TaxTMI 
TaxTMI 
2008 (11) TMI 398
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....ce No. 204 admeasuring 890 sq. ft. respectively aggregating 3,105 sq. ft. situated at 2nd Floor in the Building known as 'Swagat', C.G. Road, Ahmedabad - 380 009 with undivided share in the open terrace and shares held by them, if any as members of association. The Official Liquidator has further prayed for the direction to the respondents to pay to the official liquidator, during the pendency and final disposal of this application, by way of mesne profit and/or compensation calculated at the rate of Rs. 30 per sq. ft. per month from 1-2-1999 till vacant and peaceful possession is handed over to Official Liquidator. Lastly the Official Liquidator has prayed for direction to the Sale Committee, appointed by this Court to sell the said Office Nos. 202, 203, 204 on 2nd Floor of 'Swagat' Building in execution of the Consent Decree subject to confirmation and approval of this Court. 2. An affidavit is filed by Mr. Mahesh P. Shah, the Deputy Official Liquidator in support of the Judge's Summons. Mr. Roshan Desai, the learned Advocate appeared on behalf of the Official Liquidator. On notice being served on the respondents, M/s. Nanavati & Nanavati have filed their appearance. An Affidavi....
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..... Negotiations took place between the Company and respondents and ultimately settlement was arrived at between the parties and Consent terms signed by the parties were filed in each of the suits and it was agreed that decree in terms of Consent terms be passed. Accordingly Consent Decree was passed in each of these Suits on 20-11-1998 and 21-1-1999. By the said Consent Decrees, it was provided that the defendants as well as associate concerns of Defendant No. 2, i.e. Shri Ashish Patel would abide by Decree of Injunction regarding the property given as Security to the Plaintiff Company for its financial assistance granted and shall be released when the defendants make full payment. Decree was also passed against Shri Ashish Patel. By the said decree, defendants agreed to pay the Decretal dues in 36 monthly instalments. The charge was created on Office Nos. 202, 203, 204 and other properties as mentioned in the Decree. It is provided that the defendants have to pay a sum of Rs. 707.18 lakhs, the total outstanding as on 1-1-2000 with interest at the rate of 3 per cent per month, i.e. 36 per cent per annum. The defendants have given possession of the Security to the Company. 5. It app....
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....imultaneously buyer has stipulated and seller has consented to discharge total dues of Radhe Group of Companies (Borrower) aggregating to Rs. 671.37 lakhs payable to Piramal Financial Services Limited on account of loan/hire purchase financing and for advance for booking of property maintained in the books of Piramal Financial Services Limited as stocks of realty, loans or advances and discharge the borrower of all their obligations on receipt of the said sum in full and final settlement of all their dues payable to Piramal Financial Services Limited and also the buyer agrees to withdraw for and on behalf of Piramal Financial Services Limited all the pending suits including the Decretal orders instituted/passed against the seller and its group Companies/firms at the instance of Piramal Financial Services Limited. Further buyer also agrees to unconditionally return all documents of title and other documents/papers issued by Radhe Group of Companies/Firms in favour of Piramal Financial Services Limited for the purpose of creating charge in favour of the later." 8. It was also averred that in terms of the aforesaid agreement the buyer VFPL undertook to pay liability of Radhe Group of....
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....f 13.5 acres in favour of the party of the Fourth Part as security to the latter's satisfaction which would cover the party of the Third Part's liability of Rs. 671.37 lakhs. It was also agreed that the Party of the Third Part is the Holding Company of the party of the Fourth Part. In the said agreement, reference has been made to Para 2 of the Recital that the party of Second Part is a debtor to the party of the Fourth Part and the latter is holding various securities in respect of the amounts given to the party of the Second Part by way of loans and advances, the total debt receivable from the party of the Second Part as on 31-3-1999. 11. It has also come on record by way of an intimation given by Special Economic Offence Wing (C.I.D. Branch) that when they visited Kodaikanal, Tamil Nadu to ascertain the location of land bearing Survey No. 12/1 situated at Villupate Village, Kodaikanal, Tamil Nadu to the extent of 13.5 Acres, it was found that no such land exists. 12. It appears from the copy of the plaint forming part of the Consent Decree that Office premises bearing Nos. 202, 203 and 204 in 'Swagat' Building situated at C.G. Road, Ahmedabad along with other properties are gi....
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....rs (Partnership Firm) and Shri Ashish Patel agreed that a Decree for Injunction is to be passed and by such decree of injunction, they are restrained from allotting, re-allotting, transferring or disposing off/dealing in any manner and also from parting with possession of properties given in Security to the plaintiff, the description of which is given in the plaint and are further restrained from disturbing the possession of the property till full and final payment to the Company as per the Consent Decree. He has further submitted that the amount due to the Company-in-liquidation is not paid and the charge created in favour of the Company-in-liquidation is not satisfied and it still subsists. Securities of Flats and Offices mentioned in the plaints are available to the Company-in-liquidation and Company-in- liquidation is entitled to take possession of the said securities. He has therefore submitted that the prayers made in the Judge's Summons are required to be granted and the application be allowed accordingly. 15. Mr. S.I. Nanavati, Learned senior counsel appearing for the respondents on the other hand has strongly raised objection against the maintainability of the present app....
