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Skeptical optimist (N A)     01 April 2015

Liquidation of Private Company based on 'execution' appeals.

I entered into sale agreement for purchase of a residential plot from a Nagpur based private limited company; by upfront payment of 50% of value mentioned in sale agreement (by cheque) in 2007. The pending 'final approval' for this layout has not come through till today because of change in policy regarding land in vicinity of villages in Nagpur Rural. Since last few years, I and many other buyers tried in vain to get back principal amount. Eventually this resulted in many (district consumer court) judgements directing said company to refund principal & interest. The company neither honours these judgements, nor appeals against them in state consumer court. Instead, it waits till 'execution appeal' gets filed in district consumer court. By coincidence or design, company's director has been able to avoid arrest till date, even though hearings on 'execution' appeals goes on and on for years together (case no.s EA/09/66 dated 21/04/09, EA/09/29 dated 24/04/09, EA/11/42 dated 05/03/11, EA/12/143 dated 01/11/12, EA/13/17 dated 21/03/13, EA/14/161 dated 19/10/14 in district consumer court of Nagpur). In parallel, every two years he floats another private limited company, and continue his real estate business launching new layouts. The questions:

1. Is this a fit case to invoke Companies Act to revoke DIN number of the director / cancellation of registration of said company / company's liquidation based on said execution appeals?

2. What is the appropriate forum to approach? Company Law Board / Ministry of Corporate Affairs / High Court?

3. Are these remedies compoundable? If yes, we can use them for negotiation with for refund.



Learning

 3 Replies

Kapil Chandna (Lawyer at Supreme Court of India)     01 April 2015

Sir, That has to be done in companies act .... Regards Kapil Chandna Adv 9899011450

dineshchandra   02 April 2015

Shocking to observe that for more than 5 years since filing of execution appeal, the director can evade arrest. Can 'Make in India' succeed in this ecosystem?

T. Kalaiselvan, Advocate (Advocate)     05 April 2015

Your query was addressed very well by many members, hope you will be able to proceed as per your understanding and justification on the reasonableness you may find.

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