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2007 DIGILAW 1305 (DEL)

AJAY JOHRI v. SINGHAL LAND AND FINANCE

2007-07-06

A.K.SIKRI, ARUNA SURESH

body2007
A. K. SIKRI, J. ( 1 ) M/s. Singhal Land and Finance Pvt. Ltd. was ordered to be wound up in Company petition No. 27 of 1982. The petition was admitted on 31. 3. 1982 when the official Liquidator was also appointed as the Provisional Liquidator. Thereafter, final winding up order was passed on 8. 8. 1983. On appointment of provisional Liquidator on 31. 3. 1982 direction was given to him to take possession of the registered office of the company along with other assets , books of accounts, documents, correspondence etc. With the passing of final winding up orders, the Official Liquidator was to act as the liquidator. Liquidation proceedings commenced thereafter. Matter was taken up by the company Judge on administrative side. After more than 24 years, Company Judge has passed the impugned order dated October 17, 2006, giving permission to the official Liquidator to file an application under Section 481 of the Companies act for dissolution of the company as according to him further liquidation proceedings would not be fruitful. These appeals are filed against the said order by some of the creditors who are unsecured creditors. They claim that still certain assets of the company are left which can be disposed of and outstanding debts of the creditors including that of the appellants can be paid. Therefore, the company be not dissolved at this stage. ( 2 ) WE may mention at the outset that as per the statement of the company itself, it had purchased land measuring about 105 bighas in Ghaziabad, U. P. out of which 60 bighas was mutated in its favour and balance land could not be transferred and sale deeds could not be executed in view of the U. P. Land Reforms Act and other enactments relating to ceiling of land. This 60 bighas land also could not be taken possession of by the Official Liquidator in liquidation proceedings. The Official Liquidator was able to take constructive possession of four plots but without proper demarcation which fact was noted by the Company judge in the order passed on 1. 3. 1994. Later on status report was filed mentioning that even this was only a symbolic possession obtained on 9. 1. 1986 and actual possession was not taken as there was no demarcation and the land could not be identified. 3. 1994. Later on status report was filed mentioning that even this was only a symbolic possession obtained on 9. 1. 1986 and actual possession was not taken as there was no demarcation and the land could not be identified. It appears that most of this land was transferred to other persons and the allegation of the appellants is that there were fraudulent transfers. As far as remaining land is concerned it might have been encroached upon and said land could not be identified in the absence of proper demarcation. ( 3 ) THE grievance of the appellant is that the Official Liquidator failed to take proper steps by undertaking enquiry into the fraudulent transfers. He could have investigated into this aspect and filed appropriate proceedings under section 531 as well as under Sections 538 to 545 of the Companies Act. It is also submitted that in respect of other land which is not transferred but encroached upon, the Official Liquidator failed to get the possession by not getting it demarcated. Submission in nutshell was that the petitioners should not be made to suffer due to gross negligence and inaction on the part of the official Liquidator. The Official Liquidator should even be now directed to take such steps so that land is retrieved, thereafter sold and creditors paid. The appellants, therefore, impress that stage for dissolution of the company has not ripened and the liquidation proceedings should continue. ( 4 ) IMPUGNED order of the learned Company Judge would reveal that the learned company Judge was very much conscience of the aforesaid status of the land. Insofar as four plots are concerned of which symbolic possession was taken but actual physical possession could not be taken for want of demarcation, the Co. Judge had made efforts in this direction. Notices were issued to the Tehsildar, ghaziabad. Tehsildar filed affidavits from time to time stating that it was not possible to take any steps in this behalf. Position is noted by the learned company Judge in paras 6 and 7 of his order which read as under: "6. In these circumstances, this Court issued notice to the Tehsildar, ghaziabad to appear and furnish details of the land belonging to the company under liquidation. Several affidavits have been filed by Tehsildar Ghaziabad from time to time. Position is noted by the learned company Judge in paras 6 and 7 of his order which read as under: "6. In these circumstances, this Court issued notice to the Tehsildar, ghaziabad to appear and furnish details of the land belonging to the