In Re: Europlast India Ltd. a Company Incorporated Under Companies Act, 1956 - Court Judgment

Excerpt:
company - scheme of compromise between company and unsecured creditors - approved by company court - transfer of suit properties by company in violation of scheme of compromise - scope of power of court or tribunal to enforce compromise and arrangement - section 391 and 392 of companies act, 1956 - what is the scope of power of the court while exercising jurisdiction under section 391 and 392 of the companies act - held, parliament has, in its wisdom, conferred a power of wide amplitude on the high court in india to provide for its continuous supervision of carrying out of compromise and/or arrangement and also the consequential power to make the supervision effective by removing the hitches, obstacles or impediments in working of compromise or arrangement by conferring power to give such directions in regard to any matter or for making such modification in the compromise or arrangement as it may consider necessary for the proper working of the compromise and/or arrangement (ratio in s.k. gupta and anr. v. k.p. jain and anr. applied).company - scheme of compromise between company and unsecured creditors - scheme approved by court - effect of a sanctioned compromise scheme - held, scheme sanctioned under section 391 of the act does not merely operate as an agreement between the parties but has statutory force and is binding not only on the company but even the dissenting creditors or members as the case may be.company - scheme of compromise between company and unsecured creditors - scheme approved by court - court issuing peremptory directions to parties to dispose suit property in particular manner - company transferring property in violation of court directive - whether company entitled to transfer suit property in violation of court order on ground that there was no order of injunction - held, order issuing peremptory directions to the parties cannot be wished away on the specious argument that it is neither an order of injunction nor prohibitory order, as such - the order clearly requires the 'e' company to deal with the suit property only in the manner provided therein and to apportion the sale proceeds as per the said order - it was no less than an order of injunction or a prohibitory order, which expects the party not to do a thing specified in the order - the order requiring the parties to do a thing in a particular manner, treating the same as order of injunction and the parties are bound to obey the same unless modified, varied or set aside by the court of law.property - transfer of immovable property - transfer in violation of judicial pronouncement - suit property transferred by 'e' company in violation of peremptory order issued by court upon approval of scheme of compromise - whether transfer of suit property by 'e' company illegal -held, transfer of immovable property in violation of an order of injunction or prohibition issued by the court of law, would confer no right, title or interest in the transferee, as it is no transfer at all - in the present case, court issued peremptory direction of selling the suit property in the manner specified and thereafter to disburse the sale proceeds as provided in the order - therefore, it was not open to 'e' company to transfer the suit property to third party in the manner other than the one stipulated by the court and that too without seeking prior permission of the court in that behalf - hence, transfer of suit property by 'e' company in favour of 'g' company was illegal and cannot be recognised in law.property - transfer of immovable property - transfer in violation of judicial pronouncement - defence of fraudulent transfer - section 53 of transfer of property act, 1882 - whether defense of fraudulent transfer in section 53 of transfer of property act applicable in cases of transfer of property in violation of judicial pronouncement - held, defence of section 53 will be of no avail in cases where the transfer is effected in breach of a judicial pronouncement - the doctrine expounded by the apex court and consistently followed is that if the transfer is in violation of the order of the court, the same is no transfer in the eye of law.property - transfer of immovable property - transfer of suit property in violation of judicial pronouncement - transferee in good faith and for consideration purchasing suit property - rights of transferee of suit property - whether 'k' company' a purchaser, in good faith and for consideration, of impugned suit properties of 'e' company acquires any right under registered conveyance deed - held, transfer which is in violation of the order of the court is illegal and cannot be recognised in law - the transferee under such transfer gets no valid title and does not acquire any right and interest in the immovable property - the fact that there exists a registered conveyance deed in favour of the 'k' company does not take the matter any further for the simple reason that 'g' company who has purported to transfer the property in favour of the 'k' company itself had no valid title and had not acquired any right or interest in the immovable property in law. - maharashtra scheduled castes, scheduled tribes, de-notified tribes (vimukta jatis), nomadic tribes, other backward classes and special backward category (regulation of issuance and verification of) caste certificate act (23 of 2001), sections 6 & 10: [s.b. mhase, a.p. deshpande & p.b. varale, jj] caste certificate petitioner seeking appointment against the post reserved for member of schedule tribe his caste certificate was invalidated subsequently held, his appointment would not be protected. the observations/directions issued by supreme court in para 36 of judgment in the case of state v millind reported in 2001 91) mah. lj sc 1 is not the law declared by supreme court under article 141 of the constitution of india. said observations/directions are issued in exercise of powers under article 142 of the constitution and also have no application to the cases relating to appointments and are restricted to the cases relating to admissions. the protection, if any, to be granted in the fact and circumstances of case would depend upon exercise of discretion by supreme court under article 142 of the constitution. said powers under article 142 of constitution is not available to the high court. hence no protection can be granted by high court even in cases relating to admissions. - taking overall view of the matter i would think it appropriate to first consider the application filed on behalf of the company as well as unsecured creditors for modification of the scheme which was originally sanctioned by this court on 18.1.2001. neither the company nor the unsecured creditors are averse to the sale of the property so as to ensure disbursement of the sale proceeds on pari passu basis amongst the unsecured creditors. ajay naithani, directors of the company be and are hereby authorized to monitor the entire process of postal ballot and that they are authorized to do all acts, deeds and things as may be necessary and/or expedite in its discretion for the completion of the above transactions in the best interest of the company and to settle all questions or difficulties that may arise in the course of the implementation of the said resolution. by their letter dated 22nd march, 2007 received by me on 23rd march, 2007 informed that they are under the impression that the claim of the fixed deposit holders and ashoka buildcon has not been ascertained yet and they would like to request that before proceedings further the committee may first ascertain/verify the claims of the depositors and other unsecured lenders including ashoka buildcon and company may under present circumstances arrange for the funds from the strategic investor to settle the outstanding liabilities of the company. was well aware that said property is required to be sold as per court's directions as per the scheme propounded by the company and payment is to be made to the unsecured creditors: 15) all these facts indicates that the company was well aware that the said sale is to be conducted by the committee and the sale proceeds thereof is to be paid to the creditors. that may unravel the relevant facts so as to effectively answer the matters in issue. dated, this 3rd day of december, 2008. when the matter appeared on 5th december, 2008, chairman of the committee took time to submit further clarification as the report presented by him did not disclose the names and details of the erstwhile directors at the relevant time as well as present directors of the 'e' and 'g' company. submits that he has made best efforts to get the latest addresses of the concerned unserved noticees, who incidentally are/were either associated with the europlast india ltd. 2. needless to observe that failure to cooperate with the inspection of record by the commissioner, the court may consider of initiating appropriate action against the authorised officer and/or the person present at the registered office, if so advised. further the chairman informed the board that the management has received the very good proposal for sale of the property situated at khopoli pen road, village vanvate, taluka khalapur, distt. 1,3,4, 7 and 8 have not only failed to appear but have also not bothered to file any response or affidavits. anand bisht-director as well as r. to buttress the stand of 'k' company reliance is placed on affidavit filed by one ramesh vaze as well as their employee mr. the first affidavit is dated 18th september, 2008. the second is dated 8th january, 2008 and the third is dated 8th february 2009. in the affidavit dated 18th september, 2008, he has stated that 'e' company, in bonafide and good faith, sold and transferred the suit property in favour of the 'g' company on 29th november, 2006 against consideration of rs. it was recorded in that letter that based on the claims verified and ascertained, the 'e' company may arrange for funds from the strategic investor to settle the outstanding liabilities of the company to the best of its ability. it is stated that the intention behind disposal of the property was only to settle the creditors and with good motive. it is so done for reasons best known to the board of directors of 'e' company at the relevant time. he has stated that since the creditors and depositors were approaching the new management for settlement of dues, the new management started to search a buyer for the suit property and accordingly with good intention sold the same to 'g' company for consideration of rs. he was informed by said ajay naithani that he had become director of 'e' company and that the company was intending to sell the suit property and had identified one buyer as well his assistance was sought as he was resident of maharashtra and the property was situated in khopoli- pen road, in village vanvati, taluka khalapur, dist. they disclosed that they would like to resell the property as and when opportunity comes. he has stated that since he was not interested to work for 'e' company, he was told that entire management has changed and he would like to engage him as lawyer. niti kakkar expressed inability to send vakalatnama, but still requested the affiant to appear even on 1st march, 2007 with assurance that vakalatnama would be made available before the next date without fail. in substance, it is asserted that the conveyance executed by 'k' company was in good faith and without notice of any prior or antecedent title adverse to the interest of 'g' company or 'e' company in respect of the suit property for consideration of rs. that presupposes that 'k' company acted in good faith in the matter of purchasing the suit property for consideration. raju shinde of om chemicals who in turn recommended the suit property. arun gupta, director to negotiate as well as execute the conveyance deed. in this affidavit, it is reiterated that 'k' company purchased the suit property in good faith and without any notice of any prior or antecedent title adverse to the interest of 'g' company or 'e' company or any fraudulent intent on the part of either of them. 30. besides, three secured creditors have filed separate affidavits dated 24/10/2008, 13/10/2008 and 12/1/2009 more or less contending that the transaction effected by 'e' company inspite of the order of the court was to defeat the claim of unsecured creditors who are similarly placed like them. it is submitted that action of the 'e' company and in particular, that of its board of directors was in breach of section 293(1)(a) r/w 192a as well as 192(4)(e) of the companies act. there is strong link between the directors of the two companies. as a matter of fact, the totality of circumstances would suggest that the suit property was transferred clandestinely so that the claim of the unsecured creditors would be defeated and delayed. moreover, it has been done contrary to and in violation of the order of the court, both dated 12th february, 2004 as well as the attachment order passed by the executing court. according to the counsel for the 'k' company, purchase of suit property by 'k' company from 'g' company was in good faith and for consideration without notice of pendency of any proceedings or of any order of the court. that shows that 'k' company has paid more than reasonable price for the suit property and is bonafide purchaser in good faith for consideration. the committee having failed to take those steps, the innocent purchaser of the suit property in good faith for consideration without notice to 'k' company cannot be blamed. he submits that at best, it may be a case of contempt action. but the rights which have enured in favour of the 'k' company by virtue of conveyance deed being purchaser in good faith with consideration, cannot be impaired as provided by section 53 of the transfer of property act. considering the grievance which was raised at the relevant time by the 'e' company as well as its unsecured creditors, the said order came to be passed. it is equally well established that the rights which are enshrined in the scheme of the class of creditors cannot be impaired or superseded unless it is by a new scheme approved in the same way as the earlier one. the order clearly requires the 'e' company to deal with the suit property only in the manner provided therein and to apportion the sale proceeds as per the said oder. the petitioner challenged that action before the drt as well as in appeal before the high court. 2. it was contended that considering the fact that injunction is in personem and not in rem, the same cannot affect the rights acquired by the petitioners in good faith for consideration. it finally held that the grant of sub-lease contrary to the order of status quo was clearly illegal and all actions including the grant of sub-lease and all actions founded on such sub-lease. once these two conditions are satisfied, the transfer 'must not be upheld'.the court further observed that it is well settled that if the courts were not to honour and implement their own orders and encourage party litigants, be they public authorities, to invent methods of their own to short circuit and give a go by to the obligations and liabilities incurred by them under orders of courts, the rule of law will become casualty in the processa consequence to be jealously guarded by all and at any rate by the highest courts in the state. the fact asserted that the transfer was in good faith and for consideration cannot extricate the transferee of the legal position and permit him to contend that the transfer in its favour was a valid transfer of title, right or interest in the immovable property in the face of order of injunction or prohibitory order. once the two conditions are satisfied, namely, that the transferor was party to the proceedings and the order was in force, no other enquiry would be relevant. in the present case, there can be no dispute that 'e' company was party to the proceedings before this court as well as before the executing court which issued order of attachment and order of sale of the suit property. both the orders of attachment issued by the civil court in execution as well as by the company court while modifying the scheme under section 391 pertain to the suit property and was passed against 'e' company, who was party to the respective proceedings and both these orders were in force. as is observed earlier, it is well established position that the transfers which are made in violation of the order of the court will have to be treated as illegal and non-existing in the eye of law. besides, k' company is purchaser in good faith for consideration. according to the counsel, since the 'k' company was purchaser in good faith and for consideration, the transfer of property in favour of 'k' company has created indefeasible right in favour of 'k' company on account of such transfer, which cannot be impaired as the same is preserved by section 53 of the transfer of property act. in that case, no argument of want of knowledge or that the transfer was in good faith could be countenanced as this would result in a situation that the parties can breach and violate court's order openly with impunity. - (1) every transfer of immovable property made with intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed. nothing in this sub-section shall impair the rights of a transferee in good faith and for consideration. 46. further, the argument that the 'k' company was purchaser in good faith and for consideration and the rights acquired by the 'k' company under the registered conveyance deed cannot be impaired clearly overlooks the statement of law that the transfer which is in violation of the order of the court is illegal and cannot be recognised in law. 20,000/- secured thereby in priority to the claim of the second mortgages, contending further that as the latter failed to appeal against the decision of the district judge they were estopped from disputing the same. the commissioner though a responsible and well informed officer of this court, who was acting as company registrar at the relevant time, did not think it necessary to move for extension of time and for further consequential directions. suffice it to observe that the inaction and failure of the commissioner which is palpable from the record, has resulted in the present situation where the party to the order was emboldened to act in defiance and in violation of the order of the court. the question as to whether failure and inaction of the commissioner was deliberate, intentional or otherwise; that militates against the argument of 'k' company of having completed the transfer in good faith. this is a strong circumstance to attribute motives, as this circumstance is inexplicable. 'k' company has supported the claim of the secured creditors as well as the commissioner that the transfer effected by the 'e' company in favour of 'g' company was fraudulent and product of a conspiracy. as a result, i think it appropriate to direct 'e' company as well as 'g' company and its directors to bring back the amount, which was received by them respectively towards transfer of the suit property. both 'e' company as well as 'g' company will have to bring back the amount with interest. the principal amount as well as interest amount shall be deposited within four weeks from today. (iii) however, if 'e' company and/or 'g' company fail to deposit the amount, as per clause (i) above, in that case, it is ordered that the suit property shall be disposed of by conducting court auction disregarding the two registered conveyances in favour of the 'g' company and 'k' company respectively, which are illegal and non-existent in the eye of law.a.m. khanwilkar, j.1. this common order will dispose of all the pending applications, show cause notices and chairman' reports.2. the background in which the present proceedings have emanated can be briefly mentioned as follows: the unsecured creditors of m/s. europlast india ltd. (hereinafter referred to as `e' for the sake of brevity) passed resolution on 14th october, 2000 which read thus:.resolved that subject to floor price for sale of the assets of the `e' company i.e. land and factory building at khopoli is fixed at rs. 3.60 crores. creditors are voting for the following scheme.the amount will be paid to the creditors through the hon'ble court within three months from the date of receipt of the entire consideration in proportionate after incorporating the additional names of creditors, if any, not later than three months from today after proper verification from the books of accounts of the applicant company and rest of the claim is given up by the creditors.provided that the sale is completed within six months from the date of the order of the hon'ble bombay high court sanctioning the scheme.the said 'e' company presented the scheme of compromise and/or arrangement before this hon'ble court for sanction in exercise of powers under section 391 of the companies act, 1956. the same read thus:'exhibit 'a'scheme of compromise and/or arrangementbetweeneuroplast india limited and its credtors1. in this scheme, unless in consistent with the subject of context the following expressions shall have the following meanings:1.1 'the company' means europlast india ltd. existing company within the meaning of the companies act, 1956, having its registered office at khopoli-pen road, village vanvate, tal. khalapur dist. raigad-410203, maharashtra.1.2 'the said act' means the companies act, 1956.1.3 'the appointed date' means 31st march, 2000.1.4 'the effective date' means the date on which the certified copy of the order of the high court at mumbai, sanctioning this scheme is filed with the registrar of companies maharashtra and goa.1.5 'creditors' means persons having financial claims for fixed deposits and liquinotes against the company as on 31st march, 2000 irrespective of whether those persons have instituted proceedings against the company inter alia by way of suits or criminal complaints under section 138 of negotiable instrument act or petition for winding up of the company or for recovery of such claims and have not obtained decrees or orders by consent or otherwise in their favour for payment of such claims against the company, but does not include those who have been paid in full or part as on 31st march, 2000 in respect of such claims in terms of such decrees, orders or otherwise and also does not include any other persons having claims against the company whether secured or not.1.6 'claims' means dues of the creditors of the company other than trade creditors for goods and services inclusive of interest being provided as for the arrangement pertaining thereto.1.7 'scheme' means the scheme of compromise in its present form with any modifications as may be appointed by the creditors and approved or imposed or directed by the high court at mumbai.2. the scheme although effective from the appointed date shall become operative from the effective date.3. the claim of all persons, concerns and/or bodies or bodies corporate who do not come within the definition of 'creditors' referred to above, will stand outside the purview of the scheme.3.1 upon coming into effect of this scheme and immediately on expiry of the three months from the effective date, the creditors of the company shall be paid their dues in the following manner:a) there are in all about 698 creditors for fixed deposits amounting totally rs. 1,22,83,284/-(maturity value)b) there are in all 480 creditors for liquinotes amounting totally rs. 2,46,38,000.c) the company to pay the said dues has decided to dispose off, out of its other assets, the land alongwith the factory building at khopoli, maharashtra.d) the company has estimated the net