Gujarat High Court
Sahara vs O.L on 23 July, 2009
Author: Jayant Patel
Bench: Jayant Patel
Gujarat High Court Case Information System
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COMA/34/2007 28/ 28 JUDGMENT
IN
THE HIGH COURT OF GUJARAT AT AHMEDABAD
COMPANY
APPLICATION No. 34 of 2007
With
COMPANY
APPLICATION No. 64 of 2004
In
COMPANY
PETITION No. 29 of 1997
With
COMPANY
APPLICATION No. 455 of 2008
In
OFFICIAL
LIQUDATOR REPORT No. 20 of 2007
With
COMPANY
APPLICATION No. 25 of 2003
In
COMPANY
PETITION No. 29 of 1997
With
OFFICIAL
LIQUDATOR REPORT No. 20 of 2007
With
COMPANY
APPLICATION No. 654 of 2008
In
OFFICIAL
LIQUDATOR REPORT No. 20 of 2007
With
COMPANY
APPLICATION No. 79 of 2009
In
OFFICIAL LIQUDATOR
REPORT No. 20 of 2007
For
Approval and Signature:
HONOURABLE
MR.JUSTICE JAYANT PATEL
=========================================================
1
Whether
Reporters of Local Papers may be allowed to see the judgment ?
2
To
be referred to the Reporter or not ?
3
Whether
their Lordships wish to see the fair copy of the judgment ?
4
Whether
this case involves a substantial question of law as to the
interpretation of the constitution of India, 1950 or any order
made thereunder ?
5
Whether
it is to be circulated to the civil judge ?
=========================================================
SAHARA
PACKAGING PVT. LTD. (KNOWN AS SAHARA FINSTOCK PVT. - Applicant(s)
Versus
O.L.
OF MOTOROL (INDIA) LTD. & 4 - Respondent(s)
=========================================================
Appearance :
MR
AS VAKIL for Applicant(s) : 1,
MR JS YADAV for
Respondent(s) : 1,
MR MRUGESH JANI for Respondent(s) : 1,
MR
BHARAT JANI for Respondent(s) : 2,
MSBALARTHACKER for
Respondent(s) : 3,
MR TS NANAVATI for Respondent(s) : 4,
MR MK
VAKHARIA for Respondent(s) :
5,
=========================================================
CORAM
:
HONOURABLE
MR.JUSTICE JAYANT PATEL
Date
: 23/07/2009-06/08/2009
ORAL
JUDGMENT
Company Application No.34/07 The Company Application No. 34/07 is preferred by the applicant for the prayer to validate the transaction entered after the date of presentation of the winding up petition and before winding up order was passed, by exercising the discretion as per Section 536(2) of the Companies Act (hereinafter referred to as 'the Act'). The prayers are also made to declare that the transaction is genuine and bonafide and it is prayed to direct the OL to handover the possession of plant and machinery of the company in liquidation situated at Block No.10, village Dumiya, Taluka Halod, District Panchmahal.
In order to appreciate the contention raised by the applicant, certain facts may have relevance and the same are as under:
It is not in dispute that the Company Petition No.29/97 was filed against the Company viz. Motorol (India) Ltd. (hereinafter referred to as the Company in liquidation for the sake of convenience) for winding up of the Company on 26.12.1996. It is also not in dispute that thereafter, the Company in liquidation is ordered to be wound up by this Court and has been wound up. The OL has taken over the possession of the assets of the Company of both the plants, one situated at Dumiya, Halol and another at village Ganetha, Jambusar. The winding up order is passed on 19.08.1999 and the possession is taken over on 06.09.1999. At the relevant point of time, when the OL took over the possession of the properties of the Company, none of the representative of the applicant were present nor any representative of the applicant were present nor any representation was made before OL by the Ex-Directors of the Company in liquidation or any person that the Plant & Machinery over which the claim is made by the applicant are already disposed by the Company in liquidation to the applicant and the same is of the ownership and in possession of the applicant.
