TaxTMI 
TaxTMI 
2025 (2) TMI 906
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....v. with Mr. Prabhas Bajaj and Ms. Jyoti Taneja, Advs. for R-11. ORDER CM APPL. 10599/2024 & 11516/2024 1. This order shall decide CM APPL. 10599/2024, moved by the applicant/respondent No. 7, Mr. Vidur Bhardwaj, and CM APPL. 11516/2024, moved jointly by applicant/respondent No. 12, Mr. Pratap Singh Rathi, and applicant/respondent No. 13, Mr. Ajay Kumar, for the ACE Group of Companies, seeking the recall of the impugned interim order dated 02.02.2024, passed by this Court on the CM APPL. 6519/2024, moved on behalf of the petitioner in the instant writ proceedings. 2. Shorn of unnecessary details, the petitioner, who is a homebuyer, claims to have purchased a plot from respondent No. 3, M/s. Three C Shelters Private Limited ["TCSPL"], in a real estate project named 'Greenopolis', which was envisioned to be developed in Sector 89, Gurugram, Haryana. Allegations were made against respondent No. 3/TCSPL and its Ex-promoters/directors/ management, who are arrayed as respondents No. 6, Mr. Nirmal Singh; respondent No. 7, Mr. Vidur Bhardwaj; respondent No. 8, Mr. Surpreet Suri; respondent No. 9, Mr. Rajeev Bisoya; and respondent No. 10, Mr. Girish Chander Joshi - along with oth....
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....s unearthed by the IRP in his Status Report-2 dated 09.08.2023, which is 'Annexure P-16', and it would be pertinent to reproduce the relevant paragraphs of the aforesaid impugned order, which read as follows: "10. It is pertinent to mention that learned Senior counsel alluded to the damning findings and observations reported by the IRP before the NCLT, which report is Annexure P-16 wherein vide paragraph (31) onwards it has been brought to the fore that during the time leading to respondent No. 3 becoming involved in the insolvency proceedings up to 16.10.2020 and thereafter, various dubious/suspicious transactions had been carried from the bank account of the corporate debtors maintained with State Bank of India, whereby inter alia a sum of Rs. 200 crores have been transferred by way of multiple transactions on the very same day from one company to the another ostensibly to buy shares of some Kolkata based shell companies in the name of the corporate debtor and the money trail led to the following revelations:- "31. (a)A Sum of Rs. 4,50,00,000/- was transferred from the Account of the Corporate Debtor to M/s Manak Estates and Finance Private Limited, and thereaft....
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.... of Three C Group) from 30.10.2019 to 09.03.2021. Furthermore, Mr. Pratap Singh Rathi is also a director in one more Three C Group company i.e. Three C City Developers Pvt Ltd. from December, 2019 till date. 7.2. It is respectfully submitted that even Bright Buildtech Pvt. Ltd. and the Ace Group have been working in close relation, and the management of both the companies are inter-related to each other. As elaborated in Para 6.2. herein above- M/s Bright Buildtech Pvt. Ltd. is 100% owned by M/s Three C Town Planners Pvt Ltd. ↓ In 2012, 100% shareholding of Three C Town Planners Pvt Ltd was held by M/s Three C Universal developers Pvt Ltd. From 2012-2015 funds were siphoned off from the Corporate Debtor to M/s Bright Buildtech Pvt Ltd ↓ 100% shares of M/s Three C Town Planners Pvt Ltd. were transferred to Lotus Green LLP at merely Rs. 1 Lakhs (M/s Lotus Green LLP is held by Mr. Harakaran Singh Uppal son of Mr. Nirmal singh) ↓ 100% shareholding of M/s Three C Town Planners Pvt Ltd (renamed as M/s Mega Town Planners Pvt Ltd.) was reported to be transferred to M/s Ace Landcraft LLP at a con....
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....e Supreme Court which has been stayed in Civil Appeal no. 007762/2023 vide order dated 08.01.2024." 6. In view of aforesaid prima facie findings and forming an assumption that, despite these aforesaid damning facts being brought to the notice of respondents No. 1 and 2, they had failed to discharge their duties in terms of Chapter XIV of the Companies Act, 2013, and the following directions were passed to safeguard the interest of the petitioner, as well as other similarly placed investors/claimants/homebuyers: "20. Accordingly, following interim directions are passed:- (i) Respondent Nos. 1 and 2, are hereby conjointly directed to initiate action and ensure step-wise compliance in terms of Section 206 to 210 of the Companies Act, 2013 and other analogous provisions in Chapter XIV of the Companies Act, 2013, and thereby inspect the affairs of 'Three C Shelters' and the related companies of 'Three C Shelters' in terms of the Status Reports of the IRP before the NCLT as brought out in his reports dated 9th August, 2023 and submit an Inspection Report within four weeks from today before this Court; (ii) Initiate appropriate legal action against respondent....
