Interim Order 1

Order Details: Notice of Motion
Pdf Text: 1
IN THE COURT OF CITY CIVIL COURT AT GR.BOMBAY
NOTICE OF MOTION NO.1182 OF 2019
CNR NO.MHCCO10030522019
IN
S.C. SUIT NO.4321 OF 2013
Mr.Ashutosh Yogesh Maneklal, aged }
41 years, Occupation: Self employed }
residing at 17(B2) Woodland Apartments, }
Peddar Road, Mumbai400 026. } ..Plaintiff
Versus
1. Mrs.Lina Y.Maneklal, aged 69 years, }
Occupation: Housewife, }
residing at 17(B2) Woodland Apartments, }
Peddar Road, Mumbai400 026. }
2. Mr.Madhav Maneklal, aged 38 years, }
Occupation: Self employed }
residing at Shyam Niwas, 5B63, }
51 Bhulabhai Desai Road, Breach Candy, }
Mumbai400 026. }
3. Mr.Surinder Singh Bagai, aged 85 years }
Occupation: Tax Consultant }
Residing at G14, Masjid Moth, Near Savitri }
Cinema, New Delhi110048( deleted) }
4. M/s. Maneklal Enterprises Private Limited }
a Private Limited Company having its }
registered office at Manek Mahal, }
7th floor, 90 Veer Nariman Road, }
Mumbai400 020. }..Defendants
Ld. advocate Mr.N.B.Bhadang with Adv.Dubhash and Adv.
Sequira for the plaintiff
Ld.advocate Shah with Adv.Ms.Aproova Thipse for defendant
no.1
Ld. advocate Mr.Manish Doshi for defendant no.2
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CORAM: HIS HONOUR JUDGE SHRI M.SALMAN AZMI
DATE: 11/11/2019
ORAL ORDER
1. This notice of motion is tendered by the defendant
No.1 interalia for expedite hearing and final
disposal of Notice of Motion No.272 of 2014 and
for payment of sum of Rs.1,09,48,624/ from and
out of the fixed deposit held by defendant no.4 in
Bank of Baroda, Altamount Road branch, to
Municipal Corporation of Greater
Mumbai(hereinafter referred to as 'MCGM')
towards the property taxes and repair cess in
respect of property situated at 90, Veer Nariman
Road, Churchgate, Mumbai400 020 together with
the building Manek Mahal standing
thereon(hereinafter referred to as 'suit property.')
Submissions of defendant no.1
2. Ld. Counsel for defendant no.1 submitted that
present notice of motion is filed to preserve and
protect the property of M/s Maneklal Enterprises
i.e. defendant no.4 situated at 90, Veer Nariman
Road, Churchgate, Mumbai, together with the
building known as Manek Mahal standing thereon.
The building Manek Mahal which comprises of 7
floors is completely tenanted building. The income
generated is not sufficient to meet the expenses of
the said building. The contention of the defendant
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no.1 is that whilst the plaintiff was acting as a
director of defendant no.4 (since November 2013
ceased to be a director), by letter dated
04/01/2013 requested defendant no.1 regarding
expenses to be made from the funds of defendant
no.4 for the purposes of repairs required in normal
course in Manek Mahal. The plaintiff had also
himself and through his advocates, addressed a
letter dated 26/03/2013 for payment of property
tax and repair cess of Manek Mahal by defendant
no.4 by breaking the fixed deposits although at that
time there was sufficient cash in hand and amount
lying in the bank account. On 31/01/2013, the
cash in hand was Rs.9,95,325.48 and bank balance
was Rs.20,67,423.52/ notwithstanding which the
plaintiff has also liquidated prematurely fixed
deposits of defendant no.4 and caused donation of
Rs.6 lacs to be made by defendant no.4 in February
2013. In 2013, NHAI bond of defendant no.4 was
matured and was forwarded to the plaintiff for his
signature to enable defendant no.4 to redeem the
same. The plaintiff refused to return the same duly
signed by him after his cessation as a director of
defendant no.4. Ad interim reliefs claimed by the
plaintiff was rejected and he has challenged the
said order in A.O. No.1735 of 2013 before the
Hon'ble High Court which was disposed of by order
dated 20/12/2013 interalia directing defendant
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nos.1 and 2, not to alter the fixed
deposits/investments of defendant no.4 on the
