K.J. Sengupta, J.@mdashThis appeal is directed against judgment and order dated 26th March, 2012 passed by the learned Single Judge on the application made by the respondent above-named for appointment of provisional Liquidator pending disposal of the winding up petition. summary of the fact on which the present appeal is preferred is set out hereunder:-
2. The respondent above-named M/s. Madura Coats Limited (hereinafter in short Madura) claiming itself to be one of the creditors filed the application for winding up being C.P. No.13 of 2009 which is yet to be admitted by the learned Company Judge and the hearing of which is awaiting. Pending disposal of the above matter application being C.A. No.34 of 2012 was filed on which the impugned judgment and order was passed. The claim of the Madura in its winding up petition is based on admission of a sum of Rs.2.02 crores made in course of reference proceedings before BIFR. Admission was made in the draft rehabilitation scheme proposed and filed by the appellant company before the BIFR. In spite of such admission followed by repeated demand made by Madura, the appellant company failed and neglected to pay and/or secure above principal amount together with interest accrued thereon. The said winding up petition is seriously contested by the appellant herein contending that this claim is also part of the claim made in the civil suit filed in this Hon''ble Court in ordinary original civil jurisdiction wherein decree for an aggregate sum of Rs.9 crores and odd together with interest has been claimed. In the said civil suit an application for summary judgment under Chapter XIIIA of the Original Side Rules of this Court was taken out and necessary order for payment of Rs. 3 crores and odd was passed by the learned First Court in Civil jurisdiction followed by affirmation of the Appellate Court in the same jurisdiction however subsequently Supreme Court has reduced on modification, to the amount of security of Rupees 1 crores. As the claim was seriously disputed leave to defend has been granted by this Court on furnishing security as modified by the Supreme Court. According to the company as the claim is seriously disputed in the civil suit the winding up petition was not maintainable at all and as such there is no chance of success in the winding up petition.
3. Given the aforesaid claim and contention and rival claim and contention of both the parties, the respondent had filed the said application for interlocutory relief pending disposal of the matter u/s 450 of the Companies Act, 1956 for appointment of Provisional Liquidator. The substance of allegation culled out from the application to maintain above application is as follows:-
4. The company in total disregard to order dated 9th December, 2011 passed by the learned Trial Judge failed to furnish, the number of creditors with details of their respective dues as recorded in company''s books; the source of fund of the company based on the company''s annual accounts for the recent financial years; the value of company''s assets, particularly fixed assets; fullest particulars of all sums expended by the company by way of payment to the creditors after institution of Company Petition No.233 of 2008; the extent of the statutory dues of the company based on the claims of the appropriate authorities; the list of unencumbered assets of the company if any. That apart the present management of the appellant company had indulged in acts of manipulation and purported transactions which appear on their face to be subterfuges or bogus and this will be evident from the fact that company had sold its assets without the information to BIFR or AAIFR or the Assets Sale Committee and without following open tender process. The four properties worth Rs. 320 crores have been transferred as per the valuation of the appellant. The same was transferred to its four subsidiaries namely Dunlop Property Private Limited, Dunlop Infrastructure Private Limited, Dunlop Estates and Bhartia Hotels. The real value of the aforesaid four immovable properties would be around Rs.2000 crores and the transferee companies are under the same management receiving almost no consideration. In consideration of transfer of the four assets to its own subsidiaries shareholding of all the subsidiary companies have been transferred without paying any money consideration in favour of the appellant company. All the sales and/or transfer were made when the company was still under the purview of the Board for Industrial and Financial Reconstruction (BIFR) and orders u/s 22A of the SICA lawfully passed were valid and subsisting. No permission of the BIFR was obtained to sell any of the assets. Entire exercise of sale and/or transfer of the assets by the company was conducted by-passing the process of the Assets Sale Committee. There was no advertisement published nor was there any reserve price fixed. In short the present management of the Committee in violation of the order of the restriction u/s 22A of SICA and in scant disregard for the law, sold and transferred aforesaid four immovable properties of company leaving the company''s creditors, employees and workmen in the lurch. All these facts are recorded in the order of BIFR dated 23rd July, 2007 and order of AAIFR dated 7th March, 2002.
