Indian Bank vs M/S.V.G.P.Finance Ltd.& Anr

The Company in liquidation approached respondent No. 1 - M/s V.G.P. Finance Ltd. on 10th November, 1995 for a loan of Rs.1,00,00,000/- (Rupees one crore) for business purposes. Pursuant to the correspondence a loan agreement came to be executed on 1st December, 1995 between the Company in liquidation and respondent No. 1 herein. Following the loan agreement the parties entered into further agreements under which amounts were advanced from time to time. According to respondent No. 1 herein, in terms of the loan agreement, the Company in liquidation had mortgaged the property in question in favour of respondent No. 1 herein.

In the meantime, it appears that petition for winding up was moved on 14th October, 1996 and the Company was ordered to be wound up on 10 th March, 1999. Following the order of winding up, the Official Liquidator issued a notice on 1 st June, 1999 for handing over the assets and effects of the Company in liquidation. 2

However, to put an end to the controversy, we are restoring to the file of the Company Judge the application dated 13th September, 2004 moved by respondent No. 1 herein for validation. We direct the Company Registrar to give a proper registration to the Company Application for validation dated 13th September, 2004. On giving the registration number we give liberty to respondent No. 1 herein, if so advised, to move an application for amendment giving better particulars in support of his claim. We also direct the Company Registrar to inform the Indian Bank regarding the application being numbered as directed hereinabove. On completion of all these preliminaries we direct the Company Court to dispose of the Application for validation dated 13th September, 2004 after considering the claims of secured and unsecured creditors as well as after taking into consideration assets held by the Company in liquidation as on the date of order of winding dated 10th March, 1999, and thereafter. We also give permission to Indian Bank to make an application for impleadment in such application.

We direct the High Court to de novo decide this matter uninfluenced by any of its earlier observations made in the impugned judgment. We express no opinion on the merits of the case. We grant liberty to both sides to make submissions in support of their case.

Before concluding, we may state that the possession of the lands is with 4 respondent No. 1 herein. Status quo as regard to possession is to be maintained till the Company Court decides the Application for validation dated 13th September, 2004. However, respondent No. 1 will not encumber the property. Respondent No. 1 will neither alienate the property nor create any third party rights in respect of the said property.

The appeal is disposed of accordingly with no order as to costs.

Petition(s) for Special Leave to Appeal (Civil) No(s).28177/2008 (From the judgment and order dated 09/09/2008 in OSA No.201/2005 of the HIGH COURT OF MADRAS) INDIAN BANK Petitioner(s) VERSUS M/S.V.G.P.FINANCE LTD.& ANR. Respondent(s) (With prayer for interim relief and office report)(For orders) Date: 24/04/2009 This Petition was called on for hearing today. CORAM :