apprehension of plaintiff that defendant no.1 would
alter the constitution and shareholding of
defendant no.4 and the fixed deposits and the
investments of defendant no.4. MCGM issued
demand notice dated 29/12/2016 and 05/01/2017
calling upon defendant no.4 to pay property tax
amounting to Rs.39,20,437/ immediately on
receipt of the said notice and failing which action
under the MCGM Act, 1888 would be initiated. The
advocate for defendant no.1 by letter dated
11/02/2017 conveyed to the advocate for the
plaintiff about the same and informed that
defendant no.4 would be required to break its fixed
deposit to make the said payment as had been
requested by the plaintiff himself in the past. The
advocate for the plaintiff objected for the same. The
defendant no.1 has taken out notice of motion
No.1551 of 2016 in suit no.2546 of 2012 for
payment of statutory dues by liquidating fixed
deposits of defendant no.4. The Hon'ble High Court
vide order dated 24/03/2016 allowed the said
notice of motion. The plaintiff challenged the said
order by filing Appeal No.186 of 2017 which was
subsequently set aside by order of Division bench of
Hon'ble Bombay High Court dated 18/07/2017 and
the parties were directed to approach for fresh
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consideration. Notice of Motion No.608/2018 in
suit No.2546 of 2012 for permitting defendant no.4
to use the said fixed deposit with Bank of Baroda
for the purpose of payment of statutory dues of
defendant no.4 was heard culminating in order
dated 18th/19th April 2018 declining the reliefs
pertaining to utilization of the said fixed deposit but
directing the plaintiff to deliver the NHAI bond to
the Commissioner for taking accounts. The appeal
was preferred against the said order bearing No.234
of 2018 and the same was rejected vide order dated
26/09/2018 stating therein that the remedy
available for defendant no.1 is to approach this
Court to seek early hearing of notice of motion
no.272 of 2014. The plaintiff has filed application
in Company Petition No.32 of 2015 before National
Company Law Tribunal (hereinafter referred to as
'NCLT'). The order was passed on 17/05/2018 and
thereafter further order was passed on 01/02/2019
and further directions were given which the
defendant no.1 has complied. Defendant no.4
received notice dated 09/01/2019 from MCGM and
as on date, the outstanding in respect of property
tax and repair cess of the suit property was
Rs.1,09,48,624/ and which is to be paid without
any delay whatsoever to avoid the threatened
action and drastic consequences. Therefore, the
defendant no.1 filed the present notice of motion
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for breaking of the fixed deposits. It is the
contention of defendant no.1 that defendant no.4
does not have sufficient amount in its bank account.
Defendant no.4 has utilized the amounts collected
from tenants for the purpose of general repair,
maintenance, water charges and electricity charges
and upkeep of the building including for
replacement of one lift and repair of other lift. The
cost of replacing the old lift and repairs to other lift
was Rs.36,26,876/. This amount has not been
reimbursed by majority of the tenants of defendant
no.4 and have therefore been borne and paid by
defendant no.4 itself from its current account and
not from the fixed deposits. The funds of defendant
no.4 available in its bank accounts from time to
time are required to be utilized, if necessary, to
meet the day to day expenses without which the
essential maintenance, security etc. of the building
cannot be kept up. Defendant no.4's financial
position and liquidity and ability to meet its day
today expenses and other financial obligations has
arisen on account of and has been considerably
prejudiced by the plaintiff's acts of omission and
commission, making it even more imperative that a
portion of the fixed deposits be forthwith liquidated
towards payment of the statutory and other dues.
