Allowed

Bhanduvula Srinivasan, v. M/s. Commercial Agro Products Private Ltd.

Telangana HC18 Jun 2014COMPA/630/2014

Case brief

AI extract

What is this about?

The company held an application regarding land possession infructuous as it could not succeed in a specific performance suit on an insufficient agreement. The court directed the dispute parties to refund Rs. 25 lakhs to the liquidator to abate the company's claim and allow the applicants to resume possession.

What did the court decide?

Applicants directed to pay Rs. 25 lakhs to Official Liquidator to abate Company's claim; Company Application No. 576 of 2005 disposed of as infructuous; licensors permitted to withdraw criminal cases.

Bhanduvula Srinivasan, Vs M/s. Commercial Agro… — Company and Corporate | Telangana HC (2014)

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Hon'ble Sri Justice C.V.Nagarjuna Reddy Company Application Nos.576 of 2005 and 630 of 2014

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Date:18.06.2014

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Comp.Appln.No.576 of 2005

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Between:

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M/s.Commercial Agro Products Pvt. Ltd. (In Prov. Liqn.) Rep. by the Official Liquidator, High Court of A.P., Hyderabad

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……Applicant

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AND

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1.Sri M.Ramabhushanam and another.

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…Respondents

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Counsel for the Applicant: Sri M.Anil Kumar,

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Counsel for respondent No.1: Sri B.Vijaysen Reddy

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Comp.Appln.No.630 of 2014

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Between:

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1.Bhanduvula Srinivasan and another

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……Applicants

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AND

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1.M/s.Commercial Agro Products Pvt. Ltd., Rep. by Official Liquidator, High Court of A.P., Hyderabad and another

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…Respondents

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Counsel for the Applicant: Sri Srinivas Bodduluri

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Counsel for respondent No.1: Sri M.Anil Kumar, Counsel for OL

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Counsel for respondent No.2: Sri B.Chandrasen Reddy

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The Court made the following: Common Order:

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Company Application No.576 of 2005 is filed by the Official Liquidator for a direction to respondent No.1, who is the former Managing Director of the Company in provisional liquidation (hereinafter referred to as ‘the Company’), for furnishing full and complete details of the properties of the Company at Mattempadu Village, Nellore District, and to direct respondent No.2- Sub Registrar, Nellore Town, to furnish details of the landed properties owned by the Company in Mattempadu Village.

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The long and short of the case is that the Company has come into possession of Acs.231-47 cents of agricultural land in Survey.No.91 situated at Mattempadu Village, Nellore Rural Mandal, SPSR Nellore District. It is the pleaded case of the Company that out of the said extent, an extent of Acs.50-00 cents is the subject matter of an agreement of sale under which the land owners have,

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allegedly, agreed to sell the same on a sale consideration of Rs.14,000/- per acre; that in pursuance thereof, a sum of Rs.5 lakhs was given in advance by the Ex-Managing Director of the Company and that on various subsequent dates, the entire sale consideration of Rs.7,17,056/- was paid by him to two of the land owners viz., B. Srinivasan and B. Ramakrishna. After the provisional liquidator was appointed by this Court, the said land was stated to have been taken into possession.

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In Company Application No.912 of 1999, which is disposed of today by a separate order, AdvocateCommissioners were appointed to report on the status of various parcels of land belonging to the Company including the land admeasuring Acs.50-00 a t Mattempadu Village. The AdvocateCommissioners filed their report on 22-02-2000 wherein they have dealt with the subject land under the caption ‘Site No.6’. They have stated therein that one person by name Mangalapuri Venkateshwarlu is residing in one of the sheds; that as per his statement and that of two other persons by name Perumula Rangaiah and Thomata Nasaiah, grass is being grown over the lands given on lease and; that one Rama Sundaraiah collects the lease amount yearly

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on behalf of the Official Liquidator. It was further observed that no security guard or watchman was available to take care of the entire land.

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One Bandhuvula Uma has filed Company Application No.833 of 2013 wherein she has claimed that she and her family members own an extent of Acs.231.41 cents of agricultural land out of which she owns Acs.33.93 cents and; that the Company has nothing to do with the land other than Acs.50-36 cents in Survey No.24. She has, accordingly, prayed for restricting the claim of the Official Liquidator to Acs.50-36 cents. This Court called for a report from the Official Liquidator wherein he has confirmed, after verification of records, that the Company has no legitimate claim over the land other than

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Acs.50-36 cents. Based on the said report, this Court has clarified that in view of the restriction of claim by the Official Liquidator only to an extent of Acs.50-36 cents, the grievance of the applicant in the said Company Application stood redressed and accordingly, closed the said application by Order, dated 31-10-2013.

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At the hearing, it is agreed by all the learned

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Counsel that in view of Order, dated 31-10-2013, passed in Company Application No.833 of 2013, the Company can continue its claim over Acs.50.36 cents only in Survey No.24. In this view of the matter, the prayers in Company Application No.576 of 2005 have become infructuous and the said application is, accordingly, liable to be disposed of as infructuous. With regard to Company Application No.630 of 2014, it is filed by two persons viz., Bandhuvula Srinivasa Rao and Vedam Radha claiming to be the pattadars of the lands admeasuring Acs.231.47 cents situated at Mattempadu Village and seeking to close the liquidation proceedings in C.P.No.83 of 1997 with respect to their lands admeasuring Acs.50.00 cents in Survey Nos.17/1 and 24/1. The Company and its ExManaging Director were arrayed as respondent Nos.1 and 2 in the said application. While, the applicants pleaded that the respondents have no right or title over the extent of Acs.50-00 cents of land, in any manner, based on the alleged agreements of sale, dated

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10-07-1994 and 30-01-1995, the respondents contended that the Ex-Managing Director has entered into an agreement of sale with two persons by name Banduvula Ramakrishna and Banduvula Srinivasan

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for purchase of the extent of Acs.50-00 cents of land @ Rs.14,000/- per acre; that in pursuance thereof, a sum of Rs.5 lakhs was paid by the Ex-Managing Director to the vendors; that the entire sale consideration of Rs.7,17,056/- was paid by him on different dates, commencing from 09-07-1994 upto 23-02-1995 through various cheques and; that having received the same, the vendors have failed to execute the registered sale deed.

