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TMI Blog2023 (2) TMI 770X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of the NCLAT, which had come to the conclusion that there was a violation of the principles of natural justice in adhering to the provisions of Section 272(4) of the Companies Act 2013, will not come in the way of the appellant taking recourse to the remedies available in law after following due process. There is no merit in the Appeal, the instant Appeal is hereby dismissed. - Company Appeal (AT) No. 116 of 2020 - - - Dated:- 25-1-2023 - Justice Anant Bijay Singh Member (Judicial), Ms. Shreesha Merla Member (Technical) For the Appellant: Mr. Kamal Kant Jha, Senior Panel Counsel, G.O.I. for ROC, Mr. Avinash Singh, Ms. Priyanka, Advocates. For the Respondent: Mr. Abhishek Kr. Rao, Mr. Shailesh Suman, Mr. Rishabh Sachdeva, Advocates. Mr. Abhishek Nahta, PCA. JUDGMENT Justice Anant Bijay Singh; The instant Appeal was heard together with Company Appeal (AT) Nos. 105, 106, 115, 117, 202 and 203 of 2020. 2. Company Appeal (AT) No. 116 of 2020, in this Appeal, the Appellant has challenged the legality of the impugned order dated 18.12.2019 passed by the National Company Law Tribunal, New Delhi Bench in CP No. 308/271-272/ND/2018 whereby the w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Finance Limited (SNLFL), a public listed company listed with the Delhi Stock Exchange. iii) The Registrar of Companies (RoC), Delhi objected to the scheme of amalgamation inter alia on the grounds:- a. That NKS, the transferor company had received subscription to its share of face value of Rs. 10/- per share at a premium of Rs. 90/- per share from 3 companies and against the total subscription of Rs. 1028 crore, one crore shares were allotted to 3 companies on 26.03.2011, just five days before the end of financial year; b. That the entire share subscription received by NKS was further invested immediately in the following companies- LIPL Rs. 287.19 crore MDPL Rs. 366.41 crore USPL Rs. 336.70 crore c. NKS had not done any significant activity barring the share capital infusion and consequent investment. NKS does not have any fixed assets as per the balance sheet for the period ending on 31.03.2011 and has recorded a loss to the tune of Rs. 8.41 lakhs but still commanding huge share premium. d. There appears to be circular flow of money to the tune of Rs. 1000 crore each amongst the following set of companies:- Sital Holdings Private Limite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in creation of credits in bank account and use of such credits to subscribes the share capital, reserve and surplus and consequent investment worth Rs. 1000 crore in each of these companies. c. To analyze the scheme of amalgamation by NKS and SNLFL and examine the scheme is prejudicial in the interest of its member or the public interest. vi) The SFIO started investigation with the collection of reports from the RoC. The relevant documents such as MOA, AOA, Form 2, Form 20B, Form 32, Annual returns, Form 23 AC, Form 23 ACA maintained in MCA 21 portal, pertaining to SNLFL and NKS and other 9 companies under investigation were downloaded and analyzed. The SFIO team visited the registered office of the most of the companies and collected the documents. During investigation into the affairs of the companies, SFIO team learnt that RBI had conducted inspection in some of the Company under Investigation (CUI) and observed that most of these companies including the Respondent company were carrying on Non-bank Financial Institution (NBFI) kind of activities without obtaining valid Certificate of Registration. SFIO also learnt that the Income Tax Department had conducted search and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect Limited was taken as the lead and representative case to examine the modus operandi on the Jain Brothers which had running account of Sh. Rajesh Aggarwal in the cash of Jain Brothers along with the ledger account in his name pertaining to Jagat Projects, reflects regular inflow of cash before entries of share subscription made by USPL, SHL and SOHPL. e) Record of calculation of commission on the basis of entries of share subscription and receipt of the same by Jain Brothers, in the cash book and ledger accounts maintained by them. f) Reverse money trail preceding subscription of shares in Jagat Projects Ltd. through banking channel by USPL, SHL and SOHPL clearly showed that the three stages of money laundering: placement of cash, layering of transactions and integration into the bank accounts of the beneficiary. g) Money trail showed that cash was initially deposited with six entities Ram Trading, Bee Dee Enterprises and four entities controlled by Jain Brothers: Tirupati Fabrics, Erode Clothing Empire, Roshan Lal Lalit Kumar Co and Chhagan Lal Mukesh Kumar Co. Subsquently funds were transferred to Tulika Securities Pvt. Ltd. (TSPL) by cheque, which was furth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Jain