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Karnataka High Court

M/S. Shubha Chandi Griha vs Official Liquidator Of The Mysore on 11 July, 2008

Bench: K.L.Manjunath, B.V.Nagarathna

<3SP:.No.33.2OCV?

IN "ma HIGH comm 01:' KARNATAKA AT BANGALORE DATED THIS THE 1 1TH DAY OF ~ PRESENT m_ 1 " s TI-IE HONBLE Mnausfritig' A' THE HON'BLE MRS;J§§a*r1cfii B.32*.1NAvr3A--§§ A*1*HiuA V ~.Q.S.A'.'N<'3:.V3£'3VVf'"£2907 t' ' BE'!'WEEN:,_ * M_/S» S§3Ugz;iA_ ci:{;é§N§1%.}{}f%Im5 mmrgsA:=e- {1E3AL~&RF*1.IR'£A)'A._" ~ 1~:.Q.;0:'-1,}, KR .§e0;Aa)'* V %%%% -vTvB5Es:GALg:>RE_.»w--._ V % % ' ...APPELLAN'I' (By S21;'::.,mi"cHAN§:§:AsHEKAR, ADV.) i' """_"v:)1:'i?i(f:1AL LIQUIDATOR mi' TI-IE MYSORE . KERLOSKAR LTD., ATTACHED T0 HIGH COURT "OF KARNATAKA, 'D' WING, 4TH FLOOR 3 KENDRIYA SADAN, KORAMANAGALA BANGALORE -- 560034.

' 2 M/SINDUSWIAL DEVELOPMENT BANK OF INDIA NGL58, MISSIGN ROAD BANGALORE.

3 M] S I F' C I LTD CUBBONPET MAIN ROAD BANGALORE 4 M/S ICIC§ BANK ICICI BANK TOWER OSZLNQ. 33.2007 NO. 1, COMMISSARIAY RROAD BANGALORE ~ 560025 5 BANK op' BARODA INDUSTRIAL FINANCE BRANCH 1 ~ BOMBAY SAMACHAR MARG :

FORT, ' ~ "
MUMBAI--400023

6 BANKOFINBIA _ , CORPORATE BANKING. "RANCH I 70---80,M.G.RoAD "

MUMBAI»400023é_

7 SMALL INDUSTRIES DEVELQPMENT BANK OF INDIA NARIMAN BI~IAvAI\I; I NO.2_?.'3',_V_' K SHAII MA-R.Gv ,_ NAR1MA§'J'"I?UINT V V M¥JMEAI544f)G{)2«1'j'-- _ . "

3 'I STATE BAIIII OF}-NDIA""""

oVE'RsEI5s«.BR.AN.r;II. ;

"r_NEP DEVEISQNI I' I. ALMAS {1EF-I'FER,--._I\r'E."G.ROAD BANVGALORE'._v I 'mm I?-Iéeislraatixrr MYSORE KIRLOSKAR KARMIKAR HITARAKHANA SANGHA
- ._'fo_Iv? PQ_S'I' OFFICE HARIHARA. ' M I%I1RLosI<AR OIL ENGINES LTD REG 'OF'F'ICE:LAXMAN RAG KRLOSKAR ROAD " __§uNE~4110o3 ' . M/S KIRLOSKAR INSTITUTE OF ADVANCED MANAGEMENT STUDIES REG OFFICE AT YANTRAPUR HARIHAR-5776028 12 V R MUZUMDAR S/O LATE R K MUZUMDAR SINCE DEAD BY HIS LRS 12(A) sm' PREMA MAJUMADR w/0. LATE V R MAJUMDARE AGED ABOUT 53 YERS 16 17 I8 19 OSELNO. 33.2007 A S JAMIHAL S/O LATE SRINIVAS RAD H, JAMIHAL R/O J--13, M.K.OF'F'1CERS COLONY YANTRAPUR HARIHAR 577 602 M N GURUNATH RAD S/O M.N.AMBAJI RAG . ~ * R/() .}--6, M.K.OFFICERS COLONY YANTRAPUR * .
HARIHAR 577602 S PADMANABHAN * S/O LATE S S'HETH'UMg§Dl?EA'JAf2.g#.O R /0 3- 1 1/1, M.K;_0:r«'1a*zCI3:RS. CGLGNY YANTRAPUR HARIHAR'-~57'Z602 M'MANJUfi_ATE~i;-«.._ § sic} i'i?.IU.KAI\k NAPRA... "

---- %1R;,0~V,3--5'Es;.; M.K,0FFzC:3Rs'5coLoNY YANTLR-.APU.R .

