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Estate Officer UT Chandigarh and Ors. Versus M/s. Esys Information Technologies Pvt. Ltd.

Transfer of plot by way of transfer of shares in a company to another company - in the year 2002, Chandigarh Administration notified the rules called Allotment of Small Campus Site in Chandigarh Information Services Park, Rules, 2002 (hereinafter referred to as ‘the Rules’). Rule 9 of the Rules provided that transfer of the campus site by the allottee shall not be allowed for a period of 10 years from the date of allotment or till all dues are fully paid up whichever is later. Similar condition .....

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e counter affidavit by specific order passed on 16.7.2015. - It has been mentioned in para 17 that sale of its subsidiaries to M/s. Esys Global Holding meant that these liabilities were transferred to the buyer. Thus there is sale of assets and subsidiaries and the denial that there is no sale is incorrect statement. In the affidavit dated 24.7.2008 in paras 10 and 11, it is apparent that purchase by M/s. Esys Dubai of the assets of M/s. Esys Singapore and its subsidiaries after taking regu .....

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have been clearly violated. Thus, we are of the considered opinion that the order passed by the High Court is not sustainable and resumption of the allotted land by the appellant was legal and proper. - Decided in favor of revenue. - CIVIL APPEAL NO. 3765 OF 2016 - Dated:- 11-5-2016 - V. Gopala Gowda and Arun Mishra, JJ. For The Appellant : Mr. Chandra Prakash,Adv. For The Respndent: Mr. Tarun Gupta,Adv. JUDGMENT Arun Mishra, J. 1. The appeal has been preferred by the Estate Officer, Union Terri .....

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Park, Rules, 2002 (hereinafter referred to as the Rules ). Rule 9 of the Rules provided that transfer of the campus site by the allottee shall not be allowed for a period of 10 years from the date of allotment or till all dues are fully paid up whichever is later. Similar condition was incorporated in the allotment letter dated 1.6.2006 by which 6 acres of land was allotted to the respondents. It was necessary to make the construction within 3 years from the date of allotment. 2. On 2.1.2008 it .....

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of the company for its activities; (ii) what are the business activities of M/s. Esys Information Technologies Ltd. from the campus site; (iii) what was the holding structure of the shareholding of the company at the time of making request for allotment; (iv) what was the holding structure of the company at the time of allotment; and (v) what is the shareholding structure of the company at present. Reply by the respondent was not satisfactory, as such show cause notice was issued on 18.1.2008 by .....

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he respondent preferred an appeal under section 10(1) of the Capital of Punjab (Development and Regulation) Act, 1952. The appeal was dismissed vide order dated 14.2.2011 passed by the Chief Administrative Officer, UT Chandigarh. The respondent preferred a revision before the Advisor to Administrator, UT Chandigarh. Same had been dismissed vide order dated 24.9.2008. It is pertinent to mention that the affidavit filed by Mr. Vikas Goel in the High Court of Singapore was placed on record and was .....

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n 16.7.2015 directing the respondent to file a counter affidavit containing certain information specified in the order. Following order was passed by this Court on 16.7.2015 : Heard. Issue notice. The respondent has appeared on caveat. The respondent-company shall file a counter affidavit within six weeks from today. Rajoinder affidavit, if any, be filed by the petitioner within two weeks thereafter. Counter affidavit shall apart from answering the averments and contentions raised in the special .....

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hose of the transferee company, shall be filed along with the counter affidavit. Status quo, as it exists today, shall be maintained by the parties, pending further orders from this Court. 4. In short, in the counter affidavit of the respondent, the shareholding pattern has been given as on 1.6.2006, 31.3.2007, 3.5.2007 and it is not disputed that M/s. Esys Information Technologies Pvt. Ltd., Singapore had transferred 1,97,55,188 shares to Esys Global Holdings, Dubai owned by one Niraj Goel. It .....

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apore by M/s. Teledata Informatics. Following are the cases pending inter se parties : (i) Vikas Goel and Rainforest v. Teledata Informatics and Others - Arbitration in SIAC Singapore. (ii) Vikas Goel and Rainforest v. Ramachandran (Teledata CEO) and Others in New York. (iii) Esys India v. Teledata - Perjury Application in Chennai. (iv) Esys India v. Teledata - Winding up application in Chennai. (v) Baytech and Teledata v. Vikas Goel and Rainforest - BVI. In the counter affidavit, it is contende .....

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dent fully satisfied the eligibility criteria. Office has been rented, furnishing cost has been incurred, Managers were relocated from Singapore and Delhi. Esys has relocated its key global functions to Chandigarh. There was delay of 5 to 6 months in handing over possession of the campus site. The respondent was entitled to mortgage the site for raising loan by way of trading security. In this regard, permission was sought but was not given. The site was resumed on 24.9.2008 before the expiry of .....

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a period of ten years. The stake of Dubai company by virtue of 95% shares transfer has raised to 98%. M/s. Esys Global Holdings Ltd., Dubai further sold these stakes to Teledata, a Chennai based company. Facts stated in Affidavit dated 2.7.2008 of Mr. Vikas Goel which was part of the record of the Estate Officer have been concealed in spite of the categorical order dated 16.7.2015 passed by this Court. The way in which the transaction has been made is a transfer which is not permissible as per r .....

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its asset. 6. It was submitted on behalf of the appellant that transfer without permission was not permissible as per Rule 9 and clause 15 of the allotment letter for ten years. It is not a case which is covered by Condition No.15-b of the allotment letter. It is not only a case of transfer to Dubai company but transfer of assets to Teledata, a Chennai based IT company. Affidavit of Mr. Vikas Goel mentions various facts though it was filed before the Estate Officer as well as the DIT Office. How .....