Defendant no.4 is prevented from transferring
tenancies of premises in Manek Mahal and thus
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deprived as a landlord of huge sums of transfer
fees. The balance sheet of defendant no.4 from
20102011 to 20172018 is annexed to reflect the
financial position of the company. The plaintiff has
hired bouncers/ goons/ security personnel and
posted them at the entrance of Manek Mahal as
well as to patrol various areas of the building. On
account of these bouncers attempting to restrict the
ingress and egress of defendant no.1 and 2, licensee
and other visitors to the common areas of the
building, locking the lift room and putting an
additional lock on the meter room and the terrace
of Manek Mahal to instigate a fight, defendant no.4
was constrained to itself hire security guards to
tackle the nuisance created by the plaintiff's
bouncers/goons which resulted in increase of
expenses. The plaintiff has also illegally retained
minute books, statutory books, resolutions,
company seal, original balance sheets and original
annual returns, cheque book of HDFC bank, few
original agreement with the tenants, original share
certificates issued by defendant no.4 of the
deceased Mr.Yogesh Maneklal in respect of equity
shareholding of 833 shares, original share
certificate issued by defendant no.4 in respect of
equity shareholding of 30 shares, cash, car and
other documents and records of defendant no.4.
The defendant no.4 has to incur substantial
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expenses for reconstruction of books of account.
Defendant no.1 prayed for allowing the notice of
motion.
Submissions of plaintiff
3. The plaintiff has filed reply to the notice of motion.
Ongoing through the reply, it reflects that it is the
contention of plaintiff that defendant nos.1 and 2
have flouted the orders of NCLT dated 17/05/2018
and 01/02/2019. The company is required to
collect and hold the property tax and repair cess on
behalf of the tenants and to pay the same to
MCGM. The company has no right to spend or
utilize the said amount for its own purpose while
taxes are left outstanding year after year. This was
never the practice while the plaintiff was in control
of defendant no.4 company. Defendant No.1
around September/November 2013, alone has been
collecting the amounts towards property tax and
repair cess. Separate bills/debit notes are raised on
a monthly basis for property tax and repair cess on
the tenants. However, since 2014, despite
collecting property tax and repair cess, defendant
nos.1 and 2 have not been paying over these
amounts to MCGM and have been siphoning off and
misusing the amount collected for other purposes.
Defendant nos.1 and 2 are also tenants of
defendant no.4 and have intentionally failed and
neglected to disclose whether they have made their
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respective monthly payment of property tax and
repair cess for their own premises and to produce
the relevant receipts in this regard. The
deteriorating financial condition of the company is
a result of the mismanagement of the company by
defendant nos.1 and 2. From bare perusal of the
accounts it is apparent that since taking control of
the company in September/November 2013,
defendant nos.1 and 2 have been inflating the
expenditure of the company. This is an attempt to
show larger outstanding and losses. There has been
a steady increase in expenditure of the company
from the year 20142015. There are several
discrepancies in the Annual Returns of the company
from year to year which demonstrate that the
accounts are 'fudged'. There are serious
discrepancies and inconsistencies in the purported
expenditure for the lift of the said building.
Defendant nos.1 and 2 have inflated and increased
the expenditure on 'Car and Petrol Expenses'. On
11/02/2017, a letter was addressed by the advocate
for defendant no.1 to the plaintiff's advocate
whereby for the first time, the plaintiff was
informed that a demand notice to pay property tax
and repair cess for the year 20162017 for an
amount of Rs.52,71,997/ had been received from
MCGM. The plaintiff's advocate requested
defendant no.1 to furnish a statement of accounts
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of defendant no.4 reflecting the amounts received
towards the property tax and repair cess and to
furnish a copy of the demand notice. But,
defendant no.1 failed and neglected to comply the
same. On website of MCGM, it was noticed by the
plaintiff that property tax and repair cess was
unpaid since the year 2014. It can be seen that
despite the property tax and repair cess being due
and payable by defendant no.4, the Hon'ble High
Court, considering the financial irregularities and
mismanagement of the company's affairs, did not
permit the fixed deposit to be encashed or to allow
the company to receive the funds from NHAI bond.
The plaintiff has preferred a Miscellaneous
application bearing No. 433 of 2018 in Company
petition No.32 of 2015 before NCLT. On
17/05/2018, the NCLT passed an order directing
the plaintiff and defendant nos.1 and 2 to deposit
Rs.5 lacs each towards payment of the property
taxes of the company. Further, defendant nos.1
and 2 were also directed to make an application to
MCGM to consider a proposal for payment of the
balance property tax and repair cess in installments,
to open a separate bank account which could be an
escrow account in which the total rent, property
tax, repair cess any other amount collected by
defendant no.4 to be deposited and withdrawals
from the account were only to be made on
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obtaining permission from NCLT.. The plaintiff and
his wife are tenants of two premises i.e. 501 and
502 of the said building. The 5th floor of the said
building has three other similarly sized tenements.
