TMI Blog2020 (8) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... t Sh. V.K. Sharma had no authority to execute the said documents and to receive any consideration for and on behalf of the said companies in cash. The report unequivocally concludes that Sh. V.K. Sharma has indulged in fraudulent conduct and has siphoned off the company s money. Based on these two reports, it is quite clear that the transaction which is claimed by the applicant company cannot be accepted. Regarding the objections taken to the Thareja Committee report by the applicant, the objections are misplaced. There is no dispute that the agreement to sell and power of attorney were duly executed and registered. The issue is as to whether the consideration was actually paid given the fact that it is claimed to have been paid in cash. The Thareja Committee report concludes that the relevant documents, namely, the cash book, ledger, etc. have not been placed on record and concludes that the transaction lacks bona fide. This conclusion is supported by so many other surrounding facts and circumstances which render the objections raised by the applicant to the Thareja Committee Report completely irrelevant and without merits. The transaction as alleged by the applicant is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ders Ltd. is that the applicant purchased certain lands in question from the companies of the JVG Group through Sh. V.K. Sharma who was the authorised signatory. The applicant claims to have purchased these lands from JVG Hotels Ltd., JVG Housing Finance Ltd., JVG Foods Ltd., JVG Farm Fresh Ltd. and JVG Steels India Ltd. These lands are located in District and Tehsil Gurgaon, Haryana and located at Village Sindhrawali or Village Bhorakhurd. Full details of the description of the lands and the consideration paid are spelt out in Annexure A-2 of the application. All the seller companies belong to the JVG Group of Companies which comprise of large number of such companies. It is claimed that a number of these companies have gone into liquidation but at the time of purchase of the land, the companies noted above were not under liquidation. All these purchases were made during the period from May 2002 to July 2002. The entire consideration for the alleged purchase of the lands has been paid in cash allegedly to Mr. V.K. Sharma, the ex.-director of the JVG Group of Companies. Power of attorney and agreement to sell were executed and duly registered with the appropriate authorities during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the said Tirupati Cylinders Ltd., the applicant sought to withdraw. 6. On 10.03.2006, this court disposed of CA No. 1171/2003 with the direction again to the applicant Company to appear and put its claim before the G.P. Thareja Committee, the One Man Committee constituted by this court. 7. It is pleaded that before the Thareja Committee, the applicant filed all the relevant documents to prove its title. The applicant also filed two certificates i.e. a certificate dated 01.05.2006 issued by State Bank of Bikaner Jaipur, Muzaffar Nagar (U.P.) stating that the applicant Company had withdrawn an amount of ₹ 9 lakhs on 17.05.2002 and an amount of ₹ 7.50 lakhs on 20.05.2002. Another certificate was filed of PNB, Preet Vihar dated 04.05.2006 wherein it was stated that the applicant Company had withdrawn a total of ₹ 36 lakhs by various cheques during the period from 17.05.2002 to 23.05.2002. Hence, proof of cash in hand to pay the stated consideration of about ₹ 45 lakhs is said to have been shown. 8. It is stated that the Thareja Committee never gave/served a copy of its order on the applicant. The applicant thereafter filed CA Nos. 72/2011 and 73/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce Ltd. though they may have been purchased in the names of different companies like JVG Housing Finance Ltd., JVG Farm Fresh Ltd., JVG Hotels Ltd. JVG Steels India Ltd., JVG Foods Ltd, etc. It is further stated that the copies of the resolution of JVG Housing Finance Ltd, JVG Farm Fresh Ltd, JVG Steels India Ltd., JVG Foods Ltd. and JVG Hotels Ltd. adduced in the application reflect the registered office and head office on the date of the resolution i.e. May 2002 at 1, Ashoka Park, Main, New Rohtak Road, New Delhi and B-22, Ansal Chambers-I, Bhikaji Cama Place, New Delhi. It is pleaded that the OL in the month of June 1998 had taken possession of the property at New Rohtak Road and Ansal Chambers much before passing of the said resolution. The resolutions are hence forged. 