IN THE HIGH COURT OF ANDHRA PRADESH :: AWIARAVATI THURSDAY ,THE TWENTY THIRD DAY OF JANUARY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE MS JUSTICE B S BHANUMATHI COMPANY APPLICATION NO: 704 OF 2010 IN COMPANY PETITION NO. 132 of 1998 In the matter of the Companies Act., 1956 And In the matter of M/s Rich Field Aquatech Ltd., (In Liqn.) Between: M/s Rich Field Aquatech Ltd., (in liqn), rep by Official Liquidator, High Court of Andhra Pradesh, Amaravathi ...APPLICANT AND 1. Sri BH. A. Ramaraju, Vice Chairman, M/s Gangavaram Port Limited, Gangavaram Post, Peda Gantyada Mandal, Visakhapatnam District - 530 044 2. Gottimukkala Venkata Seetharamaraju, S/o Lakshmi Pathi Raju, D. No. 20-50- 121/1, Chaitanya Nagar, Gajuwaka, Visakhapatnarr; District 3. Mylapalli Kasulu, S/o Venkanna, Bangaramma palem , Vakapadu Sivaru S. Rayavaram Mandal, Visakhapatham District 4. The District Collector, Anakapalli District, Anakapalli - 530 032 5. The Chief Navy Officer, Navy, Pedagantyada Taluk, Visakhapatnam - 530 014. Andhra Pradesh Respondents 4 and 5 are impleaded as per Court order dt.29.08.2024. Vide lA No.1 of 2024 in COMPA No. 704 of 2010. ...Respondents Application under Section 537(1) (b) of the Companies Act., 1956 read with Rule 9 of the Companies (Court) Rules, 1959 praying that the High Court May be pleased to (i) Set aside the sale of the land admeasuring to an extent Ac. 10.51 cents in Sy. No 105/1, 105/2, 106, 107 and 271 situated at Vakapadu Village, S.Rayavaram Mandal, Visakhapatnam District under registered Sale deed No. 4389 of 2005 in favour of Sri G. Venkata Sitarama Raju. (ii)Set aside the sale of the land admeasuring an extent Ac. 3.00 cents in sy. No 269 and 275/2, situated at Vakapadu Village, S. Rayavaram Mandal, Visakhapatnam District under registered Sale deed No 4388 of 2005 in favour of Sri M. Kasulu Direct the respondent No1,2 and 3 viz., Sri Bh. A. Ramaraju, Sri G. Venkata Sitarama Raju, and Sri M. Kasulu to remit the award amount of Rs. 40,53,000/- (Rs. 31,53,000/- + Rs. 9,00,000/-) along with (iii) interest @ 18% P.A. with effect from 18/1/2006 to the Official Liquidator on behalf of the company (in Liqn) (iv) Punish the respondent No.1 Viz., Sri Bh. A. Rama Raju for fraud/ illegal sale of the landed property of the Company (In Liqn) after passing the winding up order without leave of the Hon'ble High Court, (v) order that the cost of this application do come out of the assets of the company; This Application coming on for orders, upon reading the Judge’s Summons and the affidavit dated 31-08-2010 filed by the Official Liquidator, High Court of Andhra Pradesh, Hyderabad in support of this Application and upon hearing the arguments of Sri. T V P Sai Vihari , Standing Counsel for Official Liquidator, of Sri Alladi Radhakrishna, Counsel for Respondent No.1, Smt S.Pranathi, Counsel for Respondent No.4 and of Smt M, Uma Devi (Central Government Counsel), Counsel for the Respondent No.5 and Respondent Nos. 2 and 3 not appearing in person or by Advocate, The Court while allowing the application in part doth ORDER and DECREE follows : 1. that the sale of the land admeasuring an extent of Ac. 10.51 cents in Sy.No. 105/1, 105/2, 106, 107 and 271 situated at Vakapadu village, S. Rayavaram Mandal, Visakhapatnam District under registered sale deed No.4389/2005 in favour of Sri G.Venkata Sitarama Raju be and hereby is set aside; as 2. that sale of the land admeasuring an extent of Ac.3.00 cents in Sy.No.269 and 275/2 situated at Vakapadu Village Visakhapatnam District under registered sale deed No.4288/2005 in favour of