IN THE HIGH COURT OF JUDICATURE AT MADRAS (Appellate Jurisdiction) Friday, the Thirty first day of October Two thousand and Eight Present THE HON'BLE MR.JUSTICE P.K.MISRA AND THE HON'BLE MR.JUSTICE K.KANNAN OSA.NOs. 44, 45, 46,47, 101, 102, 103, 104, 105, 106, 107, 108, 109, 110 and 188 of 2008 and connected Miscellaneous Petitions - - - M/s.Pyramid Saimira Theatre Ltd., Having Office at No.672, 2nd Floor Temple Towers Anna Salai,Nandanam, Chennai-35. ..Appellant in OSA 44/2008 45/08 (4th Respondent 4th Defendant) 5th Respondent 5th Defendant M/s.Lavanya & co. Proprietorship Firm rep.by Mr.N.Narayanan Having Office at No.245/6 R.K.Mutt Road, Mylapore,Chennai-4. ..Appellant in OSA No.46/08 & 47/2008 (4th Respondent/4th Defendant & 5th Respondent/ 5th Defendant) S.Paramasivam Pillai ..Appellant in OSA 101/08 (2nd Defendant) M/s. Ashoka Associates Partnership firm rep. by its Partner Mr.V.Manthiram having Office at No.9 Davidson Street, https://hcservices.ecourts.gov.in/hcservices/ Chennai-1. ..Appellant in OSA 102/2008 (3rd Defendant) S.Paramasivam Pillai ..Appellant in OSA 103/08 & 104/2008, 105/2008 2nd Respodent (2nd Defendant) M/s.Ashoka Associates Partnership firm rep.by its Partner Mr.V.Manthirani having office at No. 9 Davidson Street, Chennai-1 ..Appellant in OSA No.106/2008 107/2008,108/08,109/2008,110/2008 (Applicant & 3rd Defendant in OSA 106 to 108/2008 and 3rd Respondent & 3rd Defendant in OSA No.109/2008 & 110/2008 The Karur Vysya Bank Ltd., rep. by its Deputy General Manager Ms. J.Hariharan Divisional Officer K.V.B Towers No.568,Anna Salai, Teynampet, Chennai -18. ..Appellant in OSA No.188/2008 (1st Respondent/1st Defendant) -vs- 1.S.Murugan 2.Karur Vysya Bank Ltd., rep. by its Deputy General Manager Ms. J.Hariharan Divisional Officer K.V.B Towers (I Floor)No.568,Anna Salai, Teynampet, Chennai -18. 3.Mr.S.Paramasivam Pillai, S/o.Sri Sankara Narayana Pillai, Residing at No.51, 5th MainRoad, Natesan Nagar, Virugambakkam, Chennai-92. 4.M/s.Ashoka Associates Partnership firm rep.by its Partner Mr.V.Manthirani having office at No. 9 Davidson Street, Chennai-1. https://hcservices.ecourts.gov.in/hcservices/ 5.M/s. Lavanya and Co Proprietorship firm rep. by Mr.N.Narayanan, Having Office at No.245/6, R.K.Mutt Road,Mylapore,Chennai-4. 6.The Hon'blle Receiver Justice K.Swamidurai M/s. Aruna Theaties and Enterprises Ltd., No.6,Davidson Street,Chennai-1. 7.M/s.Aruna Theature and Enterprises Pvt. Ltd., rep. by its Board of Directors, Having Regd.Officeat No.3, Pillar Road, Ashok Nagar, Chennai-83. 8.M/s.Annai Mookambigai Rollor Flour Mills Ltd., No.6, Davidson Street,Chennai-1. 9.K.Muthusamy 10.N.Sankara Narayanan 11.N.Arunachaathammal 12.P.Muthu Rajeswari 13.M.Slanmuga Sundari 14.G.Vasugi 15.R.Lakshmi 16.S.Gomathy Ammal 17.S.Gomathy Ammal ..Respondents in OSA 44/2008 (Applicant & Respondents 1 to 15 Plaintiff & Defendants) (9th Defendant impleaded as per order dated 4.1.2008 in A.No.7054/2007) (10th Defendant impleaded as per order of Court dated 4.1.2008 in A.No.7054/2007 (11th Defendant impleaded as per order dated 4.1.2008 in A.No.70-6/2007 (34th Defendant impleaded as per order dated 4.1.2008 in A.No.7664/2007) (35th Defendant impleaded as per order dated 4.1.2008 in A.No.7669/2007) 36th Defendant Impleaded as per order dated 4.1.2008 in A.No.7674/2007 16th Respondent Impleaded as per order dated 4.1.2008 in A.No.7677/2007 https://hcservices.ecourts.gov.in/hcservices/ 1.M/s. Aruna Theatres and Enterprises Pvt., Ltd.,rep. by Board of Directors, 1.Mr.K.Murugan and Mr.K.Muthukrishnan Having its Regd. Office at No.9,Davidson Streeet,Chennai-1 and having its Corporate Office at No.3, Pillar Road, Asok Nagar, Chennai-83. 