TaxTMI 
TaxTMI 
2020 (8) TMI 162
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.... complete the process of registration/execution of the Sale Deeds of the land mentioned in the Annexure A-2 in terms & conditions as mentioned in the said agreements annexed with the Annexure A-3 (colly) by modifying/clarifying the said order dated 03.02.2002 passed by this Hon'ble Court in the present case and also issue appropriate further direction to the appropriate authority not to put any restriction in the process of registration/execution of sale deeds of the properties as mentioned in Annexure A-2; or c) refer this case to the newly constituted J.P. Aggarwal Committee to examine the claim of the applicant company by providing all necessary documents, particularly Exhibit No. 1 to Exhibit No. 17 [as referred by the then Thareja Committee] to the applicant company; " 2. The case of the applicant-M/s. Tirupati Cylinders 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 Distr....
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....ed CA No. 1171/2003 for grant of permission to the applicant company to complete the process of registration/execution of sale deeds. On 22.07.2004, this court while dealing with this application and other applications appointed a One Man committee of Sh. G.P. Thareja, Retd. Additional District Judge, Delhi for verifying the claims of various applicants. The Thareja Committee thereafter submitted its report being the VIIIth Report dated 16.01.2006. In the report, it noted the submission of the representative of Tirupati Cylinders Ltd. that it had moved this court for withdrawal of the petition moved by them and further stated that he has nothing further to say in the matter. The Committee further recorded that the claim of Tirupati Cylinders Ltd. as per evidence so far collected does not appear to be sound. However as stated, it noted 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, th....
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.... parties/companies @ Rs. 2 lakh per acre and made joint GPA and agreement to sell in favour of Sh. Dinesh Goyal and his company - Tirupati Cylinders Ltd. SFIO found the resolution authorising Sh. V.K. Sharma to make agreement to sell and GPA on behalf of five JVG Group of Companies as fabricated. It is claimed in the reply that SFIO has made it clear that Sh. V.K. Sharma along with other directors of JVG Hotels Industries Ltd., JVG Steels India Ltd., JVG Publications Ltd and JVG Industries Ltd. had made forged documents to facilitate the entire fraud by siphoning off funds of JVG Finance Ltd. It is also stated that this court has in its order dated 27.11.2010 noted the submission of Sh. V.K. Sharma that he does not have any objection to the sale of the properties in question inasmuch as they belong to JVG Finance 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....
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....e. 12. One Mr. Anil Aery on behalf of the applicant has also filed an additional affidavit dated 13.02.2012 and stated that in some earlier proceedings before this court in CCP 20/2002, the Ex.-Chairman-Sh. V.K. Sharma had filed a reply/affidavit dated December 2002 where he had accepted all the documents which are being relied upon by the applicant and validated the purchase of land at Gurgaon by the applicant Company. 13. A perusal of CA No.547/2011 shows that various reasons are given by the applicant as to why the findings of the Thareja Committee should be set aside. The following salient submissions have been raised in the application:- (i) The Thareja Committee has made conclusions about the sale consideration paid by the applicant being below market price on the basis of certain exhibits i.e. 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.....
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....he subject matter of the present application was grossly undervalued. (ii) It is pleaded that had the applicant been confronted with these documents, the applicant would have informed the Committee that the records supplied by JVG detailing the price paid by it for lands in Gurgaon area cannot be relied upon. (iii) It is further pleaded that if the above noted facts were brought to the notice of the applicant, the applicant would have summoned the concerned Sub-Registrar or Tehsildar who would have deposed before the Committee as to the actual and correct value of the properties. Such evidence would have helped the Committee to come to a correct conclusion regarding the market price. (iv) It is further submitted that the applicant had submitted 6 examples of registered sale deeds for the same village which show that the 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....
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....ii) The claim of M/s. Tirupati Cylinders as per evidence so far collected does not appear to be sound. As such they as stated before the Committee wants to withdraw. (iii) It is recommended that the official liquidator should take control of the lands at Gurgaon immediately including the land which the applicant had claimed to have been purchased by it through Sh. V.K. Sharma, Ex. Managing Director of JVG Group of Companies.". 20. Hence, as per the VIIIth Thareja Committee Report, the land which was purchased in the name of various companies has been purchased from the funds of JVG Finance Ltd. The claim of Tirupati Cylinders Ltd.-the applicant was rejected. 21. As noted above, the applicant was again referred back to the Thareja Committee vide order dated 10.03.2006 of this court whereafter the Committee passed the XIIIth Report dated 07.02.2007. I may now look at the 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 ....
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....re against the guidelines of the RBI and in fact fraudulent one. Even the original documents of title deed have not been procured while parting with the meagre amount. Even the meagre amount was also not paid by cheque as it is required by the Income Tax Laws. Yet, I consider the submissions which have been made by Sh. A.K. Ganguly, Advocate, in the matter. The submission of Sh. A.K. Ganguly that the companies in whose name the land existed were not under liquidation and the land have been purchased bonafide and that the claimant had come to know by letter dated 19.11.1998 written by the Official Liquidator that the land in question was not included in the letter. On the face of the observation made by me herein above the submission of Sh. Ganguly has no merit. A purchaser of the land is not only to inspect the revenue record to see if the land subsist in the name of the Company from 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 reas....
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....not been produced. Even the bank managers have not been produced in the witness box to depose about the genuineness of certificates brought by the claimant. Under the circumstances no value can be attached to certificate produced by the claimant. No importance can be given to the deposition of Sh. Dinesh who has been examined on behalf of claimant. The material evidence both oral as well as documentary has not been produced by the claimant since the claimant knew that the transaction claimed by the claimant are not genuine and bonafide as such the benefits of the judgments cited by Sh. Ganguly is not available to the claimant. In view of the reasons stated above I find that there is no merit in the prayer of the claimant. The claimant is not entitled to the permission sought for. The property situated at Gurgaon noted herein above and various other properties which are also there 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. Recommen....
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....illages of Distt. Gurgaon. 1. JVG Foods Ltd. 32 11 15 14 23.5.2002 10.6.2002 8,18,750 1,80,000 Sidhrawali Bohra Khurd 2. JVG Housing Finance Ltd. 47 17 4 02 18 6 23.5.2002. 23.5.2002 23.5.2002 11,77,500 4,47,500 1,07,500 Sidhrawali Bohra Khurd -Do- 3. JVG Farm Fresh Ltd. 29 08 5 0 23.05.2002 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....
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.... its various Stakeholders, i.e. shareholders/depositors and creditors. Shri Sharma instead of protecting the 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 ....
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....ny cannot be accepted. 28. The applicant has taken strong objections to the aforesaid findings of the Thareja 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 m....
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.... land in question for the last 18 years, there would have been surely some utilization of the land. There would 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 notic....
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....he above, the law on the issue can be summarised to the effect that the issue of drawing adverse inference is required to be decided by 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 d....
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....nvestors Forum without any consideration. It is manifest from these observations that Sh. Dinesh Goyal was a familiar figure with the JVG Group of Companies 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 y....
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...., declare that any persons who were knowingly parties to the carrying on of the business in the manner aforesaid shall be personally responsible, without 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 impo....
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.... victim of the fraud, are not involved in the transactions which constitute such conduct, and may have no personal knowledge of the same. In K.T. Dharanendrah v. R.T. Authority AIR 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 managemen....