Some floors have more numerous smaller units
whereas other floors have larger units. The area of
each floor is the same. The plaintiff and his wife
have paid a sum of Rs.17,44,241/ to the company
towards property tax and repair cess. The total
amount received by the company for the 5th floor
exclusively towards property tax and repair cess
would approximately Rs.43,60,602/ from end of
2013 till date. The company has received
Rs.3,27,04,518/ towards the property tax and
repair cess from all the tenants during end of year
2013 till date. However, from the statement
obtained from MCGM, it can be seen that the
company has only made payment of Rs.64,19,144/
to MCGM. That being so, the company has received
a sum of Rs.2,62,85,374/ under the head property
tax and repair cess from the tenants, which
defendant nos.1 and 2 have not paid to MCGM. The
learned counsel for plaintiff argued that, the
defendant no.1 & 2 have committed breach of trust
and by flouting the order of NCLT have committed
contempt of court.
4. In order to support his contention, Ld. Counsel for
the plaintiff relied upon the following judgments:
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Union of India and others V/s Sicom Limited and
another of Hon'ble Apex Court, (2009)2
Supreme Court Cases 121
Prestige Lights Ltd V/s State Bank of India of
Hon'ble Apex Court, (2007)8 Supreme Court
Cases 449
Rohini Kumar Jana V/s State of W.B. of Hon'ble
Apex Court, 2015 SCC Online Cal 7091
5. The plaintiff tried to demonstrate his share in the
company on the basis of will of his late father
Mr.Yogesh T.Maneklal. It is further argued that the
defendants have misled the Hon'ble High Court by
suppressing the order dated 20/12/2013, got order
in Notice of Motion No.1551/2016 in Suit
No.2546/2012 dated 24/03/2016. The said order
was set aside in appeal.
6. The facts related to the incorporation of the
company and the rights of the parties of holding the
shares were elaborated in the pleadings of the
parties. At this juncture, it is not worth to deal with
those issues. The various orders of the Hon'ble High
Court were pointed out and in A.O. No.275/19 by
order dated 18/07/2019, it is held by the Hon'ble
High Court that the present notice of motion has to
be decided on its merits. The plaintiff prayed for
dismissal of the notice of motion.
7. The learned Counsel for plaintiff argued that the
notice of motion is filed by defendant no.1 and not
on behalf of defendant no.4. So, the notice of
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motion filed by defendant no.1 for breaking of fixed
deposit of defendant no.4 is not maintainable. No
doubt present notice of motion is filed by defendant
no.1. The defendant no.1 is arrayed as defendant
being the director of defendant no.4. The notice of
motion is filed by defendant no.1 for breaking of
fixed deposit for payment of statutory dues of
defendant no.4. The notice of motion is not for
utilizing the said fixed deposit for her personal use.
The objection is technical in nature and cannot be
the ground for dismissal of this notice of motion.
8. There are serious allegations of mis management
and siphoning of the funds. The argument of Ld.
Counsel for defendant no.1 is not acceptable at this
stage that when the plaintiff was director of the
company, has taken away the cash and was
involved in the mismanagement of the company.
Plaintiff ceased to be the director since November
2013. Thereafter, the defendant nos.1 and 2 are
handling the affairs of the company. There is
nothing from the side of the defendant No. 1 to
suggest that any action has been initiated for
recovery of the amount of the defendant No. 4
which the plaintiff has allegedly siphoned and
misappropriated. The defendant No. 1 since about
6 years have not taken any action for the recovery
of the alleged amount allegedly siphoned by the
plaintiff therefore now the defendant No. 1 cannot
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raise the said issue. The said issue even cannot be
subject matter of enquiry in this notice of motion.
