AI Drafter 
TaxTMI 
TaxTMI 
2023 (2) TMI 330
X X X X Extracts X X X X
X X X X Extracts X X X X
....f 1988 and the Official Liquidator attached to this Court was appointed as the liquidator of the company with directions to take charge of the assets and properties of the company including the property situated at Akota Road, Vadodara and deployed its security guards for safe guarding the assets and properties of the company. After following due procedures for sale of assets of the company, the Official Liquidator had put all the assets of the company including the property situated at Akota Road, Vadodara for sale. 2.2 In response to the advertisement published by the Official Liquidator, no offers were received from the intending purchasers for the purchase of land of the company situated at Akota Road, Vadodara. The applicant submitted offer before the Official Liquidator for purchase of the assets of the company for an amount of Rs.5.15 crores, which was in turn placed before this Court for due consideration. 2.3 This Court thereafter directed the Official Liquidator to publish fresh advertisement keeping the upset price at Rs.5.15 crores. Thereafter, fresh advertisement came to be published by the Official Liquidator, in accordance with the order passed by this Court. H....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nder Section 446 of the Companies Act, 1956 has not been taken by the applicants of the suit and the same cannot be proceeded with till permission is obtained from the Court. 2.7 It appears that the Small Cause Court, Vadodara passed a judgment dated 05.01.2015 in Rent Suit No. 372 of 1988 thereby granting the application in favour of the applicant of the said suit i.e, the respondent no.2 therein, without taking into consideration of the order passed by this Court as well as the affidavit filed by the official liquidator. • The title in Rent Suit No. 372 of 1988 is as under: Plaintiff Baijubhai Baburao Kanojia Residing at-Ambica Mill Nr. Second gate, Vadodara. Vs. Defendants 1. Rajesh Jaykishan residing at Ambica No.1 Kankaria Bridge, Ahmedabad. 2. Ambica Mill-Through its Manager Mr. K.N.Parikhresiding at Bunglow No.2, Gautamnagar Race Course, Vadodara No.1 and 2 through their Official Liquidator- High Court of Gujarat, Jivabhai Chambers, Ashram Road, Navrangpura Ahmedabad. 2.8 It is true that the Official Liquidator has been joined in the suit proceedings on behalf of both the defendants, but he has....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the following order in the interest of justice: - The application of the Applicant is hereby granted and the Rent Suit No.211/1991 is hereby ordered for restore. - The applicants and opponents shall bear their own cost." 5. Undisputedly, the applicant has purchased the property for a total consideration of Rs.8.60 crores and the same has been confirmed by this Court by order dated 23.12.2003 in Company Application No. 414 of 2003. Though the Official Liquidator ought to make appropriate application to join as party respondent. The Small Cause Court has erroneously construed that there is no need to seek leave under Section 446 of the Companies Act,1956 without seeking permission of this Court. Thereby passed and order dated 05.01.2015 in Rent Suit No. 372 of 1998. Notice came to be issued on 04.12.2018, various orders were passed from time to time. 6. Submissions on behalf of the applicant Learned advocate Mr. Davawala appearing on behalf of the applicant herein has submitted the averments made in the applicant and submitted that the applicant is the bonafide purchaser of the land in question Mr. Davawala has submitted that the applicant herein is the pe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....order dated 06.05.2005 was pleased to reject the said application. Being aggrieved by the aforesaid order, the aforesaid lessors had preferred an O. J. Appeal No.34 of 2005, and the Division Bench of this Court vide order dated 01.10.2012 had remanded back the matter to the Company Court with a direction to examine the matter afresh. 7.4 It is further submitted that the Company Court examined the matter afresh and rejected the COMA No.187 of 2004 filed by lessors vide order dated 10.10.2013. It is further submitted that being aggrieved by the said order, Lessors had again preferred appeal being O. J. Appeal No. 05 of 2014, which was rejected vide order dated 20.02.2015, by the Division Bench of this Court. 