Dr. S. Muralidhar, J.

1. This judgment disposes of C. A. Nos. 477 of 2005 and 2385 of 2013 in Co. Pet. No. 59 of 2002.

Background Facts

2. The background to these applications is that the Petitioner, Empire Trading Co. (‘ETC’), through its Sole Proprietor, Mr. Mohd. Yamin, filed Co. Pet. No. 59 of 2002 in this Court on 4th February 2002 under Sections 433(c) (e) (f) and Section 434(1) (c) (b) read with Section 439 of the Companies Act, 1956 (‘Act’) seeking the winding up of the Respondent, Express Hi-Tech Pvt. Ltd. (‘EHPL’), which had its registered office in New Delhi. EHPL was established with the object of manufacturing automobile parts. It had a factory at A-85, UPSIDC Industrial Area, Sikandarabad, Bulandshahr in Uttar Pradesh.

3. According to ETC, about 3 to 4 years prior to the filing of the winding up petition, the factory of EHPL at Sikandarabad was lying closed. ETC claims that on 14th November 2000 EHPL through Mr. V.P. Rai, its Director, entered into a verbal agreement with ETC for sale of its plant and machinery including scrap, dye blocks, crane, gantry, cables – ferrous and non-ferrous, generators, electrical parts, etc. (hereafter referred to as ‘goods’) located at the factory premises of EHPL at Sikandarabad for a sum of Rs. 32,00,000. ETC claims to have paid EHPC a sum of Rs. 15,00,000 between 14th November 2000 and 7th February 2001 as part payment of the above consideration. ETC claims that subsequently a written agreement dated 7th February 2001 was executed between the parties. A copy of the said Agreement is enclosed with the petition as Annexure-P1 (later marked as Exhibit PW1/8).

4. In terms of the said Agreement, signed by Mr. V.P. Rai as Director of EHPL (described as Seller) and Mohd. Yamin as Proprietor of ETC (described as Purchaser) the latter was to purchase the goods for a total sale consideration of Rs. 32,00,000. The Agreement noted in Clause 2 that the Seller had received Rs. 15,00,000 as an advance and part payment from the Purchaser. The break-up of the sum of Rs. 15,00,000 was

5. Clauses 3 and 4 of the Agreement read as under: “3. That the balance amount of Rs. 17.00 lacs shall be paid by the purchaser after getting clearance by PICUP Trade Tax Office, SBI and other creditors who has lien on abovesaid factory seek by the seller within the month of Feb. 2001.

set out as under:

4. That any delay in seeking clearance by the seller within stipulated time purchaser shall charge security expenses and the intt. on the said amount paid to the seller from the Ist date of payment and the same shall be adjusted towards balance payment.”

6. It is not in dispute that the payment of Rs. 3.30 lacs by way of demand draft (‘DD’) was made on 14th November 2000 to The Pradeshiya Industrial and Investment Corporation of U.P. Limited (‘PICUP’). According to ETC when the said payment along with a cash payment of Rs. 2.70 lacs was made to EHPC, the property in the goods passed on to ETC immediately. Alternatively, it is submitted that the property in goods passed to ETC when the written Agreement was executed on 7th February 2001. Reliance is placed on Section 20 of the Sale of Goods Act, 1930 (‘SGA’). It is submitted that the requirement under Clause 3 of the Agreement of obtaining clearance from PICUP had nothing to do with the passing of the property in the goods. It is stated that ETC immediately appointed one of its employees as security personnel to prevent removal of goods from the factory premises of EHPL. It is further pointed out that Clause 4 of the Agreement acknowledged this fact by stating that in the event that there was delay in obtaining clearance from PICUP, the Trade Tax Officer (‘TTO’), State Bank of India (‘SBI’) and other creditors, the expenses of the security personnel and the interest on the amount paid would be charged from the Seller.

7. ETC’s case is that Mr. V.P. Rai assured that the amounts set out in the Agreement were the only ones payable by EHPL to its creditors.