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TMI Blog2013 (5) TMI 710X X X X Extracts X X X X X X X X Extracts X X X X ..... roduced and was unable to be proved. The minutes book produced before the Court showed that the crucial part of the minutes 30th April 1966 was admittedly written by Mr. R.L. Anand in his hand writing later on and not counter-signed by the Chairman of the meeting. Consequently, this Court rejects the case forthwith by the OL that the land at Versova actually belongs to AFPL. The Court rejects the plea forthwith by the OL that the land ad measuring 38681 sq. yards at Versova at Rs. 7.60 per sq. yd under a sale deed dated 17th September 1964 which has remained in possession of Mr. R.P. Anand in fact belongs to AFPL. What is the amount that should be directed to be paid by Mr. R.P. Anand to AFPL, treating the money advanced to him by AFPL as a loan that has remained unpaid till date? - Held that:- The factors that weigh with the Court are in the first place with the land not belonging to AFPL but to Mr. R.P. Anand, at the highest the sum advanced to him by AFPL for its purchase can be treated as an unpaid loan. There was no agreement at any point in time that he would pay AFPL compound interest of the sum. On the other hand as a result of pendency of the present petition for ove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wn on one of the earliest cases of this High Court, fifty seven years after its commencement. 2. The main petition, Co. Petition No. 34 D of 1966, was filed praying for the winding up of Anand Finance Private Limited ( AFPL ), a company incorporated in 1953 by Mr. G.M. Anand. After the death of Mr. G.M. Anand, his eldest son Mr. R.L. Anand became its Managing Director ( MD ). The head office of AFPL was at New Delhi. There was a branch office in Bombay which was looked after by Mr. R.P. Anand, the brother of Mr. R.L. Anand. It was stated that for every purchase of property, whether it was movable or immovable asset, resolutions had to be passed by AFPL prior to and after the event. 3. By Resolution dated 23rd May 1963 Lokmanya Cooperative Housing Society ( LCHS ) which owned lands at Versova in Bombay decided to sell a parcel thereof to Mr. R.P. Anand and 16 other joint purchasers. Permission for the said sale was given by the Registrar of Societies, Bombay on 11th June 1963. On 22nd August 1963 an agreement to sell was entered into between the LCHS and 17 purchasers. Mr. R.P. Anand was a buyer to the extent of 30% of the said land and he paid Rs. 30,000 as earnest money. It wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Committee appointed by the Court. Further detailed directions were issued by the Company Court regarding management of the company. 6. On 27th May 1966 a Scheme of Arrangement ( Scheme ) was filed by the Managing Committee of the AFPL. The said Scheme was sanctioned on 29th July 1968 in terms of which unsecured depositors were to be paid 65% in cash generated from sale of assets of the company and 35% in the form of shares. The Scheme was to be implemented in 2-1/2 years. The Court appointed a Board of Directors to implement the Scheme. 7. In a report filed in the Court in 1974, Mr. K.K. Mehra, the then Chairman informed the Court that all the fixed assets of AFPL had been sold, but money was still required to be paid to the unsecured creditors. In the meanwhile, directions were issued regarding shares of AFPL in Mazda Theatres. In a court auction Mr. R.P. Anand had purchased the shares of Mazda Theatre despite the opposition of Mr. K.K. Mehra, Mr. I.M. Lal, Administrator and Mr. R.L. Anand. 8. CA No. 156 of 1979 was filed by the Committee under Section 446 of the Act in which it was claimed that plot of land at Versova, Bombay was purchased by Mr. R.P. Anand on behalf of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. It was prayed that the title of AFPL to the extent of 30% of the Versova plot, purchased by a sale deed dated 17th September 1964, be declared and that Mr. R.P. Anand and Mr. Sanjiv Anand be restrained by an appropriate injunction from in any manner posing themselves as owners of the land or dealing with, selling or otherwise disposing of the 30% interest in the said plot. 10. It was stated in C.A. 88 of 1982 that by a sale deed dated 17th September 1964 a plot of land in Versova to the extent of 38681 sq. yards was purchased from Lokmanya Cooperative Housing Society (Regd.), Bombay for a consideration of Rs. 2,93,975.90 at Rs. 7.60 per sq. yard and a sale deed was executed by LCHS in favour of Respondent No. 1, Mr. R.P. Anand, and Respondents 3 to 