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Judgment
Sujoy Paul, J.—This application is filed u/s 443 and 450 of the Companies Act (hereinafter referred to as the "Act"). It is stated that the respondent-Company is required to pay Rs. 5,73,97,440 and 40 paise only to the petitioner with further interest and other charges thereupon. A settlement was entered into between the petitioner and the respondent-Company but the respondent-Company has not complied with the terms of the said settlement. Accordingly, a contempt petition was filed in which a limited time was granted to comply with the order. Yet respondent-Company has not complied with the agreement. It is stated that the present petition was already admitted by this Court on 29.4.2011. As required u/s 439(A-2) of the Act, the respondent-Company has not chosen to file any settlement. Accordingly, it is prayed that by invoking Section 450 of the Act, Provisional Liquidator be appointed.
Shri Bharadwaj, learned senior counsel submits that in view of the conduct of respondent No. 2, the best course is to appoint a provisional liquidator so that further action can be done in the presence and as per the assistance provided by the said liquidator. He relied on the judgment of Delhi High Court reported in Espn Software India (P) Ltd. Vs. Modi Entertainment Network Ltd., . he also relied on Motorola India Ltd. Vs. DSS Mobile Communications Ltd., By relying on these judgments, it is stated that the facts of this case and that of Motorola India Ltd. (supra) are almost identical. In identical circumstances, the Delhi High Court has decided to appoint an Official Liquidator and same course be adopted here so that the liability can be settled and order passed by this Court can be complied with. However, he fairly admitted that the order passed in Com. P. No. 24/12 by this Court has been stayed by the Supreme Court.
Shri Bharadwaj, learned senior counsel further submits that paras 5 and 8 of the reply of M.P.F.C. shows the liability of the respondent-Company. Lastly, he submits that for the purpose of seeking permission and selling land, as desired by the Company by filing I.A. No. 4589/12, an Official Liquidator for limited purpose of deciding and executing sale etc. be appointed.
I.A. No. 4589/12
By filing this application, permission to sell land and directions to Sub-Registrar to register the sale documents is prayed for. It is stated that on 8.7.2011 the Company Judge passed an adverse order against respondent No. 1. It was challenged in Company Appeal No. 7/11 During pendency of the said appeal, the parties amicably settled the matter as per the terms and conditions through a Memorandum of Settlement dated 13.8.2011. The Division Bench disposed of the Company Appeal by order dated 16.8.2011 in terms of compromise/settlement entered into between the parties.
The expectation of respondent No. 1 to generate fund was found to be impractical because of lack of liquidity available. The unforeseen circumstances were also an impediment for the Company to comply with the settlement. The Company then decided to sell the land at village Dabra (survey No. 1850, 1851, 1852, 1853 and 1854) (total 1.408 hectare) and in village Ramgarh, the part of Survey No. 727 and 741 (total 0.125 hectare).
The Company filed I.A. No. 406/12 u/s 536(2) of the Act. The Company Judge passed the order dated 16.2.2012 and decided to give permission as prayed in I.A. 406/12 with following conditions:-
(i) The respondents shall clear the NPA dues of Financial Corporation upto 31.3.2012 forthwith.
(ii) The respondent is permitted to sell the aforesaid land after paying the said claim to Financial Corporation. Permission is granted to the extent indicated above.
The respondent No. 1 approached the Sub Registrar, Dabra for registering the sale deed in furtherance to the Court order. However, the Sub Registrar refused to register the sale deed.
I.A. No. 938/12 was filed by respondent No. 1 seeking direction for Sub Registrar, Dabra to register the sale deed. The said authority was impleaded as party respondent in this matter. In turn, the said respondent filed reply of I.A. No. 938/12 and stated that in view of a Division Bench order passed by this Court in W.P. No. 1773/06 (PIL), the permission cannot be granted.
Shri Rohit Arya, learned senior counsel submits that I.A. No. 938/12 was rejected by this Court mainly on the ground that in view of Division Bench judgment passed in W.P. No. 1773/06 (PIL), no permission can be granted by this Court. It is stated that the said Division Bench judgment was under challenge before the Supreme Court in SLP No. 1861/08 and on 2.11.2012 the Supreme Court has set aside the order passed by this Court. On the strength of the said order, it is stated that the only impediment for non-grant of permission or not executing the sale deed by the Sub Registrar now does not survive after the order of the Supreme Court.