2.Karur Vysya Bank Ltd., rep. by its Deputy General Manager Ms. J.Hariharan Divisional Officer K.V.B Towers (I Floor)No.568,Anna Salai, Teynampet, Chennai -18. 3.Mr.S.Paramasivam Pillai, 4.M/s.Ashoka Associates Partnership firm rep.by its Partner Mr.V.Manthirani having office at No. 9 Davidson Street, Chennai-1. 5.M/s. Lavanya and Co Proprietorship firm rep. by Mr.N.Narayanan, Having Office at No.245/6, R.K.Mutt Road,Mylapore,Chennai-4. 6.The Hon'blle Receiver Justice K.Swamidurai M/s. Aruna Theaties and Enterprises Ltd., No.6,Davidson Street,Chennai-1. 8.M/s.Annai Mookambigai Rollor Flour Mills Ltd., No.6, Davidson Street, rep. by its Board of Directors, Chennai-1. ..Respondents in OSA No.45/2008 1. M/s. Aruna Theatres and Enterprises Pvt. Ltd Rep by its Board of Directors 1. Mr.K.Murugan and Mr.K.Muthukrishnan having its Regd.Office at No.9, Davidson Street, Chennai - 1 and having its Corporate Office at No.3, Pillai Road, Asok Nagar, Chennai - 83. 2. Karur vysya Bank Ltd Re.by its Deputy General Manager Mr.J.Hariharan https://hcservices.ecourts.gov.in/hcservices/ Divisional Office, KVB Towers,(I Floor) No.568, Annasalai, Teynampet,Chennai -18. 3. Paramasivam Pillai. 4. M/s. Ashoka Associates, Partnership Firm Rep by its Partner, Mr.V.Manthiram having office at No.9, Davidson Street, Chennai -1 5. M/s.Pyramid Saimira Theatre Ltd Having Office at No.672, 2nd Floor, Temple Towers, Anna Salai, Nandanam Chennai - 35. 6. The Hon'ble Receiver, Justice K.Swamidurai M/s. Aruna Theatres and Enterprises Pvt.Ltd. Davidson Street, Chennai - 1 7. M/s. Annai Mookambigai Roller Flour Mills Ltd.No.6, Davidson Street, Chennai - 1 ...Respondents in OSA 46/07 Applicant/Plaintiff & 1st Respondent & respondents 2 to 7 Defendants 1 to 7 1. S.Murugan 2. Karur vysya Bank Ltd Rep.by its Deputy General Manager Mr.J.Hariharan Divisional Office, KVB Towers,(I Floor) No.568, Annasalai, Teynampet,Chennai -18. 3. S. Paramasivam Pillai. 4. M/s. Ashoka Associates, Partnership Firm Rep by its Partner, Mr.V.Manthiram having office at No.9, Davidson Street, Chennai -1 5. M/s.Pyramid Saimira Theatre Ltd Having Office at No.672, 2nd Floor, Temple Towers, Anna Salai, Nandanam Chennai - 35. 6. The Hon'ble Receiver, Justice K.Swamidurai M/s. Aruna Theatres and Enterprises Pvt.Ltd. No.6, Davidson Street, Chennai - 1 https://hcservices.ecourts.gov.in/hcservices/ 7. M/s. Aruna Theatres and Enterprises Pvt. Ltd Rep by its Board of Directors having Regd.Office at No.3,Pillar Road, Asok Nagar, Chennai - 83. 8. M/s. Annai Mookambigai Roller Flour Mills Ltd.No.6, Davidson Street, Chennai - 1 . 9. K.Mutusamy 9th Defendant - Impleaded as per order dated 4.1.08 in A.No.7054/07) 10.N.Sankara Narayanan 10th Defendant - Impleaded as per order dt 4.1.08 in A.No.7054/07) 11.N.Arunachalathammal Rep.by her Power of attorney, N.Sankara Narayanan (11th Defendant - Impleaded as per order dt.4.1.08 in A.No.7061/07) 12. P.Muthu Rajeswari. 