TMI Blog2010 (7) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... would not make it a secured creditor - whether a decree-holder stands at the same footing as that of an unsecured creditor when the matter is before the company court for sanction of a scheme filed by a company - decree-holder in the light of the said section 390(c) of 1956 Act also stands on the same footing as that of an unsecured creditor and it has to be accepted that even after obtaining a decree against the appellant/petitioner by the decree-holder, the respondent herein, shall be deemed to be of the same class as that of other unsecured creditors under the said section - payment would be made to Malanpur Steels Ltd. as per the sanctioned Scheme and once the entire payment is made, Malanpur shall withdraw the proceedings under section 138 of the NI Act which were filed by it alleging non-payment of dues in the form of dishonour of the cheques, review petition bereft of any merit, dismissed - CA Nos. 1130 of 2005, 634 & 659 of 2009 - - - Dated:- 14-7-2010 - A.K. Sikri, J. Jayant Bhushan and Diwakar Maheshwari for the Petitioner. Atul Sharma, Anand Srivastava and Ms. Neeru M. Jha for the Respondent. ORDER 1. Company Petition No.385 of 2003 was filed by Roy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble. This objection was also overruled in the judgment dated 15th July, 2005. 6. Before I take note of the averments on the basis of which review of the aforesaid order is sought, it would be necessary to take note of some developments which have taken place after passing of orders dated 15th July, 2005 sanctioning the claim. It may also be recapitulated that CA No. 265/2003 was filed by Mr. Siddhanta Sharma, under section 534/441 of the Act. Genesis of this application could be traced to the allotment of certain shares of the company to three investors company belonging to S.K. Modi group, namely, Modi Overseas Investment (P.) Ltd., Kesha Investments (P.) Ltd. and Paradise Credits (P.) Ltd. 7. An innovative and deceitful methodology was introduced for making payment against these shares, without at the same time affecting the pockets of the three investment companies. The company entered into a lease agreement with Agache Associates agreeing to take the premises at Calcutta at a monthly rent of Rs. 10,000. However, it also agreed to give security deposit of realisation amount of Rs. 36 crore. This artificial liability towards Agache was created in the books of Modiluft Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore the Calcutta High Court. Proceedings in those execution proceedings were, however, stayed on 23rd June, 1998 as provisional liquidator was appointed by Delhi High Court in winding up petition filed by Indian Oil Corporation. This winding up petition was filed against Modiluft (CP 68/97) in which provisional liquidator was appointed on 29th April, 1998. 11. It may also be noted that one CP 112/99 was filed before the Company Law Board ('CLB') in respect of transfer of shares allegedly made by Malanpur in favour of prospective buyer. In this petition, orders dated 13th January, 2001 were passed by CLB holding that transfer deeds are forged and not genuine. Against this order, appeal is preferred before this court which is still pending. 12. In the suit filed before the Calcutta High Court, Malanpur had prayed for a decree of Rs. 5,83,96,465 (Rs. 5 crore ICD plus interest) together with future interest at the rate of 20 per cent per annum and had also sought declaration that it is entitled to sell pledge shares to realise the ICD. In this suit, Malanpur filed an interim application for a judgment upon admission and decree in the sum of Rs. 5,83,96,465. Decree in the sum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Official Liquidator as provisional liquidator in winding up petition filed by Indian Oil Corporation before Delhi High Court. 3. May 1998 Malanpur files its first execution petition (No.1545 of 1998 in CS 161A of 97) for execution of decree dated 8th September, 1997 before Calcutta High Court. 4. 23rd June, 1998 Calcutta High Court stays Malanpur's petition No.1545 of 1998, on account of appointment of provisional liquidator by Delhi High Court in winding up petition filed by Indian Oil Corporation. 5. 13th January, 2000 In CP 12/111/99, CLB holds that the transfer deeds are forged and not genuine. 6. 6th March, 2000 Twenty-four Carats Investment (P.) Ltd. prefers Company Appeal 2 of 2000 against the order of CLB dated 13th January, 2000 (still pending before Delhi High Court) 7. January 2001 Malanpur files another application GA 2293 of 2001 in CS 161A of 1997 praying, inter alia, that SJ and Karvy be directed to register transfer of 40,48,200 and 15,11,200 shares each in the names of the respective buyers and that SJ and Karvy be restrained from returning any shares withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Calcutta High Court dated 11th July, 2005. 