Company Application No.2296 of 2008, Company Application No.141 and 291 of 2009 in Com.Appln.No.2296 of 2008 in C.P.No.17 of 2004 P.JYOTHIMANI,J. These applications are filed by the applicant which is a licensed Money Exchange House in U.A.E. and carrying on exchange and remittance business for the past 28 years having several branches in United Arab Emirates (UAE). 2. The brief facts leading to the filing of above applications are as follows: On 17.3.2008, the demand drafts bearing Nos.074186 to 074205 each for a sum of Rs.1,18,00,000/- totalling Rs.23.60 crores had been issued by the applicant company in favour of the Official Liquidator, High Court, Madras. The demand drafts were drawn on Canara Bank, Foreign Department, Chennai. The demand drafts were purchased by one Mr.Kochupillai Thulasi Das, Chairman and Managing Director of M/s.Power Engineering International FZCO, Jebel Ali, Dubai from the applicant company. 2(a). It is the case of the applicant that the said demand drafts were obtained by Mr.Kochupillai Thulasi Das in collusion with the 2nd respondent M/s.Fairdeal Supplies Private Limited having Office at Kolkata. It appears that the applicant issued the above said demand drafts based on the request made by the said Mr.Kochupillai Thulasi Das and one Mr.Ray Divakar, Power of Attorney Holder of the wife of Mr.Kochupillai Thulasi Das viz., Mrs.Santhakumari Amma, on issuance of a cheque dated 17.3.2008 drawn on Commercial Bank of Dubai, Jabel Ali Branch, Dubai for a sum of AED 21,320,340.00 as consideration for purchasing the above said demand drafts. It is stated that the said cheque issued by Mr.Kochu Pillai Thulasidas and Mr.Ray Divakar was dishonoured on 18.3.2008 and before any steps could be taken by the applicant, the said Kochu Pillai Thulasidas had fled the country. 2(b). The said demand drafts were stated to have been passed on by the second respondent in auction sale conducted by this Court in respect of the properties of M/s.SIV Industries Limited under liquidation. The second respondent was stated to have participated in the auction and he was the second highest bidder. When the highest bidder failed to pay the amount, there was an order for fresh auction and that was challenged by the second respondent in O.S.A.No.383 of 2007. The Division Bench of this Court directed the second respondent to deposit a sum of Rs.23.60 crores within a period of 15 days and the balance sale consideration of Rs.212.24 crores within 60 days from the date of deposit of the above said amount of Rs.23.60 crores, which is the E.M.D. amount calculated at the rate of 10% of the sale consideration. It is stated that the second respondent deposited the said demand drafts issued by the applicant company to the extent of Rs.23.60 crores for purchasing the properties of M/s.SIV Industries Limited. Since the balance amount was not paid by the second respondent, there was a direction by the Division Bench, forfeiting the said sum of Rs.23.60 crores and the same has gone to the account of the Official Liquidator. 2(c). Coming to know about the alleged fraud committed by the second respondent, the applicant moved a petition before the Division Bench to implead itself as a party and also filed another petition for injunction against the Official Liquidator from dealing with the said amount of Rs.23.60 crores. 2(d). When O.S.A.No.383 of 2007 was taken up for hearing on 17.4.2008, the Division Bench recorded the undertaking given by the learned counsel for the appellant in that case who is the second respondent herein that the second respondent would resolve the dispute with the applicant herein and that rest of sale amount of Rs.212.4 crores would be deposited. However, in spite of time granted by the Division Bench, the second respondent did not choose to deposit the balance sale consideration and ultimately, the O.S.A. came to be disposed of by the Division Bench on 28.8.2008, with direction to forfeit the amount of Rs.23.60 crores deposited by the second respondent. 2(e). In respect of the rights of the applicant, the Division Bench while declining to decide the same in the appellate stage, since it would involve enquiry on the question of fact whether the second respondent (appellant before the Division Bench) had actually obtained the demand drafts for Rs.23.60 crores by playing fraud on the applicant company and therefore, the matter has to be decided by this Court after hearing the parties on merits. It was also observed by the Division Bench that if this Court comes to the conclusion favourable to the applicant on merits, the order of forfeiture for Rs.23.60 crores made by the Division Bench shall not stand in the way of the Company Court to proceed on merits. 