* IN THE HIGH COURT OF DELHI AT NEW DELHI
% CO.A. Nos. 2462/2010, 2382/2010 & 127/2011
in
CO. PETITION NO. 161/1997
+ Date of Decision: 4th April, 2011
# M/S ROCKSMELT COMPANY (INDIA) ...Petitioner
! Through: Ms Kajal Chandra, Ms. Prachi Gupta &
Ms. Jyoti Sharma, Advocates
Versus
$ M/S GANGA AUTOMOBILES LTD. ....Respondent
Through: Mr. Mayank Goel, Advocate for OL
Mr. Girdhar Govind, Advocate for GAL
& M/s Delhi Automobiles Ltd.
CORAM:
* HON'BLE MR. JUSTICE P.K.BHASIN
1. Whether Reporters of local papers may be allowed to see the
judgment?(No)
2. To be referred to the Reporter or not?(No)
3. Whether the judgment should be reported in the digest?(No)
ORDER
P.K.BHASIN, J:
By this order I shall be deciding whether property no.1, Sikandara Road, New Delhi, is liable to be sold in auction to pay off the debts of the respondent Company M/s Ganga Automobiles CA Nos. 2462/2010, 2382/2010 & 127/2011 in Co. Pet. 161/1997 Page 1 of 19 Limited(hereinafter to be referred to as „GAL‟) which already stands wound up.
2. GAL was appointed as a dealer of Maruti cars by Maruti Udyog Ltd.(now known as Maruti Suzuki India Ltd.) in the eighties. As per the petitioning creditors, GAL was managed and controlled by one Shri G.Sagar Suri though his son Shri Ashwini Suri was its Managing Director during the era when GAL was enjoying good reputation in the automobile market. Mr. G.Sagar Suri himself was the Chairman of another automobile Company in the Sagar Suri Group of Companies by the name of M/s Delhi Automobiles Ltd. which was also selling Maruti cars. In order to make quick and easy money the Directors of GAL started accepting inter-corporate deposits/loans of huge amounts from various parties against the security of bookings of Maruti cars during the nineties when Maruti cars were selling like hot cakes. During those good old days over hundred crores were stated to have been collected by GAL from various parties. It now appears that that money was collected without any intention of paying back to the investors/depositors. When the depositors/investors asked for refund of their money they were not paid back by GAL and so they started approaching Maruti Udyog Ltd. for getting back their money since their deposits were secured by the Maruti bookings. At that time Maruti CA Nos. 2462/2010, 2382/2010 & 127/2011 in Co. Pet. 161/1997 Page 2 of 19 Udyog Ltd. appears to have come to know that the bookings of Maruti vehicles against which GAL had collected crores of rupees from the market in the form of inter-corporate deposits/loans were non-existent and not genuine ones. So, it objected to GAL about the means adopted by it for collecting money from the market by putting the reputation of Maruti Udyog Ltd. at stake and that gave rise to disputes between GAL and Maruti Udyog Ltd. and because of that bookings of Maruti vehicles through GAL were stopped. That appears to have triggered off en bloc lodging of claims by the depositors with GAL but the investors were not paid back their money by GAL. During that period letters were exchanged between GAL and Maruti Udyog Ltd. and some kind of understanding appears to have been arrived at between the two and pursuant to that understanding GAL‟s Managing Director Mr. Ashwini Suri executed indemnity bond on behalf of GAL and also personal guarantee bond indemnifying Maruti Udyog Ltd. against any kind of demands against it by GAL‟s investors from whom GAL had taken inter-corporate loans against non-existent bookings of Maruti cars. Mr. G.Sagar Suri also executed a personal guarantee bond in favour of Maruti Udyog Ltd. Both father and son had admitted that GAL had secured loans from the public against non-existent bookings of Maruti CA Nos. 2462/2010, 2382/2010 & 127/2011 in Co. Pet. 161/1997 Page 3 of 19 cars and that is evident from the following paragraphs in the indemnity bond executed by Mr. Ashwani Suri on behalf of GAL:
"WHEREAS Ganga Automobiles Ltd., hereinafter to be referred to "GAL" for the sake of brevity, are dealers of Maruti Udyog Ltd., hereinafter to be referred to as "MUL", for the sale of Maruti range of vehicles;
AND WHEREAS it has come to the notice of MUL that GAL has taken loans from friends, relatives, business associates and other bodies corporate by offering security of booking of Maruti vehicles to give an appearance of transaction of loan backed by security of allotment of cars and the Managing Director, MUL has even received a copy of the legal notice issued to GAL dated 09.07.1996 from Shri U.K. Choudhary causing undue embarrassment to MUL;
AND WHEREAS upon being confronted with the fact that the transaction of this nature is not legal and/or permissible under the dealership arrangement and in any case the allotment numbers were non-existent, GAL have admitted that due to requirement of funds they resorted to device of raising money; AND WHEREAS GAL has written to MUL vide their letter dated 25.07.1996 (copy enclosed) admitting that the transaction was not regular and that the allotment numbers were in fact non-existent;."