value of the said land and factory building at rs. 3.80 crores.e) the company out of the said amount of rs. 3.80 crores desires to pay off to the said creditors in monthly installments as mentioned below:to creditors upto rs. 25,000/- in monthly 12 equal instalments.to creditors upto rs.25,000/- in monthly 18 equal instalments.to rs.50,000/-to creditors upto rs. 50,000/- in monthly 24 equal instalments.to rs.1,00,000/-to creditors upto rs.1,00,000/- in monthly 36 equal instalments.and above 4. the creditors will not be paid any interest after 31st march, 2000.5. all payments received by the creditors from and on behalf of the company after 31st march, 2000 shall be adjusted and/or deemed to be adjusted against their dues as on 31st march, 2000 as appearing in the books of the accounts of the company.6. the creditors covered by the scheme shall not be entitled to claim any payment save and except in accordance with the scheme.7. in calculating the claims of the creditors and/or payments to be made by the company to the creditors under the 'scheme' the amount stated in the 'lists' annexed hereto and marked as exhibit e and exhibit f shall be treated as final and conclusive. the creditors whose claims are disputed shall be paid to be extent the company admits their claims in accordance with the provisions of the 'scheme'. for the balance amount, which is not admitted by the company in the manner aforesaid the payment will be made after the concerned creditors obtain any decree or order from any court of competent jurisdiction in this regard subsequent to the effective date and in such case such creditors will however, be entitled to all arrears of installments under the scheme and such arrears shall be paid within twelve months from the obtaining of such decree or order provided, however, that such decree or order from any court of competent jurisdiction is obtained after effective date.8. the scheme shall become valid, operative and binding as from the date of the order of the hon'ble high court of bombay sanctioning of this scheme between the company and creditors including creditors, whose claims are disputed as aforesaid.9. subject to the provisions of clause 7, above the commencement and/or continuation of all suits and proceedings including of those now pending against the company by the creditors shall remain stayed.10. the board of the directors of the company may consent on behalf of the company any modification of this scheme or accept any condition which the hon'ble high court of bombay may think fit to impose or approve or may do all acts, deeds and things necessary for carrying this scheme into effect.the scheme was duly considered by the company judge of this court on 18th july, 2001 and the company petition no. 327 of 2001 filed under section 391 of the act was disposed of in terms of the said order which reads thus:p.c.:the petitioner company has filed this petition seeking sanction of the scheme of compromise/arrangement at exh.b as modified and annexed at exh. c. it appears that the scheme is for the benefit of unsecured creditors of the petitioner company. pursuant to an order dated 4.8.2000 passed by this court the petitioners had convened a meeting of the unsecured creditors on 14.10.2000. in the meeting scheme was approved and sanctioned by the unsecured creditors including the applicant shri brain thomas d'souza. from the minutes of the meeting it appears that the unsecured creditors in value of rs. 1.60 lakhs were represented by shri rego, the learned counsel appearing for the said shri d'souza. the scheme has been signed by the unsecured creditors who were present in the meeting and a resolution to that effect was passed which appears on page 48 of the paper book. the resolution appears signatures including the signature of the learned counsel shri rego.2. the regional director of the department of company affairs has not filed any objection to the scheme, though served, long back on 25.5.2001. it appears that the regional director has written a letter dated 17th july, 2001 requiring the petitioner to furnish balance sheet of the company as on 31.3.2000 and four other documents viz.(a) copy of memorandum of association of the petitioner company.(b) list of creditors.(c) company application and(d) newspaper cutting in respect of publication of holding of meeting of creditors.i must record here that the petition was adjourned from time to time for the say of the regional director in the matter. it appears that besides, the serving a copy of the letter dated 17.7.2001 on the learned advocate shri pandit for the petitioner today in court the regional director has not bothered to examine the petition and file his objection, if any. in view of the objection by the unsecured creditors who are complaining of delay in payment of their deposits i have refused to adjourn the matter. i have myself examined the scheme of compromise in the interest of unsecured creditors, who have approved the said scheme. i presume that the interest of the unsecured creditors has been protected by the learned counsel who was personally present in the meeting. it is therefore not necessary to adjourn the matter which would further delay the implementation of the scheme. there is no material before me not to accept the scheme and not to sanction the scheme.shri rego the learned counsel for one of the unsecured creditors has filed an affidavit of shri d'souza to pray to vacate the order dated 9.6.2000 where by ad interim stay to the proceedings in cr no. 45 of 2000 pending in the court of the special judge under the maharashtra protection of interest of depositors (finance establishment) act, 1999 was granted by this court(bobde,j.) on 9.6.2000. shri rego submits that the criminal proceedings which are pending before the special court under the aforesaid special act should be continued to proceed further in accordance with law. he further submits that the criminal proceedings are all together different from the civil proceedings before this court under section 391(b) of the companies act, 1956. shri pandit however, submits that on the complaint by the unsecured creditors the police have investigated in the complaint in the said act and that the directors were arrested and were kept in custody and were subsequently released on bail. shri pandit further submits that the investigation at the end of the police are completed and the entire record was submitted by the company during the course of the investigation and that the record is in the custody of the special court. shri pandit submits that he has no objection if the criminal proceedings continue and his clients would extend all cooperation in the proceedings before the special court. his prayer however is that no arrest of any of the directors/employees should be permitted or allowed.3. as held in the case of uma investments pvt. ltd. reported in company cases 1977 vol.47 page 242, by the learned single judge of this court the criminal proceedings can be commenced or continued notwithstanding the fact that the scheme was compromised or arrangement has been initiated under section 391. i am in respectful agreement with the said ratio in the said judgment. if the criminal proceedings are commenced they should be allowed to complete as expeditiously as possible and to let the criminal law take its own course and criminal proceedings should not be held up because civil proceedings are initiated and are pending. in the present case the scheme of compromise was approved by the unsecured creditors and has been sanctioned by this court today. under the scheme the unsecured creditors would stand benefited. there is no reason why the criminal proceedings should not be allowed to be completed in accordance with law. at the same time i agree with shri pandit that the director/employees of the petitioner company need not undergo once again harassment and rearrest by the police which would be unwarranted as the entire record is in the custody of the special court. if the presence of any of the directors or employees is required in the court the court certainly can issue summons to such persons to remain present in the court and shri pandit assures this court that they will certainly remain present in the court and extend dull cooperation in the proceedings. according to me, therefore, their arrest will not be necessary unless of course the special court finds that the directors/employees were not cooperating in the proceedings, the special court would certainly have powers and discretion to issue appropriate orders in that respect.in the aforesaid reasons i vacate the ad interim order passed by this court on 9.6.2000 staying the proceedings in c.r. no. 45/2000 pending before the special judge, under mpid act, 1999. it is hoped that the proceedings would be expeditiously disposed of. in the aforesaid circumstances the company petition is disposed of as above with no order as to costs.all concerned to act on a copy of this order duly authenticated by the company registrar.3. after the above said scheme was sanctioned by the company judge of this court, one of the creditor of the company m/s. ashok buildcon pvt. ltd. had resorted to arbitration proceedings against the 'e' company. the said arbitration proceedings were decided against the 'e' company where under the said m/s. ashoka buildcon pvt. ltd. became entitled to recover substantial amount. accordingly, the said creditor filed execution proceedings against the 'e' company. the executing court was pleased to attach the property of the 'e' company and also directed sale of the property consequent to the said attachment for sum of rs. 50 lakhs only by issuing sale notification/proclamation on 4th august, 2003.4. the 'e' company immediately rushed to this court and filed company application no. 673 of 2003 for staying the auction to be held on 28th august, 2003. one of the unsecured creditor also filed company application (lodg) no. 75 of 2002 for staying of auction sale to be held on 28th august, 2003 at panvel of the suit property belonging to the 'e' company being land and factory building situated at khopoli, village vanvatti, taluka khalapur, district-raigad. it was further prayed that pending decision of the said application further proceedings pending before the executing court be stayed. at the same time, one more application being company application (lodg) no. 139 of 2003 was moved before this court since the suit property in question could not be disposed of inspite of the order dated 18th july, 2001. in this application, it was prayed that the scheme of compromise dated 18th july, 2001 be modified to a limited extent of granting further period of 12 months for the disposal of the companies land and factory building at khopoli or in the alternative the said property be ordered to be disposed of by the special committee of unsecured creditors of the applicant company under the supervision of this hon'ble court or in the alternative, the court may appoint any fit and proper person to dispose of the assets of the company. all these three applications came to be disposed of by a common order on 12th february, 2004. relevant portion of the said order reads thus:2. having considered the rival submissions, the foremost question that arises for my consideration is whether the said ashoka buildcon pvt. ltd., can be allowed to proceed with the auction of the immovable assets of the company? to my mind, that question will have to be answered in the negative for more than one reason. in the first place, the proceedings are already pending before this court for granting further time or to modify the scheme as already sanctioned on 18.7.2001 by this court. indeed, the time granted under the scheme as sanctioned by this court on 18.7.2001 has already expired, but the fact remains that application has been filed not only by the company, but also by some of the unsecured creditors to give effect to the scheme which was already sanctioned. the said ashoka buildcon pvt.ltd., has become creditor by virtue of the award passed in its favour and against the company on 30.11.2001. the said ashoka buildcon pvt. ltd. in that sense is also one of the unsecured creditors. taking overall view of the matter i would think it appropriate to first consider the application filed on behalf of the company as well as unsecured creditors for modification of the scheme which was originally sanctioned by this court on 18.1.2001. neither the company nor the unsecured creditors are averse to the sale of the property so as to ensure disbursement of the sale proceeds on pari passu basis amongst the unsecured creditors. the said ashoka buildcon pvt. ltd. being one of the unsecured creditors would also be benefited by the said proposal which was approved by this court, if this court was to modify the scheme already approved earlier.3. accordingly, in my opinion, it would be appropriate to appoint committee of unsecured creditors to facilitate sale of the immovable assets of the company so as to recover proper sale proceeds corresponding to the fair market price of the said assets.4. the committee shall consist of five persons. the company registrar of this court is appointed as chairman of this committee, being an independent person. one representative of the company m/s. europlast india limited, one representative of ashoka buildcon pvt. ltd., and two representatives of the remaining unsecured creditors to be notified to the company registrar of this court within two weeks from today.5. the said committee is authorised to take steps to issue the advertisement for inviting offers from public for auction of immovable assets of the company on usual terms and conditions.6. before issuing the advertisement, the committee shall call for valuation report regarding the immovable assets to be auctioned, from the empaneled valuers of this court.7. the proposed auction to be concluded within twelve weeks from today and the sale proceeds received be deposited in this court so that the same can be disbursed amongst all the unsecured creditors on para pasu basis.8. accordingly, applications filed by the company and some of the unsecured creditors are allowed on the above terms.in terms of the above order, the committee appointed by the court under the chairmanship of the then company registrar of this court and other five members was expected to take steps to dispose of the specified property of 'e' company in consonance with the observations made therein. that was to generate funds so as to repay the dues of the unsecured creditors which at the relevant time was stated to be around rs. 6(six) crores. there were 698 creditors for fixed deposits valued at rs. 1,22,83,248/-; 480 creditors for liquinotes valuing rs. 2,46,38,000/-. whereas, net value of the land and factory of the company was assessed at only rs. 3.80 crores.5. it is however, noticed that the committee did not take any steps in the matter as was expected under the order of the court. instead, the then board of directors of the 'e' company passed resolution on 28th august, 2006 which read thus:certified true copy of the minutes of the meeting of the board of directors held on monday, 28th august, 2006 at 3:00 pm at khopoli-pen road, village vanvate, taluka khalapur, distt. raigad, maharashtra.'resolved that pursuant to section 192a and other applicable provisions, if any, of the companies act, 1956 and the rules made there under, approval of the board be and is hereby accorded to conduct a postal ballot to seek the approval of the members of the company by an ordinary resolution to sell/transfer/and/or otherwise dispose off the property of the company situated at khopoli-pen road, village vanvate, taluka khalapur, distt. raigad, maharashtra and that the draft notice together with the explanatory statement annexed thereto as placed before the board be and is hereby approved and that the said notice along with the explanatory statement thereto be issued to the members by mr. ajay naithani, director of the company.''further resolved that the board has directed mr. deepak arora, director of the company to find a suitable place to shift the registered office of the company.''further resolved that mr. praveen bhatt has given her consent to act as a scrutinizer, for a period not exceeding sixty days from the date of appointment, to conduct the postal ballot of the company on a remuneration and out of pocket expenses as may be fixed by the board.''further resolved that mr. deepak arora and mr. ajay naithani, directors of the company be and are hereby authorized to monitor the entire process of postal ballot and that they are authorized to do all acts, deeds and things as may be necessary and/or expedite in its discretion for the completion of the above transactions in the best interest of the company and to settle all questions or difficulties that may arise in the course of the implementation of the said resolution.'for euro plast india limitedsd/-ajay naithanidirectorit is common ground that no prior intimation of this intended sale of the property by means other than the one provided under the order of this court dated 12th february, 2004 was brought to the notice either of the committee appointed by the court for sale of the property or of this court. at this stage, it is relevant to make note of the fact that by this resolution, the then board of directors of the 'e' company assigned the job of intended sale of the suit property to one mr. ajay naithani, director; mr. deepak arora, director and one mr. pravin bhat. significantly, the said pravin bhatt is a person none other than the ex-director of gorakhnath electrical private ltd.(hereinafter referred to as 'g' company). soon thereafter, the suit property was conveyed in favour of the 'g' company on 29th november, 2006. besides the above resolution, the board of directors of 'e' company allegedly passed another resolution on 18th november, 2006, which reads thus:certified true copy of the resolution passed by the board of directors of m/s euro plast india limited at its registered office on saturday, 18th november, 2006.'resolved that the company do hereby authorise mr. naresh kaushik as authorised representative to deal on behalf of the company in the property of the company situated at khopoli pen road, village vanvate, taluka khalapur, distt. raigad, maharashtra and to transfer the title of the said property and sign the necessary documents on behalf of the company.'further resolved that mr. naresh kaushik, authorised representative of the company be and is hereby further authorised to sign and execute all the agreement, deed and documents as and when required to handover the possession of the property to the buyer for and on behalf of the company and to do, perform, execute and exercise all or any of the acts, deeds, powers, authorities, matters and things and generally to do all such things as may be necessary in regard to the above to protect all the legal interests of the company.notably, by this resolution, the company authorised one mr. naresh kaushik to act as authorised representative of the 'e' company, so as to effectuate the sale of the suit property. soon after passing of the above resolution, the said mr. naresh kaushik executed the registered conveyance deed in favour of the 'g' company as authorised representative of the 'e' company on 29th november, 2006. the suit property was conveyed by the said registered conveyance deed for a sum of rs. 75 lakhs only. significantly, the said mr. naresh kaushik, who has acted as authorised representative of the 'e' company, also acted as a witness during the execution of the subsequent registered conveyance deed in respect of suit property by 'g' company in favour of m/s. s.h.kelkar and company pvt. ltd.(hereinafter referred to as 'k' company) vide conveyance deed dated 26th april, 2007.6. the above developments took place without the knowledge of the committee appointed by this court for sale of the suit property. moreover, the board of directors of 'e' company who were bound by the orders passed by this court under section 391 of the act, as much as the unsecured creditors of the 'e' company for whom the scheme was propounded, did not bother to move this court for appropriate directions. moreover, no record has been produced that postal ballot to seek approval of the members of the company was duly conducted. even the explanatory statement issued by mr. ajay naithani, director of the 'e' company to its members is not forthcoming.7. obviously, for want of knowledge and in ignorance of the above position, the commissioner appointed by the court moved this court, for the first time, by his report dated 31st march, 2008, praying that the directors and authorised representatives of the 'e' company be directed to cooperate to implement the court's order and submit documents in respect of the suit property and consequential directions. the said report reads thus:submitted to the hon'ble judge taking company matters:pursuant to the order passed by the hon'ble shri justice a.m. khanwilkar on 12th february, 2004 in the above matter, a committee was to be constituted of unsecured creditors to facilitate sale of the immovable assets of the company so as to recover proper sale proceeds corresponding to the fair market price of the said assets. the court has also ordered that the committee shall consists of five persons and i as company registrar was appointed as chairman of this committee. one representative of the company m/s. europlast india ltd., one representative of ashoka buildcon pvt. ltd. and two representative of remaining unsecured creditors to be notified to the company registrar within two weeks from the date of the order. by the said order, the committee was authorised to take steps to issue advertisement for inviting offers from public for auction of immovable assets of the company on usual terms and conditions. the court has also directed to call for valuation report regarding the available assets to be auctioned from empaneled valuers of this court. the court has also given other directions. copy of the said order dated 12th february, 2004 passed by shri justice a.m. khanwilkar is annexed hereto and marked as exhibit 'a'.advocate for m/s. ashoka buildcon pvt. ltd. by his letter forwarded copy of the order dated 12th february, 2004 and requested to take appropriate steps to implement the said court's order. accordingly, first meeting was fixed in the office of the company registrar on 11th october, 2004 and notices were sent to the advocate for the parties. on 11th october, 2004, mr. rupesh tiwari on behalf of advocate - g.n. pandit, advocate for europlast india ltd., mr. a.a. garge, advocate for ashoka buildcon pvt. ltd. attended the office. mr. tiwari in the said meeting stated that he has no instructions in the matter and advocate intends to withdraw the appearances. at the request of shri tiwari, meeting was adjourned to 18th october, 2004 at 5.00 p.m. and shri tiwari was directed to furnish name and address of the director of the company on or before 15th october, 2004 to implement the court's order. however, shri tiwari has not furnished the information called for. again the meeting was held on 18th october, 2004 at 5.00 p.m. on 18th october, 2004, shri tiwari, appeared on behalf of advocate shri g.n. pandit for m/s. europlast india ltd., shri a.a. garge, advocate for ashoka buildcon pvt. ltd. and shri n.j.d' monte, appeared on behalf of some of the unsecured creditors. on 18th october, 2004, shri tiwari stated that he has no instructions in the matter and advocate will be applying for withdrawal of the appearance. at his request, meeting was adjourned to 1st november, 2004 at 5.00 p.m. and thereafter meetings were adjourned from time to time and lastly on 12th january, 2005. on 12th