TMI Blog2023 (1) TMI 1192X X X X Extracts X X X X X X X X Extracts X X X X ..... ngh ] Member ( Judicial ) And [ Ms. Shreesha Merla ] Member ( Technical ) For the Appellant : Appeared but not marked appearance For the Respondent : Mr. Arun Kathpalia , Sr. Advocate with Mr. Aditya Dhupra , Mr. Kshitij Wadhwa , Advocates JUDGMENT Justice Anant Bijay Singh ; The instant Appeal was heard together with Company Appeal (AT) Nos. 105, 106, 115, 116, 117 and 203 of 2020. 2. Company Appeal (AT) No. 202 of 2020, in this Appeal, the Appellant has challenged the legality of the impugned order dated 03.02.2020 passed by the National Company Law Tribunal, New Delhi Bench in CP No. 172/271-272/ND/2018 whereby the winding up petition filed against the Respondent company was dismissed with following orders: Mr. R.K. Singh, Chartered Accountant of the respondent company has placed reliance on the order of the Hon ble NCLAT dismissing the appeal filed by the RoC in a connected matter, which was based on identical facts and documents. In view of the same, it is pressed upon this Bench that the aforesaid decision of the Hon ble NCLAT upholding the decision of this Bench in the matter of ROC V/s. M/s. Apoorva Leasing Finance And Investment Company Ltd. s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivity barring the share capital infusion and consequent investment. NKS does not have any fixed assets as per the balance sheet for the period ending on 31.03.2011 and has recorded a loss to the tune of Rs. 8.41 lakhs but still commanding huge share premium. d. There appears to be circular flow of money to the tune of Rs. 1000 crore each amongst the following set of companies:- Sital Holdings Private Limited (earlier known as Quality Cyber Tech Private Limited) (SHPL). Avil Financial Services Limited (AFSL) Carewell Exim Private Limited (CEPL) Solomon Holdings Private Limited (SOHPL) Legend Infoways Private Limited (LIPL) Microland Developers Private Limited (MDPL) Utsav Securities Private Limited (USPL) Aquarius Fincap Credits Private Limited (AFCPL) Shalini Holdings Limited (SHOL) e. Identities of the persons who are behind the whole trail of investments/web of cross investments in various companies could not be found out. f. All the companies and persons involved appear to be working in concert to create share capital, share application money, share premium and reserves and surplus in these companies just by creating accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... companies, SFIO team learnt that RBI had conducted inspection in some of the Company under Investigation (CUI) and observed that most of these companies including the Respondent company were carrying on Non-bank Financial Institution (NBFI) kind of activities without obtaining valid Certificate of Registration. SFIO also learnt that the Income Tax Department had conducted search and seizure operations at the business premises of some of the companies under investigation including the residential premises of S.K. Jain Virendra Jain (Jain Brothers). Numerous incriminating documents were seized by the ITD and assessment proceedings have since been completed on the basis of these documents and post search investigations. ITD has recorded findings that Jain Brothers had been functioning as accommodation entry operators with/through 49 companies/entities under their control. The Investigation revealed that Jain Brothers were the Directing mind and will behind the functioning of all 49 companies including the Respondent herein. The observation made during the investigation are summarized as under to substantiate the above statement:- a) The primary records in the form of daily cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... beneficiary. g) Money trail showed that cash was initially deposited with six entities Ram Trading, Bee Dee Enterprises and four entities controlled by Jain Brothers: Tirupati Fabrics, Erode Clothing Empire, Roshan Lal Lalit Kumar Co and Chhagan Lal Mukesh Kumar Co. Subsquently funds were transferred to Tulika Securities Pvt. Ltd. (TSPL) by cheque, which was further transferred to SHL, USPL and SOHPL. From these three entities controlled by Jain Brothers funds were transferred to Jagat Projects Ltd. as share subscription. h) Documents pertaining to the subscription of shares in Jagat Projects by entities controlled by Jain Brothers were found from the residence of Sh. Satisw Pawa, director, Jagat Projects Ltd. during search by the ITD. i) Call records in the custody of ITD and reported in the assessment order of Jian Brothers and Jagat Projects Ltd. show regular conversation between Rajesh Aggarwal S.K. Jain, Ravinder Goel Rajesh Aggarwal and Sant Lal Aggarwal Rajesh Aggarwal, though these persons have denied to have been in touch with each other. j) Admission made by Rajesh Aggarwal during search at his residence by the ITD on 18.01.2011 regarding role played ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate Affairs