Gujarat High Court
Icici vs Mardia on 8 August, 2008
Author: Harsha Devani
Bench: Harsha Devani
OJA/118/2008 9/ 11 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD O.J.APPEAL No. 118 of 2008 In COMPANY APPLICATION No. 69 of 2008 In COMPANY PETITION No. 37 of 1998 With CIVIL APPLICATION No. 165 of 2008 In O.J.APPEAL No. 118 of 2008 ========================================================= ICICI BANK LIMITED - Appellant(s) Versus MARDIA CHEMICALS LIMITED (IN LIQUIDATION) & 1 - Opponent(s) ========================================================= Appearance : MR MIHIR THAKORE, SENIOR ADVOCATE WITH MR.SANDEEP SINGHI FOR SINGHI & CO. AND MR. SALIL THAKORE for Appellant(s) : 1, OFFICIAL LIQUIDATOR for Opponent(s) : 1, MS AMEE YAJNIK for Opponent(s) : 1, MR NAVIN K PAHWA for Opponent(s) : 2, ========================================================= CORAM : HONOURABLE MR.JUSTICE D.A.MEHTA and HONOURABLE MS.JUSTICE H.N.DEVANI Date : 08/08/2008 ORAL ORDER
(Per : HONOURABLE MR.JUSTICE D.A.MEHTA) 1 The Appellant herein is respondent No.2 in Company Application No. 69 of 2008 and has come up in Appeal against order dated 15.04.2008 rendered by the Company Court in the said Company Application. The principal grievance ventilated on behalf of the Appellant is to the effect that the learned Company Judge has exceeded jurisdiction vested in the Company Court in permitting respondent No.2 herein, the original applicant of Company Application No. 69 of 2008, to represent the Official Liquidator in various proceedings pending before different Courts/Forums wherein the Company in liquidation is either the defendant or has initiated proceedings.
2. Heard the learned Advocate for the original applicant. It was submitted by Mr. Pahwa that the original applicant is only interested in ensuring that the litigations against the Company in liquidation are properly represented so as to ensure that the Company in liquidation is not required to discharge liabilities for which the company in liquidation is not liable. That despite having drawn attention of the Official Liquidator at times the matters wherein Company in liquidation is a party have gone unrepresented. It was therefore urged that the Company Court was within its jurisdiction and had exercised those powers in accordance with law and the Appeal was required to be dismissed.
3. The learned Advocate for the Official Liquidator has also been heard. It was pointed out that the liquidator would have no objection if any assistance is rendered by the original applicant in pursuing any proceeding by or against the Company in liquidation but the decision whether to pursue such proceedings or not will have to be of the Official Liquidator only. It was submitted that at no stage was it the case of the Official Liquidator that the original applicant should represent the Official Liquidator in any of the proceedings.
4. The following prayers were made by the original applicant in Company Application No. 69 of 2008 :
ýS YOUR LORDSHIPS may be pleased to permit me to represent in all legal cases filed by / against Mardia Chemicals Limited, a Company in liquidation and to direct the Official Liquidator to provide me the copies of the documents, for defending these suits, as and when required;
YOUR LORDSHIPS may be pleased to direct the Official Liquidator of Mardia Chemicals Limited (In Liquidation) To file appropriate proceedings for challenging / recalling the order dated 12.09.2007 of the City Civil Court at Ahmedabad in Civil Suit No. 3189 of 2002;
To represent the Company in liquidation in the proceedings enlisted in Annexure A to the affidavit in support of the Judge's Summons;
To appear in Misc. Application filed in Counter Claim in Original Application No. 278 of 2002 and to suitably defend the Company in liquidation in the said proceedings;
To represent the Company in liquidation in Suit No. 434 of 2003 pending before the Bombay High Court and to suitably defend the Company in liquidation in the said proceedings;
YOUR LORDSHIPS may be pleased to start the contempt proceedings against the Official Liquidator and other responsible officers of the office of the Official Liquidator for making the contempt of the orders passed by this Hon'ble Court in Company Application No. 285 of 2006 and in Company Application No. 97 of 2006.
YOUR LORDSHIPS may be pleased to make responsible the Official Liquidator and the Government of India, Ministry of Corporate Affairs, New Delhi to compensate the losses incurred to the Company in liquidation due to the negligent and lackluster approach of the Official Liquidator towards the various affairs of the Company in liquidationýý.
