Co.Appeal Nos. 8, 9 and 10 of 2019 - V.J. Joseph v. M/S T-Line Infra (P) Ltd and M/S J&A Foundations Private Limited (In Liquidation) represented by Official Liquidator, High Court of Kerala

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR.JUSTICE C.T.RAVIKUMAR** **&** **THE HONOURABLE MR.JUSTICE N.NAGARESH** **FRIDAY, THE 25TH DAY OF OCTOBER 2019 / 3RD KARTHIKA, 1941** ## **Co.Appeal.No.8 OF 2019** **AGAINST THE ORDER IN RP 1013/2016 IN C.A NO.345 OF 2015 IN C.P. NO.50 OF 2011 OF HIGH COURT OF KERALA** ## **APPELLANT/2ND RESPONDENT:** **V.J.JOSEPH 33/2346B, VILANGUPARA HOUSE, GEETHANJALI ROAD, VYTTILA P. O., COCHIN - 682019.** **BY ADVS. SRI.S.EASWARAN SRI.P.MURALEEDHARAN (IRIMPANAM) SRI.M.A.AUGUSTINE SRI.P.SREEKUMAR (THOTTAKKATTUKARA) SMT.SOUMYA JAMES** ## **RESPONDENTS/APPLICANT & 1ST RESPONDENT:** **1 M/S.T-LINE INFRA (P) LTD 40/9451, THOMSUN ANNEX, ACHUTHA WARRIER LANE, M.G.ROAD, COCHIN - 682011 2 M/S.J&A FOUNDATIONS PRIVATE LIMITED (IN LIQUIDATION) REPRESENTED BY OFFICIAL LIQUIDATOR, HIGH COURT OF KERALA - 682031.** **THIS COMPANY APPEAL HAVING COME UP FOR ADMISSION ON 25.10.2019, ALONG WITH Co.APPEAL NOS.9/2019 & 10/2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **-:2:-** Co.Appeal Nos.8, 9 & 10/2019 ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE C.T.RAVIKUMAR** ## **&** **THE HONOURABLE MR.JUSTICE N.NAGARESH** **FRIDAY, THE 25TH DAY OF OCTOBER 2019 / 3RD KARTHIKA, 1941** **Co.Appeal.No.9 OF 2019** **AGAINST THE ORDER IN RP 1048/2016 IN C.A NO.345 OF 2015 IN C.P. NO.50 OF 2011 OF HIGH COURT OF KERALA** ## **APPELLANT/2ND RESPONDENT:** **V.J.JOSEPH 33/2346B, VILANGUPARA HOUSE, GEETHANJALI ROAD, VYTTILA P. O., COCHIN - 682019.** **BY ADVS. SRI.S.EASWARAN SRI.P.MURALEEDHARAN (IRIMPANAM) SRI.M.A.AUGUSTINE SRI.P.SREEKUMAR (THOTTAKKATTUKARA) SMT.SOUMYA JAMES** ## **RESPONDENTS/APPLICANT & 1ST RESPONDENT:** **1 MATHEW GEORGE THIRUVALLAKALAYIL BUNGLOW PERUMTHURUTHY P.O., THIRUVALLA 689 101** **2 M/S.J&A FOUNDATIONS PRIVATE LIMITED (IN LIQUIDATION) REPRESENTED BY OFFICIAL LIQUIDATOR, HIGH COURT OF KERALA - 682031.** **THIS COMPANY APPEAL HAVING COME UP FOR ADMISSION ON 25.10.2019, ALONG WITH Co.APPEAL NOS.8/2019 & 10/2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **-:3:-** Co.Appeal Nos.8, 9 & 10/2019 ## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR.JUSTICE C.T.RAVIKUMAR** ## **&** **THE HONOURABLE MR.JUSTICE N.NAGARESH** **FRIDAY, THE 25TH DAY OF OCTOBER 2019 / 3RD KARTHIKA, 1941** **Co.Appeal.No.10 OF 2019** **AGAINST THE ORDER IN RP 945/2016 IN C.A NO.345 OF 2015 IN C.P. NO.50 OF 2011 OF HIGH COURT OF KERALA** ## **APPELLANT/1ST RESPONDENT:** **V.J.JOSEPH 33/2346B, VILANGUPARA HOUSE, GEETHANJALI ROAD, VYTTILA P. O., COCHIN - 682019.** **BY ADVS. SRI.S.EASWARAN SRI.P.MURALEEDHARAN (IRIMPANAM) SRI.M.A.AUGUSTINE SRI.P.SREEKUMAR (THOTTAKKATTUKARA) SMT.SOUMYA JAMES** ## **RESPONDENTS/APPLICANT & 2ND RESPONDENT** **1 OFFICIAL LIQUIDATOR, HIGH COURT OF KERALA REPRESENTING M/S.J&A FOUNDATIONS PRIVATE LIMITED (IN LIQUIDATION)- 682031. 2 M/S.T-LINE INFRA (P) LTD 40/9451, THOMSUN ANNEX, ACHUTHA WARRIER LANE, M.G.ROAD, COCHIN - 682011** **THIS COMPANY APPEAL HAVING COME UP FOR ADMISSION ON 25.10.2019, ALONG WITH Co.APPEAL NOS.8/2019 & 9/2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** Co.Appeal Nos.8, 9 & 10/2019 ## **-:4:-** ## **JUDGMENT** ## _**C.T.Ravikumar, J.**_ These appeals are directed against a common order passed by the company court dated 27.8.2019 in R.P. Nos.1013, 1048 and 945 of 2016 respectively in C.A. No.345 of 2015 in C.P. No.50 of 2011. 