TMI Blog2020 (6) TMI 272X X X X Extracts X X X X X X X X Extracts X X X X ..... respondents nos.2 and 3 prove that respondent nos.2 and 3 had advanced to respondent no.1 a loan of ₹ 3, 44, 12, 538/- as alleged in paragraph 9 of the affidavit dated 19.1.1996 on behalf of respondent no.2? - Whether the petitioner and/or respondents nos.2 and 3 prove that respondent nos.2 and 3 advanced the said amount to respondent no.1 against pledge of shares as alleged in paragraph 7 of the affidavit of respondent no.2 dated 2.6.2000? - HELD THAT:- The requirement of proving books of account is well recognized. The burden of proof lies on the party who would fail if no evidence was led by either side. It is also a cardinal rule of evidence and as embodied in Section 34 of the Evidence Act that entries in books of account, regularly kept in the course of business, are relevant whenever they refer to a matter into which the Court has to inquire, but such statements shall not alone be sufficient evidence to charge any person with liability. In the case at hand merely producing the copy of the Cash Book will not suffice. Respondent no.2 was required to prove by leading evidence of the purported loan transaction - issues answered in negative. Whether respondent no.1 pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .6 must and therefore is answered in the negative. Whether the petitioner proves that respondent no.1 illegally or fraudulently diverted moneys from respondent no.2 and paid them over to respondent no.2 and/or 3 and if so, whether such illegal transaction would not give a valid discharge to respondent of his liability to respondent no.2 as alleged in paragraph 6 of the petition? - HELD THAT:- The 2nd respondent has not led any evidence. The affidavits of Dangarwala filed in these proceedings are of no avail. The only attempt in all these affidavits is to obfuscate and that will not help the petitioner to prove the allegations of illegal fraudulent diversion of monies from DMPL and its payment if any to respondent nos.2 or 3. The question of the 1st respondent therefore getting a valid discharge based on these averments cannot arise - issue answered in negative. Whether the petitioner is entitled to recover any amount from respondent no.1 and if so, what amount? - HELD THAT:- There is no favour of the petitioner -Custodian on this issue - the petitioner is not entitled to recover any amount from the 1st respondent. Whether respondent no.1 received the cheques drawn by respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... funds. There is no evidence of that either. Respondent no.2 or 3 have not led evidence or assisted the Custodian in this respect - Issues answered in the negative. Whether respondent no.4 paid the said amounts alleged to have been received by him from respondent no.1 to respondent no.2 and/or to respondent no.3 as director of respondent no.2 or in any other capacity? - HELD THAT:- Only if respondent no.1 establishes payment of cash to respondent no.4 to the extent withdrawn by him from the proceeds of the cheques said to have been issued to the respondent no.1 firm by respondent no.2 would the second part of issue no.13 arise inasmuch as, if such payment was established respondent no.4 would be require to establish the utilization of those funds but in the case at hand, there is no evidence of respondent no.4 having received these funds. Thus, in this petition, absent any such direct evidence it is not possible to hold that respondent no.4 paid over the amounts to respondent nos.2 and/or 3 in any capacity - the issue is answered in the negative for want of any evidence. Whether the respondent no.1 is entitled in law to contend that respondent no.1 had paid/repaid the respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to have distanced itself from the transaction and the initial claim and the disclosure made by them, it appears that the attempt to obfuscate operates across the board - the disputed transactions have not been established - issue answered in negative. Does the petition disclose a cause of action against respondent no.4? - HELD THAT:- This issue though inappropriately worded requires respondent no.1 to prove that the cheques were received from respondent no.4 on behalf of respondent no.2 3 for cheque discounting. This arises from the contention of the respondent no.1 that the cheques were handed over by respondent nos.2 to Suresh Jajoo respondent no.4 who would then hand over the cheques to respondent no.1 for being encashed through his bank accounts, for the cash to be withdrawn and paid over to respondent no.4. There is absolutely no evidence to support this plea and for want of evidence this issue is liable to be answered in the negative and is accordingly answered. Whether in view of the petitioners contentions in para 6 of the petition that the transactions were illegal, the petitioner/ respondent no.2 are entitled to see for the monies under such illegal transactions? ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sitive case that the amounts had been paid over in cash to the other respondents have not been established - the petitioner and/or respondent no.2 are not entitled to sue on the basis of such a plea that the transactions were illegal specially since the transactions have not been clearly established. There is no evidence of what the transaction really was. The true nature of the transaction is not brought out, apparently in order to layer and shield purpose of routing of funds - issue answered in the negative. Whether the petitioner is entitled to any relief, and if so, what relief? - HELD THAT:- A specific role has been attributed to respondent no.4, however, in the absence of evidence, it is not possible to indict the 4th respondent in the facts of the present case. In the facts of the case no effective relief can be granted to the Custodian, on that basis for want of evidence. The issue is now academic and is answered in the affirmative for that limited purpose only. In view of the above I am of the view that the petitioner is not entitled to any relief - issue answered in the negative. - Miscellaneous Petition No. 2 of 1996 - - - Dated:- 9-6-2020 - A.K. MENON For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplication respondent no.1 was called upon to furnish the following information; (i) cheque numbers, dates, names of banks, branches, full postal address under which the amounts were received from respondent no.2; (ii) Full details of the transaction towards which the amount had been received; (iii) If the amount had been received by way of loan the terms and conditions of the loan; (iv) Whether the amount had been repaid and if so, mode of such repayment with particulars of bank date and payment and (v) Lastly, if the amount had not been paid back, the Custodian sought reasons from respondent no.1 for not intimating the Custodian of the fact that the amount was due to be repaid despite notifications issued by the Custodian and the public notice issued on 10th December, 1992 pursuant to the promulgation of the ordinance and the Act which followed. 4. Upon receipt of the letter dated 30th July, the respondent no.1 replied vide his Advocate s letter dated 3rd September, 1994 (Exhibit B) admitting that during April 1991 and 31st March 1992 the respondent no.1 had received a total number of 21 cheques for cheque discounting . The respondent no.1 admitted having recei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st 3rd respondent had been sought, however, I understand that no application was made to the Court at the material time. During the pendency of the application, 3rd respondent expired on or about 12th February, 2019. As a result, respondent no.3A to 3E being the heirs and legal representatives of respondent no.3 have been brought on record and therefore the reference to respondent no.3 in the present application would now refer to the heirs. 7. The petition is supported by an affidavit of one M.P. Purushu on behalf of the Custodian which affirms the truth of the contents of the petition. As far as the pleadings are concerned, the original respondent no.3 T.B. Ruia has filed an affidavit dated 18th January, 1996. According to him the subject matter of this application was also subject matter of Misc. Petition no.64 of 1994 filed by the 2nd respondent company against the Custodian. He reiterates the contents of Misc. Petition no.64 of 1994 and without prejudice to the contentions therein, Ruia has denied the contents of the Custodian s letter dated 30th July, 1994 addressed to the 1st respondent. The 3rd respondent denies that any cash was paid by 4th respondent to the deponent T. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent no.4. (iv) Fourthly, it is contended that the petitioner has no cause of action. He had commenced the discounting business at the instance of the aforesaid Manubhai Maneklal. 9. According to the deponent he was introduced to the said Maneklal by one Suresh N. Shah. Suresh N. Shah was the brother-in-law of Vakil. Maneklal introduced Jajoo to Vakil. At that stage, Suresh Shah was already engaged in the business of cheque discounting through Suresh Jajoo. The said Suresh Shah requested Vakil also to enter into the cheque discounting business. In view of the recommendation of his brother-in-law, Vakil agreed to deal with Jajoo who was introduced to him as the authorized signatory of respondent no.2 and respondent no.3. According to the deponent it is in these circumstances that T. H. Vakil Company dealt with Suresh Jajoo and earned 1% commission. Between 11th June, 1991 and 6th December, 1991 Vakil is said to have received 21 cheques. The particulars of these cheques ( have already been provided in Vakil s Advocate letter dated 3rd September, 1994 Exhibit B.) The deponent states that the cheques were encashed, cash was withdrawn and handed over to Suresh Jajoo who wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om Vakil, Suresh Shah and V. Krishnakant. The deponent Dangarwala was the Secretary of respondent no.2 and was in the knowledge of the fact that the cheques were issued, encashed by Vakil and that cash was paid to Jajoo. Respondent nos.2 3 were therefore falsely denying the transaction. The receipt of cash by Jajoo as agent for disclosed principal viz. respondent nos.2 is very clear evidence of the fact that respondent no.2 3 have no claim against respondent no.1. It is contended that cheques were signed by defendant no.3 who was in control of the business and the finances of the 2nd respondent. It is further averred by the deponent that the Joint Parliamentary Committee had found that defendant no.2 had advanced monies to Suresh N. Shah, V. Krishnakant and T.H.Vakil-respondent no.1. Respondent no.3 received the foreign remittance of US Dollars 400, 948 which he declared as income under the amnesty scheme. It is further contended that respondent no.2 is a deemed public company but no resolutions had been passed in order to lend monies to T.H.Vakil. Respondent no.2 s auditors had reported large payments being made by the 2nd respondent without appropriate documentation. As far a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... documents pertaining to the bank statements, certified copy of bank statements preliminary statement under sections 131, the summons from the Income Tax Department and the assessment order, summons issued by the Enforcement Directorate and certified copy of an affidavit August 1995 said to have been filed by Manubhai Maneklal in Misc. Petition no.64 of 1994 as also certified copy of affidavit dated 8th November, 1995 in rejoinder filed by N.C Dangarwala in MP -64 of 1994. Certain references are also made to documents signed by S.K.Jajoo respondent no.4, relevant extract of the Joint Parliamentary Committee and Advocates correspondence. He has also disclosed record and proceedings in Misc. Petition no.64/94 filed by respond 2 against the Custodian, Vakil and others. 