13th Defendant - Impleaded as per order dt.4.1.08 in A.No.7664/07 13. M.Shanmuga Sundari 13th Respondent - Impleaded as per order dated 4.1.08 in A.No.7662/07) 14. G.Vasugi 35th Defendant - Impleaded as per order 4.1.08 in A.No.7669/07 15. R.Lakshmi 36th Defendant - Impleaded as per order dt.4.1.08 in No.7674/07 16.S.Gomathy Ammal (16th Respondent - Impleaded as per order dt.4.1.08 in A.No.7677/077) ...Respondents in OSA 47/07 Applicant/Plaintiff Respondents (Defendant) 1 to 4,6, 7 to 12 35 & 36 https://hcservices.ecourts.gov.in/hcservices/ 1. M/s. Aruna Theatres and Enterprises Pvt. Ltd Rep by its Board of Directors 1. Mr.K.Murugan and Mr.K.Muthukrishnan having its Regd.Office at No.9, Davidson Street, Chennai - 1 and having its Corporate Office at No.3, Pillai Road, Asok Nagar, Chennai - 83. 2. Karur vysya Bank Ltd Rep.by its Deputy General Manager Divisional Office, KVB Towers,(I Floor) No.568, Annasalai, Teynampet,Chennai -18. 3. M/s. Ashoka Associates, Partnership Firm Rep by its Partner, Mr.V.Manthiram having office at No.9, Davidson Street, Chennai -1 4. M/s. Lavanya & Co,Proprietorship firm, Rep.by Mr.N.Narayanan, Having office at 245/6,R.K.Mutt Road Mylapore, Chennai -4 5. M/s.Pyramid Saimira Theatre Ltd Having Office at No.672, 2nd Floor, Temple Towers, Anna Salai, Nandanam Chennai - 35. 6. The Hon'ble Justice K.Swamidurai(retd.) Receiver M/s. Aruna Theatres and Enterprises Pvt.Ltd. No.3 Pillai Road, Ashok Nagar, chennai-83 7.M/s.Annai Mookambigai Roller Flour Mills Ltd., No.6,Davidson Street Chennai-1 1. M/s. Aruna Theatres and Enterprises Pvt. Ltd Rep by its Board of Directors 1. Mr.K.Murugan and Mr.K.Muthukrishnan having its Regd.Office at No.9, Davidson Street, Chennai - 1 and having its Corporate Office at No.3, Pillai Road, Asok Nagar, Chennai - 83. 2. Karur vysya Bank Ltd Rep.by its Deputy General Manager Divisional Office, KVB Towers,(I Floor) No.568, Annasalai, Teynampet,Chennai -18. https://hcservices.ecourts.gov.in/hcservices/ 3. S.Paramasivam Pillai. 4. M/s. Lavanya & Co,Proprietorship firm, Rep.by Mr.N.Narayanan, Having office at245/6,R.K.Mutt Road Mylapore, Chennai -4 5. M/s.Pyramid Saimira Theatre Ltd Having Office at No.672, 2nd Floor, Temple Towers, Anna Salai, Nandanam Chennai - 35. 6. The Hon'ble Justice K.Swamidurai(Retd) Receiver M/s. Aruna Theatres and Enterprises Pvt.Ltd.No.3,Pillar Road Ashok Nagar Chennai - 83 7. M/s. Annai Mookambigai Roller Flour Mills Ltd.No.6, Davidson Street, Chennai - 1 ...Respondents in OSA 101/08 Plaintiff & Defendants 1,2 & 4 to 7 1. M/s. Aruna Theatres and Enterprises Pvt. Ltd Rep by its Board of Directors 1. Mr.K.Murugan and Mr.K.Muthukrishnan having its Regd.Office at No.9, Davidson Street, Chennai - 1 and having its Corporate Office at No.3, Pillai Road, Asok Nagar, Chennai - 83. 2. Karur vysya Bank Ltd Rep.by its Deputy General Manager Divisional Office, KVB Towers,(I Floor) No.568, Annasalai, Teynampet,Chennai -18. 3. M/s. Ashoka Associates, Partnership Firm Rep by its Partner, Mr.V.Manthiram having office at No.9, Davidson Street, Chennai -1 4. M/s. Lavanya & Co,Proprietorship firm, Rep.by Mr.N.Narayanan, Having office at 245/6,R.K.Mutt Road Mylapore, Chennai -4 5. M/s.Pyramid Saimira Theatre Ltd Having Office at No.672, 2nd Floor, https://hcservices.ecourts.gov.in/hcservices/ Temple Towers, Anna Salai, Nandanam Chennai - 35. 