R.Vijayakumar v. M.Ravindran Sr.Advocate, Administrator Anubhav Group of Companies (In Liquidation), Chennai

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATE : 21.10.2008CORAMTHE HONOURABLE MR. JUSTICE S.J.MUKHOPADHAYAANDTHE HONOURABLE MR. JUSTICE M.VENUGOPALO.S.A. NO. 129 OF 2007MP.No.1 of 2007R.Vijayakumar.. Appellant (Applicant)- Vs -1. M.Ravindran Sr.Advocate, Administrator Anubhav Group of Companies (In Liquidation), Chennai.2. The Official Liquidator High Court, Madras.3. J.Sekar .. Respondents (Respondents) (R-3 impleaded as per order of Court dt. 7.8.07 in MP 2/07)Original Side Appeal filed against the order dated 19th Jan., 2007,passed by the learned single Judge in C.A. No. 1037/06 in C.A. No.211/03 in C.P. No.130/99 as stated therein.For Appellants: Mr. R.ThiagarajanFor Respondents : Mr. M.Ravindran, SC – Administrator Mr. T.K.Seshadri, SC, for Mr. R.Murari for R-3JUDGMENTS.J.MUKHOPADHAYA, J.In the company petition, the appellant, R.Vijayakumar filed companyapplication, C.A. No.1037/06 to set aside the sale pursuant to orderdated 11th Nov., 2003, passed by the Court in C.A. No.211/03 in respectof lands situated in survey No.3 to an extent of 1.20 acres inKazhipattur village, Kanchipuram District. Learned Judge havingrejected the application, the present appeal has been preferred. https://hcservices.ecourts.gov.in/hcservices/

2. According to the appellant, agreement for sale of certain landswere reached between M/s.Good Luck Inn Pvt. Ltd. represented by itsManaging Director, Mr.R.Vijayakumar with Mr.C.Natesan of the company inliquidation. In most of the cases full consideration amount wasreceived except some in which certain amounts were payable. In somecases, sale deeds were executed; in some cases sale deeds were prepared,but not executed and in all cases none of the sale deeds wereregistered. The grievance of the appellant is that, this Court, by itsorder dated 18th Dec., 2003, directed the Official Liquidator to executethe sale deed in respect of 7.875 acres of land in Kazhipattur villagein favour of the auction purchase including the 1.20 acres of land inquestion.3. Learned counsel for the appellant submitted that the total moneyhaving received in most of the cases, the appellant filed applicationonly with regard to land situated in survey No.3 to an extent of 1.20acres in Kazhipattur village, Kanchipuram District and not for the otherlands. The following details with regard to the lands belonging to theappellant, auction sold by the Official Liquidator pursuant to court'sorder have been shown as follows :-Agreement for Saledt. 24.1.94M/s.Good Luck Inn Private Limited representedby its Managing Director, Mr.R.Vijayakumarentered into Three agreements for sale withMr.C.Natesan to sell the following propertiessituate at Kazhipattur and MuttukaduVillages :-1) Survey No.95/1A, 1C, 2A, 1B – measuring anextent of 50 cents in Mutukadu village.2) Survey No.19/2C – mesauring an extent of 79cents in Kazhipattur village.3) Survey No.19/2D – measuring an extent of 75cents out of 91 cents in Kazhipattur village.Total SaleconsiderationRs.21,50,000/=Cheque forRs.10,00,000/=issued notpresentedThe total sale consideration agreed wasRs.21,50,000/=. The appellant received acheque for Rs.10,00,000/= issued byMr.C.Natesan vide cheque bearing No.072601 dt.24.1.94 drawn on Karnataka Bank Ltd.,Kodambakkam Branch. However, the chequeissued for Rs.10 lakhs has not been presentedfor payment on instructions from Mr.C.Natesan.Period - 6 monthsTime agreed for completion of the transactionwas 6 months https://hcservices.ecourts.gov.in/hcservices/ Agreement for saledt. 28.1.94Another agreement for sale had been enteredinto with C.Natesan on 28.1.94 for sale of theproperty situate at No.37, Kazhipattur villagecomprised in survey No.20, measuring an extentof 5.42 acres or thereabout.Sale value –Rs.27.10 lakhsAgreed sale consideration was 27.10 lakhsAmount received by appellant – Rs.1.90 lakhsby cheque bearing No.072602 dt. 28.1.94 drawnon Karnataka Bank Ltd., Kodambakkam Branch.Agreement for saledt. 24.1.94Another greement dt. 24.1.94 was entered intoin respect of the property situate atKazhipattur village, measuring an extent of5.28 acres or thereabout comprised in varioussurvey nos.Sale consideration– Rs.26.40 lakhsTotal sale consideration that has been fixedwas Rs.26.40 lakhsAmount recd. -Rs.1,00,000/=Amount received – Rs.1,00,000/= by way ofdemand draft dt. 31.1.94 in the name ofMrs.E.Chinnammal.The balance sale consideration payable withina period of 6 months.Since the sale transaction could not becompleted within the stipulated period of sixmonths from the date of respective agreementfor sale, the agreements stood terminated andcancelled..The appellant, the 3rd party files a memointimating the Administrator that he hasentered into an agreement for sale withC.Natesan in an individual capacity and assuch, the same is outside the scope of thecompany petition and as such there cannot be asummary adjudication or a proceeding underSec. 477 of the Companies Act in respect ofthe aforesaid transactions.Memo in C.P.No.130/99Administrator files a Memo in C.P. No.130/99 https://hcservices.ecourts.gov.in/hcservices/ Fresh agreementdt. 