17. Narendra C. Dangarwala, Director of respondent no.2 has filed an affidavit of documents dated 13th August, 1999. He discloses in Part-I of the schedule, copies and proceedings in MP-64/94, the ledger A/c, cash book A/c for the years 1990-91, 91-92 and the original ledger account and cash book for year 92-93. Disclosure of bank statements is made generally without any specifics. Dangarwala has also filed an affida ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2 and or 3 through respondent no.4 Jajoo has been denied. The deponent has also denied receipt of any cash or the cheques either from Suresh Jajoo or any other person. Furthermore, it is contended assuming while denying Jajoo acknowledged receipt of cash, it cannot be treated as an acknowledgment of receipt of any amount in cash by the 2nd respondent. The allegation that Jajoo had paid over the cash amounts to respondent nos.2 3 has been denied. The loan advanced to respondent no.1 was allegedly secured by a pledge of shares and Maneklal had guaranteed repayment thereof. No particulars of the pledge of shares are forthcoming in this affidavit. The rest of the affidavit contains repetitive averments which I have already substantially dealt with. One important denial is that Jajoo acted as agent or as authorized signatory of respondent no.2 3 but in the very same affidavit, the deponent admits that Jajoo been granted a special power of attorney by respondent no. 2. The deponent denies having engaged in any cheque discounting business as contended by the respondent no.1. In this manner, the deponent contends that the 1st respondent is bound to pay back a sum of ₹ 3, 44, 12, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n he recorded his own statement before the Enforcement Directorate. 20. Ruia further states that Vakil, Jajoo, Maneklal and Suresh Shah as also V. Krishnakant had adopted a common defence of discounting cheques and having paid cash to DMPL and the deponent only to avoid liability to DMPL and to avoid repayment of the monies advanced. He states that the fact that monies were advanced to these persons has not been denied and repayment has not been proved. To that extent it is contended that his claim for repayment should be sustained and the Custodian must succeed in the application. According to the deponent the Joint Parliamentary Committee does not record any findings against DMPL. The deponent denies having received any foreign remittance and states that even if he had received the foreign remittance the value of the same in rupee terms is only 1.3 crores whereas respondent no.2 had advanced a sum of ₹ 3.44 crores to Vakil and had collectively advanced ₹ 6.31 crores to Vakil, Suresh Shah and V. Krishnakant. The foreign remittance he states has no relevance to these transactions of loan. Ruia further states that he has not affirmed any affidavit dated 17th October, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese amounts had been withdrawn by cash. He has annexed with the affidavit a statement of cheques received from respondent no.1 as Exhibit-1. He annexed two statements of cash withdrawn at Annexures 2 and 3. Exhibit 3 reveals that between 13th June, 1991 and 14th August, 1991 a sum of ₹ 1, 75, 10, 774/- has been withdrawn. The Annexure as Exhibit 2 reveals that between 16th August, 1991 and 11th December, 1991 a total sum of ₹ 1, 71, 001, 040/- was withdrawn in cash through diverse cheques on various dates. A Statement of account discloses that between 11th June, 1991 and 9th December, 1991 a total of ₹ 3, 40, 68, 412.62 was withdrawn in cash, ₹ 3, 44, 125.38 being 1% of the total receipts were retained and the balance amounting to ₹ 34, 06, 841.62 was paid over to respondent no.4-Jajoo. 23. The 4th Exhibit is a letter addressed by the Advocates for the deponent of the affidavit Rajen C. Vakil to Federal Bank Ltd. enquiring about the statements of account in respect of two current accounts held by the deponent in which the proceeds of the cheques were deposited wherein these cheques were realized and from which the cash was withdrawn. The bank has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bit B to the petition aggregating in all to ₹ 3, 44, 12, 538/- for discounting or as an advance/loan repayable with interest at 24% p.a.? (10) Whether respondent no.4 was an agent/representative of respondent no.2? (11) Whether respondent no.1 after encashing the said cheques paid or repaid the amounts of the respective cheques to respondent no.4 less discounting commission of 1%? (12) Whether respondent no.1 paid or repaid the said amounts to respondent no.4 as an agent/representative of respondent no.2? (13) Whether respondent no.4 paid the said amounts alleged to have been received by him from respondent no.1 to respondent no.2 and/or to respondent no.3 as director of respondent no.2 or in any other capacity? (14) Whether the respondent no.1 is entitled in law to contend that respondent no.1 had paid/repaid the respective amounts of the said cheques to respondent no.2 in cash in view of the prohibition contained in Sec.269T of the Income Tax Act against repayment in cash? (15) Does respondent no.1 prove that respondent no.2 or respondent no.3 had appointed respondent no.4 as the authorized signatory or agent of respondent nos.2 and 3 and that respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opies. He submitted that save and except for these documents Respondent no.2 had no other evidence with them. Mr.Gaonkar however sought to take advantage of the admission relied upon by Mr.Chandran and submitted that receipt of funds had been admitted but Vakil had failed to prove that funds were paid out or repaid and hence the second leg not being established, relief may be granted to the Custodian. According to him the Respondent no. 2 had proved his case by relying on the admissions of Vakil. 