2(f). It is by virtue of the said direction, the present application, C.A.No.2296 of 2008 has been filed by the applicant seeking for a direction against the Official Liquidator to refund a sum of Rs.23.60 crores deposited by the second respondent with the Official Liquidator as E.M.D. with interest. 3. Pending the above said application, the applicant company has also filed C.A.No.141 of 2009 for direction against the Commissioner of Police to investigate the complaint dated 11.11.2008 stated to have been given against the second respondent and C.A.No.291 of 2009 to implead the proposed party, M/s. Assets Reconstruction Company (India) Limited, Mumbai, which is one of the secured creditors of the company under liquidation. 4. The Official Liquidator in his report dated 30.6.2009 has stated that the said M/s.SIV Industries Limited was wound up by order dated 25.8.2004 in C.P.Nos.17 of 2004 and 107 of 2001 and the Official Liquidator has taken possession of all available assets valued by ITCOT Consultancy as per directions. The sale conducted in respect of factory was confirmed in favour of one Jalal Nazaar for Rs.236 crores on 2.11.2007 and he paid Rs.10 crores being 10% of the upset price fixed by the Court and obtained extension of time for making the balance E.M.D. Ultimately, the sale came to be cancelled and the E.M.D. paid by him was forfeited. The said Jalal Nazaar filed appeals in O.S.A.Nos.381 and 382 of 2007. 4(a). In the meantime, the second respondent who was the next highest bidder offering a sum of Rs.236 crores for the properties has also filed O.S.A.No.383 of 2007 and paid 10% of E.M.D. viz., Rs.23.60 crores. Since both of them have not paid the balance amount, the Division Bench in the order dated 28.8.2008, confirmed the Single Judge order dated 23.8.2008 forfeiting the E.M.D. made by the highest bidder as well as the second respondent and remanded the matter to the Company Court again. 4(b). As far as the events stated to have happened by the first respondent about the issuance of Demand Drafts to Mr. Kochupillai Thulasi Das and another are concerned, the Official Liquidator is not aware of the same, however, according to him, the demand drafts were handed over to the Official Liquidator on 18.3.2008 and the same were encashed on 19.3.2008. It is stated that Abu Dhabi Court punished the said Kochupillai Thulasi Das and the power of attorney agent, Ray Divakar on 22.4.2008 by imposing imprisonment for three years. However, since the said two persons were not traceable, the Red Corner alert against those accused was issued through Interpol in Abu Dhabi. It is stated that the amounts realised by the Official Liquidator were already distributed among the secured creditors and workmen as per the orders of this Court from time to time. It is denied that the Official Liquidator is an unjust beneficiary. 5. In the counter affidavit filed by the second respondent, while questioning the maintainability of the application before this Court, it is stated that the second respondent has nothing to do with the preparation of the demand drafts which were issued in the name of Official Liquidator, Madras and any accommodation by the applicant company to its customers in issuing demand drafts is a business transaction, and the applicant has to work out its remedy only against those customers. It is also denied by the second respondent that it has played fraud in obtaining such demand drafts. It is stated that the second respondent has entered into a written arrangement with M/s.Power Engineering International FZCO, Jebel Ali, Dubai which had agreed to have an assignment of this respondent's right in its favour for a consideration. It is, pursuant to the said arrangement, the said M/s.Power Engineering International FZCO, Jebel Ali, Dubai agreed to provide an initial amount of Rs.23.60 crores, which was also provided. The demand drafts were submitted to the first respondent, Official Liquidator which were genuine and encashed. It is stated that the second respondent was not aware as to who had obtained the said demand drafts and the second respondent had not been a party to any fraud alleged to have been committed. It is stated that as per the arrangement since the party, viz., M/s.Power Engineering International FZCO, Jebel Ali, Dubai did not bring any more funds, the transaction was not able to be proceeded with, resulting in the forfeiture of the amount. 