9911796707
TMI Blog2007 (7) TMI 409X X X X Extracts X X X X X X X X Extracts X X X X ..... ssets were put up for sale. The Company's office premises at 122, Maker Chambers, VI, Nariman Point, Mumbai were put up for sale through a public advertisement as per the direction of the Company Court in Company Application No. 66 of 1988. The valuation report indicated that the property was worth Rs. 4.10 crores. Thereafter, at the time of physical inspection on 10-2-2006 the property was valued at Rs. 4.55 crores. Bids were invited and the highest offer received by the Official Liquidator was Rs. 5.95 crores. The Official Liquidator accordingly submitted Official Liquidator's Report No. 166 of 2006 seeking direction for confirmation of sale in favour of M/s. Pacific Corporate Services Ltd., for purchase consideration of Rs. 5.95 crores. At the hearing of said OL Report, M/s. Mak Enterprises appeared through their learned advocate Mr. Pavan Godiawala and expressed readiness and willingness to offer more than Rs. 6.20 crores. The Company Court permitted the said firm to deposit earnest money deposit of Rs. 40 lakhs and further sum of Rs. 5 lakhs as late fee charges. The Company Court then permitted the bidders to proceed for inter se bidding. In fact, another party, Dilip H. Udani ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 007, the appellant made the following averments in paragraphs 5 and 7:- "5. Meanwhile the said partnership firm got converted into Part IX Company and hence the present application is preferred before the Hon'ble Court for necessary direction to the Official Liquidator to accept the remaining amount of Rs. 5,11,25,000 (Rupees Five Crores Eleven Lakhs Twenty Five Thousand) from the present applicant. A copy of the Memorandum and Articles of Association are marked as Annexure 'C'. 7. I say that, to incorporate the partnership firm into Part IX Company, the other partners were inducted and fresh deed was executed. At least 7 (seven) partners would be required and thereafter the firm was converted and registered into Part IX Company. All the seven partners have to be subscribers to the memorandum of association and hence the said partners are the subscribers to the Memorandum of Association." It was then pointed out that the seven partners expressed their desire vide Resolution dated 23-2-2007 to register the firm as a Limited Company within the meaning of section 565/566 of the Companies Act, 1956. The Memorandum of Association and the Articles of Association of the newly formed Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... two partners was 45% + 45% = 90% and subsequently inducted five partners were given nominal share of only 2 per cent each. As stated in the partnership deed dated 17-2-2007 (Annexure-B collectively), the names and addresses of two existing partners and the five newly inducted partners and their share in profit and loss were as under:- Sr. No Name of the member Share in Profit and loss 1. Mr. Khalid Shoukatali Chowdhary, Crystal Tower, 12th Floor, Flat No. 1202, M. T. Ansari Marg, 14, Arab Lane, Grant Road, Mumbai - 400 008. 45% 2. Mr. Asif Ismail Potia, Ratan Apartment, Flat No. 4, Plot No. 6/3, Samarth Ramdas Marg, 10th Road, JVPD Scheme, Vile Parle (West), Mumbai - 400 049. 45% Sr. No Name of the member Share in Profit and loss 3. Mr. Mohammed Iqbal Khan, 101, Morusadan, S. V. Road, Santacruz (West), Mumbai - 400 054. 2% 4. Mr. Imran Iqbal Khan, 101, Morusadan, S. V. Road, Santacruz (West), Mumbai - 400 054. 2% 5. Mr. Rashid Khalid Chowdhary, Crystal Tower, 12th Floor, Flat No. 1202, M.T. Ansari Marg, 14 Arab Lane, Grant Road, Mumbai- 400 008. 2% 6. Mr. Shahid Khalid Chowdhary, Crystal Tower, 12th Floor, Flat No. 1202, M.T. Ansari Marg, 14, Arab Lane ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Partner No. 1 7. Mr. Salim Ismail Potia, same address as of partner No. 2 Brother of partner No. 2 It is also submitted that the learned Company Judge erred in passing strictures against the learned advocate for the appellant-Company who appeared before the learned Company Judge. 8. On the other hand, Mr. J. S. Yadav, learned counsel appearing for the Official Liquidator has opposed the appeal and submitted that since the order dated 28-12-2006 specifically provided that no nomination shall be permitted and since the highest offer of Rs. 7.35 crores was made by M/s. Mak Enterprises, a partnership firm consisting of two partners, the learned Company Judge was justified in rejecting the request for executing the sale deed in favour of joint stock company having seven shareholders. 9. Having heard learned advocates for the parties, we find considerable substance in the submission made on behalf of the appellant-Company that the two partners of partnership firm 'M/s. Mak Enterprises' which had made the highest offer of Rs. 7.35 crores (which offer was accepted by the learned Company Judge on 28-12-2006) subsequently also continued to have substantial controlling interest of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, never in large numbers. It may be on account of the delays in the Court proceedings or uncertainties in such proceedings or any other reason that the end-users may be shying away from Court auction sales, but the fact remains that a number of persons dealing in plant and machinery or real estate do participate in such auction sales. If the nomination facility were to be prohibited altogether, the number of parties participating in the Court auction sales would considerably go down. This would not be in the interest of ultimate beneficiaries, i.e., secured creditors and workmen who are ordinarily the only persons getting share of the sale proceeds. 12. Assuming that nomination facility is likely to result into loss of stamp duty to the State (the intricacies of the relevant provisions of the Companies Act and the Stamp Duty Act have not been examined by us and, therefore, we would not like to express any opinion either way, but even proceeding on that basis and considering the rates of stamp duty and registration charges presently prevailing), this aspect can be suitably taken care of by providing a disincentive to the auction purchaser who wants to avail of the nomination f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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