Madras High Court
R.Vijayakumar vs M.Ravindran on 21 October, 2008
Author: S.J.Mukhopadhaya
Bench: S.J.Mukhopadhaya, M.Venugopal
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATE : 21.10.2008
CORAM
THE HONOURABLE MR. JUSTICE S.J.MUKHOPADHAYA
AND
THE HONOURABLE MR. JUSTICE M.VENUGOPAL
O.S.A. NO. 129 OF 2007
R.Vijayakumar .. Appellant
- Vs -
1. M.Ravindran
Sr.Advocate, Administrator
Anubhav Group of Companies
(In Liquidation), Chennai.
2. The Official Liquidator
High Court, Madras.
3. J.Sekar .. Respondents
(R-3 impleaded as per order of
Court dt. 7.8.07 in MP 2/07)
Original Side Appeal filed against the order dated 19th Jan., 2007, passed by the learned single Judge in C.A. No. 1037/06 in C.A. No. 211/03 in C.P. No.130/99 as stated therein.
For Appellants : Mr. R.Thiagarajan
For Respondents : Mr. M.Ravindran, SC Administrator
Mr. T.K.Seshadri, SC, for
Mr. R.Murari for R-3
JUDGMENT
S.J.MUKHOPADHAYA, J.
In the company petition, the appellant, R.Vijayakumar filed company application, C.A. No.1037/06 to set aside the sale pursuant to order dated 11th Nov., 2003, passed by the Court in C.A. No.211/03 in respect of lands situated in survey No.3 to an extent of 1.20 acres in Kazhipattur village, Kanchipuram District. Learned Judge having rejected the application, the present appeal has been preferred.
2. According to the appellant, agreement for sale of certain lands were reached between M/s.Good Luck Inn Pvt. Ltd. represented by its Managing Director, Mr.R.Vijayakumar with Mr.C.Natesan of the company in liquidation. In most of the cases full consideration amount was received except some in which certain amounts were payable. In some cases, sale deeds were executed; in some cases sale deeds were prepared, but not executed and in all cases none of the sale deeds were registered. The grievance of the appellant is that, this Court, by its order dated 18th Dec., 2003, directed the Official Liquidator to execute the sale deed in respect of 7.875 acres of land in Kazhipattur village in favour of the auction purchase including the 1.20 acres of land in question.
3. Learned counsel for the appellant submitted that the total money having received in most of the cases, the appellant filed application only with regard to land situated in survey No.3 to an extent of 1.20 acres in Kazhipattur village, Kanchipuram District and not for the other lands. The following details with regard to the lands belonging to the appellant, auction sold by the Official Liquidator pursuant to court's order have been shown as follows :-
Agreement for Sale dt. 24.1.94 M/s.Good Luck Inn Private Limited represented by its Managing Director, Mr.R.Vijayakumar entered into Three agreements for sale with Mr.C.Natesan to sell the following properties situate at Kazhipattur and Muttukadu Villages :-
1) Survey No.95/1A, 1C, 2A, 1B measuring an extent of 50 cents in Mutukadu village.
2) Survey No.19/2C mesauring an extent of 79 cents in Kazhipattur village.
3) Survey No.19/2D measuring an extent of 75 cents out of 91 cents in Kazhipattur village.
Total Sale consideration Rs.21,50,000/= Cheque for Rs.10,00,000/= issued not presented The total sale consideration agreed was Rs.21,50,000/=. The appellant received a cheque for Rs.10,00,000/= issued by Mr.C.Natesan vide cheque bearing No.072601 dt. 24.1.94 drawn on Karnataka Bank Ltd., Kodambakkam Branch. However, the cheque issued for Rs.10 lakhs has not been presented for payment on instructions from Mr.C.Natesan.
Period - 6 months Time agreed for completion of the transaction was 6 months Agreement for sale dt. 28.1.94 Another agreement for sale had been entered into with C.Natesan on 28.1.94 for sale of the property situate at No.37, Kazhipattur village comprised in survey No.20, measuring an extent of 5.42 acres or thereabout.
Sale value Rs.27.10 lakhs Agreed sale consideration was 27.10 lakhs Amount received by appellant Rs.1.90 lakhs by cheque bearing No.072602 dt. 28.1.94 drawn on Karnataka Bank Ltd., Kodambakkam Branch.
Agreement for sale dt. 24.1.94 Another greement dt. 24.1.94 was entered into in respect of the property situate at Kazhipattur village, measuring an extent of 5.28 acres or thereabout comprised in various survey nos.
Sale consideration Rs.26.40 lakhs Total sale consideration that has been fixed was Rs.26.40 lakhs Amount recd. - Rs.1,00,000/= Amount received Rs.1,00,000/= by way of demand draft dt. 31.1.94 in the name of Mrs.E.Chinnammal.