5(a). It is also stated that as against the order of the Division Bench dated 28.8.2008, an SLP was filed before the Supreme Court. The application along with the prayer is stated to be not maintainable and it is stated that the Official Liquidator is a holder in due course and therefore, the recovery of money by him is bona fide. It is the case of the second respondent that it has no contractual relationship with the applicant in obtaining the demand drafts. It is not correct to state that the second respondent has not disputed any allegation made by the applicant. It is also denied that the second respondent has stated that it would settle the dispute with the applicant. It is stated that the authorised share capital of the second respondent is Rs.12 crores and the issued and paid up capital is Rs.2 crores and not Rs.5 crores, a stated by the applicant in the affidavit and the second respondent has estimated the reserves over Rs.53 crores carrying on various businesses. The second respondent company, as a subsidiary of the Frontline Group in the field of international and domestic trading of coal and coke. 6. Mr.M.S.Krishnan, learned senior counsel appearing for the applicant would submit that the entire facts would show that the second respondent has played fraud in collusion with M/s.Power Engineering International FZCO, Jebel Ali, Dubai and the said fraud was not only against the applicant company, but also against this Court in producing demand drafts obtained by the said M/s.Power Engineering International FZCO, Jebel Ali, Dubai in the auction sale. He would also rely upon the principles of equity to show that inasmuch as the Official Liquidator is not a person entitled for the amounts, the applicant being the owner of the demand drafts is entitled to get back the said amount. His main contention is based on section 58 of the Negotiable Instruments Act,1881 and also sections 70 and 72 of the Indian Contract Act,1872. He would rely upon the judgment reported in M.L.M.Ramanadan Chettiar vs. Gundu Ayyar and others [AIR 1928 Madras 1238] to substantiate his contention. According to him, the demand drafts having been obtained from the applicant are negotiable instruments which have been obtained by unlawful means for unlawful consideration and therefore, the ultimate beneficiary viz., the Official Liquidator should be directed to release the amount to the applicant, who is admittedly the owner of the instruments. His contention is that on the facts of the case, it is clear that fraud has been played on the applicant which does not require any evidence and therefore it is not necessary for the applicant to go to the appropriate jurisdictional Court and to adduce evidence, etc. 7. On the other hand, it is the contention of Mr.Prakash Gokalaney, learned counsel for the second respondent that it was only as per the arrangement between the second respondent and M/s.Power Engineering International FZCO, Jebel Ali, Dubai, the second respondent participated in the auction and handed over the demand drafts obtained by the said M/s.Power Engineering International FZCO, Jebel Ali, Dubai from the applicant company. Since the said M/s.Power Engineering International FZCO, Jebel Ali, Dubai has not taken any steps to pay the balance amount as per the arrangement, it is not possible for the second respondent to pay the balance amount and it is, in those circumstances, the amount has been forfeited. 7(a). It is his contention that the applicant has no jurisdiction to claim any amount from the Official Liquidator inasmuch as the applicant has not participated in any of the court auction sale. It is his case that since the applicant is unable to recover the amount from its customer viz., Mr.Kochupillai Thulasi Das, Chairman and Managing Director of M/s.Power Engineering International FZCO, Jebel Ali, Dubai, the present application is filed for the purpose of recovering the same, which is not maintainable. 7(b). It is his submission that section 58 of the Negotiable Instruments Act,1881, has no application since there was no fraud played and in any event, whether fraud has been played is a question of fact which requires adjudication of facts and the same cannot be done in this application. He would also submit that the demand drafts obtained from the applicant company are not vague ones and nobody can intermeddle the same and there is no fraud played on the Court. 7(c). He would rely upon the judgment in B.P.Gupta and others vs. Standard Enamel Works (P) Ltd., [(1987) 62 Com. Cases 36 (Delhi), [(2001) 44 CLA (Sny) 1 (Madras)], The Director of Industries and Commerce, Chepauk, Chennai 5 vs. P.N.Kumar and others [2009(1) CTC 393], Ravindra S.More and another vs. Sundarsan Chits (I) Ltd., (in liquidation) [73 Com.Cases 393 (Kerala)], R.P.Verma and others vs. Aanaam Pvt., Ltd., and others [69 Com. Cases 152 (P&H)] and Bhaurao Dagdu Paralkar vs. State of Maharashtra and others [(2005) 7 SCC 605] apart from relying upon Section 188, Cr.P.C. and contend that the Commissioner of Police, Chennai cannot be directed to investigate the incident which is stated to have taken place in a foreign country. 