TaxTMI 
TaxTMI 
2024 (3) TMI 1144
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..... 2765/2014, CO. APPL. 1487/2017, CO. APPL. 1137/2018, CO. APPL. 1473/2018, CO. APPL. 1474/2018, CO. APPL. 102/2019, CO. APPL. 592/2019, CO. APPL. 601/2019, CO. APPL. 1024/2019, CO. APPL. 109/2020, CO. APPL. 574/2020, CO. APPL. 691/2020, CO. APPL. 69/2021, CO. APPL. 70/2021, CO. APPL. 142/2021, CO. APPL. 935/2023, CO. APPL. 157/2024 For the Appellant Through: Mr. Arun Srivastava, Adv. Mr. Pradeep Aggarwal, Mr. Arjun Aggarwal and Mr. Bhaskar Aditya, Advs. Mr. Saurabh Kirpal, Sr. Adv. with Mr. Dushyant Manocha, Ms. Anannya Ghosh, Ms. Chitra Vats, Mr. Brian Henry Moses, Ms. Mrinalini Mishra, Ms. Doel Bose, Ms. Mrinalini and Ms. Kashish Cahhabra, Advs. For the Respondents Through: Mr. Rakesh Kumar, CGSC with Mr. Sunil and Mr. Satyanand Kumar, Advs. for UOI/R-1 Mr. Anshuman Mehrotra and Mr. Sunny Khandelwal, Advs. Mr. Arun Srivastava, Adv. for R-4 Mr. D.S. Chauhan and Ms. Ruchi Singh, Advs.FOR Intervenor RWA/Awasiye Sudhar Mandal Mr. Rohit Gandhi, Mr. Hargun Singh Kalra and Mr. Surrender Sheoran, Advs. for applicant CA No. 678/2022 Mr. D.S. Chauhan, Ms. Ruchi Singh, Mr. Prashant Kumar, Mr. Shiker Badial and Mr. Sanbtosh Kumar Baitha, Advs. Mr. Shekhar Raj Sharma, Dy. AG Haryana an....
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....tors of the company were disposing of the property of the company in a clandestine manner and to the prejudice of the company. It has been alleged by the applicants in CO. A(SB) No. 36/2011 viz., Greenfields Resident Welfare Association, that between 1982 and 2008, a substantial portion of the Company's land was sold by means other than public auction. 4. In the interregnum, the Union of India (Ministry of Corporate Affairs) filed C.P. No. 50/2006, seeking extension of the term of the three Directors appointed to the board of the company. The same came to be approved by the Company Law Board vide order dated 09.08.2006, whereby the appointment of five Directors was permitted. 5. It is also borne out from the record that certain plots (48 Residential +1 for Cinema Complex) were advertised for sale by the then Board of Directors through the process of a tender on 13.12.2008 and such sale of plots was sought to be stayed by M/s. Greenfields Plot Holders-cum-Residents Association by way of an application being C.A. No. 23/2009 in C.P. 50/2006. The Company Law Board passed an order on 13.01.2009, whereby the company was directed to maintain status quo with respect to the plots adv....
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....uch so that it lacks basic amenities, electricity supply is insufficient and even the boundary walls and gates to the society require construction besides non development of the common areas like parks etc. 9. The appellant in CO. A.(SB) - 36/2011-Greenfields Residents Welfare Society (wrongly stated as Greenfields Residents Welfare Association in the proceedings before the CLB), is a registered Society set up with the responsibility of looking after the interests of the residents. It has been stated by the appellants that the primary challenge to the impugned order dated 24.05.2011 put forth is that the Additional Directors appointed by the Company Law Board, are the very people who were the former directors of the Company and were ousted earlier on the allegations of widespread financial and fiduciary irregularities. The impugned order has been challenged on various grounds, which are now not relevant as such. 10. The appeal bearing No. CO. A.(SB) - 37/2011 has been filed by Greenfields Plot Holders-cum-Residents Association, whose primary objection was regarding the individuals appointed as the Additional Directors. It is urged on behalf of the appellants herein that the s....
