TaxTMI 
TaxTMI 
2010 (9) TMI 927
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....ruits and fruit products, trees of all kinds and own, manage and sell the same both in India and abroad ; selling land with or without trees, plants, agricultural, floricultural and horticultural produce in all its forms and selling trees, plants, agricultural, horticultural, floricultural produce with or without lands, fell, harvest and remove partially or fully and market the same either in wholesale or retail in India or abroad ; assisting any person in procuring land and rendering all services as lessees, managers, agents, consultants and advisors and to develop them to make suitable for cultivation of agricultural crops, plantations, forestry, horticultural and floricultural and to render services to any person in procuring finance from banks, financial institutions, provide all types of management services for developing the land and operating farms ; and acting as an export house for all kinds of produce, including agricultural, horticultural and floricultural, dairy, poultry and farm products, including food grains, cereals, seeds, oil, oil seeds, plant, flowers, vegetables, fruits and edible oils, meat, fish, eggs and food and food products and preparation of any nature. ....
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....t go through at all. In the meantime, it is seen that another scheme was placed before this court in C. P. No. 119 of 2007, in supersession of the scheme in C. A. No. 63 of 2001 and that came to be rejected in the dismissal of the said company petition by this court on March 5, 2008, against which original side appeal is stated to have been filed. 7. The first respondent (P. Ananthalakshmi), as it is seen in the records of the company produced by the learned administrator, was transferred from the land acquisition department of the company to the legal department with effect from January 2, 1996 and designated as a legal executive of the company. She is stated to have executed a sale deed on March 17, 2003, in favour of the second respondent (Koduru Venkateswara Prasad) selling an extent of 24 acres of land at Kollur Village and Osmannagar Village, Medak District, Andhra Pradesh. The said sale deed executed by her, which was also registered, shows that it was executed by her in individual capacity and the recital shows as if she has purchased the property in her name under an earlier sale deed dated November 16, 1995. The portion of the recital, which is relevant for the purpose o....
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....und responsible for having thus involved me in these and any other proceedings without legal justification, what I am going through." 9. In the said affidavit, while the first respondent (P. Ananthalakshmi) has stated that she was holding the power on behalf of the company, she has categorically stated that she has not entered into any transaction and registered the document in the office of the Sub-Registrar, Sangareddy. 10. It is stated that the fourth respondent (M/s. Vajra Farms and Engineers), represented by its power agent Sri Raghujie has executed a sale deed dated March 17, 2003, in favour of the second respondent (Koduru Venkateswara Prasad) in respect of an extent of 3 acres in Kollur Village and Osmannagar Village, Medak District, Andhra Pradesh. The description of the property which was sold is as follows : "Agricultural Dry Land bearing Survey No. 191, admeasuring area acres 0-11 Gts. Kollur Village, Ramachandrapuram Mandal, under G.P. Kollur, Medak District, Andhra Pradesh, MPP R.C. Puram, and Survey No. 30, admeasuring area acres 2-29 Gts., situated at Osman Nagar Village, thus total admeasuring area acre 3-00 Gts., or 1.21 Hectors, Ramachandrapuram Mandal and G. ....
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....n of defrauding the company, the first respondent had conspired with the second respondent. Public notices were issued on behalf of the purchasers in Deccan Chronicle by an advocate P. K. Ramesh regarding the sale of 27 acres of land, about which objection was made on behalf of the company by V. R. Alva, Advocate, High Court of Andhra Pradesh. 15. It is the further case of the learned administrator that nobody has a title or power to sell the property of the company after the company petition was filed for winding up and the sale deeds do not convey any title to the purchasers. It is stated that the second respondent has been involved in dubious transactions in collusion with another the then employee of the company, Sri Ravi Babu, by fabricating the documents and sold some other lands of the company in Siddhavaram, about which, on behalf of the company, criminal prosecution has been launched. 16. With the above said averments, the learned administrator has filed these applications for setting aside the sale deeds dated August 13, 2003, registered as Documents Nos. 7314 to 7317 of 2003 on the file of the District Registrar of Medak District at Sangareddy ; sale deeds dated April ....
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.... in so far as the other respondents, they are the bona fide purchasers. Even the purchase by the first respondent (P. Ananthalakshmi) in the year 1995 was not as a general power of attorney of the company, the purchase by the third respondent was only after giving public notice. 21. It is the case of the respondents, as submitted by learned senior counsel, that even the application filed by the administrator in I. A. No. 217 of 2005 in O. S. No. 71 of 2004 on the file of the Principal Junior Civil Judge Court, Sangareddy to implead himself as a party came to be dismissed on January 25, 2006, on the basis of the recital in Document No. 5109 of 1995, dated November 16, 1995 and therefore, the same is contrary to the contention of the learned administrator. 22. It is his contention that by applying the provisions of the Benami Transactions (Prohibition) Act, 1988, even assuming that the first respondent has acted as benami on behalf of the applicant-company, that does not take away the right of the first respondent inasmuch as the property has been purchased in the name of the first respondent in her individual capacity and the first respondent has never acted as a trustee of the pr....