16 jointly who had defined shares in the plot as stated in the sale deed. It was asserted that the land was purchased in the name of Mr. R.P. Anand and 16 others with the funds of AFPL for the benefit of AFPL. It was further asserted that 30% interest in the said land ever remained the property of the company . A reference was made to the Minutes of Meeting held on 30th April 1966 by which the action of Shri R.P. Anand, Directo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... king after the affairs of Mazda Theatres Pvt. Ltd. It was asserted that the funds were borrowed by Mr. R.P. Anand from AFPL for the purchase of the land for himself. The genuineness of the minutes of the alleged meeting of the Board of Directors of AFPL held on 27th January 1970 was challenged. Mr. R.P. Anand denied receiving notice of such meeting. It was stated that there could not have been any such meeting on 27th January 1970 when the management of the AFPL was in the hands of the Committed appointed by the Court under the Scheme. Mr. R.P. Anand contended that he was not aware of any money being paid to the solicitors namely Vakil Dadabhoy Bharaucha. 13. In the rejoinder it was reiterated by the Applicant in C.A. No. 88 of 1982 that question was not whether the land was purchased benami but who was the real owner of the property. The determination of such question necessarily involved determination of the question as to whose money was utilized for the acquisition of 30% interest in the said property at Versova. Reliance was again placed on the meeting of the Board of Directors of AFPL held on 27th January 1970 and the declaration purportedly given by Mr. R.P. Anand that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or did they collect any money. The companies claim in the share of Mazda company were settled by my paying to the company Rs. 18 lakhs and paid about Rs. 14 lakhs to let the shares released from New Bank of India. After my paying money to the Company as well as to the New Bank of India, Chairman and the Administrator of the Management realized that out of all the Directors, I had the best resources and therefore, on the basis of fabricated documents, they started blackmailing and pressuring me. After I did not accede to their demands, a letter dated 8th February 1979 was sent to my by the Directors claiming Versova land to be that of the Company. I denied that the allegations and sent a letter dated 7th March 1979 to which the company did not file any reply, but instead filed CA No. 156 of 1979. 16. In para 8 of the affidavit it was stated as under: 8. The alleged resolution dated 30th April 1966 was in fact never passed. The entry relating to the same in that minute book is a patent forgery. In regard to the properties which were purchased in the name of or on behalf of the company, their sale/purchase was always brought up before the Directors and Resolutions in that regard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade to resolution dated 30th April 1966, in support of the plea that Versova land was purchased by Mr. R.P. Anand with the fund of AFPL and that the balance sheets for the year 1966 onwards showed the Versova land among the assets of the company. 19. In light of the above evidence one of the key issues that requires to be determined is the genuineness of the minutes of the meeting of the Board of Directors of AFPL held on 30th April 1966. They purported to read thus: Shri R. L. Anand was voted to be the chair and he commenced the proceedings 1. To confirms the minutes of the last meeting: The minutes of the last meeting were read and confirmed. 2. To review the working of the company The working of the company was reviewed and it was unanimously resolved that more efforts should be made to effect the recoveries from the hirers. The managing director assured the board that the work of recovering will be vigorously pursued. The question of travelling allowance was briefly discussed, M.D. authorized to deal with it. Information of purchase of land at Bombay. Resolved that action of Shri R. P. Anand, Director, in investing company s funds in the plots of land at Chambur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... about the negotiations regarding purchase of this land sometime in October or November 1963. I did take part in the negotiations regarding purchase of this land from the very beginning itself. The price of the land was settled at the time of the purchase. I do not remember how many days prior to the purchase the price was settled. As to how much advance was given is mentioned in the books of the company. My