It appears that after the OL took over the possession, OL filed compliance report with this Court and thereafter, the property of the Company in liquidation including Plant & Machinery has been sold under the order of this Court. At the time when the possession of the Plant & Machinery was to be handed over, at that stage, the applicant came out with the grievance that the Plant & Machinery was sold to the Company in liquidation after the presentation of the date of the petition for winding up but prior to the order of winding up was passed. It is also stated by the applicant that the sale consideration is paid by the applicant to the Company in liquidation and therefore, the transaction is bonafide and be validated by this Court in exercise of the powers under Section 536 of the Act. In support of the present application, the affidavit has been filed by the applicant in which the copy of the Resolution of the Company in liquidation dated 28.02.1997 is said to have been passed authorising the Director to dispose of the properties as he may deem fit in the interest of the Company. The Invoice dated 01.04.1997 issued by the Executive Director of the Company is produced. The pertinent aspect is that there is no separate price of each item of the plant, but consolidated figure is mentioned as Rs.3,40,00,000/-. In the column of payment details, it is mentioned within 45 days. The applicant has further produced the extract of the ledger account of the Company in liquidation for showing that after the Plant & Machinery was purchased on 01.04.1997, various payments have been made on 19.05.1997 to 06.08.1997 by cheques, total amounting to Rs.3,40,00,000/-. It has therefore been submitted that the Plant & Machinery was sold to the applicant and the applicant having paid the full consideration, the transaction be validated.
Section 536 of the Act which is pressed in service by the applicant reads as under-
536.
Avoidance of transfers, etc., after commencement of winding up.
(1)In the case of a voluntary winding up, any transfer of shares in the company, not being a transfer made to or with the sanction of the liquidator and any alteration in the status of the members of the company made after the commencement of the winding up, shall be void.
(2)In the case of a winding up by [the Court], any disposition of the property (including actionable claims) of the company, and any transfer of shares in the company or alteration in the status of its members, made after the commencement of the winding up, shall [unless the Court] otherwise orders, be void.
The aforesaid provision of the Act and more particularly, sub-section(2) of Section 536 shows that any dispute of the property including executable claim of the Company after commencing of winding up, shall unless the Court otherwise orders, be void. Therefore, the mandate of legislature is to treat such transaction as void, but leaving room for the powers of the Court to declare such transaction as not void or valid. To say in other words, all such transaction are to be treated as void unless any specific declaration is made by the Court to treat such transaction as valid or otherwise. Therefore, the Court has the power to declare the transaction as valid, but such power is to be exercised by way of exception to the normal intention of the legislature to treat the transaction as void. It is by now well settled that if the Court is to declare the transaction as valid so as to permit the enforceability of such transaction, such transaction has to be bonafide and genuine and it also appears that while declaring the transaction as valid, in addition to the test of transaction to be genuine or bonafide, the Court may also consider that the transaction is not in contravention to any statutory provisions or that the validation of the transaction by the Court may not result into nullifying any statute or law.
It further appears that it is upon the person seeking declaration for validation of the transaction is genuine, bonafide and not in contravention to any statutory provisions. The matter deserves to be examined in light of the aforesaid parameters.
If the transaction is to be examined in light of the statutory rights of the parties, viz. of the company in liquidation, vis-a-vis the rights of the secured creditor, it appears that as per the respondent No.2 Bank of Baroda, the property of the company including the plant and machinery were mortgage and hypothecated with it by the company in liquidation. Even on the date when the so called sale had taken place in favour of the applicant. In support of the said aspects, the affidavit has been filed by the Chief Manager of the respondent No.2 Bank of Baroda and it has been stated that the company in liquidation had mortgaged its entire plant and machinery, furniture and fixtures lying at the factory or elsewhere with the respondent No.2 Bank for enhancement of the total limit of Rs.1279 Lakhs. The copy of the registration of the charge with Registrar of Companies dated 08.11.1995 is produced. Column No.3 shows the particulars of the property which is charged and it includes the factory shed and office etc. along with fixed plant and machinery.