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....pondents No. 12 and 13 submit that although the order dated 02.02.2024 was directed at respondents No. 1 and 2 to inspect the affairs of the respondent No. 3/TCSPL, they are directly affected, as the IRP has endeavoured to reclaim or repossess certain properties belonging to them, which have no nexus or connection with the respondent No. 3/TCSPL. It is pertinent to mention that LPA bearing No. 134/2024 was filed by the applicants which was disposed of vide order dated 19.02.2024 by the Division Bench headed by the then Hon'ble Acting Chief Justice. It was directed that a recall/modification application may be moved before this Court within three working days, which be decided as expeditiously as possibly preferably within three weeks. 10. Accordingly, the present application was moved on 21.02.2024, and marathon arguments have been heard on different dates. Suffice to state that the applicants, in their application, claim that ACE Group is a renowned Real Estate Developer in Delhi and the NCR [National Capital Region], promoted by the applicants/respondents No. 12 and 13, and that the impugned order has wrongly portrayed it as a proxy of respondent No. 3/TCSPL. It is further....
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....greement dated 02-11-2011 (Development Agreement, in short) executed between Orris and Three C Shelters. Orris is the landowner and the licensee of the Greenopolis and Three C Shelters is the developer/contractor. From a bare perusal of ABA and the averments in the Writ Petition, it could be seen that petitioner is in default of its payment obligations of agreed consideration under ABA. As of today, she has only paid 23.25 lakhs (approx.) out of the agreed total consideration of Rs. 87.16 lakhs payable in respect of the apartment in question. It is submitted that a person who is admittedly in default of material obligations under the ABA, cannot invoke the extra-ordinary writ jurisdiction of this Court under Article 226 of the Constitution of India. 17. The Writ Petition is clearly neither a class action nor a Public Interest Litigation (PIL). From the documents and records, it can be clearly seen that the present writ petition is collusive proceeding at the behest of Orris. The present writ Petition has been filed clearly with an attempt to embroil the assets and properties of companies which otherwise have no financial transactions with Three C Shelters. 18. Fro....
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....no prayer or relief in the Writ Petition against Orris. 20. In a short span of time of 14 years Ace Group has completed and delivered 07 residential projects viz. Ace Platinum, Ace City, Ace Aspire, Ace Golfshire, Ace Parkway, Ace Divino all situated in Noida and Greater Noida, Uttar Pradesh and Ace Palm Floors in Gurugram, Haryana. In addition, there are many projects which are under construction and development. The Ace Group has completed and delivered 10000 (Ten Thousand) residential apartments to satisfied and happy home buyers. Ace Group has also developed some iconic commercial and IT/ITES projects like City Square, Ace Studio and Ace Capitol in Noida /Greater Noida. Ace Group has a significant presence in Northern India. That the Ace Group has some of the biggest real estate developers in the country as its partner like Godrej Properties and Prestige Group Bengaluru. Ace Group has been setting benchmarks by creating homes, commercial and institutional spaces and is today a multi thousand crores conglomerate, delivering futurecentric and high-end projects. The Petitioner or Ace Group have no connection whatsoever with Three C Shelters or Three C Group much less bein....
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....iness. Furthermore, considerable emphasis has been placed on the locus standi of the petitioner, alleging her to be a proxy acting at the behest of a rival group, i.e., respondent No. 11/Orris, and the petition having been filed without disclosing that an application for her impleadment was pending consideration before the Supreme Court. 15. It is vehemently urged by the learned counsels for the applicants/respondents No. 12 and 13 that the investigation under Chapter XIV of the Companies Act, 2013, has been ordered against ACE Group of Companies in complete violation of the principles of natural justice. It is further contended that the petitioner, without exhausting the remedies available to her under the IBC, has indulged in forum shopping and has failed to satisfy the pre-requisite for filing a 'Public Interest Litigation' in complete violation of the Delhi High Court (Public Interest Litigation Rules), 2010. It has been argued that the petitioner has approached this Court without first availing efficacious and alternative remedies, as Chapter XIV of the Companies Act, 2013, clearly provides such recourse. 16. During the course of arguments, it was contended that the peti....
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.... v. State of Karnataka (2020) 13 SCC 308. 19. At this juncture, it is pertinent to mention that learned Senior Advocates for the applicants/respondents No. 12 and 13 have filed a compilation delineating as many as eight share purchase agreements executed with regard to companies that had been formed by the erstwhile promoters and Directors of respondent No. 3/TCSPL viz., share purchase agreement dated 12.12.2012 executed between M/s. Three C Universal Developers Private Limited ["TCUDPL"] and Surpreet Singh Suri being sellers and described as first part in favour of Pradeep Jain S/o Sheel Kumar Jain; Bhupinder Singh Kochar S/o Suchet Singh Kochar; Ajay Khetrapal S/o Basant Kumar Khetrapal; Anand Goel S/o Bishan Dayan Goel; Munish Kher S/o Ram Saran Kher; Meenu Kher D/o Chaman Lal; Prashant Aggarwal S/o Prakash Chand Aggarwal; Pooja Aggarwal W/o Prashant Aggarwal, described as buyers and M/s. Sequel Building Concepts Private Limited ["SBCPL"], which agreement pertained to sale of 1000 number of shares in TCUDPL for a total sum of Rs. 1,00,000/- by the second party described above, which purportedly belonged to the Ashiana Group. 20. Likewise, reference is made to the share pur....
