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TMI Blog2023 (8) TMI 1326X X X X Extracts X X X X X X X X Extracts X X X X ..... 8/2C, 228/3, 228/4, 229/1A, 229/1C, 229/2A, 229/2B, 229/3, 230/1, 231/1A, 230/2, 231/2, 241/2, 241/3B, 242/1A and 242/1C, Nangaimozhi village, Tuticorin Registration District, Udankudi Sub-registration District. In Company Application No.359 of 2021, the applicant seeks to set aside the auction sale notice dated 05.12.2021 (the Sale Notice) and in Company Application No.360 of 2021, an interim stay of the auction sale is prayed for. Without seeking an amendment, in the rejoinder and written submissions, the first applicant included Survey Nos.56/2 and 56/3A and claimed title to 35.87 acres. Because the sale deeds that were relied on by the first applicant also disclosed the names of purported co-owners (applicants 2-4 and the late Mr.Sayed Abdul Kader), the purported co-owners and legal heirs of the late Mr.Sayed Abdul Kader were impleaded as applicants 2-7 by order dated 07.06.2023 and provided an opportunity of being heard. 2. The applicants assert title to the schedule mentioned property through the following two sale deeds executed by Indian Integrated Energy Limited (IIEL) in favour of applicants 1-4 and the late Mr.Sayed Abdul Kader: (i) sale deed bearing Document No.829 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertaking for handing over possession. 5. In relation to the sale deeds executed in favour of the applicants, learned counsel for the Administrator contended that the alleged sales are void against the Company and the Official Liquidator because they were subsequent to the commencement of winding up and not bona fide. Learned Administrator prepared and submitted detailed correlation charts (pages 369-371 of the typed set dated 06.01.2022). One correlation chart per sale deed relied on by the applicants was provided and each chart contains details of the GPAs in which the same survey numbers are dealt with. The said charts also contain details of the extents already conveyed through these GPAs to customers of the Company and the unsold extent. On the basis of the chart, he contended that it is discernible that the Company registered about 58 acres of land in favour of the customers of the Company and the remaining extent was brought for auction sale. Approval for the auction sale of the extent of 61.11 acres, including the Disputed Land of 28.11 acres, was sought and obtained from this Court in C.A.No.297/2021 and the Disputed Land was listed as the 24th item in the Sale Notice. 6. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he acts of the GPA holder under Section 237 of the Indian Contract Act, 1872 (the Contract Act); Kudithi Lakshma Reddy v. Gantla Satti Reddy & Others (Lakshma Reddy), AIR 2002 AP 418, to contend that an injunction becomes inoperative in view of Order XXXIX, Rule 3-A of the Civil Procedural Code, 1908, if the application is not disposed of within 30 days; and A.Venkatasubbiah Naidu v. S.Chellappan & Others (Venkatasubbiah Naidu), (2000) 7 SCC 695, to contend that a disobedient beneficiary of an order cannot be heard to complain about the alleged disobedience by another party. 10. Upon taking into consideration the rival contentions and material documents, it should be noticed and recorded, at the outset, that Sale Deeds dated 17.04.2003 bearing Document Nos.829 and 830 of 2013 are in favour of five persons. After noticing the above, by order dated 19.04.2023, I directed the original applicant to implead the co-owners of the property. The impleading applications were allowed on 07.06.2023 and consequential amendments were carried out by impleading them as applicants 2 to 7 in the main applications. Upon being impleaded, as stated earlier, applicants 2-7 adopted the submissions of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our of D.Sankaran after consideration was received. When viewed in context, these transactions fall within the scope of the exceptions carved out for bona fide GPA transactions in paragraphs 26 and 27 of the judgment of the Supreme Court in Suraj Lamp & Industries v. State of Haryana (2012) 1 SCC 656. 