The attempt was made by Mr. Vakil for the applicant to contend that the interpretation of the Registration of Charge by the respondent No.2 Bank over the plant and machinery in question is not correct. It was submitted that earlier, when the charge was registered by other financial institutions, they were specific with the express description of the plant and machinery, which is lacking in the present case. He also contended that the complete record of the registration of the charge is also not produced. It was therefore submitted that the Bank of Baroda is not right in contending that the property of Plant and Machinery which is produced by the applicant was mortgaged with the Bank.
Considering the record produced of registration of charge, coupled with the affidavit and also the Judgement and Award passed by the Debt Recovery Tribunal permitting the recovery of the amount from the Company in Liquidation, it is not possible to accept the contention of the learned counsel for the applicant that the plant and machinery which is said to have been purchased by the applicant was not mortgaged with the Bank of Baroda and therefore, the said contention deserves to be rejected.
If the property of the Company in liquidation was already mortgaged/hypothecated with the respondent No.2 Bank and the sale has taken place without express consent of the mortgagee or the Bank in whose favour the hypothecation was there, such sale cannot be pressed against the Bank in whose favour the rights were in existence, but can also be said as entered into by the company in liquidation for frustrating the rights of the bank. Further, if the Company had the defective title of the plant and Machinery on account of the charge or the mortgage, as the case may be, it in any case could not convey a better title than it had in favour of the purchasers.
(As the Court time is over, the matter is adjourned to 30.07.2009.) Therefore, it appears that if the impugned transfer is validated, the consequence would be that the rights of the Bank with whom the property was hypothecated may be adversely affected and the resultant effect may be for nullifying the rights of the Bank who is having the first charge over the property.
On the aspects of the transaction itself, it appears that the burden is not satisfactorily discharged by the applicant to the fullest extent inasmuch as the invoice which is pressed in service though is unusually typed, but there is no reference of actual handing over of the delivery of the machinery which is sought to be claimed. In a transaction of sale of goods or any movable property, invoice simplicitor would not be sufficient. The aspects of actual handing over of such movables may assume relevance for examining the genuineness of the transaction. There is no recording of the aspects for handing over of the possession in the invoice or any clear statement for the exclusive entrustment of the possession by the Company in liquidation in favour of the application. It is true that as per the applicant, the statement made is that it has utilized the machinery for its manufacturing activity, but such cannot be equated for entrustment of exclusive possession of such machinery. The reason being that the machinery which is stated to have been purchased, are attached to the plant and they are not detached from the plant at any point of time, even if the contention of the applicant is considered for the same of examination that it has used the machinery for some time. Further, had the payment made by the applicant of the total consideration, after discontinuing with the activity of using the same, the applicant would not have allowed such machinery to remain within the very plant of the Company in liquidation. It is not even the case of the applicant that after using it upto 1998, it had taken over the exclusive possession of the machinery. Further, the pertinent aspect is that when the representative of the OL took over the possession of the assets of the Company in liquidation, no representative of the applicant was present nor there was any signboard that particular machineries are of the ownership of the applicant or otherwise. The aforesaid goes to show that even if the contention of the applicant is considered for the sake of examination that it has used the machinery for some time after the alleged so called bill, there was no exclusive entrustment of the possession by the Company in liquidation to the applicant.
The aforesaid is coupled with the circumstance that the alleged payment by cheque in favour of the Company in liquidation is appearing in the record of the Bank only by way of a transfer entry. Whether such cheques were issued as A/c. Payee in favour of the Company in liquidation or not is not coming on record. The evidence has come on record only to the extent that the amount of so called cheques were debited from the account of the applicant, but it has not come on record that such amount was also simultaneously credited in the Bank account of the company in liquidation. Under these circumstances, it can be said that there is no satisfactory evidence demonstrated before this Court for the receipt of the consideration by the Company in liquidation, which is stated to have been parted with by the applicant.
