Mr. Murugesan, Liquidator vs Ms. Vijayalakshmi & Ors

Per: B. S.V. PRAKASH KUMAR, MEMBER (JUDICIAL)

It is an MA filed by Liquidator of M/s. Velohar Infra Private Limited seeking further reliefs as mentioned below:-

Before this MA has been filed by the Liquidator, the Liquidator had already filed MA411/2019 seeking directions against R1 (Ms Vijayalakshmi, Suspended Managing Director of M/s. Velohar Infra Private Limited (Corporate Director) – herein after called as “MD”) for production of the original title deeds of the property situated at “SUN RISE AVENUE”, Sholinganallur Village, Sholinganallur Taluk, Kanchipuram District, bearing Old Survey No. 1/1g and New Survey No. 1G/294/A1/B1 (herein after called as “the property”), upon which, MD having undertaken that the property has already been mortgaged and would hand over original documents of it to the Liquidator, basing on that undertaking, this Bench on 03.05.2019 disposed of MA 411/2019 by passing an order, which is as follows:

In furtherance of the above said order, MD on 10.05.2019 wrote a letter to the Liquidator (Mr. Murugesan) which is as follows:

For this MD has failed to hand over originals of the same to the Liquidator in furtherance of the undertaking given by her, and since those originals are essential for sale of the assets, when the liquidator has filed this MA, this MD has today come out with a new defence stating that though the sale deed was executed in favour of the Corporate Debtor, since this property was encumbered long before execution of the sale deed, MD had already demanded the Power Attorney Holder (Vendor) to return the money paid to him through cheque, on the ground this property sold to the Corporate Debtor is found encumbered. To buttress this argument, MD has filed a letter issued by Bank of India on 24.12.2018 stating that Power of Attorney Holder has not encashed the cheque till date.

When registered sale deed is executed on consideration, if at all consideration is not paid as stated by this R1, the recourse available to the Purchaser is to proceed against such Power of Attorney Holder as mentioned under Section 31 of Specific Relief Act for cancellation of the same, but till date, no such proceeding has been initiated by this MD or the Corporate Debtor against the Power of Attorney Holder for refund of that money or cancellation of registered sale deed.

Since sale deed was executed in favour of the Corporate Debtor, and the same not being invalidated till date by any court of law, the Liquidator is bound to consider the said property as an asset of the Corporate Debtor. Moreover, this MD has not filed any document showing that the property was already encumbered as on the date of execution of the registered sale deed in favour of the Corporate Debtor. If at all any encumbrance is created over the said property, this MD should have obtained Encumbrance Certificate from the Sub-Registrar to show that the property was sold and the person executed the sale deed has no right to convey title to the Corporate Debtor.

When this Bench has been dictating this order stating that MD has not produced any Encumbrance Certificate before this Bench, R1 (MD) Counsel has stated that there is some sale agreement entered into with third party. But no such agreement is placed before this Bench.

That apart, when sale deed was executed in favour of the Corporate Debtor, whatever sale agreements, if at all in existence as on the date of execution of sale deed, will have no bearing unless a decree has been obtained from court of law. Till date, there is no information any such proceeding is initiated either for cancellation of the registered sale deed executed by the Power of Attorney Holder (Vendor) in favour of the Corporate Debtor or by the third party disputing the title conveyed in favour of the Corporate Debtor.

Now R1 Counsel has stated that since documents are not available with MD, she shall be relieved from this proceeding and no action should be taken against her.

As against this argument, if we see the order passed by this Bench on 03.05.2019, it is clear that this same MD gave the undertaking in MA/411/2019 to release the originals of the sale deed, not only that, she herself addressed the letter to the RP stating that those documents are available with Advocate Mr. Rajiv Gandhi and R1 & the Liquidator could collect them from that Advocate.

It is not the case of the Liquidator that he has agreed to collect them from that advocate, who is cited as R2 in this MA. Moreover, writing a letter to somebody will not relieve anybody from their duties, and even in that letter addressed by R1, it is evident that R1 said that the Liquidator and herself would go to the Counsel (R2) and collect them. This could not be construed as MD is relieved from complying with the order passed by this Bench on 10.05.2019.

As to the letter given by the Bank regarding encashment of cheque, since it was asked to say as to whether the cheque with certain number is encashed, it is obvious that Bank would say that it was not encashed. The same was said by the Bank. There is a possibility that this Cheque might have been given as additional security or for some other reason. In any event, remaining cheque not encashed with the vendor will not have any bearing on the title conveyed to the Corporate Debtor through a registered sale deed. Therefore the letter will not have any bearing for production of the originals lying in the custody of R1 or in the custody of her Counsel (R2).

In view of the same, it is her bounden duty to cause them produced before the Liquidator. It is her lookout to collect them from her counsel, if at all lying with her advocate, therefore MD/R1 is hereby directed to produce the original of the Sale deed to the Liquidator within two weeks from the date of release of this order.

Since the document has been executed in favour of the Corporate Debtor and R1 being the Managing Director of the Corporate Debtor, and she herself having stated that these originals lying with her Counsel, R1 cannot be relieved from her duties cast upon her to produce the originals to the Liquidator.

In view of the aforesaid reasons, since the original documents are essential to the liquidator for liquidating the assets of the Corporate Debtor, for doing so, since he is required to show them to intending purchasers telling that the Corporate Debtor is vested with title over the property, therefore R1 is hereby directed to hand over the original documents within two weeks, failing which, the Liquidator is at liberty to take the assistance of the Commissioner of Police, Chennai, in the event the Liquidator has approached the police concerned, the Authority concerned is hereby suggested as contemplated under section 429 of the Companies Act to provide necessary assistance to the Liquidator for expeditious release of the said originals from these Respondents to the Liquidator herein. Accordingly, this MA is hereby disposed of.