TMI Blog2022 (12) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... es in the name of Vikram Bakshi in M/s Connaught Plaza Restaurants Pvt. Ltd apart from aforesaid 3100 shares. It is not the case of either of the parties that any more shares apart from 3100 shares are owned by Vikram Bakshi in M/s Connaught Plaza Restaurants Pvt. Ltd. Hence, the order dated 02.02.2016 issued by the Recovery Officer has to be held to be confined to 3100 shares. On the strength of said order, the Counsel for the HUDCO is not right in his submission that corporate veil of other company in which Vikram Bakshi is also shareholder should also be lifted i.e. Bakshi Holdings Pvt. Ltd. Present is not a case where there is any occasion for lifting corporate veil of other companies which has nothing to do with recovery of Ascot Hotels and Resorts Pvt. Ltd.. HUDCO is fully entitled to recover its dues which are owed by Ascot Hotels and Resorts Pvt. Ltd. On the strength of Recovery Certificate granted by Debts Recovery Tribunal being Recovery Certificate No. 330/2015, Recovery Officer in fact is proceedings to effect recovery and certain amount has already been deposited before the Recovery Officer including the value of 3100 shares of Vikram Bakshi, which were under restra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Petition No. 110(ND) of 2013 in the erstwhile Company Law Board seeking to specifically enforce some provisions of the Joint Venture Agreement and seeking reinstatement of Vikram Bakshi as Managing Director of the Company. (vi) The Company Petition came to finally decided by the National Company Law Tribunal, Principal Bench, New Delhi vide its judgment and order dated 13.07.2017. The proceeding of the meeting of the Board of Directors held on 06.08.2013 relating to re-election of Vikram Bakshi as Managing Director was set aside. The Board of Director of the Connaught Plaza was divided into 50- 50. Hon ble Mr. Justice G.S. Singhvi was appointed as Administrator with all powers. The McDonald s Corporation, Respondent No. 5 in the Company Petition was restrained from interfering with the functioning of Connaught Plaza and all its restaurants. (vii) Aggrieved by the order dated 13.07.2019, Company Appeal (AT) No. 275 of 2017 has been filed by the McDonald s India Pvt. Ltd. Ors. Appellants - McDonald s India Pvt. Ltd. Ors. prayed for setting aside of order dated 13.07.2017. (viii) Company Appeal (AT) No. 280 of 2017 has been filed by Vikram Bakshi and Bakshi Holdings Pvt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and/or interfere with the proposed Settlement; c) Upon the due filing of the Post-Closing Affidavit by MIPL on or after May 9, 2019: i. direct that the Impugned Judgment and the directions at paragraph 41 thereof stand set aside and the Learned Administrator appointed pursuant to the Impugned Judgment stands discharged; ii. dispose of Company Appeal (AT) No.275 of 2017 and Company Appeal (AT) No.280 of 2017 and all proceedings relating to the Impugned Judgment in the above terms without any order as to costs; and d) In the event of a failure of the proposed Settlement, and in the alternative to Prayer (c) above, dispose of the instant appeals on merits; e) Pass any other or further orders that this Hon ble Appellate Tribunal may be pleased to grant in the interest of justice. 4. On 13.05.2019, this Tribunal allowed the parties to file affidavit relating to settlement and matter was directed to be fixed on 15.05.2019. An I.A. No. 1599 of 2019 was filed by Housing and Urban Development Corporation Ltd. (hereinafter referred to as HUDCO ) on 13.05.2019 seeking intervention in the Appeals. This Tribunal on 15.05.2019, allowed the intervention of H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er into settlement, hence, applications were filed on 09.05.2019 before the Debts Recovery Tribunal-II, Delhi, where order was passed on 09.05.2019. On the strength of aforesaid pleadings, following prayers have been made in I.A. No. 1600 of 2019: a) Direct the parties to this Appeal to furnish to the Applicant complete particulars and documents relating to the settlement, if any, arrived at between them; AND b) Director the Appellants and / or the Respondents to deposit the entire proceeds of settlement before the Ld. DRT-II, Delhi in RC No. 330/2015 for discharge of the liability towards the applicant; AND c) Such other order(s) as this Hon ble Tribunal may deem fit and necessary in the interest of justice. 6. On 18.09.2019, noticing the submissions of learned counsel for the HUDCO, this Tribunal directed that parties should not implement the agreement. The Appeals alongwith I.A. No. 1540 of 2019 and I.A. No. 1600 of 2019 were heard by this Tribunal on 16.11.2022 and orders were reserved. 7. Learned counsel appearing for the McDonald s India Pvt. Ltd. contends that both the parties in the dispute i.e. McDonald s India Pvt. Ltd. and Vikram Bakshi having e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that total share value of 3100 shares, which were attached and restricted to be transferred, has already been deposited before the DRT of which Rs.10 Crores has been withdrawn by the HUDCO, therefore, there is no question of violation of order passed by the DRT-II. Further proceeding of OTS in which Rs.60 Crores has already been transferred/ handed over to HUDCO, is pending consideration before Delhi High Court. HUDCO has no jurisdiction to oppose the settlement between McDonald s India Pvt. Ltd. and Vikram Bakshi, it having already taking steps for recovery of its dues as pertaining to Ascot Hotels and Resorts Pvt. Ltd., which is a third entity having no concern with issues between McDonald s India Pvt. Ltd. and Vikram Bakshi. 9. Learned counsel appearing for HUDCO opposing the submissions of learned counsel for McDonald s India Pvt. Ltd. and Vikram Bakshi submits that settlement arrived between the parties is contrary to orders passed by the Debts Recovery Tribunal in favour of HUDCO dated 02.02.2016 and 09.05.2019. 