Allowed

Mr Vivek Mathias v. United Breweries (Holdings) Limited

Karnataka HC18 Feb 2021CA/253/2020

Case brief

AI extract

What is this about?

The High Court of Karnataka allowed an application under Section 457(1) & (2) of the Companies Act, 1956, directing the Official Liquidator to execute and register sale deeds for two apartments and deliver vacant possession to the applicant. The court validated the pre-winding up transaction as bona fide, contingent on the applicant providing an indemnity bond to the liquidator against any third-p

What did the court decide?

Directing the official liquidator to execute, register sale deeds for Flats 17B and 19B in Kingfisher Towers, and deliver possession to the applicant, subject to the applicant executing an indemnity b

Mr Vivek Mathias Vs United Breweries (Holdings)… — Company and Corporate | Karnataka HC (2021)

¶1

¶2

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

¶3

DATED THIS THE 18^TH DAY OF FEBRUARY 2021

¶4

BEFORE

¶5

THE HON'BLE MR.JUSTICE S. SUNIL DUTT YADAV

¶6

COMPANY APPLICATION No.253/2020 IN

¶7

COMPANY PETITION NO.162/2013

¶8

BETWEEN:

¶9

Mr. Vivek Mathias, S/o Mr. Denis Mathias, Aged about 48 years, Currently residing at Europa Residence, Place des Moulins, MC 98000, Monaco (Represented by Special Power of Attorney Holder Mr.Torun Mathias, S/o Mr. Peter Mathias, Aged about 45 years, Residing at No.36, Rest House Crescent, Bangalore, Karnataka, India).

¶10

... Applicant

¶11

(By Sri N.K. Dilip, Advocate)

¶12

AND:

¶13

United Breweries (Holdings) Limited, A Company incorporated under Companies Act, 1956, and Currently undergoing liquidation and is Represented by: The Official Liquidator, High Court of Karnataka,

¶14

¶15

Corporate Bhavan, No.26-27, 12^th Floor, Raheja Towers, M.G. Road, Bangalore - 560 001. ... Respondent

¶16

(By Ms. Kruthika Raghavan, Advocate)

¶17

This Company Application is filed under Section 457(1) & (2) of Companies Act, 1956 read with Rule 6 & 9 of the Company Court Rules 1959, praying to direct the respondent No.1, i.e., the Official Liquidator, to execute and register the Sale Deeds and deliver peaceful and vacant possession in favour of Mr. Vivek Mathias, i.e., the Applicant, in respect of the Flat Bearing No.17B (Schedule A Property) and Flat Bearing No.19B (Schedule B Property) in the project named 'Kingfisher Towers', constructed on property bearing Municipal No.24 (Old No.14 and 33) situated on Grant Trunk Road, now known as Vittal Mallya Road, Corporate Division No.61, Ward No.76 of Shanthi Nagar Range, Bangalore (PIN-560 001) by admitting and registering the Sale Deed in favour of Mr. Vivek Mathias before the jurisdictional Registrar of Assurances in terms of the said Agreements for sale and construction of Flat Bearing No.17B (Schedule A Property) and Flat Bearing No.19B (Schedule B Property) and etc.

¶18

This Company Application coming on for orders this day, the Court made the following:

¶19

ORDER

¶20

The applicant has filed an application under Section

¶21

457 (1) and (2) of the Companies Act, 1956 read with Rule 6 and 9 of the Company (Court) Rules, 1959, seeking for a direction to the Official Liquidator to execute registered Sale Deeds pertaining to Schedule 'A' property and Schedule 'B' property and deliver possession of

¶22

¶23

Schedule 'A' and Schedule 'B' property in favour of the applicant.

¶24

The facts and contentions relating to the legal question in C.A.165/2020 also arise in the present case in light of identical contentions and accordingly, the order passed must be read in conjunction with the findings made on the legal issues in C.A.No.165/2020, as legal contentions have been adverted to in detail in the order passed today, in C.A.165/2020.

¶25

The applicant submits that he has entered into an

¶26

agreement to sell dated 30.01.2012 with respect to Flat No.17B and construction agreement dated 30.01.2012 in respect of the same Flat as per Annexure-'E(a)' and 'E(b)' respectively. As regards Flat No.19B, agreement to sell and construction agreement had been entered into on 30.01.2012 as per Annexure-'F(a)' and 'F(b)' respectively. It is submitted that entirety of sale consideration with respect to Flat Nos.17B and 19B as reflected in the

¶27

¶28

documents produced at Annexure-G (a) (b) & (c) has been deposited into the Escrow account.

