$~CP-J
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment Pronounced on: 05.12.2019
+ CO.PET. 379/2009
SECURITIES & EXCHANGE BOARD OF INDIA
(TRUST PET. NO.3/1997) ..... Petitioner
Through Mr.Abhishek Baid and Mr.Praneet
Das, Advs.
versus
CRB CAPITAL MARKETS LTD . .... Respondent
Through Mr.Anurag Ahluwalia, CGSC for UOI
Mr.Sumit Nagpal, Adv. for National
Stock Exchange
Mr.Sudhanshu Batra, Sr.Adv. with
Mr.Bhuvan Gugnani and Mr.Aditya
Mishra, Advs. for CRB Special
Committee
Mr.Avneesh Garg and Mr.Neelkamal
Mishram, Advs. for non-applicant
No.2
CORAM:
HON'BLE MR. JUSTICE JAYANT NATH
JAYANT NATH, J. (JUDGMENT)
CA No.1132/2017
1. This application is filed by the Special Committee constituted by order
of this court dated 29.5.2013 for appropriate directions to the National Stock
Exchange of India Limited (hereinafter referred to as to the 'NSEIL') for
release of 1,00,000 shares of Reliance Industries Limited including all
corporate benefits thereon together with Rs.43.75 lacs on account of Fixed
Deposit standing with NSEIL.
2. It is submitted in the application that in 1993, CRB Capital Markets
Co.Pet.379/2009 Page 1
Limited had applied to SEBI to set up a mutual fund known as CRB Mutual
Fund. As per rules, CRB Asset Management Company Limited was
incorporated to manage and supervise various operations of CRB Mutual
Fund. In terms of Regulations a Trust called CRB Trustee Limited was also
constituted. Thereafter the said company CRB Capital Markets Limited was
authorised by SEBI to set up and establish the mutual fund known as CRB
Mutual Fund. The said CRB Mutual Fund floated a close ended scheme
known as Arihant Mangal (Growth) Scheme. The scheme opened for
subscription on 19.8.1994 and closed on 5.9.1994. The scheme collected
Rs.299.28 crores and was subscribed by 19,396 investors.
3. RBI subsequently in exercise of its powers under the RBI Act, 1934
read with section 433/434 of the Companies Act, 1956 instituted a winding
up petition against CRB Capitals Markets Limited. This Court appointed a
Provisional Liquidator who was directed to take into custody all the
properties, books of accounts etc.
4. To safeguard the interest of the investors of Arihant Mangal Scheme
SEBI instituted a Trust Petition on 3.6.1997 against CRB Capital Markets
Ltd. and others including CRB Trustee Limited and CRB Asset Management
Company Ltd before the Bombay High Court. This petition was numbered as
Trust Petition No. 3/1997. Bombay High Court was pleased to appoint a
Provisional Administrator for CRB Trustee Limited and CRB Asset
Management Company Limited vide order dated 3.6.1997. The Supreme
Court vide its order dated 13.08.2007 transferred the said petition to this
Court which was renumbered as the present company petition i.e. CP
379/2009. On 29.5.2013 this court by a consent order constituted a Special
Committee to carry out functions of the Trustee and to proceed to wind up
Co.Pet.379/2009 Page 2
the Scheme in terms of the Regulations 41 and 42 of the Security Exchange
Board of India (Mutual Funds) Regulations 1996. As per the said order of
this court dated 29.05.2013, the Committee was directed to dispose of the
assets of the scheme at the best available market price. The present
application has been filed by the Committee in exercise of the powers
entrusted to it by the said order of this court.
5. It is further pleaded that the Special Committee got knowledge about
the issue which is raised in the present application on coming to know about
pendency of a Civil Suit being No.2158/2008 filed by one Rommel
Investment Private Limited which was pending adjudication before this
court. It is stated that after going through the suit and the sketchy and
incomplete record received, the background facts came to light. As per the
facts which have come to the knowledge of the committee the said CRB
Mutual Funds had purchased shares of two different Reliance Companies.