I*'iARVIHARV-5.'f?V" ' 20 in VARAVDA:f€;3JA::_".E?AO s/0 RAGHAVTENDRA RAO 'V "R/O J+39,,'M.;;.oFFIcERs COLONY ' ~.YA1S{TRAPUR 'HARE'-EAR-577 502 Sziv. M ~T:§x§1N1vAs V. S/"Q 'LATE I{.P.KANARAN A Rje J--36 M.K.OFFICERS COLONY " YANTRAPUR 22 23 HARIHAR 577 602 S [-3 SHAMBANNA S/G S.B.PU'I'TAPPA R/O J--56/ 1 11 M.K.OF'F'ICERS COLONY YANTRAPUR' HARIHAR 577 602 S M KRISHNAMURFHY S] O LATE S MADHAVA RAG 24 25 26 R] O J~8 M.K.OFFICERS COLONY YANTRAPUR HARIHAR 577 602 M N GURUNATH RAO _ S/O M.N.AMBAJI RAG ' "

R] 0 we M.K.OF'F'ICERS COLONY YANTRAPUR * HARIHAR 577 602 M N MAJATHESH , S/0 M.N.AMB&J_I:'RA() OSANO. 33.2007 12/ O SUSHILAMBAO_NIV.5§3l"

A BLCECK _ VIDYANAQAR .

HAR_IVIjIAl{L5'Z?.65)2X_' "

GE}::rI~:'A 1§A0.:h}ii,'z~{
--W,1 of 'M.NI'ii3;EJ RU NAT-H MO V,M.'--K.OFFfC-ERS OQLONY ¥ANTRAs?URy.
HA§1'r1AR'57-z_5o2.OV M N MOHAN .
' 2,3/O..M.N.AMBAJ1RAO _ R10' J~--,S1 'M.'2:.'OOFF£OERs COLONY H %*:<ANTRAPUR 23 ~ 29 :;1AR;j:iAR 577 502 l3:.R.(SM'I') G C SHILAJAKSHI 'w/O DR. MALLIKARJUN R/O 49 AYYAPPA COLONY YANTRAPUR HARIHAR 577 602 DR MALLMARJUNA S/O S NAGAPPA R/O No.49 AYYAPPA COLONY HARIHAR 577 602 30 31 32 33 34 OSELNO. 33.2007 R V BHAKTHVATHSALA 3/0 H VENKOBA SHE'??? ; ' R/O BALAJI RICE INDUSTRIES compougm n SHIVAMOGA ROAB * ' 2 % HARIHAR ' HARIHAR 577 502 R V KRISHNAMURTHY s/0 R VENKOBA SHETTY . V :
R/O BALAJI RICE INDEI "'£RIES"'COMPOUND"

SHIMOGA ROAD " .. ~ HARIHAR 577 692 B U RAJSHEKAR'-$5/O 'B €'. UMAfFfA'1'HY SINCE DEAD BY HISVFATHER-.._ B C U»am:.aTHY,si'o..:;AT:?,_:?_ S CSHANNABASAPPA NO. 1 19,'52~.PA~NDaN1?. Mice. A BLOCK, DAVA.N(3EE?'Ew_5?'f am ' B c'cHA§e'}{)RA3Héi{AEAPP1' \} V ~S]"G;~Lfi;':l'E B?-IS CAIYINABPASAPPA 19002 ':~a:)...;9s9;«.Mcc ABLOCK, BAVANGERE.-.5?76Q4,_.

B SH1vA1{ti1»1Ai2:.«'%' ' "SI 'BS C-ANNABASAPPA REAR WA'I'ER._TANK, MCC A BLOCK 3?' GERE 577604.

NAT!-i ' S] 9;; is M SIDDAIAH BASAPPA BUSINESSMAN, NO.446/ 1,8TH MAIN CROSS, P J EXTENSION, " .;:,éxvANGERE 577604. * U L VANISHREE DI O.U LOKAMURTY DAVANAGERE ROAD, JAGALUR, DAVANGERE (DIST) B C UMAPATHY S] O.LATE P S CANNABASAPPA 190.1991, SPANDANA, MCC A BLOCK, DAVANGERE 577602.

