2012 (4) TMI 760 - HC - Companies Law

Summary

Issues Involved:
1. Investigation and Misfeasance Application
2. Interim Directions/Orders u/s 542(2) of the Companies Act
3. Attachment and Possession of Properties
4. Loans and Advances
5. Attachment of Bank Accounts and Personal Assets
6. Sale of Property without Court Sanction
7. Purchase of Jewellery and Silver Articles
8. Status Quo on Assets and Accounts

Summary:

1. Investigation and Misfeasance Application:
On 05th June 1998, the Court appointed a Provisional Liquidator for M/s. JVG Finance Limited and other related companies. The Central Government ordered an investigation into JVG Finance Limited u/s 235 of the Companies Act, 1956, based on a report from the Registrar of Companies. The SFIO submitted its report on 11th February 2010, leading to the Official Liquidator filing an application.

2. Interim Directions/Orders u/s 542(2) of the Companies Act:
The Court considered the SFIO report and found sufficient prima facie evidence to proceed u/s 542 of the Act against the ex-Director, Mr. Vijay Kumar Sharma, and others. The Court invoked Section 542 to attach personal properties of the ex-Director and his associates to protect the creditors and investors.

3. Attachment and Possession of Properties:
The SFIO reported that large tracts of land in Gurgaon were purchased using funds from JVG Finance Limited but registered under other JVG Group Companies. The Court directed the attachment and possession of these lands, except for land in possession of M/s. Tirupati Cylinders. The Official Liquidator was instructed to file winding-up petitions against the JVG Group Companies.

4. Loans and Advances:
The SFIO found that loans and advances of Rs. 9.73 crores were outstanding against Mr. Vijay Kumar Sharma and his family members. These were fraudulently squared off through a dubious property transfer. The Court held that the loans and advances were still due and payable, directing the attachment of bank accounts and personal assets of the involved individuals.

5. Attachment of Bank Accounts and Personal Assets:
The Court directed the attachment of bank accounts and personal assets of individuals named in the SFIO report, including Mr. Vijay Kumar Sharma and his family members. They were also instructed to file affidavits disclosing their bank accounts and personal assets.

6. Sale of Property without Court Sanction:
The SFIO reported that property bearing No. A-24, Okhla Industrial Area, Phase-I, New Delhi, was purchased using funds from JVG Finance Limited. Despite a previous Court judgment confirming its sale, the Official Liquidator was directed to take steps to protect the company's interest in the property.

7. Purchase of Jewellery and Silver Articles:
The SFIO reported that jewellery and silver articles were purchased using siphoned funds from JVG Finance Limited. The Court directed the attachment of these items and instructed the Official Liquidator to take possession with police aid if necessary.

8. Status Quo on Assets and Accounts:
The Court directed all parties against whom interim orders were passed to maintain the status quo regarding the attached assets and accounts. The matter was listed for further hearing on 18th May 2012.

Order dasti under signatures of the Court Master.