8. Mr.AL.Somayaji, learend senior counsel appearing for the Official Liquidator submitted that the Application No.2296 of 2008 is not maintainable for the simple reason that the amount of Rs.23.60 crores was received by the Official Liquidator by virtue of order of the Court forfeiting the said amount since the participant of the auction viz., the 2nd respondent failed to pay the balance sale consideration. When the amount was received by the Official Liquidator by way of forfeiture and it was not paid either by the second respondent or the applicant company to the Official Liquidator and it cannot be said that the Official Liquidator is an unjust beneficiary. 8(a). According to him, the Official Liquidator is not concerned with any dispute that the applicant company has got with its customers and it is for the applicant to work out its remedy against its customers. It is also his submission that it is only in furtherance of contractual relationship with its customer, the applicant company has issued demand drafts in favour of the Official Liquidator, Madras, and not for the purpose of the applicant participating in the auction and therefore, the applicant has no locus stanti to file the present application in this Court. 8(b). According to him, whether there is a fraud committed by the applicant's customer in collusion with the second respondent is a matter which cannot be decided in the absence of the said customer of the applicant. Even if there is any remedy available to the applicant towards the second respondent against whom an allegation of fraud is made, the Official Liquidator cannot be made responsible for the same. Once the demand drafts were forfeited, the transactions stood completed. The applicant company having paid the amounts under the demand drafts had no right to stop payment. 8(c). He would rely upon the judgment in Raghavendrasingh Bhadoria vs. State Bank of Indore and others [A.I.R. 1992 Madhya Pradesh 148] apart from relying on Tannan's Banking Law in support of his contention that it is not for the company Court to decide such an issue in winding up proceedings. The demand drafts which can be compared to a letter of credit should be treated as an independent transaction between the applicant and its customer and after the payment was made to the payee, there is no cause of action. He would rely upon the judgment in United Commercial Bank vs. Bank of India and others [(1981) 2 SCC 766]. He would submit that in any event, the Official Liquidator cannot be treated as an unjust beneficiary so as to direct him to return the amounts. He would rely upon Narendra Dada Agro Industries Ltd., vs. State of Maharashtra [CDJ 2006 BHC 1484]. 9. At the outset, on the facts which are enumerated above and which are not in much dispute, the question that has to be decided is whether the Official Liquidator in whose favour as per the order of this Court, forfeiture has been effected in respect of E.M.D. paid by a party can be directed to return the amounts to the applicant which had issued the demand drafts, either on the basis that there was a fraud played on the applicant by its customer or on the basis that the Official Liquidator has become an unjust beneficiary. 10. It is seen that the highest bidder Jalal Nazaar, who has given an offer of Rs.236 crores to purchase the properties of the company in liquidation and paid Rs.10 crores as E.M.D. and he has not paid the balance amount. It was in those circumstances, the petitions in Application Nos.2941 and 2942 of 2007 were disposed of by order dated 23.11.2007 cancelling the sale confirmed in favour of the said Jalal Nazaar, who has filed appeals in O.S.A.Nos.381 and 382 of 2007. The second respondent who was the second highest bidder has also filed an appeal in O.S.A.No.383 of 2007 on the ground that when the sale in favour of the highest bidder was cancelled, as the second highest bidder, his bid should have been accepted. When all the appeals were pending, the present applicant has filed M.P.No.2 of 2008 in O.S.A.No.383 of 2007 to grant leave to file the petition to implead itself as a party. By order dated 4.4.2008, while granting leave, the Division Bench of this Court has observed as follows: " Leave granted. Let the case be listed on 17.04.2008, as orderd earlier. On the said date the court will decide whether the Director of the appellant company of OSA.No.383/07 be directed to appear before the Court in person, if not present on the next date. Until further orders, the Official Liquidator will not disburse any amount out of Rs.23.60 crores deposited by appellant of OSA.No.383/07 without prior permission of the Court." 