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....g responsibility for clearing substantial financial debts and liabilities of these companies. Additionally, it is pertinent to highlight that certain plots in the project being developed in Sectors 78 and 79 in Noida, Uttar Pradesh, by the respondent No. 3/TCSPL were leased to different groups during the period 2013-2014. CHALLENGE BY RESPONDENTS NO. 4 & 11 23. The application for recall has been vehemently challenged by respondent No. 4/Greenopolis Welfare Confederation, as well as respondent No. 11/Orris. Mr. Maninder Singh, learned Senior Advocate appearing for the respondent No. 11/Orris, took the lead and addressed arguments in opposition to the pleas advanced by the learned Senior Advocates for the applicants/respondents No. 12 and 13. It was pointed out that the total area of the project, which was to be developed, was 47.21 acres, of which they were the owners, and construction was supposed to be carried out on an area of 37.09 acres. A development agreement was executed between the respondent No. 3/TCSPL and respondent No. 11/Orris on 02.11.2012, which was valid upto 22.12.2019, and the project i.e. 'Greenopolis' was initiated in July 2012, with the booking of flats ....
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.... the cost of land/premium for land and lease rent, which they were supposed to pay, and defrauded the home buyers, Noida Authority, Banks and other creditors. Not only this but they have also defrauded hundreds of other home buyers in various other projects similarly launched by them with different names. As a part of that conning scheme, after launching a project, they collected money, diverted it to different other companies and then resigned from directorship of the company, and push the company into insolvency and get over with all civil or criminal liabilities. Surprisingly, even after conning everyone they have been going scot free, neither the State nor the authorities are in a position to recover the said amount." 27. On the same analogy, it was pointed out that respondent No. 11/Orris was to deliver 652 flats by developer/respondent No. 3/TCSPL and instead it was saddled with the plight of 1210 buyers. Learned Senior Advocate took this Court through certain other scathing observations by the learned Judges of the Division Bench of the Allahabad High Court, as reflected in paragraph (89) to (92) and conclusions, which are as under: "89. In this backdrop, the rat....
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....mselves about rearrangement of the affairs of the company and other group companies irrespective of the purported resignation given by them from these companies long time back. 92. The fact that the promoters are still in the driving seat and have a complete control on the affairs of HPPL and other group companies has also been recognized by the order dated 30.04.2019 passed by Hon'ble High Court in Arbitration and Conciliation Application No. 39 of 2018, wherein, Anand Ram, the present director, in a Court proceeding has given a statement that he is just a store keeper with HPPL and has no knowledge about the working of the company and he had appeared on the direction of (Personal Secretary of one of the promoters, Vidur Bharadwaj), it was then the Court had issued summons to one of the directors/petitioners (who had resigned) to appear before the Court. This goes to show that the petitioner and the other directors are in complete control of the company throughout, and the present directors are their petty employees placed by them as puppets. x x x x x x 114. Since the offence committed by the petitioners/promoters is a scheduled offence under the PMLA A....
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....ertain tractions of the land measuring 37.09 acres, sold them for a meagre amount of Rs. 1 lakh. It was pointed out that the formation of these sister concerns can be deciphered from the proceedings in OMP(I) (COMM.) 299/2019, whereby this Court vide order dated 09.08.2019 and 20.08.2019, passed certain directions. 30. At this juncture it would be expedient to reproduce the order dated 20.08.2019 which goes as under: "1. Pursuant to the proceedings held on 9.8.2019, an affidavit has been filed on behalf of the petitioner. The affiant is, one, Mr. Supreet Singh Suri. 2. Mr. Supreet Singh Suri claims to be the Director and the authorised representative of the petitioner company. A perusal of the affidavit shows that the petitioner company has agreed to the offer made by respondent No. 1 and 2 on 9.8.2019 to settle the dispute obtaining amongst them. 3. I may also indicate that in paragraph 6 of the very same affidavit it has been averred that the sum of Rs. 65.50 crores was sourced by the petitioner company via its sister concern for two specific projects i.e. Greenopolis Welfare Association and Lotus Green Projects LLP (collectively referred to as "Proj....
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....he date of receipt of funds. 12. In case the petitioner company does not receive notice of any proceedings or orders of any appropriate court or authority, it would, as indicated to me, utilise the money only for the projects referred to in paragraph 6 of the affidavit filed on its behalf. 13. Accordingly, the instant petition and pending applications are closed with the following directions:- (i) The Registry will release to the petitioner company, out of the sum of Rs.250 crores retained with it, a sum of Rs. 65.50 crores alongwith simple interest at the rate of 2 per cent per annum, commencing from 21.8.2018 till 20.8.2019. (i) (a) In case any withholding tax is required to be deposited, the Registry will make suitable adjustments. (i)(b) The counsel for respondents No. 1 and 2 will revert with this aspect of the matter within the next three (3) days. This information will be given to the Joint Registrar (Judicial) by way of an affidavit. (ii) After the money is released to the petitioner company as quantified in terms of the directions issued hereinabove, the remaining amount shall be released to respondent No. 1. (....
