TaxTMI 
TaxTMI 
TaxTMI 
2017 (6) TMI 608
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed inter-alia praying for an order and direction against Economic Offences Wing, Mumbai to handover the records/Books of Accounts of M/s. City Limouzines (India) Ltd. (in liquidation), if any, in their possession. The learned Official Liquidator also seeks an order against the Enforcement Directorate, Economic Offences Wing, Mumbai to handover the possession of the properties of the Companies (in liquidation) i.e. M/s.City Limouzines (India) Ltd. (in liquidation) and M/s. City Realcom Ltd. (in liquidation) to the Official Liquidator and to handover the details of the bank accounts of the aforesaid two Companies in liquidation to the Official Liquidator with a direction to the banks described in paragraph 7 of the Report to handover the money lying in the said accounts to the Official Liquidator along with interest accrued, if any. The Official Liquidator also seeks permission to invite the claims of the workers/creditors of the aforesaid two Companies by giving an advertisement in the newspapers and to make payment to M/s. Admire Publicity Private Limited, an advertisement agency towards the advertisement charges to invite the workers/creditors. 3. Insofar as the Official Liquidat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....situated at 102, B Wing, Mittal Towers, Nariman Point, Mumbai - 400 021. The Official Liquidator, however, could not take possession of the said registered office of the said Company M/s. City Limouzines (India) Ltd. (in liquidation), as the same was already sealed by the Economic Offences Wing, Crime Branch, Mumbai. 8. The Official Liquidator thereafter, hold a meeting on 5th January 2011 with the representatives of M/s. City Limouzines (India) Ltd. (in liquidation) & others. In the said meeting, the Assistant Director, Enforcement Directorate informed the Official Liquidator that his Department had already attached the properties of the said M/s. City Limouzines (India) Ltd. (in liquidation) and of all its Promoters to the extent of more than Rs. 10.00 Crores. The Senior Inspector of Police of Economic Offences Wing, Crime Branch, Mumbai also informed the Official Liquidator that the Economic Offences Wing, Crime Branch, Mumbai also had attached the property of more than 10 Crores of the said M/s. City Limouzines (India) Ltd. (in liquidation). 9. On 4th July 2011 the Economic Offences Wing, Crime Branch, Mumbai forwarded the details of the properties i.e. movable and immovable ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Offences Wing, Crime Branch, Mumbai to handover the records/Books of Accounts of the Companies (in liquidation), if any, handover possession of the registered office of the Company in liquidation i.e. M/s. City Limouzines (India) Ltd. (in liquidation) situated at Mittal Towers, Nariman Point, Mumbai - 400 021, which had been sealed by them. There was however, no reply from the Assistant Commissioner, Police, Economic Offences Wing, Crime Branch, Mumbai in response to the two letters i.e. 4th May 2012 and 7th August 2012. 13. This Court passed an order on 21st June 2012 in Company Application No. 203 of 2012 in Company Petition No. 234 of 2010 filed by Union of India against M/s. City Limouzines (India) Ltd. (in liquidation) and permitted the Union of India, SFIO to carry out investigation under Section 235 of the Companies Act, 1956 into the affairs of the said M/s. City Limouzines (India) Ltd. (in liquidation) and to pass consequential order in that regard. 14. Sometime in the year 2012, Company Application (L) No. 600 of 2012 in Company Petition No. 234 of 2010 came to be filed against the M/s. City Limouzines (India) Ltd. (in liquidation) and Company Application No. 583 of 201....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ies and has frozen approximately 55 bank accounts of City Group of Companies, estimated value whereof is more than Rs. 180.00 crores. 17. In paragraph 18 of the said affidavit it is stated that the said department did not have any objection if this court directs the said office to remit the money to the Official Liquidator with a condition that the claims of duped investors of the company i.e. E.O.W. CR No.74 of 2007 (City Limouzines Case) to be settled on priority basis. Insofar as the records / books of account of the company in liquidation in possession of the said office is concerned, it is stated that the same being voluminous, the Official Liquidator may take photo copy of the original record. 18. On 24th July, 2013, this Court passed an order in the Company Application No.600 of 2012 for appointment of four more Chartered Accountants for getting the claims adjudicated on payment of Rs. 250/- per claim plus service tax. This Court made it clear that it would be open to the Official Liquidator to adjudicate the claim on the basis of the photo copies of the documents. The Economic Offence Wing has made a statement in the said affidavit dated 2nd May, 2013 that the said depart....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... This Court directed the Official Liquidator to consider those complaints as the claims made by the investors. 21. It is the case of the Official Liquidator that the said office has received approximately 40,000 claims from the investors and the secured creditors of the aforesaid two Companies in liquidation till the date of filing the Report on 18th March 2013 even before inviting claims of the Official Liquidator in respect of those two Companies. The Official Liquidator has given names of 28 newspapers in which the Official Liquidator proposed to release an advertisement for inviting the claims of the workers/creditors of the Companies in liquidation and to pay the advertisement charges which is estimated around Rs. 50,00,000/- when the Official Liquidator Report No.126 of 2013 was filed. 22. By a letter dated 1st November 2013, the Economic Offences Wing, Crime Branch, Mumbai forwarded a copy of their Application dated 21st October, 2011 submitted in the Court of learned Additional Chief Metropolitan Magistrate, 19th Court, Esplanade, Mumbai requesting to establish a 'lien' on the said amount of Rs. 60,00,000/-. Office of the learned Additional Chief Metropolitan Mag....