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It is the pleaded case of the applicants in Company Application No.630 of 2014 that the property of Acs.231.47 cents, of which the extent of Acs.50-00 cents claimed by the respondents forms part, is owned by as many as 8 persons including the alleged vendors under agreement of sale and that while the said agreement of sale is fabricated by the Ex-Managing Director, at any rate, the same will not create any right in the Company as, out of 8 coowners only 2 are stated to have executed the said agreement. It is further pleaded that the agreement of sale is bereft of any details as to the survey numbers, boundaries and description of the property, which was, allegedly, sought to be conveyed thereunder and that, in any event, in the absence of a registered sale deed, the agreement of sale will not convey any

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right in the immovable property to the Company. There is also a serious dispute as to the physical possession of the said property. The applicants have filed copies of adangals, dated 18-05-2013, relating to the entire extent of Acs.231.47 cents to substantiate their claim that they are in physical possession thereof.

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This Court has heard all the learned Counsel on 17-06-2014 and also today.

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On the admitted facts of this case, the Company is making the claim only on the basis of an agreement of sale. Under Section 54 of the Transfer of Property Act, 1882, a contract for sale of immovable property is a contract, which shall take place on the terms settled between the parties, and it does not by itself create any interest or charge on such property. Though the agreement of sale is stated to be of the year 1995, neither the Company nor the Official Liquidator has filed any suit for specific performance of agreement of sale. While this Court, on a careful perusal of the agreement of sale, feels that the same being silent on the description of the property including the survey numbers, there appears no chance for the Company to succeed even if a suit for specific performance of agreement of sale

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is filed as the very suit itself, at this length of time, would be barred by limitation.

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Both Mr.M.Anil Kumar, learned Counsel for the Official Liquidator, and also Mr.B.Chandrasen Reddy, learned Counsel for the Ex-Managing Director, fully agreed with the view expressed by this Court on this aspect and they fairly accepted that there are no chances of the Company succeeding before the civil Court even if a suit for specific performance of agreement of sale is filed. Under these circumstances, this Court has suggested to Sri B.Srinivasa Rao, learned Counsel for the applicants in Company Application No.630 of 2014, to find out whether his clients are willing to refund the sum of Rs.7,17,056/- stated to have been paid by the Company towards sale consideration along with reasonable interest in respect of the land in dispute.

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The learned Counsel for the applicants, on instructions, submitted that though in law or on facts, his clients are not under obligation to return the sum of Rs.7,17,056/-, which according to him was received towards lease amounts for the extent of Acs.231.47 cents and not towards sale consideration, he has, however, stated that in order to give quietus to the long drawn and vexatious litigation, his clients are

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agreeable to refund the sum of Rs.7,17,056/- along with simple interest @ 12% p.a., which comes to about Rs.23 lakhs.

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The learned Counsel for the Official Liquidator and the Ex-Managing Director, however, stated that as interests of the shareholders are involved, the applicants may offer higher amount. In response to this submission, the learned Counsel for the applicants stated that his clients are willing to pay Rs.25 lakhs as full and final settlement of the claims of the respondents.

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Upon carefully considering the facts and circumstances of the case, this Court is of the opinion that instead of continuing the litigation to hang fire and in the absence of any possibility of the respondents succeeding in getting their rights declared over the extent of Acs.50-00 cents of land before the Civil Court, it would be in the interests of the shareholders and other stake holders of the Company that the money offered by the applicants is received by the Official Liquidator in lieu of the Company’s claim over the extent of 50 acres of land. Accordingly, the applicants are directed to pay the said amount of Rs.25 lakhs to the Official Liquidator within four weeks from today.

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Accordingly, while Company Application No.576 of 2005 is disposed of as infructuous, Company Application No.630 of 2014 is disposed of by holding that on payment of a sum of Rs.25 lakhs to the Official Liquidator within four weeks from today, the claim of the Company over the extent of Acs.5000 cents of land stands abated and the applicants therein are entitled to exercise their ownership and possessory rights over the subject property along with other co-owners, if any, from the time of payment of the said money free from interference by the Official Liquidator or any one claiming through the Company in Liquidation. At this stage, it is stated that a Criminal Case is pending in connection with the property in question. In view of this order, the Official Liquidator is permitted to withdraw the Criminal cases pending before the jurisdictional Magistrate.

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______________________ (C.V.Nagarjuna Reddy, J)

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18^th June, 2014 LUR

Bhanduvula Srinivasan, v. M/s. Commercial Agro Products Private Ltd.

Case brief

What is this about?

What did the court decide?

Bhanduvula Srinivasan, v. M/s. Commercial Agro Products Private Ltd.

Case brief

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What did the court decide?

What the court decided

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