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....IRP has colluded with the promoters and directors of both respondent No. 3/TCSPL and respondent No. 11/Orris, exceeding his powers by attempting to take possession of certain properties belonging to the applicants/ACE Group. Further arguments were made regarding the locus standi of the petitioner to invoke an investigation into the company's affairs as outlined in Section 210 (2) of the Companies Act, 2013. 33. Lastly, the learned Senior Advocates for applicants/respondents No. 12 and 13 took this Court through the documents and the compilation placed on record, emphasizing that companies such as BBPL, TCRPL, and TCCDPL were acquired in the ordinary course of business. They highlighted that this acquisition was undertaken after assuming responsibility for significant debts and liabilities owed by these companies. In support of their arguments, reference was made to the documents filed on record, including balance sheets of each of the companies, as well as orders passed by the NCLT and other authorities over time. 34. Learned counsels for respondents No. 12 and 13 also relied on decisions in Sri Ramdas Motor Transport Ltd. v. Tadi Adhinarayana Reddy (1997) 5 SCC 446; Rajastha....
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....parties, in active collusion, have been able to siphon off significant funds in connivance with the promoters and directors of the Three C Group of companies. Mr. Tanmay Mehta, learned counsel argued that the application filed by the applicant/respondent No. 7, Mr. Vidur Bhardwaj, must be outrightly rejected in light of the Supreme Court's order dated 11.03.2024 in CA No. 7704 of 2023, concerning the maintainability of the present petition. He emphasized that the petitioner, an aggrieved homebuyer and senior citizen, is merely highlighting a large-scale fraud that has been established through the status reports of the court-appointed IRP and other orders and judgments passed by various adjudicating authorities, including those dated 09.08.2019 and 20.08.2019. 37. A reference was similarly made to the order dated 29.03.2022 passed by the NCLT in CP IB No. 2721/2019, as well as the order dated 01.07.2021 in SLP(C) No. 7712/2021, which relied upon an email dated 15.10.2019 from one of the ex-promoters of respondent No. 3/TCSPL. This email clearly highlighted that, in one of the accounts of respondent No. 3/TCSPL concerning the project 'Greenopolis', there were transactions exce....
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....he petitioner, this Court is not persuaded by those arguments. There appears to be no suppression of material facts on the part of the petitioner. The present writ petition is not stricto senso a Public Interest Litigation, but rather one indirectly advancing the cause of similarly situated investors/claimants/homebuyers, who form a distinct class. STATUS REPORT ON BEHALF OF RESPONDENT NO. 1 42. At this juncture, it is pertinent to mention that the Registrar of Companies, Northern Region, has filed four Status Reports at various intervals, in compliance with this Court's directions, with respect to the ongoing investigation. The Status Reports dated 29.02.2024 and 01.04.2024 were filed pursuant to the directions of this Court dated 21.02.2024 and 20.03.2024, respectively. It is brought out in such reports that the investigation in the present matter has been carried out in accordance with the order dated 28.03.2024 passed by the Competent Authority/Ministry of Corporate Affairs [MCA] (Annexure R-1), the gist of which is as under: - "F.No.CL-II-05/6/2024-O/0 DGCOA-MCA Dated: 28/03/2024. ORDER Subject: Investigation order under section 210 of M/s Thre....
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....C Shelters Private Limited and its group entities in terms of order of the Hon'ble High Court of Delhi dated 02.02.2024. - regarding. Sir, 1. With reference to the subject cited above, I am directed to refer to IOs letter dated 08.05.2024 (a copy enclosed) wherein requested for approval of the Central Government under Section 219 of the companies Act, 2013 with regard to companies mentioned in Annexure-1, herein. 2. In this regard, I am directed to convey the approval that IO is permitted to invoke powers of the Inspector under Section 219 of the Companies Act, 2013 while conducting investigation into Affairs of related companies consequent to the investigation order dated 28/03/2024. 3. You are also requested to direct IO to examine fleeing risk and submit a proposal for freezer of assets in terms of the Honorable High Court orders dated 02/02/2024, in the subject company. 4. This is issued with the approval of the Competent Authority., Encl: As stated Yours faithfully, Sd/- Sridhar Bavisetty, Joint Director Copy to: 1. Registrar of Companies Delhi, for information please 2. Guar....
