1 ca275-09 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY APPLICATION NO.275 OF 2009 IN COMPANY PETITION NO.385 OF 2001 Elfine Chemicals ....Petitioner V/s. Conway Printers Ltd. ....Respondent And Revive Realty Pvt.Ltd. ....Applicant V/s. The Official Liquidator of Conway Printers Ltd. (In Liqn.) ....Respondent Mr.Cyrus Ardeshir i/b Desai Desai Carrimjee & Mulla for the Applicant. Dr.T. Pandian, Deputy Official Liquidator present. CORAM : S.J. VAZIFDAR, J. DATE : 2ND AUGUST, 2010. P.C. :- 1. This is an application under section 536 of the Companies Act, 1956 seeking the approval of and validation by this Court of the transfer and assignment of the right, title and interest of the company in liquidation of the immovable property effected by a deed of assignment dated 1.6.2007 in favour of the Applicant. 2. The company petition was filed on 2.3.2001. It was accepted on 4.4.2001 and admitted pursuant to an order dated 13.6.2002. The final order of the winding up was passed on 12.11.2008. 3. In the meantime the Applicant and the company in liquidation had executed the said deed of assignment dated 1.6.1007. In the facts and 2 ca275-09 circumstances of this case, the application ought to be granted. 4. The company had availed of financial facilities from four banks/financial institutions – Central Bank of India, U.T.I. Asset Management Co., Oriental Bank of Commerce and I.C.I.C.I. Bank Ltd. The I.C.I.C.I. Bank Ltd. had assigned its rights in favour of Kotak Mahindra Bank Ltd. To secure the repayment of the amounts due under these facilities, the company inter-alia created a mortgage in respect of the said property in their favour. A sister concern of the company, M/s.Hiralal Printing Works, had also availed of financial facilities from these banks/financial institutions. The company had guaranteed the same. The company also executed a mortgage in their favour to secure the dues of the said sister concern. 5. The banks/financial institutions file O.A. Nos.293 of 2001 and 354 of 2001 before the D.R.T. O.A. No.293 of 2001 was filed against the company. O.A. No.354 of 2001 was filed against the said sister concern M/s.Hiralal Printing Works and the company. In both the O.As., the mortgage was sought to be enforced. 6. Consent terms were arrived at and executed between the parties before the D.R.T. in O.A. No.354 of 2001. There was a full and final settlement arrived at between the banks/financial institutions, the company and M/s.Hiralal Printing Works whereunder the banks/financial institutions accepted a sum of Rs.10,37,00,000/- in full and final settlement of its dues from the company and its sister concern. Clauses 5 to 9 of the consent terms read as under :- 3 ca275-09 “5. That, in view to bring an amicable end to the matters between the Applicants and the Defendants nos.1 to 7, negotiations were held and thereafter a compromise was agreed upon, wherein the Applicants have agreed to settle their claims and bring an amicable end to their claims against the Defendant nos.1 to 7 and based on the request being made by the Defendant nos.1 to 7, the Defendant Nos.1 to 7 have been allowed by the Applicants to sell the Suit properties both situated at D-41/1,Trans Thane Creek Industrial Area, MIDC, Navi Mumbai, together with buildings and structures thereon- Exhibit A Part B to the original application and Ready Money Terrace Annexe 167-C, Annie Besant Road, Worli, Mumbai-400 018, together with structure standing thereon-Exhibit A Part A to the Original Application. 6. The Defendant nos.1 to 7 have, based on the understanding with the Applicant, identified MR. VIBHU VISHWAMITTER KAPOOR as a Director of proposed Private Limited Company or a Partnership Firm wherein MR.VIBHU VISHWAMITTER KAPOOR will be one of the partners, Indian Inhabitant, aged 46 years residing at 702,Jamuna Niketan, Manav Mandir Road,Mumbai-400 006 for the purchase of properties situated at at D-41/1, Trans Thane Creek Industrial Area, MIDC,Navi Mumbai, together with buildings and structures thereon- Exhibit A Part B to the original application and M/s.SKY RISE PROPERTIES PVT. LTD. having its office at 301,Arcadia, 3rd floor, Nariman Point, Mumbai-400 021 for the purchase of properties situated at Ready Money Terrace Annexe 167-C,Annie Besant Road, Worli, Mumbai-400 018, together with structure standing thereon- Exhibit A Part A to the Original Application. 7. Accordingly the proposed buyers had deposited the advance sale consideration with M/s Kanga & Company, Advocates and Solicitors. As instructed by the Defendant nos. 1 to 7, an amount of Rs.8,00,00,000/- (Rupees Eight Crores only) has been paid to the Applicant towards full and final settlement. The Applicants have issued letters acknowledging the receipt of their monies and also releasing their right, interest in the said properties. Hereto annexed and marked as EXHIBIT A are the copies of the said letters. 