7.5 Furthermore, M/s. Bheruji Estates, preferred an application being COMA No. 134 of 2015 inter-alia praying this Court to direct the Official Liquidator to execute deed of conveyance by way of Assignment of Leasehold Rights in its favour. This Court vide order dated 28.04.2015 passed in COMA No. 134 of 2015 was pleased to direct the Official Liquidator to execute the deed of conveyance by way of Assignment of Leasehold Rights of Leasehold Land ad measuring 13,238.26 Sq. m....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Liquidator as party - respondent and passed an order on 05.01.2015 in Rent Suit No. 372 of 1998 and also the Judgment passed in Civil Misc. Application No.26 of 2008 on 31.03.2017 and passed an order below Ex.5, on 04.12.1999 passed in Rent Suit No.211 of 1991. 7.8 Mr. Joshi has submitted that Shri. Pravinbhai J. Patel & Others, the lessors of Survey No.482 and 483 had preferred suit being Rent Suit No. 41 of 2018 before the Ld. Small Cause Court at Vadodara. It is further submitted that the Official Liquidator filed an application under Order 7, Rule 11(d) of Code of Civil Procedure, 1908, inter-alia praying the Ld. Small Causes Court to dismiss the suit filed by the original plaintiffs as the present suit is barred by Section 446 of the Companies Act, 1956 and provisions of Limitation Act. The said application is pending before the Ld. Small Cause Court. 7.9 Therefore, he has submitted that all pending suits and legal proceedings against the company be stayed and no fresh suit or legal proceedings can be commenced without the leave of the Company Court. He has submitted that even the pending actions can be continued and a fresh action can be commenced only with the leave o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....That, official liquidator had executed the sale deed of the land in favor of auction purchaser applicant on 12-5-2015 and the applicant had file this application on 21-7-2017. Thus, there is an unexplained and gross delay of more than two years. In this view of the matter the application may be rejected on the grounds of delay and laches. 9.3 It was further stated and submitted that for availing the redress of his claims against the said freeborn land the Applicant is at a liberty to pursue an appropriate remedy of appeal against the Judgment of the Learned Small Cause Court however the present application is not filed under the provisions of an appeal and that the Applicant erred in establishing this claim on the said land by moving an application in the company proceedings itself by invoking the mandate and provisions of the Companies Act, 1956 which are not applicable to the merits of the present case. 9.4 It was further submitted that the sale deed was on "As it where is and whatever it is basis". That it is open for the applicant to move his grievance with regard to the nature of the subject land. Mr. Mehta has submitted that the applicant was party to the said suit and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....judgment decree on 05.01.2015 in Rent Suit No. 372 of 1988 and granted the applicant without taking into consideration the affidavit filed by the Official Liquidator. The said affidavit filed by the Official Liquidator reads thus: "The Official Liquidator attached to this Hon'ble High Court as Liquidator of M/s. Shree Ambica Mills Ltd.. (In Liquidation) (here in after referred to as "Company") most respectfully submits as under: (1) That, the official liquidator has been served with copy of present application inter-alia praying this Hon'ble Court to quash and set aside Judgment dated 05.01.2015 passed in Rent Suit No. 372 of 1998 and also the Judgement dated 31.03.2017 passed in Civil Misc. Application No.26 of 2008 No.211 of 1991 as being bad in Law.That. M/s: Shri Ambica Mills Ltd. has been ordered to be wound up by the Hon'ble High Court of Gujarat vide order dated 17.01.1997 passed in Company Petition No. 66 of 1988 and the Official Liquidator attached to the Hon'ble High Court has been appointed as its Liquidator. (2) That, the Official Liquidator most respectfully submits that this Hon'ble Court has vide order dated 16.02.2000/ ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....04 inter-alia praying this Hon'ble Court to direct the Official Liquidator to hand over the possession of aforesaid land to them. This Hon'ble Court has vide order dated 06.05.2005 was pleased to reject the said application A copy of order dated 06.05.2005 is annexed herewith and marked as Annexure "D". (6) That being aggrieved by the aforesaid