Supreme Court - Daily Orders
Subhasis Chatterjee vs A.Talukdar & Co.(Fertilizer) ... on 15 July, 2016
Bench: V. Gopala Gowda, Adarsh Kumar Goel
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IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 6564-6567 OF 2016
(Arising out of S.L.P.(C) Nos.30233-30236 of 2012)
A. TALUKDAR & COMPANY (FERTILIZER)
PRIVATE LIMITED …APPELLANT
VERSUS
THE OFFICIAL LIQUIDATOR
HIGH COURT OF CALCUTTA
& ORS. ETC. ETC. ...RESPONDENTS
ORDER
1. Leave granted. These appeals have arisen from judgment dated 3rd August, 2012 passed by Division Bench of the Calcutta High Court in APO Nos. 248,288 of 2011, 289 of 2011 and 303 of 2011 respectively.
2. The question for consideration is whether the Company Court could evict persons, who have occupied property of a company after commencement of winding up proceedings, on such company being revived under the order of the Company Court.
3. The appellant-company was directed to be wound up by order Signature Not Verified Digitally signed by RASHI GUPTA Date: 2016.07.21 17:23:26 IST dated 9th November, 1998 in Company Petition No. 12 of 1998 filed Reason: by one of its creditors M/s. Indian Potash Limited. The Official Liquidator attached to the High Court of Calcutta was appointed as 2 Official Liquidator. He could not take possessions of the factory premises of the company at 8, Pagladanga Road, Kolkata as one M/s. Hindustan Bone Mills was in possession claiming to be a tenant. During pendency of the proceedings, the premises of the company were occupied by five entities namely, Royal Blue Accessories, M/s. Magnate Industries, M/s. Narmada Equipments & Spares, M/s. Packtech and Premasish and Subhasish Chatterjee respectively.
4. The shareholders of the company filed an application before the Company Judge for recalling the winding up order. The said application was allowed on 6 th September, 2010. It was observed that the amount due was paid to the creditors and there was no objection to the winding up order being recalled. The official liquidator was directed to hand over the possession which was with him vide order dated 20th September, 2010.
5. The Company preferred an appeal seeking direction that the Company Judge should have restored possession of entire premises of the company and not merely of that which was in possession of the official liquidator. Once the company was ordered to be wound up, the entire property of the company came in the custody of the Company Court under Section 456 of the Companies Act, 1956 and on winding up order being recalled, the company was entitled to restoration of its assets.
6. The Division Bench had before it the above appeal of the company claiming that it was entitled to be restored the possession of 3 the entire property of the company and not merely the property in possession of the official liquidator and three appeals filed up occupants of the premises belonging to the company, claiming the right to continue in possession. The Company Judge found that though M/s. Hindustan Bone Mills, a partnership firm claimed that it was in possession of the part of the premises prior to the Company being sent to liquidation, none of the occupants was in possession prior to commencement of winding up. They entered in possession after the winding up order.
7. The stand of the occupants was in two parts. One set of the occupants had given undertaking to vacate if directed by the Company Court but they submitted that their undertaking was conditional on permission to participate in the sale and thus, the same could not be acted upon to require them to vacate. The other three occupants, respondents-herein submitted that they came in possession through M/s. Hindustan Bone Mills who was the tenant of the Company and the official liquidator had accepted this position and could not go back upon this arrangement.
8. The High Court recorded its following finding with regard to the claim of two occupants who had given undertaking to vacate the premises as and when so directed :
“In our considered view, both the occupants in view of their specific undertaking before the learned Judge would be obliged to honour such undertaking as soon as Official Liquidator was divested of possession, no matter whether the company was in liquidation or not, no matter whether property 4 was sold or not. Their possession was coterminous with the Official Liquidator’s possession that was clear from the said order. Permission to participate in the sale was superfluous. Any Indian citizen who was legally competent to participate in the sale would be entitled to venture for the same in case any property was put up for public auction. The word ‘public auction’ would connote an invitation to the public. The public would include “Pack Tech” and “Chatterjee Brothers”. His Lordship’s permission could thus be not construed as a condition upon vacating of the premises in question. We respectfully defer with Mr. Bhattacharya on that score. It would thus take care of the issue relating to Section 536(2).”
9. We did not find any reason to interfere with the above finding and have dismissed the SLP (C) Nos. 33660-33663 of 2012 and SLP (C) Nos.38562-38565 of 2012 filed by the said two occupants.