company under liquidation. Several affidavits have been filed by Tehsildar Ghaziabad from time to time. It appears from these affidavits that on the land belonging to the company in liquidation, buildings/houses have been construed and about 80 families are staying there. The affidavits also reveal that some land was sold by the company under liquidation to Mr. Rajinder Kumar and other on 21st march,1975. There have been subsequent sale deeds. However, these sale deeds are in respect of the land located in Khasra No. 420 measuring 662 hectares, khasra No. 421 measuring 278 hectares, Khasra no. 438 measuring 101 hectares, khasra no. 439 measuring 171 hectare and khasra no. 464 measuring 503 hectares situated at village Pawisadiqpur, Paragana Loni, Tehsil and Distt. Ghaziabad. 7. It is apparent that the company under liquidation was owner of lands and/or had entered into agreements to sell. Details of these lands can be found in annexure B to the reply filed by the company under liquidation. As many as 17 different properties/land were identified with reference to sale deeds in favour of the company under liquidation. Another list of nine other properties was also filed and it was stated that agreement to sell, etc. had been executed in favour of the company under liquidation. " ( 5 ) THE difficulty which the learned Company Judge has expressed is that it would be of no use taking any steps against the persons who got the land inasmuch as, as of today claim against the third party has become barred by limitation and the Managing Director had died long ago. This is clear from the following observation in the said order: "10. I do not see any purpose in allowing this matter to continue further as all the claims today against any third party are barred by limitation. Mr. R. S. Singhal who was the Managing Director of the company under liquidation has already expired and his legal heirs have filed an affidavit that they have not inherited any property or asset from their late father. The Official Liquidator is accordingly given permission to file application under Section 481 of the companies Act,1956. Mr. R. S. Singhal who was the Managing Director of the company under liquidation has already expired and his legal heirs have filed an affidavit that they have not inherited any property or asset from their late father. The Official Liquidator is accordingly given permission to file application under Section 481 of the companies Act,1956. The aforesaid application will be filed within 15 days. " ( 6 ) WE had called for the records and have gone through the same including various affidavits filed by Tehsildar, Ghaziabad from time to time and in particular affidavit dated 1. 3. 2001. We are in agreement with the opinion expressed by the learned Company Judge. At this distant time, no action can be taken in the matter as it would not bear any result. No doubt timely action by the Official liquidator would have saved the day. No doubt the Official Liquidator has failed to discharge his duty with due diligence and efficiency which is expected of the Office of the Official Liquidator. No doubt because of his failure and inaction, the assets of the company have frittered away. We are also conscience of the fact that ex-Director of the Company had practiced deception on numerous innocent people who parted with their money for purchase of plots which was to be developed by the company. These unwary buyers have neither got their land nor their money back. It is possible that land is fraudulently transferred to third parties and even to the relations of the ex-Directors. The learned company Judge has also adversely commented upon the inaction on the part of the office of the Official Liquidator and holding him responsible for the failure to get hold of and take the assets belonging to the company under liquidation. He has also mentioned that there was inaction on his part for about 7 to 8 years after his appointment as the provisional liquidator and even after final winding up order was passed he did not sprung into action. There was hardly any investigation into the conduct of the ex-Directors; possession of the land was not taken and all this has caused loss to the creditors of the company under liquidation. The harsh reality is that today no such action is possible after a lapse of more than 25 years. There was hardly any investigation into the conduct of the ex-Directors; possession of the land was not taken and all this has caused loss to the creditors of the company under liquidation. The harsh reality is that today no such action is possible after a lapse of more than 25 years. It is no use riding a dead horse and the only option is to bury the same. e. the company in liquidation by dissolving it under Section 481 of the Companies Act. ( 7 ) WE, therefore, find no reason to interfere with the order of the learned company Judge. This appeal is accordingly dismissed. No costs.