38 39 41 42

OSA.No.33.200'?

B U CHANDRASHEKAR S/0.8 C UMAPATHY 140.1991, SPANDANA, MCC A BLOCK, DAVANGERE 577604.

B U PRAWN s/0 B (3 UMAPATHY , SINCE DEAD BY ms FAT1a;~:i*.R~--sR1 "

B C UMAPATHY s/0. LATE P CHA-NNABASAPPA. NO. 1991, SPANDANA, MCCA :3L'0cK* » _ . "

DAVANGERE - 5775c4_.'_ A. U L RAJESWARI D/cw LOKAMURTY ' DAVANAGEREFIOAQ'; ,_ , JAGALUR, DAVANGERE{.DIS'F}.f ' P R KADE-R . "

s/o.1?:ANgAPPA 1 A J-45»; "M Qr.FFICEF?--S CWONY YAiN'FR;iiPUR'-.POS3',A * V' '-- V"fiAR£H}'xi?.:§?T§02. ' '- SI O.LA.T1e:« .'sANNA---'rH..Ih}1MA1AH J~._28, M K O'FFICEs1RS COLONY YANTRAPU.R ';?O'.~;«..- ', " HARIHAR'5'??602.
.sREEr§'ii?AsA RAO CEJEATE VITTOBA mo .VNQ';9.1'9/ 2A~15, 45 OLB P'()S"I' DFFICE ROAD, K B§'.Ex*rENsI0N, " QAVANGERE 577002.
VI'I"1'AL TULUJARAMSA s/ O.LA'I'E TULUJARAMSA 110.301, IST MAIN, 9'I'I-i CROSS, H s EXTENSION, HARIHAR 577601.
A G NARASAPUR S] 0.(3~UNDURAO J-48, KIRLOKAR COLONY, YNTRAPUR POST, HAREHAR 577602.
OSA.N0. 33.2007 46 A P DIXIT S/OPANBURANGA S DIXIT NCL49, 4TH MAJN 3RD COSS, SHANKARNAGAR, MAHALAKSHMI LAYOUT, BANGALORE-96.
(By Sri: DEEPAK FOR _ (31,, Co. for R12,13,15, 17,18,2o,21,26 Adv. for R19,22,23, an 25, s;1i,K».Raghaven:1xsa, Ran, Adv.for R29,30,36,42,32,33,34,35,3'7 as-$9, '3;-i.Ma11e's1i, Adv. for R9 & 10, sri.G.K.v.M'm5:hy'«\ &;{_' v,P."E;Um:;sh, Adv. for R5, Sri. K.B.Na.tayanasWamy-T. Adv; "fair _.M.'CL.'N81_.asimhan, Adv. flair R40,41,44 av. 45, S1iF3.'B..()nn't1fa:;torV Agiih " for R8, Sri.Pmkash Salmani, Advgfqr Rll 1(1)"; ti) E)"a1L'ivS1i.K.Sub1'axnanya, Adv. for ofl'ene1f)V ..
"Cc1z;1}§.*ei AppL".U.E:li"1f has filed the above appeal under Sccficn. é§83Vof.fl1c:__Co1r31panics (Court) Act, against the Orcler (fated 14.,"V07.:2Q06'p:q.ssed in (3.2% No.'763/2005 in (.30.? No. 16612301 and 'scf=aSisie the older of the learned single judge passed ix; {>r,L.R!'No.736/2006 dated 16.11.2007' in Can? No.1€v6,_lf20€)1 and etc., on for _ORDERS on this day, A ; 'MAN5JUNA_Tii___J, delivered the following» . JUDGKEHT ' ~. Thbugh the matter is posted for admission, by consent ' 1*» 'gimme pariah 3 the matter is beam on merits. The appellant is chalkzngng the legality afld correctness of the order passed by the Learned Company Judge on 14.7.2006 in COP.No.166/:«';O01 and on 16.1 1.2007 in ()LR.No.'?36/2006 in CO1'-'.No. 166/2001. 6%/.
C}SA.N-:>. 33.2007
3. We have heard the learned counsel for the appellant and Sri.Deepak for (LL.
4. The facts leading tn the this'. veixz Hasu' under:
C.A.No.763]2005 was bgémev A under Section 457(9)' of the Act; - 1.95.6; lead with Rake of the Companies requesting the Company Jiidge the highest bid ofiereati to. of land and building, assets, furniture and fixt1ii'e_s and the building wherein Bank ofihflahara. , at Hanh ara. » ._:'l"he. herein offered 70 crozes to purchase the r the company in liquidation M15 Mysoie Harihara. Learned Company Judge it " ennsiiiefing the application of the O.L noticed that the ofier V by the appellant for 70 crates was the highest and that the apyeliant herein in teams of his ofier, pursuant to the order of the 0.1., did not deposit 25% of the bid amount within 'Ir' days from the date of xeceipt of the infimation on the ground that there were certain. litigation pending in (V. OSELNO. 33.2007
-19..
respect of the quarters in occupation of the empIo3*ee3 of the company in liquidation. Considering the iéiiepnte about the title of the company in respect (Sf machinery and the land and btfilsii;x1g AV suits are pending for specific the the bid was not application filed by.» the "-re3'ected"'by5§the learned company Judge. submittw by the 0.1. in }f;ei'n1ission of the court to sell liquidation. Learned by eeifitefaerv 15.1 1.2007 considering the permitted the 0.L to notify the assets sale under two lots: (21) plaint and vmigehinexy, ____ buiidings, furniture and fixtures, »' flvehieles one lot and (b) the enfixe landed property ._ company except the quarters in respect of are pending in one lot.
'E4': Mr. S.M.Chand1ashekar, learned counsel for the appellant contends that the learned company Judge has committed an error in rejecting the applicafion of the CLL and according to him Company Judge further committed an error in dixecting to sell the properties unzier two kam as per W ""';-
OSA.No.33.2007 $12..
/occupants of the quartoxs of the company. Thoxflréfom, he brought to the notice of all the concerned "in nespect of the concerned pflxtion of the subject to the final outcome §5f"Mthc« 7. AV appiications. it was also nfzhc of concerned that M/s Kirlosks-a:f'~Qfl Eogioosi letter dated 28.4.2OQ5..Vadd;esoo§i-- is informed that that six machinos 'Erase to the Mysore Kirloskar Limigd, .V}iqi;..#t'i'ai:ion. The list of on lease by M/s were mentioned in the that the sale proceedings in respectVVV'ofVVV2€)»i1t3;<:¥;iuding the KEAMS Buildings (which }_:1£:1¢i§:gV_is a Iitta!iy..Exc1udcd from the sale and the adjacent ' be subject to the orders of the company H * by M/s. Kirloskar Institute of Advanced Studies.
From the above clarifies' tion, it is clear that the parts" s have parficipatcd in the salt accepting the terms and conditions of the sale notification, as published in the paper and also knowing the dispute as mentioned fin the clanfication dated 10.5.2005. in other Words it is clear that 69 ..........,[email protected] C)SA.No.. 33 . 2007
-14..