january, 2005, shri garge, advocate for ashoka buildcon pvt. ltd. has written a letter stating that he is unable to attend meeting on 12th january, 2005 as he has been advised by a medical practitioner to take bed rest due to surgery and requested to adjourn the meeting in the first week of february, 2005. however, since nobody attended meeting on 12th january, 2005 no further steps were taken.thereafter, again in the year 2007, meeting was held on 6th february, 2007 and intimations were sent to the advocates for the parties. in the meeting held on 6th february, 2007, advocate for ashoka buildcon pvt. ltd. appeared with mr. d. h. bhagat, manager (legal) of ashoka buildcon pvt. ltd. in the notice which was sent to shri pandit, advocate for europlast india ltd. he put a remark ' as already informed earlier, i have to inform you once again that the client has taken away all the papers and my noc in the matter. i am no more therefore concerned in the matter. you are, therefore, requested to inform the client directly' in the said meeting, mr. bhagat on behalf of ashoka buildcon pvt. ltd. furnished the names and addresses of the directors of the company which are as under:1. harsha mani pant,khopoli pen road, village vanvate, talukar khalapur, dist. raigad, maharashtra.2. corporate office, delhi blue apartment, factory road, safdarjung ring road, new delhi - 110 026.the said meeting was adjourned to 21st february, 2007 and the notices were sent to the europlast india ltd., at the abovementioned addresses. on 21st february, 2007, mr. a.a. garge advocate for ashoka buildcon pvt. ltd. and ms. deepa kamath, advocate i/b. ms. annie fernandes for europlast india ltd. appeared and the at the request of ms. kamath, meeting was adjourned to 1st march, 2007. in the meeting held on 1st march, 2007, shri a.a. garge, advocate ashoka buildcon pvt. ltd. and ms. annie fernandes, advocate for europlast india ltd. and shri n.j.d' monte, advocate for some of the unsecured creditors appears and the advocate informed me that they will furnish names and addresses of the persons who shall be the committee member on or before the next date of the meeting. the said meeting was adjourned to 15th march, 2007. on 15th march, 2007, advocate shri a.a. garge, advocate for ashoka buildcon pvt. ltd. and shri n.j.d' monte, advocate for some of the unsecured creditors appeared, however, none appeared on behalf of the eurplast india ltd. mr. garge has suggested name of deepak bhagat as committee member on behalf of ashoka buildcon pvt. ltd. and he has furnished the address of shri deepak bhagat and his telephone number shri n.j.d' monte has suggested the name of alfe b. falcon and adrain pereira as committee members on behalf of the unsecured creditors and has furnished their addresses and telephone numbers. since none appeared on behalf of europlast india ltd., meeting was adjourned to 22nd march, 2007 at 4.30 p.m. on 22nd march, 2007, a.a. garge, advocate for m/s. ashoka buildcon pvt. ltd. shri n.j.d' monte, advocate for unsecured creditors and ms. annie fernandes, advocate for m/s. europlast india ltd. appeared. ms. fernandes requested for one week's adjournment to enable her to take instructions from her client in respect of the settlement of the claim of m/s. ashoka buildcon pvt. ltd. and unsecured creditors. she also stated that she will inform me about the name and address of the person who will be the committee member on behalf of m/s. europlast india ltd. on or before the next date of the meeting. it was made clear to ms. fernandes that it she does not communicate any name and address of the person who will be the committee member on behalf of m/s. europlast india ltd. on or before the next date of the meeting, matter will be proceeded with.at the request of ms. fernandes, meeting was adjourned to 30th march, 2007, at 4.30 p.m.in the meantime, europlast india ltd. by their letter dated 22nd march, 2007 received by me on 23rd march, 2007 informed that they are under the impression that the claim of the fixed deposit holders and ashoka buildcon has not been ascertained yet and they would like to request that before proceedings further the committee may first ascertain/verify the claims of the depositors and other unsecured lenders including ashoka buildcon and company may under present circumstances arrange for the funds from the strategic investor to settle the outstanding liabilities of the company. hereto annexed and marked as exhibit 'b' is a copy of the said letter dated 22nd march, 2007.on 30th march, 2007, shri a.a. garge, advocate for ashoka buildcon pvt. ltd. and shri n.j.d' monte advocate, on behalf of some of the unsecured creditors attended the meeting. however, no one was present on behalf of europlast india ltd. shri garge submitted that europlast india ltd. is not co-operating and they are not interested in implementing the court's order. they are also not attending the meeting and not suggesting the name of the person who could be a committee member. similarly, they are not giving any clear instructions to their advocates. it is high time that the report should be submitted to the hon'ble court pointing out the conduct of the company-europlast india ltd.from the record, it appears that the company is not co-operating the committee either by attending the meetings through some representatives and suggesting the names of the persons who would be the committee member. similarly, company has not lodged documents in respect of the property and not put in funds to appoint valuer and incur initial expenses.due to non-co-operation of company-europlast india ltd. it is difficult to implement the court's order.it is therefore, prayed that:(a) the company europlast india ltd. be directed through its director or authorised representative to co-operate to implement the court's order and also to submit documents in respect of assets of the company and to put in funds to incur initial expenses and or in the alternative; to(a)(b) official liquidator be appointed as liquidator of the company.dated this 31st day of march, 2008.sd/-(a.p. kothari)while the above report was pending, the commissioner was informed by one of the creditor m/s. ashoka buildcon ltd. by their letter dated 4th july, 2008 that on visit by their representative to the factory site, it was noticed that a board has been installed mentioning the name of 'kelkar group, factory: lbs marg, mulund mumbai, office at devkaran mansion, 36 mangaldas road, mumbai'. on enquiry, it transpired that the suit property has already been conveyed in favour of 'k' company. as a result, the commissioner filed another report dated 14th july, 2008, which reads thus:submitted to the hon'ble judge taking company matters.the company europlast india ltd. propounded a scheme of compromise with its unsecured creditors under section no. 391 of the companies act, 1956 and took out summons for directions being company's application no. 263 of 2000 for convening the meeting of its equity shareholders and unsecured creditors for the purpose of considering the scheme. a copy of the scheme is annexed hereto and marked as exhibit 'a'.1) as directed by the hon'ble court, a meeting of the equity shareholders and unsecured creditors of the company were held on 14th october, 2000. in the meeting held on 14th october, 2000, the scheme of compromise was approved by the equity shareholders. however, the unsecured creditors approved the scheme with some modification. the said modifications suggested by the unsecured creditors in the meeting and approved by the company is annexed hereto and marked as exhibit 'b'.2) thereafter, the company filed a petition being company petition no. 327 of 2001 for sanctioning of the scheme. by an order dated 18th july, 2001 passed by this hon'ble court, scheme filed by the company - europlast india ltd. was sanctioned. hereto annexed and marked exhibit 'c' is a copy of order dated 18th july, 2001 passed in company petition no. 327 of 2001.3) since the proposed sale could not materialise in time, the company took out company application lodging no. 139 of 2002 praying following relief's:(a) that the scheme of compromise finalized on 18th july, 2001 be modified to a limited extent of granting a further period of 12 months for the disposal of the company's land and factory building at khopoli, or in the alternative the said properties be ordered to be disposed off by a sub-committee of the unsecured creditors of the applicant company under the supervision of this hon'ble high court, or in the alternative this hon'ble court may appoint any fit and proper person or persons or some agency to dispose off the said assets of the applicant company.(b) that ad-interim reliefs in terms of prayer (a) be granted.(c) that such further and other relief's as this hon'ble court may deem fit and proper be granted.(d) that cost of this application be provided for.'4) the company also took out another application no. 673 of 2003 for staying auction to be held on 5th august, 2003.5) some of the unsecured creditors also took out company application for relief as mentioned therein.6) by an order dated 12th february, 2004 passed by this hon'ble court in the above company applications, a committee of unsecured creditors was appointed to facilitate sale of the immovables assets of the company so as to recover proper sale proceeds corresponding to the fair market price of the said assets.7) the committee was consisting of 5 persons and i as company registrar was appointed as a chairman of the said committee. the committee also consists of one representative of the company - europlast india ltd., one representative of ashoka buildcon pvt. ltd. and two representatives of the remaining unsecured creditors and the committee was authorised to take steps to issue the advertisement for inviting offers from public for auction of immovables assets of the company on usual terms and conditions and also to call for valuation report regarding the immovable assets to be auctioned.8) pursuant to this directions, meetings were held from time to time to implement court's order dated 12th february, 2004. on most of the occasions, advocate on behalf of europlast india ltd. remained absent. however, the representative of europlast india ltd. never attended a single meeting and they have also not nominated the representative who would be the committee member. in view of non-co-operation on the part of europlast india ltd., a report dated 31st march, 2008 was submitted to the hon'ble court. hereto annexed and marked as exhibit 'd' is the copy of the said report dated 31st march, 2008.9) notices of the report were given to europlast india ltd., advocate for europlast india ltd., shri a.a. garge, advocate for ashoka buildcon pvt. ltd. and shri n.j. mon'te, advocate for some of the unsecured creditors.10) ashoka buildcon ltd. has agreed to bear the financial expenses of appointment of valuer and issuance of advertisement in the newspapers and incidental expenses for sale of the properties. in view of the above the hon'ble high court by an order dated 19th june, 2008 disposed off the said report and has directed the committee to proceed after due notice to the company and even if none remains present despite such notice, committee can take appropriate steps to implement the orders of the court. hereto annexed and marked as exhibit 'e' is the copy of the order dated 19th june, 2008.11) thereafter, ashoka buildcon ltd. one of the creditors by their letter dated 4th july, 2008 addressed to me, stated that when their representative had gone on the factory site to verify, he found that there was a board installed on the site on which the following was written:kelkar groupfactory : lbs marg, mulund mumbai, office : devkaran mension, 36 mangaldas road, mumbai.12) in the said letter it has been also mentioned that on further enquiring in the vicinity their representative came to know that the said site was recently purchased by the kelkar group and from the above it appears that the management of europlast india ltd have sold the property to the above party and thereby done a breach of the hon'ble bombay high court's order. in the said letter they have also mentioned that europlast india ltd. and kelkar group have done contempt of court's order and requested me to approach the hon'ble high court at mumbai to protect the interest of the unsecured creditors. they have also prayed for:a) issuing a contempt of notice against the directors of europlast india ltd. and kelkar group.b) restraining europlast india ltd. & kelkar group, their agents, servant, or anybody working on there behalf from alienating or creating third party interest or creating any charge/loan, lean lease on the said properties i.e. gat no. s. no. 8/1, 8/2, 8/3a/2,10/4/1, 10/4/2, 10/4/3, 10/5, 11, 13/1a/2, alongwith factory building situated on it, belonging to europlast india ltd. situated at khopoli pen road, village - vanvati, taluka- khalapur, dist. raigad, maharashtra.(c) restraining the talahlati/thasildar or any other revenue office of village vanvati and khalapur, from mutating or entering the names of any person/firm/company etc. in the record of rights without the written consent of the hon'ble high court, at mumbai.(d) restraining europlast india ltd, kelkar group their agents, servants, or anybody claiming through them from disturbing the courts possession of the said property.(e) any other relief in the interest of justice. copy of the said letter is annexed hereto and marked as exhibit ' f '.13) upon receipt of the said letter i addressed a letter on 9th july, 2008 to advocate a.a. garge and ashoka buildcon pvt. ltd. to see me alongwith all the necessary papers and orders which may be in their possession in connection with europlast india ltd. and also requested them to ascertain the exact name and address of the purchaser of the property, when it was purchased and whether the documents have been registered or not; to enable me to submit a report to the hon'ble court at the earliest. a copy of the said letter is annexed hereto and marked as exhibit 'g'.i am informed by advocate for ashoka buildcon ltd. that the property was purchased by s.h. kelkar and co. pvt. ltd.14) upon perusal of the papers and from the facts mentioned herein below it is clear that the company europlast india ltd. was well aware that said property is required to be sold as per court's directions as per the scheme propounded by the company and payment is to be made to the unsecured creditors:(a) para -9 of the company petition no. 327 of 2001 reads as under:it is submitted that the aforesaid facts and circumstances are not know to the small depositors and the numbers of the public who have invested in such schemes. the said creditors have filed 31 cases in various courts. about 398 creditors have issued notices to file litigations against the company. the petitioner company therefore decided to hold a meeting of the said creditors for the fixed deposits and liquinotes and to appraise them of the latest development and to propose a scheme for repayment of their dues. the petitioner decided to dispose off, out of its other assets, the land alongwith the factory building at khopoli, maharashtra. the company proposes to pay off the creditors in monthly installments, out of the amount of sale proceeds received as per the scheme of compromise under section 391 of the companies act, 1956.(b) the said fact is also evident from the resolution passed at the meeting of unsecured creditors held on 14th october, 2000 modifying the scheme which is at exhibit 'b'.(c) the company has also mentioned these facts in the scheme at para 3.1 (c), (d) & (e) , which are reproduced herein below:3.1(c) the company to pay the said dues has decided to dispose off, out of its other assets, the land alongwith the factory building at khopoli, maharashtra.3.1(d) the company has estimated the net value of the said land and factory building at rs. 3.80 crores.3.1(e) the company out of the said amount of rs. 3.80 crores desires to pay off to the said creditors in monthly installments as mentioned below:to creditors upto - in monthly 12 equalrs. 25,000/- installments.to creditors upto - in monthly 18 equalrs. 25,000/- to instalments.rs. 50,000/-to creditors upto - in monthly 24 equalrs.50,000/- to instalments.rs.1,00,000/-to creditors upto - in monthly 36 equalrs.1,00,000/- and instalments.above.the creditors will not be paid any interest after 31st march, 2000.(d) in order dated 12th february, 2004, the hon'ble court has stated that it would be appropriate to appoint committee of unsecured creditors to facilitate the sale of the immovable assets of the company and after the conclusion of the proposed auction, the sale proceeds to be disbursed amongst all the unsecured creditors on paripasu basis.15) all these facts indicates that the company was well aware that the said sale is to be conducted by the committee and the sale proceeds thereof is to be paid to the creditors. it appears from the letter dated 4th july, 2008 of ashoka buildcon pvt. ltd. that the company has sold property to kelkar group.16) in view of this, it is prayed that:(a) the agreement if any arrived between europlast india ltd and kelkar group or s. h. kelkar & co. pvt. ltd. and/or with any person/firm, company may be treated as null and void and the same should be treated as cancelled.(b) europlast india ltd and kelkar group or s. h. kelkar & co. pvt. ltd. may be directed to handover the documents in connection with the said plot of land and hand over the possession of the said plot of land to the committee to enable them to implement court's order.(c) kelkar group or s.h. kelkar & co. pvt. ltd. may be restrained by the order of this hon'ble court from making any further payment to europlast india ltd. towards the consideration of the said plot of land.(d) europlast india ltd. and kelkar group or s.h. kelkar & co. pvt. ltd. be restrained by an order and injunction of this hon'ble court from transferring the said plot of land to anybody else or creating any third party right and mortgage the said plot of land.(e) restraining the talathi/tahsildar or any other revenue office of village vanvate and khalapur, from mutating or entering the names of any person/firm/company etc. in the record of rights without the written consent of the hon'ble high court, at mumbai.and or(f) in the alternative, the company europlast india ltd be directed to deposit entire consideration received by them in this hon'ble court.(g) and or in the alternative, the official liquidator, high court, bombay be appointed as liquidator of the company.(h) for any such further and other relief's as the nature and circumstances of the case may require. dated, this 14th day of july, 2008.(a.p. kothari)deputy official assignee &appointed chairman of committee.on the basis of the said report, this court issued notice to the respective companies. having regard to the nature of controversy brought before this court, by order dated 17th october, 2008, the court directed the parties, in particular 'k' company to maintain status quo of the suit property as on that date till the disposal of the proceedings.8. pursuant to the notice, affidavit was filed on behalf of the 'k' company to explain their stand point. the parties were represented by the counsel who appeared during the hearing. this court, however, upon deeper consideration, thought it appropriate to call upon the chairman of the committee to submit his report on certain issues. the order passed on november 19, 2008 is self-eloquent. the same reads thus:1. arguments have been concluded and the matter was kept today for orders. however, on deeper consideration, i think that before proceeding to pronounce on the issues raised in the present proceedings, it is appropriate that clarification on some factual position is placed on record which may be useful for deciding the matters in issue. for that, it is necessary to call upon the advocates who appeared in the proceedings in company application (lodging) no. 673 of 2003 as also the advocates who appeared before the chairman of the committee appointed by the court in terms of order dated 12th february 2004.2. the advocates who indeed are officers of court, will have to state the basic facts such as who was instructing them to appear and make submissions from time to time and the names of the concerned authorised officers of the respondent company. besides, the advocates shall make available relevant record (communications) available in their offices, if any, for the perusal of the court with regard to the nature of instructions received by them from time to time given by the authorised persons of the respondent company. that may unravel the relevant facts so as to effectively answer the matters in issue. i am disposed to do so having regard to the seriousness of the issues involved.3. it is noticed that mr. g.n. pandit was advocate on record and had appeared at the hearing of the company application (lodging) no. 673 of 2003 which was disposed of by order dated 12th february 2004. before the chairman of the committee appointed by the court in terms of the said order, appearance was made by mr. rupesh tiwari i/b mr. g.n. pandit on couple of dates. thereafter, appearance was made by ms. deepa kamath i/b ms. annie fernandes. at one stage, statement was made that some settlement talks were in progress. that may be a relevant fact to be considered for deciding the points in issue.4. in the circumstances, i call upon mr. g.n. pandit and ms. annie fernandes to state on affidavit all the relevant facts so as to disclose information such as the names of concerned persons who were giving instructions in the matter and the dates on which meetings were held including the nature of interaction over telephone or such other details within their personal knowledge in the context of the plea taken by the directors of the respondent company who were responsible to sell the property in question.5. besides the affidavit of the advocates who appeared for the respondent company, i think it necessary to call upon the chairman of the committee appointed in terms of order dated 12th february 2004 to submit his explanation on following matters:(1) as to why no steps were taken by him for sale of the assets in question or otherwise between 12th january 2005 to 6th february 2007 for almost two years?(2) what prevented him to move the court for seeking extension of time beyond twelve weeks from 12th february 2004 in the context of specific direction issued in para 7 of the said order that the sale should be concluded and amount disbursed within twelve weeks from the date of order?(3) why no report was submitted soon after 30th march 2007 when advocate for ashoka buildcon pvt. ltd. informed about the developments, whereas the report was submitted only on 31st march 2008?(4) why no initiative was taken after 30th march 2007 to ascertain the factual position brought to the notice of the chairman by ashoka buildcon pvt. ltd.?(5) to take search of the register maintained by the concerned registrar of companies and obtain details about the names and addresses of (a) former directors of the respondent company (b) present directors of the respondent company and (c) directors of gorakhnath electricals pvt. ltd. at the relevant time on 29th november 2006 and also on 26th april 2007 when the property was purportedly transferred.6. appropriate decision can be taken in relation to points in issue only after receipt of the above information/affidavits.7. place this petition on 5th december 2008 under caption 'direction', high on board. this matter shall be treated as part-heard.8. copy of this order be furnished to the concerned advocates and chairman of the committee by the office forthwith. '9. the court felt that some of the issues will have to be examined before finally deciding the proceedings. pursuant to the directions issued in the above order, the chairman of the committee filed his further report dated 3/12/2008. the same reads thus:respectfully submitted to the hon'ble shri justice a.m. khanwilkar judge taking the company matters:my lord,1) pursuant to the order dated 19th november, 2008 passed by your lordship, i have been directed to submit my explanation on the following viz.:(1) as to why no steps were taken by him for sale of the assets in question or otherwise between 12th january, 2005 to 6th february, 2007 for almost two years ?