9.5.96 –extent of land :15.50 acresA fresh agreement dt. 9.5.96 had been enteredinto by the appellant with C.Natesan for saleof the properties measuring an extent of 15.50acres or thereabout in the aforesaid villages.25 sale deedsBetween 30.11.96 and 26.6.97, R.Vijayakumarhad executed 25 sale deeds in the name ofC.Natesan and his nominees and the landsconveyed under those sale deeds measure anextent of 6 acres 67.5 cents or thereabout inthe above villages.Total saleconsideration –Rs.1,91,25,000/=The total sale consideration payable underagreement for sale dt. 9.5.96 in respect ofthe properties to be conveyed –Rs.1,91,25,000/=Sale deedsexecuted &registeredSale deeds were executed and registered infavour of C.Natesan or his nominees between30.11.96 and 26.06.97.10 documentssigned10 documents have been signed. But, however,not registered before the Registrar ofAssurance (measuring an extent of 3.00 acres).3 sale deeds notsigned & notpresented forregn.3 sale deeds not signed by the appellant and,consequently, they have not been presented forregistration (measuring an extent of 1.20acres).So far as 1.20 acres of disputed land is concerned, the followingreceipt have been shown by the appellant :-Dispute in respectof 1.20 acresDispute relates to the property situate atKazhipattur comprised in survey No.3 measuringan extent of 1.20 acres or thereabout.Balance receivableby appellant –Rs.21,25,000/=Consideration agreed : Rs.1,91,25,000Payment received : Rs. 1,70,00,000 --------------------Balance receivable as Rs. 21,25,000per agreement for sale-------------------- https://hcservices.ecourts.gov.in/hcservices/

4. Learned counsel appearing on behalf of the appellant assailed theauction sale in respect of 1.20 acres of land and made the followingsubmission :-a) The sale deeds having not registered, there was no sale in favourof the company in liquidation and third party's properties cannot beauction sold in a company petition for liquidation against the company.b) The appellant was neither noticed nor had any knowledge of theorder passed by the Court directing the Official Liquidator to auctionsell the land, as he was not a party to the application, C.A. No.211/03.It was submitted that learned Judge failed to notice the aforesaidfact relating to non-registration of the documents amounting to notransfer in favour of company nor decided the question of validity ofauction without notice to the appellant. It was informed that neitherany encumbrance certificate was obtained nor original title deed washanded over to the company, and, without verifying the same the Courtordered for auction sale of 7.875 acres of land.5. Mr. M.Ravindran, learned senior counsel and Administrator for thecompany under liquidation and the Official Liquidator refuted theallegations that the appellant had no knowledge with regard to theauction. It was submitted that the appellant had not come with cleanhands; he had prior knowledge of the Court's order directing theOfficial Liquidator to auction sell the property and that total auctionsale of 7.875 acres cannot be declared to be illegal, relief havingsought for only with regard to 1.20 acres of land. He also highlightedthe manner in which the appellant executed some of the sale deeds andduped the company by not executing all sale deeds or presenting the samefor registration.6. We have heard the learned counsel for the parties, noticed therival contentions and also perused the record.From the record it appears that the Court, by order dated 2nd Nov.,1999, in C.A. No.130/99 noticed that besides the plaintiff's land of 881acres, another 2500 to 3000 acres of lands are available, but no titledeeds were available. They are in possession of the company. It wasalso brought to the notice of the Court that number of properties,including the lands at Muttukadu on the Chennai – Mamallapuram roadmeasuring 7.5 acres; 48.51 acres of land in Kumarakom in Kerala; 19.84acres of land at Valparai near Coimbatore; about 220 plots, each to theextent of 2.5 grounds in Sriperumbudur; 4.82 acres of land at Maraknam;about 9.64 acres of land in Munnar (Kerala); country club atSriperumbudur 1.7 acres of land with a built up area of 22,804 sq.ft.;built up commercial area at Anna Nagar, Chennai, measuring 1,000 sq.ft.,etc., were readily available for sale. Some of the properties are saidto stand in the name of Mr.C.Natesan, one of the Director of thecompany. By the said order, Mr.M.Ravindran, Sr. Counsel was appointedas the Administrator, as the Official Liquidator has already beenburdened with winding up of large number of companies.The said order was challenged by Anubhav Investors Association Ltd.before the Supreme Court in SLP (Civil) No.6935/00 and it was dismissed https://hcservices.ecourts.gov.in/hcservices/ on 2nd Nov., 2001. Only, thereafter, learned Judge allowed the partiesto file company application with Judges summons.7. In the company petition, the Administrator filed a memo on 16thAug., 2000, bringing to the notice of the court that 300 huts had beenput up in survey No.20, which is in the middle of other survey numbers.The land sold by R.Vijaykumar (appellant herein) having encroachednobody will come forward to buy those lands and, therefore, prayed thatthe rest of the lands may be taken over by the Government and theGovernment may be