TMI Blog2020 (1) TMI 594X X X X Extracts X X X X X X X X Extracts X X X X ..... he respondent on 4th December, 2018. It is not in dispute that the respondent had made payment of ₹ 4,07,99,612/- to the applicant under the said consent terms during the period between 10th October, 2016 and 14th June, 2017. The applicant does not dispute that under Section 441(2) of the Companies Act, 1956, the winding up of the respondent company shall be deemed to commence on the date of presentation of the petition for winding up i.e. 28th August, 2014. The applicant does not dispute that all the payments received by the applicant from the respondent under the said consent terms dated 24th October, 2016 were received after the date of commencement of the winding up proceedings against the respondent company in liquidation. The applicant also does not dispute that the payment of ₹ 49,97,357 and ₹ 50,00,059/- were received by the applicant on 12th May, 2017 and 14th May, 2017 respectively after the appointment of the official liquidator as the provisional liquidator of this Court i.e. on 5th May, 2017. Consent terms itself were filed after commencement of winding up proceedings. Section 536 (2) of the Companies Act, 1956 provides that any disposition of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ATOR’S REPORT NO. 139 OF 2018 IN COMPANY PETITION NO. 756 OF 2014 AND COMPANY PETITION NO. 119 OF 2015 ALONG WITH COMPANY APPLICATION (LODGING) NO. 89 OF 2019 - - - Dated:- 14-1-2020 - R.D. DHANUKA, J. Mr. Prathamesh Kamat along with Mr. Shanay Shah for the Official Liquidator. Mr. Sarosh Bharucha along with Mr. Som Sinha, Ms. Sneha Prabhu, Ms. Divya Vishwanath i/by M/s. Som Sinha and Associates for M/s. Arambhan Hospitality Services. Mr. Mahendhar Aithe, Company Prosecutor for O.L. Present. JUDGMENT : 1. Official Liquidator of M/s. GOL Offshore Limited (in liquidation) has filed OLR No. 139 of 2018 under Section 536 (2) of the Companies Act, 1956 inter-alia praying for a declaration that the transaction of payments made by M/s. GOL Offshore Limited (in liquidation) through director of the company (in liquidation) to M/s. Arambhan Hospitality Services Limited during the period between 10th October, 2016 and 14th June, 2017 are void and seeks direction against the M/s. Arambhan Hospitality Services Limited to refund ₹ 4,07,99,612/- to the official liquidator. 2. Company Application (L) No. 89 of 2019 is filed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parate vessel operating on west-cost and east-cost of India for the period between 1st April, 2015 and 31st March, 2018 and for 6 Rigs/Barges/MSV. 5. On 15th April, 2015, the applicant through its advocate issued a notice of demand upon the company in liquidation to pay an amount of ₹ 3,92,01,031/- allegedly due and payable to the applicant by the company in liquidation under various invoices. On 22nd July, 2015, the company in liquidation replied to the said notice dated 15th July, 2015 and requested applicant to withdraw the said notice and called upon to resolve the matter in an amicable manner. 6. It is the case of the applicant that on 9th March, 2016, the said company in liquidation in one of the meeting agreed to settle the alleged outstanding amount due and payable to the applicant and admitted that the outstanding dues of the applicant were in excess of ₹ 3 crores. It was allegedly agreed that to provide its services to company in liquidation on the assurance that the said company in liquidation will pay an amount of upto ₹ 1,50,00,000 per month of which ₹ 1 crore would be disbursed through the letter of credit and balance would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Godown on 30th June, 2017 and of the office premises on 1st April, 2017. On 3rd July, 2017, the official liquidator took possession of 20 vessels of the respondent. 9. In so far as the vessel Malaviya Thirty is concerned, possession of the said vessel was taken on 3rd July, 2017 and has been sold for ₹ 10,11,00,000/- On 7th July, 2017, the official liquidator has taken possession of GAL Constructor and has sold the same for ₹ 7,70,00,000/-. On 4th December, 2018, this Court passed final order of winding up against the respondent. The official liquidator has invited claims as per Rule 148 of the Companies (Court) Rules, 1959. The official liquidator has received about 2,000 claims from members/workers/creditors. On 6th June, 2018, the petitioner filed its claims against the respondent with the official liquidator. 10. On 6th July, 2018, this Court passed an order in the said Admiralty Suit No. 15 of 2018 recording that ₹ 4 crores had been paid by the respondent to the applicant M/s. Arambhan Hospitality Services Ltd. and an amount of ₹ 1,34,00,000/- remained unpaid. Official liquidator was served with a copy of the said Commercial Admiralt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l liquidator. He submits that the official liquidator was already appointed as a provisional liquidator of the respondent as on 5th May, 2017. The official liquidator of the respondent has been already appointed on 4th December, 2018. 