On account of a merger that took place of the two companies with Reliance
Industries Limited the said CRB Trustee Limited a/c CRB Mutual Fund were
allotted shares of Reliance Industries Limited. It is stated that in June 1996
the said CRB Asset Management Company Limited and CRB Trustee
Limited decided to sell approximately 1,10,000 shares of Reliance Industries
Limited. The mandate was given to Rommel Investment Private Limited
(hereinafter referred to as Rommel). In the mandate dated 10.6.1996 it was
agreed that before finalising any deal with the prospective buyer written
consent was mandatory from the mutual fund. Reliance is placed on a
communication dated 10.4.1996 sent to IIT Corporate Services Limited,
Bombay, share custodian of CRB Mutual Fund requesting it to deliver
1,10,000 shares of Reliance Industries Limited to Rommel. It is pleaded that
Co.Pet.379/2009 Page 3
Rommel failed to carry out the task assigned to it. It transpired that Rommel
sold 1,02,000 shares out of 1,10,000 share of Reliance Industries Limited. A
complaint was filed by the said Rommel with the National Stock Exchange
of India Limited on 10.6.1997 and 11.6.1997 about non-receipt of sale
consideration of the said shares of Reliance Industries Ltd.
6. It is the grievance of the Committee that the said Rommel has without
any authority sold the said 1,02,000 shares of RIL standing in the name of
CRB Mutual Fund in open market transaction without making any payment
thereof to the Mutual Fund. Out of the sale proceeds Rommel has bought
60,400 more shares of RIL. These 60,400 shares were sold for Rs.1.80
crores. Again part of this amount was used to purchase 1 lac shares of RIL.
A balance amount of Rs.43.75 lacs was invested in a fixed deposit by
NSEIL.
Hence, it is claimed that 1,02,000 shares belonging to CRB Trustee
Limited a/c CRB Mutual Fund have been sold by Rommel. Subsequently,
from the sale proceeds another 1 lac share of RIL have been purchased and
balance amount is lying in Fixed Deposit. It is pleaded that CRB Mutual
Fund is entitled to receive the said 1 lac shares and the amount of Rs.43.75
lacs with up to date interest. Hence, the present application seeking
directions to the National Stock Exchange of India to release 1 lac shares of
RIL alongwith all corporate benefits/dividends/bonus shares and an amount
of Rs.43.75 lacs lying in fixed deposit.
7. The non-applicant National Stock Exchange of India Limited has filed
its reply. They have stated that they have no claim over the securities and
fixed deposits for which this application has been filed.
8. Non-applicant No.2 Rommel has also filed his reply. It has been
Co.Pet.379/2009 Page 4
pleaded that the facts as pleaded in this application are incorrect. Two
agreements were said to have been executed on 22.11.1995 whereby
Rommel agreed to purchase 10 lac units of Arihant Mangal. In return CRB
Capital Markets Limited agreed to repurchase the said units in the stipulated
period and for the said purpose pledged 22,000 shares of RIL to Rommel.
Similarly, under the third agreement dated 24.4.1996 Rommel agreed to
purchase 18,75,000 units of Arihant Mangal from Exxon Financial Services
Limited. CRB Capital Markets Limited again pledged 80,000 shares of RIL
to Rommel. It is claimed that on account of default in repurchasing of the
units by CRB Capital Markets Limited Rommel sold 1,02,000 shares of RIL
which were pledged by CRB Capital Markets Limited, in the open market.
Thereafter from the said proceeds Rommel is said to have purchased 1 lac
shares of RIL which were transferred in the name of Rommel. Out of these,
in April 1997, 60,400 shares were sold in the open market through one
broker Triumph International Finance India Limited (hereinafter referred to
as Triumph) for a sum of Rs.1,87,43,559. However, sale proceeds were not
paid by Triumph to Rommel. Pursuant to a complaint made by Rommel,
Triumph furnished a bank guarantee of Rs.1,80,00,000/-. Subsequently,
Triumph replaced the Bank Guarantee for Rs.1,80,00,000/- with 1,00,000
shares of RIL then valued at Rs.1,36,25,000 and balance sum of
Rs.43,75,000 was put in a Fixed Deposit.