11. A reply has also been filed by Sh. V.K. Sharma, Ex-Chairman of JVG Group of Companies. In the said reply, it is stated that all the properties of the JVG Group of Companies have been purchased from the finances/funds of JVG Finance Ltd. (in liquidation). It is denied that the applicant Company had paid any consideration to Sh. V.K. Sharma or that any land had been sold to the applicant - Tirupati Cylinde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ex. X-1 to Ex. X-27. It is claimed that these were never shown or supplied to the applicant Company. Hence, the report has been passed contrary to the principles of natural justice. (ii) It is claimed that the Thareja Committee went on the basis of evidence of one Sh. Sushil Kumar Gupta who allegedly helped the JVG Group of Companies to buy the land in question. The applicant was never informed about the investigation or examination of the aforesaid Sh. Sushil Kumar Gupta with respect to the applicant s claim. No opportunity was also granted to the applicant Company to cross-examine Sh. Sushil Kumar Gupta. Hence, it is claimed that the procedure adopted was one sided. (iii) At no point, did the Thareja Committee summon Sh. V.K. Sharma, Ex.-Managing Director of JVG Group of Companies. The Committee never asked Sh. V.K. Sharma as to whether he had received money/consideration from the applicant company. (iv) It is further stated that in spite of producing two certificates dated 01.05.2006 and 04.05.2006 issued by the concerned branch managers of the banks with regard to withdrawal of money paid by the applicant to Sh. V.K. Sharma, the said branch managers were never s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prevailing rates in 1996 were many times lower than what was alleged by Sh. V.K. Sharma. (v) It is further pleaded that the Committee never directed Sh. V.K. Sharma to appear and testify. It is pleaded that had Sh. V.K. Sharma entered the witness box, he could have been examined by the Committee and confronted with the transaction. (vi) It is further pleaded that the Committee examined Sh. Sushil Kumar Gupta and came to a conclusion regarding the undervaluation of the property. No opportunity was given to the applicant to cross-examine Sh. Sushil Kumar Gupta. (vii) It is further pleaded that the applicant had submitted a copy of its cash book at the relevant time which demonstrates that cash money was paid by the applicant to the JVG Group as consideration for executing agreement to sell and GPA. It is pleaded that these facts have been ignored by the Committee. (viii) It is further pleaded that the Committee never communicated to the applicant that the certificates from the bankers which have been supplied showing withdrawal of money were unworthy of credence. Had such a view been placed before the applicant, the applicant would have taken remedial measures. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... XIIIth Report of the Thareja Committee and its conclusions. Certain observations of the Thareja Committee are quite revealing. The observations are as follows:- (i) The Committee notes that Sh. Dinesh Goyal s statement was recorded. He could not tell about the accounts and in fact, he deposed that the position of the account will be explained by the accountant. He did not bring the original documents which were executed in lieu of the payments made. He also could not tell what amount was paid in respect of each particular transaction. In his statement made on 28.10.2005, Mr. Dinesh Goyal admits that the land is not divided and was purchased in a combined Khewat. The properties were also in the joint names of the alleged sellers. He also admits that the land is not in the names of the applicant Company. He also admits that he has not brought the original documents which were got executed from Sh. V.K. Sharma on behalf of different Companies or the original Khewat. (ii) The Report looks at the agreement with JVG Hotel Ltd. It is pointed out that the said property was purchased in the name of JVG Hotels. Ltd. for a consideration of ₹ 29.55 lakhs. The consideration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om whom the claimants is purchasing but also for what value the land was acquired by such company. If the land was agreed to be sold at a meagre consideration, what was the reason for the same. It cannot be denied that the land has been agreed to be purchased at the meagre value. In absence of any reason in the agreement to sell, I find that submissions of Sh. Ganguly cannot be accepted. It is submitted by Sh. Ganguly that the claimant had agreed to purchase the land during May 2002 to July 2002. The Claimant had to obtain the permission on account of the order dated 03.09.2002. There was no directions that the land of the Companies which are not in liquidation cannot be sold. Further, Sh. Ganguly submitted that the claimant should not be penalized and victimized for the wrong misconduct committed by Sh. V.K. Sharma, Ex-Chairman of the Companies under liquidation. When confronted with the order of the court dated 3.9.2002 that the court has noted the complaints about the sale of the land and made observation regarding piercing the corporate veil. Sh. Ganguly submitted that such an inquiry is beyond the jurisdiction of the Committee. He placed reliance upon Indian Law Reporter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re having been purchased from the funds of M/s JVG Finance ltd. as disclosed in exhibited in EX-1 EX-17 are the properties of companies under liquidation to be taken into control by the official liquidator in the interest of the bonafide depositor/creditors of the Companies under liquidation. Recommendation for the disposal of the application is made to the Hon ble Court, that the prayer of the claimant has no merit and cannot be granted. Report with respect to application No. 1171/2003 is submitted to the Hon ble Court for directions/orders accordingly. On the application and also for directions to the Official Liquidator. 