6. The Hon'ble Receiver, Justice K.Swamidurai(retd.) Receiver M/s. Aruna Theatres and Enterprises Pvt.Ltd. No.6, Davidson Street, Chennai – 1 7.M/s.Annai Mookambigai Roller Flour Mills Ltd., No.6,Davidson Street Chennai-1 ..Respondents in OSA.103/08 & 104/08 Applicant & Respondents (Plaintiff & Defendants) 1. ARUNA THEATRE AND ENTERPRISES PVT.LTD., REP.BY DIRECTORS K.MURUGAN AND MUTHUKRISHNAN, HAVING ITS REGISTERED OFFICE AT NO.9.DAVIDSON ST, CHENNAI-1 AND HAVING ITS CORPORATE OFFICE AT NO.3, PILLAR ROAD, ASHOK NAGAR, CHENNAI-83. 2. KARUR VYSYA BANK LIMITED REP.BY ITS DEPUTY GENERAL MANAGER, DIVISIONAL OFFICE, KVB TOWERS (I FLOOR), NO.568, ANNA SALAI, TEYNAMPET, CHENNAI-18. 3. S.PARAMASIVAM PILLAI 4. M/S.LAVANYA & CO., PROPRIETORSHIP FIRM, REP.BY MR.N.NARAYANAN , HAVING OFFICE AT NO.245/6, R.K.MUTT ROAD, MYLAPORE, CHENNAI-4. 5. M/S.PYRAMID SAIMIRA THEATRE LTD., HAVING OFFICE AT NO.672, 2ND FLOOR, TEMPLE TOWERS, ANNASALAI, NANDANAM, CHENNAI-35. 6. THE HONOURABLE JUSTICE K.SWAMIDURAI, (RETD.,), RECEIVER M/S.ARUNA THEATRE AND ENTERPRISES PVT. LTD., NO.3, PILLAR ROAD, ASHOK NAGAR, CHENNAI-83. 7. M/S.ANNAI MOOKAMBIGAI ROLLER ..RESPONDENTS IN OSA.102/08 https://hcservices.ecourts.gov.in/hcservices/ FLOUR MILLS LTD., 109/08 & 110/08 NO.6, DAVIDSON STREET, (PLAINTIFF & DEFENDANT CHENNAI-1. 1, 2, 4 TO 7) 1. S. MURUGAN 2. KARUR VYSYA BANK LTD REP BY ITS DEPUTY GENERAL MANGER. DIVISIONAL OFFICE KVB TOWERS I FLOOR, NO.568, ANNA SALAI, TEYNAMPET, CHENNAI- 18. 3. M/S ASHOKA ASSOCIATES PARTNERSHIP FIRM REP BY ITS PARTNER MR V MANITHIRAM HAVING OFFICE AT NO.9 DAVIDSON STREET CHENNAI- 1. 4. M/S PYRAMID SAMIRA THEATRE LTD HAVING OFFICE AT NO.672, 2ND FLOOR, TEMPLE TOWER, ANNA SALAI, NANDANAM, CHENNAI- 35. 5. M/S LAVANYA & CO PROPRIETORSHIP FIRM REP BY MR.N. NARYANANAN HAVING OFFICE AT NO.245/6 R.K.MUTT ROAD, MYLAPORE CHENNAI- 4. 6. THE HONBLE RECEIVER JUSTICE K SWAMIDURAI M/S ARUNA THEATRE AND ENTERPRISES PVT LTD NO.6, DAVIDSON STREET, CHENNAI- 1. 7. M/S ARUNA THEATRE AND ENTERPRISES PVT LTD REP BY ITS BOARD OF DIRECTORS HAVING REGISTERED OFFICE AT NO.3 PILLAR ROAD, ASHOKA NAGAR, CHENNAI- 83. 8. M/S ANNAI MOOKAMBIGAI ROLLER ..RESPONDENTS IN OSA. FLOUR MILLS LTD 105/08, 106/08 NO.6, DAVIDSON STREET, CHENNAI- 1. (RESPONDENTS, PLAINTIFFS & DEFENDANTS 2 TO 8) & DEFENDANTS 1, 3, 4, 5 & 8) https://hcservices.ecourts.gov.in/hcservices/ 1. S. MURUGAN 2. KARUR VYSYA BANK LTD REP BY ITS DEPUTY GENERAL MANAGER. DIVISIONAL OFFICE AT KVB TOWERS I FLOOR, NO.568, ANNA SALAI, TEYNAMPET, CHENNAI- 18. 3. S.PARAMASIVAM PILLAI 4. M/S.PYRAMID SAIMIRA THEATRE LTD., HAVING OFFICE AT NO.672, 2ND FLOOR, TEMPLE TOWERS, ANNASALAI, NANDANAM, CHENNAI-35. 5. M/S.LAVANYA & CO., PROPRIETORSHIP FIRM, REP.BY MR.N.NARAYANAN , HAVING OFFICE AT NO.245/6, R.K.MUTT ROAD, MYLAPORE, CHENNAI-4. 6. THE HONBLE RECEIVER JUSTICE K SWAMIDURAI M/S ARUNA THEATRE AND ENTERPRISES PVT LTD NO.6, DAVIDSON STREET, CHENNAI- 1. 7. M/S ARUNA THEATRE AND ENTERPRISES PVT LTD REP BY ITS BOARD OF DIRECTORS HAVING REGISTERED OFFICE AT NO.3 PILLAR ROAD, ASHOKA NAGAR, CHENNAI- 83. 8. M/S ANNAI MOOKAMBIGAI ROLLER ..RESPONDENTS IN OSA. FLOUR MILLS LTD 107/08 & 108/08 NO.6, DAVIDSON STREET, CHENNAI- 1. (PLAINTIFF & DEFENDANT 1,2,4,5 TO 8) 1. S. MURUGAN 2. S.PARAMASIVAM PILLAI 3. M/S ASHOKA ASSOCIATES PARTNERSHIP FIRM REP BY ITS PARTNER MR V MANITHIRAM HAVING OFFICE AT NO.9 DAVIDSON STREET CHENNAI- 1. 4. M/S.PYRAMID SAIMIRA THEATRE LTD., HAVING OFFICE AT NO.672, https://hcservices.ecourts.gov.in/hcservices/ 2ND FLOOR, TEMPLE TOWERS, ANNASALAI, NANDANAM, CHENNAI-35. 5. M/S.LAVANYA & CO., PROPRIETORSHIP FIRM, REP.BY MR.N.NARAYANAN , HAVING OFFICE AT NO.245/6, R.K.MUTT ROAD, MYLAPORE, CHENNAI-4. 