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2016 (7) TMI 876 - SC - Indian LawsTransfer of plot by way of transfer of shares in a company to another company - in the year 2002, Chandigarh Administration notified the rules called Allotment of Small Campus Site in Chandigarh Information Services Park, Rules, 2002 (hereinafter referred to as the Rules ). Rule 9 of the Rules provided that transfer of the campus site by the allottee shall not be allowed for a period of 10 years from the date of allotment or till all dues are fully paid up whichever is later. Similar condition was incorporated in the allotment letter dated 1.6.2006 by which 6 acres of land was allotted to the respondents. It was necessary to make the construction within 3 years from the date of allotment. Held that - It is apparent that in spite of the clear direction made by this Court, the respondent has suppressed the facts with respect to its deal with M/s. Teledata Ltd. There is concealment of material facts by the respondent in spite of having been directed to disclose the full facts in the counter affidavit by specific order passed on 16.7.2015. It has been mentioned in para 17 that sale of its subsidiaries to M/s. Esys Global Holding meant that these liabilities were transferred to the buyer. Thus there is sale of assets and subsidiaries and the denial that there is no sale is incorrect statement. In the affidavit dated 24.7.2008 in paras 10 and 11, it is apparent that purchase by M/s. Esys Dubai of the assets of M/s. Esys Singapore and its subsidiaries after taking regulatory approvals which were required for transfer of shares. Thus, under the garb of transfer of shares, the respondents have completed the sale and is creating a screen to conceal this aspect. Deal with Teledata is also apparent from the aforesaid paras 19 to 21 of the affidavit of Mr. Vikas Goel. Unfortunately, the respondent has concealed the facts with respect to Teledata and has not come out with clean hands. The provisions of Rule 9 of the Rules and Clause 15 of the allotment letter have been clearly violated. Thus, we are of the considered opinion that the order passed by the High Court is not sustainable and resumption of the allotted land by the appellant was legal and proper. - Decided in favor of revenue.
Issues Involved:
1. Legality of the transfer of shares and assets by the respondent. 2. Compliance with Rule 9 of the Allotment of Small Campus Site in Chandigarh Information Services Park, Rules, 2002 and Clause 15 of the allotment letter. 3. Validity of the resumption of the allotted land by the Estate Officer. 4. Allegations of suppression of material facts by the respondent. Issue-wise Detailed Analysis: 1. Legality of the Transfer of Shares and Assets by the Respondent: The respondent, M/s. Esys Information Technologies Pvt. Ltd., Singapore, transferred a major portion of its shares to M/s. Esys Global Holdings, Dubai, without informing or seeking permission from the appellant, as required by Rule 9 and Clause 15 of the allotment letter. The transfer was discovered on 2.1.2008, prompting the Director, IT, to seek clarifications from the respondent. The respondent's reply was unsatisfactory, leading to a show-cause notice and subsequent cancellation of the allotment by the Estate Officer on 24.9.2008. 2. Compliance with Rule 9 of the Allotment of Small Campus Site in Chandigarh Information Services Park, Rules, 2002 and Clause 15 of the Allotment Letter: Rule 9 and Clause 15 stipulated that the transfer of the campus site by the allottee was not allowed for ten years from the date of allotment or until all dues were fully paid, whichever was later. The respondent argued that the shareholding pattern change did not constitute a transfer of the site. However, the appellant contended that the transfer of shares to Esys Global Holdings, Dubai, and the subsequent transaction with Teledata Informatics Ltd., Chennai, violated these conditions. The Court noted that the affidavit of Mr. Vikas Goel in the High Court of Singapore confirmed the sale of subsidiaries, including Esys India, to Esys Global Holdings, Dubai, and the involvement of Teledata. 3. Validity of the Resumption of the Allotted Land by the Estate Officer: The Estate Officer resumed the site on 24.9.2008, forfeiting 10% of the total premium and other dues. The respondent's appeal and revision petitions were dismissed. The High Court set aside the resumption, but the Supreme Court found that the provisions of Rule 9 and Clause 15 were clearly violated. The Court emphasized that the transfer of shares and assets constituted a transfer of the site, which was not permissible without prior permission. 4. Allegations of Suppression of Material Facts by the Respondent: The Supreme Court highlighted that the respondent suppressed material facts regarding its transactions with Teledata. Despite the Court's specific order on 16.7.2015 to disclose full facts, the respondent failed to do so. The affidavits filed by Mr. Vikas Goel in the High Court of Singapore revealed the true nature of the transactions, showing that the respondent engaged in a sale of assets and subsidiaries to Esys Global Holdings, Dubai, and had dealings with Teledata. Conclusion: The Supreme Court concluded that the respondent violated Rule 9 and Clause 15 of the allotment letter by transferring shares and assets without permission. The resumption of the allotted land by the Estate Officer was deemed legal and proper. The Court found the respondent guilty of suppressing material facts and violating the disclosure order dated 16.7.2015. Consequently, the Supreme Court set aside the High Court's order and allowed the appeal, with parties bearing their own costs.
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