27. Ms. Pawar learned counsel who appeared at the material time for Respondent no.3 submitted that Vakil had not produced any evidence of Respondent no.4 being an agent of Respondent no.3. Besides the transaction being illegal no relief could be granted. She relied upon the statement made by Vakil to the Income Tax Department in support of her plea that the cheque discounting transactions were not permissible in law and hence no benefit can be derived therefrom. She reiterated that Vakil had not proved his case against Respondent no.3 and Respondent no, 3/Ruia has no claim in his individual capacity against Vakil. Ms.Pawar therefore submitted that the claim as against respondent no.3 is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A. Metropolitan and Others V/s. Moran Mar Marthoma and another [1995 suppl. (4) SCC 286] Mr. Mehta also sought to rely upon the decision of a Supreme Court in Kunhayammed and others v/s. State of Kerala and Anr. [2006 SCC 359] in support of his submission that a review could be preferred in the High Court before Special Leave is granted by the Supreme Court but not after it is granted. Reliance was sought to be placed on the decision of the Supreme Court in Chandi Prasad and others V/s. Jagdish Prasad and Others on the aspect of limitation and Mr. Mehta has also placed reliance on several orders passed in these proceedings including in MP-3 of 1996 and 4 of 1996. The relevant ones have already dealt with in this judgment. He submitted that since no evidence was led in the petition and respondent no.1 s witness did not step into box despite several opportunities and notices, the trial had not effectively commenced in the petition. He submitted that the parties to the Misc. Application would never heard nor were any arguments advanced before the Court and being aggrieved by the impugned order dated 11th December, 2015 dismissing the petition the respondent no.4 had filed a review bei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al bearer cheques to Suresh N.Shah. These bearer cheques were given by Suresh N. Shah to his employees Dashrath Patel and V.V. Shah who signed on the reverse of these cheques presented them for encashment and withdrew cash. The cash so withdrawn was said to have been given to Rajen Vakil who then handed it over to Suresh Shah at the offices of Suresh Shah. The deponent further states that the bank had sent him statements of account at the material time but these have been misplaced while shifting his office. Thereafter he had made a request to the bank to issue copies, however has seen from the correspondence to which I have already referred to. The bank responded contending that these have been destroyed. The deponent however, states that in 1993 when he was summoned by the Income Tax Authorities, he had in his possession photocopies of the bank statements. He has relied upon these photocopies which are now said to be filed along with the document volumes at Annexure A C respectively. At Annexure A, he claims are the photocopies of statements of current account no.2518 for the period 13th August, 1991 to 31st March, 1994. These he submits are at volume-1 page 82 to 124. He fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatement said to have been made by Jajoo on oath on 29th January, 1993 is sought to be produced at item 13 to Annexure A. This document is in handwritten form and typed copies are also annexed. According to the deponent, Jajoo has admitted this document in his preliminary statement in the written stamen filed by him on 23rd October, 2002. 33. The Income Tax Authorities are said to have recorded a further statement of Jajoo on 22nd February, 1995 when Jajoo confirmed his earlier statement dated 29th January, 1993. Copy of this statement dated 22nd February, 1995 is also sought to be produced at item 15 of Annexure A in Vol.I. The deponent states that he received a summons dated 23rd March, 1993 from the Dy. Commissioner of Income Tax(Special Range) Central Mumbai to which he replied on 2nd April, 1993. He relies upon a copy of the acknowledgment in that respect. He further deposes that the Enforcement Directorate had in the enquiry against DMPL and Ruia under the Foreign Exchange Regulation Act, 1973 and summoned the deponent Vakil on 2nd April, 1993 to produce documents relating to the transactions between DMPL, Suresh Jajoo and Vakil s firm. He confirms as having attended the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayment of the amount of the cheques or interests thereon. The Custodian had then filed MA-86 of 1993 against DMPL seeking disclosure of assets and liabilities and that is when the DMPL filed the affidavit dated 7th October, 1993 disclosing the amounts allegedly receivable by DMPL from the 1st respondent, M/s. V.Krishnakant and M/s. S. Shah. The deponent states that though such a disclosure was made, DMPL did not disclose in the affidavit the nature of business transactions and how the amount claimed was recoverable. 