- (1.) MS. R. Banumathi, J.O.A. No. 1169 and Others in C.S. No. 937 of2007 and O.A. No. 1240 and 1241 of 2007 in C.S. No. 980 of 2007.In C.S. No. 937 of 2007 and A. No. 1169 to 1172 of 2007 applicant/plaintiff challenges the impugned Assignment Deed, Mortgage Deed and Lease Deed (dated 9.10.2007) and seeks for declaration that those documents are void abinitio on the ground of collusion and that those documents were executed without authority and are null and void. Along with the plaint, four applications were filed by the plaintiff for restraining defendants 1 to 5 and 8 and their men from acting and giving effect to the impugned deeds of assignment, mortgage and lease deed.
(2.) THE dispute relates to the 7th defendant Company's immovable assets Udayam THEa-tre and Kalyana Mandapam. THE premise comprises of theatre building viz., Udayam, Suriyan, Chandiran, Mini Udayam and Kalyana Mandapam - Udayam Kalyana Mandapam standing in the name of M/s. Aruna THEatres and Enterprises Pvt. Ltd. (for short Aruna THEatres/7th defendant) THE land in question is in an extent of 23 grounds and 1930 sq.ft. situated at T.S. No. 2, Kodambakkam, Door No. 3, Pillar Road, Ashok Nagar, Chennai. THE applicant/plain-tiff is the Shareholder and Director of D-7 Company. He was appointed as Director of D-7 Company at the EGM of the Company held on 5.1.2007. Challenging the documents, D-7 Company also filed the suit C.S. No. 980 of 2007. It has also filed applications O.A. Nos. 1240 and 1241 of 2007 for restraining de-fendants 1 to 5 from entering into the premises. D-7 and 6-8 are the family owned private Companies. Family members are the share-holders. As the dispute pertains to the family Company, other family members, who are shareholders, have filed number of impleading applications. All the applications shall stand disposed of by this common order. For convenience, parties are referred as per ar-ray in O.S. No. 937 of 2007. Background facts in brief which prolif-erated the litigation and dispute between the parties are as follows:(i) One late Sankaranayana Pillai of Udayathur, Tirunelveli District had six sons living together with their children as members of a joint family. The eldest son Narayana Pillai was instrumental in starting food grains business at Madras for the benefit of the joint family. He was assisted by one of his brothers namely Sundaram Pillai. As the business flourished, the other brothers - Subramania Pillai, Karuppasamy Pillai, Paramasivam Pillai, Kalyanasundaram Pillai, also came to Chennai and they established more number of business. They expanded the business in sev-eral fields. The 7th defendant Company is a Theatre Complex business started in 1982 in about 23 grounds 1930 sq.ft. in Ashok Nagar and the 8th defendant Company is a flour mill started in 1989. The other brothers came to Madras at later stages.(ii) Credit Facilities of Annai Muganibigai Roller Flour Mills Ltd. -M/s. Annai Mookambigai Roller Flour Mills (P) Ltd. (8th defendant) has been granted various credit facilities through KVB Kodambakkam branch from the year 1998 on-wards. Aruna Theatres & Enterprises P. Ltd. has guaranteed the due repayment of all the credit facilities with interest thereon granted to the 8th defendant herein On 12.10.1998, Aruna Theatres executed the Letter of Corpo-rate Guarantee in favour of the first respondent bank standing as the Guarantors for the finan-cial assistance of total amount of Rs. 759.68 lakhs availed by the 8th defendant under vari-ous loan facilities. Further, as a security the 8th defendant as well as the guarantor Aruna Theatres have created an Equitable Mortgage by deposit of title deeds relating to their re-spective properties situate at No. 106, Alinjivakkam Village, Ponneri Taluk, Thiruvallur District (8th defendant) and suit property situate at No. 3, Pillar Road, Ashok Nagar, Chennai consisting of Land and theatre buildings namely Udayam Suriyan, Chandran & Mini Udayam and the Kalyana Mandapam - Udayam Kalyana Mandapam standing in the name of Aruna Theatres with an extent of 23 grounds and 1930 sq. ft. or 57,130 sq. ft. situ-ated at T.S. No. 2, Part Block No.71, Kodambakkam Village, Door No. 3, Pillar Road, Ashok Nagar Chennai. Because of the irregular operations and non-payment of the loan dues to the first respondent bank by the 8th defendant Company, the account became a Non-Performing Asset. There was a huge out-standing amount of Rs. 12,53,77,604.56 as on 27.5.2004 with further interest due from the 8th defendant's, 7th defendant and the guaran-tors.(iii) Issuance of notice under Section 13(2) end 13(4) SARFAESI Act.1st respondent/defendant Bank issued a Notice on 29.1.2003 to the 8th defendant Company, 7th defendant and the guarantors under Section 13(2) of the Securitisation and Reconstruction of Financial Assets & En-forcement of Security Interest Act, 2002 (for short `SARFAESI Act).Subsequently, the 1st respondent Bank issued notice under Section 13(4) of SARFAESI Act, 2002 on 24.3.2004 for taking possession of the Secured Assets of the above said 8th defendant Company and as well as the 7th defendant company since the borrower company and the guarantors have failed to clear the dues.(iv) O.A. No. 178 of 2004 on the file off DRTSince the eighth defendant defaulted in repayment of loan, the Bank initiated proceed-ings against D-8 and its Guarantors including D-7 before DRT, Chennai by filing O.A. No. 178 of 2004 for recovery of Rs. 12.53 crores which was claimed to be outstanding as on 27.5.2004. In the said application before DRT, the Bank filed application in LA. No. 414 of 2004 for appointment of Receiver, in which DRT appointed D-6-Justice K. Swami Durai (Retired) as the Receiver of D-7 Company. The Receiver has been remitting payments to the first defendant Bank regularly out of col-lections from the D-7 theatre property. The amount so remitted was kept as no lien account.(v) C.P. No. 64 of 2006:Alleging acts of oppression ad mismanage-ment by the then Board of Directors majority share holders have filed the Company Peti-tion. Pending said proceedings, on 5.1.2007 an Extraordinary General Meeting (EGM) of the 7th respondent company was held with the permission of the Company Law Board (CLB). CLB permitted the holding of the EGM with a condition that the resolution shall not be implemented without the leave of the CLB. The said EGM was held on 5.1.2007 in which except one Mr. Balasubramaniam rest of the directors were removed from the Board and new directors were appointed including the plaintiff.
(3.) THE petitioners in the said petition filed an application C.A. 41 of 2007 in C.P. 64 of 2006 before the CLB seeking permission for the implementation of the resolutions passed at the EGM .THE CLB after hearing all the parties to the proceedings allowed the implemen-tation of the resolutions passed at the EGM. THE said Order was challenged in High Court in C.M.A. 1900 of 2007 by the directors who were removed. High Court upheld the Order of the CLB thereby confirming the appointment of new directors and removal of the old direc-tors at the EGM held on 5.1.2007. This Court in the said C.M.A. inter alia passed directions that, "No major policy or important decisions to be taken by the Board of Directors without the consent of the Company Law Board. It was also ordered that there should not be any alien-ation, transfer, encumbrance of the Company assets without the consent of the Company Law Board. Inspite of direction in C.M.A. No. 1900 of 2007 and communication to the first defen-dant Bank, the impugned transactions are al-legedly entered into.;