TMI Blog2023 (2) TMI 330X X X X Extracts X X X X X X X X Extracts X X X X ..... was categorically stated that if the respondents were to continue with the above referred proceedings then leave of this Court i.e, the Company Court was required. That the Official Liquidator was to be joined as party in the aforesaid proceedings. And only thereafter, the orders passed in the aforesaid proceedings can be enforced by the respective respondents. It is pertinent to refer the ratio laid down by the Apex Court in the case of HARIHAR NATH VERSUS STATE BANK OF INDIA [ 2006 (4) TMI 253 - SUPREME COURT ] where the Supreme Court held that, the leave under section 446 of the 1956 Act, is required to be taken. Such leave can be obtained even after initiation of the proceedings. In absence of leave the proceedings cannot be recorded as to have been instituted on the date till leave is obtained. The proceedings can be validated only after the leave from the court is obtained. The award passed in Rent Suit No. 372 of 1988 dated 15.01.2015 and also the Judgment passed in Civil Misc. Application No.26 of 2008 on 31.03.2017 below Ex.5 and on 04.12.1999 passed in Rent Suit No.211 of 1991 cannot be executed till the provisions of Section 446 of the Companies Act, 1966 ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avour of the applicant for a total consideration of Rs. 8.60 crores, on the condition that the dues of the GEB and the Municipal Corporation will be borne by the purchaser. 2.4 One Mr. Manubhai Maganbhai Patel, the nominee of the company had preferred Company Application No. 449 of 2004 seeking direction against the Official Liquidator to hand over possession of the freehold land and execute the sale deed in his favour and similarly the leasehold land of the company be executed in favour of the applicant. Accordingly, the Official Liquidator executed the sale deed of freehold land in favour of Mr. Manubhai Maganbhai Patel and leasehold land in favour of the applicant. 2.5 The applicant then preferred Company Application No. 260 of 2008 seeking direction that the Official Liquidator to remove encroachment from the leasehold land of the company. The said application came be rejected on 06.08.2009 by this Court on the ground that Company Application No. 429 of 2008 and similar matters were pending before this Court for consideration. 2.6 Further, the respondents Nos. 2 to 4 herein were directed to file application to implead Official Liquidator as a party to the cases pending ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed below Exh. 65. Thus, the plaintiff firstly obtained leave of the Court and thereafter the Official Liquidator is joined in the suit proceedings. As stated earlier the Official Liquidator has not filed any written statement or reply against the facts stated by the plaintiff in the plaint or deposition in Exh.74 and in fact, he had remained silent during the entire suit proceedings from the date he appeared before the Court. 3. It appears that respondents nos. 3 to 5 had preferred Rent Suit No. 211 of 1991 before the Small Cause Court, Vadodara and in the said proceedings as well the Official Liquidator had taken identical stand that since the permission of this Court under Section 446 of the Companies Act was not taken by the applicants. Therefore, the suit cannot be proceeded with till the permission is obtained by the applicants. The respondents nos. 3 to 5 had preferred Civil Misc. Application No. 26 of 2008 for restoration of the Rent Suit No. 211 of 1991, which came to be granted by the Small Cause Court, Vadodara by order dated 31.03.2017, without taking consideration of the orders passed by this Court and the affidavit filed by the Official Liquidator. 4. The op ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Official Liquidator was joined as party respondents the same is without following due procedures of law. He has submitted that in absence of due permission taken from this Court under the provisions of section 446 of the Companies Act, 1956, the decree passed by the Small Cause Court in Rent Suit No. 211 of 1991 is required to be set aside. 7. Submissions on behalf of the Official Liquidator: 7.1 Learned advocate Mr. Abhijit Joshi for the Official Liquidator supported the contentions advanced by learned advocate Mr. Davawala for the applicant. He has submitted that one Mr. Manubhai Patel is the nominee of M/s Bheruji Estate, has preferred COMA No. 449 of 2004 inter-alia seeking directions to direct the Official Liquidator to execute the sale deed in his favour. Since there were inter-se dispute amongst the partner. M/s Bheruji Estate also preferred COMA No. 37 of 2005. 