The court upheld that powers of attorney executed post-winding-up are void, emphasizing the need for registered sale deeds to establish valid ownership, reaffirming precedence in the corporate liquidation context.

ORDER :

SENTHILKUMAR RAMAMOORTHY, J.

Background - The Company in provisional liquidation [the Company] had obtained powers of attorney in favour of its ex-employees, A.Venkatesan and R.Natarajan, in relation to the acquisition of lands in the Minnathur Village. According to the Company, these powers of attorney were executed in favour of its ex-employees upon receipt of the entire sale consideration by the respective land owners. After the Company ran into financial trouble, it is stated that fraudulent transactions were undertaken both by the original land owners and by the ex-employees/agents of the Company.

2. Upon obtaining details in respect thereof from the caretaker, the Company filed Comp.A.Nos.594 to 596 of 2009 to set aside the sale deeds mentioned in the Judge's summons of Comp.A.No.594 of 2009, declare that respondents 1-22 therein do not have right, title or interest in the properties described in the schedule and restrain respondent 1 to 22 therein from interfering with the Company's possession; to restrain respondents 23 and 24 from registering conveyances or issuing pattas, respectively; and for a direction to respondent 25 to provide protection to the caretaker, receive complaints lodged by him, file FIRs and take suitable action. In these applications, notice was initially served on all respondents, except respondents 11, 12, 14, 19 and 21. As regards these respondents, substituted service was effected by publication in the English daily, New Indian Express, and the Tamil daily, Tamil Murasu, issues dated 26.12.2013, pursuant to order dated 08.10.2013.

3. While the said applications were pending, the Company filed C.A.No.297 of 2021 for the sale of the properties described in the Judge's summons thereto, including an aggregate extent of 57.83 acres of the Maxworth-Tanjore (Tamarind II) Project consisting of 24.10 acres at Minnathur Village and 33.73 acres at Vellakalpatti/ Themmavur Circle in Kulathur Taluk, Pudhukkottai District. The third respondent in Comp. A.Nos.362 & 363 of 2022 was declared as the highest bidder by order dated 10.01.2022. Upon receipt of the total sale consideration of Rs.1,75,00,000/- from him, the sale was confirmed in his favour by order dated 07.04.2022 and the Official Liquidator was directed to execute a sale certificate in his favour. Thereafter, the Official Liquidator executed a sale certificate dated 27.05.2022 in favour of the third respondent and the sale certificate was registered as document No.2446 of 2022 on the file Sub Registrar Office, Perungalur. Subsequently, the revenue records were mutated in the name of the auction purchaser by issuing patta Nos.2917, 3273 and 3269.

4. C.A.No.363 of 2022 was filed thereafter by three rival claimants seeking to recall order dated 10.01.2022 declaring the third respondent as the successful bidder in respect of the properties mentioned in the schedule to the Judge's summons and later order dated 07.04.2022 confirming the sale of the property mentioned in the schedule to the Judge's summons in favour of the third respondent. Pending disposal of such application, in C.A.No.362 of 2022, the applicants also sought an interim injunction to restrain the third respondent from interfering with the peaceful possession of the applicants or in any way alienating or encumbering the schedule mentioned property. By order dated 23.09.2022 in C.A.No.362 of 2022, the auction purchaser/third respondent was restrained from alienating or encumbering the property.

Counsel and their contentions

5. Oral arguments on behalf of the rival claimants/applicants in Comp.A.Nos.362-363 of 2022 were made by Mrs.AL.Ganthimathi, learned senior counsel, assisted by Mr.AR.Karthik Lakshmanan. Written arguments were also filed on behalf of the said parties. Oral arguments on behalf of the Company were advanced by Mr.H.Karthik Seshadri, learned counsel, assisted by Mrs.D.Nagasaila, learned Administrator. Submissions on behalf of the auction purchaser/third respondent in Comp.A.