TaxTMI 
TaxTMI 
2008 (4) TMI 501
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....00 for production of accused Nos. 1 and 2 before this court as despite service of notices, they have not remained present before the court. Accused Nos. 1 and 2 remained present along with their counsels on April 27, 2006. Mr. Manish J. Patel learned advocate appeared on behalf of accused No. 1 and Mr. Manoj N. Popat, learned advocate appeared on behalf of accused No. 2. Tune was prayed for, for the purpose of filing reply to the criminal case. Since the statement of affairs was not filed, this court has further passed order on August 8, 2006, directing all the three accused to remain personally present By this time, an appearance of Mr. Dharmesh V. Shah, learned counsel, is filed on behalf of accused No. 3. Accused No. 3 has filed his affidavit-in-reply on June 22, 2005, and additional affidavit was filed by him on April 1, 2006. The facts stated and averments made by accused No. 3 in his affidavit were denied by accused No. 2. This court has further ordered on September 27, 2006, observing therein that if the statement of affairs were not filed, straightaway the criminal case would be taken up for hearing on the next returnable date, which was fixed as October 6, 2006. Since, the....
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....s nil from M/s. Modi Exports in which accused No. 1 is a partner. The official liquidator has also asked accused No. 1 to furnish the details and evidence about the trans action of Rs. 50,00,000 received from Mr. Mohandas Adnani. If the amount was repaid to the said Mr. Mohandas Adnani, from which source the company had paid the amount, and on what basis settlement was arrived at. Since, no explanation was furnished with regard to the said transaction, official liquidator was of the view that the amount has been siphoned off or misappropriated and, therefore, the explanation was asked for as to why the proceedings for misappropriation and siphoning off the funds of Rs. 50,00,000 of the company should not be initiated under section 543 of the Companies Act, 1956. In response to the said notice of the official liquidator, reply dated March 12, 2008, was given by accused No. 1 stating that the matter was settled with said Mr. Mohandas Adnani. A letter dated December 23, 2004, received from said Mr. Mohandas Adnani by Mr. Ratnakar Munshi, accused No. 2 was placed on record of this case, wherein said Mr. Mohandas Adnani stated that all his dues with the company towards cheque issued by....
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....already filed prosecutions under sections 240(3), 146(1), 209(5) and also for non-filing of balance-sheets and annual reports for the years 1998 to 2001 in the court of Chief Metropolitan Magistrate, Ahmedabad. All these cases are pending before the said court. In above view of the matter, the court has finally heard the matter on April 9, 2008. All the three accused were personally present before the court. Learned advocates Mr. Manish J. Patel, Manoj N. Popat and Dharmesh V. Shah appearing for accused Nos. 1 to 3, respectively, have made their submissions. The accused have also made it very clear that they have not to say anything further beyond what they have stated before the official liquidator in their statements recorded under rule 130 of the Companies (Court) Rules, 1959. The court has also considered the various reports filed by the official liquidator from time to time. The main substance of the arguments of Mr. Manish Patel, learned advocate appearing for accused No. 1, which is based on the affidavit-in-reply by her on April 26, 2006, is that accused No. 1 had resigned as director on September 8, 1998. Form No. 32 was duly filed with the Registrar of Companies and the....
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....icer after verifying all available records and statements of all the three promoters of the company and others have observed that accused No. 2 did not appear to have any financial stake or personal involvement or any personal gain or benefit. Mr. Dharmesh Shah, learned advocate appearing for accused No. 3 i.e ., Mr. Ninad Raje has submitted on the basis of the affidavits riled by him on June 22, 2005, as well as April 1, 2006, that he had already resigned from the company. He did not have any details and/or information regarding affairs of the company and therefore, he was not in a position to deal with the facts stated in the complaint. He has further stated that on the date of winding up of the company accused No. 3 was not a director of the company. He has tendered his resignation on September 9, 1998, to the company and the same was duly accepted by the company. He has further submitted that accused No. 1 was the main key person and director of the company and both accused No. 1 as well as 2 were looking after day-to day business affairs and the management of the company. He has further submitted that accused No. 3 being a professional person, namely, chartered accountant, wa....
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....ocate appearing for their respective parties and considering the affidavits filed before the court along with relevant documents, the court is of the view that statutory requirements were complied with by the accused persons as the statement of affairs is filed before the official liquidator, though late and their statements were also recorded by the official liquidator under rule 130 of the Companies (Court) Rules, 1959. All the three accused are shifting their burdens on each other and they are trying to escape from their responsibilities as ex-directors of the company to file the statement of affairs. There is not much dispute about any other items except a transaction of Rs. 50,00,000, which was borrowed from one Mr. Mohandas Adnani and the said amount had been transferred to M/s. Modi Exports, wherein accused Nos. 1 and 2 are partners. This very transaction is a subject-matter of a detailed inquiry and investigation carried out under section 237 of the Companies Act, 1956, pursuant to the order passed by this court on December 19, 2001, in Company Petition No. 110 of 2001. The relevant facts stated in the said report, findings arrived at and conclusions drawn by the inspector ....