(2) what prevented him to move the court for seeking extension of time beyond twelve weeks from 12th february, 2004 in the context of specific direction issued in para 7 of the said order that the sale should be concluded and amount disbursed within twelve weeks from the date of order ?(3) why no report was submitted soon after 30th march 2007 when advocate for ashoka buildcon pvt. ltd. informed about the developments, whereas the report was submitted only on 31st march 2008 ?(4) why no initiative was taken after 30th march 2007 to ascertain the factual position brought to the notice of the chairman by ashoka buildcon pvt. ltd.?(5) to take search of the register maintained by the concerned registrar of companies and obtain details about the names and addresses of (a) former directors of the respondent company (b) present directors of the respondent company and (c) directors of gorakhnath electricals pvt. ltd. at the relevant time on 29th november, 2006 and also on 26th april, 2007 when the property was purportedly transferred.2) as far as point no. 1 viz.as to why no steps were taken by him for sale of the assets in question or otherwise between 12th january, 2005 to 6th february, 2007 for almost two years ?is concerned, i most respectfully submit that in the meeting held on 12th february, 2005 nobody attended the meeting and advocate a.a. garge was also operated and hospitalised, hence no date was fixed. at that time and thereafter also as i was working as company registrar there was tremendous pressure of work and in the circumstances matter remained to be attended and only in the year 2007 when advocate contacted me, i again fixed meetings and intimations were given to all the advocates concerned.3) as far as point no. 2 viz.what prevented him to move the court for seeking extension of time beyond twelve weeks from 12th february, 2004 in the context of specific direction issued in para 7 of the said order that the sale should be concluded and amount disbursed within twelve weeks from the date of order ?is concerned, i most respectfully submit that the first meeting itself was held in october, 2004 i.e. after 6 months and after january, 2005 no meetings were held and again due to pressure of work it slipped of my mind and remained to apply for extension of time from the hon'ble court.4) as far as point no. 3 viz.why no report was submitted soon after 30th march 2007 when advocate for ashoka buildcon pvt. ltd. informed about the developments, whereas the report was submitted only on 31st march 2008 ?is concerned, i most respectfully submit that advocate for ashoka buildcon only submitted that europlast india ltd. is not co-operating by not attending the meetings and it appears that they are not interested in implementing the court's order, no representative of europlast india ltd. attended the meeting or suggested the name of the person who could be the committee member and they are also not giving instructions to their advocate. this is delaying tactics adopted by europlast india ltd. and a report should be submitted to the hon'ble court pointing out the conduct of the company - europlast india ltd. no development in the matters were informed to me. in the meanwhile i was transferred to the office of the official assignee. i respectfully further submit that office of the official assignee was shifted twice i.e. first in august - 2007 and again in march, 2008 in g.t. hospital complex. there was no infrastructure provided and therefore, office could not work about a month or so. hence, there was delay in submitting report to the hon'ble court.5) as far as point no. 4 viz.why no initiative was taken after 30th march 2007 to ascertain the factual position brought to the notice of the chairman by ashoka buildcon pvt. ltd.?is concerned, on 30th march, 2007 no facts were brought to my notice, i most respectfully submit that advocate for ashoka buildcon only submitted that europlast india ltd. is not co-operating by not attending the meetings and it appears that they are not interested in implementing the court's order, no representative of europlast india ltd. attended the meeting or suggested the name of the person who could be the committee member and they are also not giving instructions to their advocate. this is delaying tactics adopted by europlast india ltd. and a report should be submitted to the hon'ble court pointing out the conduct of the company - europlast india ltd. and pursuant to that a report was submitted to the hon'ble judge taking company matters seeking directions:(a) the company europlast india ltd. be directed through its director or authorised representative to co-operate to implement the court's order and also to submit documents in respect of assets of the company and to put in funds to incur initial expenses and or in the alternative; to (a)(b) official liquidator be appointed as liquidator of the company.(6) i further submit that the said report appeared before hon'ble justice shri s.c. dharmadhikari who passed on order on 19th june, 2008, upon advocate for ashoka buildcon agreeing that ashoka buildcon will bear financial expenses of appointment of valuer, issuance of advertisement in newspapers and incidental expenses to enable me to dispose off the properties. by the said order dated 19th june, 2008 on my report dated 31st march, 2008, the hon'ble court has also directed the committee to proceed after due notice to the company and even if none remained present despite such notice, committee can take appropriate steps to implement the order of the court and accordingly said report was disposed off.7) a report dated 31st march, 2008 annexed as exhibit 'd' to the report dated 14th july, 2008 and copy of the order dated 19th june, 2008 is annexed as exhibit 'e' to the said report dated 14th july, 2008.8) it is for the first time, ashoka buildcon informed me by their letter dated 4th july, 2008 stating that 'when their representative had gone at the factory site to verify, he found that there was a board installed which indicated that kelkar group is in possession.' the said letter addressed by ashoka buildcon is annexed as exhibit 'f' to the report.9) by my letter dated 9th july, 2008 addressed to a.a. garge, advocate for ashoka buildcon requested him to see me with necessary papers and orders which might be in their possession and if possible also to ascertain the exact name and address of the purchaser, when it was purchased and whether the documents is registered or not to enable me to submit a report. since no reply was received, i immediately submitted my report dated 14th july, 2008 to this hon'ble company court for seeking necessary directions.10) as far as point no. 5 viz.to take search of the register maintained by the concerned registrar of companies and obtain details about the names and addresses of (a) former directors of the respondent company (b) present directors of the respondent company and (c) directors of gorakhnath electricals pvt. ltd. at the relevant time on 29th november, 2006 and also on 26th april, 2007 when the property was purportedly transferred.is concerned, i submit that since europlast india ltd. was represented by an advocate, i did not obtain details about the names and address of (a) former directors of the respondent company (b) present directors of the respondent company.for the first time i came to know about change in management of europlast india ltd. on 26th september, 2008 when affidavit of harshmani pant dated 18th september, 2008 was served upon me. till that time i was not aware about change in management of europlast india ltd.11) as far as directors of gorakhnath electricals pvt. ltd. at the relevant time on 29th november, 2006 and also on 26th april, 2007 when the properties were transferred is concerned, i submit that for the first time i came to know on 31st july, 2008 when tamhane & co., advocate for s.h. kelkar & co. pvt. ltd. filed an affidavit of ramesh vaze disclosing that europlast india ltd has sold properties to gorakhnath electricals pvt. ltd. on 26th november, 2006 and gorakhnath electricals pvt. ltd. sold property to s.h. kelkar co. pvt. ltd. on 26th april, 2007 which are more particularly set out in the affidavit filed by shri ramesh vaze.12) thereafter, hon'ble shri justice s.a. bobde by order dated 18th july, 2008 directed to issue notice to all the respondents. again on 1st august, 2008, the hon'ble court directed to issue notice to europlast india ltd. and gorakhnath electricals pvt. ltd. the said notice was made returnable on 21st august, 2008 and nobody attended, on behalf of gorakhnath electricals pvt. ltd. on 5th september 2008 advocate shri shah for europlast india ltd. stated that he will furnish the correct address of gorakhnath electricals pvt. ltd. within one week and notice was made returnable on 26th september, 2008. office sent notices to gorakhnath electricals pvt. ltd twice at the address mentioned in the conveyance annexed to the affidavit of shri ramesh vaze. the registered office of gorakhnath electricals pvt. ltd. is at haryana as mentioned in the conveyance. two notices sent to gorakhnath electricals pvt. ltd. by registry, packet returned back unserved. since the notice could not be served upon gorakhnath electricals pvt. ltd., advocate applied for substituted service and by taking out chamber order, advocate for ashoka buildcon pvt. ltd. sought an order for substituted service and ultimately it was published in the newspapers and affidavit of publication is filed in the registry. till 31st july, 2008 i was not aware that s.h. kelkar& co. pvt. ltd. has purchased property from gorakhnath electricals pvt. ltd. and gorakhnath electricals pvt. ltd. has purchased the property from europlast india ltd.13) for the first time on 4th july, 2008 i came to know that the property has been sold to s.h. kelkar group when a letter was received by me from ashoka buildcon pvt. ltd. and on 31st july, 2008 for the first time i came to know that europlast india ltd. has sold property to gorakhnath electricals pvt. ltd. and in turn gorakhnath electricals pvt. ltd. has sold property to s.h. kelkar & co. pvt. ltd.14) i may also point out that for the first time names of committee members on behalf of unsecured creditors were suggested in march, 2007.15) i respectfully submit that there is lapse on my part for not applying for extension of time and delay in submitting a report to this hon'ble court for the reasons mentioned hereinabove.i respectfully submit that the above acts and omission was purely unintentional due to the reasons mentioned hereinabove. i, therefore, deeply regret for the said lapses and i may be pardoned for the same for which act of kindness i shall ever remain grateful to your lordship. i also assure to your lordship that i will take utmost care in future while dealing with such matters.dated, this 3rd day of december, 2008.when the matter appeared on 5th december, 2008, chairman of the committee took time to submit further clarification as the report presented by him did not disclose the names and details of the erstwhile directors at the relevant time as well as present directors of the 'e' and 'g' company. the chairman accordingly, submitted his further report dated 8th december, 2008. on 10th december, 2008, when the chairman of the committee appeared, he sought further time to file report in the context of physical inspection taken by him in respect of the record of the registrar of the companies. accordingly, further report was submitted by the chairman dated 16th december, 2008. the same reads thus:respectifully submitted to the hon'ble shri justice a.m. khanwilkar, judge taking the company matters:my lord,pursuant to the order dated 5th december 2008, passed by your lordship and in continution of my earlier report dated 8th december, 2008, i further submit that:i have taken physical inspection of records made available to me in respect of europlast india limited at the office of the registrar of companies at cbd belapur in respect of former and present director of the company europlast india limited.the details about the name and addresses of the former directors of europlast india limited, is as under:sr. 1 name of director mr. hetram agarwals/o. d.i. agarwal address 1) 21/17, shakti nagar, newdelhi-110 007, also at 2) 114, mittal tower, nariman point, bombay-400 021. date of appointment (28-02-85) sinceincorporation date of retirement 24-12-93 2 mr. arun kumar jain s/o nemichand jain 28, snivtolla street, calcutta-700 007.(28-02-85) since incorporation 24-12-93 3 mr. ashok kumar surekha as-1/2, golf green, urban complex,calcutta-700 045. 01-06-85 (no form 32 was available thisinformation got from annual return) 05-04-90 (no form 32 was available thisinformation got from annual return) 4 mr. dilip kumar agarwal s/o radheshyamagarwal 8/1,jelie para, 1st brije lane, ganga bhavan,howrah-711 101 04-09-90 24-12-93 5 mr. mohan jaykar s/o motiram jaykar 12, makani manor, g. deshmukh marg,mumbai - 400 026. 08/11/1994 06-04-98 6 mr. rajeev j. khandelwal s/o j.c. khandelwal143/h, dalamal park, cuffe parade,mumbai-400 005. 01-06-92 04-10-04 7 mr. jagdish khandelwal s/o gauri shaijic-1/33, safdarjung development area,new delhi-110 016. 06-06-92 16-08-96 8 mrs. rajyalaxmi rao w/o vijay papa rao bunglow 3, madhuli, 4, dr.a.b.road,mumbai - 400 018 08-11-94 04-09-97 9 mr.jayprakash kamat s/o vasudev kamat 44/2, annapurna jai prakash nagar,goregaon (e), mumbai -400 063 08-11-94 04-09-97 10 mr. manoj trivedi s/o prafulchandratrivedi 48, joothica, 22, n.b. marg, mumbai -400 007. 31-08-94 30-07-96 (expired) 11 mr. robert wagner s/o sofie siebengebirgsb lick-5 53844, troisdori,germany. 18-01-95 06-11-96 12 mr. artur roschker s/o eduard &pauline; kriesel. stresemanmstrase-21, 53844, troisdori,germany. 18-01-95 06-11-96 13 mr. staurt jules paskin s/o cyrilpaskin. 16,green lanes, oxhey nr.watfod herts,w.o.l. 4 q j, england 20-09-95 06-11-96 14 mr. anant narayan s/o v.r. venkateswaran 14, madhumati orchid, majiwade,thane(east), maharashtra-400 604 04-09-97 04-10-04 15 mr. n.k.khandelwal s/o g.s. khandelwal 7-8, kailash nagar, model town, ambalacity, ambala, haryana. 06-04-98 04-10-04 16 mr. sanjiv khandelwal s/o j.c. khandelwal164 sea lord, 'a' bldg. cuffe parade,bombay-400 005. 01-09-92 31-08-94 17 mrs. sandhya khandelwal w/o rajeevkhandelwal 143 h, dalamal park, cuffe parade,bombay-400 005. 01-06-92 31-08-94 18 mr. anand bisht s/o chandan singh s-161 a, school block, shakarpur, newdelhi. 30-09-04 13-06-05 from the records available in the office of registrar of companies at cbd belapur, details about the resignation of the following persons are not available hence, the following persons appear to be present directors of company europlast india limited. the details of their name and addresses and their date of appointment are as under.sr. name of directoraddressdate of appointment 1.mr. uday kumar agarwal s/o hetramagarwal21/17, shakti nagar, new delhi-110 007 (28-02-85) since incorporation 2.mr. deepak arora s/o. m.l. arorah 130 mohan garden, uttam nagar, newdelhi-110 059 30-09-04 3.mr. harshmani pant s/o p.n. pant1) b/95 chhatrapur, pahari, ambedkarcolony, new delhi - 110 030, also at 2) 03/06/70, dakshin puri, delhi-110026. 30-09-04 4.mr. ajay kumar naithani, s/o b.p.nathan1) 162 (top floor) savitri nagar, new delhi-110017,also at 2) e-4 galli no.1 west, vinod nagar, new delhi. 13-06-05 as far as the directors of gorakh nath electricals pvt. ltd., as on 29/11/2006 and also on 26/04/2007, are concerned, i have instructed r s m & co. having their office at d-63, jff complex, jhandewalan, new delhi-110 055, to take physical inspectionn of the records at the office of the registrar of companies. accordingly r s m & co. have carried out examination of physical/online records and forms filed by the company and have stated that as on 29/11/2006 and 26/04/2007, the details about the directors gorakhnath electricals pvt. ltd. are as under:sr. no. name address date of appointment date of cessation. 1 arun gupta 133, sector-7, ambala. 20/11/2006 06/08/2007. 2 praveen bhatt v & po sona arjunpur,saharnpur(u.p.) 20/11/2006 24/10/2007. copy of letter dated 15/12/2008, of r s m & co. is annexed hereto and marked as exhibit 'a'.dated this 16th day of december, 2008.10. on the basis of information made available in this report notices were issued to the named persons. i would think it to apposite to reproduce part of the order dated 17th january, 2009 which records the stand taken by 'k' company. paragraphs-7,8 and 9 of this order are reproduced thus:7. the counsel for m/s. s.h. kelkar & co. pvt. ltd. has handed in affidavit of ramesh vaze dated 17th january 2009 which is taken on record. one of the intriguing aspect highlighted in this affidavit is that the address of the directors of m/s. gorakhnath electricals pvt. ltd., namely, of mr. ashwani dewan, mrs. sunita dewan, mr. arun gupta, who were directors from april 2001 to 2007, is the same as of mr. deepak arora, director of m/s. europlast india ltd. i.e. 103, delhi blue apartment, first floor, safdarjung ring road, new delhi - 100 029. that would indicate that the named directors of m/s. gorakhnath electricals pvt. ltd. were intimately associated with mr. deepak arora, director of m/s. europlast india ltd. if it is so, mr. deepak arora, who has been duly served, is expected to furnish latest and correct addresses of the above named directors of m/s. gorakhnath electricals pvt. ltd.8. counsel for m/s. europlast india ltd. shall forward copy of this order to mr. deepak arora- director of the said company, within one week from today. the said mr. deepak arora shall furnish the latest last known addresses of the directors of m/s. gorakhnath electricals pvt. ltd. within ten days from today.9. counsel for m/s. europlast india ltd. may, in the meantime, inform the concerned official of m/s. europlast india ltd. about the contents of this order without waiting for the copy of the order so as to impress upon mr. deepak arora to furnish latest last known addresses of the above said persons at the earliest and not wait till the 10th day provided for in this order.it transpires that notices could not be served on some of the noticees. as a result, the advocate for the 'e' company was called upon to provide necessary information. it may be relevant to produce the order dated 27th january, 2009 which reads thus:1. counsel for the europlast india ltd. submits that he has made best efforts to get the latest addresses of the concerned unserved noticees, who incidentally are/were either associated with the europlast india ltd. or directors of the said company. however, same addresses, on which notices were sent to the said noticees on the earlier occasion have been made available by advocate mr. r.n. parikh. the only course open to this court is to call upon the secretary of europlast india ltd. to appear in person before the court on the next occasion and furnish the latest and correct addresses of all the noticees including that of mr. ashwani dewan, mrs. sunita dewan and mr. arun gupta, who were shown as residing on the same address as mr. deepak arora, director of europlast india ltd.. it will be open to the secretary of europlast india ltd. to serve the said noticees personally, if so advised and report compliance thereof on the next date of hearing.2. it is made clear that if the secretary fails to furnish requisite information to the court and/or fails to appear before the court on the next date of hearing, the court may consider of initiating appropriate action against the secretary of europlast india ltd. personally.3. place this matter on 4th february, 2009.4. advocate mr. pankaj shah shall communicate this order to the secretary, europlast india ltd.hearing of these proceedings was deferred from time to time for completing service. as it was noticed that service could not be effected on all the noticees inspite of all efforts, eventually the court directed 'e' company to issue public notice in the concerned local newspapers. after resorting to substituted service on the unserved respondents, the matter proceeded further.11. in response to the notices sent by the court and/or public notice issued in local newspapers, some of the noticees appeared in court through counsel and personally. some of them have chosen to file reply affidavit to explain their position. even the advocates who were interacting with the representative of the concerned companies and on whose instructions they made statements or submissions before the court or in the proceedings before the chairman have also filed their affidavits. hearing of the matter proceeded on 4th may, 2009 when following order was passed:1. during the course of hearing, one of the question posed to the counsel appearing for the europlast india ltd. was whether the company is in a position to state the names of all the persons, who were associated with the negotiation process in respect of sale of land in question on behalf of the europlast india. my attention has been invited to the resolution passed by the company dated 28th august, 2006 as also 18th november, 2006. counsel for the company however expressed inability to make any positive statement nor is in a position to produce the minutes recorded in relation to the said resolution. it is noticed that explanatory note was circulated to the members in the context of the resolution dated 28th august, 2006. perhaps, the said explanatory note may throw some light on the names of persons who were associated with the process of negotiation and sale of the land in question for and on behalf of the europlast india ltd.. the affidavits filed as of now do not reveal or clarify the above doubt. in the circumstances, it has become necessary to direct the commissioner to forthwith visit the registered office of europlast india ltd. and take inspection of all the records of the company in relation to the proceedings instituted before this court and the order passed on 12th february, 2004 and any other related document, which would throw light on the circumstances, in which the company proceeded to complete the transaction in respect of the land in question. the company is obliged to give inspection of all the documents, as may be demanded by the commissioner during the inspection pursuant to the present order.2. needless to observe that failure to cooperate with the inspection of record by the commissioner, the court may consider of initiating appropriate action against the authorised officer and/or the person present at the registered office, if so advised.3. the commissioner shall forthwith visit the office of the company and start process of inspection and complete the same by tomorrow. report in that behalf be submitted to the court on 6th may, 2009, when this matter will be placed first on board for further hearing.4. all expenses to be incurred by the commissioner shall be borne by the company europlast india ltd.5. mr. sudhir naik of m/s. s.h. kelkar & co. pvt. ltd. and mr. sharad abhyankar from ashoka buildcon pvt. ltd. can assist the commissioner during the inspection process, which will be undertaken forthwith in the course of the day and would be continued till