10. As regards the other set of three occupants (Royal Blue, Magnet and Narmada) who had not given undertaking but who claimed to have come in possession under an arrangement with Hindustan Bone Mills who was in possession prior to the winding up, it was held :
“Royal Blue, Magnet and Narmada :
Let us now apply the law as understood by us as above, in case of Royal Blue Accessories, Magnet and Narmada.
The provision of Section 446 is discretionary. It is an enabling power without any mandate to the Court. The question would thus remain, whether in the present factual matrix the Court should be bothered with such an adjudication particularly when there was no lis pending before the Company Court as the order of winding up had already been set aside.
The occupants came in possession in 2008. The Official Liquidator initially accepted rent, soon declined to accept and categorically denied and disputed the alleged right of the occupants. From the Letter for Direction being dated March, 5, 2001 Official Liquidator informed the Court that M/s. Hindustan Bone Mills could not justify about the alleged tenancy. Such purported tenancy was nothing but a camouflage. Series of opportunities were given to the ex-Directors to assist the Official Liquidator in the affairs of the company so that the Official 5 Liquidator could proceed in beneficial winding up that would include the issue of purported tenancy. Repeated appointments were fixed with Ajit Kumar Talukdar who failed to turn up. The Official Liquidator accepted rent from M/s. Hindustan Bone Mills. The relevant Extracted of the Letter for Direction is quoted below:
“This matter has been examined by the Official Liquidator, High Court, Calcutta, it appears that the ex-Directors of the company (in liquidation) have created the tenancy in favour of M/s. Hindustan Bone Mills and issued the alleged receipt dated 5th November, 1998 and the proceedings were commenced on 9th January, 1998 which is squarely false within the purview of Sections 531, 532A and 536 of the Companies Act, 1956”.
We would thus find that as per the record of the Official Liquidator the tenancy was created after commencement of winding up proceeding.
In the subsequent Letter for Direction dated May 21, 2010 the Official Liquidator asked for eviction of three occupants being Narmada, Magnet and Royal Blue. Learned Judge directed notice to be served upon the occupants as we find from the order dated June 11, 2010. In view of the change of determination the said Letter for Direction came before another learned Judge on July 16, 2010 when His Lordship did not pass any order in terms of prayer (a). The Official liquidator accepted the said decision and did not proceed further as against the said occupants.
Mr. Basak strenuously contended, such position would not per se be fatal for the company. Accordingly to him, the Official Liquidator was in deemed possession of the property in question. In such case disposition was wrongful the Court must rise to the occasion and undo the wrong. Question would still remain, should the Court really rise to the occasion in the present factual matrix? To answer the question, we would have to lift the corporate veil. Company is ca closely held company of Talukdars. M/s. Hindustan Bone Mills was admittedly a partnership concern of Talukdars. We fully agree with the observation of the Official Liquidator that the tenancy of M/s. Hindustan Bone Mills was nothing but an attempt to stall the winding up proceeding. It was an attempt to resist the Official Liquidator from taking possession of the landed assets, Tapash Talukdar, partner of M/s. Hindustan Bone Mills 6 very recently made application inter alia claiming that the land did not belong to the company in liquidation. Hence, Talukdars were eager to resist sale. They were also trying to dispose it surreptitiously. They were successful to find out someone who could pay off their liabilities. Fortunately for the company, the liabilities were paid off. Winding up proceeding was thus set at naught. The said order was set aside vide order dated September 6, 2010. We also find that Talukdars also brought one person by the name of Ranjit Bhowmick and reconstituted the partnership only in 2008. Ranjit took possession and immediately created further encumbrances by handing over possession to five occupants including Royal Blue Accessories, Magnet and Narmada and immediately disappeared from the scene as his whereabouts were not known at least nobody informed us. We also find that the application for setting aside the order of winding up was filed by Talukdars having Tapash on their side. Hence, if the occupants would say, Talukdars got the share from Ranjit when they paid hefty amount to Ranjit in coming into possession, it could not be brushed aside. Their possession may be illegal. However, the Company Court should not come to the aid of Talukdars invoking the summary power. As we say, the refusal to act as per prayer of the company through Talukdars for eviction of the occupants was apt and we would decline to interfere.”
11. The above finding has been seriously challenged by learned counsel for the appellant. The three occupants as per above finding came into possession after the winding up order when the company’s assets were in the custody of the Company Court. No arrangement of their entering possession without court’s permission could be recognized. Thus, there was no justification for not passing an order of handing over the said assets of the company to the company, if winding up order is recalled.
12. Only response by learned counsel for the three occupants is that 7 they had already filed a suit in the matter which is to be adjudicated upon.