7.2 Mr. Joshi has submitted that this Court on 05.04.2005, had allowed the COMA No. 449 of 2004 and directed the Official Liquidator to execute the conveyance deed of freehold land in favour of Mr. Manubhai Patel. Being aggrieved by the said order, M/s Bheruji Estate had preferred OJ Appeal No. 13 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old Rights in favour of present applicant on 12.05.2015. 7.6 Mr. Joshi further submitted that on perusal of the Judgment and order dated 05.01.2015, passed in Rent Suit No. 372 of 1998, it appears that the said proceedings were carried out by respondent No. 02 i.e. original plaintiff without taking leave under Section 446 of the Companies Act, 1956 from this Court. It is further submitted that Ld. Judge of Small Cause Court has recorded that the Official Liquidator has been joined in the Suit Proceedings by the Court vide order passed below an application in Exh.65. But with regards to said order, it is submitted that Civil Court has got no power and Jurisdiction to Join the Official Liquidator as party / respondents in suit proceedings wherein the company in liquidation is a party Respondent. Hence without obtaining express leave/order of this Court, since the powers are only vested with the High Court in Original Jurisdiction as per the aforesaid provisions of Companies Act, 1956. Therefore the Judgment and decree as well as orders passed by the Small Causes Court are not maintainable in eyes of law. 7.7 Mr. Joshi has also submitted that the Ld. Trial Judge has erroneously ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said submissions, learned advocate Mr. Joshi has submitted that appropriate orders be passed by this Court. 8. He has relied upon the provisions of Section 446 of the Companies Act, 1956 and provisions of Limitation Act reads thus: 446. Suits stayed on winding up order (1) When a winding up order has been made or the Official Liquidator has been appointed as provisional liquidator, no suit or other legal proceeding shall be commenced, or if pending at the date of the winding up order, shall be proceeded with, against the company, except by leave of the Court and subject to such terms as the Court may impose. 9. Submissions on behalf of the respondent no .2: Learned advocate Mr. Gaurav Mehta for the respondent no.2 has submitted that the present application has been rejected on the ground of delay and latches. The applicant herein is the auction purchaser and has preferred this Company Application praying to quash and set aside the decree dated 05.01.2015 passed in Rent Suit No. 372 of 1988. Mr. Mehta has further submitted that the auction purchaser has no locus to file such an application and that too after a period of two years of sale deed which was execute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the matter the application may be dismissed. Analysis. The facts referred herein above being undisputed are not repeated. 10. Undisputedly, the applicant herein is the auction purchaser. The applicant erstwhile Shree Ambica Mills Ltd was ordered to be wound-up on 17.01.1997 in Company Application No. 260 of 2008 in Company Petition No. 66/1988, wherein Official Liquidator was appointed to take charge of the assets and properties of the company. The applicant herein is the auction purchaser of the land for a total consideration of Rs.8.30 crores. The operative part of the said order reads thus: 2.14 In view of the same, the Court is pleased to confirm the sale of land in favor of Bheruji Estate for Rs. 8.60 crore excluding all liabilities on the usual terms and conditions as set out in the minutes of the sale committee meeting held on 24.09.2003 and/or sicj terms and conditions as per page nos. 21 and 22 (O.L.R No. 81 of 2003) and the terms and conditions as may be imposed by this Court. The cost of stamp duty, registration and all other expenses are required to be borne by the purchaser. The Dues of Vadodara Municipal Corporation and Gujarat Electricity Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03 was pleased to confirm the sale of All piece and Parcel of 25,732.77 Sq. Mtrs., of freehold Land along-with 13.238.26 Sq. Mtrs.. of leasehold land situated at jetalpur Road, Vadoara Kasba in the Registration District and Sub District of Vadodara for sale consideration of Rs.8,60,00,000/- in favour of applicant on usual terms and conditions. (3) That. Mr. Manubhai M. Patel nominee of M/s Bheruji Estate, preferred COMA