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TMI Blog2014 (2) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... 97, 692/97 and 695/97 sold to the auction purchaser M/s. Metro Nirvana and cancel the said auction and subsequent auction also; (c) set aside the order dated 31.07.2006 passed by this Hon'ble Court in C.P. No.265 of 1998 it was directed by the Court that possession of 13.5 acres of land that belonged to the company be handed over to the auction purchaser namely M/s. Metro Nirvana; (d) restore the properties above said property which was sold in auction vide above order dated 17.05.2006 and handed over to the auction purchaser vide order dated 31.07.2006 to the applicant herein over which the applicant have the lawful title and ownership; (c) pass such other order(s) as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case." 2. The application has been filed in the following circumstances. M/s JVG Finance Ltd, which is the company in liquidation and the respondent in the company petition, was provisionally ordered to be wound up by this Court on 05.06.1998; thereafter the final winding up order was passed on 29.08.2003 on which date the Official Liquidator was appointed as the liquidator of the company. Pursuant to a sale proclamation, certain lan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that since the land was sold under orders of this court by public auction and the auction purchaser was also put in possession, no purpose would be served in impleading the applicant in the winding up proceedings. It was alleged that the applicant was merely trying to delay the proceedings at the instance of vested interests. 5. In addition to the above broad submissions, the Official Liquidator relied on the affidavit dated 21.11.1999 filed by one V. K. Sharma, the ex-managing director of the company in liquidation, in which it was affirmed that the lands in Bangalore which were put to sale belonged to the company in liquidation. The affidavit further affirmed that the land was held by the company in liquidation in the benami name of Achyut Kumar Sharma, S/o Bharat Prasad Singh, R/o No.222, III Main, Jeevan Kendra Layout Cambridge Road, Ulsoor, Bangalore-560008. The Official Liquidator also pointed out that the title deeds disclosed that the entire amount of sale consideration was paid by the applicant in cash and that he failed to disclose the source of his funds. It was pointed out that the payments to the sellers cannot be verified since they were not made by cheques or draf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ea of the applicant for stay of the auction sale was rejected by this Court. With regard to the claim of the applicant that he was an agriculturist, V. K. Sharma disputed the same on the ground that there was no proof or evidence in support of the claim, nor was there any proof as to how the applicant could come into possession of such huge funds for purchasing the land. V. K. Sharma also disputed the claim of the applicant that the latter asked for return of the original documents entrusted to him (V. K. Sharma) by the applicant for verification. For this and several other reasons, the application filed by the applicant was stoutly opposed by V. K. Sharma. 7. After considering the application, the replies, the rejoinder as well as the arguments, this Court (Sudershan Kumar Misra, J.) passed an order on 13.07.2010 in Company Application No.1315/2006 as follows: - "This application has been moved by Mr. Achyut Kumar Sharma, praying that he be allowed to intervene in the matter and be impleaded as a party. The reliefs the applicant seeks are as follows: "[i] allow/ permit the intervener herein to be impleaded as party and consequently thereof permit/ allow the intervener to make n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh application mentioning all necessary details especially with regard to the property on which he claimed ownership. 9. It is pursuant to the liberty granted by the Division Bench as above, that the applicant has filed the present application. 10. The learned counsel for the applicant reiterated the averments made earlier in Company Application No.1315/2006 and the affidavits filed in support of that application. He also drew my attention to the report of the SFIO (Serious Frauds Investigating Office). He submitted that the applicant had led ample evidence before the SFIO regarding his sources for the purchase of the land in the year 1995 which was also accepted by the SFIO and thus his ownership over the land stood proved. He further contended that the report of the SFIO does not find anything against the applicant on the money-trail. 11. The learned counsel for the auction purchaser (M/s. Metro Nirwana) submitted that the report of the SFIO was against the applicant and it is incomprehensible as to how the same can be said to be in favour of the applicant. It was pointed out that when the provisional liquidator was appointed on 05.06.1998 and when the auction took place on 17 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No separate reply, however, was filed by V.K. Sharma to the present application. The learned counsel drew my attention to the affidavit dated 29.11.1999 filed by V.K. Sharma, which was relied upon by the SFIO. 13. Mr. Rajiv Bahl, the learned counsel for the OL, while broadly supporting the stand taken by the auction purchaser and V.K. Sharma submitted that the approach of the applicant has been very casual. He could not prove the source for the funds of about Rs.17 lakhs said to have been paid by him for the purchase of the land. The income tax returns filed by the applicant, relied upon by him before the SFIO, were for the years later than the year in which the land was claimed to have been purchased by him and were, therefore, not relevant. At the relevant time i.e. when the GPA was executed in favour of C.M. Chopra, he was an officer employed with the company in liquidation. This strengthens the plea of the company that the land was purchased in benami name out of the funds belonging to it. On the basis of these submissions, Mr. Rajiv Bahl submitted that there was absolutely no merit in the application. He prayed for dismissal of the same with heavy costs. 