6. THE HONBLE RECEIVER JUSTICE K SWAMIDURAI M/S ARUNA THEATRE AND ENTERPRISES PVT LTD NO.6, DAVIDSON STREET, CHENNAI- 1. 7. M/S ARUNA THEATRE AND ENTERPRISES PVT LTD REP BY ITS BOARD OF DIRECTORS HAVING REGISTERED OFFICE AT NO.3 PILLAR ROAD, ASHOKA NAGAR, CHENNAI- 83. 8. M/S ANNAI MOOKAMBIGAI ROLLER FLOUR MILLS LTD NO.6, DAVIDSON STREET, CHENNAI- 1. 9. K. MUTHUSAMY (9TH DEFENDANT - IMPLEADED AS PER ORDER DATED 4.1.08 IN A.NO.7054/07) 10. M. SANKARANARAYANAN (10TH DEFENDANT, IMPLEADED AS PER ORDER 4.1.08 IN A.NO.7054/07) 11. N. ARUNACHALAMMAL REP. BY HER POWER OF ATTORNEY N. SANKARANARAYANAN (11TH DEFENDANT - IMPLEADED AS PER ORDER DATED 4.1.08 IN A.NO.7061/07) 12. P. MUTHU RAJESWARI (34TH DEFENDANT - IMPLEADED AS PER ORDER DATED 4.1.08 IN A.NO.7664/07) 13.M.Shanmuga Sundari (13th Respondent Impleaded as per order dated 4.1.2008 in A.No.7662/07) 14.G.Vasugi (35th Defendant Impleaded as per order dated 4.1.2008 in Appn.No.7669/07) https://hcservices.ecourts.gov.in/hcservices/ 15.R.Lakshmi (36th Defendant Impleaded as per order dated 4.1.2008 in Appn.No.7674/07) 16.S.Gomathy Ammal (16th Respondent Impleaded as per order dated 4.1.2008 in Appn.No.7677/07) ...Respondents(Applicant Plaintiff & Defendants 2, 6, 7, 8 9 to 11 34 to 36) Appeals under clause 15 of the Letters Patent against the order of the Hon'ble Mrs. Justice R. Banumathi, dated 4.1.2008 and made in the exercise of the Ordinary Original Civil Jurisdiction of the High Court 1.Application No. 1171 of 2007 in C.S.No. 937/07 2.Application No. 1240 of 2007 in C.S.No. 980/07 3.Application No. 1241 of 2007 in C.S.No. 980/07 4.Application No. 1172 of 2007 in C.S.No. 937/07 5.in C.S.No. 980/07 6.in C.S.No. 980/07 7.in OA.No.1240/07 in CS.No.980/07 8.in OA.No.1241/07 in CS.No.980/07 9.in OA.No.6927/07 in CS.No.937/07 10.in OA.No.6928/07 in CS.No.937/07 11.in OA.No.6929/07 in CS.No.937/07 12.in OA.No.6930/07 in CS.No.937/07 13.in OA.No.1240/07 in CS.No.980/07 14.in OA.No.1241/07 in CS.No.980/07 15.in OA.No.1169/07 in CS.No.937/07 https://hcservices.ecourts.gov.in/hcservices/ ORDER: These original side Appeals coming on for hearing on Monday the 18th day of August 2008 and on Friday the 22nd day of August 2008 upon perusing the grounds of Appeals, the order of the Hon'ble Mrs.Justice R.Banumathi dated 4.1.08 and made in the exercise of the ordinary Original Civil Jurisdiction of the High Court in Application Nos.1171, 1240, 1241 and 1172/07 in C.S.Nos.937,980, 980 & 937 and in C.S.Nos.980 & 980/07 and in O.A.Nos.1240 and 1241/07 in C.S.Nos.980/07 in O.A.Nos.6928 to 6930/07 in C.S.No.937/07 and inO.A.Nos.1240,1241 inC.S.No.980/07 and in O.A.No.1169/07 in C.S.No.937/07 respectively and all other papers materials to these cases and upon hearing the arguments of Mr.P.S.Raman, Senior Counsel for Mr.R.Sagadevan, Advocate for the Appellant in O.S.A.No.44 & 45 of 2008 and of Mr.A.R.L.Sundaresan Senior Counsel for M/s.G.Pavithra, Advocate for the Appellant in O.S.A.No.46 &47 of Mr.N.V.Srinvasan for M/s.N.V.S. Associates Advocate for the Appellant in O.S.A.101 to 110/08 and of Mr.A.L.Somayaji Senior Counsel for M/S.A.V.RadhaKrishnan, Advocate for the Appellant in O.S.A.188/08 of Mr.P.H.Arvind Pandian, Advocate for the 1st Respondent in O.S.A.44, 47 105 to 108 & 188/08 of Mr.A.K.Somayaji Sr.Counsel for M/s.A.V.Radhakrishnan, Advocate for the 2nd Respondent