IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 18-11-2008 CORAM THE HONOURABLE MR.JUSTICE M.CHOCKALINGAM AND THE HONOURABLE MR.JUSTICE M.VENUGOPAL O.S.A.Nos.138 and 141 of 2003 and 227 and 228 of 2006 and CMP Nos.4834 and 5135 of 2003 O.S.A.No.138 of 2003 M/s.Samratchana Trust Rep. By its Trustee Registered Office 4/40, Ellaimman Koil Street Neelankarai Chennai 600 041. .. Proposed Appellant vs 1.Magan Singh 2.Prahalad Roy Gupta 3.Gulab Sharma Roy 4.Pratksha Kumari 5.Ratnam Sales Corporation 13, Ramanan Road, Madras 79. 6.R.Hemant Kumar 7.Ashok Rao 8.Rajam Rao 9.T.R.Rao 10.V.Mahalingam 11.Kamatchi 12.Padmini 13.C.Sasikala 14.C.N.Sivasankaran .. Respondents O.S.A.No.141 of 2003: C.N.Sivasankaran .. Appellant vs 1.Magan Singh 2.Prahalad Roy Gupta 3.Gulab Sharma Roy 4.Pratksha Kumari https://hcservices.ecourts.gov.in/hcservices/ 5.Ratnam Sales Corporation 13, Ramanan Road, Madras 79. 6.R.Hemant Kumar 7.Ashok Rao 8.Rajam Rao 9.T.R.Rao 10.V.Mahalingam 11.Kamatchi 12.Padmini 13.C.Sasikala (R13 is given up in the above appeal) .. Respondents O.S.A.No.227 of 2006: Official Assignee Official Assignee Office High Court, Madras .. Appellant vs 1.C.N.Sivasankaran 2.T.Jaswanthmal Jain 3.T.Sundari Bai 4.P.Madanlal Jain 5.M.Manohar Devi 6.Sujatha Haranath .. Respondents O.S.A.No.228 of 2006: Official Assignee Official Assignee Office High Court, Madras. .. Appellant vs 1.Sujatha Haranath 2.C.Sasikala 3.C.N.Sivasankaran 4.T.Jaswanthmal Jain 5.T.Sundarlal Jain 6.Pukhraj 7.M.Manohar Devi 8.Magan Singh 9.Prahalad Roy Gupta 10.Gulab Sharma Roy 11.Pratiksha Kumari 12.Ratnam Sales Corporation 13, Ramanan Road Madras 79 13.T.Hemant Kumar 14.Ashok Rao 15.Rajam Rao 16.T.R.Rao https://hcservices.ecourts.gov.in/hcservices/ 17.V.Mahalingam 18.Kamatchi 19.Padmini 20.Kamatchi 21.Padmini 22.Vanitha Banu 23.A.Bharath Kumar (R23 impleaded as per order of Court dated 18.11.2008 in MP No.1/2007) .. Respondents O.S.A.Nos.138 and 141 of 2003 preferred under Order 36 Rule 11 of O.S. Rules read with Clause 15 of the Letters Patent against the order of this Court dated 31.3.2003 in the insolvency Jurisdiction of this court and in Appln.No.68 of 2000 in I.P.No.59 of 1985. O.S.A.Nos.227 and 228 of 2006 preferred under Section 8(2) (b) of the President Towns and Insolvency Act and Clause 15 of Letters Patent against the order of this Court dated 10.8.2004 in Appln.Nos.289 and 290 of 2003 in I.P.No.59 of 1985 in exercise of insolvency of Jurisdiction of this Court. For Appellants : Mr.I.Paranthaman in OSA 138/2003 Mr.A.L.Somayaji, Senior Counsel for Mr.G.Nagarajan in OSA 141/2003 Mr.R.Krishnaswamy Senior Counsel for Mr.C.Ramesh in OSA Nos.227 & 228/2006 For Respondents : Mr.M.Jayaraman for RR1 to 12 in OSA Nos.138 & 141/2003 and for RR14 & 15 in OSA 228/2006 Mr.R.Krishnaswamy Senior Counsel for Official Assignee Mr.G.Rajan for R13 in OSA 138/2003 Mr.G.Nagarajan for R1 in OSA 227/2006 and for R3 in OSA 228/2006 Mr.P.B.Balaji for Mr.P.B.Ramanujam for RR2 to 5 in OSA 227/2006 Mr.T.P.Shankaran for R6 in OSA.227/06 and for R1 in OSA 228/2006 Mr.R.Krishnamoorthy Senior Counsel https://hcservices.ecourts.gov.in/hcservices/ for Mr.Srinath Sridevan for R22 in OSA 228/2006 Mr.A.Babu for R23 in OSA 228/2006 COMMON JUDGMENT (Judgment of the Court was delivered by M.CHOCKALINGAM, J.) This order shall govern all the above four appeals. 2.O.S.A.Nos.227 and 228 of 2006 have arisen from the common order of the learned Single Judge whereby Application No.289 of 2003 filed by the Official Assignee seeking to declare the sale deed dated 24.7.1985, as null and void, was dismissed, while Application No.290 of 2003 filed by one Sujatha Haranth seeking to review or rescind or vary the order made in Application No.68 of 2000 insofar as the immovable property bearing No.W-7 North Main Road, Western Extension, Anna Nagar, Chennai, was allowed. 3.O.S.A.No.138 of 2003 has been brought forth by the appellant namely Samratchana Trust against the order of the learned Single Judge made in Application No.68 of 2000 issuing directions to the Official Assignee to administer the trust properties. While allowing that application, the learned Single Judge has also issued a direction to the second respondent therein namely C.N.Sivasankaran, to surrender his passport. Aggrieved over the same, the said Sivasankaran has brought forth O.S.A.No.141 of 2003. 4.At the outset, it has to be stated that neither the Trust nor the Trustees during the relevant point of time were added as parties to the proceedings in Application No.68 of 2000. Needless to say that without hearing the necessary party, no order could be passed. But, in the instant case, the said order was passed against the Trust itself, and hence that part of the order, in the considered opinion of this Court, has got to be set aside since it is not only against the settled principles of law, but also offending the principles of natural justice. In such circumstances, that part of the order of the learned Single Judge in Application No.68 of 2000 is set aside. 