Comapny petition
Bhupen
(Querist) 29 October 2012
This query is : Resolved
Hello, I have few queries in Company petiton.
In 1997, I had filed CP for winding up. That was heard and conditional order was passed in 2006 directing respondents to pay the amount.
In mean time in 2006 Company disposed off its only asset without informing court, third party.
Respondents failed to pay and in 2007 Final order of winding up was passed. In 2010 It was set aside as Respondents were nt served U/R 28. It was heard fresh and again it was order to Wound up.
However in Appeal, division Bench Set aside the order and asked petitoner to file SUIT. Aagin Suit was decreed in Favor of Petitioner/Plaintiff. But still respondents didnt pay the money.. Now again I have filed CP. The respondents are not doing any business since 2001.
The respondent doesnt have any money nor any assets except for table space office.
Now can i get hold of assets which was sold to Third Party or can i put a stay on transaction ?
Regadrs,
Bhupen Shah
Devajyoti Barman
(Expert) 29 October 2012
After decree of suit you should not have filed the suit.
You could have filed execution case in the trial court and execute the decree by attachment of property of the company including by way of civil imprisonment of company officials.
ajay sethi
(Expert) 29 October 2012
sincethere was no stay order passed by court company was free to dispose soe of its assets . if company dosent have any money you are wasting your time and money in litigation . even if company is wound up secured creditors will get prefernce .
Bhupen
(Querist) 29 October 2012
asset was disposed of in 2006 during the pendency of petiton...
In 2010 final order was passed for winding up.
In 2011 Division Bench stayed d order and asked me to file a suit..
So this is how case went on..
ajay sethi
(Expert) 29 October 2012
the intention of the Legislature under section 536(2) appears to see that no transaction after the commencement of the proceedings of winding up are given lawful effect, unless it is otherwise so declared by the C ompany Court. The major purpose appears to be that once the winding up proceedings have been commenced, no preferential payment would be permitted by the company, facing the winding up proceedings; nor the company facing the winding up proceedings may enter into a transaction which may result into giving voluntary preference to any of its creditors, which may otherwise not be legally permissible. Since section 536(2) leaves no room for the Company Court for declaration of the transaction as valid or legal, it cannot be said that all transactions would be void, but it can rather be said that unless the transaction is declared valid, all transactions would be void. Therefore, declaration of validity of the transaction is to be read as an exceptional category to the normal rule and such declaration may fall only if it is established to the fullest satisfaction of the Company Court that the transaction is genuine, bona fide and is not with a view to frustrate the rights of the other creditors. The Company Court while undertaking the exercise for declaring the transaction as valid in normal circumstances, would give more weightage to the bona fide of the party who has secured interest by such transaction and whether such bona fide transaction is without prior notice of the proceedings of winding up or not would be one of the major crucial test. So far as the company-in-liquidation is concerned, once the proceedings of winding up are initiated, it can hardly be denied by it that it was not aware of the proceedings of winding up. Therefore, it would be for the party asserting the right as bona fide purchaser or beneficiary of bona fide transaction to assert and establish that since the transaction is bona fide, the same cannot be invalid or rather would be valid to protect its right. Such validation can rather be said as for protecting the equitable interest of the parties. The burden of establishing that the transaction is bona fide would be upon the party who asserts for validation of the transaction and if such burden is not satisfactorily discharged, the Court may decline the declaration for validation of transaction.
