1 srk- IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY APPLICATION (L) NO. 212 OF 2010 IN COMPANY PETITION NO. 536 OF 2003 Virendra Kumar Agarwal .. Applicant Versus Claridges Travels Private Limited & Ors. .. Respondents Mr.B. Sarag a/w Mr. Rahul Rajadhyax i/b Adhia & Adhia for the Applicant. Mr. Zubin Behramkamdin i/b Mulla & Mulla for the Respondent No.3. Ms. Rupa Bhave a/w Ms. Aarti Khadilkar i/b Bhave & Co. for the Respondent No.5. Mr. A.M. Kazi, Deputy Sheriff of Mumbai present. Official Liquidator present. CORAM : S. J. KATHAWALLA, J. DATE : 13th April, 2010 P.C.: 1. Not on board. Taken on board. 2. By this application the applicant who is a shareholder and director of M/s Radiant Shipping Limited, the Company in liquidation has sought to restrain the Respondent Nos. 3 and 4, from selling the property of the Company in Liquidation namely Office no.167 ad-measuring 1180 square feet (carpet area) situated at Atlanta, 16 th Floor, Nariman Point, Mumbai – 400 021, or from taking any other steps infurtherence of the Execution Application No. 469 of 2006 in respect thereof. 2 3. It is the case of the Applicant that Respondent No.3 is an unsecured Creditor of the Company. Pursuant to an ex-parte decree, passed in Summary Suit No.2338 of 2001 in favour of Respondent No.3 and against the Company, respondent No.3 took out Execution Application No. 469 of 2006 and applied for attachment and sale of the said property. The office of the Sheriff, thereafter, issued a proclamation of sale dated 5 th March, 2010 for the sale of the said property and invited bids for the purpose of auction to be held on 13 th April, 2010 i.e. today at 12 noon. The said proclamation was advertised in the Times of India, Mumbai Edition dated 22 nd March, 2010. 4 Mr. Pankaj Agarwal one of the shareholders of the Company upon coming to know of the said auction, immediately addressed a letter dated 29 th March, 2010 to the office of the Sheriff and interalia pointed out that the said Company was ordered to be wound up and the Official Liquidator (Respondent No.2) was already appointed as Liquidator of the estates and properties of the Company. It was also pointed out that the said property was mortgaged by the said Company in favour of the Respondent No.5 and that Respondent No.5 has already adopted proceedings for the recovery of the amounts that were allegedly due to them and for the enforcement of the security in their favour. 5 According to the Applicant inspite of the above letter dated 29 th March, 2010 addressed to the Sheriff of Mumbai there was no response to the same. The Applicant therefore personally attended the office of the 3 Sheriff on 9 th April, 2010 when he learnt that the auction was to be held on 13 th April, 2010 as mentioned in the proclamation without taking any notice or cognizance of the letter dated 29 th March, 2010 and without responding to the same. 6 Mr. A.M. Kazi, Deputy Sheriff of Mumbai who is present in Court has informed the Court that on 30 th March, 2010 itself, the advocate of the Respondent No.3 i.e. M/s Mulla & Mulla Craigie Blunt and Caroe were informed of the receipt of the said letter dated 29 th March, 2010, by his office. 7 It is submitted on behalf of the Applicant that the Respondent No.3 could not have proceeded with the Execution Application No. 469 of 2006 after the passing of winding up order of the Company on 12 th November, 2008, without obtaining leave of this Court as required under the Companies Act, 1956. Further, it is not open for the Respondent No.3 to put the said property of the company to sale, since any sale of the property of any company in liquidation in any execution proceedings without the leave of the court would be void. It is further submitted that Respondent No.5 claims to be a secured creditor and claims that the said property of the company in liquidation is mortgaged to the Bank. It is submitted that a security of the secured creditor cannot be sold by any unsecured creditor of a company in any proceeding. It is therefore submitted that in the interest of justice Respondent No. 3 and 4 be restrained by an order of this 4 Court from selling the property of M/s Radiant Shipping Limited (in liquidation). 8 Admittedly the Company M/s Radiant Shipping Limited was ordered to be wound up on 12 th November, 2008 and the Official Liquidator was appointed as Liquidator of the assets and properties of the Company in liquidation. Therefore, it was not open for the Respondent No.3 to put the said property of the Company to sale in any execution proceedings without the leave of the Court. Respondent No. 3 and 4 after receiving the notice dated 29 th March, 2010 informing them that the Company is in liquidation, ought to have taken cognizance of the same and cancelled the auction. Instead Respondent Nos.3 and 4 have ignored the said notice and attempted to proceed with the auction sale, in violation of the provisions of the Companies Act, 1956. Under the circumstances, the Application is allowed in terms of prayer clause (a). The Official Liquidator shall forthwith take possession of the said property. 9 The Application is accordingly disposed of. 10 The Advocate for the Applicant undertakes to have the Application numbered within one week from today. (S. J. KATHAWALLA, J.)