MAXWORTH ORCHARDS (INDIA) LIMITED Vs. N.RADHAKRISHNAN

JUDGEMENT

(1.) Company Application Nos.434 and 435 of 2009 were filed by Maxworth Orchards (India) Limited (Maxworth), represented by the Administrator and the Official Liquidator, seeking to restrain the original land owners, and T. Mohan and D. Thirumagal, who claim title through them (the Alleged Purchasers), the respondents therein, from further alienating the assets described in the schedule to the judge's summons and to set aside the sale deeds and other conveyances registered in favour of the first and second respondents therein.

(2.) The company in liquidation/Maxworth was engaged in the business of procuring lands and subsequently transferring small parcels thereof to depositors / debenture holders. For such purpose, Maxworth entered into agreements with land owners or aggregators and obtained powers of attorney ( PoAs) in favour of its employees. Maxworth claims that such PoAs are coupled with interest inasmuch as consideration was paid for the purchase of the relevant lands. By using such PoAs, the relevant employees of Maxworth subsequently conveyed small parcels of land in favour of depositors of Maxworth. Maxworth conceived of and executed several projects in this manner. Since the business was mismanaged, Maxworth became insolvent. With regard to most of these projects, the process of conveying parcels thereof to depositors was incomplete when Maxworth became incapable of discharging its obligations to depositors. As a result, at that time, PoAs were in force in favour of ex-employees and the lands continued to be in the names of the original land owners.

(3.) In such circumstances, C.P.No.57 of 1998 was filed by EPC Industries Limited on or about 24/2/1998 to wind up Maxworth. While such petition was pending, Company Application No.63 of 2001 was filed to convene a meeting of unsecured creditors to consider a scheme of arrangement. In those proceedings, an Administrator was appointed on 12/2/2001. Thereafter, the Administrator filed Company Application No.740 of 2003 to restrain the agents under all the PoAs from alienating lands purchased by Maxworth in the names of these agents by using its funds and an injunction order was issued as prayed for by the Administrator on 24/4/2003. This order was extended until further orders by later order dtd. 18/11/2003. It should be mentioned that A. Venkatesan and M.Shankar, who are arrayed as respondents 44 and 45 in Company Application Nos.434 and 435 of 2009, were parties to Company Application No.740 of 2003. Subsequently, on 6/2/2006, the Administrator was conferred with all the powers of a provisional liquidator. Thereafter, the Official Liquidator was appointed as Provisional Liquidator on 17/9/2010.