Sri M.Kasulu be and hereby is set aside; S.Rayavaram Mandal, / that the respondent be and is hereby directed to pay the applicant the award amount of Rs.40,53,000/- (Rs.31,53,000/- + Rs.9,00,000/-) along with interest thereon at the rate of 6% per annum from the date of the petition, i.e., 02.09.2010 till the date of realization; that the prayer seeking to punish the respondent be and hereby is dismissed; that the order setting aside the sales in favour of 2"'^ and 3'^'^ respondents has no bearing on the acquisition of land by the 4*'' respondent; that the costs of Rs.20,000/- (Rupees Twenty thousand only) be and hereby is awarded to be payable by the 1®* respondent to the applicant, that no relief is granted against the respondents No.4 & 5 as they are only formal parties. 3. 4. 5. 6. 7. Sd/- S.V.S.R.MURTHY JOINT REGISTRAR fr //TRUE COPY// SECTION OFFICER To, 1. The Registrar of Companies, Ministry of Corporate Affairs, Government of India, 2^^ Floor, Corporate Bhawan, Nagole, Bandlaguda, Thattiannaram Village, Hayathnagar Mandal, Ranga Reddy District, Telangana State Pin Code-500 680 2. The Offical Liquidator, M/s.Rich Field Aquatech (India) Ltd., (in liqn). Office Floor, Corporate Bhawan, Nagole, Bandlaguda, Thattiannaram Village, Hayathnagar Mandal, Ranga Reddy District, Telangana State Pin Code-500 680. St at 1 3. The Regional Director. South Eastern Region, Ministry of Corporate Affairs, 3 Floor, Corporate Bhawan, Nagole, Bandlaguda, Thattiannaram Village. Hayathnagar Mandal, Ranga Reddy District, Telangana State Pin Code-500 680. 4. Three CD Copies vna HIGH COURT DATED:23/01/2025 DECREE ^ 19 MAR 2025 5^ . Current iseciion . o COMPA.No.704 of 2010 9»h *y PARTLY ALLOWING THE COMPANY APPLICATION IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVATI THURSDAY ,THE TWENTY THIRD DAY OF JANUARY TWO THOUSANDAND TWENTY FIVE PRESENT THE HONOURABLE MS JUSTICE B S BHANUMATHI COMPANY APPLICATION NO: 704 OF 2010 IN COMPANY PETITION NO. 132 of 1998 In the matter of the Companies Act, 1956 And In the matter of M/s Rich Field Aquatech Ltd., (In Liqn.) Between: M/s Rich Field Aquatech Ltd., (in liqn), rep by Official Liquidator, High Court of Andhra Pradesh, Amaravathi ...APPLICANT AND 1. Sri BH. A. Ramaraju, Vice Chairman, M/s Gangavaram Port Limited, Gangavaram Post, Peda Gantyada Mandal, Visakhapatnam District - 530 044 2. Gottimukkala Venkata Seeth aramaraju, S/o Lakshmi Pathi Raju, D. No. 20-50- 121/1, Chaitanya Nagar, Gajuwaka, Visakhapatnam District 3. Mylapalli Kasulu, S/o Venkanna, Bangaramma palem , Vakapadu Sivaru S. Rayavaram Mandal, Visakhapatham District 4. The District Collector, Anakapalli District, Anakapalli - 530 032 5. The Chief Navy Officer, Navy, Pedagantyada Taluk, Visakhapatnam - 530 014. Andhra Pradesh Respondents 4 and 5 are impleaded as per Court order dt.29.08.2024. Vide. lA No. 1 of 2024 in CO MPA No. 704 of 2010. ...Respondents Application under Section 537(1) (b) of the Companies Act., 1956 read with Rule 9 of the Companies (Court) Rules, 1959 praying that the High Court May be pleased to (i) Set aside the sale of the land admeasuring to an extent Ac. 10.51 cents in Sy. No 105/1, 105/2, 106, 107 and 271 situated at Vakapadu Village, S.Rayavaram Mandal, Visakhapatnam District under registered Sale deed No. 4389 of 2005 in favour of Sri G. Venkata Sitarama Raju. (ii)Set aside the sale of the land admeasuring an extent Ac. 3.00 cents in sy. No 269 and 275/2, situated at Vakapadu Village, S. Rayavaram Mandal, Visakhapatnam District under registered Sale deed No 4388 of 2005 in favour of Sri M. Kasulu Direct