Even otherwise, defendant no.1 was also the
director when plaintiff was in the helms of affair of
the defendant no.4, so any act of the plaintiff which
was detrimental to the interest of the company
ought to have been objected by the defendant no. 1
at that time. The objection to the said acts and
omissions of the plaintiff at this stage is not worth.
9. The contention of defendant no.1 is not that the
statutory dues were of the period of which the
plaintiff was director and handling the affairs of the
company. It is further pointed out that the sum of
Rs.92 lacs and odd amount was received from the
tenants under several heads. The plaintiff has
raised escalated bills and therefore there is
reduction in the income of the company.
10. The argument of the Ld. Counsel for the plaintiff is
that the liquid assets of the company can be utilized
if there was earlier due and if the amount received
by defendant no.4 is not sufficient to meet the
statutory dues. The defendant nos.1 and 2 are
guilty of misappropriation and breach of trust. The
tenants have made the payment under the head of
property tax, repair cess, water charges, so it was
the responsibility of defendant nos.1 and 2 to
deposit it with the MCGM.
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11. The allegations are serious in nature. The
allegations raised cannot be decided at the prima
facie stage. Serious enquiry is required to deal with
the allegations and strict proof of it is required. The
parties are at loggerheads and there are several
disputes pending between the parties at different
forum. Any finding of this court on the allegations
made by either of the parties would be prejudicial
to the interest of the parties visavis other pending
dispute. Apart from that the enquiry in the suit is
limited to the extent of alleged illegal cessation of
plaintiff as director of the company. The handling
of the affairs of the company after cessation of the
plaintiff as a director would not be the scope of
enquiry in this suit. The enquiry in the interim
application cannot overreach the enquiry in the suit
for final hearing. Therefore, it would not be proper
for this court to deal with the allegations levelled by
the parties against each other in respect of
mismanagement and siphoning of the funds of the
company. Even otherwise NCLT is ceased with the
matter in respect of allegation of oppression and
mismanagement of the affairs of the company. In
this backdrop the above judgments tendered by the
plaintiff are not applicable.
12. On perusal of the documents filed by the plaintiff it
is apparent that bills were raised in different heads
i.e.for property tax/repair cess/rent. No doubt it
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was the responsibility of the defendant No. 1 being
director to ensure that the statutory dues are
deposited preferentially. The tenants who have paid
statutory dues to the extent of their tenanted
premises have to face wrath in case MCGM proceed
to take coercive action.
13. It is unfortunate that interse dispute between the
members of the family has led to a disastrous
situation wherein the main asset of the defendant
No. 4 company i.e. building Manek Mahal is in
threat of coercive action by the MCGM for recovery
of statutory dues. In case of any action by the
MCGM for recovery of the statutory dues the
existence of the defendant No. 4 company would be
in danger. Therefore, the enquiry at this stage is to
be restricted to the extent of saving the main asset
of the defendant No. 4 company. In the event of
enquiry and findings at this stage in respect of
mismanagement and siphoning of the funds will not
ensure preserving the asset i.e. Manek Mahal
building of the defendant No. 4 company. The
existence of the defendant No. 4 company is
directly dependent upon the existence of its main
asset Manek Mahal building. Therefore, the present
notice of motion has to be considered in that
prospective.
14. Admittedly there is huge outstanding and the
amount lying in both the accounts of the company
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as per the submission of defendant no.1 on oath is
to the tune of Rs.3548.23/ in Bank of Baroda and
Rs.50,505.25/ with HDFC bank. This amount is
negligible as compared to the statutory dues.
15. The parties are not at dispute that the NCLT vide
order dated 17/05/2018 directed the plaintiff and
defendant no.1 to contribute Rs.5 lacs each towards
the payment of tax with MCGM. The direction was
given to the management of the company to move
an application to the Authorities of MCGM to grant
installment for rest of the outstanding property tax.
The spirit of the orders dated 17/05/2018 and
01/02/2019 of the NCLT is that priority has to be
given for payment of statutory dues in order to
protect the property of defendant no.4 from
coercive action of MCGM. Even NCLT has not dealt
with the aspect of mismanagement while deciding
the miscellaneous application. The relevant portion
of the order of NCLT dated 17/05/2018 is
reproduced as under:
i)That the petitioners of the main petition shall
contribute Rs.5 lacs(five lacs) likewise, the
Respondents, barring Company(Respondent
No.1),shall contribute Rs.5,00,000/ thus totalling
Rs/10,00,000/(ten lacs)immediately within 24
hours without fail to make the payment to MCGM.