By placing reliance on paras 13 and 14 of the judgment of Supreme Court, learned senior counsel submits that there is no impediment for the State authorities for the purpose of execution of sale deed. Paras 13 and 14 of the said judgment reads as under:-
The rights of a bhumiswami are clearly enumerated by Section 165 of the MP Land Revenue Code which encompasses a right to transfer. The bar imposed on the right to transfer does not apply to non-agricultural lands and, hence, would not be relevant to the present case. If the right of transfer has been conferred on the appellant by the provisions of a statute and the bar contemplated does not apply to the appellant, we do not see how a clause or a condition in the original patta granted by the zamindar in samvat 1978-79 (corresponding to English Calender year 1940-41) can restrict such a right. In any case, there is no specific clause or condition in any of the original pattas prohibiting or even restricting the right of the appellant to transfer any part of the land allotted to it that may be lying vacant. Neither any material has been placed before us to enable us to take the view that under terms of the lease granted u/s 101 of Tenancy Act and section 39 of Abolition of Zamindari Act any restriction or bar had been imposed on the appellant-Company from making such a transfer.
In view of the aforesaid conclusions the issue with regard to applicability of the Urban Land Ceiling Act and the Ceiling on Agricultural Holding Act, need not detains us, save and except to hold that the provisions of either of the aforesaid Acts, ex-facie, do not apply to the case of the appellant-Company. We would further like to observe on the view taken by us it is not necessary to go into the question as to whether the decree affirmed by the High Court of Madhya Pradesh in S.A. No. 482 of 2002 binds the State or whether the same is in respect of the entire land holding of the appellant-Company or only a part thereof.
The learned senior counsel further submits that the respondent-Sub Registrar has filed its reply and assigned untenable and flimsy reasons for not executing the sale deed. He submits that the Supreme Court has made it clear that there is no impediment about the right of transfer of property and, therefore, the objection is without any basis. Shri Arya further submits that the order of Debts Recovery Tribunal (DRT) filed by the State is also of no assistance to them. He submits that the direction by the DRT is against respondent No. 4 therein, Agricultural Company and it has nothing to do with the respondent No. 1 herein. Lastly, by placing reliance on the interim order of the Supreme Court filed along with the response of the State, Shri Aarya submits that this order dated 25.4.2011 makes it clear that earlier order of Supreme Court whereby respondent No. 1 was restrained from alienating the property is vacated and it is confined to only such properties which are restrained by the Additional Commissioner by virtue of his order dated 3.2.1999. Therefore, it is clear that even the Supreme Court intended to permit the respondent No. 1 to sell the property. To emphasis, Shri Arya submits that the respondent No. 1 is owner of the land and he wants to sell the property so that the liabilities can be fulfilled and the Company can proceed further. He further submits that the petitioner filed I.A. No. 2590/11 in June, 2011. He did not press this application for quite some time. This Court earlier granted permission on 16.2.2012 after hearing the parties including the petitioner. The petitioner did not press I.A. No. 2590/11 on that date, nor decided to press it on subsequent dates also. When I.A. No. 938/12 was rejected on 14.8.2012, after a long slumber the petitioner woke up and now insisted on I.A. No. 2590/11 which prayer cannot be allowed.
Shri Arya, learned senior counsel further submits that in view of settled legal position, the Official Liquidator (OL) cannot be appointed on mere saying or in a routine manner. By relying on the judgment of this Court in the case of Virendrasingh Bhandari and others Vs. Nandlal Bhanddari and Sons P. Ltd. decided on 3.5.1974, it is submitted that the step towards appointment of Official Liquidator is a drastic step, which can be taken when it is absolutely necessary. He relied on paras 24, 25, 26, 28, 29, 30, 31, 32 & 33 of this judgment. He then relied on another judgment of this Court in the case of Kailash Prasad Mishra and others Vs. Medwin laboratory P. Ltd. and others decided on 17.12.1985. He relied on paras 16 and 19 of the said judgment. On the strength of these judgments, it is stated that the ingredients for appointment of Official Liquidator are not available and, therefore, in a routine manner such permission cannot be granted.