8. Pursuant to the receipt of the settlement amount the Applicant have released their Charge, right, title and interest on the Suit properties of the Defendant nos.1 to 7 and further conveyed their no objection for 4 ca275-09 confirmation of the sale in favor of MR. VIBHU VISHWAMITTER KAPOOR as a Director of proposed Private Limited Company or a Partnership Firm wherein MR.VIBHU VISHWAMITTER KAPOOR will be one of the partners for the purchase of properties situated at D-41/1, Trans Thane Creek Industrial Area, MIDC, Navi Mumbai, together with buildings and structures thereon-Exhibit A Part B to the original application and M/s SKY RISE PROPERTIES PVT. LTD. for the purchase of properties situated at Ready Money Terrace Annexe 167-C,Annie Besant Road, Worli, Mumbai-400 018, together with structure standing thereon- Exhibit A Part A to the Original Application. Simultaneously, the Applicants hereby withdraw the cases filed in the DRT against the Company and the promoters and issue a No Dues Certificate and release the personal guarantees of the promoters. The Applicants will also complete the necessary formalities with the ROC for satisfaction of charges and take necessary steps for withdrawing the name of the Company and its promoters from the defaulters list of RBI. 9. On execution hereof, the DRT Court Receiver M/s.Seven Star Security Services India Pvt. ltd. appointed pursuant to the order dated 30th September, 2004 in the above matter in respect of the properties as mentioned in Exhibits ”A”,”B”,”C”,”C-1”,”C-2”,”D-1”,”D-2”,”E-1”,”E-2”,E-3” to the Original Application would stand discharged and the Applicants have no objection in DRT Court Receiver M/s.Seven Star Security Services India Pvt. Ltd. handing over the possession in favor of MR.VIBHU VISHWAMITTER KAPOOR as a Director of proposed Private Limited Company or a Partnership Firm wherein MR. VIBHU VISHWAMITTER KAPOOR will be one of the partners for Exhibit A Part B and M/s.SKY RISE PROPERTIES PVT. LTD. for Exhibit A Part A to the original application. The possession of the other moveable assets taken by M/s. Seven Star Security Services India Pvt. Ltd. on 17th November,2004 will be handed over to Defendant Nos 1 & 2 and the shares certificates belonging to Defendants nos.5 to 7 taken into possession by the Receiver vide letter dated 26th November,2006 be returned and handed to Defendant Nos.5,6 & 7. It is further agreed that the charges, if any, of DRT Court Receiver- M/s.Seven Star Security Services India Pvt. Ltd. shall be borne by the Defendants till the date of execution hereof. It is also agreed by and between the parties that Security Charges but not limited to Rs.5,67,892/- shall be reimbursed by the Defendants to the Applicants on or before execution hereof.” 5 ca275-09 7. It is clear therefore that the consideration has been paid over to the secure creditors. The D.R.T. has endorsed its approval of the settlement and the transactions contained therein. 8. The only remaining question about which I wanted to be satisfied was as to the adequacy of the consideration for the said property. By an order dated 7.6.2010, I directed the Official Liquidator to obtain a valuation report in respect of the property as on the date of the transaction viz. 1.6.2007. The valuer N.M. Shah & Associates submitted their report dated 1.7.2010. The property has been valued at Rs.5,07,00,000/-. Under the deed of assignment, the consideration is Rs.5,50,00,000/-. The Applicant has paid a further amount of Rs.25,22,958/- towards the statutory dues to various authorities which were payable by the company. In other words, the consideration for the said property under the deed of assignment was about Rs.5,75,00,000/-. 9. Mr.Ardeshir relied upon a certificate dated 28.6.2006, addressed by Sarva Shramik Sanghatana stating that all the staff and workers of the company had been paid their full and final settlement amounts under the V.R.S. entered into with the company on 31.5.1999 and that there are no dues outstanding against the company or its directors as per the agreement. 10. The Official Liquidator has appointed out that the claim thus far have not been invited from the secured creditors or from the workers. I am satisfied however that the transaction was bona-fide. If indeed there are any outstanding amounts due to any workers, they would be entitled to be paid proportionately with the secured creditors. In that event it would 6 ca275-09 always be open to the Official Liquidator to make a claim from the secured creditors who have been paid the entire consideration under the said deed of assignment dated 1.6.2007. 11. In the circumstances, the company application is disposed of by the following order :- i). The company application is made absolute. ii). The Official Liquidator shall invite the claims on or before 15.9.2010. iii). The company shall pay the costs of the advertisement inviting the claim as directed by the Official Liquidator forthwith without raising any demur. iv). There shall be no order as to costs.