2. The same person moved all the three appeals. In fact, he was the applicant in C.A. No.345 of 2015. Evidently C.A. No.345 of 2015 was moved before the company court seeking leave of the court to enable the applicant/appellant herein to proceed with Arbitration O.P. No.2 of 2015, pending on the files of the District Court, Ernakulam, as well as Arbitration Request No.58 of 2014, then pending on the files of this court. The company court passed an order on 19.8.2015 in C.A. No.345 of 2015 in C.P. No.50 of 2011. The copy of the same is produced in all the appeals. It would reveal that it was passed by the company court, after hearing the learned counsel for the applicant/the appellant Co.Appeal Nos.8, 9 & 10/2019 ## **-:5:-** herein and the learned counsel for the official liquidator. Upon hearing them, the court passed the following order: “Heard. Leave is granted as prayed for on condition that the interest from the assets of the company shall not be affected by the arbitration process and that financial transactions including receipt of money shall be made only with the knowledge of the official liquidator and the permission of the court.” 3. Subsequent to the passing of the said order, the 1st respondent in Co.Appeal No.8 of 2019 filed R.P. No.1013 of 2016, the 1st respondent in Co.Appeal No.9 of 2019 moved R.P. No.1048 of 2016 and the 1st respondent in Co.Appeal No.10 of 2019, the official liquidator, filed R.P. No.945 of 2016, in C.A. No.345 of 2015 in C.P. No.50 of 2011. It is on the said review petitions that the impugned common order dated 27.8.2019 was passed. 4. Evidently, the company court reviewed its earlier order passed on 19.8.2015 in C.A. No.345 of 2015. Feeling aggrieved by the common order dated 27.8.2019, reviewing the earlier order in C.A. No.345 of 2015, the captioned appeals have been filed. 5. Heard the learned counsel appearing for the Co.Appeal Nos.8, 9 & 10/2019 **-:6:-** appellants, the learned counsel for the official liquidator and the learned counsel appearing for the respective party respondents in the appeals. 6. The pleadings in the appeals and the arguments advanced on behalf of the appellant before us would reveal that the core contention of the appellant in the appeals is that the common order dated 27.8.2019 is virtually null and void as the company court got no power to review its earlier order. Furthermore, it is submitted that the earlier order passed by the company court in C.A. No.345 of 2015 was already given effect to and on its basis the arbitration proceedings have already been commenced. It is in the aforesaid circumstances that the appellant takes up the contention that the company court went wrong in entertaining the review petitions and reviewing its earlier order dated 19.8.2015 passed in C.A. No.345 of 2015. 7. It is only appropriate to refer to the contentions of the respondents in the captioned appeals regarding the situation that constrained them to move the review petitions Co.Appeal Nos.8, 9 & 10/2019 ## **-:7:-** seeking review of the order in C.A. No.345 of 2015. To put it differently, they in unison contended that having passed an order for liquidation, the company court ought not to have proceeded with C.A. No.345 of 2015 for the purpose of considering the question of grant of permission to go for arbitration. Evidently, they had also taken up a contention that once an order for liquidation is passed by the company court, the company in question could not have been represented thereafter by anyone and it could have been represented only by the official liquidator in any proceedings. In that context, it is to be noted that C.A. No.345 of 2015 was moved by the appellant herein with the above mentioned prayers only after the passing of the order for liquidation. 