ASHA BHOSALE Vs. M/S. MAGNASOUND INDIA LTD.

JUDGEMENT

(1.) By the above reports, the Official Liquidator is seeking a declaration that a Deed of Assignment dated 14.03.2012 executed by Mr. Shashi Gopal, an ex - director of Magnasound India Ltd. ("MSIL"), the Company (In Liqn.), in favour of one Magnasound Media Pvt. Ltd. (hereinafter "MMPL") is illegal and void. The Official Liquidator is also seeking other consequential directions including, inter -alia, a direction to MMPL and Sony Music Entertainment Pvt. Ltd. (hereinafter "Sony Music") to hand over the documents and assets which were the subject matter of the purported Deed of Assignment and also for directions to restrain MMPL and Sony Music from dealing with these assets.

(2.) It is the Official Liquidator's case that Shashi Gopal, in purported exercise of his rights as a Subrogee, has after the winding up order sold assets belonging to the Company (In Liqn.) without the leave of this Court, without valuation and without inviting public offers to a related party at a price randomly fixed by the Assignor (Mr. Shashi Gopal) and the Assignee (MMPL). It is submitted on this basis that the Assignment is void as contrary to Sections 536(2) and 537(1)(b) of the Companies Act, 1956.

(3.) The Company in liquidation had sometime in the late 1990s, availed of certain facilities from Union Bank of India (hereinafter "UBI"). In this connection, the Company had executed Three Deeds of Hypothecation dated 12.8.1998, 30.7.1999 and 28.7.2000 in favour of UBI in respect of the copyright in recordings containing the original music compositions rendered by various artistes and which were owned by the Company. Each of the Deeds of Hypothecation contained a clause which permitted the Lender, in the event of the borrower committing default, to "sell all or any part of the hypothecated sound recording copyrights in such manner as the bank shall think fit, but by giving 15 days notice to the borrower and either by public auction, private Contract or tender..."