5. The aforesaid application was contested by filing affidavit by the appellant company. The learned Trial Judge having found strong prima facie case which is described to be almost unimpeachable one in favour of the respondent and having found that assets and properties have been transferred in a clandestine manner felt that it would be totally unsafe in the interest of company to keep the remaining assets and properties at the hands of the present management of the appellant company. Hence for the preservation of the left over property the aforesaid impugned judgment and order was passed.
6. Mr. Kalyan Bandyopadhyay, learned Senior Advocate appearing with Mr. Utpal Bose, learned Advocate on behalf of the appellant has highlighted that defence in the affidavit to contend that claim made in the winding up petition is also part of the claim made in the suit which is being contested on obtaining leave to defend upon furnishing security. Therefore this winding up petition is pressure tactics and brought as a measure of parallel proceeding. He contends that after obtaining order of security by this Court the respondent company obtained an order of amendment excluding the claim of Rs.2.03 crores to make the winding up application maintainable. He contends that on this factual position it is greatly doubtful whether winding up petition at all should be maintained far less of passing any order of admission.
7. He, emphasizes, therefore, at the instance of the respondent whose winding up petition is not maintainable on the face of it the learned Trial Judge ought not to have entertained prayer for appointment of provisional Liquidator. The basis of passing impugned order was transfer of assets made by the company during the period 2006-07. The legality and validity of those transfer cannot be questioned nor the learned Trial Judge can decide this matter in this proceedings. The transfer of assets and properties were made for the benefit of the company and such order of transfer was within the knowledge of BIFR and AAIFR and further Madras High Court has also taken note of such transfer impliedly with approval. Whether transfer is bad or good can only be questioned before the BIFR and AAIFR. The learned Company Judge has no jurisdiction to do so hence the order passed by the learned Trial Judge is not sustainable. Moreover the order of injunction initially passed by the learned Company Judge on 14th November, 2011 and also by the Hon''ble Appeal Court dated 29th March, 2012 are adequately protective measure and no further order was required to be passed. In view of this situation the learned Trial Judge should have dismissed the application as no ground has been made out.
8. Since a number of creditors who filed their separate winding up petitions were allowed to appear and advanced argument before the learned Trial Judge, We also allowed them to appear before us. One of the creditors Suryamani Financing Company Limited has preferred separate appeal. This creditor while pressing its appeal through their learned lawyer has supported the argument of Mr. Bandopadhyay. Learned counsel contends that his client is secured creditor of the appellant company and has lent and advanced a sum of Rs.41 crores and odd. It is submitted that there is no need to wind up the company nor any situation has arisen for which appointment either provisional or otherwise is warranted as the company has not lost its substratum. The company might be facing temporary financial crisis, however, it can be managed effectively.
9. Learned counsel for the appellant of this appeal submits further that learned Single Judge exceeded his authority and jurisdiction in passing impugned judgment and order. The observation of the learned Trial Judge about transfer being fraudulent, is totally misplaced as this observation is possibly based with reference to Section 531 of the Companies Act. According to him Section 531 in the facts and circumstances has no manner of application, in as much as, the date of filing of the winding up application to be considered is the date on which the company is actually held to be wound up not any time prior thereto. Learned Single Judge, as such, without passing any order of winding up of the company, would not have invoked the provisions of Section 531 or Section 441(2) or Section 447 of the Companies Act, 1956 to hold that the transfer of property made by the company to be fraudulent in nature. Learned counsel has referred to the decision in case of
10. Mr. Pratap Chatterjee, learned Senior Advocate appearing for the respondent Madura, while contesting the appeal and also placing his client''s cross-objection for passing further order contends that the rationale for appointment of provisional liquidator is to preserve the company''s assets and to prevent Directors from dissipating them. It is indisputable that the assets of the company are not safe in the hands of the present management. The element of public interest which has been judicially recognized to have been incorporated in the manner in which the Company Court''s discretion u/s 450 is to be exercised, demands that the assets of the company ought not to be left with the hands of the present management. He contends that sale of these four properties by the company is void ab initio, non est in the eye of law and nullity. Placing reliance on the Supreme Court decisions reported in
