H.S.B.C. Bank Oman S.A.O.G. (Oman Internation Bank S.A.O.G.) v. The Official Liquidator Of Eupharma Laboratories Ltd And 2 ORS.

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

ORDINARY ORIGINAL CIVIL JURISDICTION APPEAL NO.196 OF 2017 IN COMPANY APPLICATION NO.43 OF 2014 IN COMPANY APPLICATION NO.108 OF 2013 IN COMPANY PETITION NO.945 OF 1998 HSBC Bank Oman S.A.O.G.

(erstwhile Oman International Bank S.A.O.G.) : Appellant.

Versus

The Official Liquidator of Eupharma Laboratories Ltd and ors.

: Respondents.

Mr. Rajeev K Panday a/w Mr. Sanjiv Punalekar i/by M Janardanan for the Appellant.

Mr. Naushad Engineer for the Official Liquidator. CORAM :

R. M. SAVANT & SARANG V KOTWAL, JJ.

DATE :

08th November 2017 P.C.

The above Appeal challenges the order dated 30/11/2016 passed by a learned Single Judge of this Court (S.C.Gupte, J) by which order the Company Application No.443 of 2014 filed by the Appellant came to be dismissed.

The Appellant herein claims to be a secured creditor of the company in liquidation one Eupharma Laboratories Ltd. The issue that is raised by the Appellant/Applicant is as regards the regularization of sale of the

property of the company in liquidation being land and factory building which was effected by one Lalitkumar Dave in favour of one M/s. Vasa Pharma Chem Pvt. Ltd. Since the sale was effected in its favour by the said Lalitkumar Dave during the pendency of the liquidation proceedings of which the said M/s. Vasa Pharma Chem Pvt. Ltd. had no notice, the said M/s. Vasa Pharma Chem Pvt. Ltd. filed an application for regularization of sale being Company Application No.108 of 2013. The said Application came to be allowed the learned Single Judge of this Court by order dated 23/07/2013, however, prior thereto the Official Liquidator has presented a report being OLR No.68 of 2012 along with re-submitted OLR No.130 of 2012 for declaring the sale of the property to the Respondent No.2 i.e. the said M/s. Vasa Pharma Chem Pvt. Ltd. to be void.

By the said report the Liquidator had also sought an order against the Respondent No.2 for delivery of possession of the property to the Liquidator. It is during the pendency of the consideration of the said report that the Respondent No.2 moved the said Company Application No.108 of 2013. The said application was founded on the fact that the Respondent No.2 had purchased the property bonafide and after taking over the possession of the said property it had spent an amount of Rs.234.30 lakhs for improvement of the property and for setting up of a chemical factory. It was also stated that it has started production activities in the property since October 2012 and during the period from 1st October 2012 to 31st March 2013 had produced goods worth over Rs.378 lakhs.

this Court directed the Official Liquidator to appoint a valuer from his Panel of Valuers to value the property which was the subject matter of the OLRs and the said Company Application. It was at the hearing of the said Company Application along with the OLRs when the report was opened by the Court, the property was found to be valued at Rs.139 lakhs. Upon this the Respondent No.2 through its counsel offered to pay the sum of Rs.139 lakhs to the Official Liquidator towards regularization of the sale under Section 536(2) of the Companies Act, 1956. As indicated above, the Company Court i.e. the learned Single Judge by order dated 23/07/2013 allowed the said Application by exercising discretion under Section 536(2) of the Companies Act and thereby regularized the sale in favour of the Respondet No.2.

The Appellant herein who as indicated above claims to be a secured creditor thereafter filed the instant Application being No.43 of 2014 questioning the regularization of the sale inter-alia on the ground that there was no notice of the OLRs as also the Company Application filed by the Respondent No.2 to the creditors including the Appellant, that the Court approved valuer had grossly undervalued the property whereas the valuation report obtained by the Appellant/Applicant puts the value of the property at Rs.5.08 crores.

Company in liquidation.

During the course of hearing of the said Application, the aforesaid grounds were reiterated by the learned counsel for the Appellant and it was also contended that the sale in favour of the predecessor in title of the Respondent No.2 being void and illegal, there could be no sale in favour of the Respondent No.2 and therefore there can be no regularization of sale. The aforesaid contentions have been dealt with by the learned Single Judge of this Court in the impugned order dated 30/11/2016. In so far as the valuation report of the Appellant/Applicant is concerned, the learned Single Judge has observed that the said valuation is the mere ipse dixit of the valuer meaning thereby the hypothesis on the basis of which the valuation has been arrived at cannot be seen from the said report.

It has further been held by the learned Single Judge that the valuation report produced by the Appellant was vis-a-vis the year 2013 whereas the date of reckoning for the valuation is the sale in favour of the Respondent No.2 which was in the year 2011. The learned Single Judge therefore did not deem it appropriate to give any credence to the said valuation report of the Appellant. We have also persued the said valuation report and upon such perusal we do not find any reason to deviate from the said observation made by the learned Single Judge.

In so far as the ground of no notice being served on the Appellant/Applicant is concerned, the learned Single Judge has observed that the Official Liquidator has served the notice on the creditors who had not chosen to remain present. The learned Single Judge did not countenance the submission urged on behalf of the Appellant/Applicant that the valuation that is required to be taken into consideration is as on the date of regularization of the sale.

The learned Single Judge held that sub-section 2 of Section 536 requires the Court to consider whether to regularize any disposition of property of the Company in liquidation after the commencement of the winding up proceedings and the matters therefore to be considered by the Court as laid down by the judgments of this Court as well as the Apex Court is on the basis of the bona fides of the parties in the matter of such disposition and the adequacy of consideration of such sale.

The learned Single Judge held that having regard to the fact that the Company Court by its order dated 20/06/2013, called for the valuation of the property as on the date of sale and later by its order dated 23/07/2013 accepted such valuation as final, had decided the said issue and therefore did not deem it appropriate to review or re-visit the said order on the basis of the arguments which were sought to be rendered on behalf of the Appellant/Applicant.

filed by the Appellant/Applicant for recall and review of the order regularizing the sale. We do not find any fault with the said reasons. We therefore do not deem it appropriate to exercise our Appellate Jurisdiction. The above Appeal is accordingly dismissed.

[SARANG V KOTWAL, J] [R.M.SAVANT, J]