X X X X Extracts X X X X
X X X X Extracts X X X X
....2/-. It is further stated that as per the order dated 23rd September, 2013, passed by this Court, an amount of Rs. 43,76,434/- has been transferred to the Official Liquidator and an amount of Rs. 96,34,809/- has been transferred to the competent authority of Chennai pursuant to an order of the Court of Special Judge under TNPID Act, Chennai. The amount of Rs. 9,32,72,735/- lying in the account of the Standard Chartered Bank, Mumbai and the Maharashtra State Co-operative Bank has been transferred to the Deputy Director of Enforcement, Mumbai. It is mentioned that at present the total amount attached with various banks aggregates to Rs. 1,34,13,058/-. 27. In paragraph 5 of the said affidavit, it is stated that the total value of the property (movable and immovable) is worth approximately Rs. 191.00 crores which has been seized and secured under M.P.I.D. Act. The Government of Maharashtra has designated a competent authority to dispose of the said seized properties and to settle the claims of the investors. On 9th September, 2015, the District Collector at Mumbai City appointed the Resident Deputy Collector, Mumbai City as the competent authority in this matter. It is stated that out....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e proceeds towards making payment to the investors. It was alleged that the said promoter Mr.Sayyed Masood did not have any other properties standing in his name for which he could give NOC for sale thereof. 31. On 12th May, 2016, the State Government issued two notifications under sections 4(1), 5(1) and 8 of the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999 and appointed the Sub Divisional Officer, Latur to be the competent authority to exercise the control over the properties of the Aryarup Tourism and Club Resort Private Limited, Latur District described in the said notifications. It was also notified that the Government of Maharashtra had attached the properties of the said company and in the name of its directors and their relatives as per the schedule appended to the said notification. The second notification was in respect of the two properties, one situated at Sanganer, Jaipur, Rajastan and another situated at Balegaon, Murbad, Thane, Maharashtra. 32. On March, 2016, the State Government issued another notification in respect of the said company and attached some more properties thereby and appointed the Sub Divisional Officer, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....in section 530 are paid. The preferential payments are statutory dues, taxes, cesses etc. as also the amount payable to non-workmen employees. Thereafter unsecured creditors shall be entitled to receive the amount that may be found due and payable. 37. It is submitted by the learned counsel that all types of the creditors can lodge their claim before the Official Liquidator, including the investors under the provisions of the M.P.I.D. Act. He submits that in case of B.K. Paper Mills in Company Application No.268 of 2010, claims of over 1000 depositors, who had filed the claims before the Economic Offence Wing at Mumbai and who had also filed their claims before the Official Liquidator. Those claims have been adjudicated by the Official Liquidator. 38. Learned counsel for the Official Liquidator invited my attention to section 2(c)(d), 3, 4 and 7 of the M.P.I.D. Act and Rule 5 of the MPID Rules. It is submitted by the learned counsel that the attachment of the properties under section 4 of the MPID Act is for protecting the interest of the investors. He submits that under section 7 of the said Act, payment can be made only to the depositors as defined under the said Act. The MPID ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....judication and payment. It is submitted that MPID Court thus cannot pass any orders with regard to the property of the company in liquidation, once such company is would up. 42. Learned counsel for the Official Liquidator placed reliance on the judgment of the Supreme Court in case of Bank of Maharashtra vs. Pandurang Keshav Gorwardkar & Ors., (2013) 7 SCC 754 and in particular paragraphs 62, 63, 66 and 67. He submits that the Supreme Court has held that once the company is in winding up, the only competent authority to determine the workmen's dues and quantify the workmen's portion is the Official Liquidator. The Official Liquidator is responsible and competent to determine the workmen's dues where the debtor company is in liquidation. The Debt Recovery Tribunal followed the mandatory provisions of section 529A by making distribution in equal proportion to secured creditors and the workmen of the debt company in winding up. 43. Learned counsel for the Official Liquidator placed reliance on the judgment of the Supreme Court in case of M. Karunanidhi vs. Union of India & Anr. (1979) 3 SCC 431 and in particular paragraph 35 thereof in support of his submission that in o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... He submits that there is no answer to the submissions made by the Official Liquidator that on winding up of the company, all the assets of such company vests in the Official Liquidator and the custody thereof has to be taken by the Official Liquidator from the company in liquidation and from any third parties found in possession of such properties. 