the Petitioner by the Respondent Company. The Company Petition shall stand admitted, made returnable within six weeks from the date of default and advertised in two local news papers i.e. Free Press Journal (English) and Maharashtra Times (Marathi) and in Maharashtra Government Gazette.”

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The respondent admittedly did not deposit an amount of Rs.50.00 lacs within a period of twelve weeks. The company petition accordingly stood admitted in view of the self-operative term of the order dated 08.02.2012. A further order dated 10.05.2012 was passed on the respondent's application for extension of time to deposit an amount of Rs.50.00 lacs. The learned Company Judge noted that the company petition stood admitted in view of the selfoperative order dated 08.02.2012. The learned Judge recorded the statement on behalf of the company that irrespective of the admission of the petition and advertisement of the admission of the petition, the respondent wanted to deposit a sum of Rs.50.00 lacs if some time was given. In view of the statement, the learned Judge directed the respondent to deposit an amount of Rs.50.00 lacs in three installments. The learned Judge further recorded that the same would not preclude the appellant from advertising the admission of the above company petition as directed by this Court by its order dated 08.02.2012.

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Accordingly, the petition was advertised on 25.05.2012 and on 31.05.2012. The respondent thereafter deposited Rs.50.00 lacs in Court.

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In the circumstances, the amount of Rs.50.00 lacs was not deposited pursuant to the order dated 08.02.2012. The consequence was that the petition stood admitted and was subsequently advertised. It is important to note that no extension was granted for depositing the said amount and that amount was ultimately deposited only after the petition was admitted and advertised.

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In the circumstances, the amount of Rs.50.00 lacs deposited by the respondent after the petition stood admitted cannot enure solely for the benefit of the petitioner / appellant. It enures to the general body of creditors. The learned Judge wrongly came to the conclusion that the amount deposited secured the appellant's claim. This was one of the reasons for refusing to appoint a Provisional Liquidator. The judgment of the learned Judge in this regard is therefore, set-aside.

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Despite the same, we however, do not intend allowing this appeal by appointing a Provisional Liquidator. One of the businesses carried on the respondent is of development / redevelopment. The appointment of a Provisional Liquidator at this stage, may hamper the business of the company. Further Mr.Kanade, the learned counsel

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appearing on behalf of the appellant had stated that the audited accounts had not been filed with the ROC. Mr.Naidu, the learned counsel appearing on behalf of the respondent states that subsequently the audited accounts for the year 2010-2012 have been filed and that the company is in the process of filing the same for the year 2013. The same shall be stated on affidavit which shall be filed in the company proceedings.

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In the circumstances, the ends of justice would be met by issuing the following directions to the respondent company :- i). The respondent company shall file accounts by annually on or before 10^th day of June and 10^th day of January each year, commencing from 10.01.2015 with the Company Court. Liberty to the appellant to apply to the Company Judge in the event of there being any change in circumstances warranting any interim reliefs, including for appointment of the Provisional Liquidator.

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ii). The respondent shall not dispose of, alienate, encumber, part with possession of or create any third party rights in respect of its immovable assets without the leave of the Court.

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iii). The respondent shall also not surrender its tenancy or jeopardize the same in any manner whatsoever without the leave of the Court. The respondent shall also not terminate or forfeit its rights or otherwise howsoever apart from its rights in respect of the

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development / redevelopment contracts without the leave of the Court

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It is clarified that the sale of the flats shall be in the usual course of business as directed by the impugned order. All other interim reliefs and directions granted by the Company Court shall also remain. The learned Judge has noted that the appellant has filed the proceedings under section 138 of the Negotiable Instructions Act and the suit before the Bombay City Civil Court at Dindoshi.

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The appeal is, accordingly, disposed of.

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The notice of motion is also accordingly disposed of.

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(A.K. MENON, J.) (S.J. VAZIFDAR, J.)

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Lakhvinder Atmasingh Randhawa v. Vaidehi Akash Housing Pvt. Limited

Case brief

What is this about?

What did the court decide?

Lakhvinder Atmasingh Randhawa v. Vaidehi Akash Housing Pvt. Limited

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

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