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.... direct otherwise, all proceedings taken in the voluntary winding up shall be deemed to have been validly taken. (2) In any other case, the winding up of a company by the court shall be deemed to commence at the time of the presentation of the petition for the winding up." especially in sub-section (2) states that the winding up shall be deemed to have commenced from the date of presentation of the petition for winding up. On the facts of the present case, the winding up petition was presented on February 24, 1998. 26. Section 450 of the Act, while explaining about the appointment and powers of the provisional liquidator, states as follows : "450. Appointment and powers of provisional liquidator.-(1) At any time after the presentation of a winding up petition and before the making of a winding up order, the court may appoint the official liquidator to be liquidator provisionally. (2) Before appointing a provisional liquidator, the court shall give notice to the company and give a reasonable opportunity to it to make its representations, if any, unless, for special reasons to be recorded in writing, the court thinks fit to dispense with such notice. (3) Where a provisional liq....
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....thstanding anything contained in any other law for the time being in force, have jurisdiction to entertain, or dispose of- (a) any suit or proceeding by or against the company ; (b) any claim made by or against the company (including claims by or against any of its branches in India) ; (c) any application made under section 391 by or in respect of the company ; (d) any question of priorities or any other question whatsoever, whether of law or fact, which may relate to or arise in course of the winding up of the company, whether such suit or proceeding has been instituted, or is instituted, or such claim or question has arisen or arises or such application has been made or is made before or after the order for the winding up of the company, or before or after the commencement of the Companies (Amendment) Act, 1960 (65 of 1960). (3) Any suit or proceeding by or against the company which is pending in any court other than that in which the winding up of the company is proceeding may, notwithstanding anything contained in any other law for the time being in force, be transferred to and disposed of by that court. (4) Nothing in sub-section (1) or sub-section (3) shall apply to an....
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....nal liquidator, it can only be an official liquidator. In such event, if the company court desires to appoint a provisional liquidator before passing the order of winding up, it is certainly a healthy trend that the official liquidator should be appointed as a provisional liquidator. But it does not take away the powers of the company court to appoint any other person like the administrator as a provisional liquidator, in which event he will have the restricted powers of the administrator under the supervision and control of the company court. Be that as it may, on the facts of the present case, these applications have been filed by the learned administrator only as an administrator and not as a provisional liquidator, as it is seen from the records. 32. Now coming to section 536 of the Act regarding the avoidance of transfers and declaring the transfers effected after the commencement of winding up proceedings as void, the same is based on the celebrated concept that when once it is brought to the notice of the company court about the insolvent status of the company, immediately the company court thinks in terms of protection of the creditors and contributories of such company an....
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....the substitution, for the reference to six months, of a reference to three months. (2) For the purposes of sub-section (1), the presentation of a petition for winding up in the case of a winding up by or subject to the supervision of the court, and the passing of a resolution for winding up in the case of a voluntary winding up, shall be deemed to correspond to the act of insolvency in the case of an individual. 531A. Avoidance of voluntary transfer.-Any transfer of property movable or immovable, or any delivery of goods, made by a company, not being a transfer or delivery made in the ordinary course of its business or in favour of a purchaser or encumbrancer in good faith and for valuable consideration, if made within a period of one year before the presentation of a petition for winding up by or subject to the supervision of the court or the passing of a resolution for voluntary winding up of the company, shall be void against the liquidator." 35. The contention of learned senior counsel for the respondents, Mr. P. Jayaraman, that the first respondent (P. Ananthalakshmi) never acted as a general power of attorney and there is no record to show that she acted as a trustee of th....
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....onishing to note that in the documents, especially Document Nos. 7314 to 7316 of 2003 executed by the second respondent (Koduru Venkateswara Prasad), the beneficiary himself has signed as a witness to the documents. 38. In addition to the above, while the total extent transferred under the said documents sought to be set aside is 27 acres, the fourth respondent has chosen to execute a sale deed in respect of 3 acres and if that is so, the total extent of lands put together would come to 30 acres as against 27 acres and this would show the unscrupulous manner with which the sale deeds have been executed in respect of the properties of the company. 39. With regard to the effect of sections 441(2) and 537(1) of the Act, it is useful to quote a decision of the Rajasthan High Court in Rajasthan Finance Corporation v. Official Liquidator [1963] 2 Comp. LJ 309, wherein it was held as follows : "The case before us is clearly covered by the residuary clause of in any other case as contemplated by section 441(2) of the Companies Act. Learned counsel has urged two grounds for excluding the applicability of section 441 for interpreting section 537 of the Companies Act. The first is that the....