3. M/s Rocksmelt Company(India) was one of the creditors of GAL who had approached this Court for winding up of GAL. Company Petition No.161/97 of M/s Rocksmelt Company(India) had been treated as the lead case. When notice of C.P.No.161/97 was given to GAL it had entered appearance and right from the beginning not only GAL had started coming out with proposals for liquidating the liabilities of its creditors but M/s Delhi Automobiles Ltd. also came forward to re-pay the debts of GAL so that GAL was not wound up by CA Nos. 2462/2010, 2382/2010 & 127/2011 in Co. Pet. 161/1997 Page 4 of 19 the Court. Now, it also appears that proposals and assurances given by GAL as well as Delhi Automobiles Ltd. during the pendency of winding up proceedings to avoid passing of order of its winding up and to save the reputation of Sagar Suri Group of Companies were never intended to be honoured by the Directors of both these Companies.
That is evident from the orders passed in the matter on different dates.
The relevant portions of those orders are re-produced below:
20/01/98 "Learned counsel for the petitioner states that the price of the land which has been offered as security by the respondent is merely Rs. 200/- to Rs. 300/- per square metre and not Rs. 4,000/- per square metre as mentioned in the proposal of the respondent. Learned counsel for the petitioner suggests that a valuer be appointed to value the plot which is being offered to the petitioner as security. I am of the opinion that the submission of the learned counsel for the petitioner needs to be accepted. Accordingly, M/s. G.C. Sharma & Sons, Architects & Town Planners (Partner Mr. S.C. Sharma), 28/G-2, Connaught Place, New Delhi, Official Valuer for the banks, as suggested by the petitioner and accepted by the respondent, is appointed as valuer to value the plot of land which has been offered by the respondent to the petitioner to serve as a security for the debt due from the respondent to the petitioner..............................................................."
CA Nos. 2462/2010, 2382/2010 & 127/2011 in Co. Pet. 161/1997 Page 5 of 19"02/02/98 "..... It is submitted by the learned counsel for the respondent that M/s Delhi Automobiles Limited have immovable property, namely, 1, Sikandara Road, New Delhi. According to the learned counsel for the respondent the property is extremely valuable. He further states that efforts are being made to sell the property and in case the property is sold, the money will first be utilized for meeting the amount due to the creditors who have filed petitions in this Court. He further states that the Chairman of M/s Delhi Automobiles Limited and Mr. Mukhinder Singh, the Director of M/s Ganga Automobiles Limited are present in Court and their statements may be recorded. Let their statements be recorded.