13. It is submitted by the learned counsel that the transactions carried out after the date of commencement of winding up of the respondent company must be in the ordinary course of business and has to be in the interest of company. He submits that the applicant who had applied for ratification of the transaction has to not only plead that the transactions carried out by the respondent after commencement of winding up proceedings were in the ordinary course of business and were in the interest of company but also to prove such plea. He submits that the applicant has already filed its affidavit of debt before the official liquidator. 14. Learned counsel for the applicant placed reliance on the judgment of this Court in case of Forbes and Company v/s. Coromandel Garments Ltd. and Ors., (2018) 5 Bom CR 550 and in particular paragraph 25(ix) and would submit that on appointment of the official liquidator as provisional liquidator, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondent by this Court. The payments made by the respondent to the applicant were under the consent terms and was standalone transaction. The applicant cannot rely upon the earlier transactions, if any with the respondent prior to the date of filing of consent terms. He submits that even the consent terms were filed after the date of the commencement of the winding up of the respondent. 17. Mr. Bharucha, learned counsel for the applicant M/s. Arambhan Hospitality Services Ltd. on the other hand submits that the word void mentioned in Section 536 (2) has to be read as voidable . In support of this submission, learned counsel placed reliance on the judgment of Supreme Court in case of Pankaj Mehra and another v/s. State of Maharashtra and Others, (2000) 2 SCC 756 and more particularly in paragraph 1 and 14. It is submitted that the applicant had already raised various invoices upon the respondent prior to the date of commencement of winding up of the respondent. The dispute between the parties had already arisen prior to the date of commencement of winding up of the respondent. The consent terms filed between the applicant and the respondent were thus not illegal and we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of statutory dues of the applicant towards various authorities and various payments and thus applicant shall be exempted from the purview of Section 536(2) of the Companies Act, 1956. He submits that the very vessel which was impounded and subsequently released on execution of the consent terms was sold by the official liquidator for an amount of ₹ 7,70,00,000/-. 21. Mr. Bharucha, learned counsel for the applicant, distinguished the judgment of this Court in case of Board of Industrial and Financial Reconstruction (supra) and submits that the Court must have regard to all the compelling circumstances to come to the conclusion that the transaction should not be void. If Court comes to the conclusion that the transaction was for the benefit of and in the interest of company or in keeping the company going same should be ratified. 22. Learned counsel for the applicant placed reliance on the judgment of this Court in case of Maharashtra State Financial Corporation and Ors. v/ s. Official Liquidator, High Court, Mumbai and Ors., 2012(5) ALL MR 54 and in particular paragraphs 18 in support of the submission that merely because winding up process has started wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... already displaced upon appointment of the official liquidator as a provisional liquidator and thus the respondent company through its ex-directors could not have dealt with the assets of the company in liquidation with the applicant. The applicant has not justified the execution of consent terms with the respondent company after the date of commencement of winding up proceedings. 26. In so far as the judgment of this Court in case of Maharashtra State Financial Corporation and Ors. (supra) relied upon by the learned counsel for the applicant is concerned, Mr. Kamat, learned counsel for the official liquidator distinguished the said judgment on the ground that in the said judgment this Court had considered a situation where the sale proceeds of the assets of the company in liquidation after the date of commencement of winding up proceedings were utilized for payment of the dues of secured creditors. The applicant in this case, however is admittedly one of the unsecured creditor. The applicant ranks last in the list of priority under the provisions of Companies Act, 1956. He submits that in the facts of this case, the respondent had paid two installments after appointme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of the official liquidator as the provisional liquidator i.e. 5th May, 2017. Final order of winding up of the respondent is already passed by this Court on 4th December, 2018. The applicant has already filed its claim against the official liquidator of the respondent on 6th June, 2018. A copy of the Comm. Admiralty Suit No. 15 of 2018 was served upon the official liquidator only on 11th July, 2018. 