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Teledata along with its subsidiary is setting up a six acre TBO facility in Rajeev Gandhi Information Technology Park in Chandigarh. The affidavit filed by Mr. Vikas Goel in Singapore court indicates that he has signed an agreement to sell 51% stake to Teledata. Vikas Goel wanted to dupe Teledata and therefore surreptitiously transferred shares to Esys Global Holding, Dubai. It is a clear cut violation of the rules. Esys India had ceased its operations after 2010 as all its businesses were clos .....

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e the construction also. Thus, their intention was never to start the construction. 7. It was submitted on behalf of the respondent that there is no violation of clause 15 of the allotment letter. The allottee remains the same. Clause 15 is not attracted as transfer of site is not to the other entity. It is not a case of allottee company being merged with other company or a case of split. The allottee company was subsidiary of M/s. Esys Singapore. The shares have been transferred to M/s. Ezy Glo .....

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ent, or till all dues are full paid, whichever is later. In exceptional circumstances permission may be granted for transfer prior to expiry of this period, for reasons to be recorded in writing. (b) In the event of the allottee company being merged with another company or in the event of a split of the allottee company or the setting up of a subsidiary by the allottee company, in accordance with statutory provisions and with the permission of the concerned regulatory authorities, the consequent .....

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to time. 9. The appellant has relied upon the statement made in affidavit dated 2.7.2008 filed by Mr. Vikas Goel in the High Court of Singapore thus : 16. As mentioned earlier, Esys Singapore s bankers and creditors withdrew their credit lines and demanded payment within days of the SEC Announcement. While Esys Singapore was negotiating with its bankers and suppliers, Esys Singapore was at the same time considering the various means by which it could raise funds to pay its creditors. One option .....

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apital Limited (which owned Esys Latin America), Esys India, and Esys Distribution (Korea) Ltd., based on these subsidiaries book values/fair market value, without any pre-conditions. 17. This offer by Esys Global Holdings Limited represented the best opportunity for Esys Singapore to maximize the amount of funds it could raise at that time to pay its creditors. Esys, Singapore therefore agreed to sell certain subsidiaries to Esys Global Holdings at book value/fair market value, without pre-cond .....

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sipate my assets. This is not true. The transfer of my shares in Esys Singapore to Rainforest was to facilitate the investment of Teledata in Esys Singapore, in order to shore up the confidence of Esys Siongapore s creditors in the wake of the SEC Announcement. I elaborate briefly on this below. 27. As a result of the SEC Announcement, Esys Singapore s creditors suffered a crisis of confidence in Esys Singapore s ability to meet its debts. The management of Esys Singapore decided that in order t .....

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received shares in Rainforest. 29. Teledata subscribed for new shares in Rainforest. In consideration, Teledata paid for the new shares in Rainforest and provided guarantees to Esys Singapore s creditors. On completion of the transaction, I owned 58,880,000 shares in Rainforest (representing 49% of Rainforest) and Teledata 61,120,000 shares in Rainforest (representing 51% of Rainforest). 30. As can be seen, the transfer of my shares in Esys Singapore was part of a package to secure a new invest .....

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ets in the future. This is not true. Now that Esys Singapore is a subsidiary of Teledata, Esys Singapore has access to the resources of the Teledata group of companies. Given this, there is no need for Esys, or myself, to dissipate any of our assets. Indeed, Teledata has furnished numerous guarantees to Esys suppliers. Copies of some of these guarantees are annexed as VG-20. The guarantees furnished by Teledata have enabled Esys Singapore to tide over a difficult period after the Plaintiff s SEC .....

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have chosen not to inform this Honourable Court of the existence of the charge created in favour of Teledata. 11. In the affidavit dated 24.7.2008 filed in the High Court of Republic of Singapore in the same suit with respect to charge by Teledata Informatics Ltd., over the assets of M/s. Esys Singapore, it has been mentioned that general charge of Teledata remains. Following facts have been mentioned : 10. I have at paragraphs 16-17 of my 2nd Affidavit referred to Esys Global Holdings Ptd ( Es .....

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red for the transfer of those shares had been obtained. x x x x x 19. Teledata essentially recommended the same kind of restructuring for Esys Singapore to deal with its financial situation, in that it recommended a holding company to hold 100% of the shareholding in Esys Singapore. However, instead of proposing the issue of convertible bonds from the holding company like Credit Suisse, Teledata was prepared to invest directly in the holding company. Furthermore, Teledata was prepared to give Co .....

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of my 2nd Affidavit, I owned 58,888,000 shares in Rainforest (representing 49% of Rainforest) and Teledata owned 61,120,000 shares in Rainforest (representing 51% of Rainforest). 22. Teledata paid valuable consideration to Rainforest to subscribe for its shares in Rainforest. All of Rainforest s assets, including the subscription monies received from Teledata, and the Consideration Shares, are subject to the control of the Board of Rainforest, which is controlled by Teledata as the majority shar .....

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material facts by the respondent in spite of having been directed to disclose the full facts in the counter affidavit by specific order passed on 16.7.2015. It is apparent from the affidavit dated 2.7.2008 of Mr. Vikas Goel extracted above that in order to raise the fund to pay to its creditors, M/s. Esys Singapore considered its option to raise it through the sale of its assets and subsidiaries and M/s. Esys Global Holding Ltd. was prepared to buy subsidiaries including M/s. Esys India based on .....

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shares. Thus, under the garb of transfer of shares, the respondents have completed the sale and is creating a screen to conceal this aspect. Deal with Teledata is also apparent from the aforesaid paras 19 to 21 of the affidavit of Mr. Vikas Goel. Unfortunately, the respondent has concealed the facts with respect to Teledata and has not come out with clean hands. It is also apparent that Teledata in its unaudited results has published that Teledata along with its subsidiary M/s. Esys Technologies .....

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