Sd/-
February 2, 1998. Anil Dev Singh, J The statement of Mr. G.Sagar Suri, Chairman, M/s Delhi Automobiles Limited, and Mr. Mukhinder Singh, Directors of M/s Ganga Automobiles Limited, have been recorded. The undertakings given by them are accepted. In case the property No. 1, Sikandara Road, New Delhi is not sold within a period of three- and-half months and the amounts which are due to the creditors who are before this Court are not paid off or any other favourable arrangement securing the monies of the creditors is not reached within the above said period from today, the property No. 1, Sikandara Road, New Delhi will be deemed to have been attached and will be sold under the supervision of the Court................................................" 20/02/98 "Learned counsel for the respondent states that he is conscious of the fact that the respondent had given an undertaking in certain cases to make the payment to the petitioners within a particular period of time and the same could not be carried into effect because of financial difficulties which are being faced by the respondent. He further states that he is also conscious of the fact that the chairman of M/s. Delhi automobiles on 2nd February, 1998 had made a statement in this Court that he had authority to state on behalf of M/s. Delhi automobiles Limited that efforts were being made to sell the property of M/s. Delhi Automobiles located at 1, Sikandara Road, New Delhi so that the liability of M/s. Ganga Automobiles Limited towards its creditors could be liquidated but on 3rd February, 1998 the Chairman of M/s. Delhi Automobiles Limited had stated that he did not have the authority of the Board to make any statement with regard to 1, Sikandara Road, New Delhi. Learned counsel further states that despite the CA Nos. 2462/2010, 2382/2010 & 127/2011 in Co. Pet. 161/1997 Page 6 of 19 circumstances which are against the respondent, he would pray that the respondent be given an opportunity till 21st of May, 1998 to make the payment to all the creditors who are before this Court and in the event of the payments not being made by the said date, the company be deemed to have been wound-up and the Official Liquidator attached to this Court be deemed to have been appointed as the Liquidator of the Company. Learned counsel for the petitioners have no objection to the passing of the order of deemed winding-up in the light of the submission of leaned counsel for the respondent.
Having regard to the statement of learned counsel for the respondent and learned counsel for the petitioners, I am of the view that the submission of Mr. Sethi, learned counsel for the respondent, with regard to the deemed winding-up of the company should be accepted. Accordingly, it is directed that in case the admitted liability of the creditors who have filed petitions in this Court is not discharged by the respondent before 21st May, 1998, the Company will be deemed to have been wound-up and the Official Liquidator attached to this Court will act as the Liquidator of the Company.
...........................................................................................
Mr. Sethi prays that in view of his statement that M/s. Ganga Automobiles will liquidate its liability to the creditors by 21st May, 1998 and in case that is not done the Company will be deemed to have been wound-up, the order dated 2nd February, 1998 be modified.
Having regard to the statement of Mr. Sethi, learned counsel for the respondent, the following lines of the order dated February 2, 1998, will not have effect till the next date.
"In case the property No. 1, Sikandara Road, New Delhi is not sold within a period of three-and-half months and the amounts which are due to the creditors who are before this Court are not paid off or any other favourable arrangement securing the monies of the creditors is not reached within the above said period from today, the property No. 1, Sikandara Road, New Delhi will be deemed to have been attached and will be sold under the supervision of the Court"
22/05/98 " Mr. Kapil Sibal, learned senior counsel appearing for the respondent, states that at this stage without insisting for the variation of the order dated February 20, 1998, his client will deposit a sum of Rs. 610 lakhs for being disbursed to the petitioners in the following manner:-
On or before Amount (Lacs)
15-07-98 40-00
14-08-98 40-00
CA Nos. 2462/2010, 2382/2010 & 127/2011 in Co. Pet. 161/1997 Page 7 of 19
30-09-98 40-00
31-10-98 110-00
30-11-98 140-00
31-12-98 250-00
Mr. Sibal also states that in case of default in the payment of any of the above instalments, it will be open to the court to appoint the Official Liquidator as the Provisional Liquidator of the company.