29. The question that arises for consideration of this Court is whether the applicant has pleaded and proved that the consent terms arrived at between the applicant and the respondent in the Comm. Admiralty Suit on 24th October, 2016 after commencement of the winding up proceedings was in the ordinary course of business and was in the best interest of the respondent company in liquidation or not. 30. The applicant has strongly urged before this Court that there were various contracts entered into between the applicant and the respondent prior to the date of filing company petition by one of the secured creditors against the respondent. It is the case of the applicant that the applicant had to recover a substantial amount under those agreements from the respondent. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aims from members/workers/creditors pursuant to the public notice issued by the official liquidator inviting clams as per Rule 148 of the Company (Court) Rule, 1959. It is not disputed by the applicant that the applicant is one of the unsecured creditors of the respondent and has already filed its claim with the official liquidator on 6th June, 2018 i.e. after filing of the consent terms in the said Comm. Admiralty Suit No. 15 of 2016. This Court in case of Board of Industrial and Financial Reconstruction v/s. M/s. Hindustan Transmission Products Ltd. (supra) has held that the applicant must plead and prove not only that the transfer is bonafide but also that the transfer was in the interest of the company. 34. Section 536 (2) of the Companies Act, 1956 provides that any disposition of the property made after commencement of winding up shall unless the Court otherwise orders be void. This Court rejected the contention of the applicant that the official liquidator must plead and prove that the transaction was fraudulent before it can be treated as void under Section 536(2) of the Companies Act, 1956. It is held by this Court that Section 536 treats the transfer after co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The submission made by the learned counsel for the applicant is contrary to the law laid down by this Court in case of Asha Bhosale v/s. M/s. Magnasound India Ltd. (supra). 37. This Court in case of Board of Industrial and Financial Reconstruction v/s. Modi Stone Ltd. (In. Liqn.) (supra) has held that in view of Section 441(2) of the Companies Act, 1956, the winding up of the company by the Court shall be deemed to have commenced at the time of the presentation of the petition for the winding up in cases other than the provisions of Section 441(1) of the Companies Act, 1956. This Court adverted to the judgment of Supreme Court in case of J.K. (Bombay) (P) Ltd. v/s. New Kaiser-I-Hind Spinning and Weaving Co. Ltd., AIR 1970 SC 1041 in which it was held by the Supreme Court that once a winding up order is passed, the undertaking and the assets of the company pass under the control of the liquidator, whose statutory duty is to realize them and to pay from out of the sale proceeds to its creditors. Such creditors acquire on such order being passed right to have the assets realize and distributed among them pari passu. It is held that no new rights can thereafter be cre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to consider that the transfer must be for the best interest of the company. The principles of the law laid down by this Court in case of Board of Industrial and Financial Reconstruction v/s. Modi Stone Ltd. (In. Liqn.) (supra) squarely applies to the facts of this case. I am respectfully bound by the said judgment. 41. The official liquidator has already received about 2,000 claims from the various members/workers/contributors. The large number of the creditors out of them are secured creditors. The applicant is one of the unsecured creditor. The applicant has already filed its affidavit of debt before the official liquidator. The Court while considering an application for validating the transactions carried out post the date of commencement of winding up proceedings has to also consider the factum of substantial claim received by the official liquidator from various secured creditors and the other creditors who are entitled to be paid their debts on priority under Section 529A of the Companies Act, whose claims would be superior to the claims of the applicant who would be one of the unsecured creditor. 42. In my view, the applicant has failed to plead su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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