5. After hearing the parties the Court issued following directions :
ýS24.There is no much dispute about the proposition of law made in the decisions of A.P.K. Kallappa Nader (Supra) and Associated Banking Corporation of India Limited & Others (Supra). There is no question of any independent action being taken by the applicant. He has to work along with the Official Liquidator till his interest remains in conformity with the interest of the Company in liquidation. The applicant's only endeavour is to protect or safeguard the interest and properties of the Company in liquidation. He neither replaces nor substitutes the Official Liquidator in any of the proceedings. The Court, therefore, inclines to grant this application partly and issues following directions :-
The applicant is permitted to assist the Official Liquidator or his advocate in any proceedings which are filed by or against the Company at his own cost. The applicant is also permitted to address any Court, authority or forum as a representative of the Official Liquidator, to protect the interest of the Company in liquidation. It is, however, clarified that wherever the Official Liquidator has filed any matter or initiated any proceedings before any Court, authority or forum against the applicant or where the applicant's interest and the interest of the Company in liquidation are in conflict with each other, the applicant will not have any say for the Company in that particular matter. It is also made clear that the assistance that may be rendered by the applicant to the Official Liquidator shall be at his own cost and consequences.
The applicant is further permitted to point out to the Official Liquidator all such matters which are disposed off either ex-parte or in absence of any representation on behalf of the Official Liquidator and any further action is required to be taken in those matters. On pointing out such matters by the applicant to the Official Liquidator, the Official Liquidator shall take prompt and immediate action in the best interest of the Company in liquidation. The applicant shall be allowed to represent the Official Liquidator at his own cost.
The applicant shall not have any access to the records of the Company in liquidation. He has to make a request in writing to the Official Liquidator, which shall be examined by the Official Liquidator on its merits and if he finds such request to be acceptable, he shall provide necessary inspection to such records.
The applicant's prayer for initiating contempt proceedings against the Official Liquidator is hereby rejected.
This order is passed considering the peculiar facts of this case and it shall not be considered as precedent.ýý
6. The aforesaid directions as made by the Company Court have to a certain extent travelled beyond the correct position in law which was stated by the Company Court itself in the earlier part of paragraph No.24.
ýSThere is no question of any independent action being taken by the applicant. He has to work along with the Official Liquidator till his interest remains in conformity with the interest of the Company in liquidation. The applicant's only endeavour is to protect or safeguard the interest and properties of the Company in liquidation. He neither replaces nor substitutes the Official Liquidator in any of the proceedings.ýý 7 Therefore, it is apparent that the directions made by the Company Court have to be appreciated and understood in light of the aforestated position viz., the original applicant cannot be permitted to either represent the Official Liquidator or the Company in liquidation independent of the powers available to the Official Liquidator, which in law have to be exercised by the Official Liquidator, in concurrence with and under the aegis of the Company Court after obtaining permission from the Company Court. Therefore, independent of the Official Liquidator the original applicant cannot either pursue any proceeding as an applicant or as a defendant in so far as the Company in liquidation and the Official Liquidator are concerned. In other words, the original applicant cannot transpose himself in place of the Official Liquidator who represents the Company in liquidation.
8 Subject to aforesaid position it is always open to the original applicant to assist the Official liquidator or an Advocate appointed by the Official Liquidator in any proceedings wherein the Official Liquidator representing the Company in liquidation is a party. Therefore, there can be no question of the original applicant being permitted to address any Court or Forum in any proceedings as a representative of the Official Liquidator or the Company in liquidation.
9. It is further open to the original applicant to request the Official Liquidator to take a decision in any matter where the original applicant finds it necessary so as to protect and safeguard the interest of Company in liquidation and this request may include a request to the Official Liquidator to move the Company Court for appropriate directions in the matter. In the event the Official Liquidator fails to record a decision within a reasonable period it would always be open to the original applicant to move the Company Court seeking appropriate directions to the Official Liquidator in this regard.
10. It is clarified that at no point of time can the Official Liquidator abdicate his responsibilities /duties which are cast upon him in favour of any third party and every decision which is required to be taken in the best interest of the Company in liquidation shall have to be of the Official Liquidator only. For arriving at such a decision it is always open to the Official Liquidator to take assistance from not only the original applicant but any other source which the Official Liquidator may find it necessary for the purpose of obtaining assistance and this will include engaging an additional Advocate wherever necessary, whose cost shall be borne by the original applicant, but the decision to engage such an additional Advocate shall be of the Official Liquidator.
11. Accordingly, the directions made by the Company Court shall stand substituted by what is stated hereinbefore. The Appeal is allowed in the aforesaid terms with no order as to costs.
CIVIL APPLICATION No. 165 of 2008 In light of the order in Appeal the Civil Application has been rendered infructuous and stands disposed of accordingly.
Sd/- Sd/-
(D.A. Mehta, J.)
(H.N. Devani, J.)
M.M.BHATT