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2024 Supreme(Mad) 2003

IN THE HIGH COURT OF JUDICATURE AT MADRAS
Senthilkumar Ramamoorthy, J.
S.Nandagopal - Appellant
Vs.
The Official Liquidator, High Court, Madras. As Provisional Liquidator of Maxworth Orchards (India) Limited - Respondent
Comp.A. Nos.55, 89, 90, 129, 130, 131, 132, 133 & 134 of 2022 in C.P.No.57 of 1998
Decided On : 15-11-2024

Advocates:
Advocate Appeared:
For the Applicant :Mr.Subbiah, Senior Advocate for M/s. Elizabeth Ravi & P.Raja
For the Respondents: Mr. H.Karthik Seshadri Assisted by Mrs.Nagasaila Suresh Administrator Ms.Ambili, B, Deputy Official Liquidator M/s.Shivakumar & Suresh (ICICI Bank)

Conveyances executed post-winding up and in violation of court orders are void; title cannot be conveyed under a power of attorney.

Headnote:(A) Companies Act, 1956 - Section 536(2) - Prohibition of Benami Property Transactions Act, 1988 - Claims of title over immovable properties by applicants rejected as void due to conveyances executed post-winding up and in contravention of court orders - The court emphasized that title cannot be conveyed under a power of attorney and that any disposition after winding up is void unless ordered otherwise. (Paras 21, 27)

(B) Powers of Attorney - Validity of transactions executed under powers of attorney examined - The court reiterated that bona fide transactions involving powers of attorney are valid, but the claims in this case were found to be fraudulent and void. (Paras 17, 26)

Facts of the case:
The applicants claimed title to various lands through sale deeds executed by M.Muthuraman, acting as an agent. The Company asserted ownership based on powers of attorney and original sale deeds. The court found that the conveyances were executed after the commencement of winding up and in violation of court orders.

Findings of Court:
The court held that the conveyances in favor of the applicants were void, and the mutations in the revenue records were invalid. The Official Liquidator was directed to rectify the records accordingly.

Issues: The main issues included the validity of the claims made by the applicants under sale deeds executed by an agent and the implications of executing conveyances in contravention of a court order.

Ratio Decidendi: The court ruled that any disposition of property made after the commencement of winding up is void unless the court orders otherwise, and that title cannot be conveyed under a power of attorney. The claims made by the applicants were found to be fraudulent and void due to the timing of the transactions and the breach of court orders.

Result: Applications rejected.

ORDER :

C.A.Nos. 55, 89 and 90 of 2022 were filed to implead S.Nandagopal, A.Kirubakaran and Jebalatha as parties to C.A.No.297 of 2021, i.e. an application for sale of the immovable assets described in the schedule thereto. Being proceedings in rem, such applications are unnecessary. The other applications (C.A.Nos. 129 to 134 of 2022) were filed by S.Nandagopal, A.Kirubakaran and Jebalatha seeking to set aside the order dated 26.11.2021 in C.A.No.297 of 2021 in C.P.No.57 of 1998 insofar as the lands described in the respective Judge's summons are concerned, and to stay all further sale proceedings pursuant to the aforesaid order in respect of the above mentioned lands pending disposal of the applications to set aside the sale.

2. S.Nandagopal traces title to an extent of 01.82.00 hectares in S.No.92/1 in Ezhuvaraimukki Village, Sathankulam Taluk, Tuticorin District from one Perumal Thevar, son of Veerasangili Thevar. Similarly, as regards an extent of 01.53.50 hectares in S.No.92/3 in the same village, he traces title from the said Perumal Thevar. According to him, the said Perumal Thevar sold the said properties under six sale deeds bearing Document Nos.567 to 572 of 1991 to Vijayakumari, Vijayakumar, R. Selvadasan and Packiyarani.

3. Subsequently, the aforementioned owners of the two parcels executed a general power of attorney in favour of one M.Muthuraman under general power of attorney document dated 22.08.1994, which was registered as document No.30 of 1994 on the file of the Sub Registrar Office, Nazareth (GPA dated 22.08.1994). According to S.Nandagopal, acting as agent of the owners, M.Muthuraman had executed a sale deed dated 08.09.2004, which was registered as document No.795 of 2004 on the file of the Sub Registrar Office, Nazareth, in his favour and also put him in peaceful possession and enjoyment of the said property. Thereafter, the revenue records were transferred in his name and a revenue patta was issued by the Deputy Tahsildar, Sathankulam, in his favour.

4. Jebalatha, wife of Kirubakaran, asserts title over an extent of 5 acres 2 cents in S.No.270/4; an extent of 5 acres in S.No.274/1; an extent of 5 acres and 9 cents in S.No.273/1; an extent of 5 acres and 7 cents in R.S.No.273/2; and an extent of 3 acres 2 cents corresponding to 1.22.0 hectares in R.S.No.281/5, all situated in Nazareth Village, Eral Taluk, Tuticorin District. According to Jebalatha, the lands situated in S.No.270/4 and 274/1 originally belonged to one Madasamy Thevar. After his lifetime, his son, Prof.M.Kasirajan, inherited the property. The said M.Kasirajan executed a general power of attorney dated 28.09.1995 and registered as document No.226 of 1995 on the file of the Sub Registrar, Nazareth, to and in favour of M.Muthuraman. The said Muthuraman executed a sale deed dated 22.02.2008, which was registered as document No.242 of 2008 on the file of the Sub Registrar, Nazareth, in favour of A.Kirubakaran, the husband of Jebalatha. Thereafter, A.Kirubakaran executed a settlement deed dated 15.10.2010 in favour of Jebalatha, which was registered as document No.2214 of 2010 on the file of the Sub Registrar, Nazareth and put Jebalatha in physical possession and enjoyment of the property.

5. As regards the land bearing S.No.273/1 and 273/2, she relies upon a general power of attorney dated 07.06.1991, registered as document No.268/1991, and executed by D. Daniel Sundaraj in favour of M.Muthuraman. She also relies upon a general power of attorney dated 27.09.1991, registered as document No.269/1995, and executed by D. Daniel Sundaraj and S.John Chandraraj in favour of M.Muthuraman. According to her, the said M.Muthuraman, on behalf of his principals, sold their undivided 2/3rd share in favour of Jebalatha's husband, A.Kirubakaran, under a sale deed dated 12.04.2007, which was registered as document No.397 of 2007 on the file of the Sub Registrar, Nazareth. As for the remaining 1/3rd share in the lands, Prof. D. Daniel Sundaraj, executed a sale dee

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