in O.S.A.44,45,46,101 to 110/08 of Mr.K.S.Natarajan, Advocate for the 6th respondent in O.S.A.44, 45, 46,47, 101 to 104, 105 to 108,110 and 188/08 of Mr.T.V. Ramanarayan Senior Counsel for M/s.C.Ramasankar, Advocate for the Respondent in O.S.A.44,47,105 to 108 and 188/08 and for the 1st Respondent in O.S.A.45, 46,101 to 104, 109 & 110/08 of Mr.K.Sudkar, Advocate for the 8th Respondent in O.S.A.44,47,105 to 108 and 108/2008; and for the 7th Respondent in O.S.A.45, 46,101 to 104, 109 &110/08 of Mr.Muthusamy Senior Counsel for Mr.V.Radhakrishnan,Advocate for the 9th Respondent in O.S.A.44 & 47/08 of Mr.T.R.Mani Senior Counsel for M/s.A.Raghavalu, Advocate for 10th and 11th Respondent in O.S.A.44 &188/08 of Mr.A.R.R.Sundaresan, Senior Counsel for M/s.G.Pavithra, Advocate for the 4th Respondent in O.S.A.No's 101 to 104 109,110 of 2008,5th Respondent in O.S.A.44,105 to 108 and 188/08; of Mr.P.S.Raman, Senior Counsel for Mr.R.Sagadevan, Advocate for the 4th Respondent in O.S.A.105,106,107,108 and 188/08 and for the 5th Respondent in O.S.A.46,101 to 104,109 and 110/08 of Mr.N.V.Srinvasan for M/s.N.K.S. Associates, Advocate for the 3rd Respondent in O.S.A.44 to 47/08 and having stood over for consideration till this day the court made the following order; https://hcservices.ecourts.gov.in/hcservices/ J U D G M E N T P.K. MISRA, J I have gone through the judgment so meticulously prepared by my learned Brother Kannan, J and I agree with the same. However, I would like to supplement (not supplant) by observing as follows :- There is no dispute about the right of the Bank to recover the amount borrowed from such Bank along with interest as per the transaction. There is also no dispute that the Bank has right to sell the property concerned, namely, the Theatre complex. The Company and its shareholders, who have been impleaded as interveners, unanimously agree that one time settlement with the Bank is beneficial for the Company and its shareholders. However, either individually or collectively they are not in a position to arrange for the huge fund required to complete the one time settlement. In other words, even though all of them are impugning the transactions with fourth and fifth defendants by the second defendant, they have unanimously submitted that one time settlement should not be allowed to fall-through. They are also not in a position to repay the amount received from fourth and fifth defendants. Senior Counsel appearing for the Bank has unequivocally stated that if the Bank is forced to wait indefinitely, it will not be in a position to honour the one time settlement and it will be forced to pursue its statutory remedy by completing the proceedings under the SARFAESI Act and realize the amount due to it along with the normal rate of interest by selling the property in question. Senior counsels appearing for fourth and fifth defendants have also submitted that in case they are not able to enjoy the benefit of the transactions for which they had advanced huge amount, they would be forced to pursue their right by availing legal remedy for refund of the amount paid by them with interest. In such a scenario, not only the benefit of the one time settlement would not be available to the Company and its shareholders, but also the Company would be embroiled in further litigations and the ultimate result would either be same or even more disastrous. In