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.... U70200DL2010PTC205856 Petition under Section 9 of IBC pending before LD NCLT 3. Three C Homes Pvt Limited U70101DL2011PTC212252 19.12.2019 4. Three C Green Developers Pvt Limited U70102DL2010PTC211958 23.12.2021 5. PIYUSH IT Solutions U70102DL2011PTC221242 Petition under Section 9 of IBC is pending 6. Hacienda Projects Pvt Limited U70200DL2010PTC199426 11.11.2022 7. Granite Gate Properties Pvt. Limited - Two projects U45200DL2007PTC202952 10.01.2019 8. Boulevard Projects Pvt Limited U70200DL2010PTC203764 08.02.2019 9. Three C Projects Pvt Limited U70200DL2010PTC205607 29.10.2020 10. Bright Buildtech Pvt Limited U45201DL2006PTC146221 Taken over by ACE Group 11. Three C Universal Developers Pvt Ltd U45200DL2007PTC160055 17.12.2019 Table No. 03 12. Three C Town Planners Pvt Limited (Now Mega Town Planners Pvt Limited) U70109DL2010PTC211989 This company is associated with Bright Buildtech Pvt Ltd 13. Three C Universal Developers Pvt Ltd U45200DL2007PTC160055 14. Three C Residency Pvt Limited U70109DL2011PTC228512 Acquired land parcel of ....
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.... this company was transferred to Ace Group for an amount of Rs. 1 lakh. i. YEIDA had cancelled the allotment of land of this company by cancellation letter dt. 16.04.2019 (Pg. 50 of CM No. 11516 of 2024). ii. There are no assets or cash or bank balance in this company. i. The Balance Sheet of Three C Residency Pvt. Ltd. as on 31.03.2020 shows that it has assets worth approx. Rs. 236 crores (Pg. 5 and page 33 of Compilation dated 24.05.2024). This is only the Book Value, whereas the market value of the land allotted to this company, would be much higher. 2. Bright Buildtech Pvt. Ltd. The ownership of Three C Town Planners was transferred to Lotus Greens LLP in 2012. Three C Town Planners is 100% owner of Bright Buildtech Pvt. Ltd. Bright Buildtech Limited has development rights in approx. 50 Acres of Land at Sector 89-90, Gurugram, Haryana (Pg. 37 r/w 39 of CM No. 11516 of 2024). Ace Group acquired shareholding of Three C Town Planners Ltd. in June 2019 for an amount of Rs. 1 lakh. i. The company had no assets or cash or bank balance. ii. IBC proceedings had been initiated against this case, however, the Ace Group settled with the Petitioner in IBC proc....
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.... cost or net realisable value, whichever is lower. Costs include land acquisition cost, estimated internal development costs, government charges towards conversion of land use/licenses including external developments charges, interest on project specific lands in accordance with policy on borrowing costs and other related government charges and cost of development/construction materials. ii) Development rights represents amounts paid by the Company under collaboration agreement, to acquire exclusive and irrevocable development rights on the identified land. 49. Long story short, it was pointed out that since TCRPL was entangled in legal conundrum with YIEDA [Yamuna Expressway Industrial Development Authority], the said company was acquired by the ACE Group of Companies on 27.11.2020, taking on all its liabilities. Subsequently, any actions or inactions on the part of YIEDA were contested before the Allahabad High Court in Civil Writ Petition No. 22354/2023, and as per directions of the Court dated 14.07.2023, a sum of Rs. 50 crores have since been deposited towards subject property by TCRPL, which is now controlled by Ace Group of Companies. 50. Learned Senior Advoca....
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....L"]. Subsequently, BBPL and respondent No. 11/Orris entered into an agreement on 18.05.2013, transferring 50% of the development rights of the township to BBPL. 53. In other words, it is strongly argued on behalf of the applicants/respondents No. 12 and 13 that MTPPL became the holding company of BBPL, and that BBPL was transferred to Lotus Green LLP on 12.07.2018 after completing all the necessary legal formalities. It is also claimed that, at the time of the transfer of control and ownership to Lotus Green LLP, MTPPL had no assets, properties, or projects, as shown in its balance sheet for 31.03.2012 and trial balance sheet for 12.07.2012. It is asserted that, in fact, no part of MTPPL's land was included in the land allegedly allotted to respondent No. 3, or to Lotus Green LLP, in Section 89 of the Greenopolis Project. Furthermore, it is pointed out that BBPL launched a project named Wood View Residencies using its own funds and resources in 2013. However, due to defaults in construction and development, numerous claims were filed before HRERA, NCTL, and NCDRC, as the project was at risk of being declared an NPA [Non-Performing Asset]. 54. It is argued that BBPL was ac....
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....the characterization of the Ace Group of Companies as a proxy of respondent No. 3/TCSPL is unwarranted, particularly since the acquisition was carried out through the legal process. However, it is pertinent to note that, insofar as TCUDPL is concerned, the Resolution Plan remains stayed by the Supreme Court in Civil Appeal No. 7762/2023, in terms of order dated 08.01.2024. 57. The question arises is whether the foregoing submissions on the part of the learned counsels for the parties should at all be considered by this Court sitting in writ jurisdiction under section 226 of the Constitution of India, 1950? Before the same is answered, we must look into the judicial orders that have passed during the course of the proceedings before this Court. JUDICIAL ORDERS PASSED DURING THE PROCEEDINGS: 58. There was a grievance espoused by the applicant/respondent No. 11/Orris in CM APPL. 41270/2024 that the respondents No. 1 and 2 taking shelter behind the order of this Court dated 02.02.2024, are directing investigation into the affairs of the applicant/respondent No. 11/Orris. Suffice to state that on perusal of the Status Report filed by the respondents No. 1 and 2, it was observed....
