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TMI Blog1998 (6) TMI 471X X X X Extracts X X X X X X X X Extracts X X X X ..... restrictions under article 226 of the Constitution of India, we, the Courts, cannot be silent spectators to such piquant situa- tions. 3. In the present case, it is the case of the Petitioners that the Petitioners No. 1 to 4 are shareholders of Respondent No. 1 - Company, viz., Indo French Biotech Enterprises Ltd. Petitioner No. 1 is also shareholder of a Company known as 'Indo Global Biotic Ambience Ltd.' The said Compa-nies are floated by Respondent No. 3, who is the Chairman and managing director and collected large funds. They have floated a Scheme known as "PROJECT GRAPES". The return mentioned in the brochure of PROJECT GRAPES is 1025 per cent and, for that purpose, the members of public were requested to invest in any of the 6 attractive and convenient Schemes and get incredible returns. It appears that, on the basis of the said scheme, nearly 50,000 investors have invested their hard-earned money in PROJECT GRAPES, which scheme was started in the year 1993. 4. Various allegations are made with regard to siphoning off the compa- ny's property and investment made by the public at large. In all, Respon-dent No. 1 has collected Rs. 32 crores and odd from the sharehold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the whole situation by joining as a co-promoter of such companies. The learned counsel for M.M.T.C. Ltd. states that M.M.T.C. Ltd. has already taken proceedings under sections 397 and 398 of the Companies Act against Respondent No. 1 and the proceedings are pending for the last one year. Prima facie, we do not find that the action taken is sufficient to render justice to the common investors in such companies. 11. On behalf of the Petitioners as well as SEBI, it has been pointed out that as many as 50 investors have filed complaints with the economic offences wing of the police department, stating that the cheques issued by Respondents No: 1 and 2 have bounced and are not honoured. The amount mentioned for that purpose in Exhibit T is, in all, Rs. 29,75,000. 12. The learned counsel appearing on behalf of SEBI states that, SEBI has already filed a criminal complaint against Respondent No. 1 and its Directors under the SEBI Act and the Companies Act. However, he points out that the said remedy is not a sufficient remedy for protecting the investors or depositors. 13. The learned counsel appearing on behalf of the RBI also points out that, at present, the RBI is also n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d women and will do justice between the real persons. After discussing other authorities, the Court has observed that the concept of corporate entity was evolved to encourage and promote trade and commerce but not to commit illegalities or to defraud people and held as follows: "Where, therefore, the corporate character is employed for the purpose of committing illegality or for defrauding others, the Court would ignore the corporate character and will look at the reality behind the corporate veil so as to enable it to pass appropriate orders to do justice between the parties concerned. The fact that Tejwant Singh and members of his family have created several corporate bodies does not prevent this Court from treating all of them as one entity belonging to and controlled by Tejwant Singh and family if it is found that these corporate bodies are merely cloaks behind which lurks Tejwant Singh and/or members of his family and that the device of incorporation was really a ploy adopted for committing illegalities and/or to defraud people." The Court has also held that the absence of a statutory provision will not inhibit the Court (as the Court was exercising power under article 142 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8 and 15 are directed to furnish a list of the group companies and indicate the amounts/assets, whether mov- able or immovable, transferred from Respondents No. 1 and 2 to their group companies or any other companies in which Respon- dents No. 3 to 8 are directors or shareholders; ( f )The Deputy Commissioner of Police is further directed to find out the assets of the Directors of Respondents No. 1 and 2 companies and whether any amount of the companies is siphoned off to any sister concerns or in the name of relatives of the directors. ( g )The enquiry by the Police would include the following : ( A )To inquire into the disappearance of Rs. 1,47,19,974 which amount is stated to have been earned by way of interest on public issue in the year 1993-94 (and does not find place in the balance sheet of Respondent No. 1 company). ( B )To inquire whether Respondent No. 1 owns 500 acres of land at Nasik and whether it includes the land amounting to 218 acres belonging to project grape investors or the same is separately held in the names of the said Investors. ( C ) To inquire whether 218 acres of land at Nasik for Project scheme was taken on deposit of Rs. 291.00 lacs on 50 y ..... X X X X Extracts X X X X X X X X Extracts X X X X
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