tomorrow.6. the commissioner shall ensure that the concerned minutes and relevant record of the company, as he may think it appropriate, shall be produced in court for perusal of the court at the time of hearing on wednesday, 6th may, 2009 alongwith his report.7. counsel for the europlast india ltd. assures to inform the contents of this order to the concerned officer of europlast india ltd., irrespective of availability of copy of this order today or otherwise, who in turn shall provide inspection to the commissioner and coordinate with the commissioner for production of original records of the company in terms of this order.after the above order was dictated in court, the matter was moved just before lunch time of the court when liberty was given to the company registrar to produce the matter at 3 p.m. after the lunch break, following order was passed:1. after the order was dictated and before the court rose for lunch break at 2 p.m., the advocate for europlast india ltd. mentioned the matter pointing out that he attempted to inform the order passed in the earlier part of the day to the authorised officer of the company, but could not get in touch with the said officer. he submitted that he may be discharged from the matter.2. the company registrar was directed to inform all the advocates and to call out the matter once again at 3 p.m. so that appropriate orders can be passed in presence of other counsel.2. formal application for discharge is moved before me. however, before any further order is passed on this application, i think it appropriate to direct the person, who was instructing the advocate mr. shah in the matter to espouse the cause of europlast india ltd. to remain present in court on 6th may, 2009. ordered accordingly.to complete the record, it may be useful to advert to the order passed on 6th may, 2009 which records the fact that deepak arora, director of 'e' company produced minute book. the same was taken on record. the minute book is for the period from 4th october, 2004 till 31st march, 2009. on close examination of the said register, it is noticed that the same has been prepared with dexterity. it is noticed that the minutes are kept in loose leaves of sheets compiled in a file. obviously such pages can be added, subtracted and replaced at any time. moreover, it is noticed that common printing error runs through all the pages at the foot of the page, which is possible only if the said documents were printed on the same day and with the same printer. therefore, it is obvious that the printing of all the minutes, though spread over from 4th october, 2004 till 31st march, 2009, for almost five years, have been printed on one day with the same printer. however, to give an impression that the said minute book is genuine, each minute is signed by the chairman after some gap of the concerned meeting. merely putting the dates below the signatures of the chairman would not belie what is so obvious. for, the pattern of signature though by using different ink, would show that the same were also initialed together. that can be inferred from the consistency with which the signatures appear. the minute book also contains the resolution, extract whereof is appended to the conveyance deed, at page 143 of the paper book. minutes of the said meeting dated 18th november, 2006 as a whole would read thus:minutes of the meeting of the board of directors of europlast india limited, held on 18th day of november, 2006 at 11.30 a.m. at the registered office of the company.present1. mr. ajay kumar naithani chairman2. mr. deepak arora director3. mr. harshmani pant director1. confirmation of previous minutes:the minutes of the previous meeting were considered and confirmed.2. to sale the property of the company:the chairman apprised the board that as it has been decided to pass the ordinary resolution through postal ballot for sale of property situated at khopoli pen road, village vanvate, taluka khalapur, distt. raigad, maharashtra, the same has been approved by the overwhelming majority. the results for the same had been declared by the scrutinizer vide his report dated 03rd october 2006.the chairman further apprised the board that to pay the deposit holders, the company is in need of money and hence it has been decided to sell the property of the company situated at khopoli pen road, village vanvate, taluka khalapur, distt. raigad, maharashtra. further the chairman informed the board that the management has received the very good proposal for sale of the property situated at khopoli pen road, village vanvate, taluka khalapur, distt. raigad, maharashtra. after detailed discussion the following resolution was passed:'resolved that the company do hereby authorise mr. naresh kaushik as authorised representative to deal on behalf of the company in the property of the company situated at khopoli pen road, village vanvate, taluka khalapur, distt. raigad, maharashtra and to transfer the title of the said property and sign the necessary documents on behalf of the company.'further resolved that mr. naresh kaushik, authorised representative of the company be and is hereby further authorised to sign and execute all the agreement deeds and documents as and when required to handover the possession of the property to the buyer for and on behalf of the company and to do, perform, execute and exercise all or any of the acts, deeds, powers, authorities, matters and things and generally to do all such things as may be necessary in regard to the above to protect all the legal interests of the company.3. review of performance of the company:the chairman placed before the board reports on the working of the company. the board reviewed the progress report of the company and satisfaction was expressed over the same.4. vote of thanks:there being no other business to transact, the meeting terminated with vote of thanks to the chair.sd/-chairman5/12/06.suffice it to observe that the genuineness of the document (minute book) now produced is questionable.12. be that as it may, out of the 8 directors of 'e' company as on 12th february, 2004, only noticee nos. 2,5 and 6 have appeared before the court and filed their affidavits. noticee nos. 1,3,4, 7 and 8 have not only failed to appear but have also not bothered to file any response or affidavits. the affidavits of the persons associated with 'e' company, namely, harshmani pant, director; anant narayan, director; deepak arora-director; anand bisht-director as well as r.n. pareek, advocate, j.n. pandit, advocate and annie fernandes advocate, who were handling the litigation of 'e' company have filed their affidavits. even mr. naresh kaushik who was appointed as authorised representative by the board of directors of 'e' company has filed his affidavit. mr. pravin bhatt, director of 'g' company and one arun gupta who was authorised to execute conveyance deed in relation to the suit property in favour of 'k' company has filed his affidavit. to buttress the stand of 'k' company reliance is placed on affidavit filed by one ramesh vaze as well as their employee mr. vilas wakde and dealer raju b. shinde. for and on behalf of m/s. ashoka buildicon pvt. ltd., satish d. parakh has filed his affidavit. besides, advocate adrian periera, sunil d'souza, advocate for the creditor; mr. anibal antohio de. monte have also filed their affidavits.13. in substance, the stand of the directors of 'e' company at the relevant time (when the property of 'e' company was conveyed to 'g' company on 29th nobrmber, 2006), is that, there was change in the management. they took over the management much after the order was passed by the company judge dated 12th february 2004. insofar as harshmani pant, director of the 'e' company one of the noticee, he has filed in all three affidavits before this court. the first affidavit is dated 18th september, 2008. the second is dated 8th january, 2008 and the third is dated 8th february 2009. in the affidavit dated 18th september, 2008, he has stated that 'e' company, in bonafide and good faith, sold and transferred the suit property in favour of the 'g' company on 29th november, 2006 against consideration of rs. 75 lakhs. he has stated that when committee was appointed by this court on 12th february, 2004, 'e' company was under previous management. he has stated that after the acquisition of 'e' company by the new management, three new directors joined the board of directors on 30th september, 2004. the new directors were not aware of the order passed by this court on 12th february, 2004 nor they were aware of the present proceedings pending in this court till they received notice. he has further stated that out of the sale proceeds of rs. 75 lakhs, 'e' company has paid by way of settlement to most of its unsecured creditors and has thus reduced the liability of the company to a considerable extent. significantly, no details thereof have been furnished in any of the affidavits.13a. be that as it may, the affidavit further states that the new directors who joined board of directors of the 'e' company were not informed about the order dated 12th february, 2004 by the outgoing management. he has stated that the 'e' company by its letter dated 22nd march, 2007 had addressed to the official assignee requesting him to ascertain/verify the claims of the depositors and other unsecured creditors including m/s. ashoka buildcon - one of the unsecured creditors. it was recorded in that letter that based on the claims verified and ascertained, the 'e' company may arrange for funds from the strategic investor to settle the outstanding liabilities of the company to the best of its ability. he has stated that no response was received to the said letter. whereas, a letter was received from the company registrar of this court dated 21st august, 2008 to appear before the court. at the end, it is stated that the 'e' company is ready and willing to convene a fresh meeting of its unsecured creditors for a fresh settlement and has no intention to deprive them of their legitimate dues subject however, to ascertaining the genuineness and bonafides of their claims. in the second affidavit dated 8th january, 2009, more or less similar plea is taken. it is further stated that he has not come across any paper, information or communication, from where it could be gathered that some order has been passed by this court to settle the claim of the creditors or any proceedings are pending in that behalf. he has further stated that from the last available balance sheet of the company, there is nothing to indicate about the pendency of proceedings under section 391, for that reason the new management was unaware of that fact. he has denied the suggestion made in the affidavit filed by ashok buildcon that one of the director was common in both the managements. instead, he has stated that mr. anand bisht joined the board on 30th september, 2004, who later on resigned on 13th june, 2005, when mr. ajay naithani joined the board. further, for the first time in february, 2007, he received communication from the chairman of the committee to attend meeting on 21st february, 2007. he has further stated that he had requested the company secretary to arrange for a lawyer who instructed ms. annie fernandis to inform the committee regarding the developments and to attend to the matter. he has stated that after receipt of notice of the company registrar dated 21st august, 2008, they came to know through lawyer at delhi that one advocate of delhi mr. r.n. pareek was associated with the company. in the circumstances, he approached mr. pareek and requested him to attend to the matter, who initially refused. but, when he was informed that there was change in the management, he agreed to appear for the company. he agreed to help the company to engage appropriate lawyer. it is stated that the intention behind disposal of the property was only to settle the creditors and with good motive. further, no profit has been made by the company as the liability of the company was far more than the value of the sale proceeds received. he has stated that no prudent man would have waited for almost 26 months after joining the management, if he had any illmotive. he has then stated that if the committee appointed by the court had acted in time, they would not have been trapped in the present situation. he has also stated that before sale of property, detailed enquiry was made in regard to any charge or prohibitory endorsement etc. through concerned revenue record and only after that sale was effected. he has reiterated that the sale was neither intentional nor deliberate but due to lack of knowledge and information. he has requested to take a sympathetic view of the matter and pardon them for any act committed by them without knowledge and also to drop the proceedings. the third affidavit filed by him is dated 8th february, 2009, which once again reiterates the position stated in the earlier affidavits. he has further stated that the company has no business activities since long and from year 2002 'e' company has been delisted even from the stock exchange. he has stated that the company does not have any secretary/company secretary. he has stated that noticee no. 13 ms. niti was associated with the company for a very short period as consultant company secretary and was not on regular pay roll or employment. he has stated that noticee no. 15 mr. parida was never associated with the new management and must have been employed with previous management, whose whereabouts were not known or are available. insofar as noticee no. 18 mr. naresh kaushik, he has stated that he was introduced by one of the ex-director mr. ajay naithani for the property transaction. he did not know his whereabouts. he has reiterated that the property was sold by the new management bonafide and with no intention to violate order of the court and it was purely because of lack of information and knowledge, for which sympathetic view be taken.14. the other director of 'e' company mr. deepak arora has filed two affidavits dated 8th january, 2009 and 7th may, 2009. the first affidavit, is drafted on the same lines as that of mr. harshmani pant's affidavit dated 8th january, 2009. in other words, affidavit of mr. deepak arora is verbatim. in the second affidavit dated 7th may, 2009, he has more or less reiterated the position stated by mr. harshmani pant that the outgoing management had not handed over any old minute book of the company, but assured to provide later on - which was never done. he has stated that new management started maintaining new minute book with effect from 30th september, 2004 i.e. the date of joining of the new management and since then the minute book is in his possession. although deepak arora has produced minute book, the genuineness thereof is questionable for more than one reason as indicated earlier.15. significantly no minutes have been recorded after the sale of the suit property in favour of 'g' company on 29th november, 2006. there is no mention that funds have become available, which needs to be disbursed to the unsecured creditors. thus, minutes are conspicuously silent on these matters. interestingly, the board of directors resolved to shift the registered office to some other place on the ground that it would be more convenient to do business from such place without referring to the fact that the suit property in which the registered office was situated has been sold, necessitating shifting of registered office. it is so done for reasons best known to the board of directors of 'e' company at the relevant time.16. in this affidavit, he has stated that the registered office of the company is at 7a, pednekar chawl, s.s. wagh marg, naigaum, dadar, mumbai since 5th january, 2007 for the purpose of correspondence only. he has stated that after the new management took over the company, records of the company were kept at delhi blue apartment, 2, factory road, safdarjung ring road, new delhi-110 029, which was taken on rent by the company from m/s. ashwani dewan & co.. he has stated that subsequently m/s. ashwani dewan & co. shifted their premises to p-10, basement, green park extn. new delhi-110 016. where after 'e' company also shifted record to the said premises where the same are available till date. he has stated that alongwith him two other directors namely mr. harshmani pant and late mr. ajay naithani were engaged in the business of investment and assets management. the said mr. ajay naithani negotiated and finalized the takeover of all companies of mr. rajiv khandelwal. he has stated that m/s. euro cotspin ltd. was one of the other group of company of rajeev khandelwal, besides the 'e' company. he has stated that after examining the balance sheet in regard to the assets and liabilities, the new management decided to take over 'e' company on 30th september, 2004, when it was non-functioning company. he has stated that since it was a non-functioning company, new management did not find any problem in arrangement of taking over. he has stated that except few files and balancesheet, the new management has not received the old minute book etc. from the outgoing management. he has stated that on 13th june, 2005, when mr. anand bisht, ex-director of the 'e' company resigned from the board of directors, mr. ajay naithani, who was the key person behind the concept of asset management, himself joined the board as additional director and continued till his demise on 4th march, 2007. he has stated that there was mutual understanding between the directors of the new management that the field work of the company would be looked after by mr. harshmani pant, director, while accounts and routine banking work by himself (i.e. deepak arora); and work of disposal of the suit property and settlement with creditors/depositors to be handled by mr. ajay naithani, ex-director of the company. he has reiterated that no one had disclosed or discussed during the process of takeover of the 'e' company that litigation is pending before this court with regard to the suit property, or that the suit property is attached by any order. he has stated that since the creditors and depositors were approaching the new management for settlement of dues, the new management started to search a buyer for the suit property and accordingly with good intention sold the same to 'g' company for consideration of rs. 75 lakhs by executing registered conveyance deed on 29th november, 2006. it is stated that the suit property was sold almost after 26 months of joining of the new management and therefore cannot be said to have been sold in haste or with malafide intention. he has stated that mr. naresh kaushik was authorised on behalf 'e' company and mr. pawan nagpal on behalf of the 'g' company. he has then stated that the sale proceeds were utilized by the company to settle the claims of the creditors/depositors. he has stated that 'g' company sold the suit property to 'k' company for consideration of rs. 4.30 crores after due publication of public notice in local newspapers and necessary enquiry. he has prayed for taking sympathetic view and accept unconditional apology.17. mr. anant narayan, ex-director of 'e' company has filed his affidavit dated 9th january, 2009. he has stated that he was appointed as one of the director of 'e' company in the year 1997 due to vacancy created by resignation of one of the director. he was appointed only as nominal director. he was not involved nor entrusted in any decision making of the company. he was not entitled for any benefits as a director, nor was entitled for any remuneration. he resigned as director of the company on or about 23rd may, 2000, having learnt that the company had not sent intimation to the registrar of companies. by his letter dated 24th march, 2002, he informed the registrar of companies about his resignation as director, which was duly received in the office of the registrar of companies on 27th march, 2002. he has stated that after his resignation as director, he continued to be an employee of the company somewhere till march, 2002 and thereafter left the company as there were no activities in the company. he has stated that he later on started legal practice.18. another ex-director of 'e' company mr. anand bisht has filed his affidavit stating that he joined the board of the applicant company on 30th september, 2004 and resigned on 13th june, 2005. he has stated that he was not aware of any proceedings pending against the company in respect of the suit property. the authorised representative of the 'e' company who executed registered conveyance in favour of the 'g' company mr. naresh kaushik has sent un-affirmed copy of his affidavit dated 29th april, 2009, in which he states that he was involved in part-time job of property dealing activities. in relation to his routine work, he has stated that around september-october, 2006 his friend mr. ajay naithani from delhi contacted him. he was informed by said ajay naithani that he had become director of 'e' company and that the company was intending to sell the suit property and had identified one buyer as well his assistance was sought as he was resident of maharashtra and the property was situated in khopoli- pen road, in village vanvati, taluka khalapur, dist. raigarh. he has stated that as per instructions, he made enquiries with the revenue authorities and found that the property was free from any charge, lien or encumbrances. only thereafter he executed necessary documents on 29th november, 2006 as authorised representative of the 'e' company. during that process he came in contact with the officials of 'g' company who had purchased the property for investment purpose. they disclosed that they would like to resell the property as and when opportunity comes. he has stated that he informed 'g' company since he came across prospective buyer. 