ARCHEAN GRANITES LTD Vs. RPS BENEFIT FUND LTD

JUDGEMENT

(1.) Leave granted. Heard the counsel.

(2.) The first respondent Company ('Company' for short), was the owner of an odd shaped (triangular) plot of land bearing No. 23, G.N. Chetty Road, T. Nagar, Chennai measuring 9315 sq. ft. The first respondent had mortgaged the said property in favour of Bank of Madura Ltd. in the year 1998 for a loan of Rs. 60 lakhs. The first respondent decided to sell the said property to pay its depositors and the secured creditor. It took out advertisements on 22.11.1998 and 21.3.1999 for sale of the property. After considering the responses, on 22.4.1999, the Board of Directors of first respondent passed a resolution to sell the said property to the appellant for a consideration of Rs. 1.65 crores and entered into an agreement of sale with appellant on the same day. In pursuance of it, the first respondent, under a Sale Deed dated 13.8.l999, sold the said property to the appellant herein for a consideration of Rs. 1.65 crores. The sale deed recited that out of the sale price, Rs. 95,80,275/- was paid to the vendor (first respondent); and as the property was subject to a mortgage in favour of Bank of Madura Ltd, Rs. 69,19,725/- was retained for payment to the said Bank towards full and final settlement of the dues of the vendor. On 9.9.1999, the appellant paid Rs. 10 lakhs towards the Bank's dues. The appellant offered the balance amount due to the Bank by a demand draft under cover of its letter dated 17.9.1999 with a request to the Bank to accept the same and discharge the mortgage.

(3.) In the meanwhile in July, 1999, Company Petitions No. 233 to 238 of 1999 were filed against the first respondent in the Madras High Court for winding up. By order dated 7.9.1999, the High Court appointed the Official Liquidator as the Provisional Liquidator, to take over the assets of the company into custody. In view of the pendency of the liquidation proceedings, the Bank refused to accept the balance amount and discharge the mortgage. The appellant therefore made an application to the High Court and sought confirmation and validation of the sale in its favour. It also sought permission to pay the balance money due to the secured creditor and receive the title deeds from the bank.