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Present: Mr. Arnn Bhardwaj, Sr. Adv. with Mr. Mayank Kumar, Advs. for the Appellant.
Mr. S.K. Maniktala & Mr. Alok Tripathi, Advs. for the
Respondent
+ EFA(OS) 4-5/11 & CM No.6694/11, EFA(OS) 6-7/11 &
CM No.6696/11 & EFA(OS) 8-9/11 & CM No.6698/11
*
In these Appeals, the first ground of challenge is that without a determination of the Appellant's Objections of the non compliance of Section 446 read with Section 537 of the Companies
Act, 1956, an order for sale of 'Vehicles/Dumpers' was contrary to law. In the circumstances of this dispute, it has been finally decided by the Hon'ble Supreme Court that the ownership of these
Vehicles/Dumpers was neither with the Appellant nor in the
Company in liquidation, but was always with Respondent No.1.
Obviously, it is for this reason that in the impugned Order, the learned Judge has, for equitable reasons, also gone into question of whether the Appellant was in possession of these
Vehicles/Dumpers. It is in this regard that it has been noticed that the Court Receiver of the Calcutta High Court was in possession.
The Appellant before us is a Guarantor and an Ex-Director of the
Company in liquidation. As a Guarantor, his liability is distinct from that of the Principal Debtor. The Appellant does not enjoy locus standi to challenge or assail the sale of assets belonging to the
Company in liquidation even though he may be an erstwhile
2011:DHC:12893-DB
Director. If there were any objections in this regard, it was for the
Official Liquidator to raise them.
Purely on equitable considerations, we had offered the
Appellant permission to purchase the Vehicles/Dumpers at ~
15,00,000/-, which appears to be the best offer received by the
Respondent for them. The Appellant has declined this opportunity.
So far as Sections 446 and 537 of the Companies Act are concerned, the words that are employed in the statute are 'suits or other legal proceedings'. A suit is a legal action of first instance.
The same was held in Official Liquidator; High Court ofA.P. -vs-
Andhra Pradesh State Financial Corpn., 2001(105) Company Cases
JUDGMENT
778. We are in respectful agreement with the Judgment of the learned Single Judge. It is distinct from execution proceedings. On a reading of Section 446 of the Companies Act, we are not persuaded by the argument of Mr. Arnn Bhardwaj, learned Senior Counsel for the Appellant, that this Section or any other Section of the Companies Act prohibits the sale of assets belonging to a third party without the leave of the Court. As already mentioned by us, the Appellant is a Guarantor and in the circumstances of the present Appeals, if anyone is aggrieved by the failure of taking leave under Section 446 of the Companies Act, it would be the Official Liquidator. No ground for interference made out. Appeals are dismissed. Pending applications are also dismissed. EFA(OS) 13-15/11 & CM No.8964/11, EFA(0S)16-18/11 & CM No.8966/11 & EFA(OS) 19-21/11 & CM No.8968/11 On the first hearing of the foregoing Appeals, that is, 1.4.2011, while issuing notice, we had clarified that the Company Judge would not be precluded from passing a final order. This was so ordered in view of the contention of Mr. Arnn Bhardwaj, learned Senior Counsel for the Appellant, that his objection of noncompliance with Sections 446 and 537 of the Companies Act, 1956 had not been taken into consideration by the learned Company Judge. In terms of the impugned Order dated 4.4.2011, this contention has also been specifically rejected. Reliance has rightly been placed on Official Liquidator, High Court ofA.P. -vs- Andhra Pradesh State Financial Corpn., 2001(105) Company Cases 778. Appeals are dismissed. Pending applications are also dismissed. /d~,. v::. May 25, 2011 tp VIKRAMAJIT SENI J. SIDDHARTH MRIDUL, ].