'g' company accordingly, instructed him to complete the transaction. as a result, he got the deal completed and signed the documents as witness. he asserts that his act was bonafide without knowledge of any court proceedings in respect of suit property.19. as aforesaid, mr. r.n. pareek, advocate, who was associated with the 'e' company, has also filed his personal affidavit. he has stated that he was retained as advocate at delhi on 8th december, 1999 by mr. rajeev khandelwal to attend legal matters of m/s. euro cotspin ltd. which is situated at punjab. in may, 2000, he was requested to help in appointing advocate for the 'e' company at bombay in relation to some arbitration matter. in that connection, he visited mumbai when he was introduced to mr. girin pandit, advocate. he has stated that he was constantly in touch with mr. pandit to coordinate with some senior counsel and to attend arbitration proceedings at chembur and regarding bank recovery proceedings and pending cases of 138 n.i. act at bombay. he has stated that he got assignment with m/s. lloyds finance ltd. in march, 2001, who were in need of a full time legal professional to look after their litigation in north and eastern india. accordingly, he withdrew himself from the assignment with euro cotspin ltd. and worked for m/s. lloyds finance ltd. bombay till july, 2008. he has stated that he was never in touch of rajeev khandelwal and/or his associates or his company from march 2001 till july 2008. in july 2008 one advocate at delhi high court told him without disclosing his identity that he was in search of a lawyer to visit bombay high court. he consented to take up the assignment. where after, mr. harshmani pant met him and told about the pending matter at bombay against the 'e' company. he has stated that since he was not interested to work for 'e' company, he was told that entire management has changed and he would like to engage him as lawyer. he had made it clear that he would only help in finding out appropriate lawyer as he would not be able to frequently visit mumbai. thereafter, he contacted mr. girin pandit, advocate, who in turn, informed that he had already returned the brief in 2004 and has given no objection to the company, who engaged another lawyer. thereafter, he contacted mr. pankaj shah and discussed the matter with him, who in turn consented to accept the brief. he has denied the fact stated by mr. g. pandit that papers of the proceedings were handed over by shri g. pandit. in short, he has denied his role and involvement in connection with the proceedings on hand.20. mr. girin n. pandit, advocate has filed his affidavit dated 4th december, 2008. he has stated that he was engaged in the matter by one mr. rajeev khandelwal, who claimed to be the director of the 'e' company. the said company had its office at maker chamber, nariman point, from where the said rajeev khandelwal used to operate. he has stated that the company had also office at amarchand mansion, near regal theater. further, said rajeev khandelwal used to instruct him on the basis of which he had filed petition under section 391 of the act before this court. he has then stated that said rajeev khandelwal used to visit his office and during his visit mr. r.n. pareek, advocate from delhi also used to come to instruct him. the said mr. pareek claimed to be lawyer handling legal matters of the company at delhi. he has stated that one mr. parida in the bombay office of the 'e' company used to give him instructions on behalf of 'e' company. he has stated that he was not aware about the whereabouts of mr. khandelwal and even mr. parida, who was the only person attending office at amarchand mansion. he was unaware about his whereabouts. on that count, he thought it appropriate to withdraw from the matter and return the papers. he has stated that as per his recollection, he had handed over papers of the proceedings of the company to mr. r.n. pareek who had visited his office alongwith mr. parida sometime in november-december of 2004. he has also stated that the said person had also brought a vakalatnama on which he had put endorsement as 'no objection' for engaging any other lawyer in his place and since then he is not representing the company. he has stated that he had twice deputed his junior to attend the proceedings before the chairman of the committee and to inform that his office has no instruction from the company and would want to withdraw from the matter.21. another advocate ms. annie fernandes, who represented 'e' company before the chairman of the committee has filed her affidavit dated 5th december, 2008. in the said affidavit, she has stated that she had received phone call from advocate sunil d'souza, who in turn had received call from 'e' company regarding the matter before the official assignee. thereafter, on 21st february, 2007, she received call from ms. niti kakkar of 'e' company. she introduced herself as company secretary of the 'e' company and instructed her to attend the matter before the official assignee and take adjournment. she has stated that since she was preoccupied, it was not possible for her to appear before the official assignee on 21st february, 2007. therefore, she requested her colleague ms. deepa kamat to do the needful, who in turn appeared at her instance at 4.30 p.m. before official assignee and sought adjournment. she has stated that ms. niti kakkar was in contact with her to know about the developments of the matter and when she was informed that in absence of vakalatnama, she would not be able to continue in the matter. it is stated that ms. niti kakkar expressed inability to send vakalatnama, but still requested the affiant to appear even on 1st march, 2007 with assurance that vakalatnama would be made available before the next date without fail. it is stated that on instruction of ms. niti kakkar, she appeared before the chairman of the committee and took adjournment on 1st march, 2007. again on 1st march, 2007, said ms. niti kakkar assured to send vakalatnama before the next date of which was 15th march, 2007. she has stated that on 15th march, 2007 at about 3 p.m. ms. niti kakkar once again called her and instructed to appear before the chairman of the committee and instructed not to appear before the official assignee on that date. she has further stated that on 22nd march, 2007 at about 3 p.m. ms. niti kakkar called her and instructed to seek adjournment on the ground that settlement talks were in progress. on the basis of those instructions, she had appeared before the official assignee and sought adjournment on the ground of settlement. before the next date, once again ms. niti kakkar called the affiant and instructed not to appear before the official assignee. accordingly, she did not attend the hearing before the official assignee on 30th march, 2007.22. the advocates have filed their affidavits pursuant to observations of the court, so that the information to be disclosed by them would enable the court to unravel the web of circumstances in which the suit property was transferred by the 'e' company notwithstanding the scheme sanctioned by this court.23. besides the above affidavits, mr. pravin bhatt, ex-director of 'g' company has filed his affidavit dated 10th april, 2009. he has stated that he came to know about present proceedings through mr. arun gupta on the basis of notice published in local newspaper. he has stated that he was director of 'g' company between 20th november, 2006 and 6th august, 2007 when he resigned. he has stated that 'g' company purchased the suit property as bonafide purchaser by registered sale deed from 'e' company for consideration of rs. 75 lakhs only after due confirmation from relevant revenue record that there were no charge, endorsement, lien, seizure and injunction from any competent authority. he has stated that he had no personal knowledge of pendency of any court proceedings in respect of the suit property. according to him, buying of the suit property by 'g' company is absolutely bonafide and normal business transaction. there was no intention to disobey and violate orders of the court.24. mr. arun gupta, another ex-director of 'g' company has filed his affidavit dated 10th april, 2009. he has more or less reiterated the stand taken by mr. pravin bhat, another ex-director of 'g' company. he has stated that he had joined 'g' company as director on 20th november, 2006 and resigned with effect from 6th august, 2007. significantly, the sale deed executed between 'e' company and 'g' company is dated 29th november, 2006. moreover, he was authorised to execute the deed between 'g' company and 'k' company , which was executed on 26th april, 2007.25. one mr. ramesh vaze has filed three affidavits on behalf of 'k' company dated 31st july, 2008, 5th january, 2009 and 17th january, 2009. in the first affidavit, he has asserted that 'k' company became aware of the scheme sanctioned only on being served with a copy thereof alongwith report of the chairman dated 14th july, 2008, served on them on 16th july, 2008. it is stated that 'k' company has purchased the suit property consisting of land admeasuring in all 7 acres 9 gunthas and 4 prati together with structures standing thereon by registered conveyance deed dated 26th april, 2007 from 'g' company for consideration of rs. 4.30 crores. it is stated that before entering into the said conveyance, 'k' company had issued a public notice in two local newspapers on 4th april, 2007 before executing conveyance on 26th april, 2007. however, no objection of any kind was received by their advocate, who had issued the public notice on behalf of the company. they had also obtained conveyance deed dated 29th november, 2006 where under 'g' company had purchased the property from 'e' company. besides, prior to purchase, 'k' company caused a search to be taken in the records of the sub-registrar of assurances, karjat in respect of the suit property which did not contain any revelation about the scheme. in this backdrop, it is submitted that 'k' company had exercised proper and due diligence and had no notice of the facts, which have now come on record. 'k' company had no knowledge that 'e' company was not entitled to sell the suit property. in substance, it is asserted that the conveyance executed by 'k' company was in good faith and without notice of any prior or antecedent title adverse to the interest of 'g' company or 'e' company in respect of the suit property for consideration of rs. 4.30 crores, which was much higher than the estimated value fixed by the court under the scheme. that presupposes that 'k' company acted in good faith in the matter of purchasing the suit property for consideration. moreover, after purchasing the suit property, the company had installed a board on the suit property indicating that the possession thereof was that of 'k' company. it is stated that 'k' company has no concern with the dealing between 'e' company and 'g' company. moreover, it proceeded to purchase the suit property only after making proper enquiries. it is stated that the direction sought by the chairman that the conveyance between the 'k' company and 'g' company be declared as null and void was untenable in the facts of the present case. in the second affidavit dated 5th january, 2009 disclosure is made about persons with whom company interacted before culmination of registered conveyance deed. it is stated that as 'k' company was looking forward to a suitable property to shift its manufacturing facility of aromatic chemicals from mulund to the suitable location near to its new fragrance manufacturing facility at vashivali, had deputed its manager mr. vilas keshav wakade from 16/8/2006 with specific responsibility to locate land with building. the said mr. wakade amongst other located the suit property. in the month of december, 2006, he introduced one mr. raju shinde of om chemicals who in turn recommended the suit property. thereafter, mr. kedar ramesh vaze, representative of the director(son of the affiant) visited the site alongwith mr. vilas wakade, raju shinde and rajeev khandelwal of 'g' company. since the site was found suitable, negotiations were held with mr. rajeev khandelwal of 'g' company.26. at this stage, it may be relevant to note that the resolution passed by 'g' company authorised mr. arun gupta, director to negotiate as well as execute the conveyance deed. neither said mr. arun gupta nor mr. rajeev khandelwal has explained this anomaly. from the affidavit of the directors of 'e' company, it is noticed that rajeev khandelwal was the king-pin of group of companies of which 'e' company was one of the companies.27. in this affidavit, mr. ramesh vaze has further asserted that due diligence was taken before execution of the conveyance deed in respect of the suit property. in that, 'k' company had appointed epicon consultants for structural assessment of factory sheds in march, 2007 and independent valuer m.m. vaidya & co. for inspection/valuation of land/building/compound wall etc. the valuation report indicates the price as rs. 4.42 crores. it is stated that final negotiations took place between rajeev khandelwal of 'g' company and 'k' company and the price of the suit property was concluded at rs. 4.30 crores. since the said price was acceptable to the company, decision to acquire the suit property was taken by the 'k' company and advance of rs. 5 lakhs was paid on 26th march, 2007. thereafter, advertisements were issued in local newspapers on 4th april, 2007 and as no objections were received, the balance amount of rs. 4.25 crores was paid at the time of execution of the conveyance deed on 26th april, 2007. the conveyance is directly executed with 'g' company. it is also stated that 'k' company paid amount of rs. 9 lakhs towards brokerage for the said transaction to one mr. raju shinde. that payment was made by cheque although the said mr. shinde insisted the payment by cash. the names and addresses of two persons associated with the deal has been mentioned in this affidavit. the third affidavit of mr. ramesh vaze discloses the address of mr. deepak arora, director of 'e' company. it also discloses the names of the directors of 'g' company, viz. mr. ashwani dewan, mrs. sunit dewan, mr. arun gupta and mr. praveen bhatt, between 2000 to april, 2007. it is also stated that the directors of the 'e' company passed board resolution on 28th august, 2006, wherein an approval of board was accorded to conduct a postal ballot to seek approval of the members of the company to sell, transfer, dispose of the suit property. the said resolution was minuted and certified by mr. ajay naithani, who was then a director of 'e' company. the said mr. naithani later on expired on 4th march, 2007. the contents of the resolution are spelt out in this affidavit. it is stated that the said resolution was passed by the company after a period of 12 weeks provided under the court's order dated 12th february, 2004 had expired. further, the committee did not comply with the directions nor the chairman sought extension of time from the court. moreover, the board of 'e' company was although aware of the order dated 12th february, 2004, made no mention thereof in the resolution nor does it seem to have informed the committee of this decision. reference is then made to the certified true copy of another board resolution filed by mr. deepak arora of 'e' company dated 18th november, 2006, which authorised mr. naresh kaushik to deal with the suit property. it is stated that mr. deepak arora still continues to be a director of the 'e' company and the transaction which took place on 29th november, 2006 was within his knowledge. it is stated that there is a nexus and improper connection and connivance between the directors of 'e' company and 'g' company with regard to the sale of the land and that the directors of 'e' company and 'g' company be directed to bring all the amount received under the conveyance dated 29th november, 2006 i.e. rs. 75 lakhs, as also conveyance dated 26th april, 2007 rs. 4.30 crores. it is also stated that 'e' company changed its registered address. similarly, 'g' company changed its registered address. it is then stated that 'k' company after purchase of suit property had applied for grant of central excise license at panvel, when they were informed that 'e' company owed a sum of rs. 32 lakhs to the collector and until that amount was paid, no license would be granted to 'k' company. 'k' company thereafter, immediately approached khalapur police station to file complaint against 'g' company, which however, was not entertained by the named inspector. in this affidavit, it is reiterated that 'k' company purchased the suit property in good faith and without any notice of any prior or antecedent title adverse to the interest of 'g' company or 'e' company or any fraudulent intent on the part of either of them. it is stated that the negotiation in favour of 'k' company is protected by section 53 of the transfer of property act, 1882 and binding on all concerned. the same cannot be set aside.28. the two named persons who were associated with the deal, mr. vilas wakade, employee of 'k' company and the broker mr. raju shinde have filed their respective affidavit dated 3rd february, 2009 and 4th february, 2009. mr. wakade in his affidavit has stated that he joined service of 'k' company as a research and development chemist and thereafter was transferred to lab scales chemicals and production of bulk aroma chemicals. he was promoted to the post of manager category in the year 1994 and as assistant production manager in the year 1997. he has asserted that he has clean past and unblemished record and there is no adverse complaint against him till he resigned from the company on 12th may, 2007. he has stated that he was still in contact with the directors of 'k' company. he has stated that on 16th august, 2006, he was deputed as manager with specific responsibility to locate site for the plant at khalapur/patalganga and/or khopoli pen road near to its fragrance manufacturing unit at khalapur to shift the unit of mulund. he has corroborated facts stated in the affidavit of ramesh vaze as to how the site of the suit property was identified and finalised. he has stated that he has visited the site alongwith mr. raju shinde and mr. naik, project in-charge of vashivali plant, patalganga. he has stated that the legal advisor of 'k' company m/s. s.s. tamhane & co. gave opinion, on the basis of which decision was taken to go ahead with the purchase of the suit property. he has stated that he was present at the time of execution of the conveyance deed.29. the said mr. raju shinde associated as broker during the transaction between 'g' comapny and 'k' company in his affidavit has stated that he was having business relations with 'k' company and was doing part-time business in property. he has stated that he knew mr. wakade , mr. kokje, mr. kedar vaze and mr. giresh vaze of 'k' company. he has stated that in october, 2006, mr. wakade had discussed with him about requirement of suitable land alongwith structure thereon. further, he was frequently visiting patalganga, khalapur, pen-khopoli road for purchasing of recovered solvents from chemical factories. during such visit, he had noticed the site being the suit property when travelling on khopoli-pen road during his stop at vanavate for taking tea. he made enquiries with mr. dabhane, who was present over there about the suit property, who in turn informed that the same was to be sold. the said mr. dabhane gave mobile number of mr. naresh kaushik after two three days, who confirmed that the suit property was to be sold. thereafter, the site was mentioned to mr. wakade, who called him for discussion and later on site visit was made alongwith mr. wakade and mr. kedar vaze before finalising the sale. upon finalisation of the site, he contacted mr. naresh kaushik and called upon him to furnish documents pertaining to the suit property. he has stated that he never took part in the meetings of negotiations. he had no communication with 'g' company and had taken part in sale transaction to the extent of showing the site and informing mr. kaushik to hand over documents in respect of the suit property. he has stated that after completion of transaction, he has not taken remuneration although he was not working as broker in land dealing. he had submitted bills for technical consulting charges of his firm i.e. om chemicals.30. besides, three secured creditors have filed separate affidavits dated 24/10/2008, 13/10/2008 and 12/1/2009 more or less contending that the transaction effected by 'e' company inspite of the order of the court was to defeat the claim of unsecured creditors who are similarly placed like them. in substance they have supported the report of the chairman of the committee and have asserted that the transaction was intended to defeat and delay their claim and similarly placed unsecured creditors.31. the advocate appearing for the unsecured creditors have submitted that keeping in mind the settled legal position that the transaction such as this will have to be treated as null and void having been entered inspite of the order of the court dated 12th february, 2004. they have submitted that in any case, the order of attachment issued by the executing court at the instance of unsecured creditors m/s. ashok buildcon pvt. ltd. was in operation in respect of the suit property. therefore, the question of dealing with the suit property inspite of such order will have to be treated as illegal, null and void. to buttress this submissions, reliance is placed on the decision of the division bench of our high court in the case of keshrimal jivji shah and anr. v. bank of maharashtra and ors. : 2004 (3) mh.l.j. 893 and surjit singh and ors. v. harbans singh and ors. : (1995) 6 scc 50. it was argued that the order passed by the company judge on 12th february, 2004 is in fact a judicial pronouncement and in the nature of direction to deal with the property in the manner provided for in the said order and in no other manner. it is further submitted that the scope of powers under sections 391 and 392 of the act are wide enough and it is the duty of the court to continuously supervise the implementation of the scheme till it is finally executed. in support of the above submission, reliance is placed on the decision in the case of krishna nath sen, secy. and treasurer, dinajpur arya 'pustakagar' library v. dinajpur loan office ltd. : a.i.r. 1938 calcutta 337 and of the supreme court in the case of s.k. gupta and anr. v. k.p. jain and anr. : (1979) 3 scc 54. it was argued that 'e' company could not have passed resolution to evoke consent of the members of the company to sell or transfer the suit property by postal ballot as the company was not listed on stock-exchange at the relevant time. moreover, no resolution of postal ballot having been passed is placed on record. the only resolution of the board meeting dated 28th august, 2006 is available on record. it is submitted that action of the 'e' company and in particular, that of its board of directors was in breach of section 293(1)(a) r/w 192a as well as 192(4)(e) of the companies act. it is further submitted that connivance, collusion and conspiracy of the persons who interacted for effecting sale of the suit property in favour of 'g' company is evident from the facts which have come on record. there is strong link between the directors of the two companies. in that, mr. pravin bhatt who is the ex-director of 'g' company was appointed as scrutinizer for postal ballot and also gave his consent to do so. it is also noticed that letters received on the registered address of 'e' company were sent to mr. ashwin dewan and company. the said mr. ashwin dewan is the exdirector of 'g' company. moreover, the address of ashwin dewan is the same as that of deepak arora, director of 'e' company. similarly, 'g' company permitted arun gupta to negotiate and complete the sale, as is recorded in the resolution produced on record. however, the affidavit filed for and on behalf of 'k' company discloses that the negotiations were held with one rajeev khandelwal of 'g' company. the said rajeev khandelwal was the king-pin of group of companies amongst which 'e' company was one of the company. the affidavit of ramesh vaze discloses that he interacted with rajeev khandelwal gupta, who was the authorised representative. in such a case, it is too late in the day for the 'k' company to contend that due diligence was observed before executing conveyance deed in its favour. it is submitted that the letters sent by harshmani pant dated 22nd march, 2007 to the chairman of the committee makes no disclosure of the fact that the suit property is already transferred and sold in november, 2006. it is contended that section 193 of the companies act obliges the company to keep complete record. therefore, the new management cannot take the plea of no knowledge. that plea is obviously afterthought and to subterfuge the real issue. it is not as if no record was maintained by the company. besides, law requires that the scheme after sanction, a copy of every such order should be annexed to every copy of the memorandum of the company issued after the certified copy of the order in terms of section 391(4). there is no statement that this compliance was not done by the management at the relevant time. it is unfathomable that no such record was noticed by the new set of directors. as a matter of fact, the totality of circumstances would suggest that the suit property was transferred clandestinely so that the claim of the unsecured creditors would be defeated and delayed. it is submitted that if totality of circumstances are taken into account, it would appear that the transaction