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....(C) NOS. 586-590/2024 in C.A. NOS. 6792-6796/2023 & CONMT.PET.(C) No ....@ DIARY NO(S). 23327/2024 1. The contempt petitions are disposed of with the liberty to the petitioner(s) to file appropriate application before the NCLT, which will be considered in accordance with law. 2. Pending application(s), if any, shall stand disposed of." CIVIL APPEAL NO(S). 6792-6796/2023, C.A. NO. 6797-6801/2023 & C.A. NO. 6802-6806/2023 Greenopolis Welfare Confederation versus Rakesh Kumar Gupta & Ors. 1. These appeals are admitted. 2. Until further orders, there shall be stay of the impugned order dated 28.08.2023 passed by the National Company Law Appellate Tribunal (NCLAT), Principal Bench. 3. It is clarified that the stay would not mean the stay of proceedings before the National Company Law Tribunal (NCLT) and the same would proceed in accordance with law. 4. Some of the parties have raised serious grievance with regard to the conduct of the Interim Resolution Professional (for short, 'IRP'). Shri Nalin Kohli, learned senior counsel appearing for the IRP disputes the said allegations. 5. We do not find it necessar....
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....r. Nalin Kohli, Ld. Sr. Counsel appearing for IRP as also Mr. Gopal Jain, Ld. Sr. Counsel who is representing the Applicant in a different application (ibid) on various judgments. We would examine the issue of maintainability of application for replacement of RP/ IRP before this Tribunal, even when there is no resolution passed by the CoC to replace him in the application in which the Applicant is represented by Mr. Gopal Jain, Senior Advocate. In the present case, where the IRP appointed by this Tribunal has discharged his function of re-verifying the claim only in terms of the order passed by this Tribunal as upheld by Hon'ble NCLAT cannot be set to have committed any irregularity or lapse. If the IRP has taken some view regarding rejecting any claim erroneously or even so accepting any other claim, the parties are not without remedy and they can always approach this Tribunal by way of an appropriate application. Once this Tribunal had directed the RP to do the verification, the IRP could not have done the same, without having access to books and other records qua the CD. As far as the issue of preparation of status report by the RP and placing the same before the courts are ....
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....nd it would be for this Tribunal to pass appropriate orders regarding the issues observed and flagged by the Monitoring Committee. The members of the Monitoring Committee would be entitled to honorarium of Rs. 1 lakh each for every meeting, which would be held by them weekly till Constitution of CoC. The process regarding constitution should be completed as early as possible, preferably within 30 days. The honorarium payable to the members would be paid by IRP and the same would be subsequently included in the CIRP cost. The IA stands disposed of." 61. That being the disposition directed by the NCLT, it is also pertinent to indicate at this juncture that a fresh Status Report was called by this Court from respondents No. 1 & 2, considering the long lapse of time since the hearing of the arguments on 18.09.2024. A Status Report dated 10.02.2025 has been filed by the Inspector Seema Rath, Joint Director, RD (Northern Region). In a nutshell, the Status Report reveals that investigation is going on into 16 more companies, the details of which are as under: SN Name of the company CIN Status Last Balance Sheet Filed 1. Three C Shelters Pvt. Limited U70200DL2010....
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....urt-II) in the matter of M/s Straight Edge Contracts Private Limited V/s M/s Three C Shelters Private limited and in the matter of I.A. No. 5743/2024, the Ld. NCLT while dismissing the application of GWA has appointed a Monitoring Committee comprising of Hon'ble Mr. Justice Sunil Gaur, former judge of Hon'ble Delhi High Court, Ms. Rashmi Chopra, Sr. Counsel and Mr. Anil Mittal, ex-C.V.O of Canara Bank to monitor the affairs of the process till Constitution of CoC. The two associations i.e. GWA and GWC, will also nominate one of their elected representatives to be part of the Monitoring Committee. The IRP on 07.02.2025 by hand submitted information with regard to Status Report prepared by him in respect to the Three C Shelter Pvt Limited. The information is bulky and is being examined." DECISION: 62. In view of the aforesaid turn of events and considering the complexity of the factual narrative and interwoven set of legal proceedings involving several parties and decisions rendered by the Supreme Court, along with the fact that NCLT is now seized of the matter, the bottom line is that the petitioner and those who are similarly placed, i.e., the homebuyers, are yet to s....