13. By asserting that the Company plotted the land after purchase into 1, ½ and ¼ acre plots, learned Administrator also stated that such plots aggregating to a total extent of about 58 acres were conveyed to 107 customers of the Company between 1996 and 1997. In support of this submission, a table listing the 107 customers, providing details of the registered sale deeds in their favour, the relevant survey numbers and the extents conveyed therein was also provided. Learned Administrator also placed on record the encumbrance certificate for the period 01.01.1995 to 31.05.2003. For illustrative purposes, if the table of customers is compared with the encumbrance certificate, the entry relating to Sale Deed Document No.112/96 shows the name of VED. Vardhan as the claimant/purchaser (page 270 of the typed set). In the list of customers, his name is at serial number 1, whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 acres and 73 cents; (iii) sale deed dated 21.07.2008 between IIEL and a vendor, namely, Glory Nesabai, through her power of attorney, C.Muthuraman, for the sale consideration of Rs.15,51,000/- and covering Survey nos. 242/1A, 242/1C, 241/3B, 241/2, 227/2, 62/3, 58/1, 58/2A, 62/1C2, 57/1A2, 62/1C1, 58/2B, 62/1A2, 59/3, 230/1, 77/1, 58/5B, 59/2A2, 29/2A1 of an aggregate extent of 25 acres and 80 cents; (iv) sale deed dated 21.07.2008 between IIEL and a vendor, namely, P.James Moses, through his power of attorney, C.Muthuraman, for the sale consideration of Rs.29,42,000/- and covering survey nos. 77/2, 61/2C, 61/2B, 62/4B, 230/2, 231/2, 229/2B, 230/1, 61/2A1D, 62/1C4, 62/1C5, 62/1C3, 62/4A2, 77/3, 76/2, 78/2, 62/4A1 of an aggregate extent of 49 acres and 6 cents; and (v) sale deed dated 21.07.2008 between IIEL and a vendor, namely, Glory Nesabai, through her power of attorney, C.Muthuraman, for the sale consideration of Rs.9,39,000/- and covering Survey nos. 229/2A, 229/1C, 228/3, 228/1C, 228/2A, 57/1A3, 78/1, 228/1A, 229/1A, 228/4, 228/2C of the aggregate extent of 16 acres and 44 cents. 16. The recitals to the sale deeds (i) and (ii) above, each of which deal with extents below 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irections were issued on 24.04.2003: "1.That the GPA Holder/Respondents herein be and are hereby restrained by way of injunction from alienating lands purchased by the Company with the funds of the company in their name and General Power of Attorney holders till 30.06.2003. 2... 3... 4. That, the administrator herein be and is hereby permitted to write to sub Registrars concerned not to register the documents, if any executed; 5..." The above order was extended until further orders on 18.11.2003 and the order of interim injunction operates till date against the GPA holders. 18. Since the sale deeds were executed after 24.04.2003, it is clear that such sale deeds were executed after the GPA holder was restrained from exercising powers under the GPAs by orders of this Court. Consequently, the critical question that arises at this juncture is: what is the effect of the injunction order on the sale deeds executed by the GPA holder subsequent thereto? Learned senior counsel for the applicants placed reliance on three judgments to contend that the interim order does not invalidate the sale deeds executed by the GPA holder and a brief discussion thereon is warranted. Both ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r exercising reasonable due diligence is examined next. 20. As per the direction of this Court in C.A.No.884 to 886 of 2008 vide order dated 17.09.2010, the OL took possession of the Max- Nangaimozhi lands. Pursuant thereto, notice was affixed on the compound pillar and M/s.Global Security Services, a security agency, was appointed to safeguard the immovable property of the Company. The encumbrance certificates for the period from 01.01.1995 to 31.05.2003 reflect the name of the GPA holder. The said encumbrance certificates also indicate that sale deeds in respect of about 58 acres were executed by the GPA holder in favour of the Company's customers. If reasonable due diligence was exercised by the applicants, these entries would have been noticed. The sales in favour of the applicants in 2013 were, therefore, undoubtedly not bona fide. 21. Section 536(2) of the Companies Act, 1956 (CA 1956) deals with the disposition of the property, including actionable claims, of a company after the commencement of winding up. The said provision is set out below: "536(2) In the case of a winding up by or subject to the supervision of the Court, any disposition of the property (including ..... X X X X Extracts X X X X X X X X Extracts X X X X
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