Besides the above statement, learned counsel for the respondent submits that the dispute between M/s. Gujarat Lease Financing Ltd. and the respondent company with regard to the question of liability could be resolved by appointing a Chartered Accountant to go into the question as to whether liability of the respondent towards the petitioner is Rs. 4.60 crores or is Rs. 17 lakhs. He further submits that the dispute between M/s Goyal MG Gases Limited and the respondent stands referred to an arbitrator. Learned counsel also submits that the dispute between M/s. Poysha Oxygen Pvt. Ltd. and the respondent has also been referred for arbitration. Learned counsel for the respondent says that the liability of the respondent towards M/s. Rajeev Goel Architects Pvt. Ltd. will be notified to the petitioner. He states that the respondent will calculate the interest payable to each of the petitioners on the admitted rate of interest and will file a schedule of payment. Learned counsel for the respondent submits that Mr. Mukhinder Singh, a director of the respondent company, will give a statement that he will abide by the statements and undertakings given on behalf of the respondent, and in the event of the breach of the payment schedule he will be personally liable for the consequences arising from such a breach.
Mr. Sibal states that Mr. Mukhinder Singh is present and is willing to make a statement to the above effect. Let the statement of Mr. Mukhinder Singh be recorded.
Sd/-
May 22, 1998 Anil Dev Singh, J.
Statement of Mr. Mukhinder Singh has been recorded.
Having regard to the submissions of the learned counsel for the parties, I am of the view that the order dated February 20, 1998 needs no variation................"
18/8/98 "The petitioners are the creditors. The respondent company failed to pay its debt to the petitioners, inspite of the CA Nos. 2462/2010, 2382/2010 & 127/2011 in Co. Pet. 161/1997 Page 8 of 19 statutory notice having been served on it, therefore, petitioners approached this Court for winding up of the respondent company. After receipt of notice the respondent company was represented by a counsel, on 2nd February, 1998 counsel for the respondent made a statement that M/s. Delhi Automobiles Limited has immovable property, namely, 1, Sikandara Road, New Delhi. According to him this property was extremely valuable. He further stated that efforts were being made to sell this property and in case the property was sold, the money would first be utilized for meeting the amounts due to the creditors who filed petitions in this Court. Accordingly this Court recorded the statement of Mr. G. Sagar Suri, Chairman of M/s. Delhi Automobiles Limited and of Mr. Mukhinder Singh, Director of M/s. Ganga Automobiles Limited. It was ordered by this Court that in case the property bearing No. 1, Sikandara Road, New Delhi was not sold within a period of three- and-half months and the amounts due to the creditors (before this Court) were not paid or any other favourable arrangement securing the monies of the creditors not reached within the above said period, the property No. 1 Sikandara Road, New Delhi would be deemed to have been attached and would be sold under the supervision of this Court. The Directors of the respondent company gave personal guarantees in the loan transactions. They were directed to disclose their personal properties, movable as well as immovable. Subsequent thereto on behalf of Mr. G. Sagar Suri, application for review was filed. It was taken up on 3rd February, 1998 and thereafter the case was adjourned to 20th February, 1998.
