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TMI Blog2012 (6) TMI 281X X X X Extracts X X X X X X X X Extracts X X X X ..... ver derived shall be solely utilised and applied towards the promotion of its aims and objects as set forth in the Memorandum of Association. No part of the income and property of the Society shall be paid or transferred directly or indirectly, by way of dividend, bonus shares or otherwise, howsoever by way of profit to the person who at any time are or have been members of the Society or to any of them or to any persons claiming through them, provided that nothing herein contain shall prevent the payment in good faith of remuneration to any member thereof or to any person in return for any services rendered to the Society for travelling allowance, halting or other similar charges. No member of Society shall have any personal claim on any movable or immovable property of the Society or make profits whatsoever by virtue of his membership. In order to pursue its objectives, the applicant entered into a lease agreement with Mysore Kirloskar Limited, which is running a factory at Harihar. As per the registered lease deed dated 22-1-2000, the said Company has agreed to lease 6 acres 29 guntas (1.430 acres and 4.689 acres) on a monthly rent of Rs. 1,250 for a period of 28 years. The said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpanies in the country. The present residential capacity of the students is 160. In view of the approval granted by the AICTE fixing intake to 120 per year, the residential capacity has to be increased in the hostels. The applicant-Society has received 3000-3500 applications for filling up of 120 seats. For the purpose of expansion of the college building as well as the hostel building, the applicant approached M/s ICICI Bank for the financial assistance. The ICICI Bank after considering the application sanctioned the loan for its expansion. However, in order to have the primary security over the property, the said Bank had sought for specific orders from this Court approving creation of charge on the Leasehold land and keeping the said land outside the liquidation proceedings at least till 31-7-2017 by which date, loan amount would be repaid with interest. Since the Lessor who has leased the land is under winding up under the control of the Official Liquidator, unless this court grant permission to create charge on the leasehold property, the Bank is not ready to accept the land and building as security for the said loan. The applicant has been in possession and enjoyment of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or subject to the supervision of the Court or passing of the resolution of voluntary winding up of the company shall be void against the liquidator. In the instant case, the transfer has been made within one and half month prior to the winding up proceedings. Further in Davanagere one acre of land is valued at Rs. 1,00,00,000 (One crore). The Mysore Kirloskar company had transfer 6 acres 29 guntas of land by way of lease for a period of 28 years on a monthly rent of Rs. 1,250 to the applicant-society. As per clause 19 of the Agreement, on expiry of the term of the lease agreement, the lessee becomes the absolute owner. Clause 19 of the said agreement reads as under : "On the expiry of the term of this Lease Agreement, the subject Demised Premises shall be conveyed by the Lessor to the Lessee without any further financial or other compensation whatsoever and the parties herein shall execute such documents of conveyance as may be required to transfer the absolute title over the Demised Premises to the LESSEE, the LESSOR shall permit the right of passage to the staff members of the Lessee located within the residential colony premises of the LESSOR. The stamp duty, registration charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the appellant as a Lessee put to public auction sale, the appellant would also be at liberty to participate in the said auction proceedings. This according to us serves the purpose of the appellant. The Official Liquidator also contended that the applicant has suppressed the said fact and approached this Court. Hence, he sought for dismissal of the Company application. 7. I have carefully considered the arguments addressed by both the parties and perused the relevant records. 8. Having heard the learned counsel for the parties, the only point that arise for consideration in this application is whether the permission sought for by the applicant for creating charge on the leasehold right can be granted? 9. It is not in dispute that the applicant entered into a lease agreement with the Mysore Kirloskar Limited as per the lease deed dated 22-1-2000 taking 6 acres 29 guntas of land on lease for a period of 28 years on a monthly rent of Rs. 1,250. The liquidation proceedings has been initiated against the Mysore Kirloskar Limited on 14-3-2000 i.e., 1/½ months prior to the commencement of proceedings. The liquidation proceedings ended with the order of winding up on 1-4-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating the transfers covered thereby as void against the liquidator. Section 531(A) of the Companies Act provides for avoidance of voluntary transfer made by the Company within a period of one year before presentation of the petition for winding up, if such transfer was not made in the ordinary course of business or such transfer was not made in good faith for valuable consideration. When the court comes to the conclusion that the transfer made within a period of one year before presentation of the winding up petition either in the ordinary course of business or in good faith or for valuable consideration, such transfer would be annulled. In order to constitute fraudulent preference, the dominant motive in the mind of the company as represented by its directors should be to prefer a particular creditor. Where transaction is made in favour of a creditor solely with a view to avoid civil or criminal proceedings, that will not be treated as fraudulent preference. If the transaction is tainted with an element of dishonesty, question of fraud may arise. Then only it can be called as fraudulent preference. In the instant case, much prior to the commencement of winding up proceedings i.e., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation was dismissed by this Court. Thereafter, the applicant-society once again approached this Court in C.A. No 188/2008 seeking direction to the Official Liquidator to sell 6 acres 29 guntas of land held by the applicant-society and applicant to purchase the same. The said application has been dismissed by this Court on 30-9-2008, Being aggrieved by the same, OSA 27/2008 was filed by the applicant-society and the same was also dismissed by the Division Bench of this Court on 28-1-2009 observing as under : "Therefore, we do not find any reason to interfere in the impugned order passed by Learned Company Judge. More so, when Learned Company Judge has made it categorically clear that as and when land, under occupation of appellant, is put to an auction sale, it would also be at liberty to participate in the auction proceedings. This according to us serves the purpose of the appellant. There cannot be any other better method for sale of the properties belonging to company in liquidation so as to have complete transparency in the transaction. As and when land in occupation of the appellant as lessee is put to auction sale, appellant would be at liberty to participate in the said auct ..... X X X X Extracts X X X X X X X X Extracts X X X X
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