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....ed upon the CLB a wide power for regulation of the conduct of the affairs of the company upon such terms and conditions as may be, in the opinion of the Board, considered just and equitable in the circumstances of the case with a view to bringing to an end the matters complained of. This power of CLB is without prejudice to the generality of the powers of the Board under the provisions of the Act. The CLB has been conferred with wider jurisdiction to give an effective relief and to do complete justice to the parties. There cannot be any rigid rule which can be insisted upon. An order under section 408 may not be able to cure the illegal or prejudicial act which may already have performed but can be used to prevent further damage. The purpose of section 408 is to ensure that the Govt. Directors are appointed to act like a watch dog to ensure that the affairs of the company are in a proper manner. It is also beyond any controversy that the CLB while exercising its discretion is not bound by the terms contained in the provisions of the Act if in a particular fact situation a further relief or reliefs, as the CLB may deem fit and proper, is warranted. While hearing petition under Secti....
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.... appointed as Additional Directors for a period of one year. They along with the Whole Time Director shall constitute the Board of the R-1 Company. These two Additional Directors shall not be entitled to any sitting fee or any other expenses except travelling expenses limited to Rs. 25,000/- per month for each such Additional Director. The quorum for the Board shall be the Whole Time Director and any one or more of the Additional Directors. Before expiry of one year, the Whole Time Director shall mention a Company Application through the UOI to seek further extension of tenure of the Additional Directors for further one year. The Whole Time Director shall also update the CLB on the status of other shareholders on getting entitled to be on the register of Members on disposal of the pending proceedings before the Hon'ble High Court at Mumbai to enable the CLB to consider putting them as well on the Board of the R-1 Company. The Whole Time Director shall also constitute a Grievance Cell in the R-1 Company to redress the grievances of the so-called allotees of the plots as per law. The Grievance Cell shall be headed by the Whole Time Director and shall also cater to the requirement....
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....main lines of roads, drainage, sewerage and electricity etc. are to be laid out and constructed by the Government, Haryana Urban Development Authority or the concerned local authority, the proportion of which was to be paid from time to time inter alia also enjoining that the company would be responsible for maintenance and upkeep of all roads, open spaces, public parks and public health services for a period of five years from the date of issue of Completion Certificate. 13. It appears that the DGTC vide order dated 01.12.2016 directed the company to transfer possession of all such roads, open spaces, public parks and public health services in the colony to the MCF on an "as is where is" basis leaving the colonizer to continue to be responsible for compliance of the various terms and conditions of the exemption, including but not limited to the following: "a. Construction of community sites as per provision of Act No. 8 of 1975 as amended up to date. b. Liability to obtain completion/part completion certificate. c. Development of commercial pockets including approval of building plans and grant of occupation certificates. d. Liability to depo....
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....d chart has been formulated below for the bare perusal of this Hon'ble Court:- 1. Re-construction of Mall Road/Avenue H Road Rs. 4,84,42,083/- 2. Internal Roads construction (total 193 roads. Rs. 18,82,98,660/- 3. Drain with mall road Rs. 2,05,79,161/- 4. Internal Road Storm water drain Rs. 17,33,21,989/- 5. Street Light Maintenance Rs. 38,86,926/- 6. Park with five-year maintenance cost Rs. 13,74,25,154/- 7. Water supply/repair of existing booster Rs. 1,11,68,621/- 8. Sewer system Rs. 7,50,76,955/- 9. New community Centre construction Rs. 7,71,14,430/- 10. Construction of STP with MPS Rs. 26,25,00,000/- The Deficiencies in lieu of Electrical Infrastructure have not been included. The necessary amount in lieu of electrical infrastructure shall be deposited with Dakshin Haryana Bijli Vitran Nigam. The company shall submit NOC from all other respective Departments for payment of water supply charges and electricity bills. 12. That the deponent has issued instructions to the colonizer/developer company to ensure DTCP, Haryana directions issued on 01.12.2016 and order Dated 1....
