TaxTMI 
TaxTMI 
TaxTMI 
2016 (8) TMI 423
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..... Metro Nirvana; cancellation of the auction and subsequent fresh auction was sought. As a consequence, an order was passed on 31.07.2006 which directed the company to hand over possession of 13.5 acres of land that belonged to it, to the auction purchaser, namely M/s. Metro Nirvana. The appellant/applicant claims that he is the absolute owner of the suit land and has further claimed restoration of possession. 2. M/s JVG Finance Ltd ("the Company") was provisionally ordered to be wound up by Court on 05.06.1998; thereafter the final winding up order was passed on 29.08.2003 and an Official Liquidator was appointed for the company by that order. Further to a sale proclamation, the suit property, which belonged to the company in liquidation was sold through auction on 17.05.2006. The land was sold to M/s. Metro Nirvana for a sum of Rs. 2,05,00,000/-; the entire amount was paid by the auction purchaser on 31.07.2006. The Applicant/appellant filed CA No.1315/2006 on 24.08.2006 seeking his impleadmentas a necessary party in the company petition. It was contended that the applicant had purchased 21 acres of land out of which 16.9 acres were wrongly sold to the auction purchaser on 17.05....
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....n liquidation. In the reply filed by him it was urged that if the applicant was the real owner of the property, he would have raised objections even at the time when the Official Liquidator took possession of the property, much prior to the date of auction. It was stated that the property belonged to the company in liquidation even though the sale deed was in the name of Achyut Kumar Sharma. On 14.09.2005, V.K. Sharma made a statement in Court, in the presence of the applicant, that the land was purchased out of the funds of the company in liquidation and was so purchased in the name of the applicant only as a nominee of the company. It was thus pointed out that before the auction took place on 17.05.2006 this Court was aware that the land belonged to the company in liquidation, though standing in the name of the applicant. As a consequence the Court rejected the applicant's plea for stay of the auction sale. V.K. Sharma disputed the applicant's claim that he was an agriculturist. He highlighted that there was no proof or evidence in support; nor did the applicant reveal the source of such huge funds for purchasing the land. V.K. Sharma also disputed the claim of the applicant that....
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....t this stage. To my mind, this application is entirely devoid of merits and the same is dismissed with costs of Rs. 11,000/- to be deposited in the account of the company (in liquidation) within two weeks from today. 6. An appeal was filed against the above order before the Division Bench (Comp. A No.26/2010). This appeal was disposed of on 21.12.2010; the Division Bench permitted the applicant to withdraw the appeal and granted liberty to him to approach the Company Court with a fresh application mentioning all necessary details especially with regard to the property on which he claimed ownership. Further to the liberty granted, the appellant/Applicant moved a fresh application. This application reiterated the same facts, but sought more reliefs from the Court. The applicant relied, in addition to the report of the SFIO (Serious Frauds Investigating Office) and submitted that sufficient evidence was led before that body regarding the sources of his income for the purchase of the land in 1995 and that SFIO accepted it. 7. The auction purchaser pointed out that the auction took place on 17.05.2006 and possession was given to the auction purchaser on 21.08.2006, after the applican....
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....nd issued summons to both Achyut Kumar Sharma, the applicant herein, and V.K. Sharma, Managing Director of the company in liquidation. V.K. Sharma did not appear before the SFIO, but the applicant appeared and a statement was recorded from him by the SFIO. He also placed certain documents through letter dated 26.02.2013. The SFIO first issued summons to 35 persons from whom the applicant claimed to have purchased the lands. Ten persons responded to the summons by either appearing before the SFIO or by sending replies. Out of five persons who appeared before the SFIO, one of them (Munikalappa) refused to sign the statement. Five persons out of 35 sent in their replies. 15. The SFIO thereafter went to Bangalore to record the statements of all the 35 persons since they were all residents of Bangalore rural district. Only 5 persons appeared at the camp office for recording their statements. Their statements are annexed to the report of the SFIO. 16. The SFIO obtained the relevant documents from the Sub-Registrar concerned. It also perused the balance sheets, bank statements and other relevant records of the company in liquidation. 17. In an attempt to verify the income tax return....
