M.A:18/2011
1. This appeal impugns the order dated 24.11.2010 passed by the Learned Presiding Officer, DRT-I, Chennai in IA No.135/2006 in OA 23/2005. The order under appeal in this case was passed by the Ld. Presiding Officer in a “common order” alongwith the order in IA No. 174/2010 in OA 23/2005.
2. The case of the appellant may be stated as follows:
It is stated that the appellant is the applicant in OA No.23/2005 pending in DRT-I Chennai and that the said OA was originally filed by ICICI Bank Ltd., against the first respondent for the recovery of a sum of Rs.8,18,80,538/- together with future interest and against the 2nd respondent for a sum of Rs.210 lakhs together with future interest. It is stated that after the filing of the OA the debt alongwith the securities and all other connected rights were assigned by ICICI Bank Ltd., to and in favour of the appellant.
It is stated that thereafter the appellant filed IA No.559/2005 for the substitution of the appellant as the Applicant in the OA in the place of ICICI Bank. It is stated that the said IA was allowed by DRT on 2.2.2006 and the necessary amendment was carried out in the OA. It is stated that the order dated 2.2.2006 passed in IA No.559/2005 was challenged by the respondents in appeal before this Tribunal and the same was disposed of by holding that the issue of assignment can be made as a specific issue at the time of arguments.
It is stated that even when the substitution petition was pending before the Tribunal below the respondents took steps to transfer their assets and properties with a view to defraud its creditors, including the appellant.
It is stated that the appellant therefore filed IA No.586/2005 before the Tribunal below for the grant of orders of injunction restraining the respondents from in any manner alienating, encumbering or transferring their assets and shares pending disposal of the OA and by order dated 15.12.2005 the tribunal below ordered the respondents to maintain ‘status quo’ until further orders. It is stated that inspite of the said order the first respondent floated a wholly owned subsidiary company by name ‘Adderley Estates Ltd.,’ and proceeded to transfer its immovable assets in favour of the said ‘Adderley Estates Ltd.,’ and presented the said document for registration on 15.3.2006 before the Sub Registrar, Coonoor and the same is pending registration for want of certain documents.
It is stated that the act of the first respondent in executing a document of transfer of its assets in favour of its wholly owned subsidiary company with the full knowledge of the order of ‘status quo’ passed by DRT-I Chennai is an act in violation of the order of the said Tribunal and that the same amounts to a contempt of Court. It is stated that the appellant therefore filed IA No.135/2006 before the Tribunal below seeking to set aside the transaction effected by the 1st respondent in transferring Adderley Estates in favour of Adderley Estates ltd., under the Deed of Transfer presented for registration on 15.3.2006 and pending before the Sub Registrar, Coonoor under pending Doc. No.5/2006.
It is stated that thereafter the respondents came out with an application in IA No.67/2006 seeking to permit the first respondent to complete the transfer of Adderley Estates to and in favour of its wholly owned subsidiary company viz., Adderley Estates Ltd. It is stated that the applications IA No.135/2006 and IA No.67/2006 were taken up together for arguments and by order dated 30.3.2007 the Tribunal below ordered the parties to maintain ‘status quo’ till the disposal of the OA.
It is stated that aggrieved by the said order the appellant filed MA No. 83/2007 before this Tribunal and by order dated 12.11.2007 this Tribunal directed the tribunal below to dispose of OA No.23/2005 within a period of three months from the date of receipt of a copy of the order and also directed the parties to maintain ‘status quo’ as ordered by DRT-I Chennai and also directed the appellant to produce the assignment deed before the DRT alongwith its proof affidavit at the time of enquiry.
It is stated that since the order directing the time bound disposal of the OA was passed on the premises that the parties had consented for passing of the order the appellant filed a Review Application in Dy No.1342/2007 before this Tribunal for clarifying that the appellant did not consent for the order dated 12.11.2007 passed by this Tribunal in MA No.83/2007 and the said Review Application was ordered on 5.6.2008 expunging the words “The Ld. Counsel for the Respondents has fairly conceded….”. It is stated that the appellant thereafter filed CRP No. 1953/2008 before the Hon’ble High Court of Madras challenging the order dated 12.11.2007 passed in MA No. 83/2007 as reviewed on 5.6.2008.
It is stated that the Hon’ble High Court of Madras remitted the matter to DRT-I Chennai for determination of the question relating to substitution, the legality and propriety of the transfer of the mortgaged property and further directed all the parties to maintain ‘status quo’. It is stated that in pursuance of the said order the DRT took up the issues for consideration and by order dated 1.10.2009 in IA No. 559/2005 held that the order of substitution of the appellant in the place of ICICI Bank Ltd., is proper.
It is stated that said order was challenged by the respondents in CRP No.3331/2009 wherein by order dated 25.2.2010 the Hon’ble High Court of Madras held that the respondents can put forth all its contentions in the OA and directed DRT-I Chennai to dispose of IA No.135/2006 as expeditiously as possible and also to dispose of OA No.23/2005 within a period of three months from the date of receipt of a copy of the order and the parties were also directed to file their respective pleadings within a period of one month. It is stated that pursuant to the said order IA No.135/2006 was taken up for hearing by DRT-I Chennai.