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....: "465. Repeal of certain enactments and savings.-(1) The Companies Act, 1956 (1 of 1956) and the Registration of Companies (Sikkim) Act, 1961 (Sikkim Act 8 of 1961) (hereafter in this section referred to as the repealed enactments) shall stand repealed: 1* * * * * [Provided that] until a date is notified by the Central Government under sub-section (1) of Section 434 for transfer of all matters, proceedings or cases to the Tribunal, the provisions of the Companies Act, 1956 (1 of 1956) in regard to the jurisdiction, powers, authority and functions of the Board of Company Law Administration and court shall continue to apply as if the Companies Act, 1956 has not been repealed: [Provided further that] provisions of the Companies Act, 1956 (1 of 1956) referred in the notification issued under section 67 of the Limited Liability Partnership Act, 2008 (6 of 2009) shall, until the relevant notification under such section applying relevant corresponding provisions of this Act to limited liability partnerships is issued, continue to apply as if the Companies Act, 1956 has not been repealed. (2) Notwithstanding the repeal under sub-section (1) of the repea....
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....ponding provisions of this Act; (i) any prosecution instituted under the repealed enactments and pending immediately before the commencement of this Act before any Court shall, subject to the provisions of this Act, continue to be heard and disposed of by the said Court; (j) any inspection, investigation or inquiry ordered to be done under the Companies Act, 1956 (1 of 1956) shall continue to be proceeded with as if such inspection, investigation or inquiry has been ordered under the corresponding provisions of this Act; and (k) any matter filed with the Registrar, Regional Director or the Central Government under the Companies Act, 1956 (1 of 1956) before the commencement of this Act and not fully addressed at that time shall be concluded by the Registrar, Regional Director or the Central Government, as the case may be, in terms of that Act, despite its repeal. (3) The mention of particular matters in sub-section (2) shall not be held to prejudice the general application of section 6 of the General Clauses Act, 1897 (10 of 1897) with regard to the effect of repeal of the repealed enactments as if the Registration of Companies (Sikkim) Act, 1961 ....
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.... 9. After some detailed discussion on the proposals submitted for finding out a way forward, a consensus has emerged. Accordingly, it is directed that let the petitioners/shareholders file a detailed and structured affidavit cum undertaking through their duly authorised representative so as to specify the names/details of the Directors, Managing Director of the UICPL who would be controlling its management and to delineate and demonstrate as to how and in what manner they propose to infuse funds into the entire township project including specific and tangible safeguards based on the report of accredited architects with regard to the situation at the site, status of the pending projects with timeline for their completion and unsold inventory & disposition with regard thereto etc. if any. 10. Such affidavit cum undertaking shall also provide for setting up an escrow account with a bridge loan agreement from any nationalized bank or scheduled banks, or in the alternative without bridge agreement, as the case may be. It shall also specify the time line within which the petitioners/shareholders propose to hand over the site to the MCF and make the payment of lump sum am....
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....ks"); * installation of sewage treatment plant * construction of storm water drainage * construction of new Community Centre building; and development of parks. (v) The Shareholders' Works be completed within 15 months from the Trigger Date subject to any force majeure conditions and the handover of the Greenfields Colony to MCF after completion of Shareholders' Works will be done in terms of the Exemption Memo dated 05.04.1982 issued to the Company by the Town and Country Planning Department, Haryana under Section 23 of Haryana Development and Regulations of Urban Areas Act 1975 (hereinafter "Exemption Memo"). A copy of the Exemption Memo dated 05.04.1982 by the Town and Country Planning Department, Haryana is annexed herewith and marked as Annexure - "B". (vi). During execution of the Shareholder's Works, any variation/escalation m costs, shall be borne by the Appellants shareholders at their own costs. (vii). The Appellants shareholders will deposit the operations and maintenance cost for the Sewage Treatment Plants (including the main pumping station) and electricity charges / bills of Sewage Treatment Plants for a p....
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....ld be credited in the Shareholders' Escrow within 6 months of the Trigger Date. (iii) The third instalment of 25% of the estimated cost as per DPR, for the MCF Works, would be credited in the MCF Escrow within 9 months of the Trigger Date. Similarly, 25% of estimated cost as per the DPR for Shareholders Works, would be credited in the Shareholders' Escrow within 9 months of the Trigger Date. (iv) The final instalment of 25% of the estimated cost as per DPR for the MCF Works, would be credited in the MCF Escrow within 12 months of the Trigger Date. Similarly, 25% of estimated cost as per the DPR for Shareholders Works, would be credited in the Shareholders' Escrow within 12 months of the Trigger Date." 20. It was urged that the term "Trigger Date" would be the date from which the shareholders take over the control of the affairs and management of the company including its assets and properties. It may further be indicated that the submissions advanced by the learned Counsels for the parties were heard at some length on 08.02.2024. It has been clarified that as per the estimates, Rs. 55 crores shall be payable to the MCF for the developmental work and....
