Delhi HC allows appeals on plot sales applications under Section 536(2) Companies Act after condoning filing delays

Delhi HC allowed appeals challenging dismissal of applications under Section 536(2) of Companies Act for acceptance of plot sales. Court condoned delays in filing and refiling appeals, noting pending SFIO report and Income Tax Authority submissions required consideration. HC set aside and quashed impugned orders dated August-November 2011, remanding cases to Company Judge for fresh merit-based decisions. Court found appellants' claims deserved reconsideration alongside similarly placed parties from previous appeals, accepting explanations for procedural delays.

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Issues:
Challenges to orders dismissing applications under Section 536(2) of the Companies Act for acceptance of sale of plots, validity of agreements to purchase plots, receipt of payments, appointment of provisional liquidator, actions of Colonel Ganapati, rejection of claims by One Man Committee, rejection of applications by learned Company Judge, delay in filing appeals, consideration of new facts by Serious Fraud Investigation Office and Income Tax Department.

Analysis:

The judgment involves appeals challenging orders dismissing applications under Section 536(2) of the Companies Act seeking validation of the sale of plots owned by a company under liquidation. The appellants claimed to have entered into agreements to purchase plots before the appointment of the provisional liquidator. The One Man Committee rejected their claims, stating that payments were taken after certain restrictions were imposed, rendering the sale deeds invalid. The appellants argued that they were bona fide purchasers unaware of the restrictions and had paid the entire consideration. Several other similarly situated persons had also approached the court with similar claims. The Division Bench set aside the orders of the learned Company Judge rejecting these applications.

Colonel Ganapati, claiming to act on behalf of the company, received payments and executed sale deeds after the appointment of the provisional liquidator, concealing the winding-up proceedings' status. The One Man Committee accepted the validity of agreements and part payments made before the winding-up petition but rejected the balance payments taken later. The appellants sought validation of their approvals under Section 536(2) of the Companies Act, claiming they were bona fide purchasers and willing to pay the balance consideration. The court noted delays in filing and refiling appeals, but considering the peculiar circumstances and previous judgments, condoned the delays and set aside the impugned orders.

The court remanded the cases to the learned Company Judge for fresh consideration, taking into account new facts presented by the Serious Fraud Investigation Office and the Income Tax Department's attachment order. The appellants were directed to appear before the Single Judge for further proceedings. The judgment emphasized the need for a fresh examination of the appellants' claims in light of observations made, including the actions of Colonel Ganapati, the validity of agreements, and the willingness of the appellants to pay the balance consideration. The court highlighted the importance of considering all relevant matters and ensuring justice for the appellants and other similarly situated individuals.

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