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....ng up to the present date. There has been a blatant attempt by respondent No. 11/Oris, along with the applicants for ACE Group of Companies, to take the entire dispute to a different tangent. Furthermore, the roles of the two homebuyer Association have come into question, as they appear to have taken opposing stances in this highly contentious matter. Now that the investigation under Chapter XIV of the Companies Act, 2013, has commenced, any order to recall investigation shall be counter-productive and shall not serve the ends of justice. Any such action would be highly detrimental to the interests of the primary stakeholders-namely, the affected homebuyers. 66. The reliance by the learned Senior Advocates upon the decision in the case of Rohtas Industries Ltd. v. S.D. Agarwal 1968 SCC OnLine SC 372 does not help them in any manner. The Supreme Court had an occasion to consider the scope of exercise of powers under Section 237 (b)^2 of the Companies Act, 1956, and it was held: 2. Section 237 (b) provides that the Central Government may appoint one or more competent persons as inspectors to investigate the affairs of the company and to report thereon in such manner as th....
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.... of the company is a member of a particular community. Within these narrow limits the opinion is not conclusive and can be challenged in a court of law. Had Section 237 (b) made the opinion conclusive, it might be open to challenge as violative of Articles 14 and 19 of the Constitution, see Corporation of Calcutta v. Calcutta Tramways Co. Ltd [(1964) 5 SCR 25] distinguishing Joseph Kuruville Vellukunnel v. Reserve Bank of India [(1962) Supp 3 SCR 632]. Section 237 (b) is not violative of Articles 14 and 19. 5. If it is established that there were no materials upon which the authority could form the requisite opinion the court may infer that the authority did not apply its mind to the relevant facts. The requisite opinion is then lacking and the condition precedent to the exercise of the power under Section 237 (b) is not fulfilled. On this ground I interfered with the order under Section 237 (b) in Barium Chemicals v. Company Law Board[(1966) Supp 3 SCR 949] . 67. In summary, there are overwhelming material to suggest that the buying and selling of sister concerns, which were previously managed and controlled by the ex-promoters & directors of respondent No. 3/TCSPL, ra....
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....illy v. Mackman, (1983) 2 AC 237 : (1982) 3 WLR 1096 (HL)] to have liberated English public law from the fetters that the courts had theretofore imposed upon themselves so far as determinations of inferior courts and statutory tribunals were concerned, by drawing esoteric distinctions between errors of law committed by such tribunals that went to their jurisdiction, and errors of law committed by them within their jurisdiction. 17. But Racal, In re [Racal Communications Ltd., In re, 1981 AC 374 : (1980) 3 WLR 181 (HL)] made a distinction between courts of law on the one hand and administrative tribunal/administrative authority on the other and held that insofar as (inferior) courts of law are concerned, the subtle distinction between errors of law that went to jurisdiction and errors of law that did not, would still survive, if the decisions of such courts are declared by the statute to be final and conclusive. Thus one distinction was gone with Anisminic [Anisminic Ltd. v. Foreign Compensation Commission, (1969) 2 AC 147: (1969) 2 WLR 163 (HL)], but another was born with Racal, In re [Racal Communications Ltd., In re, 1981 AC 374 : (1980) 3 WLR 181 (HL)]. This could be se....
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....Nath Roy v. Ram Chandra Barna Sarma [Hriday Nath Roy v. Ram Chandra Barna Sarma, 1920 SCC OnLine Cal 85 : ILR (1921) 48 Cal 138]. It was held therein that: (Sachindra Nath Chatterjee case [Official Trustee v. Sachindra Nath Chatterjee, (1969) 3 SCR 92 : AIR 1969 SC 823] , AIR p. 828, para 15) "15. ... before a court can be held to have jurisdiction to decide a particular matter it must not only have jurisdiction to try the suit brought, but must also have the authority to pass the orders sought for". (emphasis supplied) This Court also pointed out that it is not sufficient that it has some jurisdiction in relation to the subject-matter of the suit, but its jurisdiction must include (1) the power to hear and decide the questions at issue, and (2) the power to grant the relief asked for. This decision in Official Trustee [Official Trustee v. Sachindra Nath Chatterjee, (1969) 3 SCR 92 : AIR 1969 SC 823] was followed in a recent decision in Iffco Ltd. v. Bhadra Products [IffcoLtd. v. Bhadra Products, (2018) 2 SCC 534 : (2018) 2 SCC (Civ) 208], quite independent of Anisminic [Anisminic Ltd. v. Foreign Compensation Commission, (1969) 2 AC 147 : (1969) 2 WLR 163 (HL)] an....