The proceeding of 20th February, 1998 show that the counsel, appearing for the respondent company, Mr. Ravinder Sethi, Senior Advocate made a statement that despite the circumstances against the respondent company an opportunity till 21st May, 1998 for making the payment of all the creditors (who are before this Court) be given and in the event of the payment not being made by the said date, the company be deemed to have been wound up and the Official Liquidator attached to this Court be deemed to have been appointed as the Liquidator of the Company. To this statement of counsel for the respondent, petitioners expressed no objection for passing of the order of deemed winding up. Accordingly, having regard to the statement of counsel for the respondent company and of the petitioners, this Court passed the order that if the liability or the debts of the creditors who filed petition before this Court was not discharged by the respondent company before 21st May, 1998, the company would be deemed to have been wound up and the Official Liquidator attached to this Court would act as the Liquidator of the company. It was in this background that the order of attachment and sale of the property bearing No. 1, Sikandara Road, New Delhi was kept in abeyance till 21st May, 1998. Mr. Kapil Sibal, Senior Advocate appearing for the respondent company without insisting on the variation of the CA Nos. 2462/2010, 2382/2010 & 127/2011 in Co. Pet. 161/1997 Page 9 of 19 order dated 20th February, 1998 made a statement that his client would deposit a sum of Rs.610/- lakhs for being disbursed to the petitioners. The respondent company was to pay Rs. 40 lakhs on or before 15th July, 1998 and another sum of Rs. 40 lakhs on or before 14th August, 1998 and another sum of Rs. 40 lakhs on or before 30th September, 1998. Thereafter the respondent company was to pay Rs. 100 lakhs on or before 31st October, 1998 and Rs. 140 lakhs on or before 30th November, 1998 and finally the respondent company was to pay Rs. 250 lakhs on or before 31st December, 1998. Mr. Kapil Sibal, Senior Advocate also stated that in case of default in the payment of any of the above instalments, it would be open to this Court to appoint the Official Liquidator as the Provisional Liquidator of the company. He also made a statement that the respondent would calculate the interest payable to each of the petitioner on the admitted rate of interest and would file a schedule of payment. Mr. Mukhinder Singh, Director of the respondent company also gave undertaking/statement that he would abide by the statement of the counsel and further undertook on behalf of the respondent company, that in the event of the breach of the payment schedule, he would also be personally liable for the consequences arising from such a breach. Pursuance to the statement of counsel for the respondent company and the undertaking given by Mr. Mukhinder Singh, Director of the respondent company, this court ordered Liquidator not to take over the assets of the company till the next date. At the same time this Court made it clear that the Official Liquidator would not cease to be the Liquidator of the company.
The respondent company failed to adhere to the schedule of payment given to this Court on 22nd May, 1998. Thus the breach has been committed by the respondent was well as by its Director in adhering to the schedule of payment. The order of restraining the Official Liquidator from taking possession was kept in abeyance till the next date. Now even after three months of the said order the respondent company has not been able to pay even the first instalment as committed to this Court vide order dated 22nd May, 1998. On the last date of hearing, the respondent company paid a sum of Rs. 15 lakhs in this Court vide two cheques. Today again another cheque of Rs. 5 lakhs has been deposited in this Court. Thus as against two instalments which have become due amounting to Rupees eighty lakhs, the respondent company has been able to pay only twenty lakhs. There is thus a breach in the undertaking given by the respondent company through its counsel as well as of its Director, Mr. Mukhinder Singh. This Court vide order dated 22nd May, 1998 made it absolutely clear that in case there would be a breach of the payment schedule the deemed winding up order would come into operation and the Official Liquidator appointed as Liquidator of the company would take over the assets of the company as well as of the Director, Mr. Mukhinder Singh who had CA Nos. 2462/2010, 2382/2010 & 127/2011 in Co. Pet. 161/1997 Page 10 of 19 by his undertaking made himself personally liable for the consequence arising from such a breach.
Since there is a deemed winding up order operating against the respondent company and the Official Liquidator attached to this Court was appointed as the Liquidator of this company, the said order was kept in abeyance from time to time to enable the respondent company to pay up its debts. Number of opportunities were given to the respondent company to adhere to the schedule of payment as given by it before this Court on 22nd May, 1998. But the respondent company has faulted and thus committed a breach of the same. Thereafter, in these circumstances there is no alternative but to hold that respondent company stood would up and the Official Liquidator attached to this court who was appointed as Liquidator of the company to take into custody and possession the assets, effects and records of the respondent company as well as the assets movable and immovable of Mr. Mukhinder Singh, Director of the respondent company, who made himself personally liable for the consequences arising from such a breach. Necessary communication may also be sent to the Registrar of Companies. Notice in the prescribed form for making the order be published in the newspaper "Statesman" (English edition) as well as "Jan Satta" (Hindi edition). Copy of the order be sent to the Official Liquidator. Registrar is directed to draw up notification and formal order as prescribed under the rules.