obtained the opinion of the Ministry of Law Justice on the winding up of 49 shell companies. The Ministry of Law Justice had opined that 49 shell companies controlled by Jain Brothers were involved in providing accommodation entries to various beneficiary companies and it was agreed that the administrative Ministry may file the petition for winding up of shell companies before the NCLT. ix) Based on these other averments, the Appellant preferred petition being CP No. 172/271-272/ND/2018 before the NCLT with following reliefs:- a. Issue/pass necessary directions/orders for winding up of M/s Sri Amarnath Finance Ltd. in the public interest. b. Appoint Liquidator for taking over the assets of the Respondent company. c. Issue directions to the directors of the Respondent Companies to file statement of affairs showing the assets and liabilities with the Liquidator appointed by the Hon ble Tribunal. d. Direct the respondents to maintain status quo in respect of the properties of the company and the respondent company be prohibited from dealing with the funds of the company except with the prior permission of this Hon ble Tribunal. e. Restrain the responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e money laundering activities came into the light. Resultantly, SFIO was appointed for conducting the investigation. During the course of investigation of certain companies, it revealed that the Respondent company was also one of those companies which were being controlled by Jain Brothers for committing the organized crime of money laundering. The SFIO submitted its report on 31.03.2016 and gave its recommendation for initiating winding up petition against all those 49 companies which were found involved in the crime. 6. It is further submitted that the letter dated 29.08.2017 is the letter of sanction to the Registrar of Companies and it was issued after due discussion, deliberation and application of minds. However, the letter has been addressed to the Director, SFIO and a copy thereof has been sent to the petitioner but the perusal of the letter dated 29.08.2017 reveals that the purpose of addressing the Director, SFIO was only to request him to assist the ROC to file the winding up petition be deputing the concerned IO who had conducted the investigation. Further, there is no any prescribed format for granting sanction in a particular manner. The word sanction means officia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es promoted by Jain brothers and its adverse impact on the exchequer as well as on the economy. This order of the Tribunal will embolden the accommodation entry operators and purchasers of such accommodation entries like the present management in carrying out such activities in further also. Based on above submissions the impugned order is fit to be set aside and the Appeal be allowed. 9. The Ld. Sr. Counsel for the Respondent during the course of argument and in his reply affidavit along with written submissions and additional written submissions submitted that the Tribunal vide order dated 03.02.2020 dismissed the petition on both grounds lack of sanction as well as on merit. The Tribunal held that facts of this case are identical to the case which was dismissed by this Bench vide order dated 18.01.2019 in the case of Registrar of Companies Vs. Apoorva Leasing Finance Investment Company Limited and is now upheld by this Appellate Tribunal comprising of Hon ble three Member Bench in Company Appeal (AT) No. 88 of 2019 vide order dated 04.12.2019 which read hereunder: 15. This sanction order does not contain what are the allegations against the Respondent No.1 company an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he extent of a further period of 60 days. Hence, since the appeal has been filed beyond the maximum period that can be condoned under the proviso to Section 423, the appeal cannot be entertained and is accordingly dismissed on the ground of limitation. 3. However, since we have not entered upon the merits of the controversy, it only needs to be clarified that the order of the NCLAT, which had come to the conclusion that there was a violation of the principles of natural justice in adhering to the provisions of Section 272(4) of the Companies Act 2013, will not come in the way of the appellant taking recourse to the remedies available in law after following due process. 4. Pending applications, if any, stand disposed of. 11. It is further submitted that in view of the fact that the Hon ble three Member Bench of this Appellate Tribunal have dismissed the Appeal i.e. Company Appeal (AT) No. 88 of 2019 and the case of the Respondent is fully covered by this Judgment which have attained finality as the Civil Appeal has also been dismissed by the Hon ble Supreme Court, therefore, there is no merit in the Appeal, the instant Appeal may be dismissed. 12. After hearing the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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