¶29

It is submitted that a joint venture agreement was executed on 26.04.2010 between the Company (in liquidation) and M/s.Prestige Estates Projects Ltd., and that the Master Facility Agreement executed between the company and HDFC Ltd., was executed on 21.12.2010 and such Master Facility Agreement provides for payments as envisaged under Schedule II (2) and mandates that HDFC Ltd., is entitled to the project receivables in favour of the Borrowers Escrow Account No.00090350002126 opened with HDFC Bank.

¶30

It is submitted that as contended in

¶31

C.A.No.165/2020 and noted in the order passed, admittedly HDFC Ltd., being a secured creditor and all amounts being deposited with HDFC Ltd., and noticing that the sale agreement and the construction agreement having been executed on 30.01.2012, all payments being made as on 22.02.2012 much prior to initiation of winding up

¶32

¶33

proceedings on 26.03.2012 ought to be validated and a further direction be issued for execution of the sale deed.

¶34

It is further submitted that the transaction was made in the ordinary course of business and there are no circumstances to raise any suspicion and that the bonafide transaction ought to be saved. Reliance is placed on the judgment in the case of K. Periasamy Gounder v. Kothari Industrial Corporation Ltd. and Ors. reported in [MANU/TN/4074/2009].

¶35

Though the present application is filed under Section 457 (1) & (2), taking note that the sale deed is sought to be executed after initiation of winding up proceedings, it is necessary for the court before arriving at a conclusion relating to the execution of the sale deed as sought for, to satisfy itself as to the bonafideness of the transaction that was made and that it was made in the ordinary course of business, and that there is no prejudice caused to the body of creditors.

¶36

¶37

Taking note that the agreement to sell and construction agreement both have been executed on 30.01.2012 as per the documents referred to supra, that the entirety of sale consideration has been remitted to the Escrow account of HDFC Ltd., which is admittedly the secured creditor of the company as on 22.02.2012, and that consideration paid prima-facie reflects the market value and no other circumstances being made out leading to any other scrutiny as made herein and taking note of the detailed memo of clarification made out by the Official Liquidator in C.A.165/2020 which is taken note of and also noticing the legal position as enunciated while dealing with C.A.165/2020 and also noticing that the present applicant's transaction unlike in C.A.No.165/2020 was at a point of time prior to initiation of winding up proceedings, a case is made out for allowing the application.

¶38

To avoid repetition, the consideration of the identical legal contentions raised would require reference to the order passed in C.A. 165/2020 today, wherein detailed

¶39

¶40

consideration on the legal contentions has been made and findings are recorded.

¶41

Accordingly, I pass the following:

¶42

ORDER

¶43

(i) C.A. No.253/2020 is allowed.

¶44

(ii) The official liquidator is directed to execute and register the sale deed in respect of the subject Apartment bearing No.17B in the 17th Floor, Kingfisher Towers, constructed on the property bearing Municipal No.24 (old Nos.24 and 33) situated in Grant Road, presently known as 'Vittal Mallya Road', Corporation Division No.61 of Shanthinagar Range, Bangalore - 560 001 and

¶45

(iii) Execute and register the sale deed in respect of the subject Apartment bearing No.19B in the 17th Floor, Kingfisher Towers, constructed on the property bearing Municipal No.24 (old Nos.24 and 33) situated in Grant Road, presently known as 'Vittal Mallya Road', Corporation Division No.61 of Shanthinagar Range, Bangalore-560 001, in favour of the applicant within a period of one month from the date of receipt of a copy of this order subject to the applicant complying with the following conditions:-

¶46

¶47

(a) The applicant shall ensure the presence of Developer M/s. Prestige Estates Projects Ltd., at the time of execution and registration of the sale deed in respect of the subject Apartment in favour of the applicant.

¶48

(b) The applicant shall execute Indemnity Bond in favour of the Official Liquidator indemnifying the Official Liquidator against any loss that may be caused to the Official Liquidator as regards third party claims prior to registration of the sale deed.

¶49

(c) It is made clear that all remedies available in law to the official liquidator are kept open, in the event the transaction is vitiated by fraud as indicated in the indemnity bond stated supra.

¶50

(d) The official liquidator shall take necessary steps to hand over possession of the subject Apartment in favour of the applicant.

¶51

Sd/-

¶52

JUDGE

¶53

Np/-

Mr Vivek Mathias v. United Breweries (Holdings) Limited

Case brief

What is this about?

What did the court decide?

Mr Vivek Mathias v. United Breweries (Holdings) Limited

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

Similar cases

Tinton River Palms Vs State of Karnataka

M/S. B.R.Impex Vs Commissioner of Commercial Tax

Mrs Chandra Devi Kothari Vs the Income Tax Officer

B P Manjunath Vs Official Liquidator

Mr. Vivek Mathias Vs United Breweries (Holdings) Limited

Ms Kiran Mazumdar Shaw Vs the Official Liquidator