11. One of the creditors namely SBI Global Factor Limited came in this appeal to make submission through their learned counsel. Learned Trial Judge as it appears from the impugned judgment and order permitted this creditor to make submission so we did. The learned counsel for this creditor contends that the appellant company is indebted to a sum of Rs.37,84,48,340.79 together with interest which is an amount due and payable to this appellant under the trade finance facility availed of by the appellant - company. It is the successor in interest of one M/s. Global Trade Finance Limited which was amalgamated by an order of the Bombay High Court with SBI Factors and Commercial Services Private Limited and then name of this company has been changed to SBI Global Factors Limited. In view of nonpayment and further failure to secure the above amount winding up petition was filed preceded by service of statutory notice. The said winding up petition being Company Petition No.159 of 2011 has been admitted as it was not contested. The learned Company Judge by order dated 28th July, 2011 admitted the application filed by this creditor and it has been advertised once in The Times of India and once in Ananda Bazar Patrika. In terms of order dated 28th July, 2011 advertisement of filing other winding up applications was made. In fact the dues of this creditor has been admitted by the company. The learned counsel has supported argument of Mr. Chatterjee, in addition thereto contends that it would be apparent from the balance-sheet of the company for the year ending 31st March, 2007 and in the financial year 2006-07 the company transferred assets to its wholly owned subsidiaries companies in consideration of transferring all the fully paid-up equity shares to the company. The company had indulged in such transfer notwithstanding restrictions u/s 22A of the SICA being in force. It is further to be noted from the balance sheet of the appellant that for a property acquired by them for only 80 crores from Dunlop India Limited, ICICI Bank agreed to grant credit facilities of value of Rs.575 crores. Such fraudulent transfers were made when the company was under the purview of BIFR and thereafter such paid up equity shares were used to show that the company had become positive and the company managed to come out of the purview of the AAIFR.
12. Learned counsel further contends that in view of the aforesaid antecedent it is reasonably apprehended that the present management of the company would resort to various method to defeat the claim of all the creditors, and therefore in order to protect interest of the creditors including workmen, preservation of assets is the only measure that has been taken by the learned Trial Judge. According to the estimation of this creditor the company unable to pay the debts which runs into over 300 crores, therefore, there is no reason for the company should be kept alive and must be wound up.
13. We have heard the learned counsel for the parties in this appeal as well as the learned counsel appearing for the creditors not being parties in this proceeding. We have gone through the materials placed before us. It appears from the records that impugned judgment and order was passed at the instance of Madura. To examine the legality and validity of the impugned judgment and order, reading of the prima facie case made out by the respondent and answer to the same by the appellant would have been usual mode of dealing with the matter and then to pass order which would have warranted on the merit of the case. But in this appeal this Court has to adopt different method as the impugned judgment and order has been passed while dealing with not only the application of Madura but considered cases of other creditor also, Madura''s application is yet to be admitted. One of the creditors namely SBI Global Finance Limited has intervened in the matter, and informed that its application for winding up being C.P. No.159 of 2011 has already been admitted and order of advertisement has been issued, hence, the issue of winding up of the appellant company has assumed representative character. Of course another creditor namely Suryamani Financing Company Limited who has filed a separate appeal against the said judgment and order supported the case of the appellant and opposes the prayer for appointment of provisional Liquidator at this stage. Mr. Abhrajit Mitra, learned Advocate contends that the learned Trial Judge has no jurisdiction to declare any transfer being void or illegal unless such transfer takes place within six months before the presentation of winding up petition u/s 531.
14. On reading of the impugned judgment and order it appears that learned Trial Judge has proceeded having noted the statement and averment made in the affidavit in support of Judge''s Summons taken out by the respondent Madura and the submission of the other creditors has not been considered. Therefore this Court at the first instance is to examine whether relying on the statement and averment made in the affidavit in support of Judge''s Summons taken out by Madura for appointment of provisional Liquidator is justified or not?
15. The power of the Court to appoint provisional Liquidator u/s 450 is set out hereunder:-
Section 450. Appointment and powers of provisional liquidator.-(1) At any time after the presentation of a winding up petition and before the making of a winding up order, the Tribunal may appoint the Official Liquidator to be liquidator provisionally
(2) Before appointing a provisional Liquidator, the Tribunal shall give notice to the company and give a reasonable opportunity to it to make its representations, if any, unless, for special reasons to be recorded in writing, the Tribunal thinks fit to dispense with such notice.
(3) Where a provisional liquidator is appointed by the Tribunal, the Tribunal may limit and restrict his powers by the order appointing him or by a subsequent order, but otherwise he shall have the same powers as a liquidator.
(4) The Official Liquidator shall cease to hold office as provisional liquidator, and shall become the liquidator, of the company, on a winding up order being made.