It is stated that when the appellant came to know of the details of an another transfer effected by the 1st respondent i.e., the transfer of Glendale estates, the appellant filed an application in IA No.174/2010 before the tribunal below to set aside the sale effected in favour Glenworth Estates Limited as the same is hit by Section 52 of the Transfer of Property Act.
It is stated that the transferee companies viz., Adderley Estates Ltd., and Glenworth Estates Ltd., are not parties either to the OA proceedings or to the connected IA proceedings. It is stated that the said companies have no say whatsoever in OA No.23/2005 and they cannot also be heard in IA No.135/2006 and IA No.174/2010 as they had ventured to act against the orders of ‘status quo’ passed by the Tribunal below.
It is stated that however after the order of the Hon’ble High Court of Madras dated 25.2.2010 in CRP No.3331/2009 the transferees came out with an application in IA No.77/2010 seeking to implead themselves as parties to the OA proceedings.
It is stated that the applications in IA No.135/2006, IA No.77/2010 and IA No.174/2010 were heard together by the Tribunal below and by order dated 24.11.2010, the Tribunal below without considering the materials available before it erroneously directed the impleading of Adderley Estates Ltd., and Glenworth Estates Limited as parties to the IAs and OA.
3. The Ld. Counsel for the Appellant relied upon the following decisions in support of his contentions:
a) Bakhtawar Singh and others Vs. Nirmal Singh and others AIR 1973 Punjab and Haryana 448.
b) Robust Hotels (P) Ltd., and 03 Ors. Vs. E.I.H. Limited and Ors 2010-5-L.W. 544.
c) Usha Sinha Vs. Dina Ram and others (2008) 7 SCC 144
d) Prithawi Nath Ram Vs. State of Jharkhand and Others (2004) 7 SCC 261.
e) Director of Education, Uttaranchal and Others Vs. Ved Prakash Joshi and Others (2005) 6 SCC 98.
f) Delhi Development Authority Vs. Skipper Construction Co. (P) Ltd., and Another (1996) 4 SCC 622.
g) ICICI Bank Limited Vs. Official Liquidator of APS Star Industries Limited and Others (2010) 10 SCC 1.
h) Director of Education, Uttaranchal and Others Vs. Ved Prakash Joshi and Others (2005) 6 SCC 98.
i) Surjit Singh and others etc., Vs. Harbans Singh and Other etc., AIR 1996 SC 135.
j) Bakthavatsalam Vs. Anjapuli and 5 others 2001 (1) CTC 19.
4. The Respondents filed their written submissions and the same forms part of the record.
5. The Respondents relied upon the following decisions in support of their contentions:
a) Khemchand Shankar Choudhari and Anr. Vs. Vishnu Hari Patil and Others (1983) 1 SCC 18.
b) Bhagwan Dass Chopra Vs. United Bank of India and Others 1987 (Supp) SCC 536.
c) Savitri Devi Vs. District judge, Gorakhpur and others (1999) 2 SCC 577.
d) Dhurandhar Prasad Singh Vs. Jai Prakash University and Others (2001) 6 SCC 534.
e) Devendra Kumar Sarewgee Vs. Purbanchal Estates (P) Ltd., 2006 (9) SCC 199.
f) Amit Kumar Shaw Vs. Farid Khatoon 2005 (11) SCC 403.
g) Empress Mills Vs. Member, Industrial Court & Ors. 2007 (1) BCR 91
6. Heard the Ld. Counsel.
7. A perusal of the transfer deed dated 22.10.2005 between M/s Kothari Industrial Corporation Limited and M/s Glenworth Estate Limited reveals that the transfer of Glendale Estate to M/s.Glenworth Estate Limited has been made together with all assets, rights, benefits and other movables and immovable properties alongwith the liabilities and obligations of the said Estate.
It is also seen that it is further clarified in the undertaking contained in the said transfer deed that the transfer had been effectuated for a gross consideration of Rs.22 crores alongwith the Term Loan and debenture dues.
It is also seen that the transferee company is a wholly owned subsidiary of the transferor company. Similarly M/s Kothari Industrial Corporation Limited had transferred the Adderley Estates to M/s Adderley Estate Limited for a gross consideration of Rs.8,50,00,000/- and M/s Adderley Estate Limited is also a wholly owned subsidiary of the transferor company.
It is also seen from the affidavit filed in support of the application in IA No.77/2010 that Glenworth Estate Limited and Adderley Estate Limited have undertaken to settle the dues arising out of OA No.23/2005 upon due adjudication of the matter in accordance with law.
8. A perusal of the index sheet annexed to the original records pertaining to OA No.23/2005 reveals that Page Nos.747 to 819 are the proceeding sheets of the OA. From a perusal of Page 813 it reveals that it contains the order dated 15.12.2005 and a Xerox copy of the very same order / proceeding is stapled to the said proceeding sheet and contains endorsements which are reproduced below:
“Original order sent to ex. PO for signatures on 28.9.2006”
Sd/-
28.9.2006
“Reminder sent on 22.11.2006”.
