The High Court transferred a suit filed by the applicant for specific performance of an MOU against a company in liquidation and its director to this court, disposing of the company application.
Suit transferred from Civil Judge, Kalyan to this Court; further directions to be fixed.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMPANY APPLICATION 258 OF 2014 IN
COMPANY PETITION NO. 1044 OF 1997
M.R. Realtors
… Applicant
IN THE MATTER BETWEEN : M/s. Paper Chase International … Petitioner Versus
Mr. Mayur Khandeparkar a/w. Mr. Phadnis for the Applicant. Mr. M.P.S. Rao, Sr. Adv. a/w. Mr. Bodke i/b. Chitnis Vaithi and Company for Respondent No. 2.
Mr. S. Jagtiani for the OL. Mr. S. Ramakantha, OL, present.
CORAM : S.J. KATHAWALLA, J. DATE : 8TH DECEMBER, 2014
P.C. :
M.R. Realtors for the following reliefs against the Official Liquidator High
Court Bombay and Mr. Sameer Lakhani, Ex-Director of the Company (in liquidation) :
“a. that this Hon'ble Court in exercise of powers under Section 446 (1) of the Companies Act, 1956, be pleased to grant leave to the Applicant abovenamed to file a suit against the Respondents hereto in respect of the property more
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particularly described in the Schedule “A” hereto ;
i. That by an order dated 29th September, 2005 passed by this Court in Company Petition No. 791 of 2005, the Official Liquidator was appointed as Provisional Liquidator of M/s. B.K. Paper Mills Limited. Subsequently, by an order dated 17th August, 2006 passed by this Court in Company Petition No. 1044 of 1997 filed by M/s. Paper Chase International (the Petitioner), the Company – M/s. B.K. Paper Mills
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Limited was ordered to be wound up and the Official Liquidator High Court Bombay was appointed as Liquidator thereof with the powers prescribed under the Companies Act, 1956.
ii. That as per the order of this Court dated 3rd May, 2006, the Court Receiver High Court Bombay handed over possession of the immovable property of the Company (in liquidation) situated at Vidavali Village, Taluka – Kalyan, Dist. - Thane, Maharashtra to the Official Liquidator on 26th July, 2006 (the said property).
iii. That pursuant to the order of this Court, the property of the Company was valued and put for auction sale on 6th May, 2010 after fixing reserve price at Rs. 15 Crores. The offers received by the Official Liquidator were placed before this Court. The highest offer was of the Applicant for Rs. 19,51,00,786/-.
iv. That Mr. Sameer Lakhani, the Ex-Director of the Company (in liquidation) had taken out Company Application No. 268 of 2010 to permanently stay of winding up order. Mr. Sameer Lakhani, the ExDirector of the Company (in liquidation) as per the direction of this Court also deposited an amount of Rs. 15 Crores to establish his bonafide to settle the claims of all the creditors of the Company. Mr. Lakhani deposited further amount of Rs. 5 Crores with the office of the Official Liquidator as per order of this Court dated 6th July, 2010 towards payment
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of the dues of the creditors of the Company (in liquidation).
v. As per the order dated 6th July, 2010 passed by this Court, the Official Liquidator had refunded the EMD amount of the offerers including the Applicant herein alongwith interest accrued thereon.
vi. That thereafter pursuant to the orders passed by this Court dated 23th December, 2011, 21st May, 2012 and 17th October, 2013 in the Official Liquidator's Reports dated 24th November, 2011, 14th May, 2012 and 4th September, 2013 respectively, the Official Liquidator has declared and paid 100% dividend to the Workers and Secured Creditors etc. as more particularly set out in paragraph 7 of his Affidavit dated 30th July, 2014.
vii. That the Applicant has filed a Suit before the Court of Civil Judge, Senior Division at Kalyan seeking specific performance of the MOU dated 6th April, 2010. According to the Applicant under the alleged MOU, Mr. Sameer Lakhani, Ex-Director of the Company (in liquidation) has allegedly agreed to sell the Suit property of the Company (in liquidation) to the Applicant on 6th April, 2010. The Applicant now wants to join the Official Liquidator a party Defendant to the said Suit. The Official Liquidator was appointed as a Provisional Liquidator by an order dated 29th September, 2005, the Company was directed to be wound up by an
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order dated 17th August, 2006, the Company continues to be in liquidation till date, and the Official Liquidator continues to be the Custodian of all the properties of the Company as provided under section 456 of the Companies Act, 1956.
viii. That since the Ex-Director Shri Sameer Lakhani did not have any right to enter into any MOU with the Applicant in respect of the property admittedly owned by the Company (in liquidation), without the permission of this Court, the said MOU is void ab initio and the question of allowing the Applicant to file any Suit against the Company (in liquidation) through the Official Liquidator seeking specific performance of the MOU dated 6th April, 2010 does not arise. If any leave as sought by the Applicant is granted by this Court, the Official Liquidator will have to engage an Advocate and defend the Suit, which is prima facie not maintainable thereby wasting time of the Official Liquidator as well as the funds which are required to be distributed amongst the Creditors of the Company.
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Application and the Affidavit in Reply filed by the Official Liquidator. Prima facie, it appears that the Applicant and the Ex-Director of the Company have entered into a MOU dated 6th April, 2010 dealing with the property of the Company (in liquidation) despite being aware of the fact that the Official Liquidator is the custodian of the property of the company (in liquidation) and that they have no right of whatsoever nature to enter into any deal / agreement qua the property of the Company, which is required to be protected for equitable distribution amongst the Creditors and Shareholders of the Company. The Official Liquidator is correct that if leave is granted to the Applicant to join the Official Liquidator and continue the suit before the Court of Civil Judge, Senior Division at Kalyan, the Liquidator will have to spend the limited funds of the Company and also spend considerable time in defending the Suit which prima facie is not maintainable. In the circumstances, I pass the following order :
i. The Suit filed by the Applicant in the Court of Civil Judge, Senior Division at Kalyan is transferred to this Court.
ii. The Registrar, Court of Civil Judge, Senior Division at Kalyan is directed to forward the necessary papers and proceedings in the Suit filed by the Applicant to this Court on or before 15th January, 2015.
iii. Upon the said Suit papers being transferred to this Court, place
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the same for directions before this Court on 16th January, 2015. The above Company Application is accordingly disposed of.
(S.J. KATHAWALLA J.)
2 issues framed by the court
Whether the applicant is entitled to leave to file a suit for specific performance of an MOU against a company in liquidation.
Whether a suit filed against the official liquidator and an ex-director of a company in liquidation regarding company property should be transferred.
1 provisions across 1 enactments
M.R. Realtors
M/s. Paper Chase International
The Official Liquidator of B.K. Paper Mill Limited
S.J. Kathawalla
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