16. It appears that this power can be exercised at any time after presentation of winding up petition and before making of final winding up order as an interim measure. It is well settled that same principle while appointing Receiver followed by the Civil Court is required to be applied before passing an order of provisional Liquidator. In the process question of maintainability as raised by the appellant, whether prima facie case has been made out as to indebtedness of the Company to the petitioning creditor and then whether the assets and properties are at the hands of the company are safe or not are to be adjudged by the Courts and lastly whether the learned trial Judge indeed has undertaken such judicial exercise or not. In addition thereto the Court has to see the special circumstances as to whether company has lost its substratum or situation of apparent insolvency or not.
17. In an old decision of Kerala High Court cited by Mr. Chatterjee, in case of Canara Bank vs. Brunton and Company Engineers Limited reported in 63 Company Cases 299 learned Single Judge has held what are the consideration to be borne in mind for appointing provisional Liquidator. In that case on factual finding it was felt by the Court that there exist special circumstances pointing to the danger to the assets of the company and also patent insolvency. Such measure is absolutely necessary to preserve the assets of the company. The learned Single Judge has also accepted that stopping of business activity is one of the factors for appointment of provisional Liquidator.
17. It appears from Bombay High Court decision in case of Darshan Anilkumar Patel vs. Gitaneel Hotels Pvt. Ltd reported in 81 Company Cases 805 the learned Single Judge had taken view that for appointment of provisional liquidator a strong prima facie case for winding up is required to be made out and when the Court is of the view that it would be just and equitable and proper to appoint provisional Liquidator in the interest of the company, the complaining shareholders or creditors or the workmen and lastly public interest etc.
18. We also take the same view as it has been taken by the learned Single Judges of the Kerala High Court and the Bombay High Court and hold that strong prima facie case in the winding up of petition and protection and preservation of the property of the company, vis-�-vis interest of the creditors of all classes and lastly in the public interest. From the language of sub-section 1 of Section 450 it would appear that the power of the Court is discretionary. Obviously the discretion should be exercised judiciously, for effect of appointment of provisional Liquidator may in certain situation be disastrous if all powers of Liquidator are given, namely to take over the entire management control and affairs of the company. At the same time Court is to think about consequences if interim measure is not taken appropriately on a given strong prima facie case as to waste and dissipating of the assets of the properties of the company.
19. Keeping in view of the above principle and the aforesaid provision we have to examine whether in the application for appointment has disclosed such a strong case for appointment is warranted or not. On reading of the affidavit in support of the Judge''s Summons of the respondent and the affidavit-in opposition of the company it appears that some of the properties of the company have been transferred without any dispute whatsoever by the company to the third party which is absolutely separate juristic entity. But those transferee belong to the same group of management as that of appellant company and it is clear findings of the learned Trial Judge and those fact finding has not been assailed at all before us. The learned Trial Judge found with judicial investigation that four immovable properties have been transferred to one M/s. Dunlop Properties Private Limited, Dunlop Infrastructure Private Limited and Dunlop Estates and Bhartiya Hotels and those transferee companies are controlled and managed by the same shareholders and in fact they are having same place of business as that of the appellant company. In fact these are the subsidiary companies formed very recently by the same group of management. We do not find any challenge to this findings, rather factum of transfer is admitted.
20. Learned Trial Judge also found that no monetary consideration was received only the shareholding of all those subsidiary transferee companies have been transferred as and by way of consideration for sale of the two properties. Apparent consideration for sale of these two properties is deliberately undervalued. After receipt of the shares of those transferee companies the company has transferred the entire shareholding of those transferee companies to a Mauritius based company. Thus in real sense the ownership and control as far as those subsidiary companies are concerned have been given in favour of the foreign company.
21. The learned Trial Judge thereafter found basing on disclosure of information stated in the affidavits that immediately after sale the said two of transferee companies created mortgage in favour of ICICI Bank Limited for granting credit facilities to their Singapore based companies and the ICICI Bank has agreed to accept those properties as security for granting credit facilities of Rs.575 crores. This fact finding of the learned Trial Judge in real sense has not been disputed by the appellant-Company. But those sale has taken place before presentation of the winding up petition factually therefore, question is whether the aforesaid sale could constitute a case of deliberate act of waste and dissipating of the company''s properties. In ordinary circumstances it were not so.
22. Had it been so it would not have been clear case of appointment of provisional Liquidator without any ado. This case would have been strong had transfer taken place after presentation of winding up petition. Here, factual situation is not so as far Madura''s application is concerned.