the respondent No1,2 and 3 viz., Sri Bh. A. Ramaraju, Sri G. Venkata Sitarama Raju, and Sri M. Kasulu to remit the award amount of Rs. 40,53,000/- (Rs. 31,53,000/- + Rs. 9,00,000/-) along with interest @ 18% P.A. with effect from 18/1/2006 to the Official Liquidator on behalf of the company (in Liqn) (iii) (iv) Punish the respondent No.1 Viz., Sri Bh. A. Rama Raju for fraud/ illegal sale of the landed property of the Company (In Liqn) after passing the winding up order without leave of the Hon’ble High Court. (V) order that the cost of this application do come out of the assets of the company; Counsel for the Appellant: Sri. T V P Sai Vihari (Standing Counsel for Official Liquidator) Counsel for Respondent No.1 : Sri Alladi Radhakrishna Counsel for Respondents No.2 & 3 : None Appeared Counsel for Respondent No.4 : Smt S. Pranathi Counsel for Respondent No.5 : Smt M. Uma Devi (Central Government Counsel) The Court made the following: ORDER APHC010577132010 r IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3311] THURSDAY, THE TWENTY THIRD DAY OF JANUARY TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE MS JUSTICE B S BHANUMATHI COMPANY APPLICATION No.704/2010 Between: M/s Rich Field Aquatech Ltd., (in Liqn) ...APPELLANT AND Sri Bh A Ramaraju 2 Others and Others ...RESPONDENT(S) Counsel for the Appellant: 1,T V P SAI VIHARI(SC FOR OFFICIAL LIQUIDATOR) Counsel for the Respondent{S): 1.M UMA DEVI (CENTRAL GOVT COUNSEL) 2. A RADHAKRISHNA 3.. 4.S PRANATHI The Court made the following: 2 BSB, J Comp.Appn.704of 2010 ORDER: This application has been filed under Section 537(1 )(b) of the Companies Act, 1956 read with rule 9 of the Companies (Court) Rules, 1959 by the Official Liquidator on behalf of M/s. Rich Field Acquatech Limited (in liquidation) seeking the following reliefs;- Set aside the sale of the land admeasuring to an extent of Ac.10.51 cents in Sy.No.105/1, 105/2, 106, 107 and 271 situated at Vakapadu Village, S. Rayavaram Mandal, Visakhapatnam District under registered Sale deed, No.4389/2005, dated 18.07.2005, executed by Sri Bh.A.Ramaraju, Ex-Managing Director/respondent No.1 in favour of Sri G.Venkata Sitararama Raju/respondent No.2; Set aside the sale of the land admeasuring an extent of Ac.3.00 cents in Sy.No.269 and 275/2 situated at Vakapadu village, S. Rayavaram Mandal, Visakhapatnam District under registered sale deed No.4388/2005, dated 18.07.2005, executed by Sri Bh.A.Ramaraju, Ex-Managing Director/ respondent No.1 in favour of Sri M. Kasulu /respondent No.3; Direct the respondent No.1, 2 and 3 viz., Sri Bh.A. Ramaraju, Sri G.Venkata Sitarama Raju & Sri M. Kasulu, to remit the Rs.40,53,000/- (Rs.31,53,000/- + Rs.9,00,000/-) along with interest @ 18% P.A with effect from 18-01-2006 to the Official Liquidator on behalf of the company (in liquidation): Punish the respondent No.1, viz., Sri Bh. A. Rama Raju for fraud/illegal sale of the landed property of the company (in I. III. award amount of IV. r 3 liqn.) after passing the winding up order without leave of the Hon’ble High Court; Order that the cost of this application do come out of the assets of the company; and pass such other order or orders as this Hon’ble Court may deem fit and proper in the circumstances of the V. case. 2. The case of the applicant is as follows: a. By order, dated 03.12.2002, made in Company Petition No. 132 of 1998, this Court ordered winding up of M/s. Rich Field Aquatech Limited and the Official Liquidator has been appointed as its liquidator by virtue of the provision of Section 449 read with Section 448 of the Companies' Act, 