47. It is submitted that the Central Government though, the learned Additional Solicitor General had taken time to consider whether any amounts can be paid to the Official Liquidator for making adjudication of all the claims of the investors / depositors, but till date no additional amount is sanctioned by the Government. Whatever amounts have been received by the Official Liquidator, substantial part of the said amount is already spent on the claims adjudicated so far by the Official Liquidator. He submits that the Official Liquidator will invite the claims within such time as this Court may direct from other secured and unsecured creditors of the company in liquidation. 48. Insofar as the company City Limouzines (India) Limited (In liquidation) is concerned, it is submitted that the Official Liquidator has received the claims of aro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....vestigation. 51. Learned counsel invited my attention to various provisions of the MPID Act and submits that the MPID Act has been enacted by the State Government with an object to curb the unscrupulous activities of such financial establishments in the State of Maharashtra who have grabbed money received as deposits from large number of public mostly from middle class and poor on the promises of unprecedented high attractive interest rates of rewards and without any obligation to refund such deposits to the investors on maturity. It is submitted by the learned counsel that the said MPID Act is a Special Act. 52. Learned counsel placed reliance on Section 14 of the said Act and would submit that the said Act shall override any other laws notwithstanding anything inconsistent therewith contained in the other law for the time being in force. He submits that though this Court had struck down the said MPID Act, Supreme Court in another matter in the case of K.K. Bhaskaran vs. State, (2011) 3 SCC 793 has upheld the full bench judgment of the Madras High Court and disagreed with the view taken by this Court. The constitutional validity of the two Acts including the MPID Act has been up....
X X X X Extracts X X X X
X X X X Extracts X X X X
....PID Act in respect of settling of claims and/or interest in the property of the financial institutions attached by the competent authority. It is submitted that the MPID Court is already seized of the matter and thus the official liquidator cannot seek any direction in respect of the properties attached by the competent authority as prayed in the reports filed by him. He submits that notifications issued under Section 4 of the MPID Act by the State Government are not challenged by the official liquidator or by any party and thus are binding not only on the companies in liquidation, its Ex-directors and its agents but also the official liquidator. 57. It is submitted by the learned counsel that the Companies Act, 1956 is referrable to inter-alia under Entry 43 and 44 of List I (Union List) of the Seventh Schedule to the Constitution of India. The MPID Act passed by the State Legislature is referrable to Entries 1, 30 and 31 of List II (the State List) of the Seventh Schedule to the Constitution of India. He submits that these two enactments operate in two different fields. The source of power of the Companies Act, 1956 comes under Article 245 of the Constitution of India whereas th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....12 of the MPID Act and has already issued a notification thereby attaching the properties of the company M/s.City Limouzines (India) Ltd. and M/s.Aryarup Tourism Club Resorts Pvt. Ltd. (in liquidation). He submits that the notifications issued by the State Government are not set aside by the appropriate Court till date. The official liquidator has not challenged those notifications and the same are also binding on the official liquidator. He submits that this Court thus cannot direct the authority under the provisions of the said MPID Act to return the immovable properties of the companies in liquidation to the official liquidator in the teeth of the said notifications issued by the State Government thereby attaching those immovable and movable properties standing in the name of the company in liquidation. 62. Ms.Palsule-Desai, learned AGP appearing for the State of Maharashtra in the Company Petition (L) Nos.234 of 2010 and 182 of 2012 and in Official Liquidator's Report No.126 of 2013 filed in the matter of M/s.City Limouzines (India) Ltd. supports the case of the State Government in the Company Petition No.278 of 2014 and the Official Liquidator's Report No.252 of 2015 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....urt in Company Application No.583 of 2012 and the Company Application (L) No.600 of 2012 and various orders passed in Official Liquidator's Report No.126 of 2013. He submits that the members of the Association have lodged their claims and complaints before the authority under the provisions of the said MPID Act. He submits that as per Section 456 of the Companies Act, 1956, the official liquidator is the custodian of the properties belonging to the companies in liquidation. 