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....d giving excuses for not appearing. All of them stated that they did give a friendly loan to the applicant. The SFIO, however, observed that from a plain reading of the letters, it appeared to them that the replies were written by the same person. Thus, the identity and creditworthiness of these persons have not been established by the applicant. They were not even mentioned before the SFIO in the course of the proceedings before it. Clearly, the story trotted out by the applicant that he took friendly loans from seven persons in Bihar was an afterthought. In addition to this the SFIO has also remarked that all the letters received from the seven persons appeared to have been written by the same person. Thus, there is no evidence to show the nature and source of the monies used for the purchase of the lands by Achyut Kumar Sharma, the applicant. 19. It is also very important to note that Achyut Kumar Sharma himself admitted before the SFIO that he gave the original title deeds relating to the lands to V.K. Sharma within a few months after he purchased the lands. He stated that he knew V.K. Sharma as he had meet him in an investor meet. He claimed to have made a deposit of Rs. 75,....
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....t of the company in liquidation, of which he was the managing director. It is also relevant to note that in the sale deeds the residential address of Achyut Kumar Sharma shown was in fact the address of the guest house of the JVG Group of companies in Bangalore. Coupled with this is the further fact - and a very crucial fact at that - that Achyut Kumar Sharma had executed a general power of attorney in favour of C.M. Chopra who was an officer in the employment of the JVG Group of companies. This is a registered general power of attorney which was later sought to be revoked by an unregistered document. These facts, taken together with the fact that Achyut Kumar Sharma was wholly unable to prove the nature and source of the monies utilised for purchasing the land, can lead to the only conclusion that the lands in question actually belonged to the company in liquidation. ************* ************* 22. In addition to the above I find merit in the contention of the learned counsel for the auction purchaser that the applicant did not challenge the action of the provisional liquidator, who took possession of the lands and also put it to auction, for a period of six years. Moreover, t....
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.... or against any other person shall lie by or on behalf of a person claiming to be the real owner of such property." The bar is absolute; the transaction of sale contained in the sale deeds of 1995 clearly shows that the applicant is owner. In such case, the so called benami owner is deemed to be the real owner and any action by one claiming to be the "real" owner who alleges to have funded the transaction, is barred. It is also urged that the applicant moved this court earlier, but was permitted by the Division Bench to file a fresh application. Learned counsel relied on the decision reported as Valiammal v Subramaniam AIR 2004 SC 4187 to urge that since the Sale deeds designated the applicant as the purchaser, he is deemed to be the owner. It was also stressed that at no point of time did the Company ever enter the suit property as part of its assets in the returns and balance sheets prepared and compiled at the time. 10. Learned counsel for the Liquidator, Mr. Behl, and counsel for the ex-director, Mr. Deepak Khosla, urge that this court should not interfere with the order of the learned Company Judge, who considered all the circumstances in great detail. It was urged that the e....
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....ch is the subject matter of the present appeal, reproduced the same facts and circumstances which the applicant had averred in the previous application, i.e., CA No.1315/2006. In addition, the applicant had produced a copy of the SFIO report. The threshold question is whether the applicant can be heard on the merits. 13. The first bar urged by the respondents to the maintainability of the new application is constructive res judicata. For this purpose, it would be useful to notice that the relief of declaration and cancellation (of the sale deed) was available and could have been sought in CA 1315/2006. The applicant omitted to claim that relief. Yet, all the factual details on the basis of which such relief could be claimed, were pleaded. The Court, after examining the merits of the application rejected it. That the Division Bench permitted withdrawal of the appeal by granting liberty to the applicant to approach for appropriate relief afresh did not mean that what could have been asked, and was deemed to have been abandoned (i.e the constructive res judicata principle) could nevertheless be sought. This is because of Explanation IV to Section 11, CPC, whose principles apply to th....
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....fic Relief Act, 1963 regulates suits pertaining to cancellation of an instrument. It enacts that any person against whom a written instrument is void or voidable and who has a reasonable apprehension that such instrument, if left outstanding, may cause him serious injury, can sue to have it adjudged void or voidable and the court may in its discretion so adjudge it and order it to be delivered or cancelled. 15. Ownership of a property is transmitted by a registered sale deed as per Section 54 of the Transfer of Property Act, 1882. Every sale deed has an effect of divesting the transferor of the ownership of the property and the vesting of the ownership in the transferee. A sale deed by which ownership in an immovable property are transferred can be ignored only where it is void ab initio. In all other cases where it is pleaded that sale deed is a voidable document because it ought not to have been executed or that there is a fraudulent transfer of title by means of the particular sale deed or for any reason which makes the transfer voidable, it is necessary that a claim has to be filed for cancellation of such a sale deed within a period of three years from the date a person comes....