2018 (12) TMI 1992 - HC - Indian Laws

Initiation of an enquiry - whether this Court can in its testamentary and intestate jurisdiction on a report of a administrator order an inquiry as sought? - Siphoning of funds from the estate of the deceased - HELD THAT - The scope of Section 247 of the Succession Act empowers the Court to appoint an administrator with rights and powers of general administration excluding the right to distribute the estate. The administrator in question shall be subject to the immediate control of the Court and shall act under the directions of the Court. Needless to mention, administration as contemplated in Section is pendente lite. There is now no doubt that in the facts of the present case the appointment of the administrator was justified inasmuch as it is now final, with all challenges to his appointment having been repelled - This Court in the case of Rupali Mehta v/s Tina Narinder Sain Mehta 2006 (8) TMI 698 - BOMBAY HIGH COURT dealt with the scope of Section 269 observing that Section confers special powers of the Court to interfere with the protection of property till probate is granted provides the deceased was not a Hindu, Mahomedam, Buddhist, Sikh, Jaina or an Indian christian. Ione following the excluded persons. In the present case the administrator has been appointed and we are concerned with an application seeking ordering an investigation pursuant to the appointment of the administrator. In effect, it is an application to assist or further empower the administrator. Post the appointment of an administrator, the question to be considered is whether the Court is required to by judicial orders to empower the administrator to adopt appropriate proceedings - It is not as if the remedy of the suit is ousted by the application or vice versa. If the remedy of the suit was not ousted one of the aspects to be considered is whether there is justification in the instant case for ordering an enquiry or investigation. In the case at hand, there are no doubt that the defendant/notices have been non-cooperative and such behaviour, despite appointment of the Administrator is causing material prejudice to the estate and the administration of justice. Under section 340(3)(a) where the Court making the complaint is a High Court, an officer of that court may be appointed to make that complaint. Since the High Court is exercising its testamentary jurisdiction, it is therefore permissible for an officer of High Court registry to make that complaint. The object and scope of section 340 is to institute an enquiry and ascertain whether any offence affecting administration of justice has been committed in relation to any document produced and given as evidence in Court. Section 340 of the Code has been held to be applicable to all proceedings in all Courts in criminal cases or civil cases irrespective of the fact that whether the matter in court is one involving an offence mentioned in Section 195 - In the present case, the parties involved, not having faithfully disclosed the extent of their involvement and have undoubtedly held back in making a full and proper disclosure and have been engaged in deceitful conduct. The question that arises is whether the Administrator should stand by in anticipation of compliance by the defendant/notices. The conduct of the defendant that of the trustees and all those associated with the Trust and those inter-meddling with the estate leaves much to be desired and that the disclosures are neither complete nor entirely truthful. Attempts are made to frustrate the exercise undertaken by the Administrator and the attitude of the defendants and the respondents is obstructive - The conduct of defendant no. 1 is undoubtedly obstructive of the administration of justice and the earlier affairs under administration are probed, the more beneficial it will be for the estate. The Court must also ensure that the Administrator is provided with all necessary assistance to complete the task in hand. Given the non co-operative, obstructive and misleading conduct demonstrated over the past few years it is time to ensure that the protection of the estate is complete in all respects both by securing the estate as presently stands and by recovery of all that has been taken away from it to meet the ends of justice and to ensure proper administration of justice. An independent investigation is required to be carried out as to the scope of the investigation, after the complaint contemplated in this order is filed, it would be for the investigating agency to seek appropriate directions from this court time to time should the need so arise. It is necessary to ensure that the enquiry is conducted in a focused and purposive manner. The administrator will therefore be required to provide all necessary support - The resistance to an enquiry does not appear justified in view of the first defendants contention that the administrator may if he so desires file complaints. The Administrator appointed by this Court shall draw up a complaint to be filed and provide the draft complaint to the Prothonotary and Senior Master within a period of four weeks from today - Upon the draft complaint being lodged and subject to scrutiny of its contents the Prothonotary and Senior Master shall forward the complaint on behalf of the Administrator to the Commissioner of Police, Mumbai who shall nominate a suitable team of officers to initiate an investigation into the complaint and the affairs of deceased Purvez Burjor Dalal. The progress of the investigation after it commences shall be reported to the Prothonotary and Senior Master on a fortnightly basis - This Report shall be listed for further hearing after eight weeks.

Summary

Issues Involved:
1. Appointment and duties of the Administrator of the estate.
2. Allegations of misappropriation and siphoning of estate funds.
3. Requests for specific disclosures and recovery of funds.
4. Legal authority and jurisdiction of the court in testamentary matters.
5. Requests for investigation and involvement of third parties.

Detailed Analysis:

1. Appointment and Duties of the Administrator:
The court appointed an administrator for the estate of the deceased, Purvez Burjor Dalal, on 21st November 2013, and this order has attained finality. The administrator has taken charge and filed reports regarding the estate. The court directed the plaintiffs and defendant no. 1 to hand over properties and identify estate properties. The Administrator was instructed to recover properties and engage advocates as necessary. An administrative account was opened with the Central Bank of India.

2. Allegations of Misappropriation and Siphoning of Estate Funds:
The administrator sought reliefs including the disclosure of documents related to various bank accounts and transactions involving significant sums of money. The plaintiffs alleged that defendant no. 1, along with Amoha Traders Pvt. Ltd. and other entities, conspired to siphon funds from the estate. Disclosures revealed that substantial amounts were transferred to entities such as Amoha Traders and the Bai Avabai Hormusji Tata Trust, purportedly for charitable purposes, but these transactions were suspect and possibly fraudulent.

3. Requests for Specific Disclosures and Recovery of Funds:
The administrator requested the court to direct various entities, including HSBC and Kotak Mahindra Bank, to provide detailed account statements and transaction details. The administrator also sought the recovery of funds transferred to Amoha Traders and the Bai Avabai Hormusji Tata Trust, alleging that these transfers were unauthorized and not in line with the deceased's will. The court was asked to compel these entities to disclose documents and repay the misappropriated funds with interest.

4. Legal Authority and Jurisdiction of the Court in Testamentary Matters:
The court examined its jurisdiction under the Indian Succession Act and related statutes. It was argued that the testamentary court's jurisdiction is limited to the genuineness and execution of the will and does not extend to determining the title or existence of the property bequeathed. However, the court has plenary and inherent powers to ensure justice and can order investigations into fraudulent activities related to the estate. The court referred to various precedents to establish that it has the authority to take necessary actions to protect the estate and ensure proper administration.

5. Requests for Investigation and Involvement of Third Parties:
The court considered the administrator's request for an investigation into the alleged fraudulent activities. The court noted the obstructive behavior of defendant no. 1 and other involved parties, which hindered the administrator's efforts. Given the complex and deceitful conduct revealed, the court decided that an independent investigation was necessary. The court directed the administrator to draft a complaint and submit it to the Prothonotary and Senior Master, who would then forward it to the Commissioner of Police for further investigation.

Conclusion:
The court ordered an independent investigation into the affairs of the deceased's estate, recognizing the need for thorough scrutiny due to the obstructive and potentially fraudulent actions of the involved parties. The administrator was instructed to draft a complaint, which would be forwarded to the police for investigation, ensuring that the estate's interests are protected and justice is served.