23. But when it is noticed as rightly pointed out by Mr. Chatterjee that aforesaid transfer has been effected in clear violation of the order of BIFR as has been found by the AAIFR in order dated 7th March, 2002 obviously such an act and conduct of the company is factor to be taken into consideration. The learned Trial Judge has taken note of the same of course. Mr. Bandyopadhyay has taken plea that it was within the knowledge of the AAIFR and BIFR therefore such transfer did not offend their order.
24. Indisputably when this company has been under pending reference before the BIFR, and thereafter AAIFR gave direction u/s 22A of the Sick Industrial Companies (Special Provisions) Act, 1985 (hereinafter referred to SICA) of the said properties of the appellant-company have been sold. It appears from the record that this fact has not been disputed at all. However, to verify such factual position we notice that BIFR on 23rd July, 2007 has recorded the fact of such sale effected in violation of the direction given u/s 22A of SICA. The relevant portion of the said order in paragraph 24 is as follows:
From Schedule-17B(2). Notes to Accounts it appears that certain assets of the company have been transferred/sold to its wholly owned subsidiaries/others. The company is directed to explain why this has been done without the permission of BIFR when restrictions u/s 22A of SICA were in force and further, why action should not be taken against the company/its Directors/officials u/s 24 of SICA and the sale/transfer nullified. The company should also explain whether valuation of the assets was done and reserve price fixed, advertisements given as required and whether the assets were transferred/sold through a transparent bidding process through the ASC.
25. Therefore, it is clear that management of the company has no regard for the order of the statutory authority and the learned Trial Judge has correctly recorded this prejudicial act and conduct of the management of the appellant. The learned Trial Judge of course recorded strongly that the aforesaid transfer is said to be fraudulent and the same is void. In our considered opinion such prompt findings in this proceedings was not called for. In the application of this nature the Court is to see whether the properties whatever is the worth, of the company are properly preserved or act and conduct of the management is such that they are genuinely interested to preserve the assets and properties of the company. The aforesaid act and conduct of the management and company though anterior to the presentation of the winding up petition, is such that it does not inspire confidence of the Court. The learned Trial Judge however has strong suspicion against the act and conduct of the present management.
26. It is an admitted position that the company is not in business and in past just maintenance activities of the machinery was undertaken and there has been no production. The dues of the workmen are huge and the same are remaining unpaid. Learned Advocate General has submitted that substantial amount is due and payable by the company to the State on account of tax dues and other dues. However he submits that assets of the companies are huge and if those assets of the companies are properly managed and utilized there may be chance of revival of the company. He advocates that at this stage the appointment of provisional Liquidator as have been done with a drastic power given by the learned Trial Judge would virtually destroy the business prospect of the company as a result of which no creditor including Madura would be benefited. He submits that chance should be given so that the company can be revived and State Government is agreeable to lend all assistance to the extent legally possible for reopening of the company and to save the employment of large number of workers.
27. We think that at this stage this Court cannot support the findings of the learned Trial Judge that the aforesaid transfer which have taken place before presentation of winding up as being fraudulent and invalid in the insolvency jurisdiction. But we accept the views of the learned Trial Judge while overruling the contention of Mr. Bandyopadhyay that, there exists prima facie case for maintainability of the winding up petition and the prima facie strong case of indebtedness of the company amongst other Madura. Such indebtedness appears to have been established not only in relation to the dues of the respondent but also in relation to the dues of another creditor who appeared before us namely SBI Global Factor Limited. This creditor supports the measure taken by the learned Trial Judge.
28. We however add that our views as to maintainability are prima facie and this has to be finally adjudicated by the learned Trial Judge before whom winding up application of the respondent is pending. We find as rightly pointed out by Mr. Chatterjee that the claim made in the winding up petition has no nexus with the claim made in the suit and the learned Trial Judge has recorded findings in the judgment and order of learned Trial Judge and appellate Judge while disposing of a proceeding for summary judgment. The claim made in the winding up petition relates to the amount covered by the draft rehabilitation scheme which was submitted to the BIFR though ultimately had come out from the clutch of the BIFR conveniently. The claim made in the suit has nothing to do with the amount of outstanding dues which was agreed to be paid by the rehabilitation scheme, and it is left out from the scheme and for such purpose leave was granted to file a suit. In fact the suit was filed leaving the amount of the dues covered by the draft rehabilitation scheme but by mistake this amount was added to the prayer in the plaint initially but subsequently by an order of amendment this outstanding claim covered by the draft rehabilitation scheme was excluded.
