Bombay High Court
Sanjay Kumar vs Ashok Commercial Enterprisesand Ors on 15 March, 2024
Author: Abhay Ahuja
Bench: Abhay Ahuja
2024:BHC-OS:4623
19-IA-2140-2021.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INTERIM APPLICATION NO.2140 OF 2021
IN
COMPANY PETITION NO.291 OF 2014
SANJAY KUMAR )...APPLICANT
V/s.
ASHOK COMMERCIAL ENTERPRISES AND ORS. )...RESPONDENTS
Mr.Naushad Engineer a/w. Mr.Sharad Bansal, Mr.Yogesh Salunke i/by
Karansingh Shekhawat, Advocate for the Applicant.
Mr.Rushabh Sheth, Advocate for the Official Liquidator.
Mr.Chandan Kumar, Official Liquidator, present in Court.
CORAM : ABHAY AHUJA, J.
DATE : 15th MARCH 2024
P.C. :
1. Pursuant to earlier orders of this Court, today when the matter is called out, Mr.Sheth, learned Counsel for the Official Liquidator, submits that an additional affidavit dated March 2024 of Respondent no.1 Official Liquidator, has been filed. Mr.Engineer, learned Counsel for the Applicant would submit that in view of the no objection conveyed on behalf of the Official Liquidator vide the said affidavit, this Court allow the Application.
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19-IA-2140-2021.doc
2. The Applicant has filed this application under Section 536(2) of the Company Act, 1956, seeking ratification of the transaction of sale of Flat No.B-1102, admeasuring 674 sq.ft. (the said "flat") in Mantri Serene, situated opposite MHADA Bungalow, off Film City Road, Goregaon (East), Mumbai - 400 065 by Mantri Realty Limited (the company in liquidation) to the Applicant. Mr.Engineer would submit that the Applicant is an Advocate. He moved to Mumbai in 2013 from New Delhi due to change of employment. Initially, the Applicant was residing in Mumbai in rental premises and in August / September 2014 he started searching for an apartment in Mumbai as he was desirous of purchasing his own house and came across the second respondent's hoardings published in Goregaon (East). It is submitted that, thereafter, the Applicant contacted the Respondent no.2 and relying upon the advertisement, inspected the flats developed by the Respondent no.2 at the site in November 2014. Upon visiting the site, the Applicant met the second Respondent's representative who showed him a sample flat and the list of available flats. The Applicant was informed that possession of the flat would be handed over in four to six months. After inspecting the available flats, the Applicant decided to buy a flat on the 11 th floor. Thereafter, the Applicant approached the HDFC Limited to avail a loan to pay the consideration for the flat. avk 2/7 ::: Uploaded on - 19/03/2024 ::: Downloaded on - 31/03/2024 04:12:17 :::
19-IA-2140-2021.doc HDFC informed the Applicant that the project was pre-approved and the Applicant could avail a loan, after which the Applicant decided to purchase the said flat and paid Rs.2,00,000/- as earnest money on 28 th November 2014. On 3rd December 2014 the Applicant made certain further payments to the Respondent No.2 after which the Agreement for Sale of the flat was executed and registered between the Applicant and the Respondent No.2 on 8th December 2014. It is submitted that the total consideration of the flat, as per the Agreement, was Rs.1,13,47,100/-. The Applicant has paid stamp duty as well as registration charges, service tax and VAT as a result of which the total amount paid by the Applicant is Rs.1,27,98,074/-. Mr. Engineer would submit that the following payments have been made by the Applicant :
Date of Payment Amount Head of Payment
28 November 2014 Rs. 2,00,000/- Earnest Money / Price of Flat
3 December 2014 Rs. 31,47,100/- Price of Flat
3 December 2014 Rs. 5,97,400/- Stamp Duty and registration
charges
3 December 2014 Rs. 1,13,471/- VAT
3 December 2014 Rs. 4,20,750,/- Service Tax
22 December 2014 Rs. 80,00,000/- Price of Flat
23 December 2014 Rs. 3,19,353/- Maintenance charges
3. Thereafter, the Applicant received keys of the said flat in May, 2015 and has been in possession of the said flat since then. avk 3/7 ::: Uploaded on - 19/03/2024 ::: Downloaded on - 31/03/2024 04:12:17 :::
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4. However, in January 2016 when the Respondent No.1 visited the site, the Applicant learnt of the multiple winding up petitions including Company Petition No.291 of 2014 which had been filed against the Respondent No.2. It is in these circumstances, that the Applicant has filed the present Application seeking ratification of the sale of the flat.