entered into by 'k' company was not a case of due diligence. moreover, it has been done contrary to and in violation of the order of the court, both dated 12th february, 2004 as well as the attachment order passed by the executing court. as a matter of fact, the executing court had ordered public auction of the suit property after its attachment and that the directions stood merged in the order passed by the company judge on 12th february, 2004 considering the relief's claimed in the applications, which were disposed of by that order.32. counsel for the 'e' company reiterated the stand taken in the affidavit filed by the directors that there was change of management and the new set of directors had absolutely no inkling about pendency of proceedings and of any order preventing 'e' company from disposing of the suit property in any manner. according to them, the transfer of the suit property in favour of 'g' company was a bonafide transaction after taking necessary precautions. on the other hand the stand taken by the directors of the 'g' company is that both the conveyance deed, one purchasing the suit property from 'e' company and thereafter selling the suit property in favour of 'k' company by 'g' company were bonafide for consideration without notice of the pendency of the proceedings or the order of the court.33. the argument of the 'k' company is that 'k' company is victim of fraud played by the directors of 'e' company and 'g' company in collusion. it is argued that even though the conveyance in favour of the 'g' company may be in violation of the order of the court, even so, the rights which have crystalised in favour of 'k' company consequent to execution of the registered conveyance deed in its favour in respect of the suit property would not be affected in any manner. that protection flows from section 53 of the transfer of property act. according to the counsel for the 'k' company, purchase of suit property by 'k' company from 'g' company was in good faith and for consideration without notice of pendency of any proceedings or of any order of the court. the suit property has been purchased for substantial price of rs. 4.30 crores inspite of the valuation thereof done by the committee and by the court as rs. 3.60 crores. that shows that 'k' company has paid more than reasonable price for the suit property and is bonafide purchaser in good faith for consideration. it was argued that the present situation is the making of the inaction of the committee appointed by the court and the fraud by the directors of 'e' company and 'g' company for which they should not be made to suffer. according to him justice demands that the transaction in favour of 'k' company should be preserved. he has placed reliance on the decision of the lahore high court in the case of firm man singh moti ram maliwara v. b.n. sinha and anr. air 1940 lahore 198. reliance is also placed on the decision of our high court in the case of raja bahadur motilal shivlal v. the poona cotton and silk . and anr. vol. xlii indian law reporters page 215. it is submitted that this court directed to sell the suit property within 12 weeks from the date of the order. no steps were taken by the committee to effectuate the said directions even after expiry of 12 weeks and much less even issuance of public notice as was directed nor applied for extension of time for sale. moreover, 'k' company before finally executing conveyance deed in respect of suit property had taken all precaution such as issuance of public notice, inspection of revenue record to reassure that no claim whatsoever was pending in respect of the suit property. it is only after reassuring that no such claim was pending, conveyance was executed. the order only authorises the committee to act in a particular manner. the committee having failed to take those steps, the innocent purchaser of the suit property in good faith for consideration without notice to 'k' company cannot be blamed. it is submitted that as a matter of fact, the argument canvassed on behalf of the unsecured creditors that the transaction was in violation of the injunction/ prohibitory order, cannot be countenanced. in that, the orders referred to by the unsecured creditors are neither in the nature of order of injunction or prohibitory order. the legal position stated in the reported decision pressed into service therefore, would be of no avail. the counsel also relied on the observations in the case of s.k. gupta(supra) that a scheme after it is sanctioned is statutory in nature, thus putting it on a higher footing than mere consent terms. according to him, however, even then, such a scheme remains an agreement between the parties to which the court has given its imprimatur. for that reason, it does not by itself have the force of an injunction, unless one or more of the parties thereto has undertaken to do or not to do something. he submits that at best, it may be a case of contempt action. but the rights which have enured in favour of the 'k' company by virtue of conveyance deed being purchaser in good faith with consideration, cannot be impaired as provided by section 53 of the transfer of property act. according to him, even if the transaction between 'e' company and 'g' company is held to be fraudulent, the protection under section 53 would enure to 'k' company being transferee.34. it may be placed on record that although an application has been filed by the advocate for discharge for the reasons mentioned therein, the same has become redundant as the advocate continued to appear before the court and participated in the hearing of the case, who in turn was assisted by noticee nos. 5 and 6. accordingly, no orders were solicited on that application which therefore, would stand disposed of by this order having become infructuous.35. considering the rival submissions and going through the material on record, the moot question that needs to be addressed is: what is the effect of order dated 12th february, 2004 passed by this court. the same has been reproduced in the earlier part of this order. the said order although purports to accord sanction to the scheme prepared by the company is, in fact, issuing direction to the company as to the manner in which the suit property should be sold and the sale proceeds thereof to be dealt with. it is a peremptory direction given by the court. the background in which the said order was passed also assumes some significance. it is a common order disposing of three different applications. two applications were moved by the unsecured creditors. one of the relief claimed was to set aside the judicial order passed by the executing court of not only attaching the suit property but also ordering public auction thereof on the specified date. considering the grievance which was raised at the relevant time by the 'e' company as well as its unsecured creditors, the said order came to be passed. it is noticed that the order of attachment passed by the executing court in respect of the property in question also merged in the order passed by this court. as aforesaid, the said order issued peremptory directions about the manner in which the suit property should be disposed of and the sale proceeds thereof to be appropriated. it is obviously a judicial pronouncement on matters referred to in the said order.36. the question as to what is the scope of power of the company court while exercising jurisdiction under section 391 and 392 of the act is no more res integra. the apex court in s.k. gupta's case (supra) had occasion to observe, while interpreting the said provisions which are in pari materia with the provisions occurring in the u.k. act. the apex court went on to observe that the parliament has, in its wisdom, conferred a power of wide amplitude on the high court in india to provide for its continuous supervision of carrying out of compromise and/or arrangement and also the consequential power to make the supervision effective by removing the hitches, obstacles or impediments in working of compromise or arrangement by conferring power to give such directions in regard to any matter or for making such modification in the compromise or arrangement as it may consider necessary for the proper working of the compromise and/or arrangement. it is further observed that the scheme sanctioned under section 391 of the act does not merely operate as an agreement between the parties but has statutory force and is binding not only on the company but even the dissenting creditors or members as the case may be. while referring to the decision in the case of j.k. (bombay) pvt. ltd. v. new kaiser-i-hind spg. & wvg. co. ltd. : air 1970 sc 1041 the court has observed that the effect of the sanctioned scheme is to supply by recourse to the procedure thereby prescribed the absence of that individual agreement by every member of the class to be bound by the scheme which would otherwise be necessary to give it validity. it is also observed that scheme represents a contract sanctified by court's approval between the company and the creditors and/ or members of the company. it is equally well established that the rights which are enshrined in the scheme of the class of creditors cannot be impaired or superseded unless it is by a new scheme approved in the same way as the earlier one. further, sanction of the court operates as a judgment in rem. in the case of smt. pramila devi v. peoples bank of northern india ltd. : (1939) 9 com cases page 1 : air 1938 pc 284, the court held that the scheme when sanctioned acquires statutory force and has greater sanctity than a mere agreement between the parties affected. it cannot be varied by a mere agreement of the parties. in the case of krishnanath sen v. dinajpur loan office : (1938) 8 com cases 152 : air 1938 cal 337, it is observed that the scheme when sanctioned has the force of judicial pronouncement. it no more remains in the domain of contract but becomes an order of the court.37. a priori, the order sanctioning and/or modifying the scheme passed by this court on 12th february, 2004 and in the peculiar facts and the background of the relief's made in the three applications disposed of by the said common order is of merging of order passed by the court of law in execution of the decree of attachment and sale of the property. such order issuing peremptory directions to the parties cannot be wished away on the specious argument that it is neither an order of injunction nor prohibitory order, as such. the order clearly requires the 'e' company to deal with the suit property only in the manner provided therein and to apportion the sale proceeds as per the said oder. it was no less than an order of injunction or a prohibitory order, which expects the party not to do a thing specified in the order. the order requiring the parties to do a thing in a particular manner, treating the same as order of injunction and the parties are bound to obey the same unless modified, varied or set aside by the court of law.38. the next question is in the face of the said order dated 12th february, 2004 whether the suit property can be said to have been validly disposed of by 'e' company in favour of the 'g' company. in view of the finding already recorded, the answer to this question has become obvious keeping in mind the dictum of the apex court in the case of surjit singh(supra) and that of the division bench of our high court in the case of keshrimal jivji shah(supra). the apex court in the case of surjit singh(s) faced with a problem where assignment was made by a party to the restraint order by means of a registered deed after restraint order in favour of the third party in the teeth of the restraint order. the lower court proceeded on the finding that it was not a transfer of property affected by the restraint order, as such. the apex court deplored the said approach and instead held that it did not make any difference whether property per se had been alienated or a decree pertaining to that property. the court went on to find that in defiance of the restraint order, the alienation/assignment was made. while dealing with the situation, the apex court observed thus:in defiance of the restraint order, the alienation/assignment was made. if we were to let it go as such, it would defeat the ends of justice and the prevalent public policy. when the court intends a particular state of affairs to exist while it is in seisin of a lis, that state of affairs is not only required to be maintained, but it is presumed to exist till the court orders otherwise. the court, in these circumstances has the duty, as also the right, to treat the alienation/assignment as having not taken place at all for its purpose.in the case of keshrimal shah(supra) the situation was no different. in that, an ad-interim order of injunction was passed on 6th march, 1998. inspite of that injunction, the respondent no. 2 transferred and assigned its lease hold rights in the property in favour of petitioner no. 2. the said property was further put up for auction by the recovery officer. the petitioner challenged that action before the drt as well as in appeal before the high court. the court held that sub-lease in favour of the petitioner was in contravention of the order of the injunction passed by the high court on 6th march, 1998, for which reason, the same was void and confers no right, title and interest in favour of the petitioners therein. in the challenge before the high court, the principal argument was that there was no provision either in the cpc or else where, which makes transfer of immovable property in violation of an order of injunction null and void. that the law visits parties acting in violation of orders of court with serious penalties but does not render the transaction itself null and void or of no legal effect. the restraint order does not make the right, title and interest in the immovable property but only restrains allocation and disposal thereof. that would not prevent the party against whom restraint order was passed to transfer his rights in favour of third party and moreso, when the party was holding only a leasehold right and the property belonged to the authority cidco, who had given prior concurrence to the transfer. it was also the case of the petitioners that no lis pendence was registered and that the petitioners therein had taken all precautions before purchasing the rights and it was not a case where petitioners colluded with the respondent no. 2. it was contended that considering the fact that injunction is in personem and not in rem, the same cannot affect the rights acquired by the petitioners in good faith for consideration. moreover, when the title is already passed on, in such a case, the tax recovery officer cannot precipitate the matter until title issue is finally concluded in a civil suit. this and similar arguments have been rejected by the division bench of our high court relying on the exposition in the case of surjit singh(supra) and decisions in ramchandra ganpat shinde v. state of maharashtra and ors. : air 1994 sc 1673 and satya barata biswal v. kalyan kumar kisku and ors. : air 1994 sc 1837. in ramchandra sinde's case(supra), the apex court has adverted to the dictum of mr. justice arthur, j. venderbilt, which states:.it is the courts and not in the legislature that our citizens primarily feel the keen, the cutting edge of the law. if they have respect for the work of their courts, their respect for law will survive the shortcomings of every other branch of the government; but if they lost their respect for the work of the courts, their respect for the law and order will vanish with it to the great detriment of society.39. following the said observation, the court proceeded to hold that faith of the people is the source and succor to invigorate justice intertwined with the efficacy of law. the faith of the people in the efficacy of judicial process would be disillusioned, if the parties are permitted to abuse its process and allowed to go scot free. it further observed that it is but the primary duty and the highest responsibility of the court to correct such mischief at the earliest and restore the confidence of the litigant public, in the purity of fountain of justice; remove stains on the efficacy of judicial adjudication and respect for rule of law, lest people would lose faith in the courts and take recourse to extra-constitutional remedies which is a deathknell to the rule of law. in satya brata biswal's case, the controversy was that the order of status quo was voilated. the court found the act of having effect of violating preservation of status of the property and opined that the principle contained in the maxim : actus curiae neminem gravabit has no application at all when in violation of status quo order a sub-tenancy has been created. the court rejected the argument that a trespasser cannot be evicted without recourse to law is without merit on the ground that the state of affairs in relation to the property as on the date of the order ought to be the concern of the court. that order cannot be circumvented by parties with impunity and expect the court to confer its blessings. the party cannot gain an advantage in derogation of the rights of the parties, who were litigating originally. it finally held that the grant of sub-lease contrary to the order of status quo was clearly illegal and all actions including the grant of sub-lease and all actions founded on such sub-lease.40. on analysing these decisions, the division bench of our high court has opined that act done in defiance of injunction order will have to be denuded on the pedestal of public policy. considering thus, the very faith of litigants in rule of law and administration of justice, the argument canvassed to defend right passed on in favour of the third party cannot be countenanced. if such arguments were to be accepted, it would result in nullifying the efficacy of the injunction order or prohibitory order. it would also mean that the parties can breach and violate court orders openly and with impunity and neither they nor the beneficiaries would suffer any consequences therefore. the court then went on to observe that it is time that the court affirms the principle that transfer of immovable property in violation of an order of injunction or prohibition issued by the court of law, would confer no right, title or interest in the transferee, as it is no transfer at all. the transferee cannot be allowed to reap advantage or benefit from such transfer merely because he is not party to the proceedings in which order of injunction or other prohibitory order came to be issued.41. what is significant for our purpose is the observation made by the court that it is enough that the transferor is a party and the order was in force. once these two conditions are satisfied, the transfer 'must not be upheld'. the court further observed that it is well settled that if the courts were not to honour and implement their own orders and encourage party litigants, be they public authorities, to invent methods of their own to short circuit and give a go by to the obligations and liabilities incurred by them under orders of courts, the rule of law will become casualty in the processa consequence to be jealously guarded by all and at any rate by the highest courts in the state. this legal position is restated in the decision reported in : air 2001 sc 2790. referring to this dictum, the division bench observed that the argument of the transferee that they had no knowledge of injunction was of no avail. the court instead opined that the petitioners cannot be allowed to go scot free as bonafide purchasers for value without notice, once it is held that transfer has no legal effect. at the end, the court answered the question by holding that the transfer was illegal and cannot be recognised and the transferee gets no valid title nor does he acquire any right or interest in the immovable property.42. applying the abovestated exposition, there is hardly any scope to entertain the defence now taken before this court that the conveyance was executed without knowledge of the pending court proceedings or the order of the court. as that argument will be advanced in every singular case of this kind. the fact asserted that the transfer was in good faith and for consideration cannot extricate the transferee of the legal position and permit him to contend that the transfer in its favour was a valid transfer of title, right or interest in the immovable property in the face of order of injunction or prohibitory order. once the two conditions are satisfied, namely, that the transferor was party to the proceedings and the order was in force, no other enquiry would be relevant. in the present case, there can be no dispute that 'e' company was party to the proceedings before this court as well as before the executing court which issued order of attachment and order of sale of the suit property. in fact, at the instance of 'e' company, this court issued peremptory direction of selling the suit property in the manner specified and thereafter to disburse the sale proceeds as provided in the order. both the orders of attachment issued by the civil court in execution as well as by the company court while modifying the scheme under section 391 pertain to the suit property and was passed against 'e' company, who was party to the respective proceedings and both these orders were in force. in the wake of those orders, it was not open to 'e' company to transfer the suit property to third party in the manner other than the one stipulated by the court and that too without seeking prior permission of the court in that behalf. thus understood, the transfer of suit property by 'e' company in favour of 'g' company was illegal and cannot be recognised in law. as a concomitant of this finding, it follows that 'g' company had no valid title nor it had acquired any right, title and interest in the suit property, what so ever in law. if so, 'g' company could not have validly transfered the suit property to any other person, inspite of the registered conveyance deed in its favour executed by 'e' company. necessarily, therefore, 'g' company could not have validly transferred the suit property to 'k' company, notwithstanding the execution of conveyance deed in favour of the 'k' company in respect of the suit property. in other words, all actions dependent on the transfer by way of transfer of suit property in violation of the orders of the court were of no consequence in law and ought to be disregarded as non-existent. on this finding, i have no hesitation in acceding to the prayer made by the commissioner in his report dated 14th july, 2008 to declare the sale of the suit property is illegal and non-existing and cannot be recognised in law. indeed, the commissioner has submitted his report for and on behalf of the committee appointed by the court to espouse the cause of unsecured creditors of the 'e' company.43. in view of the answer to the above issue, the next question is: should the court pass order of status quo ante, so as to restore the position in respect of suit property as on 12th february, 2004. further, if such direction is to be issued, will subsequent transferee ('k' company) have any remedy to redress its grievance for the loss and damages caused to it. as is observed earlier, it is well established position that the transfers which are made in violation of the order of the court will have to be treated as illegal and non-existing in the eye of law. it is enough for the court to restate the legal position and pronounce that notwithstanding the execution of the registered conveyance deed in respect of the suit property by 'e' company in favour of 'g' company and the subsequent transfer by 'g' company to 'k' company, both these conveyance deeds are illegal and cannot be recognised in law. more so, neither the 'g' company nor 'k' company would get valid title or acquire any right or interest in the suit property. in other words, all concerned including the court of law would recognise 'e' company as the real owner of the suit property till this date and the suit property will have to abide by the further directions to be issued by this court. this is the only view that can be taken to uphold the public policy and to restore confidence of the litigant public in the authority of the court. indeed, this court is not directly concerned with the question as to whether 'k' company can proceed against the 'g' company or for that matter 'e' company for relief's, as may be available to them in law. that is a matter, which will have to be adjudicated in appropriate proceedings, if resorted to by 'k' company.44. the stand taken on behalf of the two companies(i.e. 