As observed earlier, the burden is upon the person who seeks validation of the transaction as against the statutory presumption of the voidity of the transaction. The peculiar circumstance of no entrustment of the possession of the property to the applicant and no sufficient proof for credit of the amount in the Bank Account of the Company in liquidation coupled with the circumstance that when the OL took over the possession of the assets of the Company, neither the representative of the applicant was present nor there was any board showing the ownership of such machinery as that of the applicant and when the OL took over the possession of the record of the Company, no record was available for credit of the amount in the Bank account of the Company in liquidation show that a conclusion cannot be recorded of a complete genuine transaction for sale of the property by the Company in liquidation in favour of the applicant and if the very element of the consideration is not satisfactorily proved coupled with no full proof of the exclusive entrustment of the property, the transaction can hardly be described as genuine or bonafide so as to come out from the net of Section 536 of the Act.
The aforesaid discussion shows that the transaction is neither genuine nor there is any sufficient evidence on record to show that the transaction was genuine or bonafide nor it can be said in furtherance to the enforcement of law, since such transaction is apparently to result into frustrating the rights of the Bank with whom the property was hypothecated and first charge was with the Bank.
As per the settled legal position, two criteria for validation of the transaction to come out from the net of Section 536 are generally required to be taken into consideration. One is genuineness of the transaction and another is bonafides of the transaction. Neither of the element in view of the discussion made hereinabove exists. Further, even if the Court is to consider the transaction as genuine and bonafide, normally the power would be exercised in furtherance to the enforcement of the law and such powers are not to be used for frustrating the enforcement of law. If the Bank was having first charge over the assets of machinery which is said to have been purchased by the applicant, the rights cannot be read with the applicant on the alleged transaction frustrating the rights of the Bank. If such is permitted, it will run counter to the rights under law of the Bank with whom the property was hypothecated and therefore consequently, would result into making a declaration against the enforcement of the law which can never be the intention of the Legislature to cloth the power with the Company Court under Section 536 of the Act for declaring the transaction as valid and thereby avoiding the normal voidity of such transaction. Therefore, it appears that none of the elements viz. neither genuineness of the transaction nor bonafides of the transaction exist coupled with the situation that validation of such transaction would result into frustrating the rights of the Bank with whom the property was mortgaged, it would not be a fit case to exercise the discretion for declaring the transaction as valid as against the operation of the statute for treating such transaction as void.
The decisions upon which the learned counsel for the applicant has relied upon are not in the facts as exist in the present case nor the present case is to be considered as against the rights of other ordinary creditors. Further, the transaction in question is not in ordinary course of business of the Company nor it is demonstrated arising out of extreme necessity of the Company in liquidation. Therefore, such decisions since were in different facts and situation than as arising in the present applications, are of no help to the applicant. At this stage, it may be recorded that for exercise of powers under Section 536(2) of the Act, this Court in the case of Star Chemicals (Bombay) Limtied Vs. Vitta Mazda Limited, reported at 2005(0) GLHEL 216070, summarized the principles as under:
(1)In normal circumstances, the transactions entered into after the commencement of the proceedings of winding up are void unless and otherwise declared by the Company Court as valid.(2)
The validation of the transaction by the Court would be only in exceptional category and on equitable and just considerations.(3)
The transactions entered into in ordinary course of business by the Company for running day-to-day business may stand excluded from the purview of Section 536(2) of the Act and Section 536(2) of the Act would apply to the transactions entered into by the company otherwise than for running its day-to-day business of the company.(4)
The burden of proving that the transaction is bonafide would be upon the beneficiary of the transaction.(5)
The Court may at the time when transaction is to be considered for its validation, examine the aspects as to whether such transaction was for conferring additional benefits to the properties of the Company or not.(6)
If the Court is satisfied on equitable consideration that the transaction is fully bonafide without notice of the proceedings of winding up, the Court normally would declare such transaction as valid.(7)
If the transaction is in breach of any prohibitory order of the competent authority or there were prohibitions against the transfer of the property of the company, then also while declaring the validity of the transaction, the Court may provide for the suitable conditions to make loss good in case the Court is satisfied that the purchaser entered into transaction in bonafide. As the whole exercise of the power is on just and equitable consideration, the Court may also put the company in liquidation to fulfill suitable conditions even if the transaction is to be treated as invalid.