29. Therefore, we are of the view prima facie that strong case for indebtedness has been made out. Equally strong case has been made out about the act of waste of the present management. They are not trustworthy nor do they inspire any confidence in the mind of the Court to keep the properties with them with free hands. But when we take note of argument of Learned Advocate General, we find State Government is keen to lend support for putting back the company in running. Hence judgment and order of the learned Trial Judge appointing Official Liquidator as Provisional Liquidator for taking full control and management of the company is not warranted at this stage.
30. Thus in the interest of all the creditors accepting the suggestion of Learned Advocate General, a chance ought to be given to the appellant, but with guarded manner. We think that following order will subserve interest of justice. We have already by way of interim order appointed Official Liquidator as Special Officer in lieu of provisional Liquidator. We, therefore, confirm the said order which has been passed earlier, in addition thereto we direct the Official Liquidator to make inventory of all the books of account of the company and the Special Officer shall pay monthly visit and preserve in all respect upon taking symbolic possession to preserve all the properties. However symbolic possession of the Special Officer will not prejudice the present management of the company to take lawful steps for the revival of the company but the company will not approach BIFR once again without leave of the learned Trial Judge. In view of this order we do not think that any relief should be granted in the cross-objection simply such relief cannot be granted in the proceeding initiated by Madura at this stage.
31. This appeal has been preferred with the leave of the Court against the same judgment and order of the learned Company Judge dated 20.1.2012 passed in the aforesaid company application. The above appellant was not a party to the proceedings and they have been able to satisfy prima facie at the time of admission of appeal that it is affected by strong observation and direction given by the learned Trial Judge without hearing it. The appellant is a banking company carrying on its business in India as well as in Singapore having its branch office thereat.
The case of the appellant is shortly put hereunder:-
32. In or about May 2008 one Wealthsea Pte. Limited approached ICICI Bank Limited, Singapore for availing of foreign currency term loan facility (in short FCTL) with an overall limit of USD 125 million. After negotiation and discussion the appellant at its Singapore branch sanctioned aforesaid facility in the shape of back to back Stand By Letter of Credit Facility (hereinafter in short SBLCF) of USD 125 million. Hence in India, the appellant issued the said letter of credit facilities in favour of the branch of the appellant at Singapore at the behest of Shalini Properties and Developers Pvt. Limited and SPR Resorts Limited for guaranteeing FCTL of ICICI Bank, Singapore. The two properties namely 132A, Dr. Annie Besant Road, Worli, Mumbai belonged to the Bhartiya Hotels Limited and another property at Ambattur, Chennai belonged to Dunlop Properties Private Limited were mortgaged with the petitioner to secure the SBLC facility. The said two companies also stood as corporate guarantors in respect of the same facility.
33. It is claimed that said credit facility was duly granted, however the loanee failed and neglected to make payment of the outstanding dues of Rs.2,234,296,346.43 which comprised of the invoked Letter of Credit amount of Rs.2,200,271,866.33 and outstanding SBLC commission of Rs.34,024,480.10. No payment was made either by the borrower nor by the corporate guarantor. Thus for recovery of the alleged outstanding dues the appellant seeks to enforce the said security namely two mortgaged properties. According to the appellant it is unable to do so, in view of observation and direction given by the impugned judgment and order which affects the right of the appellant.
34. Mr. Jayanta Mitra, learned Senior Advocate with Mr. Bimal Chatterjee, Senior Advocate, for the appellant contends that the decisive observation made and direction given by the learned Trial Judge by the same impugned judgment and order has seriously affected his client''s right as mortgagee. This decision has been rendered without hearing his client. According to them their client is bona fide mortgagee for value without any notice. There has been no transaction with the Dunlop India Limited respondent company herein and this Bank. The mortgages were created by the separate companies which have got different and distinct entities, to secure amount of loan advanced to the aforesaid companies.