23. The Thareja Committee hence concludes that an amount of ₹ 22.80 crores from which the lands in Tehsil Gurgaon, Nuh, Tavru and Tizara were purchased was provided from the accounts of JVG Finance Ltd. and was transferred from the account of JVG Finance Ltd. to the account of Sh. Sushil Kumar Gupta. A total of ₹ 22.80 crores was transferred. Properties were purchased in the name of various companies of JVG Group. The report comes to the conclusion that the land was purchased by Sh. Sushil Kumar Gupta in the name of various JVG Group of Comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10.06.2008 7,31,250 2,00,000 Sidhrawali Bohra Khurd 4. JVG Hotels Ltd. 32 8 23.5.2002 8,10,000 Sidhrawali 5. JVG Steels India Ltd. 15 23.5.2002 18,750 Sidhrawali Total 44,91,250 4.1.6 Shri Dinesh Goyal filed an application on behalf of the Company M/s. Tirupati Cylinders Pvt. Ltd. under Rule 9 of the Companies (Court) Rules, 1959, in the matter of RBI vs. M/s. JVG Finance Ltd. Company Petition No. 265 of 1998. It is pertinent to mentioned here that the Delhi High Court passed an order on 3/9/2002 (Annexure-23) to the effect that prior to effecting any further sale, alienation, transfer of creation of any third party interest in any assets of the JVG Group of Companies, permission of this court should be obtained. However, all the deals were ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e interests of JVGFL and its stakeholders has in fact, indulged in siphoning off the company s money in connivance with Smt. Namrata Krishan. He has fabricated false documents with the help of Smt. Namarta Krishan on behalf of other JVG group Companies for sale of land of these companies. He has also kept whole consideration with himself. JVGFL had collected these funds from innocent public. 25. Hence, the SFIO report notes that the documents/details submitted by Sh. Dinesh Goyal have been examined. It also concludes that the resolution authorising Sh. V.K. Sharma to make agreement to sell and GPA on behalf of the aforesaid five companies of the JVG Group is fabricated. The date mentioned in the resolution is wrong as on the said date, no meetings were held as per the company record. SFIO records the statement of Sh. V.K. Sharma that a deal was made with Tirupati Cylinder Ltd. but the same could not be completed. However, the report concludes that Sh. V.K. Sharma being a director was duty bound to protect the interest of JVG Finance Ltd. and its stake holders. Instead, he had indulged in siphoning off funds of the Company and fabricated false documents. The report concludes th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hareja Committee. According to them, the procedure followed by the Thareja Committee was illegal and contrary to the principles of natural justice. The Committee came to a conclusion that the property in question has been sold to the applicant at throw away rates without giving an opportunity to the applicant to summon the revenue authorities or to even cross-examine Sh. V.K. Sharma or Sh. Sushil Kumar Gupta. It is also pleaded that exhibits X.-1 to X-27 on the basis of which the value of the property has been ascertained by the Committee were not provided to the applicant. On the SFIO report, the learned counsel for the applicant had strenuously urged that the report accepts the fact that Sh. V.K. Sharma has made the GPAs and agreement to sell in favour of the applicant and that the applicant has also paid consideration to Sh. V.K. Sharma. It is pleaded that these conclusions show that the stand of the applicant has been accepted by SFIO. 29. The argument raised by learned counsel for the applicant regarding the SFIO report supporting the case of the applicant is entirely misplaced. The report in para 4.1.8 clearly spells out that the resolution authorising Sh. V.K. Sharma to m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be enough evidence with the applicant to demonstrate their possession on the land, namely, as to whether they are carrying out any farming on the land or they are using it for some commercial purpose or that they have rented out the property. The entire application and the submissions of the learned counsel for the applicant are completely silent about the same. There is no attempt to demonstrate that the applicant at any stage exercised any rights as a title owner for the property in question for the last 18 years/ as a person in physical possession of the property. In the last hearing, it was urged that the land is being used for agriculture purpose. However, nothing to support this plea has been placed on record. Any such user of the property as claimed would have generated income for the applicant company. Such income would be reflected in its books of account/balance