role in the negotiation was that the deal was almost finalized by me and also by Mr. R.P. Anand. As far as I remember the negotiations were finalized in November 1963 and the sale deed was executed in April 1964. I was not present in Bombay on the date when the sale deed was executed. The amount for the purchase of this land was sent to Bombay from the Delhi Office. This amount was sent by means of bank draft so far as I remember but I do not remember if the draft was sent by post or through some messenger. The money from Delhi office on occasions was being remitted to Bombay office. Question: Was it mentioned anywhere as to why money was being sent each time? Answer: As far as I know there is no such procedure in accounting system to mention the purpose for which the money ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r ever in existence as deposed by me. Q: Did you ever mention this disclaimer letter in any court proceedings or in document or affidavit filed by you? A: Since, I am not a party to the proceedings the question of referring to this disclaimer letter did not arise. I might have filed reply in the proceedings connected with the Scheme proposed by R.P. Anand if I was a party therein. R.P. Anand who was a director of the company was, however, not present when resolution dated 30th April 1966 was passed. Part A and Part B of the Board proceedings dated 30th April 1966 and Ex.PW-1/2A are not in the handwriting of one individual. The first part of the resolution encircled red and marked B could be in the writing of Radhey Sham but I am not quite sure. The second part encircled red and marked A is, however, in my writing. The latter portion marked A in the resolution was written by me some time in May, 1966. Q: Why did you not mention the date when you wrote portion encircled red and marked A? A: This part of the resolution mentioned in portion marked A was discussed in the Board meeting held on 30th April 1966. Somehow it was forgotten to be included in the proceedings. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ersova land after the litigation regarding Mazda Theatre shares was over. He was unable to deny the balance sheet for the year 1964 was prepared in 1971-72. 28. In light of the above answers, the statement conferred in the minutes of the Board meeting of AFPL held on 27th January 1970 that Mr. R. P. Anand made a declaration on 30th April 1966 loses significance. No such declaration was in fact seen by the Board even on that date i.e. 27th January 1970. 29. An analysis of the above evidence renders the version of Mr. R.P. Anand that the Versova land was purchased by him in his own name by borrowing the funds in part from AFPL more probable. On the other hand, the OL has been unable to produce credible evidence in support of the plea that the Versova land had in fact been purchased by Mr. R.P. Anand as a benami for AFPL or that the Board of Directors of AFPL had resolved the land in Versova should be purchased by AFPL in the name of Mr. R.P. Anand. The declaration alleged to have been given by Mr. R.P. Anand was not produced and was unable to be proved. The minutes book produced before the Court showed that the crucial part of the minutes 30th April 1966 was admittedly written by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sq. yards. The current market value ought to be applied to determine the sum to be paid by Mr. R.P. Anand. 33. The factors that weigh with the Court are in the first place with the land not belonging to AFPL but to Mr. R.P. Anand, at the highest the sum advanced to him by AFPL for its purchase can be treated as an unpaid loan. There was no agreement at any point in time that he would pay AFPL compound interest of the sum. On the other hand as a result of pendency of the present petition for over 47 years, Mr. R.P. Anand has effectively been deprived of the right of dealing with the property. The extent available is about 7,000sq.yds and not 11,700 sq.yds as contended by the OL. At one stage of proceedings Mr. R.P. Anand himself offered to pay a sum of Rs. 50 lakhs and this fact was noticed in the order by the Court in its order dated 6th May 2002. However, even before the said offer could be acted upon, a higher offer was made. 34. In light of the above factors the Court considers it appropriate to direct Mr. R.P. Anand to pay to the OL in the account of AFPL a sum of Rs. 65 lakhs by 15th July 2013 in full discharge of all of his liabilities towards AFPL and all interim orders ..... X X X X Extracts X X X X X X X X Extracts X X X X
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