66. It is submitted that the EOW, Crime Branch, Mumbai in the matter of M/s.City Limouzines (India) Ltd. and M/s.City Realcom India Ltd. (in liquidation) had given no objection for transferring of properties approximately more than Rs. 180 crores by way of an affidavit dated 2nd May, 2013 in Company Petition No.234 of 2010 and Company Petition No.326 of 2010. He submits that in compliance to the said directions, the properties of the companies in liquidation are to be handed over to the official liquidator for satisfaction of claims. He also placed reliance on certain paragraphs of affidavit dated 9th March 2016 filed by Mr.Prabhakar Loke, Senior Inspector stating that the official liquidator can deal with ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ith Rule 233 of the Companies (Court) Rules, 1959. Nobody other than the official liquidator has the right to represent the company. 70. It is submitted by the learned counsel that in so far as the attachment of properties of the Directors and Agents under the MPID Act are concerned, at present the official liquidator has not raised any claim in respect of those properties. If it is ultimately found that those properties belonged to the companies in liquidation or that the same are purchased out of the funds of the companies in liquidation by the Directors or by any third party, the official liquidator will make a claim in respect of those properties also by filing an appropriate report before this Court. 71. It is submitted that the official liquidator is ready and willing to invite claims which are not invited so far in respect of the creditors of M/s.Aryarup Tourism Club Resorts Pvt. Ltd. (in liquidation). It is submitted that merely because the petitioner in the said Company Petition No.278 of 2014 had filed the said company petition merely on the ground of default committed by the company in liquidation in repayment of sum of approximately Rs. 1 lakh, this Court cannot refus....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing at the date of the winding up order, shall be proceeded with, against the company, except by leave of the Court and subject to such terms as the Court may impose. The words 'Court' has now been substituted by the word "Tribunal" i.e. National Company Law Tribunal (NCLT). Under Section 447, an order for winding up a company shall operate in favour of all the creditors and of all the contributories of the company as if it had been made on the joint petition of a creditor and of a contributory. Section 448 provides for appointment of the official liquidator relating to the winding up of companies by the Court and now tribunal. 75. Under Section 449, on a winding up order being made in respect of a company, the Official Liquidator shall, by virtue of his office, becomes the liquidator of the company. Section 450 provides for appointment and powers of provisional liquidator. Under Section 451, the liquidator has to conduct the proceedings in winding up the company and perform such duties in reference thereto as the Court may impose. The acts of a liquidator shall be valid, notwithstanding any defect that may afterwards be discovered in his appointment or qualification. Unde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....had jurisdiction in respect of the company if its registered office had been situate at such other place, and in the same manner in all respects as if the order had been made by that Court. 79. Under Section 491, on the appointment of a liquidator, all the powers of the Board of directors and of the managing shall cease, except for the purpose of giving notice of such appointment to the Registrar in pursuance of section 493 or in so far as the company in general meeting or the liquidator may sanction the continuance thereof. Under Section 497, the official liquidator has to make up an account of the winding up as soon as the affairs of the company are fully wound up subject to the provisions of Section 498. 80. Under Section 511 of the Companies Act, 1956, the assets of a company shall, on its winding up, be applied in satisfaction of its liabilities pari passu and, subject to such application, shall, unless the articles otherwise provide, be distributed amongst the members according to their rights and interests in the company subject to the provisions of the Companies Act as to preferential payments. 81. Chapter V provides for proof and ranking of claims. All claims shall be a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ensuring rendering of the services in kind in return, as assured. The said Act has come into force on 29th April, 1999. The competent authority has been defined under section 2(a) which provides that competent authority means the competent authority appointed under section 5. 'Designated Court' is defined under section 2(b). 'Financial Establishment' is defined under section 2(d) as under:- "Financial Establishment" means any person accepting deposit under any scheme or arrangement or in any other manner but does not include a corporation or a co-operative society owned or controlled by any State Government or the Central Government or a banking company defined under clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949)." 85. Section 4 of the MPID Act reads thus :- "4. Attachment of properties on default of return of deposits :- (1) Notwithstanding anything contained in any other law for the time being in force - (i) where upon complaints received from the depositors or otherwise, the Government is satisfied that any Financial Establishment has failed ,- (a) to return the deposit after maturity or on demand by the depositor; or (b) to pa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e direction for realisation of the assets attached and for equal distribution amongst the depositors of the money realised from out of the property attached. 