8. Essentially, the contention of the appellant is that he is entitled to move such an application and he is also entitled to represent the company in arbitration proceedings on the strength of a resolution passed by the Board of Directors of the company in question, prior to the order of Co.Appeal Nos.8, 9 & 10/2019 **-:8:-** liquidation. At this juncture, it is relevant to note that the party respondents in the appeals were not heard at the time of passing of the order dated 19.8.2015 in C.A. No.345 of 2015. Going by the order dated 19.8.2015 in C.A. No.345 of 2015 it is clear that it was passed after hearing the counsel for the applicant and the counsel for official liquidator. The impugned common order dated 27.8.2019 would reveal that the earlier order dated 19.8.2015 was recalled and the review petitions were allowed. That apart, it is evident that after recalling the earlier order dated 19.8.2015 and allowing the review petitions, the company court posted C.A. No.345 of 2015 for consideration on its maintainability. 9. The learned counsel appearing for the appellant contended that the company court ought not to have allowed the review petitions and posted C.A. No.345 of 2015 for fresh consideration on its maintainability. We have already adverted to the bifold contentions raised by the appellant in support of the same. In that context, it is Co.Appeal Nos.8, 9 & 10/2019 ## **-:9:-** relevant to refer to the contentions raised by the respondents in these appeals and in the above mentioned review petitions. Evidently, the impugned common order would reveal that the review petitioners took up the contention that after the winding up order, the company court alone got jurisdiction to try any dispute or claim by the company or against the company. That apart, in the order it is specifically stated that while passing the order dated 19.8.2015 in C.A. No.345 of 2015, the applicant who moved the winding up application was not heard. That apart, it would reveal that a serious dispute was raised by the said applicants regarding the competency of the appellant in the appeals to represent the company. Paragraph 3 of the impugned order would reveal that on considering the review petitions the court was also of the view that it is bound to advert to the status of arbitration proceedings before the arbitrator after the winding up order. Evidently, a prima facie observation was also made by the company court that after the winding up order, the Co.Appeal Nos.8, 9 & 10/2019 ## **-:10:-** liquidator is primarily responsible for the conduct of the affairs of the company and after making such observations, the company court held that the earlier order dated 19.8.2015 was passed without considering the observations and the company court held that the earlier order dated 19.8.2015 was passed in C.A. No.345 of 2015 without considering those aspects, certainly at the time of granting leave. It is assigning such reasons that the order was recalled and after allowing the review petitions, C.A. No.345 of 2015 was posted for consideration on its maintainability. 10. As noticed hereinbefore, the main contention of the learned counsel appearing for the appellant is that having granted leave and on the strength of the leave granted by the court, when arbitration proceedings are commenced, the company court virtually ceased power to entertain a review petition. Thus, it is evident that the very contention is regarding the power of the company court to entertain the review petition in such circumstances and at that distance of time. At the first blush, the said contention Co.Appeal Nos.8, 9 & 10/2019 ## **-:11:-** appears to be attractive and acceptable. But, at the same time, as noticed hereinbefore, the very impugned common order passed by the company court itself would reveal that while considering the application seeking leave to continue with the Arbitration O.P. No.2 of 2015 and proceed with the Arbitration Request No.58 of 2014 then pending before this Court, the aforementioned vital aspects were not considered. It is not in dispute that the appellant herein moved