35. The affidavit then refers to the demand notice issued by the Custodian dated 30th July, 1994 to which I have already adverted to at the outset and the reply filed by the deponent through his Advocate which is also annexed to the petition. The deponent then makes reference to the petition MP- 64 of 1994 filed by DMPL against the Custodian, Manubhai Maneklal, Suresh N. Shah, V. Krishnakant, T.H.Vakil (respondent no.1) and one Loknath Shroff and one A.B. Shah and some others. In this application, the petitioner sought certain reliefs against these named respondents who are allegedly jointly and severally liable to pay to DMPL amounts of certain cheques issued to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turns of the amounts or interest. According to the deponent the cheques were not issued by DMPL in respect of any badla transactions between DMPL and his firm of M/s. T.H. Vakil. The deponent has not stepped into the witness box to tender the documents. The affidavit however remains to be on file. 37. At this stage, it is appropriate that a mention be made to the manner in which this matter has proceeded. The record indicates that when this matter was listed before the Special Court on 10th August, 2012, the Court observed that recording of evidence before the Commissioner was underway. Time to complete recording of evidence was extended by 12 weeks. The matter was then listed on 21st December, 2012 when the Commissioner was directed to file the report. These orders were passed in the above petition. In the meanwhile it transpires that recording of evidence was in fact proceeding not in this petition but in other connected matters such as MP-4 of 1996 filed by the Custodian against Suresh Shah and others. On 27th June, 2014, certain applications made by the Custodian for payment of fees of the Commissioner appear to have been allowed on that date and these applications made by p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ored. However, in MP-3/96 and 4/96, the respondent Suresh N. Shah and M/s. V.Krishnakant filed statutory appeals against the order dated 11th August, 2016 passed by the Special Court allowing the review applications. They sought that the impugned orders dated 11th August, 2016 passed by the Special Court in Review Petition Nos. 3/16 and 4/16 be set aside. On 28th April, 2017 the Supreme Court passed the following order in both the civil appeals filed against the orders in the review petitions ; Delay condoned Issue notice. Status quo, existing as on today, shall be maintained until further orders. The order of the Supreme Court operates in two of these matters viz. the MP-3/96 and 4/96. The respondent in MP-2/96 did not file any statutory appeal and as such this matter is being ripe for hearing has been taken up for hearing. 39. In a similar matter viz Miscellaneous Petition No.112/95, the Custodian sought a decree against the 1st respondent one Loknath Shah-stock broker in sum of ₹ 1, 95, 63, 567/-. Respondent no.2 was DMPL and the application is similar to the present application. The respondent no.2 had contended that it had advanced certain mon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence that they had advanced a loan is relevant and commends itself to me. This is precisely what the order dated 5th October 1996 passed in this petition directs. Meanwhile I find that in yet another companion Misc. Petition no.177/95, the Custodian sought a decree in a sum of ₹ 52, 32, 933/- against one M/s. A.B.Shah c/o Manubhai Maneklal. The 2nd respondent in that application was DMPL. In that case notice was issued to the respondent no.1, however, the respondent no.1 chose to remain absent vide an order dated 20th October, 1999, (S.H.Kapdia, J. as he then was) the application came to be allowed on the basis that the respondent no.2 had pursuant to an order passed in MP -86/93 disclosed on oath that a sum of ₹ 52, 32, 933/- was outstanding and receivable by the 2nd respondent from M/s. A.B. Shah. Later a demand was made upon the M/s. A.B.Shah seeking confirmation that the payment was due and directing the 1st respondent to make payment into the attached a/c of DMPL. However, M/s. A.B shah failed and neglected to reply and based on the books of account of respondent no.2, a decree came to be passed for want of written statement since the averments in the petition w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld file examination in chief on 2nd December, 2016, Advocates for respondent no.1 stated that they have applied for discharge. On 7th April, 2017 a new Advocate appearing on behalf respondent no.1 contended that he had received fresh instructions to come on record and he sought time to intimate all the parties whether 1st respondent intended to lead evidence. Time was accordingly granted. However, on 21st April, when the matter was listed the 1st respondent s Advocate were absent. Upon notice they appeared and stated that the 1st respondent will be leading evidence and then affidavit would be filed. However, unknown to the learned counsel, the affidavit of evidence on behalf of the 1st respondent was already on record. Strangely on 9th June, 2017 she sought further time to file an affidavit of evidence. Time was extended and later it was found that an affidavit of 14th November, 2016 is already on record and the learned counsel for respondent no.1 stated that the 1st respondent did not intend to lead any further evidence. The matter was thereafter listed on 14th July 2017. On 18th August, 2017, the Advocate for the 1st respondent who were then recently appointed, again sought leav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time to time. 44. On 3rd August, 2018, in the midst of hearing parties, it was pointed out by counsel that they had not sought inspection