ANIL KAUR Vs. HARYANA FINANCIAL CORPORATION

JUDGEMENT

(1.) A Company, under the name and style of Punjab Malt Private Limited came to be incorporated on 1-12-1973 having been promoted by the petitioner and her husband, namely, Ranjit Singh along with Mr. L. M. Thapar and late Kanwar Shamsher Singh who were also Directors of the Company along with the petitioner and her husband. The name of the Company was later on changed as "Punjab Malt Limited" (hereinafter referred to as "the Company"). The Company was set up as a heavily Export Oriented plant for the manufacture of Malt from Barley at Panchkula in Haryana. Respondent No. 1 agreed to advance a loan of Rs. 30.00 lacs to the Company. The loan was secured by respondent No. 1 with the mortgage of the assets and properties of the Company along with personal guarantee of the petitioner and her husband as also personal guarantee of Kanwar Shamsher Singh and another Director of the Company. The Company also secured loan from IFCL, Syndicate Bank and New Bank of India (now merged into PNB). The pari passu charge was created in favour of IFCI. It is admitted factual position that the unit did not take off and production never commenced. It is alleged that even though respondent No. 1 agreed to pay loan of Rs. 30.00 lacs, however, only one-third amount was disbursed. With a view to make up its financial requirements and overcome other related problems, the petitioner floated a public offer by issuing 2,04,000 shares of Rs. 10.00 each for cash at par. Despite that the Company could not go into production and became defaulter in payment of its dues to all the financial institutions referred to above. Respondent No. 1 vide letter dated 7-3-1979 recalled the entire loan from the Company. It is alleged that at the time of recall, total outstanding amount was Rs. 11,23,229.164 paise. The Company objected to the recall. In view of default, the Financial Institutions formed a consortium with IFCI as the lead partner and decided to take over the management and control of the Company by superseding the existing Board of Directors to be substituted by their own nominees. An understanding was arrived at between the management of the Company and the Financial Institutions. It is stated that under the said understanding the petitioner and her husband were to sell their shares in favour of Kanwar Shamsher Singh, nominee of the financial institutions and banks at a consideration of Rs. 7,25,420/- and also to relinquish the management and control. It is further alleged that in view of the understanding, the personal guarantees given by the petitioner were to be released. The petitioner tendered her resignation from the Board of Directors vide letter dated 9-7-1979 which was accepted by the then Board of Directors. An intimation in this regard was given by the petitioner to the financial institutions vide her letter dated 16-7-1979. It is further alleged that the petitioner wrote communications to all the financial institutions to release personal guarantees on the basis of alleged package deal between the financial institutions, Kanwar Shamsher Singh, on the one hand and the petitioner and her husband on the other hand. Some of such communications have been placed on record as An-annexure P-9 (collectively). It is also the case of the petitioner that after the exit of the petitioner and her husband, the Board was reconstituted with the nominees of respondent No. 1 as is evident from the Director's report dated 7-9-1979 (Annexure P-10). To substantiate that the outstanding amount of respondent No. 1 up to 31-12-1978 was only Rs. 9,67,215.95 paise, reference made to the balance sheet dated 25-8-1979 as it stood on 31-12-1978 (Annexure P-ll). A letter dated 25-2-1980 was received whereby petitioner's husband was informed by IFCI that he is still liable for the payment of the Corporation dues on the basis of the bond of guarantee. The petitioner claims to have revoked her personal guarantee vide letter dated 7-3-1980 (Annexure P-14). Some understanding reached between the financial institutions and Kanwar Shamsher Singh whereby the Board of Directors was re-constituted and some decisions were taken as is evident from Annexure P-15. In the meanwhile, a winding up petition No. 211 of 1980 under Section 433 of the Companies Act came to be filed in the High Court of Punjab and Haryana at Chandigarh by various persons. The Company was accordingly ordered to be wound up and official liquidator attached to the Court asked to take over the management and affairs of the Company vide order dated 27-7-1984.

(2.) It is alleged that the petitioner was informed by her tenant of SCO 12, Sector 17, Chandigarh that a warrant of attachment of rent has been issued by respondent No. 2, the Collector as per recovery certificate dated 22-2-2006 issued by respondent No. 1. A public notice in this regard was also issued by respondent No. 2 regarding attachment of the property. Order of winding up was challenged by respondent No. 1 in Company Appeal No. 19 of 1997 which came to be dismissed vide order dated 12-1-2007. As a consequence of the winding up order properties of the Company were put to sale under the orders of High Court of Delhi under Section 30 of the State Financial Corporations Act, 1951. The sale was confirmed by the Hon'ble Delhi High Court vide its order dated 27-10-2005 in favour of Chandigarh Malt Limited at the instance of IFCI. It is further case of the petitioner that respondent No. 1 did not initiate any action against the Company for recovery of its dues nor even got its charge registered with the Registrar of companies in terms of Section 125 of the Companies Act. Respondent No. 1 did attempt by making an application for registration of the charge before the Company Law Board after seven years and seven months which was objected to by the Syndicate Bank and the Company Law Board vide its order dated 26-2-1995 asked respondent No. 1 to obtain leave of the High Court under Section 446 of the Companies Act. Despite this order, no application was made before the High Court. Respondent No. 1, however, approached the Official Liquidator who declined the request. The petitioner has challenged the recovery certificate dated 26-2-2006 and the warrant of attachment dated 22-1-2007 attaching the rent accruing from SCO No. 12, Sector 17E in the present petition.

(3.) The contesting respondents filed a detailed written statement. While this petition was pending, Hamohinder Singh Chadha, Mrs. Varinder Chadha, Sandeep Bansal and Ranjeesh Bansal, filed CM. Nos. 12130-32 of 2009 for impleadment as party respondents claiming to be purchaser of the property on the basis of a decree of civil Court. The applicant has also pleaded that the entire sale consideration amount i.e. Rs. 8.50 crores has been deposited in the Executing Court on 13-12-2007. The applicants have also purchased the stamp paper amounting to Rs. 54,36,900/-for execution of the sale deed. Respondent No. 1 moved an application before the Executing Court for recall of the order passed by Executing Court and also asked for stay of release of the amount and a civil revision also came to be filed before this Court for setting aside the order dated 25-10-2008 whereby the consideration amount was ordered to be released in favour of the judgment-debtor. In CR No. 6443 of 2008, operation of the order of the Executing Court was stayed vide order dated 20-11-2008. The application on coming to know about the pendency of this writ petition had filed this application for impleadment claiming right over the property sought to be attached through the impugned order as a purchaser thereof and has pleaded that respondent No. 1 can only claim the sale consideration which has been deposited by the applicant before the Executing Court.