17. 26th November, 2008 Memorandum of Settlement ('MoS') effected between SK Modi group, RHSL, Spice Jet and BS Kansagra covering, inter alia , the dispute regarding shares (including Pledged Shares) being partly paid. 18. 12th December, 2008 Decree in terms of the said MOS is passed by Delhi High Court. 19. 16th January, 2009 CA 265/2003 (covering dispute of partly paid shares) is dismissed as withdrawn pursuant to permission from Delhi High Court. 20. 6th July, 2009 SLP No. 17474/2005 is disposed of by Supreme Court with directions to the Delhi High Court to decide, the issue of forfeiture of shares de novo and till such time this issue is decided, status quo shall be maintained. 17. Now I proceed to discuss the grounds on which the review of orders dated 5th July, 2005 is sought. 18. First submission is that this court has wrongly treated the Malanpur as creditor belonging to ICD category. According to the learned counsel, since Malanpur is having decree in his favour and further shares were also pledged by Spice Jet (Modiluft) at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion even this decree passed in its favour is under challenge before the Division Bench of the Calcutta High Court. It may also be of significance to point out that Malanpur has right to recover a sum of Rs. 1.39 crore out of the decretal amount. If that is to be treated as payment against the principal amount, the principal amount would stand reduced by this amount.' There is hardly any ground to seek review inasmuch as under the garb of review, Malanpur is trying to re-argue the matter which is not the scope of the review and, thus, impermissible. 20. The plea predicated on pledged shares was not even raised at the time of arguments and, therefore, in review application, such a plea cannot be permitted to be raised for the first time. In any case this plea is without any merit. 21. Merely because certain shares were pledged with the Malanpur, would not make it a secured creditor. This plea is afterthought as well. Malanpur had raised this very issue in the execution petition filed by it in the High Court of Calcutta. The Division Bench of Calcutta High Court formulated the question raised in the following manner : "[V]ery interesting question, although already settled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecree along with interest is prayed. Additional prayer is that decree of declaration be passed that the Malanpur is entitled to sell the said shares by public auction and/or private treaty and realise the sale proceeds thereof in pro tanto satisfaction of its claim. Therefore, I do not agree with this contention of Malanpur. 26. Another plea taken in this review petition relates to the proceedings initiated by Malanpur under section 138 of Negotiable Instruments Act. It was submitted by Mr. Jayant Bhushan, learned senior counsel appearing for the Malanpur that even when the company court is considering scheme under section 391/392 of the Act, it has no jurisdiction to stay such proceedings. In support, the learned senior counsel referred to a Division Bench judgment of this court in Krishna Texport Industries Ltd. v. DCM Ltd. [2009] 89 SCL 151 (Delhi) 27. This contention is again misconceived. In para 56 of the judgment, same very objection was dealt with in the following manner : "56. Insofar as objection of Malanpur to the two conditions attached to making payment of first instalment are concerned, there may not be of any cause of worry inasmuch as it can be direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r section 138 of the NI Act instituted against the company could not be stayed. That stage is long over. It is stated at the cost of repetition that scheme was sanctioned way back in the year 2005. But for the present review petition, said scheme has attained finality. That has even been substantially acted upon as well, inasmuch as, payment to most, other creditors have already been given as per the scheme. 30. One aspect, however, which needs to be discussed which does not arise out of the review petition. As pointed above, the Division Bench of Calcutta High Court has passed orders directing Spice Jet to register the transfer of pledged shares in the names of their respective purchaser. The Spice Jet had filed SLP thereagainst. In its order dated 6th July, 2009, the Supreme Court has directed this court to decide the question regarding forfeiture of shares. 31. As already noted above, decree was passed by the learned Single Judge of Calcutta High Court for a sum of Rs. 58,39,64,657 along with interest. The Spice Jet has filed appeal thereagainst which is pending before the Division Bench. Malanpur had filed execution petition which was, however, stayed by the learned Sin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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