pursued to give equal extent of land, i.e., 5.51 ½acres of land elsewhere in the same village.In the said application, the appellant, R.Vijayakumar filedobjection. In the said objection, R.Vijayakumar (appellant herein) gavedetails of agreement signed between 1994 and 1996 in favour ofMr.C.Natesan of the company. All the facts as shown and grounds takenin the present appeal have also been brought to the notice of the Court.Only after hearing the parties, including the appellant herein, theCourt passed order on 18th Jan., 2001. Notice was ordered toR.Vijayakumar and also to the Government of Tamil Nadu. Since theinterest of large number of depositors of Anubhav Group of Companies wasinvolved, it was directed that investigation should be conducted by CB-CID of the State of Tamil Nadu by higher officers, not lower in the rankthan that of the Superintendent of Police.8. It is not in dispute that after the aforesaid order aninvestigation was made by CB-CID and appellant has been charge sheetedin a criminal case along with other State Government Officials. Theappellant, R.Vijayakumar, challenged the abovesaid order of the Courtbefore Division Bench, which was dismissed by order dated 22nd Feb., 202in O.S.A. No.401/01. Thereafter, the Court directed to auction sell theproperties vide order dated 9th April, 2003 and asked to publish noticein eight national newspapers. Draft sale notice was approved by theCourt, whereinafter tender-cum-notice was published on 14th Sept., 2003.The Administrator having submitted report in regard to tender, theCourt, vide order dated 12th Nov., 2003 ordered to execute sale deed infavour of J.Sekar (3rd respondent herein).9. The aforesaid fact shows that the appellant had knowledge atleastsince 2000 when he filed objection with regard to sale of land on 1stNov., 200. The appellant's objection, though rejected, and upheld byDivision Bench vide order dated 26th Feb., 2002, in O.S.A. No.401/01,wherein the appellant R.Vijayakumar himself was the appellant, but hedid not choose to move against the said order before the Superior Court.The order of the Court dated 9th Feb., 2003 to auction sell the propertyby publication of notice in eight national newspapers was neverchallenged by the appellant though he had knowledge of the case since 1stNov., 2000. Though the auction was was made pursuant to the Court'sorder dated 12th Nov., 2003, but the auction sale was not challenged.A draft affidavit was prepared by the appellant on 16th March, 2004,which is at page-95 of one of the typed-set to set aside the order dated11th March, 2003 and was served on the others, but for reasons best known https://hcservices.ecourts.gov.in/hcservices/ to the appellant, it was not filed for two years. Only two yearsthereon, it was actually filed in 2006.10. Learned counsel appearing on behalf of the appellant raised thequestion with regard to the nature of sale of property belonging to theappellant in absence of a registered sale deed. It has not beendisputed that he consideration amount in most of the cases has beenreceived by him. It is for the said reason the Court allowed time tothe parties so as to enable the appellant to accept the rest of theamount, if any, due from the company through the Official Liquidator,but the appellant was not agreeable to the same. On the other hand, theappellant offered to give back the consideration amount with interestafter four years of sale deed. This was not accepted by theAdministrator as sale has already taken place and the sale made infavour of the 3rd respondent, J.Sekar is not under challenge in thepresent appeal.11. The question whether the transfer made by the appellant infavour of the company was legal or not was not to be determined in thepresent company petition. If the company was in possession of the land,as was shown before learned Judge in their affidavit, if any amount wasdue to the company it was well within the jurisdiction of the Court toauction sell the property. The order of the Court dated 9th April, 2003directing the Official Liquidator to auction sell the property bypublication of notice in eight national newspapers having not beenchallenged, the matter could not have been reopened in the companypetition.12. We find the appellant also suppressed material fact that out ofthe total lands he sold some of the Government lands and for that chargesheet has been served against him. It is also not in dispute thatthough total land was more than 5 acres, but his claim is only withregard to 1.20 acres and not for the rest of the area, though sold inthe same manner. In view of the admitted facts as mentioned above, wefind no ground made out to interfere with the order passed by learnedJudge.There being no merit, the appeal is dismissed. There shall be noorder as to costs. Consequently connected MP.No.1 of 2007 is closed.Sd/Asst.Registrar/true copy/Sub Asst.RegistrarGLN https://hcservices.ecourts.gov.in/hcservices/ To1. The Sub Assistant Registrar,Original Side,High Court, Madras.2. M.RavindranSr.Advocate, AdministratorAnubhav Group of Companies(In Liquidation), Chennai.3. The Official LiquidatorHigh Court, Madras.2 cc To Mr.R.Thiagarajan, Advocate, SR.5863.1 cc To Mr.M.Ravindran, Advocate, SR.58520. O.S.A. NO. 129 OF 2007 BV(CO)RVL 23.10.2008