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....MINISTRY OF CORPORATE AFFAIRS: 26. Not wanting to give up its say in the running of the affairs of the Company, the Ministry of Corporate Affairs has raised objections inter alia to the effect that in the affidavit dated 03.01.2024, no details have been provided with regard to the township projects and the affidavit is not accompanied with the architect's report. Further that no worthwhile plan has been put forth for the development of a sewage treatment plant, storm water drainage, Community Centre and also park development. It is pointed out that the appellants/ shareholders have not given any calculation for the estimated expenses required to cover the cost of the sewage treatment plant, operations, maintenance and electricity costs. There are several objections with regard to the correctness of unsold inventory referred to in Annexure-C of their affidavit pointing out that it is reflected that there are 59 residential plots under litigation whereas 56 plots exist and the appellants/shareholders have omitted to make additions of the vacant sites for various facilities in Annexure-C to their affidavit; and lastly, that no statement has been given by the appellant/shareholders ....
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.... Company to the extent of Rs. 99 crores, including variations/ escalation of market rates or arrange the same amount with existing funds or any other resources of the Company. The obligation of payment for shareholders will begin after the Hon'ble High Court of Delhi or the Competent Authority hands over the company's control back to its original shareholders. It is agreed between the parties that in the event *of Company, which would be controlled by shareholders after the Trigger date, not being able to pay the above said amounts of instalments on time, the shareholders shall be personally liable to pay the balance amount to the tune of Rs . 99 crores. It is further agreed between the parties that the liability of the shareholders to pay the balance amount, as per the above said clause, would arise as soon as the time period to pay the respective instalments, as stipulated in Clause 3.2, by the Company gets over. 3.2 Upon sale of assets of the Company or existing funds or amounts arranged through any other resources of Urban Improvement Company Pvt. Ltd., the Shareholders would deposit all the sale proceeds and funds from other resource if any (after deducting th....
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....t levelled bald allegations in their reply to the affidavit dated 03.01.2024, without substantiating the same with any categorical averment and/or documents. Further, indisputably, it is also brought to the fore that the long-standing disputes amongst the shareholders have since been resolved after the shareholders have entered into a family settlement before the Bombay High Court in terms of order dated 24.09.2018 [Annexure 'A' to order dated 24.09.2018]. It is also pertinent to mention that the entire mess has been created due to inter se disputes amongst the shareholder. There is no plea except for the mismanagement of the affairs of the company by the erstwhile shareholders and that none of the promoters and/or the directors have been proceeded with any kind of cheating, fraud or misappropriation in any criminal court or by the Serious Fraud Investigation Office (SFIO). 31. However, in view of the dismal track record of the shareholders which demonstrates a history of lack of credibility on their part, the disposition agreed as per the MOU dated 18.04.23 with regard to the sale, alienation or disposal of the properties of the company, is quite understandably, not acceptable ....
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....am Dialdas being his daughter 10 12. Angelina Kohli . 10 shares from the state of Balram Dialdas being his daughter 10 FINAL DIRECTIONS: 32. The crux of the problem is that there are too many stakeholders and each wants to have a say in the matter. While that is understandable as they have suffered insurmountable problems due to lack of basic amenities and facilities for a very long and difficult forty years, that were promised by the company. All said and done, it is oft- repeated that "doubts kill more dreams than failure ever could". The doubts in the mind of the stakeholders and in particular the residents of the locality, need to be addressed in a manner that inspires confidence. While it would not be prudent to allow the RWAs to run the affairs of the company who have no expertise and skills that the Real Estate Market demands, the shareholders have to come clean and show their sincerity, commitment and financial wherewithal to undertake to do development work at the site. 33. This Court finds that certain calculated and strategic measures can be initiated so to commence development work at the site and ameliorate the suffering of the stakeholders. At ....