of documents filed by one another. Although two parties had filed affidavits of documents referred to above, they did not offer inspection of documents to the others. The documents had not even been filed in Court. In the compilations as required, respondent no.1 did not present himself for cross examination and the Advocates concerned had withdrawn their appearance. The Court recorded that on 25th January, respondent nos.2 to 4 had made a statement that they did not intend to lead any evidence. Respondent no.1 did not thereafter appear despite several attempts to serve him. Thus, further notices were issued to the respondent no.1 informing him that the Court would be constrained to issue warrant to secure his presence. Fresh notice was directed to be served through Commissioner of Police and through local police station at Bopal, Gujarat whereby he was believed to be having his address. On 25th September, 2018, an email was received by the Officer on Special Duty of the Court from Kunal Vakil and on behalf of Rajen C. Vakil, proprietor of T.H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax Department save and except, copy of the cash book, which was provided to respondent no.2 by the Income Tax Department on 7th May, 2019 and which compilation had been filed in Court on behalf of respondent no.2. On 26th July, 2019, Mr. Mehta appearing on behalf of the 4th respondent, had submitted that upon scrutiny of the documents, the 4th respondent had no further submission to make except that none of the documents relied upon by the respondents were admitted in particular cash book for financial year 1991-92 and that since no evidence had been led, these documents could not be read in evidence. The parties concluded their submissions on 27th September, 2019. 46. The issues in the above MP are largely identical to the issues framed in MP-4 of 1996. The main difference being the names of the parties and the amounts to which reference is made. The 1st issue is whether the respondent no.1 proves that the claim was barred by the law of limitation. No submissions have been made on behalf of respondent no.1 on this aspect. Although Mr.Mehta did support the Respondent no.1 s plea of the claim being barred, the issues have not been recast but considering the defence in Res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Department even these consists of cash book for the relevant period. Neither the Cash Book nor its contents have been proved save and except to state that copies have been produced by the Income Tax Department at the direction of this Court. There is no primary evidence. Even assuming the entries to be correct, in the course of the submissions, the Advocates for respondent no.2 have only relied upon certain entries in the cash book. These entries appear on various dates. A perusal of these entries reveal that the description of the amounts said to have been paid to T.H. Vakil by the 2nd respondent do not figure under the caption of Loans andadvances . The cash book for the period December 1991 and in particular 9th December to 11th December, 1991, reveals several entries under a heading loans and advances . The name of TH Vakil does not figure in that list. On the other hand, on page between June 17 and June 22, 1991 the cash book entries makes a mention of T.H. Vakil s account and a remark which reads as following; Following cheques issued . The particulars of 3 cheques are then mentioned total into ₹ 19, 13, 205/- but save and except for mentioning that the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be issued under the heading T.H Vakil s Account bearing cheque no.820 dated 22nd October, 1991. Cheques are also seen to be issued to V. Krishnakant and A.B Shah. In December 1991, 2 cheques for ₹ 5 lakhs and 9 lakhs each are seen to be issued on 6th December, 1991 to T.H Vakil. Several other payments are also made on the said date. The entry of 9th December to 11th December, 1991, in the cash book, does make reference to the heading loans and advances 9 party s names appear. These are small figures of loans and advances ranging from ₹ 100 to 1000/- seems to have been deducted from staff salary of November 1991. Nevertheless, these are under the heading loans and advances . No mention is made of the 1st respondent under this heading. Thus, it seems that although the respondent nos.2 3 sought to rely upon the cash book, it is of no consequence the cash book has not been proved as required in law. 51. The requirement of proving books of account is well recognized. The burden of proof lies on the party who would fail if no evidence was led by either side. It is also a cardinal rule of evidence and as embodied in Section 34 of the Evidence Act that entries in b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e evidence and if any portion of the affidavit did not confirm to be exact requirements, it was not examination in chief and could not form part of the evidentiary record. That apart the Court also considered whether an affidavit filed pursuant to Order 18 Rule 4 could be ordered to be withdrawn and this aspect was answered in the negative and rightly so. Once an affidavit is filed, there is no question of withdrawing the same. It is a statement on oath by the witness deposes to facts and in support of his plea and the issues that he seeks to prove. The judgment in terms holds vide order 18 Rule 4 states firstly what is stated must constitute examination in chief and must be stated in the form of an affidavit. The affidavit cannot contain issues and references to fact which do not conform to these requirements. The reliance placed on this judgment by Mr. Chandran is on the basis that no evidence affidavit under Order 18 Rule 