sheets/income tax records. None of these documents has been produced to show the manner in which the property is being utilized/is generating income for the company. (b) I also cannot help noticing the conduct of the applicant. The applicant has failed to place on record the income tax records and balance sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the court taking into consideration the pleadings of the parties and by deciding whether any document/evidence, withheld, has any relevance at all or omission of its production would directly establish the case of the other side. The court cannot lose sight of the fact that burden of proof is on the party which makes a factual averment. The court has to consider further as to whether the other side could file interrogatories or apply for inspection and production of the documents, etc. as is required under Order 11 CPC. Conduct and diligence of the other party is also of paramount importance. Presumption of adverse inference for non-production of evidence is always optional and a relevant factor to be considered in the background of facts involved in the case. Existence of some other circumstances may justify non-production of such documents on some reasonable grounds. In case one party has asked the court to direct the other side to produce the document and the other side failed to comply with the court's order, the court may be justified in drawing the adverse inference. All the pros and cons must be examined before the adverse inference is drawn. Such presumption is permissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompanies and was involved in some of the transactions relating to JVG Group of Companies/functioning of the said group. He is not a bona fide third party dealing with the JVG Group/the five companies in question for a bona fide sale of the properties. (f) I also cannot help noticing the manner in which the applicant Company has been lingering along with its so called claim to the title of the property. On 22.07.2004, this court had referred the matter to the Thaeja Committee to give its recommendations on the claim raised by the applicant Company. On 24.11.2005 before the Thareja Committee, a statement was made on behalf of the applicant that they do not wish to pursue the matter and sought withdrawal of the petition. Subsequently, on a request made by the applicant Company, on 10.03.2006 this court permitted the applicant to approach the Thareja Committee to substantiate its claim again. The Thareja Committee gave its XIIIth Report dealing with the claim of the applicant on 05.02.2007. It was in 2011 that the applicant, four years after the report had been given sought to move the court claiming that it had not received a copy of the report of the Thareja Committee dated 05.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t any limitation of liability, for all or any of the debts or other liabilities of the company as the Court may direct. On the hearing of an application under this sub- section, the Official Liquidator or the liquidator, as the case may be, may himself give evidence or call witnesses. (2) (a) Where the Court makes any such declaration, it may give such further directions as it thinks proper for the purpose of giving effect to that declaration. (b) In particular, the Court may make provision for making the liability of any such person under the declaration a charge on any debt or obligation due from the company to him, or on any mortgage or charge or any interest in any mortgage or charge on any assets of the company held by or vested in him, or any person on his behalf, or any person claiming as assignee from or through the person liable or any person acting on his behalf. (c) The Court may, from time to time, make such further order as may be necessary for the purpose of enforcing any charge imposed under this sub- section. (d) For the purpose of this sub- section, the expression assignee includes any person to whom or in whose favour, by the directions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R 1987 SC 1321 the Supreme Court, while dealing with a case under the Customs Act, 1962 observed that An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the Community. A disregard for the interest of the Community can be manifested only at the cost of forfeiting the trust and faith of the Community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the National Economy and National Interest. 36. Reference may also be had to the works of the learned Author 'A Ramaiya, Guide to the Companies Act, (17th Edition 2010)' where while dealing with Section 542 of the Act, it is stated as follows:- A personal can be held liable for fraudulent trading, if he assisted in the commission of the fraud. It is not necessary that he should be actively involved in the management of the company. The court said that as a matter of ordinary language the section was not restricted to those who performed a managerial role. Moreover, the legislative history of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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