5.When the above appeals were taken up for enquiry and remained part heard, the 22nd respondent in OSA No.228 of 2006 who purchased the property from the 3rd respondent in that appeal, has made a suggestion that for getting the ratification of the sale deed already executed in her favour, she was willing to pay a sum of Rs.45 lakhs in order to satisfy the creditors. The Official Assignee was also amenable. This Court is of the considered opinion that such a course of payment to be made by the 22nd respondent which would come to the estate of the insolvent, would be beneficial to the interest of and also would satisfy the body of creditors to the larger extent and also the estate of the insolvent. It remains to be stated at this juncture that the https://hcservices.ecourts.gov.in/hcservices/ deposits were made before 20 or 25 years. Under the circumstances, it would be fit and proper and also in the interest of the creditors, the parties could be permitted to follow the said course. 6.On the earlier occasion, there was a direction issued by this Court to the effect that one representative for the Counsel for the depositors and also one for the Counsel for the 22nd respondent must sit, peruse the documents and find out the creditors who have got to be paid among the claims made. According to the report filed, claims made by 91 claimants have been proved, and they have got to be paid. 7.Now, at this juncture, the learned Counsel appearing for the body of the creditors brought to the notice of the Court that there are more creditors whose interest has got to be looked into. In view of the said contention, it would be proper to direct the Official Assignee to wait for a period of six months within which period if new claims are made, they could be scrutinized, and the Official Assignee could decide whether those claimants are entitled to get money on their claims. 8.This day, when the matter was taken up for hearing, a compromise memo singed by the respective Counsel was filed. The same is recorded. That apart, a Cheque for a sum of Rs.45 lakhs (Rupees forty five lakhs only) is handed over by the learned Counsel for the 22nd respondent to the Official Assignee. The same is also received by the Official Assignee. The said amount of Rs.45 lakhs would include the Government Commission and the Senior Counsel's fee of Rs.1 lakh. Excepting those amounts, the balance amount should be deposited with the Indian Bank, High Court Branch, Madras, in order to yield interest, which will be in the interest of the depositors. 9.Accordingly, six months' time is granted to the Official Assignee during which time he is directed to peruse and scrutinize the other claims already made and to be made within the stipulated period, and if proved and payable, they should be added along with the other claims already proved, numbering 91. The Official Assignee is also directed to issue a public notice calling for the claims which have got to be made within the stipulated time of one month from the date of publication. After the said period of six months is over, the amount so deposited with the Bank, has got to be distributed to the creditors by obtaining necessary orders from the Court. That apart, after the cheque is encashed and the balance amount as stated above, is deposited by the Official Assignee, he is directed to execute a ratification deed in favour of the 22nd respondent in OSA No.228/2006 in respect of the property in question within a period of two weeks therefrom. The cost of preparation and also the ratification deed have got to be borne by the 22nd respondent. 10.In view of the circumstances stated above and also in view of the above order, it is not necessary to direct the second respondent in Application No.68 of 2000 to surrender his https://hcservices.ecourts.gov.in/hcservices/ passport. This Court is of the view that the said order of the learned Single Judge has got to be set aside, and accordingly, it is set aside. 11.In the result, O.S.A.Nos.138 and 141 of 2003 are allowed. O.S.A.Nos.227 and 228 of 2006 are, accordingly, disposed of. No costs. The said compromise memo will form part and parcel of the record. Consequently, connected CMPs are closed. (Here attached Xerox Copy of Memo of Compromise) Nsv/ Sd/ Asst.Registrar /true copy/ Sub Asst.Registrar To 1. The Sub Assistant Registrar, Original Side, High Court, Madras 104. 2. The Official Assignee, Official Assignee Office, High Court, Madras. + 1 cc to Mr. G. Nagarajan, Advocate, SR No.64223 + 1 cc to Mr. C. Ramesh, Advocate, SR No.64226 + 1 cc to Mr. M. Jayaraman, Advocate, SR No.64285 + 1 cc to M/s. T. P. Sankharan, Advocate, SR No.64479 + 1 cc to Mr. P. B. Ramanujam, Advocate, SR No.64471 + 1 cc to M/s. Srinath Sridevan, Advocate, SR No.64337 OSA Nos.138 and 141/2003 and 227 and 228/2006 KSK(CO) SR/29.12.2008 https://hcservices.ecourts.gov.in/hcservices/