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....ity stood fully discharged on 8-9-1999 in view of the said Agreement. In furtherance of the said Agreement dated 8-9-1999, PFSL issued a 'No Due Certificate' which communicates that the liability of Shri Ashish Patel and his associates to PFSL amounting to Rs. 671.37 lakhs stood fully discharged. In the said Certificate, PFSL agreed to return and release all the documents of tiles and other deed and papers handed over by Shri Ashish Patel and his associates for the purpose of creating charge as security for various loans/ advances for booking of properties etc. PFSL agreed to withdraw unconditionally and irrecovably all pending suits including decretal orders instituted/passed against Shri Ashish Patel and his associates and the said No Due Certificate was to be treated for all intents and purposes as 'No Due Certificate' by PFSL to Shri Ashish Patel and his Associates. Thereafter necessary pursis was filed in the Ahmedabad City Civil Court, Ahmedabad in Civil Suit Nos. 3110 of 1998 to 3115 of 1998 recording the satisfaction of the Consent Decree in toto. The City Civil Court recorded the said pursis stating that the decree passed in the concerned suit stands fully satisfied and th....
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....ons raised on behalf of the respondents bear any substance or merits and the same deserves to be rejected. The main thrust of the argument canvassed on behalf of the respondents by Mr. Nanavati is that the Competent Civil Court has passed the decree and the said decree is duly satisfied. The order is not set aside by any Court in any legal proceedings. The consent decree is duly satisfied by way of joint pursis filed by parties. Once the decree having been satisfied there is no question of execution of the said decree. It is also contended on behalf of the respondent that in the present proceedings, the Official Liquidator has invoked the jurisdiction of the Company Court seeking declaration that the order passed on 21-9-1999 is an illegal order and even otherwise the parties have not acted as per the decree and decree is not satisfied in its true sense. The Liquidator has, therefore, prayed for execution of the decree. If there is any grievance against the order dated 21-9-1999 the same can be challenged in the properly initiated legal proceedings. This is not the forum where the order can be challenged by the Official Liquidator. If these submissions are examined in light of the ....
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....s any property of the company in the possession of the anybody since the court is to administer justice and to prevent multiplicity of proceedings when the fact of unauthorised occupation of the company's asset or property by a person is clearly proved before the Court, the Court has ample power under section 446(2)(a), (b), (d ) and section 468 read with rule 9 of the Companies (Court) Rules, 1959, to pass such order as it may think proper which the facts and circumstances of the case demand, for determining the rights of the parties. Once it is established that there was failure by the heirs of respondent No. 1 to comply with the terms of the decree in the civil suit the company (in liquidation) became entitled to seek vacant and physical possession of the land from them. The company became entitled to vacant and physical possession of the land from all the persons claiming through the deceased respondent No. 1 when the default in making payment of compensation from 1986 and sub-letting was admitted. 19. The Court further held that a judgment debtor cannot be heard to say that the decree holder must proceed to enforce the decree only in a particular manner and not in any other m....
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....dismissed. In Radhe Associates v. O.L. of Piramal Financial Service Ltd. [2007] 135 Comp. Cas. 251 the Division Bench of this Court, while dismissing the said appeal held that the agreements dated 9-7-1997 and September 7 and 8 of 1997 were not legally executed. SLP filed against the judgment of the Division Bench is also dismissed by the Hon'ble Supreme Court. 21. Keeping the above legal position in mind the present application is considered by the Court. 22. Civil Suit Nos. 3110 to 3115 of 1998 were filed by PFSL the Company-in-liquidation in City Civil Court at Ahmedabad for the relief of permanent injunction regarding the properties given as securities for the suits loan and for the relief for the decree for the amount mentioned in the suits. Suits have come up for final hearing in November, 1998 and January, 1999 and consent terms in each suit were filed. The defendant No. 1 firm i.e., Radhe Estate Developers and the defendant No. 2 i.e., Shri Ashish P. Patel, as a Partner/Promoter/Director or Proprietor of several other concerns to whom advances were made by the Company-in-liquidation have acknowledged and admitted the debts and after referring to the MoU dated 6-10-1998, t....
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....an order on the same day i.e., 21-9-1999, after considering the endorsement of 'No objection' and held that the decrees were fully satisfied, without ascertaining as to whether properties offered as securities under the alleged consent terms were in existence and without verifying as to who are the signatories of the agreement dated 8-9-1999. As a matter of fact agreement dated 7-9-1999 was not referred to in the pursis and agreement dated 8-9-1999 was signed by the same person for and on behalf of the plaintiff i.e., PFSL (Company-in-liquidation) and VFPL, the party, said to have satisfied the decrees. It appears that the learned Trial Judge had acted in very undue haste and passed the order on the pursis at Ex. 29 on the same day i.e., 21-9-1999. Once the decree having been passed by the competent Civil Court, it becomes functus officio. If the decrees were satisfied subsequently, the executing court would pass appropriate order in an execution petition, if filed and if no such petition were filed and the same court were to take cognizance of such satisfaction of the decrees, proper procedure should have been followed and on a proper application, such order should have been passe....