14. On a careful con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In an attempt to verify the income tax return stated to have been filed by the applicant, a letter was written by the SFIO to the income tax authorities but there was no response. The bank accounts of the applicant, one from Allahabad Bank, Baddopur Branch, Pandarak, Patna and the other from HDFC Bank, Exhibition Road, Patna were obtained by the SFIO. It was seen that the account in Allahabad Bank was opened on 12.03.2008 on which the Kisan credit loan of Rs.3 lakhs was taken. The account with HDFC Bank was opened on 16.01.2003. Both these dates are much later than the dates on which the lands were stated to have been acquired by the applicant. The SFIO has also found that the entire payment of Rs.17,00,000/- for the purchase of the lands was made in the year 1995-96 in cash. Therefore, the opening of the bank accounts several years later or the filing of the income tax return for a later year does not establish the source of the funds. 18. Another important finding of the SFIO in its report is that Achyut Kumar Sharma, the applicant stayed in Bangalore for 3 to 4 months and persuaded some agriculturists to sell the land to him. They sold the land to him on the strength of a cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed to have made a deposit of Rs.75,000/- in the JVG Group, but could not produce any evidence in support of this claim before the SFIO. As an explanation for giving the address of the guest house of the JVG Group in Bangalore as his local address in the sale deeds, Achyut Kumar Sharma stated before the SFIO that when he met V.K. Sharma in the investor meet, he told him that he needed a local address to purchase the land and V.K. Sharma readily offered the address of the guest house of the JVG Group. According to Achyut Kumar Sharma's statement on oath before the SFIO, V.K. Sharma had taken the original title deeds of the lands for verification and that he had assured that he would pay a good price for the lands. In other words, Achyut Kumar Sharma had stated before the SFIO that he had left the original title deeds with V.K. Sharma, the Managing Director of the JVG Group of companies, on the latter's assurance to buy the lands. However, when asked whether he got back the title deeds when the lands could not be sold to V.K. Sharma, he has stated that he tried to obtain the documents back but he could not contact V.K. Sharma. This is clearly unbelievable. One is asked to believe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of land shown as stock-in-hand in the balance sheets of JVG Finance Ltd. for the years 1994-95, 1995-96 and 1996-97. Even the prospectus issued by the company for the public issue in 1997 did not mention any land at Bangalore as the company's asset or stock-in-trade. It is, however, recorded in the same paragraph that in the brochure published with regard to the JVG Hills Project at Hyderabad, the land at Bangalore is mentioned. 21. On the basis of the aforesaid findings of the SFIO, I have no hesitation in coming to the conclusion that the lands belonged to the company in liquidation but were registered in the benami name. I am, however, unable to appreciate as to how the SFIO concluded in paragraph 27 of the report that it was not clear whether Achyut Kumar Sharma purchased the land for himself or on behalf of JVG or if he sold it to JVG after purchasing it. All its findings are based on relevant material and they point only to the conclusion that the funds belonging to the company were utilised for purchasing the lands in the name of the applicant. This was stated by V.K. Sharma in his affidavit dated 29.11.1999 submitted to this Court to which reference has been made by the SF ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he company court by taking frivolous and repetitive objections. His earlier application in Company Application No.1315/2006 was dismissed against which he filed an appeal before the Division Bench. He simply withdrew the appeal but obtained liberty to approach the company court again with a fresh application mentioning all necessary details with regard to the lands. In the fresh application, which is the present one, there is nothing of vital importance which was not submitted in the affidavits and the additional affidavits filed in support of the earlier Company Application No.1315/2006 which was dismissed by the learned Single Judge with costs of Rs.11,000/-. In the course of the arguments before me, no vital fact which was not brought to the notice of this Court earlier, was brought to my notice. The only new document is the report of the SFIO which was claimed to be in favour of the applicant. I have already held that there is no reason to hold that the report of the SFIO is in favour of the applicant. In these circumstances, I have no option but to accept the plea taken by Mr. Rajiv Bahl, the learned counsel for the OL that the present application should be dismissed with heav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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