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....ort and marked as annexure G. 6.4. From the documents collected from the State Bank of Hyderabad, Maninagar Branch, Ahmedabad, it is observed that company's application for opening the bank account is not available with the bank. There is no board resolution also for opening the account with the bank. However, the specimen signature card indicates that Ilaxi Modi and Ninad Raje were authorised to operate the bank account singly or jointly. The signature of I. D. Modi is verified by the manager, Bank of Maharashtra and the signature of Ninad Raje is verified by the manager, Syndicate Bank. A copy of the specimen signature card for account No. 774 is annexed with the report and marked as annexure H. 6.5. On very first day of opening the company's bank account with State Bank of Hyderabad, i.e., September 9, 1998, itself, a cheque of Rs. 50,00,000 is issued in favour of Modi Exports. The cheque No. 242901 so issued on September 9, 1998, is written by Ilaxi Modi herself in her own handwriting and is signed also by her as a director of Ilaxi Modi Exports P. Ltd. It is pertinent to note that there was credit balance of Rs. 5,000 only in the company's account on September 9, 1998, as th....
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....by Shri Ninad Raje as proprietor of Raje Financial Consultancy Services who is also having current account No. 872 in the same bank and same branch. As per the account operating instructions to the bank for the current account No. 1219, the account of Modi Exports could be operated by any of the partners, namely, Ratnakar Munshi or Ilaxi Modi. 6.8. As per the bank statement (Syndicate Bank, current account No. 1219, Modi Exports), a cheque of Rs. 50,00,000 is deposited in this account on September 10, 1998. As per the pay-in-slip, it was the cheque No. 242901 of State Bank of Hydrabad, Maninagar Branch, Ahmedabad. The pay-in-slip is filled up and signed by Shri Ninad Raje on September 9, 1998, i.e., before the amount of Rs. 50,00,000 was received by the company (i.e., Ilaxi Modi Exports P. Ltd.), who has issued the cheque No. 242901 from its current account No. 774 with State Bank of Hydrabad. These facts sufficiently prove that siphoning of company's funds was pre-planned and all the directors of the company acted in concert and connivance of each other in the nature of a conspiracy to swallow the money anticipated from Shri Mohandas M. Adnani which anticipation was in fact mater....
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...., another cheque, being cheque No. 298535 is written by Shri Ninad Raje for an amount of Rs. 5,00,000 in favour of S. R. Investment. This cheque is also signed by Ilaxi Modi. On specific questions, neither Shri Ninad Raje nor Ilaxi Modi dis closed the purpose of paying Rs. 5,00,000 to S. R. Investment on the contrary both of them expressed ignorance about the identity of S. R. Investment or its relations with Modi Exports or its partners. 7.5. On September 12,1998, itself one more cheque is issued being cheque No. 298537 for an amount of Rs. 23,16,500 in favour of Shri Anil Munshi. This cheque is also signed by Ilaxi Modi but it is not a handwritten cheque. This cheque is typed one. On September 12, 1998, three cheques are issued. Two are handwritten and written by Shri Ninad Raje whereas the third one is typewritten issued in favour of Shri Anil Munshi. Shri Anil Munshi is brother of Shri Ratnakar Munshi and he appeared before the inspector voluntarily on behalf of Shri Ratnakar Munshi and stated that he is not aware why this money was transferred from Modi Exports account to his account. Shri Anil Munshi also made allegations against Shri Ninad Raje saying that it is done by Nin....
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....count on September 14, 1998, to account No. 872. This transaction shows that out of the amount of Rs. 23,16,500 (which came from Modi Exports), an amount of Rs. 21,00,000 has ultimately gone to Shri Ninad Raje. On asking the specific questions in this regard, Shri Ninad Raje in his statement has not denied the receipt of money but he stated that the amount of Rs. 21,36,000 was paid by Shri Anil Munshi to Raje Financial Consultancy Services (RFCS) towards money due from Anil Munshi to RFCS since RFCS was giving money to Shri Anil Munshi in his various property schemes from time to time. On the other hand Shri Anil Munshi has stated that this money is taken away by Shri Ninad Raje fraudulently by using his signed blank cheque book which was lying with Shri Ninad Raje. These facts of actual flow of money and contrary statement of Shri Anil Munshi and Shri Ninad Raje clearly show that they were having financial dealings for undisclosed purposes and the money has been siphoned off in squaring up their internal transactions/dealings. 8.3. On September 21, 1998, Shri Anil Munshi issued a cheque of Rs. 1,00,000 in favour of Inland Realities and Finstock P. Ltd. being cheque No. 15468. Thi....
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....y, i.e., Daxi Modi Exports P. Ltd. was a part of conspiracy to borrow money on the faith of a genuine company but the route for siphoning off money was simultaneously masterminded by creating a bogus unregistered firm in the name of Modi Exports and to create legal hurdles and technical complications to avoid suit for recovery and other legal proceedings directly against Shri Anil Munshi, Shri Ninad Raje and Ms. Haxi Modi. M/s. Ilaxi Modi Exports P. Ltd. is a paper company having no assets at all except Modi Exports as debtor for Rs. 50,00,000 but Modi Exports is also a paper firm having no assets or business or actual existence. It is a case where corporate veil requires to be lifted and Shri Ratnakar Munshi, Shri Anil Munshi, Shri Ninad Raje and Ms. Ilaxi Modi require to be made jointly and severally personally liable and fully accountable for the liabilities of the company including the amount of Rs. 50,00,000 borrowed by them from Mohandas M. Adnani, in the name of the company." From the above findings of the inspector, it appears that the transaction of Rs. 50,00,000 was elaborately dealt with in the investigation report and pursuant to the said report, several complaints are....