Raxesh Jagmohan Pandey v. JVG Finance Ltd.

COMPANIES ACT, 1956

--Winding up--Appeal against notice of vacation of possession of flatsNo knowledge of prohibitory orders passed by RBI under section 45MB--No intention to defraud other creditors--When Official liquidator failed to prove that buyer had any knowledge of prohibitory orders passed by RBI under section 45MB of RBI Act restraining the company to sell the property and the company or the buyer ever had acted in collusion or share the common intention to defraud other creditors or did not act in good faith, then transactions of sale of flats were neither hit by section 45MB of the RBI Act nor by section 531A of the Companies Act, 1956 and accordingly notice of vacation of possession of flats and report of one-man committee was to be set aside.--Buyer purchased two flats from the company and paid entire consideration to the company prior to the filing of the winding up petition by the Reserve Bank of India against the company. Subsequently, the one-man committee rejected the claim of the buyer on the ground that the company had been prohibited in accordance with prohibitory order of the RBI under section 45MB of RBI Act, from selling, transferring, creating charge or mortgaging or dealing in any manner with its property and assets without prior written permission of the bank and the sale was also not for valuable consideration. Further that, the transaction being neither in its ordinary course of business nor appeared to be in good faith or for valuable consideration, hence hit by section 531A of avoidance of voluntary transfer. Thus, based on the report of the one-man committee, Official liquidator had demanded vacant possession of both flats. Therefore, the buyer filed an appeal against notice of the official liquidator and report of the one- man committee on the ground that he was a bona fide purchaser having paid the entire consideration for the flats. Held: One-man committee had completely ignored that the prohibitory order was valid only for a period of six months from the date it was issued, but these flats were purchased by the buyer after six months had elapsed. Therefore, the order was never extended, and would not have any effect upon the legality of sale of the flats. Thus, the finding of the one-man committee, regarding the sale being hit by section 45MB of the RBI Act was incorrect. Further that, the one-man committee failed to file any evidence, which proved that the sale was not for valuable consideration. Official liquidator failed to prove that the buyer had any knowledge of prohibitory orders passed by the RBI restraining the company to sell the property and the company or the buyer ever had acted in collusion or share the common intention to defraud other creditors or did not act in good faith. Therefore, the sale transactions for the flats were neither hit by section 45MB of the RBI Act nor by section 531A of the Companies Act, 1956. Hence, the appeal was to be allowed and set aside the report of the one-man committee and the notice of the official liquidator.