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....pany it will be the duty of the liquidator to realise all claims subsisting in favour of the company. It must be his endeavour to collect all the assets of the company which have been unauthorisedly, dishonestly, fraudulently or illegally taken away from the company. In order to prevent the scramble for the assets of the company, the liquidator has to step in and to take possession of and protect the assets of the company. As observed by Lindley L. J. in Oak Pits Colliery Co., In re [1882] 21 Ch. D 322 (CA), the object of the winding up provisions of the Companies Act is to put all unsecured creditors upon an equality and to pay them pari passu. To accomplish this it was provided that any action, execution, distress or other process against the assets of the company should be suspended, otherwise winding up would result into a scramble for the assets. Sections 531 to 537 grouped together under sub-heading 'effect of winding up on antecedent and other transactions' provide for avoidance of certain transactions or recovery of payments made during certain period before the commencement of winding up proceedings or from the commencement of winding up proceedings. There appears to be an....
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.... O. S. A. Nos. 384 to 386 of 2007 (Chetan Arvind Bhagat v. Maxworth Orchards (I) Ltd.) which relates to the same company under liquidation regarding the various sale transactions and the Division Bench while upholding the decision of the learned single judge in setting aside similar sales effected, observed as follows : "14. We entirely agree with the reasoning of the above Division Bench of the Rajasthan High Court as well as the single Bench decision of the Gujarat High Court. After taking into consideration the factual scenarios in this case, we are of the view that the learned single judge is correct in allowing the applications filed by the administrator, the first respondent-company and setting aside the sale deeds. Though learned senior counsel appearing for the appellant has relied on the case laws cited supra, those judgments are factually different and the same are not under section 537 read with section 441 of the Companies Act as in the instant case. So, we are not dealing with the above case laws cited by learned counsel appearing for the appellant one by one." 42. For the foregoing reasons, I am of the considered view that the sales which are the subject-matter of t....
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.... the original owners, who are all ex-servicemen and who had given general power of attorney to the first respondent (Kamlesh Lohade, "Poonam", 3.5.839, Hyderguda, Hyderabad, Andhra Pradesh). 47. In the affidavit filed by the first respondent (Kamlesh Lohade) in C. A. Nos. 307 to 309 of 2006, the first respondent has clearly stated that as a general power of attorney of the land owners, he has executed sale deeds in favour of the company between 1993 and 1995 and surrendered patta certificates and general power of attorney originals to the company at the time of execution of the sale deeds. He has categorically stated that he has not executed any sale deeds in favour of any person either under Document No. 3520 of 2005, dated March 29, 2005, or Document No. 10156 of 2003, dated October 28, 2003. The relevant portion of the counter affidavit filed by the said Kamlesh Lohade is as follows : "3. I submit at the outset that I was the general power of attorney of the land owners (i.e., the original allottees-ex-servicemen) in respect of the properties in Survey Nos. 191 and 30 of Kollur and Osman Nagar Villages, Ramachandrapuram Mandal, Medak District. I submit that I had executed the ....
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....31 of 2003 some of the lands in the same area at Rs. 1.35 lakhs per acre in the year 2003. 50. The third respondent, who is stated to have purchased the property without knowing the extent of lands and without verifying the authenticity and right of the second respondent in selling such properties, cannot claim any better title. It is also further relevant to note that the second respondent is being prosecuted under the Andhra Pradesh Land Grabbing (Prohibition) Act, 1982. 51. For the foregoing reasons, C. A. Nos. 308 and 309 of 2006 in C. P. No. 57 of 1998 and C. A. Nos. 625 and 626 of 2005 in C. A. No. 63 of 2001 are allowed and the respective sale deeds stand set aside. Third batch C. A. Nos. 688 to 690 of 2006 in C. P. No. 57 of 1998 52. C. A. No. 688 of 2006 is filed to set aside the four sale deeds dated September 1, 2005, registered as Documents Nos. 11481 of 2005, 11482 of 2005, 11483 of 2005 and 11484 of 2005 in the office of the Sub-Registrar, Sangareddy, Medak District. All the lands are situated in S. No. 191. 53. Document No. 11481 of 2005 relates to 4.20 acres of land situated at Kollur Village, Ramachandrapuram Mandal, Medak District, under G. P. Kollur Z. P. P....