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....ance sheet of the company without creating a charge, mortgage or lien over the assets/properties of the company. (v) The amount so infused shall be reimbursable to the shareholders who would invest the same, without payment of interest and the contributing shareholders shall remain unsecured creditors. (vi) Further, the company shall be at liberty to transfer any amount over Rs. 50 crores into its personal account subject to the approval of the Court Commissioner. (vii) The aforesaid development work shall be carried out within a period of 15 months from 15.04.2024 by the company, failing which the advances and loans given to the Company shall stand forfeited to the company to be utilized exclusively for the maintenance and upkeep of the Colony (vi) Shri Arun Arya, Principal District & Sessions Judge, Delhi (retired) is hereby appointed as the Court Commissioner to supervise the completion of the pending projects, initially for a period of six months from 15th April, 2024. He will be paid a fee of Rs. 3.25 lakhs per month plus Rs. 5,000/- for every visit to the site; and who shall be assisted by Shri Ravi Chawla. Advocate, who shall be paid a mon....
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.... (a) The first instalment of 25% of the estimated cost as per DPR for the MCF Works, would be credited in the MCF Escrow in advance on or before 30th April, 2024. This is mandatory condition so that the work starts before the Monsoon period. (b) The second instalment of 25% of the estimated cost as per DPR for the MCF Works, would be credited in the MCF Escrow within four months i.e., on or before 31St August, 2024. (c) The third instalment of 25% of the estimated cost as per DPR, for the MCF Works, would be credited in the MCF Escrow within 9 months i.e., on or before 31st December, 2024. (d) The final instalment of 25% of the estimated cost as per DPR for the MCF Works, would be credited in the MCF Escrow on or before 31st March, 2025. (viii) Escalation costs, if any, that may be demanded by the MCF, subject to just exceptions, shall be borne by the company. C. GENERAL CONDITIONS: (i) All the records including the books of accounts, record of the minutes, which are in the possession hitherto with the Board of Directors conducting the affairs of the company shall be handed over to the Chairman of the company in terms of af....
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....d shall perform all tasks and legal work including drafting, preparing and writing of periodical reports, and carry out visits to the site for physical inspection and do such all acts that he may be called upon to do by the Court Commissioner. (xi) Any of the Resident Welfare Association's through its authorised Office bearers shall, or otherwise too, if there is any issue, be at liberty to approach the Court Commissioner who may pass appropriate directions to the Chairman and /or the Managing Director for taking appropriate action. (xii) A dedicated email account shall be created by the Court Commissioner so as to enable the stakeholders to reach out to the Court Commissioner in case of any problems. (xiii) The progress of development work and compliance as per above orders/directions shall be reviewed after every two months, for which the matter shall be placed before this Court on 15th May, 2024, 15th July, 2024, 17th September, 2024, 19th November, 2024, and further dates would be given on publishing of the Delhi High Court calendar for the year 2025. (xiv) The Court Commissioner shall ensure that the aforesaid directions are duly publicized/....
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....stituted by Act 31 of 1988, Section 54, for sub-Sections (1) and (2) (w.e.f. 15.6.1988). ][may, if the company has not availed itself of the option given to it under section 265, direct the company to amend its articles in the manner provided in that section and make fresh appointments of Directors in pursuance of the articles as so amended, within such time as may be specified in that behalf by the [Tribunal] [Substituted by Act 31 of 1988, Section 54, for sub-Sections (1) and (2) (w.e.f. 15.6.1988).]. (2) [ In case the [Tribunal] [Substituted by Act 31 of 1988, Section 54, for sub-Sections (1) and (2) (w.e.f. 15.6.1988).][passes an order under the proviso to sub-section (1), it may, if it thinks fit, direct that until new Directors are appointed in pursuance of the order aforesaid, such number of persons as the [Tribunal] [Substituted by Act 31 of 1988, Section 54, for sub-Sections (1) and (2) (w.e.f. 15.6.1988). ][may, by orders specify as being necessary to effectively safeguard the interests, of the company, or its shareholders or the public interest, shall hold office as additional Directors of the company and on such directions, the Central Government shall appoint suc....