At this stage, Mr.Girdhar Govind states that land belonging to leasing company had been sold by the respondent company vide three agreements. The purchaser happens to be one of the creditors who purchased the land for Rs. 48 lakhs. It shows respondent company's bonafide to discharge its liability by selling the lands even of its sister concerns. This was done in order to pay the creditors. No useful purpose will be served by appointing the Liquidator. The respondent company has in fact in a span of two to three weeks been able to pay almost Rs. 68 lakhs i.e. Rs. 48 lakhs to one creditor and Rs. 15 lakhs were paid on the last date of hearing and Rs. 5 lakhs have been deposited today. He further states that if winding up order has to come in operation and the Liquidator has to take into the custody and possession the assets of the company, then the respondent company is not interested in depositing Rs. Five lakhs. The cheque of Rs. Five lakhs be returned to him. These arguments of Mr. Girdhar Govind have no force. If the respondent has entered into a private agreement with one of the creditors that is neither here nor there. The respondent Company was to pay the amount as per the schedule of payment given to this Court on 22nd May, 1998. He was to deposit the instalments in this Court and thereupon Court was to take the decision regarding disbursement. By entering into a private agreement it does not prove that the respondent has discharged its CA Nos. 2462/2010, 2382/2010 & 127/2011 in Co. Pet. 161/1997 Page 11 of 19 liability or that it has not committed breach of the undertaking given to this Court on 22nd May, 1998.
For the reasons stated above, I order that the cheque deposited today in the name of the Registrar be encashed by the Registrar of this court, and therefore, FDR of this amount be taken out for a period of 46 days.
Notice of contempt may also be issued to Mr. Mukhinder Singh, Ex-Director of the respondent company, returnable on 10th September, 1998.
Counsel for the petitioners contend that in view of the order passed on 20th February, 1998, the property bearing No. 1, Sikandara Road, New Delhi which was attached to be sold under the supervision of this Court, be ordered to be sold. To this Mr. Girdhar Govind states that he would like to address argument. According to him his review application has yet not been disposed of. On his request, adjourned to 10th September,1998."
4. GAL after the passing of the order dated 02-02-98 regarding deemed attachment of the property at Sikandara Road had been contending before this Court that Mr. G. Sagar Suri, the then Chairman of M/s. Delhi Automobiles Ltd. had no authority to bind the said Company by making a statement before this Court that property no. 1, Sikandara Road, New Delhi would be sold in order to liquidate the liabilities of GAL since GAL had nothing to do with M/s. Delhi Automobiles Ltd. So recalling of the order dated 2nd February, 1998 whereby it was ordered by the Court that in case the debts of the creditors of GAL were not paid off within the period of 3 ½ months property no. 1, Sikandara Road, New Delhi shall be deemed to have been attached and become liable to be sold under the supervision of the CA Nos. 2462/2010, 2382/2010 & 127/2011 in Co. Pet. 161/1997 Page 12 of 19 Court was sought. However, that was not done and so an appeal was filed before the Division Bench by M/s. Delhi Automobiles Ltd. (being Co. Appeal No. 16/96). Pursuant to the liberty given by the Division Bench in that appeal M/s. Delhi Automobiles Ltd. had moved a review application before the Company Court(being CA No. 1508/98) seeking review of the order dated 2nd February, 1998. In that application also it was contended that Mr. G. Sagar Suri had no authority to bind the said Company of which he was the Chairman during those days since its Board of Directors had not authorized him to make the statement before the Court which he had made on 2nd February, 1998. Before that application could be disposed of an amendment application(being CA No. 1241/05) came to be filed by M/s. Delhi Automobiles Ltd. seeking amendment in its review application to the effect that even if Mr. G.