13. After careful consideration of the rival submissions, we are of the view that once the Company was ordered to be wound up, the assets of the Company came in the custody of the Company Court and no arrangement, after winding up order, without permission of the Company Court could be recognized in respect of assets of the Company. There was no legal handicap in the occupants, who came into picture during winding proceedings, being evicted by the Company Court so as to restore the possession of the assets of the Company, after the winding up order was recalled.
14. In view of the above, we allow these appeals, set aside the impugned order and hold that the respondents-occupants are liable to be evicted. The official liquidator may hand over possession of the said assets to the appellant within three months. Further dispute, if any, including the implementation of this order may be raised before the Company Court.
15. Accordingly, the appeals are allowed in the above terms.
………………………………………………J. ( V. GOPALA GOWDA ) ………………………………………………J. ( ADARSH KUMAR GOEL ) NEW DELHI;
JULY 15, 2016.
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ITEM NO.35 COURT NO.9 SECTION XVI
S U P R E M E C O U R T O F I N D I A
RECORD OF PROCEEDINGS
Petition(s) for Special Leave to Appeal (C) No(s).33660-33663/2012
(Arising out of impugned final judgment and order dated 03/08/2012 in APO No. 289/2011 03/08/2012 in APO No. 288/2011 03/08/2012 in APO No. 248/2011 03/08/2012 in CP No. 12/1998 17/09/2012 in ACO No. 205/2012 17/09/2012 in APO No. 289/2011 17/09/2012 in CP No. 12/1998 17/09/2012 in ACO No. 207/2012 17/09/2012 in ACO No. 208/2012 17/09/2012 in APO No. 288/2011 17/09/2012 in APO No. 248/2011 17/09/2012 in ACO No. 211/2012 17/09/2012 in ACO No. 212/2012 17/09/2012 in APO No. 303/2011 passed by the High Court of Calcutta) SUBHASIS CHATTERJEE & ANR. Petitioner(s) VERSUS A.TALUKDAR & CO.(FERTILIZER) PVT.LTD.&OR Respondent(s) (With interim relief and Office Report) WITH SLP(C) No. 30233-30236/2012 (With interim Relief and Office Report) SLP(C) No. 38562-38565/2012 (With interim relief and Office Report) Date : 15/07/2016 These petitions were called on for hearing today. CORAM : HON'BLE MR. JUSTICE V. GOPALA GOWDA HON'BLE MR. JUSTICE ADARSH KUMAR GOEL For Petitioner(s) Mr. M. N. Krishnamani, Sr. Adv.
Mr. Abhijit Sengupta, Adv.
Mr. Dibyadyuti Banerjee, Adv.
Mr. A. V. Manavalan, Adv.
Mr. Avijit Bhattacharjee, Adv.
Mr. Abdhesh Chaudhary, Adv.
Mr. Niendu Vatsyayan, Adv.
Mr. Rajiv Ranjan Dwivedi, Adv.
For Respondent(s) Mr. Arjun Singh Bhati, Adv.
Mr. Arvind K. Gupta, Adv.
Mr. Avijit Bhattacharjee, Adv.
Ms. Upma Shrivastava, Adv.
9Mr. Sudesh B.M., Adv.
Mr. Sanjay Kumar Ghosh, Adv.
Mr. Deba Prasad Mukherjee, Adv.
Mr. Subramanyam Swami, Sr. Adv.
Mr. S. Prasad, Sr. Adv.
Mr. Subhasish Bhowmick, Adv.
Ms. Anamika, Adv.
Mr. Himanshu Pal, Adv.
Mr. Neerja Sharma, Adv.
Mr. Rajesh Kumar, Adv.
Mr. Gaurav Kumar Singh, Adv.
Mr. Rakesh Chaurasiya, Adv.
Mr. Anant Gautam, Adv.
Mr. Yashraj Singh Deora, Adv.
` Ms. Sharmila Upadhyay, Adv.
UPON hearing the counsel the Court made the following O R D E R SLP (C) No(s).33660-33663/2012 & 38562-38565/2012 Heard.
No ground for interference is made out to exercise our jurisdiction under Article 136 of the Constitution of India.
The Special Leave Petitions are accordingly dismissed. Order granting stay is vacated.
Pending application(s), if any, stands disposed of. SLP(C) No. 30233-30236/2012 Leave granted.
The appeals are allowed in terms of the signed order.
(RASHI GUPTA) (SUMAN JAIN)
SR. P.A. COURT MASTER
[SIGNED ORDER IS PLACED ON THE FILE]