order to avoid such disastrous consequence, the Board of Directors of the Company, which is the plaintiff in one of the cases, has passed a resolution subject, of course, to the approval of the appropriate authorities so that the Theatre complex can be sold off and the amount payable either to the bank or the fourth and the fifth defendants, as the case may be, can be repaid. The overwhelming majority of the shareholders through their Counsels have also submitted that the best possible solution would be to sell-off the property so that the surplus amount can be distributed among all the shareholders after meeting all the liabilities. The only objection has emanated from some of the shareholders, who represent comparatively much less shares. As a matter of fact, the Senior https://hcservices.ecourts.gov.in/hcservices/ Counsels, representing such shareholders who are far less in number, have only suggested that any alternative property should be sold and not the Theatre complex. Of course, Defendant No.2 has raised vehement objection to such proposals and suggestions by raising various technical objections. Even though prima facie conclusion of the learned single Judge raises doubt regarding the bona fide of the conduct of Defendant No.2, the fact remains that the amount received from Defendant No.4 and Defendant No.5 have been utilized to make the one time settlement possible. In other words, the company and all the shareholders are the beneficiaries. The Defendant Nos.4 and 5, instead of pursuing their appeals, are prepared to take return of the amount with reasonable interest. The Company and the overwhelming majority of shareholders have suggested that the Theatre complex can be auctioned so that the Defendant Nos.4 and 5 can be repaid and the surplus amount can be distributed. In such a scenario, instead of wading through the maze of legal hurdles and technicalities, the best possible and equitable solution would be to auction the property. In order to protect the ultimate interest of the Company as well as the overwhelming majority of its shareholders and keeping in view the equitable principles, it is felt just and proper in the peculiar facts and circumstances of the case to adopt a novel method of finalising the dispute by permitting sale of the property. 31.10.2008 I. Disposition by Court of first instance: 1. All the appeals have arisen out of the common order passed on 4.1.2008 in O.A.No.1169 to 1172 of 2007 and Application Nos.6926 to 6930,6935, 6936 of 2007 in C.S.No.937 of 2007 and O.A.NO.1040 and 1041 OF 2007 in C.S.No.980 of 2007. The array of parties are as described in the first suit C.S.No.937 of 2007. C.S.No.937 of 2007 has been filed by an individual shareholder of 7th defendant company impugning certain transactions relating to the indebtedness of the 7th defendant and the 8th defendant company through the creation of mortgages, assignment of mortgages, lease and sub-mortgage. C.S.No.980 of 2007 has been subsequently instituted containing similar prayers as found in C.S.No.937 of 2007 by the 7th defendant company. A common order was passed on 4.1.2008 which found that the plaintiff had established a prima facie case by showing that all the four impugned transactions were not free from doubt in its opinion and that there were serious questions of allegations of fraud to be tried in the suit. The learned Single