Sagar Suri was considered to be competent to make the statement which he made on 2nd February, 1998 that statement was ultra-vires the Company‟s Memorandum and Articles of Association since it was not one of the objects of the Company to offer security of its own assests for the repayment of debts of another Company. Both the review petition as well as the amendment application, however, were not pursued and were finally dismissed for non-prosecution on 13-08-09.
Then an application was filed for revival of those applications but that CA Nos. 2462/2010, 2382/2010 & 127/2011 in Co. Pet. 161/1997 Page 13 of 19 application(being CA No. 1242/09) also was dismissed for non-
prosecution on 18-03-10. The appeal which M/s. Delhi Automobiles had filed against the order dated 2nd February, 1998 was also disposed of by the Division Bench without giving any relief to the appellant.
5. From the fore-going narration, it becomes more than evident that M/s. GAL as well as M/s. Delhi Automobiles Ltd. had been getting the benefit of deferment of passing of winding up order against GAL because of false assurances/undertakings given on their behalf to the Court. The fact that M/s. Delhi Automobiles Ltd. did not pursue its application for review of the order dated 2nd February, 1998 clearly shows that its contention that Mr. G. Sagar Suri had no authority from its Board of Directors to make the statement which he had made before this Court on 2nd February, 1998 on oath and based upon which this Court had passed the deemed order of attachment of the property at 1, Sikandara Road was false. That is also evident from the fact that Mr. G. Sagar Suri himself had never come forward and filed any affidavit to the effect that he had wrongly claimed before this Court that he had been authorized by the Board of M/s. Delhi Automobiles Ltd. to make the statement in respect of its property at Sikandara Road. When this Court was moved by the petitioner in CP No. 161/97 for sale of property no. 1, Sikandara Road, New Delhi and by the Official CA Nos. 2462/2010, 2382/2010 & 127/2011 in Co. Pet. 161/1997 Page 14 of 19 Liquidator for rendering police assistance to it for taking over the physical possession of the said property, Mr. Girdhar Govind, the learned counsel who had been earlier representing GAL as well as M/s.
Delhi Automobiles Ltd. once again entered the scene and reiterated that Mr. G. Sagar Suri had no authority to bind M/s. Delhi Automobiles Ltd.
by suffering an order of deemed attachment of its property at Sikandara Road.
6. As far as the opposition to the sale of property no. 1, Sikandara Road, New Delhi on behalf of M/s. Delhi Automobiles Ltd. is concerned that chapter,in my view, stood closed once for all after the dismissal of its application which had been filed for recalling of the order dated 2nd February, 1998 whereby this Court had ordered that in case of non-payment of the dues of the petitioning creditors within a period of 3 ½ months the said property shall be deemed to have been attached and become liable to be sold under the supervision of the Court as well as the disposal of the appeal filed by the said Company against the order dated 2nd February, 1998. That order has thus already attained finality.
7. It also appears that M/s. Delhi Automobiles Ltd. had realized long time back that it would be difficult for it to avoid the consequences CA Nos. 2462/2010, 2382/2010 & 127/2011 in Co. Pet. 161/1997 Page 15 of 19 of the statement which had been made before this Court by its Chairman Mr. G. Sagar Suri on 2nd February, 1998 as well as the consequences of the order passed by this Court on that date. Therefore, the Board of Directors of M/s. Delhi Automobiles Ltd. decided to create a third party interest in property no. 1, Sikandara Road, New Delhi by entering into an agreement to sell with one builder and developer by the name of Taneja Developers and Infrastructure Ltd. on 24th December, 2002 for a sale consideration of Rs. 23,50,00,000/-
which later on was increased to 25 crores. This fact has come to the knowledge of the Court when M/s. Taneja Developers and Infrastructure Ltd. moved an application(CA No. 192/11) in the present proceedings for recalling the order of attachment of property no. 1, Sikandara Road . It was claimed by the said builder that it was not aware of the attachment order passed by this Court in the present proceedings in respect of the said property at Sikandara Road when it had entered into an agreement to sell with its owner M/s. Delhi Automobiles Ltd. However, that application was dismissed as withdrawn on 10th February, 2011 and liberty was given to the applicant to approach the Court again after the disposal of applications for the sale of the said property moved by the petitioner in CP No. 161/97 and the Official Liquidator.
