TMI Blog1974 (5) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... nt-bank since 1959. In January, 1966, an equitable mortgage by deposit of title deeds of the property was created in favour of the bank by way of additional security. It is not disputed that, at the relevant time, the appellant was the managing director of the company. A total of more than Rs. 10,00,034.20 stood to the company's debit in the said cash credit account with the bank. A winding-up petition (Company Petition No. 34 of 1966) was pending against it, as was also pending a petition for sanction of a scheme of compromise between the company and its unsecured creditors, when the respondent-bank entered into a compromise with it. In April, 1968, a joint application was moved under section 443(2) read with sections 391 and 392 of the Act for sanctioning the said compromise. The company admitted under the compromise that the respondent-bank was a secured creditor and a sum of Rs. 9,97,04850 stood to its debit in favour of the bank as on May 11, 1966. It was also admitted that the bank held an equitable mortgage of the property in dispute by way of security. The compromise also provided that the parties will co-operate in taking appropriate steps to get the attachment of the prop ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en up and the counsel appearing on behalf of the company stated before us that the company supported the claim of the bank and the order of the learned company Judge. It had been contended by the appellant, as has been contended on his behalf even before us, that he was not a party to the said agreement and compromise and was, therefore, not bound by it. It was also contended that he was the owner of the property and the company had nothing to do with it. His property, according to him, could not be sold to satisfy the indebtedness of the company. The learned company judge rightly brushed aside this objection of the appellant, by noticing that the title deeds were admittedly in the bank's possession. The appellant himself was the managing director of the company. There is no suggestion that the title deeds were not given voluntarily or of free will. The appellant then contended that the company had agreed to pay him Rs. 2,05,000 in lieu of his giving up his rights in the property in dispute. This amount not having been paid, the property, according to him, still remained his. This plea has reference to a scheme of arrangement which had been entered into between the company an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to avoid this dispute, Shri R. L. Anand agreed in the interest of the general body of creditors to give up all his rights in respect of the said property and to hand over the vacant possession thereof and the fixtures and furniture therein to the directors of the company forthwith, and the company agrees to pay a sum of Rs. 2,05,000 in such manner as the chairman of the board of directors of the company may consider fit, unless the same is adjusted in the manner provided hereafter. The credit of Rs. 2,05,000 made in favour of Messrs. Veer Finance shall be reversed accordingly" Veer Finance Co. referred to in this paragraph was another concern of the appellant himself. Mr, R. M. Lal, the learned counsel appearing on behalf of the appellant, contended that the appellant was no party to this settlement. He had joined in his capacity as a representative of the shareholders and not in his personal capacity. He, according to him, was not personally bound by the said settlement. The contention of the learned counsel is without any basis. It is mentioned in para. 4, reproduced above, that Mr. R. L. Anand agreed to give up all his rights in respect of the said property and to hand over ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,05,000 referred to in paragraph 4 towards this payment, if so desired by Shri R. L. Anand, the balance will in that case be payable in cash" It is, thus, clear that a sum of Rs. 2,05,000 was not required to be paid forthwith, but was to be either adjusted in the price of the Bombay flat in accordance with paragraph 6( f ) or was to be paid in such manner as the chairman of the board of directors of the company considered fit. Mr. B. R. Aggarwal, appearing on behalf of the bank, contended that this clause was deliberately incorporated to enable the company to make adjustment of its claims against the appellant, if any, against the amount of Rs. 2,05,000. We need not go into this aspect of the matter. It is clear to us that the payment of Rs. 2,05,000 was not a condition on the performance of which alone the rights in the property in dispute were to be given up by the appellant. All the same, there is no doubt that the appellant's undertaking to give up his rights in respect of the property in dispute and to hand over the vacant possession along with the fixtures and furniture therein to the company on one side and the company's commitment to pay to him a sum of Rs. 2,05,000 in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , is a case involving peculiar circumstances. The compromise with the bank was sanctioned, way back in May, 1968 ; and the other compromise between the company and its unsecured creditors was sanctioned in July, 1968. Nothing is known as to what happened during all these years. Mr. Roshan, the learned counsel appearing on behalf of the company, stated at the Bar that the appellant had handed over possession of the premises to the company in the beginning, but subsequently it was taken back by him. The circumstances under which this happened, if it happened at all, have nowhere been disclosed. Whether the company performed its promise or any part thereof, or whether it even offered to perform its part of the contract? Has anything been paid by the company by adjustment or otherwise ? If not, whether the company is still ready and willing to perform its part of the contract and, if so, how and in what manner it proposes to pay the sum of Rs. 2,05,000 which was to be paid to the appellant ? Answers to these questions shall have to be ascertained in all fairness to the parties concerned, in order to find out if this part of the compromise was still enforceable. It may not be fair to ex ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