C.A. No.345 of 2015 only after the company court passed the order for winding up. It is representing the company, which was thus ordered to be wound up, the appellant herein moved the said application. In such circumstances, we do not find any reason to hold that the company court was wrong in observing that the question whether after the passing of the order for winding up, anyone other than the liquidator could represent the company or is primarily responsible for the conduct of the affairs of the company. In the aforesaid circumstances, the very locus standi of the appellant herein to maintain C.A. Co.Appeal Nos.8, 9 & 10/2019 ## **-:12:-** No.345 of 2015 ought to have been considered and the company court very rightly observed in the impugned order that it is also a matter to be looked into. When those crucial aspects, which would go to the root of the very matter, were not considered and when that fact is realised and recognized by the court and it is reflected in the impugned order, we are of the view that it can be treated as an order passed virtually in recognition of the salutary maxim actus curiae neminem gravabit. The salutary principle is to the effect that none can be put to prejudice by the act of court. The Apex Court held in the decision in **Board of Control for Cricket, India and Another v. Netaji Cricket Club and Others** (AIR 2005 SC 592) that this maxim is founded upon justice and good sense which serves a safe and certain guide for the administration of law. On going through the impugned common order, it is evident that though the company court recalled the order, it had not dismissed C.A. No.345 of 2015 filed by the appellant herein. In fact, the order itself would reveal that after recalling the earlier order Co.Appeal Nos.8, 9 & 10/2019 ## **-:13:-** dated 19.8.2015 assigning the aforesaid reasons, the company court ordered for positing of C.A. No.345 of 2015 for consideration of its maintainability. We do not find any illegality in the aforesaid action. 11. In view of the circumstances as mentioned earlier and in view of the salutary maxim referred hereinbefore, we are of the view that when the attempt on the part of the company court is to consider C.A. No.345 of 2015 which was actually passed without hearing the applicant who moved the court for winding up, no illegality or perversity could be attributed to the said order. The upshot of the discussion is that these appeals fail. Consequently, these appeals are dismissed. ## **Sd/-** ## **C.T.RAVIKUMAR, JUDGE** ## **Sd/-** **N.NAGARESH, JUDGE** vps Co.Appeal Nos.8, 9 & 10/2019 ## **-:14:-** ## **APPENDIX OF Co.Appeal 8/2019** ||**APPENDIX OF Co.Appeal 8/2019**| |---|---| |**PETITIONER'S/S**|**EXHIBITS:**| |**ANNEXURE A1**|**CERTIFIED COPY OF ORDER DATED**| ||**27.08.2019 IN R.P. NO.1013 OF 2016.**| |**ANNEXURE A2**|**COPY OF MEMORANDUM OF UNDERSTANDING**| ||**DATED 28.11.2011 EXECUTED BETWEEN THE**| ||**RESPONDENTS.**| |**ANNEXURE A3**|**COPY OF JOINT VENTURE AGREEMENT DATED**| ||**23.01.2012**<br>**EXECUTED**<br>**BETWEEN**<br>**THE**| ||**RESPONDENTS**| |**ANNEXURE A4**|**COPY OF PETITION DATED 07.13.2016**| ||**ADDRESSED TO THE OFFICIAL LIQUIDATOR BY**| ||**THE 1ST RESPONDENT**| |**ANNEXURE A5**|**COPY OF COUNTER AFFIDAVIT ALONG WITH**| ||**THE DOCUMENTS FILED BY THE APPELLANT TO**| ||**M.C.A.NO.29 OF 2016.**| Co.Appeal Nos.8, 9 & 10/2019 ## **-:15:-** ## **APPENDIX OF Co.Appeal 9/2019** **PETITIONER'S/S EXHIBITS: ANNEXURE A1 CERTIFIED COPY OF ORDER DATED 27.08.2019 IN R.P.NO.1048 OF 2016 ANNEXURE A2 CERTIFIED COPY OF MEMO DATED 13.08.2015 EVIDENCING RECEIPT OF THE PETITION FOR LEAVE BY THE 1ST RESPONDENT** Co.Appeal Nos.8, 9 & 10/2019 ## **-:16:-** ## **APPENDIX OF Co.Appeal 10/2019** **PETITIONER'S/S EXHIBITS: ANNEXURE A1 COPY OF ORDER DATED 27.08.2019 IN R.P.NO.945 OF 2016**