CA Nos. 2462/2010, 2382/2010 & 127/2011 in Co. Pet. 161/1997 Page 16 of 198. It is also significant to note that when the application of the Official Liquidator for getting police aid for taking over the possession of the property no. 1, Sikandara Road was being heard learned counsel representing the ex-management of GAL and M/s. Delhi Automobiles Ltd. had agreed to place on record the title deed in respect of the afore-
said property which was being sought to be sold. Accordingly, a photocopy of a registered sale deed dated 14 th January, 2003 executed by Shri G. Sagar Suri, as the attorney of the original owners of the said property, in favour of M/s. Delhi Automobiles Ltd. was filed. A perusal of this sale deed goes to show that on 2nd February, 1998, when Mr. G. Sagar Suri had made a statement in the present proceedings based upon which this Court had passed the order of deemed attachment of the said property he was holding proper power of attorneys in his favour by the erstwhile owners which had been executed in his favour after some settlement had been arrived at between M/s. Delhi Automobiles Ltd. and the erstwhile owners in a suit for specific performance which the said Company had filed against them in respect of the said property and compromise decrees were passed in the year 1992 on different dates and it was on the basis of those power of attorneys that Mr. G. Sagar Suri had executed the sale deed in favour of M/s. Delhi Automobiles Ltd. in January, 2003.
CA Nos. 2462/2010, 2382/2010 & 127/2011 in Co. Pet. 161/1997 Page 17 of 19Therefore, from this document also placed on record by M/s. Delhi Automobiles Ltd. it is clear that Mr. G. Sagar Suri was fully competent to make a statement in Court in respect of the said property at Sikandara Road which he had actually made on 2nd February, 1998. I am, however, of the view that Mr. G. Sagar Suri should have disclosed the fact to the Court on 2nd February, 1998 that no sale deed in respect of the said property in favour of M/s. Delhi Automobiles Ltd. was in existence at that time and that he was having power of attorneys in his favour on behalf of the erstwhile owners under which he was competent to execute the sale deed on their behalf.
9. Property no. 1, Sikandara Road, New Delhi having stood attached by this Court has now, therefore, become liable to be sold after taking over its physical possession and for that purpose the Official Liquidator would be entitled to get police aid for which already a prayer stands made on its behalf since the local police had not rendered its aid earlier because of there being no such direction from this Court. The Official Liquidator is now also permitted to get the property no. 1, Sikandara Road, new Delhi valued from some approver valuer and after that is done further appropriate orders for the sale of this property shall be passed. The applications filed on behalf of the petitioner and the Official Liquidator stand allowed accordingly.
CA Nos. 2462/2010, 2382/2010 & 127/2011 in Co. Pet. 161/1997 Page 18 of 1910. That, however, is not the end. Since, prima facie, it appears to this Court that false/misleading statements had been made and undertakings given throughout in the present proceedings on behalf of GAL as well as M/s. Delhi Automobiles Ltd. and despite there being an order of attachment in respect of property no. 1, Sikandara Road, New Delhi a third party interest was sought to be created in it by the Directors of Delhi Automobiles Ltd., a notice is directed to be issued to all those persons who were on the Board of Directors of GAL as well as M/s. Delhi Automobiles Ltd. during the years 1998 to 2002 to show cause as to why appropriate action be not taken against them. In this regard, the Official Liquidator shall place on record the particulars of the concerned Directors of the two Companies and shall get them served with the show cause notices, returnable for 28th April, 2011.
P.K. BHASIN,J April 04, 2011 sh CA Nos. 2462/2010, 2382/2010 & 127/2011 in Co. Pet. 161/1997 Page 19 of 19