TaxTMI 
TaxTMI 
2026 (6) TMI 1466
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....ecured assets was taken and possession notice dated 02.02.2015 came to be issued. 2. It is further not in dispute that in Insolvency Petition No.71/2006, the High Court of Bombay adjudicated Mr. Anant V. Hegde, Managing Director of the borrower, and one Mr. D.V. Sathe as insolvents. 3. Despite the said adjudication, the said Mr. Anant V. Hegde is alleged to have travelled to Bengaluru and alienated certain immovable properties, including factory premises situated at Yeshwanthpur, in favour of third parties. 4. Upon coming to know of such transactions, the petitioner informed the Office of the Official Assignee, High Court of Bombay, by communication dated 23.01.2024. Pursuant thereto, Report No.5/2024 was filed before the High Court of Bombay. 5. The High Court of Bombay, upon consideration of the report, issued specific directions restraining the said Mr. Anant from acting as Chief Executive Officer and further directed the jurisdictional Sub-Registrars at Vijayanagar, Rajajinagar and Nagarbhavi to take necessary steps to declare all agreements and registered sale deeds executed by him as null and void and to desist from entertaining any further transactions in respect....
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.... (India) Ltd. inter alia, subject to the following conditions: "(i) Directed to pay 10% of his salary every month for benefit of general body of his creditors. (ii) Directed to lodge xerox copy of Salary Certificate for each and every month." 3. It is submitted that the public and private examination of the said Insolvent No.1 is still going on and as per the schedule, the liability of the Insolvent No.1 is Rs. 1,76,87,94,948/ and a total of 36 claims have been lodged with the Office of the Official Assignee against the Insolvents, totalling to Rs. 77,13,35,795.21/-. 4. The learned Official Assignee has submitted that as per the statement submitted by the Accounts Department, there is a cash balance of Rs. 4012.12 ps. and fixed deposit of Rs. 2,71,35,564/- lying in the estate account of the said Insolvents. 5. It has been submitted by the Official Assignee that one of the creditors viz., Kotak Mahindra Bank, who is today represented by Mr. Sharma had sent a letter dated 23rd January 2024 to the Office of the Official Assignee alongwith the copies of various Deeds/Agreements executed by the Insolvent No.1, in spite of having been adjudica....
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....ects the assets of the Company viz., Electrex (India) Ltd. be disclosed by the Insolvent No.1 by the next date by way of an Affidavit. 14. Let the Insolvent No.1 continue to remain present in Court on every date when the matter is listed. 15. Let the Insolvent No.2 also remain present in Court on every date when the matter is listed. 16. The Official Assignee's Report accordingly stands disposed as above." On a bare perusal of the directions extracted above, it clearly demonstrates that the High Court of Bombay, in exercise of its jurisdiction, has passed specific and operative directions declaring that the transactions executed by the insolvent, acting as CEO, are to be treated as null and void and has further directed the jurisdictional Sub-Registrars to take consequential steps. 10. It is not the case of the respondents that the said order has been stayed, modified, or set aside by any competent forum. The order has attained finality and continues to operate in the field. 11. At this juncture, it becomes necessary to emphasize the scope and import of Article 226(2) of the Constitution of India. Article 226(2) of the Constitution of India r....
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....egal status of the transactions in the registration records. 16. The inaction on the part of the respondents, despite communication of the order and subsequent representation by the petitioner, amounts to wilful disobedience of a binding judicial order and is wholly untenable. 17. Applying the aforesaid principles to the facts of the present case, this Court is of the considered view that the High Court of Bombay, having validly exercised jurisdiction in insolvency proceedings wherein the borrower and its management were adjudicated insolvent, was fully competent to issue consequential directions in respect of the properties forming part of the secured assets, notwithstanding that such properties are situated outside its territorial limits. The subsequent alienation of the secured assets at Bengaluru is not an independent or disconnected transaction, but forms an integral part of the same chain of cause of action arising out of the insolvency proceedings and the rights of the secured creditor. In that view of the matter, the directions issued by the High Court of Bombay, particularly to the jurisdictional Sub-Registrars, are binding and enforceable upon the authorities in the....
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.... concept of cause of action is to be construed liberally and pragmatically, and where a chain of events forms a continuous transaction spanning multiple States, each component constitutes a material part of the cause of action. (iii) Once a High Court validly assumes jurisdiction and issues directions, such directions are not territorially confined, but are capable of enforcement wherever their implementation is required, particularly when the subject matter of the dispute extends beyond one State. (iv) Orders of Constitutional Courts carry binding force on all executive and statutory authorities, and such authorities cannot evade compliance on the ground that they are situated outside the territorial limits of the issuing Court. (v) The Sub-Registrar, being a statutory authority discharging ministerial functions under the Registration Act, 1908, is bound to give effect to judicial directions, especially where such directions pertain to the validity of registered documents and entries in public records. (vi) Any refusal or inaction on the part of the registering authority amounts to a failure of constitutional duty, undermines the authority of ju....