The balance sale consideration payable within a period of 6 months.
Since the sale transaction could not be completed within the stipulated period of six months from the date of respective agreement for sale, the agreements stood terminated and cancelled..
The appellant, the 3rd party files a memo intimating the Administrator that he has entered into an agreement for sale with C.Natesan in an individual capacity and as such, the same is outside the scope of the company petition and as such there cannot be a summary adjudication or a proceeding under Sec. 477 of the Companies Act in respect of the aforesaid transactions.
Memo in C.P. No.130/99Administrator files a Memo in C.P. No.130/99 Fresh agreement dt. 9.5.96 extent of land : 15.50 acres A fresh agreement dt. 9.5.96 had been entered into by the appellant with C.Natesan for sale of the properties measuring an extent of 15.50 acres or thereabout in the aforesaid villages.
25 sale deeds Between 30.11.96 and 26.6.97, R.Vijayakumar had executed 25 sale deeds in the name of C.Natesan and his nominees and the lands conveyed under those sale deeds measure an extent of 6 acres 67.5 cents or thereabout in the above villages.
Total sale consideration Rs.1,91,25,000/= The total sale consideration payable under agreement for sale dt. 9.5.96 in respect of the properties to be conveyed Rs.1,91,25,000/= Sale deeds executed & registered Sale deeds were executed and registered in favour of C.Natesan or his nominees between 30.11.96 and 26.06.97.
10 documents signed 10 documents have been signed. But, however, not registered before the Registrar of Assurance (measuring an extent of 3.00 acres).
3 sale deeds not signed & not presented for regn.
3 sale deeds not signed by the appellant and, consequently, they have not been presented for registration (measuring an extent of 1.20 acres).
So far as 1.20 acres of disputed land is concerned, the following receipt have been shown by the appellant :-
Dispute in respect of 1.20 acres Dispute relates to the property situate at Kazhipattur comprised in survey No.3 measuring an extent of 1.20 acres or thereabout.
Balance receivable by appellant Rs.21,25,000/=
Consideration agreed : Rs.1,91,25,000
Payment received : Rs. 1,70,00,000
--------------------
Balance receivable as Rs. 21,25,000
per agreement for sale --------------------
4. Learned counsel appearing on behalf of the appellant assailed the auction sale in respect of 1.20 acres of land and made the following submission :-
a) The sale deeds having not registered, there was no sale in favour of the company in liquidation and third party's properties cannot be auction sold in a company petition for liquidation against the company.
b) The appellant was neither noticed nor had any knowledge of the order passed by the Court directing the Official Liquidator to auction sell the land, as he was not a party to the application, C.A. No.211/03.
It was submitted that learned Judge failed to notice the aforesaid fact relating to non-registration of the documents amounting to no transfer in favour of company nor decided the question of validity of auction without notice to the appellant. It was informed that neither any encumbrance certificate was obtained nor original title deed was handed over to the company, and, without verifying the same the Court ordered for auction sale of 7.875 acres of land.
5. Mr. M.Ravindran, learned senior counsel and Administrator for the company under liquidation and the Official Liquidator refuted the allegations that the appellant had no knowledge with regard to the auction. It was submitted that the appellant had not come with clean hands; he had prior knowledge of the Court's order directing the Official Liquidator to auction sell the property and that total auction sale of 7.875 acres cannot be declared to be illegal, relief having sought for only with regard to 1.20 acres of land. He also highlighted the manner in which the appellant executed some of the sale deeds and duped the company by not executing all sale deeds or presenting the same for registration.
6. We have heard the learned counsel for the parties, noticed the rival contentions and also perused the record.
From the record it appears that the Court, by order dated 2nd Nov., 1999, in C.A. No.130/99 noticed that besides the plaintiff's land of 881 acres, another 2500 to 3000 acres of lands are available, but no title deeds were available. They are in possession of the company. It was also brought to the notice of the Court that number of properties, including the lands at Muttukadu on the Chennai Mamallapuram road measuring 7.5 acres; 48.51 acres of land in Kumarakom in Kerala; 19.84 acres of land at Valparai near Coimbatore; about 220 plots, each to the extent of 2.5 grounds in Sriperumbudur; 4.82 acres of land at Maraknam; about 9.64 acres of land in Munnar (Kerala); country club at Sriperumbudur 1.7 acres of land with a built up area of 22,804 sq.ft.; built up commercial area at Anna Nagar, Chennai, measuring 1,000 sq.ft., etc., were readily available for sale. Some of the properties are said to stand in the name of Mr.C.Natesan, one of the Director of the company. By the said order, Mr.M.Ravindran, Sr. Counsel was appointed as the Administrator, as the Official Liquidator has already been burdened with winding up of large number of companies.