50 per cent shareholding of Connaught Plaza Restaurants Pvt. Ltd. which has been transferred under settlement was owned by Vikram Bakshi to the extent of 3100 shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned order and disposing of the Company Petition in terms as mentioned in the I.A. No. 1540 of 2019. The application I.A. No. 1540 of 2019 is being opposed by HUDCO which has filed I.A. No. 1600 of 2019. The question which need to be considered in these Appeals is as to whether HUDCO has made sufficient ground to reject I.A. No. 1540 of 2019. We need to recapitulate the case of HUDCO as has been delineated in I.A. No.1600 of 2019. 13. HUDCO has sanctioned a loan of Rs.80 Crores to a Company M/s Ascot Hotels and Resorts Pvt. Ltd. Vikram Bakshi was Promoter and full time Director of Ascot Hotels and Resorts Pvt. Ltd. Vikram Bakshi was Personal Guarantor to guarantying the repayment of the loan. Due to default committed by Ascot Hotels and Resorts Pvt. Ltd., account was declared NPA. OA No. 224 of 2013 was filed which was decided by DRT on 12.08.2015 holding that HUDCO is entitled to recover sum of Rs.68,62,91,032/- with interest until payment. Recovery Certificate No. 330/2015 was issued by the DRT. HUDCO put the Recovery Certificate in execution, in which Execution Proceeding I.A. No. 1010/2016 was filed by HUDCO. In the I.A. which was filed by the HUDCO in RC No. 330 of 2015 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no.6562 dated 09.05.2019 to the CD#3 4 and CD#3 4 are directed to file their response on the same with an advance copy of the same to the CHFI on or before the next date of hearing. 4. CD#3 is once again directed to not to transfer the attached shares vide order dated 02.02.2016 by this Forum and also file the details of the rate of the shares of CD#3 as on date. Let a copy of this order be given dasti to CHFI for compliance. Let this matter be listed on 13.05.2019 as already listed. 16. There is material on the record that insofar as 3100 shares held by Vikram Bakshi in Connaught Plaza Restaurants Pvt. Ltd, the amount corresponding to the share value has already been deposited before the DRT, an amount of Rs.10 Crores which has been withdrawn. 17. The contention which has been much pressed by learned counsel for the HUDCO is that the deposit of amount towards 3100 shares is not sufficient compliance of the order of the Recovery Officer. It is submitted that 50% shareholding in Connaught Plaza Restaurants Pvt. Ltd consisted of 1.06% shareholding by Vikram Bakshi (3100 shares) and 48.94% shareholding of M/s Bakshi Holdings Pvt. Ltd. (1,42,500 shares). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... altogether from the subscriber...; and though it may be that after incorporation the business is precisely the same as it was before and the same persons are managers and the same hands received the profits, the company is not in law the agent of the subscribers or trustee for them. Nor are the subscribers as members liable, in any shape or form, except to the extent and in the manner provided by that Act . Since then, however, the Courts have come to recognise several exceptions to the said rule. While it is not necessary to refer to all of them, the one relevant to us is when the corporate personality is being blatantly used as a cloak for fraud or improper conduct . (Gower : Modern Company Law - 4th Edn. (1979) at P. 137). Pennington (Company Law - 5th Edn. 1985 at P. 53) also states that where the protection of public interests is of paramount importance or where the company has been formed to evade obligations imposed by the law , the court will disregard the corporate veil. A Professor of Law, S. Ottolenghi in his article From Peeping Behind the Corporate Veil, to Ignoring it Completely says the concept of 'piercing the veil' in the United States is much mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of law by using the device of a corporate entity. In the present case, the corporate entity has been used to conceal the real transaction of transfer of mining lease to a third party for consideration without statutory consent by terming it as two separate transactions the first of transforming a partnership into a company and the second of sale of entire shareholding to another company. The real transaction is sale of mining lease which is not legally permitted. Thus, the doctrine of lifting the veil has to be applied to give effect to law which is sought to be circumvented. 27. In Victorian Granites (supra), it was observed:- 4. It is true that a facade of compliance of law has been done by P. Rama Rao and Magam Inc. for having the transfer of the leasehold interests had by P. Rama Rao made in favour of the latter. The best of the legal brains will be available to escape the clutches of law and transactions would be so shown to be in compliance of semblance of law. In that pursuit, payment of royalty and permits remained in the name of P. Rama Rao. The court has to pierce through the process, lift the veil and reach the genesis and effect. Article Page 20 20 39(b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... very Officer has to be held to be confined to 3100 shares. On the strength of said order, the Counsel for the HUDCO is not right in his submission that corporate veil of other company in which Vikram Bakshi is also shareholder should also be lifted i.e. Bakshi Holdings Pvt. Ltd. Present is not a case where there is any occasion for lifting corporate veil of other companies which has nothing to do with recovery of Ascot Hotels and Resorts Pvt. Ltd.. HUDCO is fully entitled to recover its dues which are owed by Ascot Hotels and Resorts Pvt. Ltd. On the strength of Recovery Certificate granted by Debts Recovery Tribunal being Recovery Certificate No. 330/2015, Recovery Officer in fact is proceedings to effect recovery and certain amount has already been deposited before the Recovery Officer including the value of 3100 shares of Vikram Bakshi, which were under restraint in the Recovery Officer s order. The fact that HUDCO is entitled to pursue its Recovery Certificate No.330/2015 cannot be a ground to reject I.A. No. 1540 of 2019 which has been filed by both the parties of the Company Petition No. 110(ND) of 2013, order passed in which Company Petition is under challenge in these Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