'g' company and 'k' company) that they had no knowledge about the pendency of any proceedings in relation to the suit property or for that matter, of order of court of law will be of no avail to answer the controversy in issue. to get over this position, the counsel for 'k' company had vehemently argued that from the record it is more than evident that 'k' company is itself a victim of fraud committed by the directors of 'e' company and 'g' company. besides, 'k' company is purchaser in good faith for consideration. it has taken all precautions that were necessary before executing conveyance deed in its favour. they have gone to the extent of contending that as a matter of fact, the order passed by this court on 12th february, 2004 had worked out on expiry of 12 weeks and thereafter, nothing prevented the 'e' company to deal with the property in appropriate manner. according to the counsel, since the 'k' company was purchaser in good faith and for consideration, the transfer of property in favour of 'k' company has created indefeasible right in favour of 'k' company on account of such transfer, which cannot be impaired as the same is preserved by section 53 of the transfer of property act. all these arguments, in my opinion, are arguments of desperation. once the court finds that the suit property is transferred by 'e' company in violation of the order of court to which it was a party and the same was in force, it would necessarily follow that the transfer so effected by 'e' company was illegal and non-existent in law. such transfer cannot be recognised in law and the transferee would not get any valid title nor would acquire any right or interest in the immovable property. this is the established legal position. in that case, no argument of want of knowledge or that the transfer was in good faith could be countenanced as this would result in a situation that the parties can breach and violate court's order openly with impunity. that position not only operates against the party to the order who is restrained but also to the beneficiaries or persons claiming directly or indirectly through such party. the only legal argument that needs to be examined is one of the protection flowing from section 53 of the transfer of property act. section 53 of the transfer of property act reads thus:53. fraudulent transfer.-(1) every transfer of immovable property made with intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed.nothing in this sub-section shall impair the rights of a transferee in good faith and for consideration.nothing in this sub-section shall affect any law for the time being in force relating to insolvency.a suit instituted by a creditor (which term includes a decree holder whether he has or has not applied for execution of his decree) to avoid a transfer on the ground that it has been made with intent to defeat or delay the creditors of the transferor, shall be instituted on behalf of, or for the benefit of, all the creditors.(2) every transfer of immovable property made without consideration with intent to defraud a subsequent transferee shall be voidable at the option of such transferee.for the purposes of this sub-section, no transfer made without consideration shall be deemed to have been made with intent to defraud by reason only that a subsequent transfer for consideration was made.]this section is part of chapter-ii of the act. chapter-ii inter alia deals with transfer of different types. indeed, one such transfer is a fraudulent transfer envisaged in section 53 of chapter-ii. significantly, the third clause of sub-section (1) provides that nothing in the said sub-section shall affect any law for the time being in force relating to insolvency. in broad sense, transfer in violation of a judicial pronouncement can be termed as a fraudulent transfer. however, considering the settled legal position, the defence of section 53 will be of no avail in cases where the transfer is effected in breach of a judicial pronouncement. in the latter cases, the doctrine expounded by the apex court and consistently followed is that if the transfer is in violation of the order of the court, the same is no transfer in the eye of law. it is enough to show that the transferor was party to the order of the court and that the said order was in operation when the transfer was effect by him. no other enquiry would be necessary. if such a plea were to be entertained, it would be antithesis to the doctrine of basic justice which mandates the parties to abide by the authority of court and to ensure that fountain of justice is unsoiled. it is in larger public interest to adopt that view, else it will shake the very edifice of justice. if the legislature intended to protect even transfers made in violation of court's order, it would have made express provision in that behalf in chapter-ii of the transfer of property act. any other view would militate against the doctrine of basic justice, for it would be an usual defence taken in such matters to overreach the orders of the court. that would be opposed to the rule of law. thus understood, section 53 will be of no avail to the case on hand.46. further, the argument that the 'k' company was purchaser in good faith and for consideration and the rights acquired by the 'k' company under the registered conveyance deed cannot be impaired clearly overlooks the statement of law that the transfer which is in violation of the order of the court is illegal and cannot be recognised in law. the transferee under such transfer gets no valid title and does not acquire any right and interest in the immovable property. the fact that there exists a registered conveyance deed in favour of the 'k' company does not take the matter any further for the simple reason that 'g' company who has purported to transfer the property in favour of the 'k' company itself had no valid title and had not acquired any right or interest in the immovable property in law. as a result, the protection claimed by the 'k' company on account of section 53 of the act is ill-advised.47. counsel for the 'k' company has relied on the decision of the lahore high court in the case of firm man singh(supra). the exposition in that case will be of no avail. it was not a case where the primary transfer was held to be invalid because it was in violation of the order of the court. even the judgment pressed into service in the case of raja bahadur motilal shivlal(supra) will be of no avail to the fact situation of the present case. in that case, the charge was created in respect of the disputed property. after taking sanction of the district court, the property was sold and thereafter the controversy raised was about the priority of disbursal of the sale proceeds. the court noticed that in the mortgage suit an order by consent was passed for sale of the mortgaged properties by the liquidators reserving the contention of all the parties. the plaintiff however, claimed that by virtue of the document of charge to pay the amount of rs. 20,000/- secured thereby in priority to the claim of the second mortgages, contending further that as the latter failed to appeal against the decision of the district judge they were estopped from disputing the same. the court was not called upon to consider the question as in this case, as to whether the transfer of suit property was illegal being in violation of the order of the court and further about the consequence of such order on the efficacy of the transfer though effected by registered conveyance deed.48. the next question is: whether the explanation offered by the commissioner of committee appointed by the court regarding his inaction is plausible and can be accepted as just explanation. there is no doubt that the present situation has resulted on account of the inaction of the commissioner. if he had acted with despatch after the order dated 12th february, 2004, the present situation was obviously avoidable. the explanation offered by the commissioner in his reports filed pursuant to the liberty given by the court to say the least is unacceptable. in the order dated november 19, 2008, this court raised pointed queries to be answered by the commissioner. even on liberal view of the explanation offered by the commissioner in his report dated december 3, 2008, no explanation whatsoever is forthcoming as to why the commissioner took so much time to convene the meeting to effectuate the directions of the court. the first meeting was obviously called on october 11, 2004, after 12 weeks period provided under the order dated 12th february, 2004 was over. the commissioner though a responsible and well informed officer of this court, who was acting as company registrar at the relevant time, did not think it necessary to move for extension of time and for further consequential directions. suffice it to observe that the inaction and failure of the commissioner which is palpable from the record, has resulted in the present situation where the party to the order was emboldened to act in defiance and in violation of the order of the court. in my opinion, for the course that i intend to adopt, it may not be necessary to elaborate on this aspect any further. the question as to whether failure and inaction of the commissioner was deliberate, intentional or otherwise; or he was party to the smaller conspiracy of the larger conspiracy or otherwise is a matter which needs to be enquired into. that will have to be considered in appropriate proceedings, if and when occasion arises.49. the last but most important question, that needs to be addressed is whether this is a fit case for initiating criminal action against all the erring persons including the members of the committee appointed by the court, for their act of commission and omission or of conspiring to defeat the directions issued by this court, which action in one sense has resulted in defeating and delaying the rights of the creditors. from the affidavits filed, it is amply clear that the order was passed on 12th february, 2004, at the instance of the directors of 'e' company, it can be safely presumed that the concerned directors of the 'e' company had knowledge and were fully aware that the property cannot be dealt with other than the manner provided by the court. the prominent persons were amongst the directors, namely, rajeev khandelwal, anant narayan, ajay kumar naithani, deepak arora, harshmani pant and anand bhist. insofar as anant narayan and anand bhist are concerned, they have appeared in the present proceedings and have filed their respective affidavits. rajeev khandelwal has neither appeared nor bothered to file any response. from the affidavit filed by mr. ramesh vaze, it transpires that mr. rajeev khandelwal was the central figure, who was involved in the negotiations with 'k' company, presumably projecting himself to be the director of 'g' company. at the same time, the new directors of 'e' company have asserted that when the management was transferred, no disclosure was made about the pending proceedings or the order of the court in relation to the suit property. it is possible that mr. rajeev khandelwal had not disclosed that position. it is also possible that new management must have entered the deal fully aware of the prevailing position. they may have indulged in speculation. for, it has been stated on affidavit that the company was not functioning at all since 2000. the purpose of taking over the management by the new directors was obviously to encash the immovable properties of the company. moreover, it is noticed that the directors of 'e' company and 'g' company were freely interacting before the suit property was conveyed. as a matter of fact , 'e' company authorised mr. naresh kaushik to act as its authorised representative. he not only executed conveyance deed on behalf of the 'e' company but surprisingly also acted as witness of 'g' company during the execution of conveyance deed between 'g' company and 'k' company. at the same time resolution passed by 'g' company mentions that mr. arun gupta was made overall incharge of negotiations and execution of the conveyance deed to transfer the suit property in favour of 'k' company. however, the person who was negotiating and/or was in the forefront was not mr. arun gupta but mr. rajeev khandelwal, ex-director of 'e' company. that militates against the argument of 'k' company of having completed the transfer in good faith. it is also noticed that 'e' company appointed mr. pravin bhatt, director of 'g' company as scrutinizer. from the various circumstances emerging from the record as made available, it would appear that the transfers by 'e' company in favour of the 'g' company and soon thereafter, by 'g' company in favour of 'k' company were in collusion and part of larger conspiracy to over-reach the orders of the court of law and also to defeat and delay the claim of the creditors. notably, the conveyance by 'e' company in favour of 'g' company was executed on 29th november, 2006, which is stated to be on the basis of resolution passed by the board of directors on 28th august, 2006 and 18th november, 2006 respectively. significantly, the value of the property is shown only as rs. 75 lakhs as against the assessed value thereof by the company itself before this court as rs. 3.80 crores two years prior thereto. not only that, within a short span of 'only five months', 'g' company further transferred the same property in favour of 'k' company on 26th april, 2007, that too at a staggering price of rs. 4.30 crores, as against acquisition price of rs. 75 lakhs only. this is a strong circumstance to attribute motives, as this circumstance is inexplicable. notably, a common trend is noticed that just around the time of respective transaction the persons involved have resigned from the respective companies. all these matters lead to an inevitable inference that it is a clear case of act of commission and omission in connivance and as a part of conspiracy so as to act in breach of the order of this court to encash the property of the 'e' company and also to defeat the claim and rights of the creditors of that company. in the peculiar facts of the present case, it is appropriate to direct initiation of criminal action against all the erring persons who were directly or indirectly concerned with the transaction in question, which was intended to overreach the orders of the court of law and to defeat the claim of the creditors. in my considered opinion, in not resorting to criminal action against the erring persons inspite of such a finding would be abdicating the powers and duty of the court to take the matter to its logical end.50. the last and most important aspect to be answered is the nature of order that ought to be passed. it is noticed that the directors, former or present of 'e' company, are primarily responsible for the present situation. it is also noticed that although 'e' company transferred the suit property in favour of the 'g' company, an independent entity, it was a collusive act with purpose. in other words, although they are two different entities, the persons acting behind the scene namely, the interests of the directors of the two companies were overlapping. they singularly and together transferred the property in favour of the 'k' company for consideration, even though they had no right to transfer the same. 'k' company has supported the claim of the secured creditors as well as the commissioner that the transfer effected by the 'e' company in favour of 'g' company was fraudulent and product of a conspiracy. at the same time, it is the case of 'k' company that it is a victim of fraud played by the concerned persons associated with 'e' company and 'g' company. in this peculiar situation, the court will have to pass an order, which would not only mitigate the loss and damage caused to the 'k' company, but also create deterrence that such conduct cannot be viewed lightly. as a result, i think it appropriate to direct 'e' company as well as 'g' company and its directors to bring back the amount, which was received by them respectively towards transfer of the suit property. 'e' company will have to bring back rs. 75 lakhs. 'g' company will have to bring back rs. 4.30 crores received from 'k' company under the conveyance deed, after deducting rs. 75 lakhs paid to 'e' company under the former conveyance, i.e. rs. 3.55 crores. both 'e' company as well as 'g' company will have to bring back the amount with interest. 'e' company will have to bring back the amount of rs. 75 lakhs with interest with effect from 29th november, 2006, the date on which conveyance was executed in favour of 'g' company and the amount received there under. insofar as 'g' company is concerned, it will have to bring back the amount of rs. 3.55 crores with interest with effect from 26th april, 2007, the date on which the conveyance deed was executed between 'g' company and 'k' company. the interest shall be payable until the date of realisation of the full amount.51. the next question is: what should be the quantum of interest there can be no dispute that the transactions were purported to be commercial transaction. ordinarily, i would have directed the two companies to return the amount with interest at the rate of 12% per annum. however, the transaction was in respect of immovable property. the 'k' company intended to purchase the immovable properties and paid full price of rs. 4.30 crores to 'g' company. since it is a case of immovable property, the ordinary rate of interest may not match with the rate of escalation of property price. moreover, since transactions between the 'e' company and 'g' company and thereafter between 'g' company and 'k' company is the product of fraud, the said two companies being beneficiaries thereof would be obliged to bring back the amount with interest, which should deter them and other litigants from indulging in such illegalities which shakes the confidence of the litigating public and impinges upon the rule of law. in my considered opinion, following order will meet the ends of justice.order(i) both 'e' company and 'g' company will have to bring back the stated amount of rs. 75 lakhs and rs. 3.55 crores respectively (aggregate amount of rs. 4.30 crores) alongwith interest at the rate of 18% per annum to be computed from the dates referred to in paragraph 50 above. the principal amount as well as interest amount shall be deposited within four weeks from today. if the said amount is deposited in time, the same will be made over to 'k' company. thereafter, 'k' company would be free to avail of the amount so deposited without prejudice to its rights and contentions and remedy for recovery of loss and damages against the directors of 'g' company and/or 'e' company and/or against respective companies, if so advised. the said proceedings will have to be decided on its own merits.(ii) in the event, 'e' company and 'g' company comply with the direction contained in clause (i), the property in question of 'e' company shall be disposed of by conducting court auction disregarding the two registered conveyances in favour of 'g' company and 'k' company respectively, which are illegal and non-existent in law. 'k' company will be entitled to participate in the court auction of the suit property, if so advised. the sale proceeds would be primarily used for settling the claims of all the creditors of the 'e' company. that will be without prejudice to the rights of the unsecured creditors of the 'e' company to proceed against the directors of 'e' company and/or 'g' company or against either of the two companies for appropriate relief, as may be advised. the said proceedings will be decided on its own merits.(iii) however, if 'e' company and/or 'g' company fail to deposit the amount, as per clause (i) above, in that case, it is ordered that the suit property shall be disposed of by conducting court auction disregarding the two registered conveyances in favour of the 'g' company and 'k' company respectively, which are illegal and non-existent in the eye of law. it will be open to 'k' company to participate in the said court auction of the suit property, if so advised. out of the sale proceeds, the amount equivalent to principal amount of rs. 4.30 crores will have to be set apart and/or adjusted against the bid amount offered by 'k' company, if it were to be the highest bidder, with liberty to the 'k' company to proceed against the directors of 'e' company and 'g' company and/or against the said two companies for claim of further damages and loss, if so advised. the said proceedings will have to be decided on its own merits. the residuary amount of the sale proceeds will be distributed amongst the unsecured creditors of the 'e' company in terms of the scheme. in case, 'k' company is not the highest bidder, the amount of rs. 4.30 crores to be set apart from the sale proceeds will be made over to 'k' company with liberty to proceed against the directors of 'k' company and 'g' company and/or against the said two companies for claim of further damages and loss, if so advised. the said proceedings will be decided on its own merits.(iv) in addition, if the direction contained in clause (i) is not complied by 'e' company and/or 'g' company in whole or in part, all the assets of the concerned company would stand attached under this order, so that the same can be realised and distributed amongst the unsecured creditors of 'e' company as per the scheme, to the extent of aggregate amount of rs. 4.30 crores alongwith interest accrued thereon referred to in clause(i) above after deducting the residuary amount of the sale proceeds recovered from the sale of the property in question of the 'e' company left after setting apart rs. 4.30 crores for 'k' company as per clause (iii) above. this will be without prejudice to the rights of the unsecured creditors to proceed against the directors of 'e' company and/or 'g' company or against either of the two companies for appropriate relief's, as may be advised. those proceedings will be decided on its own merits. in the event any further amount is still available for distribution out of the sale proceeds of the property of the 'e' and/or 'g' company, the company registrar shall submit his report for appropriate directions.(v) the prothonotary and senior master is ordered to take steps to initiate criminal action against the erring persons in the light of the observations made in this decision.(vi) copy of this judgment be placed before the registrar general of this court to initiate appropriate action against the then company registrar of this court, who was appointed as the chairman of the committee in terms of order dated 12th february 2004, in view of observations made in this judgment, in particular, paragraph 48.(vii) accordingly, all applications, show-cause notices, chairman/commissioner's reports are disposed of by this common judgment.