4 can be allowed to be withdrawn. This aspect does not arise in the present case. The affidavit is very much on record but the witness has not identified his signature or deposed to the truth of the contents. The decision further holds that evidence affidavi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Maneklal carrying on business as sole proprietor of the said firm had dealings with respondent nos.2 3. It was apparently Manubhai Maneklal who caused Rajen Vakil to get into the discounting business along with Suresh N Shah and M/s. V. Krishnakant. Suresh Shah is said to have managed these businesses on behalf of T.H Vakil and the others as well using bank accounts held by T.H Vakil. Inter alia T.H Vakil to deposit cheques issued by respondent no.2 and facilitating withdrawal of cash through the employees of Suresh Shah. The cash was then said to have been delivered to Suresh Jajoo and so on and so forth in each of these cases. The affidavit does not in any manner contain admissions except to the extent that Rajen Vakil, Suresh Jajoo, and T.B. Ruia were all summoned by the Income Tax Authorities and the Enforcement Director in relation to business of respondent no.2. 54. Contents of this affidavit of evidence have already been dealt by me in detail and none of the statements therein would be supportive of the case of respondent no.2 or 3. The only material admission is the statement of cheques received from respondent no.2 and these are set out in Exhibit 1. The fact that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h 6 of the petition. It is for the 2nd respondent and/or the 3rd respondent to have provided the petitioner with sufficient material on the basis of which this claim could proceed. Let me hark back to the order dated 5th October 1996 in the above petition in which the Court observes that the claim of the Custodian is based on a disclosure made by the 2nd respondent DMPL and it is for the 2nd respondent to come up with such evidence as appropriate in order to establish that claim. The 2nd respondent has not led any evidence. The affidavits of Dangarwala filed in these proceedings are of no avail. The only attempt in all these affidavits is to obfuscate and that will not help the petitioner to prove the allegations of illegal fraudulent diversion of monies from DMPL and its payment if any to respondent nos.2 or 3. The question of the 1st respondent therefore getting a valid discharge based on these averments cannot arise. In the circumstances the answer to issue no.7 must be in the negative and it is accordingly answered in the negative. In view of the answer to issue no.7 above, I am unable to find in favour of the petitioner -Custodian on issue no.8. As a result, I am of the vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of a disclosed principal viz. respondent no.3. In the aforesaid circumstances, Ruia himself being a party respondent to the present proceedings. This respondent as the agent of disclosed principal is therefore not personally liable for the debts of respondent no.3. (emphasis supplied). This limited admission helps in establishing the fact that respondent no.4 was indeed an agent to the extent admitted. However the consequences of such agency are something that we will have to consider. Meanwhile Issue no.10 is answered in the affirmative. 59. Issue nos.11 12 can be conveniently dealt with together. Issue no.11 requires the 1st respondent to establish that after encashing the cheques it had paid or repaid the amounts of cheques to respondent no.4-Jajoo after deducting the discounting commission of the rate of 1%. Issue no.12 requires the 1st respondent Vakil to establish that he had paid/ repaid the amounts to respondent no.4-Jajoo as an agent/representative of respondent no.2. Effectively the burden is upon T.H. Vakil to establish that the amounts of the cheques were parted with to the respondent no.4 after deducting his commission. Issue no.12 would depend on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich respondent no.1 alleges were paid to him. In this behalf, respondent no.1 has not led evidence to establish his positive case that any amount was paid by him to respondent no.4 in cash and for being paid to respondent no.2 and/or 3. Only if respondent no.1 establishes payment of cash to respondent no.4 to the extent withdrawn by him from the proceeds of the cheques said to have been issued to the respondent no.1 firm by respondent no.2 would the second part of issue no.13 arise inasmuch as, if such payment was established respondent no.4 would be require to establish the utilization of those funds but in the case at hand, there is no evidence of respondent no.4 having received these funds. Thus, in this petition, absent any such direct evidence it is not possible to hold that respondent no.4 paid over the amounts to respondent nos.2 and/or 3 in any capacity. Issue no.13 is therefore answered in the negative for want of any evidence. In this behalf, it may be apposite to mention that although counsel before me have repeatedly made submissions to the effect that the trial of MPs-nos.2, 3 and 4 were being carried out or was proceeding in common what the record reveals is that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ehalf of respondent nos.2 3 for cheque discounting. In my view, absent any direct evidence that respondent no.4 had been engaged to collect cash amounts and also acted as authorized signatory it is not possible to hold in favour of the petitioner. The only admission of respondent no.4 which comes to the assistance the petitioner is that the respondent no.4 admits to having been a power of attorney holder and to that limited extent an agent. However, his stated case is