AJAY JOHRI Vs. SINGHAL LAND AND FINANCE

JUDGEMENT

(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. 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.