TaxTMI 
TaxTMI 
2025 (7) TMI 1342
X X X X Extracts X X X X
X X X X Extracts X X X X
....el appearing for the recall applicant contends that the said order was passed in the absence of the present applicant. Although admitting that a notice was recorded in the order under recall to have been served on the learned advocate for the applicant, it is submitted that the said advocate had shifted his law practice to Rajasthan High Court, Jaipur Bench since the month of May, 2023. Hence, in effect, the present applicant did not have notice of the said proceedings. 3. Secondly, it is argued that the order under recall ought to be set aside on the ground of suppression of material facts by the DA. By an order dated August 14, 2987 passed in the winding up proceeding, the Company Court had, inter alia, directed the DA, namely M/s. East India Cotton Manufacturing Company Limited, to complete sale of the subject-property in favour of the Company (in Liquidation) pursuant to an agreement for sale dated September 29, 1980 entered into between DA and the Company (in Liquidation). 4. The Official Liquidator (O/L) filed an application in the year, 1989 for implementation of the said order, alternatively for leave to sue for specific performance of such agreement, which was, and s....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... applicant and the DA and a third company, which are apparently family companies. 14. It is reiterated that title in the property all along rested with the DA. 15. Learned senior counsel points out that the order dated August 14, 1987 was passed in chambers and was in the nature of a mere direction for legal action to be taken for taking possession of the property and could not be equated with a decree of specific performance of the purported agreement. Furthermore, by the said order, the purported agreement for sale was directed to be registered prior to a sale deed being executed pursuant thereto. Such registration never took place and, as such, the occasion to execute a conveyance did not arise even in terms of the said order. 16. Furthermore, it is argued by the DA that the original of the agreement- in-question has never come forth before the court. 17. It is next argued by learned senior counsel appearing for the DA that since all the secured creditors of the Company (in Liquidation) have already been paid up, no further liability remains of the contributory. Thus, the applicant has no present interest in the assets of the company. 18. Upon hearing learned seni....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a) of the 2013 Act empowers the Company Court, in a winding up proceeding, to entertain any suit/proceeding by or against a company which indicates that to assert the right of the company available in civil law, the company had to file a proper suit which can at best have been entertained by the Company Court. The Company Court would step into the shoes of a Civil Court in such event and could not have greater powers than the Civil Court de hors the law. 24. As discussed above, even the Civil Court could not pass a decree for specific performance without a judgment on trial. Several factors such as whether the company was ready and willing to perform its part of the contract and other aspects of the matter such as whether the possession of the property was ever handed over "in terms of the agreement" were to be looked into on evidence by the Company Court even if such a suit was entertained. 25. In any event, since no suit for specific performance of the agreement for sale has been filed and the statutory limitation period has already expired in that regard, the agreement, even existent, would be toothless at the juncture when the order under recall was passed and could not b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e of the recall applicant is misconceived. (iii) Effect of dismissal of the applicant's application for enforcement of the 1987 order. 32. It is an admitted position that as long back as in the year 2018, the applicant's own application for enforcement of the order dated August 14, 1987 by execution of a conveyance in favour of the company was dismissed for default. Thus, the principle embodied in Order IX Rule 9 of the Code of Civil Procedure is attracted and the applicant is, even otherwise, debarred from urging the same claim by way of the present recall application. It is well-settled that what a person cannot directly do in law, cannot be done indirectly as well. (iv) Whether the order under recall was otherwise valid in law. 33. Section 333 of the Companies Act, 2013 provides for disclaimer regarding properties of the company burdened with onerous covenants. In absence of a valid and enforceable agreement in law, at present juncture or at the juncture when the disclaimer order was passed, the subject-property was an onerous burden on the Company (in liquidation), since it had to clear off the huge amounts of arrears of occupation charges in lieu of rent as well as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....The primary ground for recall appears to be that the applicant did not have notice of the disclaimer application at the relevant point of time. 40. The said ground is based on the specious plea that Mr. Saket Sharma, the then Advocate for the applicant, had shifted practice to Rajasthan High Court in the month of May, 2023, that is, prior to the disclaimer order. 41. However, such contention has been patently belied by several orders passed after May, 2023 in the Company Petition. Mr. Saket Sharma appeared on certain occasions on behalf of the applicant, including on June 24, 2024, and had accepted service on behalf of the applicant on April 4, 2024, as well as of the notice regarding the pendency of the disclaimer application. Hence, the ground of shifting practice is a mere camouflage, in an attempt to reopen the disclaimer order on merits, and cannot be accepted. 42. Even otherwise, the shifting of practice of an advocate, who still holds power to represent a party, cannot be a good ground for recall at all. Order III Rule 3(1) of the Code clearly provides that the process served on a recognized agent of a party shall be as effectual as if it was served on the party its....