as is the case of the respondent no.4 is that respondent no.4 was agent for disclosed principal viz. respondent no.2. In which case he may not be liable by virtue of the law of agency and in particular Section 230 of the Contract Act. The presumption of contract to the contrary may not arise in view of disclosure as aforesaid. There is no evidence on record to establish that respondent no.4 had been engaged to collect amounts in cash from the cheques being discounted. I must observe here that the discounting of cheques itself has not been established by the 1st respondent. It was incumbent upon 1st respondent to establish that he had indulged in cash discounting business at the instance of Suresh N. Shah Others an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt no.4. This issue is liable to be answered in the affirmative in view of the numerous averments in relation to the role played by the 4th respondent Suresh Jajoo considering the fact that he is admittedly power of attorney holder of respondent no.2/3 has been involved in the share trading transactions of respondent no.2 a fact that this admitted by respondent no.2 as well in his affidavit filed in these proceedings in particular. 68. In fact Narendra Dangarwala has in his affidavit dated 19th January, 1996 denied that 1st respondent had paid back any amounts in respect of the cheques to the company or to its director Ruia through Suresh Jajoo the respondent no.4. He denies that Suresh Jajoo is was or had ever acted as agent of the company DMPL in respect of the transactions in question viz. the encashment of the cheques and alleged payment by cash. The deponent further states that in the ordinary course of business DMPL had advanced diverse amounts to Suresh Jajoo and members of his family which were duly repaid and respondent no.2 had purchased and sold shares, stock debentures and advance short term finance and securities through the aforesaid Manubhai Maneklal and for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m can only be considered since the evidence affidavit has been filed in Court and having been taken on record forms part of the evidentiary record. However, his positive case that the amounts had been paid over in cash to the other respondents have not been established. In that view of the matter, I find that the petitioner and/or respondent no.2 are not entitled to sue on the basis of such a plea that the transactions were illegal specially since the transactions have not been clearly established. There is no evidence of what the transaction really was. The true nature of the transaction is not brought out, apparently in order to layer and shield purpose of routing of funds. Issue no.19 is therefore answered in the negative. 70. As far as issue no.20 is concerned, the plea that the petition is barred by principles of res judicata or constructive res judicata has not been made out. It is only to be stated to be rejected. Nothing on record indicates that the issues in the present petition were substantially in issue in other proceedings between the same parties. Merely because MP 64 of 1994 was filed and was withdrawn is no reason to question the maintainability of the present pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot entitled to any relief. Issue no.22 therefore must be answered in the negative. 72. Before concluding, I may make reference to the deposition of Suresh Nandlal Shah in companion Miscellaneous Petition no.4 of 1996. Shah is said to be the brother-in-law of Rajen C.Vakil proprietor of respondent no. 1 in this petition. The evidence of Suresh Shah is prolix, commenced in 2007 and concluded only on 27th October, 2015. It will be useful to make brief reference to that case since the parties have made several references to the transaction forming subject matter of these petitions. Issues in MP- 4/96 framed on 22nd April, 2003 are also 22 in number and largely mirror the issues in this petition. On 24th November, 2006, 1st respondent therein Suresh Shah stated that he wished to lead evidence and the Court appointed a Commissioner on that date. Thereafter the matter was repeatedly adjourned between 24th November, 2006 and 13th February, 2015. On several occasions time to complete recording of evidence was extended. On 21st August, 2015, the mater was adjourned to 25th September. On that date, the above MP was tagged with MP-3 and 4 of 1996 on 11th December, 2015 when the Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from M/s. T.H.Vakil involved in any manner in respect of the cheque discounting transactions? A. No person from M/s. T.H Vakil was involved. Q.402. Was anybody from M/s. V. Krishnakant involved in any manner in respect of the cheque discounting transactions? A. No person from M/s. V. Krishnakant was involved. Q. 403. Apart from you, in your office who was involved in these cheque discounting transactions relating to M/s. T.H. Vakil and M/s. V. Krishnakant? A. No one. V.V. Shah, D.B. Patel and K.C. Shah were depositing cheques and withdrawing monies from the bank. Q. 500. Was D.H. Nanavati, your Advocate in Petition no.64 of 1994? A. Yes. Q.501. Do you remember who were the Advocates for Manubhai Maneklal, T.H.Vakil and V. Krishnakant in Petition no.64 of 1994? A. D.H. Nanavati. Q.502. Can you tell us who gave the instructions to D.H. Nanavati to prepare the affidavits and to contest Petition no.64 on behalf of the respondents i.e. Manubhai Maneklal, T.H.Vakil, V. Krishnakant and yourself? A. I used to give instructions for myself, T.H.Vakil and V.Krishnakant. I do not know who used to give instructions for Manubhai Maneklal. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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