was mastermind behind all the transaction carried out among all the 49 shell companies giving effect to his object laundering of unaccounted cash to various business through placement of funds, layering of transactions though many entities and then integration of the same back into the business of the beneficiaries by way of subscriptions to shares at huge premium. viii) After investigation of the NKS Holdings Private Limited and other group companies, SFIO arrived at the conclusion that 49 shell companies of Jain Brothers including the Respondent company were involved in providing accommodation entries to various beneficiaries and recommended for winding up the said companies to prevent any further money laundering activities committed by such companies and submitted its Report dated 31.03.2016. The Ministry of Corporate Affairs obtained the opinion of the Ministry of Law Justice on the winding up of 49 shell companies. The Ministry of Law Justice had opined that 49 shell companies controlled by Jain Brothers were involved in providing accommodation entries to various beneficiary companies and it was agreed that the administrative Ministry may file the petition for wind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oney for taking the commission giving accommodation entries. 5. It is further submitted that the Respondent Company is a body corporate and it never dies with the change of the management. In the present case, it appears that the management of the Respondent company got changed in the year 2015-16 but the revenue and the surplus amount which reflects in the balance sheet of company is outcome of the fraud and illegal activities. The SFIO was appointed for investigation of some of the companies of Jain Brothers who are mastermind of the all the organized crime of money laundering activities. In the year 2012, an amalgamation petition was filed in the High Court of Delhi at New Delhi and the objection of the Registrar of Companies was called for. The Registrar of Companies submitted its objection and the involvement of those companies in the money laundering activities came into the light. Resultantly, SFIO was appointed for conducting the investigation. During the course of investigation of certain companies, it revealed that the Respondent company was also one of those companies which were being controlled by Jain Brothers for committing the organized crime of money laundering. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accommodation entry operators and purchasers of such accommodation entries like the present management in carrying out such activities in further also. Based on above submissions the impugned order is fit to be set aside and the Appeal be allowed. 8. The Ld. Counsel for the Respondent during the course of argument and in his reply affidavit along with written submissions submitted that the Tribunal vide order dated 18.12.2019 dismissed the petition on both grounds lack of sanction as well as on merit. The Tribunal held that facts of this case are identical to the case which was dismissed by this Bench vide order dated 18.01.2019 in the case of Registrar of Companies Vs. Apoorva Leasing Finance Investment Company Limited and is now upheld by this Appellate Tribunal comprising of Hon ble three Member Bench in Company Appeal (AT) No. 88 of 2019 vide order dated 04.12.2019 which read hereunder: 15. This sanction order does not contain what are the allegations against the Respondent No.1 company and to substantiate the allegations what documents were placed before him. It is also not mentioned that before according sanction the company has been given reasonable opportunity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed and is accordingly dismissed on the ground of limitation. 3. However, since we have not entered upon the merits of the controversy, it only needs to be clarified that the order of the NCLAT, which had come to the conclusion that there was a violation of the principles of natural justice in adhering to the provisions of Section 272(4) of the Companies Act 2013, will not come in the way of the appellant taking recourse to the remedies available in law after following due process. 4. Pending applications, if any, stand disposed of. 10. It is further submitted that in view of the fact that the Hon ble three Member Bench of this Appellate Tribunal have dismissed the Appeal i.e. Company Appeal (AT) No. 88 of 2019 and the case of the Respondent is fully covered by this Judgment which have attained finality as the Civil Appeal has also been dismissed by the Hon ble Supreme Court, therefore, there is no merit in the Appeal, the instant Appeal may be dismissed. 11. After hearing the parties and going through the pleadings made on behalf of the parties and also the Judgment passed by Hon ble three Member Bench of this Tribunal in the case of Registrar of Companies Vs. A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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