11. On 17.4.2008, on the very same applications in the said appeals, by taking note of the submissions made by all the parties, the Division Bench has passed the following order: " OSA.Nos.381 & 382 of 2007: Learned counsel for the appellant submitted that the appellant is still interested to pay the amount if some more time is granted. But in view of the earlier order passed by this court, we are not passing any special order for the present. The court may consider it if for one or other reason, the matter is not settled with the appellant of OSA.No.383 of 2007. OSA.No.383 of 2007: Learned counsel appearing for the appellant submits that the appellant has taken steps to resolve whatever the dispute as now raised by the intervenor-M/s.A.L.Rostaman Internatinal Exchange. He further assured that rest of the amount of Rs.212.4 Crores will be deposited within the time frame, as per the earlier order of the court. The pendency of these appeals shall not stand in the way of the Official Liquidator to review the security arrangement and/or to take any direction from the Company Judge (Single Judge) for protection of the assets of the Company under winding up. Let a copy of this order be handover to the counsel for the parties and Official Liquidator. Post "for orders"on 10.6.2008 at 2.15 pm in the chambers." 12. By a subsequent order passed in various applications in the above said appeals dated 17.7.2008, the Bench, having noted the fact that neither the highest bidder Jalal Nazaar, nor the second respondent deposited the sale consideration of Rs.236 crores, held as follows: " In spite of time allowed to the appellants, they have filed to deposit the total amount of Rs.236 crores. In the circumstances, the appellants are given opportunity to state as to why their appeals be not dismissed and heavy costs be not imposed and the amount(s) be not forfeited and the concerned person(s) be not punished for "contempt" of court for giving false statement/undertaking before the court. Let a copy of this order be handed over to the counsel for the appellants for information to the person(s) who have sworn to the affidavit(s) in the appeals. Post the appeals "for orders" on 4.8.2008 on top of the list above the "hearing" cases." 13. Ultimately, when all the said appeals were taken up along with the applications filed by the applicant as intervener, having heard the parties extensively, the Division Bench in the judgment dated 28.8.2008, has drawn the questions to be decided as follows: " 20. The only question that arises for consideration in all these O.S.As. is as to whether the "Earnest Money" in terms of the auction-notice, deposited by one or other appellant(s), should be refunded or not?" 14. After referring to various judgments on the issue relating to the refund of E.M.D., the Division Bench having found that as per the terms of contract, the forfeiture has to be effected, ultimately held as follows: " 21. The question relating to refund of "Earnest Money" fell for consideration before the Supreme Court in the decision reported in AIR 1970 SC 1986 ("H.C.Mills vs. Tata Air Craft"), wherein, the Supreme Court, while dealing with the provisions of Section 74 of the Contract Act, 1872, relating to the deposit of the "Earnest Money", having noticed the fact that the purchaser, by the terms of the Contract, was liable to deposit 25% of the purchase-price, held that, upon default/failure of the purchaser in paying the purchase-price, the "Earnest Money" deposited, shall be forfeited. 22. Similar view was taken by the Apex Court in the decision reported in 1996 (4) SCC 249 ("H.U.D.A. vs. Kewal Krishan Goel") wherein, the Court held that the "Earnest Money" deposited shall bind the contract between parties and the forfeiture would be justified, when the contract falls through, on default/failure on the part of the allottee/purchaser. 23. In the decision reported in 2007 (1) SCC 228 ("Swurabh Prakash vs. DLF Universal Limited"), the Supreme Court noticed the distinction between "Security" and "Earnest Money" and held that the appellant-developer of the said case, rightly exercised its right to forfeit the "Earnest Money" as per the terms of the Contract. 24. In the present O.S.As. as it is not in dispute that in the tender-advertisement, the bidder(s) were asked to deposit 10% of the "Earnest Money" on acceptance of their bid, and in pursuance of the bid, the highest bidder (appellant-JalalNazar, in O.S.A.Nos.381 and 382 of 2007) deposited only Rs.10 crores and not the total amount, subsequently, as the offer accepted by the Court on request of the appellant of O.S.A.No.383 of 2007, was in confirmity with the terms and conditions of the tender- advertisement, he appellant-M/s.Fairdeal Supplies Private Limited, being the second highest bidder (in O.S.A.No.383 of 2007) is also bound by the terms and conditions of the tender-advertisement, and he is liable to deposit 10% of the offer amount and the offer of Rs.236 crorres, having been given by the appellant-M/s.Fairdeal Supplies Private Limited, he duly deposited 10%