9911796707
TMI Blog2008 (12) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction as void against the Official Liquidator in terms of section 531A of the Companies Act, 1956. 2. Company Application No. 414 of 2008 is filed by M/s. Siddhi Vinayak Corporation seeking confirmation of sale by M/s. Trimline Health and Resort Limited (in Liquidation) of the property bearing Plot Nos. 8, 9 and 10 of Revenue Survey No. 467/1 in village Atladra, Baroda vide registered sale deed dated 1-8-2006/14-8-2006 and sale of furniture, fixtures and appliances in favour of the applicant. 3. Asfaras OLR No. 107 of 2007 is concerned, this Court has issued notice on 18-6-2007. After service of the notice on the respondents and after considering the pleadings of the parties, this Court has passed a detailed order on 15-12-2008 observing therein that the property of the Company's Registered Office situated at 79, Vishwas Colony, Opp. Alkapuri Shopping Centre, Vadodara is not standing in the name of the Company in liquidation, the Official Liquidator has not taken the possession of the said property. The Court further held that evidence to that effect are placed on record and no further document is required. Hence, prayer 7(A) made in the report no longer survive. The Court, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he provisions of section 531A of the Companies Act, 1956, any transaction of sale or transfer of property of the Company, if made within a period of one year before the presentation of the winding up petition is void as a statutory presumption unless the transaction is proved by the purchaser to be in ordinary course of Company's business and in good faith and for valuable consideration, as a bona fide transaction. The transaction is indisputably within the period specified under section 531A of the Companies Act and not in the ordinary course of Company's business and is, therefore, by statutory presumption, void against the Official Liquidator. It is for the respondent No. 5 to prove that the transaction was in the ordinary course of Company's business and in good faith and for valuable consideration. 6. Mr. Mehta has further submitted that the respondent No. 5 cannot contend that it is not in the knowledge of the winding up petition. The respondent No. 5 in its own affidavit has explained that he was approached by the Directors of the Company to purchase the property. As a bona fide purchaser and as a matter of due diligence, it was necessary for the purchaser to ascertain as t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, it appears that it is dated 1-8-2006. On page 3, the date mentioned is 14-8-2006. It is practically impossible to take cognizance of No Due Certificate issued by HUDCO on 14-8-2006 in a sale deed dated 1-8-2006. He has, therefore, submitted that the transaction is clearly hit by the provisions of section 531A of the Companies Act, 1956 and hence, the Official Liquidator is entitled to claim the possession of this resort property from the respondent No. 5. 9. The respondent No. 5 has strongly objected to the prayer made by the Official Liquidator in his report and filed a detailed affidavit on 8-7-2008 along with which all necessary documents are filed showing that the transaction is real, genuine and bona fide. Mr. S.N. Soparkar, learned Senior advocate with Mr. Amar N. Bhatt, learned advocate appeared for M/s. Siddhi Vinayak Corporation in both these matters. Mr. Soparkar has submitted that M/s. Siddhi Vinayak Corporation has purchased the property bearing Plot Nos. 8, 9 and 10 admeasuring about 850.50 Sq. Mts., each aggregating to 2551.50 Sq. Mts. Bearing Revenue Survey No. 467/1 in village Atladra, Baroda as well as the furniture, fixtures and appliances on 1-8-2006 for a c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4-3-2006 and 10-3-2006, the Company submitted one time settlement proposal to HUDCO. HUDCO vide its letter dated 14-3-2006 informed the Company that it did not accept the said proposal. The Company vide its letter dated 1-4-2006 gave an improved one time settlement proposal for full and final settlement of the dues of HUDCO for Rs. 418 lakhs. Along with its letter, the Company gave a cheque of Rs. 1 Crore towards one time settlement proposal. The said cheque was issued by M/s. Siddhi Vinayak Corporation. However, as the clearance of the said cheque was likely to be delayed due to the nation wide strike of SBI on 17-4-2006, M/s. Siddhi Vinayak Corporation gave another cheque of Rs. 1 crore payable at Ahmedabad along with its letter dated 17-4-2006. Thereafter, on 20-7-2006, HUDCO accepted the one time settlement of the Company. On 27-7-2006, the Company wrote another letter to HUDCO wherein it was mentioned that the entire payment of one time settlement is being made by M/s. Siddhi Vinayak Corporation. On 31-7-2006, HUDCO issued a receipt for 3,43,73,012 towards the repayment of the dues of the Company. On 1-8-2006, the sale deed was executed for the property in question for a tota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 Sq. Mts. and Plot No. 7 admeasuring 1450 Sq. Mts. aggregating to 3390.50 Sq. Mts. of Revenue Survey No. 467/1 in village Atladra, Distt. and Sub-Distt. Vadodara from Mr. Pradhan, his wife and their relatives for agreed sale consideration of Rs. 1,15,28,000 and the sale consideration was used by them to clear the dues of the Company to Anyonya Co-operative Bank Limited, Vadodara, Bharat Co-operative Bank Limited and Baroda City Co-operative Bank Limited. The amount of sale proceed was also used for payment of one time settlement amount. After purchasing the said property, M/s. Siddhi Vinayak Corporation has also incurred huge expenses of approximately more than Rs. 35 lakhs for the maintenance of the said properties. 16. Mr. Soparkar has further submitted that Company Petition No. 124 of 2006 appears to have been filed in collusion with the Company as is evident from the bare reading of the said Company Petition. The said petition was filed on 19-7-2006. Notice was issued by this Court on 31-7-2006 making it returnable on 30-8-2006. The order of admission of the Company Petition and advertisement was passed on 28-9-2006 fixing final hearing on 22-11-2006 which date was ultimately ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y otherwise than in the ordinary course of business, will be void, if it had been made within one year from the presentation of a winding-up petition or the passing of a resolution for voluntary winding up. Section 531A has put the initial burden upon the one who wants to avoid the transaction to establish that the transaction was not made in the ordinary course of business or that it lacked good faith. It is only when this initial onus is discharged that it will shift to the Official Liquidator. An application under this section for setting aside a transfer can be allowed where either it is proved that there was no consideration for the transaction or that the consideration was so inadequate as to raise a presumption of want of good faith. Even if there was valuable consideration, the Liquidator may show want of good faith in the sense that the transferee entered into the transaction with the knowledge of all the circumstances with a view to shield the assets against the claims of creditors. Where a transaction is sought to be annulled under this provision, the burden of proof is on the Official Liquidator or the person who impugns the transaction of transfer. If the Court comes t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the transaction in question, the Court takes note of the fact that the manner and method in which the winding up order is passed is not just and proper nor it is in accordance with the statutory Rules. Despite the fact that the order of admission and advertisement was passed on 22-11-2006 which was extended to 29-1-2007, the petition was advertised only on 19-1-2007 and winding up order was passed on 29-1-2007 i.e., within 10 days from the date of the publication of the advertisement. At least 21 days time should have been given either to raise objection or to support the winding-up petition. These facts were not brought to the notice of the Court and winding-up order was got to be passed. Since this order is not challenged by any one nor by the Company in liquidation and since it has become final, no further discussion is necessary at this stage. Suffice it to say that the Official Liquidator is not justified in making prayer before this Court to declare the transaction in question as void against him only on the ground that the transaction in question was entered into on 1/14-8-2006 and winding-up petition was filed on 19-7-2006. 22. There is no substance in other objections r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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