1956. Consequently, on 29.04.2003, the Official Liquidator has taken possession of the land, buildings and structures etc., belonging to company (in liquidation) S. Rayavaram Mandal, Visakhapatnam. Liquidator filed an application for sale of the the situated at Vakapadu village. Thereafter, the Official properties of the company comprising of land to an extent of Ac.85.05 cents along with buildings and structures. By order, dated 23.12.2005, made in C.A.No.2237 of 2004, this Court directed the Official Liquidator to take necessary steps to represent the company (in liquidation) in the acquisition proceedings. In view of the proposal of the government to acquire land and pursuant to the directions of this Court, the Official Liquidator addressed letter to 4 BSB, J Comp.Appn.704 of 2010 the Special Deputy Collector, Land Acquisition, Yelamanchili, The Official Liquidator received letter dated 25.05.2006 from the Special Deputy Collector, Land Acquisition, informing that an award was passed in favour of the Official Liquidator and requesting to depute an official to receive the compensation amount relating to the land under acquisition. Accordingly, an amount of Rs.2,84,86,203/- was collected towards compensation for the land admeasuring Ac.85.05 cents along with buildings and structures thereon. Visakhapatnam. b. The Andhra Pradesh Co-op. Bank Limited who is the sole Secured creditor of the company (in liquidation) informed the Official Liquidator, vide letter dated 17.04.2006, that the Ex-Managing Director, (Sri Bh.A.Ramaraju/respondent No.1) after passing the winding up order on 03.12.2002, sold the lands on 18.07.2005. The details are as follows: SI. Description of the property in Survey Number Sold by Sold to Vide document No. No. 1 Ac. 10.51 cents in Survey No. 105/1 & 2, 106, 107 & 271 Bh. A. Rama Raju Ex-Managing Director Sri G.V. Sitarama Raju (R2 herein) Sri Mylapilli Kasulu (R3 herein) 4389 of 2005 Dt.18.07.2005 2 Ac.3.00 cents in Sy.No.269, 275/2 Bh. A. Rama Raju Ex-Managing Director 4388 of 2005 Dt.18.07.2005 5 BSB, j Comp.Appn.704 of 2010 The above properties of the company (in liquidation) situated at Vakapadu village, S. Rayavaram Mandal, Visakhapatnam were purchased by respondent Nos.2 & 3, viz., Sri Gottumukkala Venkata c. Sitarama Raju and Sri Mylapilli Kasulu in the year 2005, and the respondent was not empowered to dispose of the assets of the company (in liquidation) and the said transaction is in violation of the orders of this Court and violation of Sections 456 and 537 of the Companies Act, 1956. d. On the basis of the information furnished by the Bank, the Official Liquidator addressed a letter to the Sub Registrar, Yelamanchili, Visakhapatnam to furnish the details of the lands sold by Sri Bh. A. Ramaraju, Ex-Managing Director of the company (in liquidation). In reply, the Sub Registrar vide their letter dated 14.08.2006, furnished the copies of the sale deeds executed by the Ex-Managing Director in favour of the respondents 2 & 4. As these lands were in the name of the company (in liquidation), the sale of the properties of the company without the leave of the Court is illegal and void. Since, without the leave of the Court, the above said landed properties to an extent of Ac. 10.51 cents & Ac.3.00 cents were sold on 18.07.2005, i.e., after winding up order, dated 03.12.2002 of this Court, without the leave of this Court, the Official Liquidator filed an application 1442 of 2006 under 6 BSB, J Comp.Appn.704 of 2010 Section 477 of the Companies Act, 1956 read with Rule 9 and 11(b) of the Companies (Court) Rules, 1959 and the same was ordered by this Court on 28.01.2009 granting liberty to the Official Liquidator to take further steps. The Official Liquidator contends that the alleged sales are dubious and illegal transactions effected only with a view to prevent the assets from coming into the custody of the Court and are hit by the provisions of Section 537(1 )(b) of the Companies Act, 1956, and therefore, the sale of property of the company in favour of respondents 2 & 3 is illegal and void. e. On a perusal of the copy of the statement of award passed by the Special Deputy Collector (Land Acquisition), it is clear that an amount of Rs.31,53,000/- was paid to Sri G.Venkata Sitarama Raju, respondent No.2 against the sale deed document No.4389/2005 for an extent of Ac.10.52 cents and an amount of Rs.9,00,000/- was paid to Sri M. Kasulu, respondent No.3 against the sale deed document No.4388/2005 for an extent of Ac.3.00 cents towards compensation. Thus, the respondents have to remit the award amount of Rs.40,53,000/- (Rs.31,53,000/- received by the 2"^^ respondent) and Rs.9,00,000/- received by the respondent No.3) along with interest @ 18% per annum with effect from 18.01.2006 to the Official Liquidator. f. Hence, this application. 7 BSB,J Comp.Appn.704 of, 2010 3. The respondent No.4/The Deputy Collector, Anakapalli District and respondent No.5/The Chief Navy Officer, came to be impleaded vide order, dated 29.08.2024 in I.A.No.1 of 2024. The counter of the 4‘^ respondent, in brief, is as follows: 4. The awards Nos.5/2006 to 8/2006 were passed on 17.01.2006 by the then Land Acquisition Officer & Special Deputy Collector (Land Acquisition) and compensation was paid to the above awardees. The Land Acquisition Officer & Special Deputy Collector (Land Acquisition), Yelamanchili followed the due procedure as per the Land Acquisition Act, 1894, for payment of compensation to the awardees, requested to pass appropriate orders. It is Heard the learned counsel for the applicant and the 1 respondent. The respondents No.2 & 3 have not made appearance. The respondent No.4 filed counter, but no oral arguments submitted. Though the respondent No.5 filed counter, the returned by the Registry on certain office objections. 5. St were same was 6. Section 537 of the Companies Act, 1956 and Rule 9 of the Companies (Court) Rules, 1959 are excerpted herein below: 8 BSB,J Comp.Appn.704 of 2010 537. (1) Where any company Is being wound up by or subject to the supervision of the Court- (a) any attachment, distress or execution put in force, without leave of the Court, against the estate or effects of the company, after the commencement of the winding up; or (b) any sale held, without leave of the Court, of any of the properties or effects of the company after such commencement: shall be void. (2) Nothing in this section applies to any proceedings for the recovery of any tax or impost or any dues payable to the Government.” Rule 9: “Inherent powers of Court - Nothing in these rules shall be deemed to limit or otherwise affect the inherent powers of the Court to give such directions or pass such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court.” Since the 1®* respondent has no authority and without the 7. permission of the Court sold the properties of the company covered by the sale deeds, dated 18.07.2005 in favour of respondents 2 and 3, they are invalid and are liable to be set aside. As such, the amount of consideration passed under those sale deeds is liable to be refunded to the applicant. Further, the applicant is also entitled to interest at a reasonable rate as the amount has been illegally withheld. 