TaxTMI 
TaxTMI 
2008 (8) TMI 563
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....it the aforesaid amount in twelve equal monthly instalments of Rs. 8.5 lakh beginning 15-4-2000. Against the order passed by the learned Single Judge, the appellant preferred an appeal before the Division Bench of the Court under section 483 read with section 466 of the Companies Act, 1956. The Division Bench affirmed the order of the Single Judge and dismissed the appeal vide order dated 3-12-2001 in Company Appeal No. 12 of 2000. The present appeal is directed against the order passed by the Division Bench. 2. The Debtor Company has a number of creditors.Some of its creditors instituted proceedings for recovery of their dues before different courts and authorities, including the Punjab and Haryana High Court, the Delhi High Court and the Debts Recovery Tribunal, Delhi. The Debtor Company and the other parties to those proceedings, apparently guided by expediency and motivated by self-interest did not consider it their duty to report to the concerned Court/Tribunal about the analogous proceedings before other Courts. As a result, orders came to be passed by courts that do not seem to be harmonious or completely consistent with each other. The overall picture, therefore, appears....
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.... came to light. 6. In yet another suit instituted before the Delhi High Court Pure Drinks (Calcutta) Ltd.,[Civil Suit No. 2311 of 1993], a sister concern of the Debtor Company sold its property A-31, Mohan Co-operative Industrial Estate, New Delhi to the common vendor MGF Ltd. At this stage it appears that the Debtor Company, MGF Ltd. and the present appellant came to some sort of an arrangement and MGF Ltd. agreed to pay to the appellant a sum of Rs. 1.95 crores out of the consideration money for A-31, Mohan Co-operative Industrial Estate. It does not need much imagination to see that the Debtor Company and MGF Ltd. agreed to pay the large amount to the appellant simply in order to ward off the consequences that might arise from the breach of the restraint order passed by the Punjab and Haryana High Court on 20-2-1997. This arrangement was reported to the Company Judge in the Punjab and Haryana High Court and it finds mention in the order passed in Company Petition No. 16 of 1997 on 28-1-1997. 7. On 17-3-1999, the Punjab and Haryana High Court was told that the Delhi High Court had permitted sale of the properties of the Debtor Company and its sister concern, namely Pure Dri....
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....at the sale has been confirmed by the Delhi High Court and that the parties namely the applicant, M/s. Motor General Finance Ltd. and the Respondent have no objection, it is directed that the stay that had been granted against the Respondent would stand vacated as against the abovesaid property only in CP No. 16 of 1997. In view of the confirmation by the Delhi High Court, of the sale, there is no need thus to pass any order." [Emphasis added] 9. It is significant to note here that the Delhi High Court declined the request to allow MGF Ltd. to make any payment to any one else other than the Income-tax Department and insisted that after payment to the Income tax Department the balance amount of Rs. 3,66,64,995 be deposited with the Registrar of that Court within two weeks from its order dated 7-10-1999. Against the order dated 7-10-1999 MGF Ltd. filed an appeal before the Division Bench of the Delhi High Court and by an interim order it was directed to deposit Rs. 2,66,69,995 apparently because Rs. one crore was already paid to the appellant. It is not clear from the records what final order was passed in the appeal by the Division Bench. 10. This bilateral arrangement between....
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....ourt. On 14-3-2000 the Company Judge passed the final order in the matter. The relevant extract from the order is as follows : "As regards the rest of the amount of Rs. One crore, it is abundantly clear from reproduced paragraph above that when Company Application 441 of 1999 was preferred in this Court, reference was made to the statement made by the learned Senior Counsel for MGF. It only conveyed that Delhi High Court has no (sic) conveyed otherwise. The order of Delhi High Court has been reproduced above. It reveals otherwise. There was a clear direction by Delhi High Court that entire amount has to be deposited with the Registrar of Delhi High Court. The same had not to be paid to DCM Company. A copy of order passed by Delhi High Court dated 2-9-1999 has also been appended. It indicates that before the Delhi High Court it was stated on behalf of MGF that order dated 4-3-1999 had not been correctly understood by MGF. The Delhi High Court recorded that it is difficult to accept the submission. These facts clearly show that the payment that was made to DCM company was contrary to the direction of the Court. It was undue preference given to one creditor. ****** The positi....
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....an over simplified way and completely overlook the provisions of the Companies Act. It is misconceived and fallacious to suggest that the appellant received a sum of Rs. 1.95 crores from MGF Ltd. in a transaction falling outside the purview of the Company Petition pending before the Punjab & Haryana High Court. It is misleading to say that the money received by the appellant was part of the consideration money payable to M/s. Pure Drinks (Calcutta) Ltd. and it had no connection with the Debtor Company. In the facts and circumstances of the case, it is not the source of money that is important but what is important is the cause on the basis of which the appellant was able to get the money from MGF Ltd. The payment of the large sum by MFG Ltd. to the appellant was not gratuitous. It was evidently intended to patch up the brazen breach of the Court's orders committed by the Debtor Company and MGF Ltd. in effecting the sale of A-30, Mohan Cooperative Industrial Estate, Mathura Road, New Delhi. The payment was thus directly within the purview of the Company Petition pending before the Punjab & Haryana High Court. 14. In this connection it should also be borne in mind that the proceed....