Sd/-
22.11.2006
From the above it can be easily seen that the Ld. Presiding Officer did not sign the order on 15.12.2005 and had signed it only after 22.11.2006 i.e., nearly after one year and that too after a reminder dated 22.11.2006 was sent to him to sign the orders and further that he has signed not in one order dated 15.12.2005 but in two orders of the same order dated 15.12.2005.
The respondents have filed a copy of the ‘A’ diary proceedings dated 15.12.2005 though it is not a certified copy and have placed the same in Page No. 167 of their typed set filed in Appeal No.19/2011 before this Tribunal.
A perusal of the endorsement seen in the left side therein would reveal that the signature of the Ld. Presiding Officer found in the upper portion of the page may not be that of the Ld. Presiding Officer as the endorsement speaks of sending the order for signature to the ‘ex. PO’ on 28.9.2006 and that the endorsement would not have been made had the Ld. Presiding Officer signed the order on 15.12.2005 itself. Further a perusal of the docket sheet of the IA No.586/2005 reveals that the copies of the said IA were served on the respondents therein only on 24.11.2006 i.e., after one year of the order.
The non signing of the Ld. Presiding Officer in the order dated 15.12.2005, the office endorsement showing that the original order was sent to the ‘ex. PO’ for signatures on 29.9.2006 which was followed by a reminder on 22.11.2006 and the existence of two originals of the same order dated 15.12.2005, the service of the IA on the respondents only on 24.11.2006, the absence of any proof of service to demonstrate that the 1strespondent was informed of the order of ‘status quo’ dated 15.12.2005 before 24.11.2006, a verification revealing that an official of DRT-I Chennai was sent to Mumbai to obtain the signature of the Ld. Presiding Officer who had then rejoined his parent department i.e., Ministry of Law at Mumbai, when coupled with the averments made in paragraph 19 of the counter affidavit of the first respondent in IA No.135/2006 clearly reveal that there was no order of ‘status quo’ much less any order passed on 15.12.2005 and hence this Tribunal is compelled to brush aside the order dated 15.12.2005 upon which the signatures had been obtained after a period of one year and inserted in to the record and proceed to hold that the circumstances prevalent on 15.12.2005 and thereafter do not warrant this Tribunal to infer that an order of ‘status quo’ was indeed passed on 15.12.2005.
9. A perusal of the application filed by the petitioners in IA No.135/2006 and IA No.174/2010 reveals that the prayer made therein is to set aside the transaction effected by the first respondent transferring the Adderley Estates in favour of Adderley Estates Limited and Glendale Estate in favour of Glenworth Estate Limited. The main contention of the appellant is that the said transfer has been effected when the ‘status quo’ order dated 15.12.2005 passed by the Tribunal below was in operation.
It is seen from the records that the transfer of Glendale Estate in favour of Glenworth Estate Limited and Adderley Estates in favour of Adderley Estates Limited has been effected by transfer deed dated 22.10.2005 and 30.11.2005 on which dates there was no restraint upon the respondents from in any way dealing with their properties.
Further, as brought out above, the order of status quo did not exist on 15.12.2005 and could not have existed on any day before 22.11.2006 and that the Respondents were not put on notice about the existence of the order of ‘status quo’ prior to 24.11.2006.
10. Therefore, in view of the fact that the order of status quo did not exist on 15.12.2005 and could not have existed any day before 22.11.2006 this Tribunal is driven to conclude that the Ld. Presiding Officer, DRT-I, Chennai has not properly considered the facts and circumstances of the cases and has erred in coming to the conclusion that the Glenworth Estate Limited and Adderley Estate Limited are required to be impleaded in the IAs before proceeding to decide about setting aside the transfers where the respondents are said to have been restrained from transferring the properties by the operation of an non existent order said to be dated 15.12.2005 and such being the case this Tribunal is driven to hold that the Ld. Presiding Officer ought to have dismissed the IA No.135/2006 and IA No.174/2010 and also ought not to have ordered impleadment of Glendale Estates Limited and Adderley Estates Limited in the said IAs and ought to have proceeded to hold that the said IAs warrant only a dismissal.
The Ld. Presiding Officer ought to have taken up the OA itself for disposal and disposed of the same in obedience to the order of the Hon’ble High Court of Madras dated 25.10.2010 made in CRP No.3331/2009.
11. Therefore in view of the above the order dated 24.11.2010 passed by the Ld. Presiding Officer, DRT-I Chennai in IA No.135/2006 is hereby set aside and IA No.135/2006 shall stand treated as closed and the Ld. Presiding Officer is requested to take up the OA itself for disposal in obedience to the order of the Hon’ble High Court of Madras mentioned above and dispose of the same..
12. The appeal is disposed of accordingly.
Order delivered by DRAT Chennai on 7 th Sep 2011
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