87. Under section 10 of the said MPID Act, the designated court is empowered to pass an order for administration of the attached property. Under section 11 of the said Act, an appeal lies to the High Court against the order passed by the competent authority under the said Act. Section 14 provides that save as otherwise provided in the said Act, the provisions of the said Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any custom or usage or any instrument having effect by virtue of any such law. The State of Maharashtra has framed the rules viz., the Maharashtra Protection of Interest of Depositors (In Financial Establishments) Rules, 1999. It is not in dispute that the State of Maharashtra has already constituted designated court in this State by exercising powers under section 6 of the MPID Act. The State Government has also appointed the competent authority under section 5 of the said MPID Act. 88. A perusal of the definition of 'Financial....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s Act, 1993 or of financial corporations coming under the State Financial Corporations Act, 1951 can only be with the association of the Official Liquidator and under the supervision of the Company Court. 91. It is held that whether the assets are realized by a secured creditor even if it be by proceeding under 1993 Act or the 1951 Act, the distribution of assets would only be in terms of Section 529-A of the Companies Act and by recognizing the right of the Liquidator to calculate the workmen's dues and collected for distribution among them pari passu with the secured creditors. Supreme Court also considered section 529-A of the Companies Act and held that security of the every secured creditor shall be deemed to be subject to a pari passu charge in favour of the workmen to the extent of the workmen's portion. It is held that where a company is in liquidation, a statutory charge is created in favour of workmen in respect of their dues over the security of every secured creditor and the said charge is pari passu with that of the secured creditor. It is held that the workmen of the company in winding up acquire the standing of secured creditors on and from the date of the winding u....
X X X X Extracts X X X X
X X X X Extracts X X X X
....City Limouzines (India) Ltd. (in liquidation) on 1st October,2010. By an order dated 3rd December, 2010, the said M/s.City Limouzines (India) Ltd. (in liquidation) has been ordered to be wound up. By an order dated 9th March,2012, M/s.City Realcom Ltd. (in liquidation) was ordered to be wound up. By an order dated 28th October, 2010, this court had directed the Official Liquidator to take possession of the registered office of M/s.City Limouzines (India) Ltd. (in liquidation). 95. On 4th July, 2001, the Economic Offences Wing, Crime Branch, Mumbai forwarded the details of the properties i.e. moveable and immoveable to the Official Liquidator which properties were attached by the Economic Offences Wing, Crime Branch, Mumbai in respect of M/s.City Limouzines (India) Ltd. (in liquidation). It is thus clear beyond reasonable doubt that all three companies referred to aforesaid are already wound up by a separate orders passed by this court and the Official Liquidator is already appointed in respect of the aforesaid three companies. The MPID Court appointed under section 6 of the MPID Act or the competent authority appointed under section 5 of the MPID Act, thus cannot pass any orders d....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the directions of the company court. It is held that the distribution of the sale proceeds under the direction of the company court is responsibility of the Official Liquidator. 99. Supreme Court in case of A.Talukdar and Company (Fertilizer) Private Limited vs. Official Liquidator, High Court of Calcutta and others, (2016) 14 SCC 289 has held that once the company was ordered to be wound up, the assets of the company came to be in custody of the company court and no arrangement, after winding up order, without permission of the company court could be recognized in respect of assets of the company. 100. Under section 447 of the Companies Act, 1956, an order of winding up a company shall operate in favour of all the creditors and of all the contributories of the company as if it had been made on the joint petition of a creditor and of a contributory. The liquidator or the provisional liquidator as the case may be is bound to take into his custody or under his control all the properties effect or executable claim to which the company is or appears to be entitled. It is not in dispute that the competent authority has attached some of the properties not only of the company in liquid....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cts of those companies already stood vested in the company court on the date of the order for the winding up of those companies, the subsequent orders passed by the State of Maharashtra by exercising power under section 4(1) of the MPID Act or other provisions of the said Act in the year 2016 without obtaining leave of the Company Court would be of no consequence insofar as this court and the Official Liquidator is concerned. In my view, there is thus no merit in the submission of the learned A.G.P. that since those notifications are not challenged by the Official Liquidator or by the petitioner, the same would continue to be binding on the Official Liquidator or upon the petitioner and thus no such properties which are attached by the State Government under those two notifications can be ordered to be dealt with by the company court. 