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2024 Supreme(Online)(MAD) 42317

HIGH COURT OF MADRAS
MR.JUSTICE SENTHILKUMAR RAMAMOORTHY, J
S.Nandagopal S/o. Soundarapandian – Appellant
Versus
The Official Liquidator high court madras – Respondent
Comp.A. Nos.55, 89, 90, 129, 130, 131, 132, 133 & 134 of 2022 in C.P.No.57 of 1998



Advocates:
Mr.Subbiah, Senior Advocate for M/s. Elizabeth Ravi & P.Raja; 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 are void unless court-ordered otherwise; powers of attorney cannot convey title to property.

Headnote:(A) Companies Act, 1956 - Section 536(2) - Prohibition of Benami Property Transactions Act, 1988 - Claims of title under sale deeds executed by M.Muthuraman as agent - Claims rejected as conveyances were void due to being executed post-winding up and in contravention of court orders. (Paras 27, 28)

(B) Powers of Attorney - Validity of conveyances executed under powers of attorney - Supreme Court's exception for bona fide transactions discussed, but not applicable here due to fraudulent conveyances. (Paras 17, 22)

Facts of the case:
The applicants assert title to lands through sale deeds executed by M.Muthuraman, who acted as an agent for the original owners. The Company claims title under powers of attorney executed in its favor. The court examined the validity of these claims in light of the winding-up proceedings and existing court orders.

Findings of Court:
The conveyances in favor of the applicants were declared void as they were executed after the commencement of winding up and in violation of a court order. The claims of the Bank as a mortgagee were also rejected.

Issues: The main issues were the validity of the title claims under sale deeds and powers of attorney, and the implications of the winding-up proceedings on these claims.

Ratio Decidendi: The court ruled that conveyances executed post-winding up are void unless the court orders otherwise, and that powers of attorney cannot convey title to property.

Result: Applications disposed of without costs; conveyances declared void.

Table of Content
1. title traced from sale deeds (Para 2 , 3)
2. claims of jebalatha (Para 4)
3. claims of a.kirubakaran (Para 6 , 7 , 8 , 9 , 10 , 11)
4. contentions by mr.subbiah (Para 12)
5. response by mr.karthik seshadri (Para 13 , 14 , 15 , 16 , 18 , 19 , 20 , 21 , 22 , 23 , 24 , 25)
6. discussion on claims (Para 17)
7. validity of conveyances (Para 26 , 27)
8. applications disposed of (Para 28)

ORDER

Background

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 Chan

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