5. When this matter was called out on 2 nd February 2024, after Mr. Engineer had concluded his submissions, the learned Counsel appearing for the Official Liquidator had sought some time to clarify certain aspects of the affidavit in reply to the Interim Application.
6. On 16th February 2024 Mr.Sheth had sought some time to file a limited affidavit clarifying the reply of the Respondent No.1 submitting that in view of the payments made by the Applicant, as set out in paragraph 19 of the affidavit in rejoinder of the Applicant and reflected in the exhibits, if the Applicant was to submit bank statements reflecting debits of those payments from the respective accounts of the Applicant, that could assist the Official Liquidator's office in working out the matter. Therefore, Mr.Engineer, learned Counsel for the Applicant had agreed to furnish bank statements within a period of one week and the Official Liquidator's office was directed to revert on the same. Thereafter, when the matter was called out on 8 th March 2024, avk 4/7 ::: Uploaded on - 19/03/2024 ::: Downloaded on - 31/03/2024 04:12:17 ::: 19-IA-2140-2021.doc Mr.Sheth submitted that pursuant to a verification of the bank statements submitted on behalf of the Applicant, it was found out that bank statements did reflect the debits made in the Applicant's account and the monies had in fact been paid by the Applicant into the account of the Respondent No.2.
7. As noted above, today when the matter is called out, on behalf of the Official Liquidator an affidavit dated 13th March 2024 has been filed where it has been submitted that since the said transaction had taken place after the presentation of the winding up Petition i.e. 22 nd January 2014, a preliminary objection had been taken to the Application filed on behalf of the Applicant. Thereafter, on 23 rd February 2024, the Applicant had placed on record bank statements showing payment of Rs.1,13,47,100/- to the Respondent No.2 and that office of the Official Liquidator had verified the individual entries from the bank statements to match the amounts paid by the Applicant towards the said flat. It is also submitted that as per the bank statements, the Applicant has paid Rs.44,78,721/- from his bank account No.165001500705. That, the email through which the Applicant has received loan of Rs.80,00,000/- from HDFC bank and the cheque issued by HDFC bank of Rs.80,00,000/- has also been verified. In paragraph 5 of the affidavit it avk 5/7 ::: Uploaded on - 19/03/2024 ::: Downloaded on - 31/03/2024 04:12:17 ::: 19-IA-2140-2021.doc has been submitted on behalf of the Official Liquidator that the Official Liquidator has no objection if this Court ratifies the transaction under Section 536(2) of the Companies Act.
8. Section 536(2) of the Companies Act is usefully quoted as under :
"536(2) In the case of a winding up by [the Tribunal], 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 Tribunal] otherwise orders, be void.
9. As can be seen, Section 536(2) provides that in the case of a winding up any disposition of property of the company shall be mandatorily held to be void, unless the Court otherwise orders. It is settled law that bonafide transactions for consideration stand outside the provision of 536(2) and the Court is empowered to ratify such transaction.
10. In the facts of this case, the Petition of winding up was presented on 22nd January 2014 and the date on which the Agreement in respect of the said flat was registered is 8th December 2014, which is after the date of the winding up of the company. Therefore, the transaction in respect of the said flat is after the date of winding up. However, from avk 6/7 ::: Uploaded on - 19/03/2024 ::: Downloaded on - 31/03/2024 04:12:17 ::: 19-IA-2140-2021.doc the facts noted above, it is clear that the transaction had been made bonafide by a flat purchaser, who is an Advocate, after availing of loan as well as making some payments of his own. As has been stated by the Official Liquidator, the payments have in fact been made by the Applicant to the Respondent No.2, who is now in liquidation. The discretion that has been vested in this Court under Section 536(2) is to protect these very type of transactions which are bonafide and carried out in the ordinary course of business, and therefore, ought to be validated. No contrary fact or material has been brought to my notice to hold otherwise.
11. In the circumstances, I am inclined to allow the Application in terms of Prayer clause (b) which reads thus :
"That this Hon'ble Court be pleased to pass an order under Section 536(2) of the Companies Act, 1956 ratifying, approving and sanctioning the sale by Respondent No. 2 to the Applicants of Flat No.B-1102 in 'Mantri Serene', situated opposite MHADA Bungalow, off Film City Road, Goregaon (East), Mumbai 400
065."
12. The symbolic possession of the liquidator, accordingly, stands revoked.
13. The Application, accordingly, stands disposed.
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