103. In my view since all the three companies are already wound up by this court under the provisions of Companies Act, 1956, the Official Liquidator only can deal with those properties under directions of this court and has to realize the monies by sale of those assets of the companies in liquidation and then to pay over the proceeds under the provi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ies Act, 1956 operate in separate field. This court has clearly held that if the company is wound up, the MPID Court shall not pass any order against the properties of the company. Both the parties through their respective counsel have made a common argument before this court that the Companies Act, 1956 and MPID Act operates in separate fields and there is no question of any repugnancy in the two Acts. In my view section 14 of the MPID Act thus would not be attracted in the facts of this case. The provisions of MPID Act thus cannot take away the powers under the Companies Act. If the properties of the company in liquidation are allowed to be sold and the sale proceeds are allowed to be distributed through the competent authority only amongst the depositors, the same would be in teeth of the provisions of the Companies Act, 1956 and the secured creditors and the workmen, preferential creditors having statutory dues would be totally deprived of their legitimate claims against the company in liquidation whereas the depositors under the provisions of the MPID Act would exclusively be benefited under the provisions of the said MPID Act which would result in great mischief. This court t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ted only a sum of Rs. 1,00,000/- in the said company in liquidation at this stage. 109. Insofar as various amounts standing in the name of the companies in liquidation are concerned, the competent authority has already given its no objection to transfer those amounts to the Official Liquidator. 110. The Office of the Official Liquidator had received approximately 40,000 claims from the investors and the secured creditors of the two companies in liquidation till the date of filing of the report on 18th March, 2013 even before inviting the claims by the Official Liquidator in respect of those two companies. 111. In my view the powers of competent authority appointed under the MPID Act and the MPID Court does not supersede or prevail upon the powers of the Official Liquidator or of the Company Court under the provisions of the Companies Act. MPID Act is totally silent on the aspect relating to the winding up and thus if the financial establishment as defined under the provisions of the MPID Act is in winding up, then the provisions of the Companies Act, 1956 would apply to such financial establishment. The MPID Act cannot take away the powers under the Companies Act. In my view the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....court and if any other authority, depositors or creditors would raise the claim with the Economic Offence Wing, the said Economic Offence Wing will forward the same to the Official Liquidator after carrying out a preliminary enquiry. 114. During the course of the arguments, learned counsel for the Official Liquidator brought to the notice of this court that no further amounts are transferred to the Official Liquidator which are required for the purpose of incurring expenses for adjudication of the claims received from the investors/depositors. The competent authority under the MPID Act however on the other hand had attached some of the properties of the companies in liquidation and also of its directors or agents. In my view, in these circumstances it would be more appropriate if the claims which are received by the Official Liquidator from the investors/depositors so far and the claims which are already adjudicated upon the Official Liquidator out of such claims received from such investors/depositors, such claims with adjudication orders or without adjudication can be transmitted to the competent authority appointed under the provisions of MPID Act with a clarification that thos....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ified in the said letter that his client did not have any other properties standing in his name for which he could give NOC for sale thereof. In view of the specific order passed by the Supreme Court, the Official Liquidator can sell those four properties standing in the name of Mr.Sayyed Masood and can remit the sale proceeds of those properties to the MPID Court for distribution. 118. I am not inclined to accept the submission of the learned A.G.P. that the competent authority appointed under the MPID Act has power to deal with the properties of the financial establishment i.e. the companies in liquidation in these matters under the provisions of the said MPID Act and to distribute the sale proceeds of the companies in liquidation amongst the investors. There is no merit in the submission of the learned A.G.P. that the only such competent authority is empowered to administer the monies and properties in the interest of the depositors under Rule 5(1) of the said rules by attaching and selling the properties standing in the name of the companies in liquidation who were financial establishment under the provisions of the said MPID Act. 119. In my view, the Official Liquidator acts....