9 BSB, J Comp.Appn.704 of 2010 Since there is no proof that the 1"* respondent has mala f/dely sold the property, prayer seeking to punish the respondent, Sri Bh. A. Rama Raju, is dismissed. 9. The order setting aside the sales in favour of 2 respondents has no bearing on the acquisition of land by the 4 respondent as it is a compulsory acquisition irrespective of the ownership of a private person and the amount of sale consideration is also directed to be paid to the applicant by the 1 respondent. The company application is partly allowed as follows:- 8. rd nd and 3 th 10. Sale of the land admeasuring an extent of Ac. 10.51 cents in 105/2, 106, 107 and 271 situated at Vakapadu (i) Sy.No.105/1 village, S. Rayavaram Mandal, Visakhapatnam District under registered sale deed No.4389/2005 in favour of Sri G.Venkata Sitarama Raju is set aside; Sale of the land admeasuring an extent of Ac.3.00 cents in Sy.No.269 and 275/2 situated at Vakapadu Village, Visakhapatnam (ii) District under Mandal. S. Rayavaram registered sale deed No.4288/2005 in favour of Sri M.Kasulu is set aside; respondent shall pay the applicant the award amount of Rs.40,53,000/- (Rs.31,53,000/- + Rs.9,00,000/-) along with interest thereon at the rate of 6% per annum from the date of the petition, i.e., 02.09.2010 till the date of realization; The prayer seeking to punish the 1®* respondent is dismissed. St (iii) The 1 (iv) 10 BSB, J Comp.Appn.704 of 2010 nd rd (V) The order setting aside the sales in favour of 2 respondents has no bearing on the acquisition of land by the respondent: Costs of Rs.20,000/- (Rupees Twenty thousand only) is awarded to be payable by the respondent to the applicant. No relief is granted against the respondents No.4 & 5 as they are only formal parties. and 3 (Vi) (vii) Sd/- S.V.S.R.MURTHY JOINT REGISTRAR //TRUE COPY// SECTION OFFICER 1. The Official Liquidator. M/s.Rich Field Aquatech (India) Ltd., (in liqn). Office Floor. Corporate Bhawan. Nagole. Bandlaguda. Thattiannaram Village. Hayathnagar Mandal, Ranga Reddy District. Telangana State Code-500 680. To, St at 1 Pin 2. The Registrar of Companies. Ministry of Corporate Affairs. Government India. 2"'" Floor. Corporate Bhawan. Nagole. Bandlaguda, Thattiannaram Village, Hayathnagar Mandal, Ranga Reddy District, Telangana State Code-500 680 3. The Regional Director, South Eastern Region, Ministry of Corporate Affairs, 3^^ Floor, Corporate Bhawan. Nagole. Bandlaguda. Thattiannaram Village. Hayathnagar Mandal. Ranga Reddy District. Telangana State Code-500 680. 4. Sri BH. A. Ramaraju, Vice Chairman, M/s Gangavaram Port Limited, Gangavaram Post Peda Gantyada Mandal Visakhapatnam District - 530 of Pin Pin 044 5. Gottimukkala Venkata Seetharamaraju, S/o Lakshmi Pathi Raju, D. No. 20-50- 121/1, Chaitanya Nagar, Gajuwaka, Visakhapatnam District 6. Mylapalli Kasulu, S/o Venkanna, Bangaramma palem , Vakapadu Sivaru S. Rayavaram Mandal, Visakhapatham District 7. The District Collector, Anakapalli District, Anakapalli - 530 032 8. The Chief Navy Officer, Navy, Pedagantyada Taluk, Visakhapatnam - 530 014. 9. One CC to Sri. T V P Sai Vihari(Standing Counsel for Official Liquidator) Advocate [OPUC] 10. One CC to Sri. A Radhakrishna Advocate [OPUC] 11. One CC to Smt S. Pranathi Advocate [OPUC] 12. One CC to Smt M. Uma Devi, (Standing Counsel for Central Government) [OPUC] 13. Three CD Copies stu HIGH COURT DATED:23/01/2025 S’oTandT?;^ 19 MAR 2025 ORDER 'X ^ . Current section ^ COMPA.No.704 of 2010 PARTLY ALLOWING THE COMPANY APPLICATION