Uma Packaging vs State Of Telangana

Heard learned counsel for the petitioners, learned Assistant Government Pleader for Stamps and Registration appearing for respondent Nos.1 to 3 and Sri Raja Shekar Rao Salvaji, learned counsel appearing for respondent No.4.

This writ petition is filed seeking a writ of mandamus to declare the action of respondent No.3 in cancelling the registered sale deeds bearing Nos.5653 and 5654 of 2014, dated 15.11.2014, in respect of land admeasuring Acs.5.00 in Survey Nos.311 and 312 of Budvel Village, Rajendranagar Mandal, Ranga Reddy District, pursuant to the order passed by the National Company Law Tribunal (NCLT), Hyderabad, in Company Petition No.431/241/HBD/2020, without there being any execution petition filed by respondent No.4 under Section 424(3) of the Companies Act, 2013 (for short, ‘the Act’), as illegal and arbitrary.

This Court, at the time of admission on 20.07.2022, passed an interim order under a mistaken impression that a copy of the order dated 15.06.2022 passed by the NCLT was not furnished to the petitioners and thus directed respondent No.3 not to entertain any transaction in respect of the subject documents bearing Nos.5653 and 5654 of 2014.

Respondent No.4 filed counter affidavit along with the vacate petition.

From a perusal of the material on record, it is noticed that the NCLT, Hyderabad, passed an order in the above Company Petition on 15.06.2022 holding that it is a clear case of mismanagement and thereby in exercise of power under Sections 241 and 242 of the Act, set aside the two transactions and cancelled the two sale deeds bearing document Nos.5653 and 5654 of 2014, dated 15.11.2014. A copy of the said order is also filed along with this writ petition by the petitioners. Aggrieved by the said order, dated 15.06.2022, the petitioners have already availed a remedy of appeal before the NCLT, even before filing the writ petition and the said appeal is pending consideration before the appellate Tribunal. As on date, no stay order is granted by the NCLAT on the operation of the order, dated 15.06.2022, passed by the NCLT, Hyderabad, and the same is still in operation. Respondent No.3, having come to know about the order passed by the NCLT, Hyderabad, cancelled the above referred two sale deeds and made necessary entries in Encumbrance Certificate to that effect, thereby implemented the order passed by the NCLT, Hyderabad.

It is the contention of learned counsel for the petitioners that unless and until an execution petition is filed under Section 424 (3) of the Act r/w. Rules 56 and 57 of the Rules made under the Act, and the petitioners are put on notice and an opportunity of raising objections is afforded, respondent No.3 straight away cannot implement the order passed by the NCLT, Hyderabad, and cancel the registered sale deeds behind the back of the petitioners.

This Court, having considered the submissions made by learned counsel for the petitioners, is of the considered view that as and when any document is cancelled by a judicial forum and such an information is furnished to the respondent – Sub Registrar, the Sub Registrar is under obligation to give effect to the same, unless the operation of the said order is stayed or set aside by the appellate Court. Therefore, this Court does not find any error or irregularity in the action of the respondent No.3 in cancelling the above referred two sale deeds and making necessary entries in that regard in the encumbrance of the property in question.

Admittedly, there is no stay granted by the NCLAT against the order, dated 15.06.2022, till date. Hence, when an authority, which is under obligation to give effect to the orders passed by the NCLT is inclined to give effect without there being any execution petition, there is no necessity to initiate execution proceedings. Therefore, the contention of the learned counsel for the petitioners in this regard is wholly unsustainable and this Court does not find any merit in this writ petition.

Accordingly, this writ petition is dismissed leaving it open to the petitioners to pursue their remedies otherwise available under law, including the appeal filed before the NCLAT against the order, dated 15.06.2022, passed by the NCLT, Hyderabad. There shall be no order as to costs.

Miscellaneous Petitions, if any, pending in this writ petition shall stand closed.