Even if such principles are taken into consideration, as observed earlier, neither the bonafides nor the genuineness of the transaction is proved. Therefore, until the consideration is proved to have been transferred to the corpus of the Company in liquidation, even if the equitable considerations are to be applied for making the law loss to the parties who entered into the transaction in bonafide, there is no question of passing an order for refund of the consideration or otherwise.
The reliance placed upon the another decision of this Court by the learned counsel for the applicant in the case of Farokh S. Todywalla Vs. OL of Vitta Mazda reported in Company Application Nos. 310/03 and allied matters, is also ill-founded inasmuch as since the Court found in that case as the OL has not been able to trace the record and therefore, the defence of the OL is made unbelievable and the orders were passed for validation of such transaction. Such is not the fact situation in the present case inasmuch as, as observed earlier, firstly the burden is upon the beneficiary of the transaction who is seeking validation. It is only after that burden is satisfactorily discharged, OL may contend otherwise. The proof including the Bank Certificate only goes to show that the amount is debited from the account of the applicant, but it does not show as to whether the same were credited in the account of the Company in liquidation. If the cheques are drawn as crossed cheques and other than by way of A/c Payee cheque, it could be credited in the Bank account of any party though the amount may be debited from the Bank account of the drawer of the cheques. Therefore, unless the said aspect is satisfactorily proved, the beneficiary of the transaction would not be entitled for validation of such transaction as against intention of the statute to treat such transaction as void. Therefore, the said decision is of no help to the learned counsel for the applicant.
The another decision of the Gujarat High Court in the case of Reliance Textiles Industries Ltd. reported at (1987) 61 Company Cases 756, only states that the discretion is to be exercised for validation of the transaction on well recognized principles which guide the exercise of the judicial discretion generally with a particular attention to the interest of the Company and it is further observed that the Court can validate such impugned transaction in those bonafide cases which demand protection of equitable consideration. Therefore, even if such principles are taken into consideration, the same carries the case of the applicant no further to the extent of validation of transaction, more particularly in view of the facts of the present case as the bonafide is lacking, apart from the non-genuineness of the transaction and the fact that the transaction is to result into frustrating the rights of the Bank with whom the property was hypothecated.
In view of the aforesaid, the only conclusion deserves to be recorded is that the transaction does not deserve to be validated and whatever the effect of voidity of such transaction, as per the Act, would prevail. Hence, the application is dismissed. No order as to cost.
The aforesaid takes me to examine the other connected applications.
Company Application No.455/08 Company Application No. 455/08 is preferred seeking recalling of the order dated 05.08.2008 passed in OLR No. 20/07 and to set aside the directions in terms of prayer 8(c) of the OLR No.20/07.
The basis of the present application is that the applicant has purchased the machinery by the transaction which was subject matter of the Company Application No.34/07 and therefore, the directions be issued against the OL as prayed.
In view of the reasons recorded by this Court hereinabove and also the conclusions for declining the relief as prayed in Company Application No.34/07, the order for recalling on the basis of such transaction or alteration in the directions issued to the OL would not be required. Hence, the said application deserves to be dismissed. Hence, dismissed.
Company Application No. 79/09 Company Application No.79/09 has been preferred for the relief inter alia for modification of the order dated 05.08.2008 passed by this Court (Coram : C.K. Buch, J) in OLR No.20/07 so as to direct the OL to call back the amount of Rs.4 Crore from the Prothonotary and Senior Court Master, Bombay High Court.
It appears that the basis of the present application is that because of the proceedings initiated by the applicant in Company Application No.34/07, the applicant whose offer was accepted has suffered and the amount which was so deposited by him ought not to have been transferred to the Prothonotary and Senior Court Master, Bombay High Court.
It has also been submitted by Mr. Munshi that the applicant is now desirous to withdraw the offer by getting the refund of the amount. It has been therefore submitted that the amount which has been transferred be recalled and the EMD which is lying may also be refunded to the applicant.