He submits that in response to I.A. No. 3486/12 he has filed a valuation report (Annexure R-1(1) and R-1(2) which shows that the huge amount of land, machinery and plant are there for respondent No. 1. Its valuation is much more higher than the liability on the petitioner towards various heads. He submits that if small pieces of land are permitted to be sold, it will not adversely affect the liabilities. The learned senior counsel further submits that respondent No. 1 is bound to pay the statutory dues to the P.F. Organization and shall also satisfy the amount due to the M.P.F.C. He submits that he undertakes on behalf of respondent No. 1 that the said amount shall be paid and the permission is prayed for with a view to fulfill and discharge the aforesaid liability.
Criticizing the stand of the State, Shri Arya submits that the State has filed review petition before the Supreme Court but no orders are passed by the Supreme Court on the said review and it is kept in default and, therefore, the said review is of no assistance to the State, nor it can be an impediment for not executing the sale deed. Criticizing I.A. No. 3486/12 filed by M.P.F.C., Shri Arya submits that the ingredients and conditions mentioned in Section 446 are not satisfied. Therefore, the application is not maintainable.
Shri J.D. Suryavanshi, learned counsel for M.P.F.C. Submits that I.A. No. 3486/12 is maintainable. M.P.F.C. is established u/s 3 of the M.P.F.C. Act, 1951. The petitioner had obtained Rs. 380 lakhs as loan but did not repay the same. By taking this Court to the documents along with I.A. No. 2590/11 (page 12 condition No. 11) and page 19 condition No. 19), it is submitted that without fulfilling these conditions, the land cannot be permitted to be sold by respondent No. 1. Shri Suryavanshi further submits that in I.A. No. 4589/12, the respondent No. 1 is seeking permission to sell the land of Ramgarh also whereas in his earlier application I.A. No. 406/12 decided on 16.2.2012, he only prayed for permission to sell the land in Dabra village. He submits that the M.P.F.C. has no objection if permission is accorded to sell the land situated in Dabra village as per the conditions laid down by this Court but it has objection regarding the land situated at Ramgarh. By placing reliance on Boolani Engineering Corporation Vs. Asup Synthetics and Chemicals Ltd., and Bakemans Industries Pvt. Ltd. Vs. New Cawnpore Flour Mills and Others, , Shri Suryavanshi submits that the first charge is of M.P.F.C. and, therefore, the respondent No. 1 is bound to pay the amount to the M.P.F.C.
Shri Praveen Newaskar, learned Dy. Govt. Advocate submits that a review petition is pending before the Supreme Court and till decision of that review petition, in the fitness of things, permission be declined. He relied on order of DRT filed with his response to submit that there is direction to defendant No. 4 therein and in the light of said direction, it will not be proper to accord permission.
Shri R.K. Goyal, learned counsel appearing for P.F. Organization was heard on I.A. No. 700/12. Interrupting him, Shri Rohit Arya submits that copy of this I.A. has not been provided to respondent No. 1 till date. It is not refuted by Shri Goyal. Considering the aforesaid, Shri Goyal is directed to supply copy of this I.A. to Shri Santosh Singh/respondent No. 1 within three days from today. In turn, respondent No. 1 may file response to this I.A. before the next date of hearing. However, the stand of Shri R.K. Goyal is that the P.F. liability towards respondent No. 1 is about 3.97 lakhs and other liability regarding contract labourers, interest dues arising out of other statutory provisions will be added which will enhance the amount. He also submits that the first charge on the amount is of P.F. Organization. He relied on Employees Provident Fund Commissioner Vs. O.L. of Esskay Pharmaceuticals Limited, and Textile Mazdoor Congress Vs. State of Madhya Pradesh and Others, in this regard.
This matter consumed lot of time today and could not be concluded. The learned counsel for the parties submit that they still have to apprise this Court on certain issues. Because of paucity of time, with consent of parties, matter is adjourned for 28.2.2013.
Certified copy as per rules.