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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 ..... 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 was stated that Mr. R.P. Anand took a sum of Rs. 12,400 from AFPL on 10th September 1964. 4. On 17th September 1964 LCHS executed a sale deed in favour of 17 purchasers including Mr. R.P. Anand in respect of the land at Versova for a sum of Rs. 2,93,975 which included Rs. 30,000 already paid to the LCHS by 17 purchasers as earnest money. On the same date M/s. Ambabhai Diwanji, Solicitors acknowledged receipt for Rs. 1,10,000 from Mr. R.P. Anand towards sale consideration and another receipt was executed by them a sum of Rs. 14,000 towards expense ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 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 AFPL and that money for the said purchase had been given by AFPL. An objection was raised by Mr. R.P. Anand regarding the maintainability of that application. It was contended that since no winding up order had been passed the said application was not maintainable. Accepting the said objection, the Company Judge dismissed CA No. 156 of 1979 by an order dated 3rd February 1982. On the administrative side, an order was passed by the Company Judge on 3rd February 1982 in which it was noted that with the dismissal of CA No. 156 of 1979 "there is no clai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ative 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, Director of the Company in investing company's funds in the plots of land at Champur Khar, Kandla, Versova and Thana" was confirmed. A reference was also made to the minutes of the meeting of Board of Directors of AFPL purportedly held on held on 27th January 1970 wherein a decision was taken for settlement with the unauthorised tenants in the "company's property". It was stated that Board also noted that Mr. R.P. Anand had given a declaration on 30th April 1967 that he had no right, title or any interest in the said land and that 'the said land has been purcha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ended 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 he had no right, title or interest in the land at Versova and that the same was purchased for and on behalf of AFPL. It was claimed that the said declaration was in the custody of Mr. M.N. Kaul, Sardar Singh, Rai Bahadur Ganga Saran, Maj. Partap Singh and Mr. R.L. Anand who had been inducted into the management and had attended the meeting of the Board of Directors on 27th January 1970. It was pointed that there was no resolution of AFPL permitting Mr. R.P. Anand to borrow money for the purchase of the land in question nor was any promissory note executed f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry 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 were passed. Some of the properties which belong to the company and their sale etc. has been confirmed by the Board of Directors are: (i) Plot No. 5, Hauz Khas, New Delhi. (ii) 88, Sunder Nagar, New Delhi. (iii) 889 shares of Mazda Theatres Pvt. Ltd. (iv) Flat in Embassy Apartment, Bombay. (v) 19, Curzon Road, New Delhi. (vi) Partnership in Eastern Engineering Company. (vii) Napences Road, Bombay. (viii) Property at Prahland Flat, Bombay. (ix) Jal Darshan Apartments." 17. In para 9 of the affidavit it was pointed out by Mr. R.P. Anand that "out of my ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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, Khar, Kandla, Versua and Thana be and are hereby confirmed. There being no other matter the meeting ended with a vote of thanks to the chair While the portion in the top beginning with "the minutes of the meeting...." and ending with "... the recovery will be vigorously pursued" was marked as "B", the lower portion beginning with "the question of travel allowance..." and ending with "...thanks to the chair" was marked as "A". 20. The copy of the minutes book which was produced in original to the Court (Ex. PW-1/2) shows that the two portions of the minutes marked 'A' and 'B' a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 was being sent. I cannot say if I ever brought to the notice of the Board that the negotiations purchase of the land in question had been finalized. I cannot say if it was not the practice of the company to record the finalization regarding a deal of any immovable property. I do not remember how much total sale consideration was paid in respect of the land in question roughly I would say that it was about or over a lac of rupees." 23. The above answers show that Mr. R.L. Anand was not clear as to the facts concerning the sale consideration and the date of the sale deed. It is uns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 minutes of the proceedings dated 30th April 1966 the portion marked B had not been signed at the time when the books were to be handed over to the Board of Directors appointed by the Court. It was at that time that I noticed that it did not record the whole of the proceedings inasmuch as the portion marked A had been discussed and not added, therefore, I added portion marked A and signed the minutes. Whole of the proceedings will be taken to be of the date 30th April 1966." 25. In his cross-examination on 8th October 1986 Mr. K.K. Mehra admitted that Mr. R.P. Anand paid around Rs. 20/30 lakhs fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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. 30. During the course of arguments Mr. Mayank Goel, learned counsel for the OL sought to place reliance on the plaint in Suit No. 183 of 1963 titled Anand Finance Private Limited v. Lokmanya Co-operative Housing Society filed in the High Court of Judicature at Bombay. The said document was also filed in these proceedings as part of an application (Co. Appl. No. 208 of 2004) filed by Mr. Vijay Meh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able 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 operating against him as well as the property in question will stand vacated. Mr. R.P. Anand will be free to deal with his portion of the Versova property. With the above directions, CA No. 88 of 1982 is disposed of. 35. With the payment of Rs. 65 lakhs by R.P. Anand, the final curtain would be drawn on this beleaguered litigation that has persisted for well over four decades. Upon such payment being made, nothing would remain to be examined as there are no claims to be settled, no assets to be realised and none of the contributories other than Mr. R.P. Anand surviving. Thus in exercise of its powers under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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