Morgan Signature Towers Pvt. Ltd. Petitioner v. M.P Nagar And Another S

Mehinder Singh Sullar, J. (Oral)

The epitome of the facts, which needs a necessary mention for the limited purpose of deciding the core controversy, involved in the instant revision petition and emanating from the record, is that M/s Jalani Tools (India) Limited was the owner and in possession of the suit property, which had gone into liquidation in the year 1998. The Delhi High Court has appointed an Official Liquidator in the winding up proceedings, which are pending before the Company Judge (Delhi High Court).

2. M/s Morgan Signatures Towers Pvt. Ltd. petitioner-plaintiff (for brevity “the plaintiff”), claiming itself to be subsequent purchaser of some property of the company (in liquidation) through its attorney, by virtue of sale deed dated 27.10.2004 (Annexure P3), filed the suit (Annexure P5) for a decree of permanent injunction, restraining M.P Nagar son of Jagi Ram Nagar and Municipal Corporation, Faridabad respondent-defendants (for short “the defendants”) from taking forcible possession and from raising any construction on the disputed plot.

3. In the wake of notice, the defendants appeared and defendant No. 1 moved an application (Annexure P8) for rejection of the plaint, in view of bar created under section 446 of the Companies act (hereinafter to be referred as “the Act”). The plaintiff contested the application and filed the reply (Annexure P9), in which, it was pleaded that the provisions of section 446 of the Act are not applicable to the facts of the present case and hence prayed for its dismissal.

4. The trial Court accepted the application (Annexure P8) and rejected the plaint (Annexure P5) under Order 7 Rule 11 CPC, by way of (not so happily worded) impugned order dated 19.1.2011 (Annexure P11), the operative part of which is as under:-

“Apart from that it is also desirable to reproduce the observations of the Hon'ble Delhi High Court. According to applications “it was not open to the official liquidator to seek sale of these properties” as the same did not belong to the company (in liquidation) at the relevant time.

Here the word “notwithstanding” in Section 446 Companies Act bar any other court to override the express provision of Section 446. Moreover section 9 CPC also says that the courts shall subject to the provisions herein contained have jurisdiction to try all suits of a civil nature excepting suits of which their cognizance is either expressly or impliedly barred.

In the present case, His Lordship has specifically observed in this case that “it was not open to the official liquidator to seek sale of these properties” as the same did not belong to the company (in liquidation) at the relevant time.

Hence, after going through the decision of the Hon'ble Delhi High Court and Section 446 of C.A, I am of the view that this court is (sic. not) seized of any power from entertaining and going ahead with the case.

Thus, after keeping in view the above-mentioned discussion, I hereby reject the plaint under order 7 Rule 11 CPC for want of jurisdiction.”

5. Aggrieved by the decision of the trial court, the plaintiff filed the appeal, which was dismissed as well, by the Ist appellate Court, by means of impugned order dated 28.4.2011 (Annexure P14).

6. The petitioner-plaintiff still did not feel satisfied with the impugned orders of the Courts below and preferred the present revision petition, invoking the provisions of Article 227 of the Constitution of India. That is how I am seized of the matter.

7. Having heard the learned counsel for the petitioner-plaintiff, having gone through the record with his valuable help and after bestowal of thoughts over the entire matter, to my mind, there is no merit in the instant petition.

8. Ex facie, the argument of learned counsel that since the plaintiff has purchased the property from and has stepped into the shoes of company (in liquidation), so, his suit was maintainable and the Courts below committed a legal mistake in rejecting his plaint, is not only devoid of merit but misplaced as well.

9. Possibly, no one can dispute with regard to the crux of the observations of Hon'ble Apex Court in case Ammonia Supplies Corporation (P) Ltd. v. Modern Plastic Containers Pvt. Ltd. 1998 (4) R.C.R (Civil) 584 relied on behalf of the petitioner-plaintiff that “if the matters are not fully covered within the scope of section 155 of the Act, in that eventuality, the parties have to seek the mandatory leave and it is for the Company Judge to decide at the Ist instance as to whether the dispute is real or is privolons one just to oust the jurisdiction of the Company Court” and of the Kerala High Court in case Official Liquidator, Swaraj Motors (P) Ltd. (In liquidation) v. Income Tax Officer, Company Circle, (1972) 42 Company Cases 96 that “the assessment or reassessment proceeding or a proceeding to impose penalty under the Income-tax Act does not fall within the ambit of sub-section (1) of section 446 of the Act, as such a proceeding does not come under sub-section (2) of section 446”, but to me, the same would not come to the rescue of the petitioner-plaintiff in the instant controversy.

10. As is evident from the record that M/s Jalani Tools (India) Limited had gone in liquidation in the year 1998, in which, the official liquidator has been appointed and winding up proceedings are pending before the Company Judge in Delhi High Court. The plaintiff claimed that it has purchased the property after initiation of winding up proceedings from the attorney of the company (in liquidation), by virtue of subsequent sale deed (Annexure P3). Section 446 of the Act is as under:-

“Suits stayed on winding up order- (1) When a winding up order has been made or the Official Liquidator has been appointed as provisional liquidator, no suit or other legal proceeding shall be commenced, or if pending at the date of the winding up order, shall be proceeded with, against the company, except by leave of the [Tribunal] and subject to such terms as the [Tribunal] may impose.

(2). [Tribunal] shall, notwithstanding anything contained in any other law for the time being in force, have jurisdiction to entertain, or dispose of—

(a) any suit or proceeding by or against the company;

(b) any claim made by or against the company (including claims by or against any of its branches in India);

(c) any application made under section 391 by or in respect of the company;

(d) any question of priorities or any other question whatsoever, whether of law or fact, which may relate to or rise in course of the winding up of the company

whether such suit or proceeding has been instituted or is instituted or such claim or question has arisen or arises or such application has been made or is made before or after the order for the winding up of the company, or before or after the commencement of the Companies (Amendment) Act, 1960 (65 of 1960).”

11. A conjoint and meaningful reading of this provision would reveal that when a winding up order has been made or the Official Liquidator has been appointed as provisional liquidator, no such suit or other legal proceeding shall be commenced or if pending at the date of the winding up order, shall be proceeded with against the company, except by leave of the Court and subject to such terms that may be imposed. Furthermore, any suit or proceeding or any claim, any application made under section 391 of the Act by or in respect of the company and any question of priorities or any other question whatsoever whether of law or fact, which may relate to or use in course of the winding up of the company cannot be decided except with the prior leave of the Company Court and not otherwise. Such questions are to be decided by the Company Court at the first instance in this relevant connection. This provision perhaps was amended to avoid the unnecessary multiplicity of the proceedings.

12. Therefore, to me, the Courts below have rightly negatived the claim of the plaintiff and rejected its plaint, by way of impugned orders (Annexures P11 and P14). Such impugned orders containing valid reasons cannot possibly be set aside, in exercise of limited revisional jurisdiction of this Court under Article 227 of the Constitution of India, unless and until, the same are perverse and without jurisdiction. Since no such patent illegality or legal infirmity has been pointed out by the learned counsel for the petitioner-plaintiff, so, the impugned orders (Annexures P11 and P14) deserve to be and are hereby maintained in the obtaining circumstances of the case.

13. No other legal point, worth consideration, has either been urged or pressed by the learned counsel for the petitioner-plaintiff.

14. In the light of the aforesaid reasons, as there is no merit, therefore, the instant revision petition is dismissed as such.