No. 449 of 2004 inter-alia praying this Hon'ble Court to direct the Official Liquidator to execute the sale deed in his favour. Since there were interse dispute amongst partner. M/s. Bheruji Estate also preferred COMA No.37 of 2005. This Hon'ble court had vide order dated 05.04.2005 allowed the COMA No. 449 of 2004 and directed the Official Liquidator to execute the conveyance deed of freehold land in favour of Mr. Manubhai M Patel. Being aggrieved by the said order, M/s. Bheruji Estate, preferred O J . Appeal No. 13 14 of 2005. The Hon ble Division Bench vide order dated 23.08.2005 read along with order dated 25.08.2005, was pleased to direct the official Liquidator to incorporate / add conditions mentioned in the said order in the conveyance deed, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nment of Leasehold Rights in its favour. This Hon'ble Court vide order dated 28.04.2015 passed in COMA No. 134 of 2015 was pleased to direct the Official Liquidator to execute the deed of conveyance by way of Assignment of Leasehold Rights of Leasehold Land admeasuring 13.238.26 Sq. Mtrs, Lying and being at Vadodara Kasba, bearing R.S. No.482 and 483 and City Survey No.1298 and in favour of present applicant. A copy of order dated 28.04.2015 passed in COMA No. 134 of 2015 annexed herewith and marked as Annexure H . (9) In compliance of the said order, the Official Liquidator has executed deed of conveyance by way of Assignment of Leasehold Rights in favour of present applicant on 12.05.2015. A copy of deed of conveyance by way of Assignment of Leasehold Rights is annexed herewith and marked as Annexure I . (10) That, being aggrieved by the order 20.02.2015 passed in 0. J Appeal No.05 of 2014, the said Lessors preferred Special Leave to Appeal (c) No. 15240 of 2015 before the Hon'ble Supreme Court of India. The Hon'ble Supreme Court of India vide order dated 26.07.2017 disposed the said SLP with an observation that It will always be open for the petitioner t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this Court dated 06.08.2009, as stated in para. 6 and 7 in Company Application No. 260 of 2008, wherein it was categorically stated that if the respondents were to continue with the above referred proceedings then leave of this Court i.e, the Company Court was required. That the Official Liquidator was to be joined as party in the aforesaid proceedings. And only thereafter, the orders passed in the aforesaid proceedings can be enforced by the respective respondents. Position of Law. 15 (A) It is pertinent to refer the ratio laid down by the Apex Court in the case of Harihar Nath Ors. Vs. State Bank of India reported in (2006) 4 SCC 457 the operative part of the judgment reads thus: 18. The object of Section 446 of the Act is not to cancel, nullify or abate any claim against the company. Its object is to save the company which has been ordered to be wound up, from unnecessary litigation and from multiplicity of proceedings and protect the assets for equitable distribution among its creditors and shareholders. This object is achieved by compelling the creditors and others to come to the court which is winding up the company and prove their claims in the winding up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... suit or proceeding not being such an application for any relief, will not attract Article 137. 20. It is now well settled that if any winding up order is passed, during the pendency of a suit against the company, and if the suit is continued without obtaining leave, in spite of that bar contained in section 446(1), the decree passed is only voidable at the instance of the liquidator, and not void ab initio. In fact, where such decree has been passed against the company and others, the only person who can avoid the decree on the ground of non-compliance with section 446(1) of the Act, is the official liquidator of the company and not the other defendants. A suit/proceeding filed against a company, prior to the order of its winding up, does not come to an end on the passing of an order of winding up. The order of winding up merely stays further proceedings in the suit/proceeding. The suit/proceeding becomes dormant. Various alternatives are possible when a suit gets so stayed. The plaintiff in the suit can move an application under section 446(1) of the Act, and when leave is granted, proceed with the suit. If the leave is refused, the suit may be transferred to the company court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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