It is true that in view of the aforesaid litigation initiated by the applicant of Company Application No.34/07, the proceedings are delayed and as a result thereof, the sale, which has been confirmed has also not been implemented well in time. But, in view of the fact that now there is no legal impediment to the OL in disposal of the property as per the confirmation of the sale ordered by this Court, consequently, to the applicant purchaser. Therefore, the direction as prayed does not deserve to be granted for allowing the applicant to come out from his offer which has been accepted, but in view of the order passed by this Court today in Company Application No.34/07, the sale as was confirmed earlier would remain and the consequence would follow.
As regards the aspects of calling back the amount is concerned, it does appear that in spite of the earlier interim directions in the present applications, there is no proper response by the Prothonotary and Senior Court Master, Bombay High Court, though the matter was also persuaded by the OL. Therefore, the amount which has been transferred deserves to be called back and the same shall be without prejudice to the rights of respondent No.6 to claim the amount as per the provisions of the Act, subject to the approval of this Court. I am inclined to issue such direction because though the Company in liquidation may be party to the proceedings of the suit in the Bombay High Court, the question of rights of the Bank as the secured creditor over the immovable property as well as the plant and machinery will be required to be considered. Not only that, but after the verification of the said aspects by the OL with the help of the Chartered Accountant, the apportionment will have to be made to the extent of first charge holder and second charge holder etc. The rights of the plaintiffs of the Suit may also be required to be considered at that stage and thereafter only, appropriate disbursement can be finalized. Until such aspect is concluded, the amount as transferred cannot be allowed to remain under control in the proceedings of Suit No.686/98. Therefore, it appears that earlier order dated 05.08.2008 passed by this Court in OLR No. 20/07 so far as it relates to transferring the amount to Prothonotary and Senior Court Master, Bombay High Court, deserves to be modified by recalling of the said amount and to entrust the said amount to OL, subject to the orders which may be passed by this Court for disbursement or apportionment amongst secured creditors and may also be to respondent No.6. Hence, OL shall communicate the order to the Prothonotary and Senior Court Master, Bombay High Court and the amount shall be deposited by the said Prothonotary and Senior Court Master, Bombay High Court either with this Court or with the OL as per the present order within a period of two weeks from the receipt of the order of this Court, if required, after seeking appropriate orders from the concerned forum.
It is also clarified that as a consequence of the aforesaid order, the offeror whose sale has been confirmed will have to redeposit the amount which has been returned to him as per the earlier order in furtherance to the sale confirmation.
Company Application No.79/09 shall stand partly allowed to the aforesaid extent only.
Company Application No.654/08, OLR No.20/07 with Company Application No.64/04 The Company Application No.654/08 has been preferred for confirmation of the sale of Lot No.A-5 for the consideration of Rs.1.77 Crores and the alternative prayer is made for refund of the EMD of Rs.7.5 Lakhs.
The present application can be considered with OLR No.20/07.
It appears that the highest offer of Maharaja International, who has preferred the Company Application No.654/08 was of Rs.1.77 Crore. It appears from the valuation report that the valuation of the property is Rs.60,27,000/- and another valuation of another valuer Shri K.S.Thaker is for the valuation of Rs.91.53 Lakhs. The pertinent aspect is that both the valuation are of the year 2003 and 2004. Therefore, if the sale is confirmed as on today after a period of about 4 years in a case where the valuation was made much earlier, the same would be against the interest of the Company and the creditors at large. Therefore, it would be just and proper not to accept the offer for unit of the Company in liquidation at Padra (Lot No.A-5) for Rs.1.77 Crores. Therefore, the prayer 8(a) in the OLR No.20/07 shall stand disposed of accordingly with the further direction to the OL to get afresh valuation and to issue advertisement in Indian Express, Vadodara Edition as well as Gujarat Samachar, Ahmedabad and Vadodara edition, and also on website. If the fund is not available, OL shall be at the liberty to call for the fund from the secured creditor, i.e. Bank of Baroda for such purpose.
In view of the aforesaid order, Company Application No.654/08 for confirmation of the offer cannot be granted, but would stand granted only to the extent of directing the OL to return the EMD to the applicant Maharaja International.
The application No.654/08 shall stand disposed of accordingly.