order, Sho Pravinbhai J. Patel & Others, preferred O. J. Appeal No.34 of 2005. It is further most respectfully submitted that the Hon'ble Division Bench vide order dated 01.10.2012 remanded back the matter to the Hon'ble Company Court with a direction to examine the matter afresh. A copy of the order dated 01.10.2012 is annexed herewith and marked as Annexure "E". (7) That, this Hon'ble Court examine the matter afresh and rejected the COMA No.187 of 2004 filed by lessors vide order dated 10.10.2013. It is further most respectfully submits that being aggrieved by the said order. Lessors again preferred appeal being O. J. Appeal No. 05 of 2014. The Hon'ble Division Bench has vide order dated 20.02.2015 rejected the O. J. Appeal No.05 of 2014 filed by Lessors. Copies of order dated 10.10.2013 & order da....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd provisions of Limitation Act. The said application is pending before the Ld. Small Cause Court." 12. Similarly, the Official Liquidator was in receipt of notice from the Small Cause Court, suit filed by the respondents for restoration of Rent Suit No. 211 of 1991. In the aforesaid suit also the Small Cause Court vide judgment dated 31.03.2017, wherein also without taking into consideration the order passed by this Court and the affidavit filed by the Official Liquidator, the Small Cause Court proceeded and passed the order in favour of the respondent nos. 3 to 5. 13. The official liquidator as referred above filed affidavits before the Court below to substantiate the stand that the suit could not be proceeded in absence of the due permission taken from the Company Court under the provisions of Section 446 of the Companies Act,1956 as referred above. The Court below appears to have proceeded on a presumption that merely joining the Official Liquidator below Exh. 65, would suffice the procedure as required under the law. 14. In view of this Court it was incumbent for the respondents herein to take permission / to take leave of this Court under section 446 of the Companies....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on 446(1) of the Act. However, as elaborate arguments were advanced on this issue, we will deal with it in some more detail. 19. An application seeking leave to proceed, in respect of a pending suit or proceeding (filed before the order of winding up) is not an application for enforcement of any claim or right. It does not seek any 'relief' or 'remedy' with reference to any claim or right or obligation or liability. It is an application which is interlocutory in nature. An interlocutory application is not subject to any period of limitation, unless otherwise specifically provided by law. We are conscious of the fact that an application under Section 446(1) seeking leave to proceed with the suit/proceeding, is not filed as an 'interlocutory application' in the suit/proceeding before the court where such suit/proceeding is pending. But an interlocutory application is nothing but an application in the course of an action. It is a request made to a court, for its interference, in a matter arising in the progress of a proceeding. Therefore, in a broad sense, the application under section 446(1) filed before the company court seeking leave to proceed with....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the court deems fit, under section 466 of the Act. When the winding up is so stayed, a suit against the company (filed before the winding up order) which stood stayed under section 446(1) could be proceeded with, even though leave had not been obtained to proceed with the suit. We have referred to these alternative possibilities to show that having regard to the nature of an application under Section 446(1) of the Act, it does not attract Article 137." 15 (B) At this stage, it is apposite to refer the ratio laid down by the Apex Court in the case of Erach Boman Khavar vs Tukaram Sridhar Bhat & Ors reported in AIR 2014 SC 544 the operative part reads thus: "20. In State of J&K v. UCO Bank and others[5], while interpreting Section 446(1) of the 1956 Act, the Court opined that a suit cannot be instituted once a winding-up order is passed except by leave of the court. The two-Judge Bench referred to the earlier decision rendered in Bansidhar Shankarlal v. Mohd. Ibrahim[6], wherein the leave had been obtained at the time of filing of the suit and the question was whether fresh leave ought to be obtained before proceeding under Section 446(1) of the 1956 Act before instituti....