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.... [Hari Prasad Mulshanker Trivedi v. V.B. Raju, (1974) 3 SCC 415] K.K. Mathew, J., speaking for the Constitution Bench, pointed out that though the dividing line between lack of jurisdiction or power and the erroneous exercise of it has become thin with Anisminic [Anisminic Ltd. v. Foreign Compensation Commission, (1969) 2 AC 147 : (1969) 2 WLR 163 (HL)], the distinction had not been wiped out completely. 22. But it is relevant to note that Official Trustee [Official Trustee v. Sachindra Nath Chatterjee, (1969) 3 SCR 92 : AIR 1969 SC 823] /Anisminic [Anisminic Ltd. v. Foreign Compensation Commission, (1969) 2 AC 147 : (1969) 2 WLR 163 (HL)] and what followed both, were mostly in the context of the power of the superior court to interfere with the decisions of subordinate courts/tribunals or administrative authorities. Most of these decisions were not in the context of the exercise of jurisdiction despite the availability of alternative remedy. That there exists such a distinction between (i) cases where the jurisdiction of a superior court is questioned on the basis of ouster clauses and (ii) cases where the exercise of jurisdiction by a superior court is questioned on the ....
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....ise its supervisory jurisdiction. The same principle was applied in (1) Nivedita Sharma v. COAI [Nivedita Sharma v. COAI, (2011) 14 SCC 337 : (2012) 4 SCC (Civ) 947], and (2) Cicily Kallarackal v. Vehicle Factory [Cicily Kallarackal v. Vehicle Factory, (2012) 8 SCC 524 : (2012) 4 SCC (Civ) 540] in relation to the awards passed by the special fora constituted under the Consumer Protection Act, 1986. 51. Even fraudulent tradings carried on by the corporate debtor during the insolvency resolution, can be inquired into by the adjudicating authority under Section 66. Section 69 makes an officer of the corporate debtor and the corporate debtor liable for punishment, for carrying on transactions with a view to defraud creditors. Therefore, NCLT is vested with the power to inquire into (i) fraudulent initiation of proceedings as well as (ii) fraudulent transactions. It is significant to note that Section 65 (1) deals with a situation where CIRP is initiated fraudulently "for any purpose other than for the resolution of insolvency or liquidation". 52. Therefore, if, as contended by the Government of Karnataka, the CIRP had been initiated by one and the sa....
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....no final verdict from this Court or from any other judicial or quasi-judicial forum declaring the IRP report as the gospel truth. Given that successive IRP reports are now before the NCLT and a Monitoring Committee has been constituted, it is essential that the law is allowed to take its own course. 71. All said and done, it remains clear in the mind of this Court that respondent No. 11/Orris and the ACE Group of companies, represented by respondents No. 12 and 13, are active and functioning entities within the real estate market. The material presented suggests that these parties have been meeting their contractual obligations and are not facing significant allegations of fraud or fund siphoning by their secured or unsecured creditors. Regarding the ACE Group of companies, both the petitioner and respondent No. 11/Orris have failed to establish any direct link or connection to the ex-promoters and directors of respondent No. 3/TCSPL. It also appears that the ACE Group acquired some of the sister companies at arm's length, as part of the ordinary course of business, and notably, none of their companies have acquired land in Gurugram that is part of the "Greenopolis Project." ....
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.... or conjectures. The stark fact is that the Greenopolis project has been abandoned by the respondent Nos. 6-10/ex-promoters and directors after siphoning of funds generated directly through respondent no. 3/TCSPL and the petitioner as well as those who are similarly placed investors/claimants/homebuyers are the victims at their hands, which is an undisputed proposition. FINAL ORDER/DIRECTIONS 75. In view of the foregoing discussion, in modification of earlier order dated 02.02.2024, the following directions are passed: (i) CM APPL. 10599/2024 moved on behalf of the applicant/respondent No. 7, Mr. Vidur Bhardwaj, for recalling of order dated 02.02.2024 is hereby dismissed; (ii) The Central Government is hereby directed that the investigation be conducted into the affairs of the respondent No. 3/Three C Shelters Pvt. Ltd. besides its Ex-Promoters and Directors/Management viz. respondent No.6/Mr. Nirmal Singh, respondent No. 7/Mr. Vidur Bhardwaj, respondent No.8/Mr. Surpreet Suri and respondent No.9/Mr. Rajeev Bisoya besides respondent No. 10/Mr. Girish Chander Joshi through the SFIO to unearth the manner in which the funds generated from the petitioner and oth....
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.... with the law. 77. Nothing contained in this order shall tantamount to an expression of opinion on the merits of the matter before the NCLT as also with regard to the investigation to be conducted by the other agencies. 78. A status report shall be filed by the Central Government as well the SFIO on or before on 26.05.2025. 79. Accordingly, both the applications stand disposed of. ------------------ Notes: 1. Trade payable as reflected in note 5 and 7 represents non-current and current portions respectively of the amounts payable against 2,57,155 sq. metre of leasehold land/plot No.TS-2, t Sector - 18, Yamuna Expressway Industrial Development area, Gautam Budh Nagar (UP), acquired by the company from Yamuna Express Industrial Development Authority (YEIDA Authority) for setting up of urban and industrial township, in accordance with the lease deed dated 17th February, 2012. The lease term is of 90 years. As per the revised letter by Y.E.A/232/2013 dated 06/03/213, premium of such leasehold land, is to be paid in 14 half yearly instalments commencing on 19 August, 2013 along with interest rate of 12.50% p.a. on outstanding balance. Yamuna Express....