Being aware of the fact that the parties are contesting
over the rights in the Company, hence it is hereby
made explicit that the contribution as directed shall
not create any right of any nature to either side in the
Company M/s. Maniklal Enterprises. The fate of this
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contribution shall depend upon the outcome of the
main petition.
ii)The management of the company shall move an
application to the Authorities of MCGM to grant
instalment for rest of the outstanding property tax.
An undertaking on oath by filing an affidavit be
submitted to MCGM by the present Management.
Hopefully the Ld. Authorities of MCGM shall consider
the proposal judiciously and also favourably.
iii)For rest of the instalments, if granted, the
company shall open a separate bank account, can be
an escrow account, in which the total rent/property
tax/repair cess/any other amount collected shall be
deposited henceforth. Withdrawals shall be made
only on obtaining the permission and subject to the
satisfaction of the Bench.
iv)That henceforth the first charge over the collection
shall be of MCGM till the outstanding due is squared
up.
v)That the property of the company shall be protected
by all means by the directors without personal malice
or dispute among family members.
vi)That photocopy of balance sheets of the company
alr eady tendered to this Bench for scrutiny for the
period 20142015, 20152016 and 20162017,
however the Ledger A/c under the head 'Other
Expenses' with narration is to be tendered on the next
date of hearing. Further, directed to furnish bank
statement for the said period with explanation of
each debit and credit entry.
vii)That on due analysis of the Balance Sheet of M/s.
Maniklal Enterprises for the period 31/03/2017 it is
noticed that the company has substantial trade
receivable as on 31/03/2017 of Rs.20,17,690/ and
Rs.70,80,209/ under two distinct heads i.e.
outstanding for a period less than six months and
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outstanding for a period exceeding six months,
respectively. One more financial position of the
company emerges that there is a huge cashinhand of
Rs.14,50,036/(as on 31/03/2016) and
Rs.15,63,871/ (illegible) (as on 31/03/2017). The
management of the Company is directed to deposit
available cashinhand and all 'receivables' in the
bank account as directed in clause (iii) supra within
20 days from the date of this order.
16. Further interim order was passed on 01/02/2019.
The relevant portion of the order is reproduced as
under:
“A notice to be issued to Assistant Assessor &
Collector, (“A” Ward), AWard Municipal offices,
134A, S.B.S. Road, Fort, Mumbai400 001 to be
present or to be presented by authorized person before
this Court so that a Schedule of payment of
outstanding Municipal tax can be discussed and
finalized in the presence of the Respondents, both can
obtain a certified copy of this order and serve upon
the concerned authority of BMC with a request to be
present on the next date of hearing to discuss the
schedule of payment.
The Auditor of the Respondent Company be present
with the complete audited accounts for the period as
already communicated in the previous order
alongwith cashflow statement. Utilizing the new
technologies, the Auditor M/s. Mehta & Chaturvedi
can furnish the account in the compact disc or in any
other form, a soft copy of the accounts. Non
compliance may compel this Bench to refer the matter
to the Chairman, National Financial Reporting
Authority, New Delhi with a copy to the Institute of
Chartered Accountants.
The directions for opening a separate bank account
(refer para15(iii) in Interim order dated
17/05/2018) is yet to be complied with. The
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concerned persons managing the affairs of the
company shall be held responsible if do not obey the
directions. The reason given is unacceptable because
of the fact that the first requirement is to open a bank
account and the second requirement is the payment of
installments through the said bank account. Non
accomplishment of the first requirement is definitely a
disregard of an order of the Court”.
17. Ld. Counsel for the plaintiff argued that compliance
of the order was not made by defendant nos.1 and
2 and therefore defendant no.1 cannot claim for
any relief. He would submit that the defendant no.1
was bound to place on record the amount received
by defendant no.4 since 17/05/2018 and amount
deposited with MCGM.