bringing to the nofioc of the company oourt non-

deposit of the amount by the highest bidder. b ' V

11. The learned Company has rejected the appficafioo of :'O_.zL V offer made by the appellant be noted at this stage by us""tb{at hebzein not made an application before requesting the vf;o"v§«'§icposit R-3.70 crores subject; V_'t;t§ie:;'.§iis;)utes pending before the t employees. when the by the appellant, accotding to us,':.z;e challenge the oniers passed by qgggge in rejecting the application of the 0.1.. 'A : zgpwllant has failed to deposit 25%, he has no . to file this appeal. Similarly, he cannot the order passed by the Company Judge in OLR * When the sale has not been accepted or by the Company Court, it is for the Company Court to dizect the ().L how the property of the company has to be sold in public auction in View of the pendency of the dispute between the employees of the company in liquidation and the Company Judge has rightly directed the (LL to sell <§'/ g3ng$ iuV:

OSA.N0.33.2007 "15- the assets of the company in two lots. to avo'gd .. iitigation. if the Company Court using its further litigation has brought the pmper1.y_.cf liquidation for sale, in rcspectlpf :1,1xA1{3.isput:-;d._ 1.:rs:»;_:c1:tit:és_. .,g._g_ _j
-...\._cs€.-V \..!:&'{-E.'~(R-€='( Q '\;~& :13-':~ According to us, this appeal is ij>Ii*tiit:
pmceedings. In the result cosf of Rs.25,0{)O/--.
sdH,..
Iu<1'9'° Sd/* Tudge