Judge took notice of the fact that the Receiver was able to generate income of Rs.29 to https://hcservices.ecourts.gov.in/hcservices/ 30 lakhs per month and being assured by counsel representing the Receiver that the income could be further increased by proper management and refixing the rates of tickets, the Court found that the balance of convenience lay in favour of the plaintiffs and other shareholders, who, if the interim orders were not issued would be subject to great hardship and inconvenience. Consequently, the Court passed the restraint orders against the respective defendants from acting on the four impugned documents dated 9.10.2007 In the application for removal of the Receiver, the Court found that the Receiver should continue in possession. Consequently, O.A.Nos.1169,1170,1171,1172 for grant of injunction were allowed. Applications 6926,6927, 6028,6929,6930 ,6935 and 6936 for vacating the orders of injunction at the instance of the various defendants were dismissed. Applications for impleadment of the parties filed in the injunction applications were allowed. Curiously, applications for impleadment do not appear to have been filed in the suit, but only in the applications in 7660 to 7678 in C.S.No.937 of 2007 . They were allowed. O.A.No.1240 and 1241 of 2007 filed in C.S.No.980 of 2007 were allowed granting injunction as prayed for. It is this common order passed in the above applications that is assailed in the appeals filed by affected the parties. 2. M/s Pyramid Saimeera has filed OSA.NO.44 to 47 of 2008 against O.A.NO.1169,1172 OF 2007 IN C.S.No.937 OF 2007, OSA.NoS.101 TO 110 have been filed by the second defendant Paramasiva Pillai in so far as the orders were against him in various applications OSA.188 of 2008 has been filed by the Bank in so far as there are certain observations against the bonafides of the transactions involving the bank and the assignments in favour of the second defendant. II. The nature of business and the genesis of disputes: 3. The genesis of the problem that has given rise to this spate of applications and respective appeals was the act of the 8th defendant viz., Annai Mookambigai Roller Flour Mills Private Limited, called the Mills Company, availed of a loan of Rs.759.68 lakhs from the first defendant Karyur Vysya Bank, hereinafter referred as the Bank on 12.10.1988. The loan was secured by creation of equitable mortgage of properties belonging to it . The 7th defendant, M/s Aruna Theatre and Enterprises Private Limited, hereinafter called the Theatre Company, stood corporate guarantee for the loan facility and created equitable mortgage of various assets and particularly Theatre and the premises situate in an extent of 23 grounds 1930 sq ft. There were also personal guarantees by several Directors of the Theatre Company . The Mills Company committed default in repayment of the loan that resulted in bank initiating proceedings before the Debt Recovery Tribunal, Chennai in O.A.No.18 of 2007 for Rs.12.53 Crores and odd with interest at 19.5% per annum. The bank had itself filed an original application for appointment of Receiver pending disposal of the original application and a retired Judge of this Court Hon'ble https://hcservices.ecourts.gov.in/hcservices/ Mr.Justice Swamidurai was appointed as Receiver. 4. Some of the Directors of the Mills Company are the Directors of the Theatre Company.