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed vide notice of admission of proof of debts. 123. Insofar as submission of the learned counsel for the Official Liquidator that the Official Liquidator reserve his rights to make claim in future in respect of the properties of the directors and the agents in case, if it is ultimately found that those properties also actually belongs to the company in liquidation or that the same were purchased out of the funds of the company in liquidation by exdirectors or by a third party, the Official Liquidator shall be allowed to make a claim in respect of those properties also in future is concerned, admittedly no such claim is made by the Official Liquidator till date. 124. Insofar as the claims in respect of the creditors of M/s.Aryarup Tourism Club Resorts Pvt. Ltd. (in liquidation) not invited so far by the Official Liquidator is concerned, the Official Liquidator is ready and willing to invite the claims in respect of the creditors of the said company within such time as may be granted by this court. 125. I shall now consider the prayers/directions sought by the Official Liquidator in various reports and also the prayers sought by the City Group Investors Welfare Association, Hydera....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r expeditiously. 129. Insofar as the direction sought by the Official Liquidator in OLR No.126 of 2013 is concerned, if the records/books of accounts of M/s.City Limouzines (India) Ltd., company in liquidation are in possession of the Economic Offence Wing, Crime Branch, Mumbai, the same shall be handed over by the Economic Offence Wing, Crime Branch, Mumbai to the Official Liquidator within two weeks from the date of the communication of this order. The Economic Offences Wing, Crime Branch, Mumbai however would be entitled to retain photocopies thereof if they so require of such records/books of accounts. 130. The Enforcement Directorate and the Economic Offences Wing, Crime Branch, Mumbai shall also handover the details of the bank accounts of M/s.City Limouzines (India) Ltd., (in liquidation) to the Official Liquidator and shall also remit the entire money lying in the said accounts to the Official Liquidator with accrued interest if any, within two weeks from the date of the communication of this order passed by this court. 131. The Official Liquidator may invite the claims of investors/depositors of M/s.City Limouzines (India) Ltd., and M/s.City Realcom Ltd. (in liquidation....
X X X X Extracts X X X X
X X X X Extracts X X X X
....equired to hand over all such properties to the Official Liquidator within two weeks from the date of communication of this order. 134. It is made clear that MPID Court / competent authority who is in possession of the properties of the directors and/or agents of the said company M/s.Aryarup Tourism Club Resorts Private Limited (In Liquidation) would be entitled to deal with those properties, including the sale thereof for the purpose of discharging the claims of the investors / depositors and are not required to hand over those properties to the Official Liquidator in view of the fact that no such claims are made by the Official Liquidator in respect of those properties till date. 135. For the reasons recorded aforesaid, I pass the following order :- (a) OLR No.252 of 2015 is made absolute in terms of prayer clause (a). The properties and the monies standing in the name of the said company shall be handed over by the Police Inspector, State Crime Investigation Department, Mumbai or the competent authority appointed by the State Government who is in possession of the said properties to the Official Liquidator within two weeks from the date of communication of this order. (b) OL....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ot later than six months from the date of this order. The expenses if any, incurred on effecting sale of those properties can be recovered by the Official Liquidator from the sale proceeds of those four properties. The Official Liquidator shall thereafter handover the balance sale proceeds to the MPID Court for distribution of balance sale proceeds amongst the investors as contemplated in order dated 14th September,2016 passed by the Supreme Court. (g) The MPID Court/the competent authority shall thereafter distribute the said amount amongst the investors whose claims are adjudicated upon on pro-rata basis. If the claims of all the investors/depositors whose claims are adjudicated upon are not fully satisfied, those claims can be conveyed to the Official Liquidator. The Official Liquidator shall submit a report for declaration of dividend to all the creditors in respect of the payment proposed to be made including the unpaid amount to investors/depositors in accordance with the provisions of the Companies Act, 1956. The priority of the claims shall be considered by the Official Liquidator as per provisions of sections 529, 529A and 530 of the Companies Act, 1956 and in accordance ....