It appears that prayers 8 (a), (b), (c), (d), & (e) of OLR No.20/07 were already disposed of by the order dated 05.08.2008 passed by this Court by accepting the offer for Lot Nos. B-3 & B-4. In view of the order passed by this Court today in Company Application No.34/07, now there is no impediment to any part and portion of plant and machinery of the unit, which is included in the aforesaid sale. Therefore, no further direction is required in this regard.
The only prayer left to be considered in the OLR No.20/07 is prayer 8(d) which relates to permitting the OL to invite fresh offer for LOT No.C being Motorol House, Vadodara, as no offer is received of the property. Such prayer is required to be considered with the Company Application No.64/04 which relates to the very property and the said application has been preferred to direct the opponent to pay the mesne profit compensation of Rs.4000/- per month and it is also prayed to direct the OL to handover the vacant possession of the land bearing Survey No.563-1-2 at Vadodara.
Mr. Soparkar, learned counsel appearing for the applicant submitted that though the prayer is made, but his client is agreeable if the land and building both are sold and the price realized for the land be given to the owner of the land who is applicant of Company Application No.64/04 and the price realized of the superstructure be given to the Company in liquidation since the construction is made by the Company in liquidation. It appears that no useful purpose would be served in segregating the land from the building which otherwise may get the scrap value. It also appears from the proceedings of Company Application No.64/04 that the ownership of the land is of the applicant of Company Application No.64/04. The same is demonstrated by the document, which is signed before the Notary and also the Sale Deed for purchase of the property by the applicant. Therefore, it is also an admitted position that the property is in the possession of the OL.
Therefore, OL may get the valuation of the property with the bifurcation of the land and building. Thereafter, OL may move suitable report for seeking fixation of the upset price and direction for advertisement. After the offer is finalized, the apportionment shall be made by the Court for the land and for the building. The disbursement or the distribution would follow accordingly.
Therefore, in view of the aforesaid direction, the prayer made by the applicant to direct the OL to handover the possession of the land cannot be granted nor there is any question to direct for ordering measne profit.
Hence, Company Application No.64/04 as well as prayer 8d in the OLR No.20/07 shall stand disposed of accordingly.
Company Application No.25/03 Company Application No.25/03 is preferred for directing the OL to handover the possession of the machineries to the applicant, details of which are given in the application. It appears that the basis of the application is that such machineries were owned by the applicant and were given on agreement of hire purchase to the Company in liquidation. It is the say of the applicant that all the amount as per the hire purchase agreement has not been paid. Therefore, the applicant has got the right to get the possession of the machineries and it has also the right to sell and dispose of the property.
Mr.Nanavati, learned counsel for the applicant during the course of the hearing submitted that the applicant has no objection if the machineries are sold by the OL under the supervision of this Court. However, he submitted that before the sale process is undertaken, the machineries may be separately marked by separate valuation so that after the price is realized, proportionately, the amount may be available to the applicant.
Whereas, OL has submitted that only 5 machineries were found as belonging to ICICI and therefore, all the machineries which are mentioned in the application are not owned by the applicant nor they were found from the site.
Be as it may, if the separate valuation of the machineries as are found on site is made by the valuer, no prejudice would be cause to the either side. After the separate valuation, such aspect can be considered after the sale of the property and the money having realized. Even the aspects of availability of the machinery or otherwise can be concluded at the later stage. Therefore, the following order :
OL shall get the valuation of the machineries separately for which the claim is made by the applicant provided they are found available on the site. If any of the machineries are not found available on the site, the valuer concerned shall make specific note for such purpose and the representative of the applicant may also be kept present at that time. If for any machinery, the claim is stated by the other banker, the said aspect shall also be recorded by the OL.
After getting the valuation, OL shall be at the liberty to include all such machineries in the Sale process and after the sale is confirmed and the money is realized, OL shall submit the report for disbursement or in the alternative, the applicant may move appropriate application for proportionate disbursement.
Application shall stand partly allowed to the aforesaid extent.
In view of the above, all the applications with the OLRs shall stand disposed of accordingly.
(JAYANT PATEL, J.) *bjoy Top