35. According to them there was no warrant to make any comment or observation with regard to legality, validity and enforceability of the mortgage property vis-�-vis title of the mortgagor. The direction given upon the official liquidator to take legal steps to recover amongst other mortgaged properties has really sealed the fate of the bank''s claim as a mortgagee. In effect the learned Trial Judge has declared the said mortgage being invalid and illegal. This exercise undertaken by the learned Trial Judge so to say is without jurisdiction as far as transaction of granting loan between the appellant and said borrower as well as the guarantors are concerned. The Company Court has no jurisdiction to examine legality and validity of the same before final winding up order is passed. Therefore this direction and observation made therein should be expunged immediately so that their client can approach the appropriate forum for enforcement of the mortgage or to take legal step as permissible under the law without being affected by the order and judgment of the learned Trial Judge.
36. Mr. Pratap Chatterjee, learned Senior Advocate appearing for the Madura, respondent No.2 herein submits on fact in this case that admittedly the present management of Dunlop India Limited in violation of the order of restriction u/s 22A of SICA sold and transferred four immovable properties of the company leaving company''s creditors, employees and workmen in the lurch. Sale of all these four properties of the company were void ab initio, non est in the eye of law and nullity. The suspicious circumstances surrounding the transaction which prompted the appellant to advance money in respect of two of those immovable properties display total lack of bona fides and want of jurisdiction. His legal submission is that the instant appeal is liable to be dismissed as the appellant has no locus standi to file the same. The appellant is not the mortgagee in respect of Mumbai and Chennai property. One 3i Infotech Trusteeship Services is the mortgagee in respect of the said properties. The appellant has deliberately not disclosed the copies of the title deeds of the suit properties in question. In any event the appellant had no reason to be aggrieved. The appellant should have moved the application before the learned Trial Judge. Since the sale of the said properties by the company were void ab initio, non est in the eye of law and nullity as such the title has not passed at all to the company.
37. On behalf of the appellant/Dunlop Company no argument was advanced.
38. We have considered the respective contention of the learned counsel for the parties and carefully gone through the materials placed before us. We notice when the application for interim relief was made there was no document to show that the appellant was the mortgagee nor it was a lender to any company for which any security has been furnished. However, on granting leave this appellant filed supplementary affidavit annexing certain documents. It appears from these documents that the appellant as rightly contended by Mr. Chatterjee that appellant is not mortgagee and rather one M/s. 3i Infotech Trusteeship Services Limited is mortgagee and one M/s. Bhartiya Hotel is the mortgagor by indenture of the mortgage dated September 26, 2008 in respect of property at 132A, Dr. Annie Besant Road, Worli, Mumbai intending to furnish collateral security for SBLCF. Similar way by an indenture dated 26th September 2008 Dunlop Property Private Limited mortgaged in favour of the said 3i Infotech Trusteeship Services Limited mortgagee in respect of immovable property at Ambattur, Chennai in the State of Tamil Nadu collateral security for stand by letter of credit facilities. We have read these two documents annexed to the supplementary affidavit it appears that recorded mortgagee is purporting to act as a security trustee and acting on behalf of the ICICI Bank Limited. We are of the view that whatever may be the status of the said recorded mortgagee vis-�-vis the appellant the said recorded mortgagee is the separate juristic entity. It is difficult to conclude in this appeal whether the appellant before us can derive any title on the strength of the aforesaid document apparently executed in favour of 3i Infotech Trusteeship Services Limited. Thus on prima facie reading we cannot say that appellant is aggrieved rather the said recorded mortgagee might be aggrieved who has not approached us. Under those circumstances we think that the direction given by the learned Trial Judge at the instance of the appellant cannot be deleted. However reading the judgment and order of the learned Trial Judge we feel that it will be great injustice if observation recorded and direction given by the learned Trial Judge are allowed remain in the impugned judgment and order. Admittedly the parties who might be affected were not heard nor any notice was given. We therefore clarify those observation and direction will not be binding factor on any person at the moment simply, the learned Trial Judge at this stage has no jurisdiction. In the event the aforesaid two alleged mortgages are sought to be enforced by any person interested prior notice therefor should be given upon the Special Officer appointed by this Court who on receipt of the same will be entitled to approach the learned Company Judge to seek leave to take appropriate legal measure as may be advised and as may be directed. Therefore, we do not find any reason to grant any relief on this appeal. We make it clear that it would be open for the appellant to take steps in accordance with law; obviously notice of such action shall be given to the Special Officer in the event aforesaid transferred properties are sought to be roped in. Thus this appeal is disposed of with above observation and finding and direction.
There will be no order as to costs.
K.J. Sengupta, J.
Asim Kumar Mondal, J.
I agree.