The said order was challenged by Anubhav Investors Association Ltd. before the Supreme Court in SLP (Civil) No.6935/00 and it was dismissed on 2nd Nov., 2001. Only, thereafter, learned Judge allowed the parties to file company application with Judges summons.
7. In the company petition, the Administrator filed a memo on 16th Aug., 2000, bringing to the notice of the court that 300 huts had been put up in survey No.20, which is in the middle of other survey numbers. The land sold by R.Vijaykumar (appellant herein) having encroached nobody will come forward to buy those lands and, therefore, prayed that the rest of the lands may be taken over by the Government and the Government may be pursued to give equal extent of land, i.e., 5.51 = acres of land elsewhere in the same village.
In the said application, the appellant, R.Vijayakumar filed objection. In the said objection, R.Vijayakumar (appellant herein) gave details of agreement signed between 1994 and 1996 in favour of Mr.C.Natesan of the company. All the facts as shown and grounds taken in the present appeal have also been brought to the notice of the Court. Only after hearing the parties, including the appellant herein, the Court passed order on 18th Jan., 2001. Notice was ordered to R.Vijayakumar and also to the Government of Tamil Nadu. Since the interest of large number of depositors of Anubhav Group of Companies was involved, it was directed that investigation should be conducted by CB-CID of the State of Tamil Nadu by higher officers, not lower in the rank than that of the Superintendent of Police.
8. It is not in dispute that after the aforesaid order an investigation was made by CB-CID and appellant has been charge sheeted in a criminal case along with other State Government Officials. The appellant, R.Vijayakumar, challenged the abovesaid order of the Court before Division Bench, which was dismissed by order dated 22nd Feb., 202 in O.S.A. No.401/01. Thereafter, the Court directed to auction sell the properties vide order dated 9th April, 2003 and asked to publish notice in eight national newspapers. Draft sale notice was approved by the Court, whereinafter tender-cum-notice was published on 14th Sept., 2003. The Administrator having submitted report in regard to tender, the Court, vide order dated 12th Nov., 2003 ordered to execute sale deed in favour of J.Sekar (3rd respondent herein).
9. The aforesaid fact shows that the appellant had knowledge atleast since 2000 when he filed objection with regard to sale of land on 1st Nov., 200. The appellant's objection, though rejected, and upheld by Division Bench vide order dated 26th Feb., 2002, in O.S.A. No.401/01, wherein the appellant R.Vijayakumar himself was the appellant, but he did not choose to move against the said order before the Superior Court. The order of the Court dated 9th Feb., 2003 to auction sell the property by publication of notice in eight national newspapers was never challenged by the appellant though he had knowledge of the case since 1st Nov., 2000. Though the auction was was made pursuant to the Court's order dated 12th Nov., 2003, but the auction sale was not challenged.
A draft affidavit was prepared by the appellant on 16th March, 2004, which is at page-95 of one of the typed-set to set aside the order dated 11th March, 2003 and was served on the others, but for reasons best known to the appellant, it was not filed for two years. Only two years thereon, it was actually filed in 2006.
10. Learned counsel appearing on behalf of the appellant raised the question with regard to the nature of sale of property belonging to the appellant in absence of a registered sale deed. It has not been disputed that he consideration amount in most of the cases has been received by him. It is for the said reason the Court allowed time to the parties so as to enable the appellant to accept the rest of the amount, if any, due from the company through the Official Liquidator, but the appellant was not agreeable to the same. On the other hand, the appellant offered to give back the consideration amount with interest after four years of sale deed. This was not accepted by the Administrator as sale has already taken place and the sale made in favour of the 3rd respondent, J.Sekar is not under challenge in the present appeal.
11. The question whether the transfer made by the appellant in favour of the company was legal or not was not to be determined in the present company petition. If the company was in possession of the land, as was shown before learned Judge in their affidavit, if any amount was due to the company it was well within the jurisdiction of the Court to auction sell the property. The order of the Court dated 9th April, 2003 directing the Official Liquidator to auction sell the property by publication of notice in eight national newspapers having not been challenged, the matter could not have been reopened in the company petition.
12. We find the appellant also suppressed material fact that out of the total lands he sold some of the Government lands and for that charge sheet has been served against him. It is also not in dispute that though total land was more than 5 acres, but his claim is only with regard to 1.20 acres and not for the rest of the area, though sold in the same manner. In view of the admitted facts as mentioned above, we find no ground made out to interfere with the order passed by learned Judge.
There being no merit, the appeal is dismissed. There shall be no order as to costs.
GLN To
1. M.Ravindran Sr.Advocate, Administrator Anubhav Group of Companies (In Liquidation), Chennai.
2. The Official Liquidator High Court, Madras [ PRV / 15969 ]