18. On perusal of the rejoinder of defendant no.1, it
reveals that there is no whisper whether the
compliance was done as per the order of NCLT .
The learned counsel for defendant no.1 submitted
new account has been opened as per the direction
NCLT but the amounts received were not deposited
in the said account.. The details are not placed on
record. The defendant no.1 has not given the
account of the receipts since 17/05/2018 till the
date and the payment of statutory dues to the
MCGM. This amount to deliberate suppression of
the facts by defendant no.1.
19. The income of the company is from building Manek
Mahal and it is required to preserve and protect the
property of Maneklal Enterprises which is in short
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of funds to pay the statutory dues of MCGM. The
reason for short fall of amount may be whatever.
The argument of the Ld. Counsel for defendant no.1
is not acceptable that the plaintiff earlier desired to
break the fixed deposit for payment of statutory
dues. This cannot be the ground but at the same
time when the court is required to balance the
equity, it has to consider that the main source of the
income of the company i.e. Manek Mahal building
is required to be preserved. The liquid assets are of
the company required to be utilized for the purpose
of preserving the property of the company which is
in the larger interest of the company. As the
defendant no.1 has not given the details of the act
done in pursuance of the order of NCLT, therefore
some conditions are required to be put to make up
the liquid assets of the company utilized for the
purpose of payment of statutory dues. Hence, in
order to save the asset of the company from
coercive action of the MCGM which is in the larger
interest of the company, the notice of motion is
required to be considered. Hence, it is expedient to
pass following order:
ORDER
1. Notice of Motion No.1182 of 2019 is allowed
on following terms:
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(a) Defendant no.1 is permitted to pay the
statutory dues out of fixed deposits held by
defendant no.4 with Bank of
Baroda, Altamount Road branch, Mumbai.
(b) The payment of statutory dues to be made by
demand draft/pay order/cheque.
(c) The remaining amount after the payment of
statutory dues should be reinvested in the
fixed deposits.
(d) The defendant No.1 to file affidavit giving
details in respect of amount paid to MCGM
and the remaining amount reinvested by way
of fixed deposit within 15 days of the
payment.
(e) The defendant No.1 and 2 are directed to
inform within thirty days of this order, the
tenants for depositing of rent/property tax/
repair cess in the Escrow account/new
account opened as per the directions of
NCLT. In case the original tenants have
deposited the amount in the account of
defendant no.4, the said amount
should be transferred to the Escrow/new
account.
(f) The defendants are further directed to
deposit any amount collected inclusive of
rent/property tax/repair cess, in the Escrow
account/new account opened as per the
direction of NCLT.
(g) The withdrawal of Rs.5,000/ per month is
permitted in a month for the miscellaneous
expenses. If Rs.5000/ is not spent in a
month,then in the second month the
defendants are permitted to withdraw only
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remaining amount .The withdrawal for other
regular expenses are permitted i.e for
payment of salary of the employees which
were working with the defendant
no.4 as on November 2013, electric bills and
statutory dues. All these payments be done
by cheque/demand draft/pay order.
(h) Any other withdrawal only be permitted to
the satisfaction of the bench of NCLT till
the makeup of the amount of the fixed
deposits released for the purpose of payment
of statutory dues.
(i) In case, the NCLT Petition is decided before
this suit, the handling of the Escrow/New
account would be subject to the direction of
NCLT in that respect and if no such direction
is given by NCLT in its decision for handling
the said account, then it would be as per the
direction of this Court.
2. Notice of motion is disposed of accordingly.
11/11/2019 M.SALMAN AZMI
CITY CIVIL COURT,
GR.MUMBAI.
Dictated on : 11/11/2019
Transcribed on : 14/11/2019
Signed on : 21/11/2019
'CERTIFIED TO BE TRUE AND CORRECT COPY OF THE ORIGINAL
SIGNED JUDGMENT/ORDER”.
22/11/19 at 11.41 am.
MRS.T.C.KAMBLE
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Name of the Judge HHJ SHRI M.S.AZMI, CR NO.1
Date of Pronouncement of
judgment/order
11/11/2019
Judgment and order signed by P.O. 21/11/2019
Judgment/order uploaded on 22/11/2019
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