9. It is the grievance of Rommel that National Stock Exchange of India
Limited has wrongly continued to withhold the shares and the Fixed Deposit
amounts. Hence, Rommel filed various proceedings. Finally, a suit was filed
before the Bombay High Court seeking a declaration that Rommel is the
lawful owner of 60,400 shares of RIL which were sold through Triumph and
Co.Pet.379/2009 Page 5
is entitled to the sale proceeds. Based on the above, it is prayed that this
application may be dismissed.
10. The facts as stated above show that the evidence of both sides is a bit
sketchy. At one side the Special Committee relies upon communication
dated 10.6.1996 sent to Rommel mentioning that Rommel will negotiate sale
of 1,10,000 share of RIL held by CRB Trustee Limited a/c CRB Mutual
Fund. It is pleaded that this was followed by subsequent communication
including a communication dated 10.10.1996 to IIT Corporate Services to
withdraw the shares and keep them ready to be handed over to Rommel.
Thereafter on 28.3.1997 a reminder was sent to Rommel regarding the status
of the matter. It is pleaded that the 1,10,000 shares have been sold by
Rommel without prior consent of CRB Mutual Fund. It is their case that this
1,10,000 shares of RIL were given to Rommel vide Folio No.75915497 held
by the CRB Mutual Fund. No sale consideration was received by CRB
Trustee Ltd.
11. Rommel, however, claims that the present 1 lac shares of RIL relate
back to Agreements entered into with CRB Capital Markets Limited dated
22.11.1995 and 24.4.1996 whereby 1,02,000/- shares were pledged as
security on account of loans given by Rommel for subscription to Arihant
Mangal Scheme. It is stated that 1,02,000 shares were pledged by the said
CRB Capital Markets Limited. It is further stated that these 1,02,000 shares
were sold in the market and from the proceeds another 1 lac shares of RIL
were bought. Out of these 1 lac share in April 1997 Rommel sold 60,400
shares in the open market through Triumph for a consideration of
Rs.1,87,43,559. There was a default on the part of Triumph. Subsequently,
Trimuph has given 1 lac shares to Rommel. Balance of Rs.43.75 lacs is said
Co.Pet.379/2009 Page 6
to be deposited in Global Trust Bank Limited. Rommel denies letters relied
upon by the Committee dated 10.6.1996.
12. The Committee, however, denies the Agreements relied upon by
Rommel. It is stated that the shares in question were owned by CRB Trustee
Limited a/c CRB Mutual Fund which are subject matter of the present
application. No shares which belonged to CRB Capital Marks Limited are
involved.
13. I may first refer to a letter written by the National Stock Exchange of
India Limited to the office of Official Liquidator on 30.09.2004. This
communication provides some details of the transactions that have taken
place between the applicant and Rommel. The relevant part of the letter
reads as follows:-
"From the facts mentioned in the complaint, it was observed
that certain transactions took place in 1996 related to shares
held by CRB Trustees Limited A/c CRB Mutual Fund and
therefore the above sale consideration was not released by
Triumph to Rommel."
..........
"From the above facts and submission made by Rommel, the following factual position emerges:-
1. IIT Corporate Services Ltd., the custodian for CRB Mutual Fund have confirmed that the sales proceeds in respect of 89,400 shares sold in 1996 have been directly received by the CRB Mutual Fund.
2. The Court order dated September 7, 2001 issued by the Hon'ble High Court at New Delhi does not include the name of Rommel Investment P Ltd. and also name of Triumph International Finance India Ltd.
Co.Pet.379/2009 Page 7 As Rommel Investment P. Ltd. has been pursuing the matter with us for release of the sale consideration to them, in view of the above factual position, it appears to us the sale consideration does not require to be continued to be held.
The sale consideration for 60,400 shares of Reliance Industries Ltd is held by NSCCL in the form of 1,00,000 shares of Reliance and fixed deposit receipts of Rs.43.75 lakhs. Of the 1,00,000 shares, 97,355 shares are held in trust by NSCCL in demat mode and the balance 2,645 shares have been returned under objection, which are in physical form.
After retaining 13,200 shares (1,02,600 Reliance shares delivered by Rommel in 1996 less 89,400 shares whose sale consideration has been reported to have been received by CRB Mutual Fund) and dividend amount of Rs.3,23,576/- on these 13,200 shares plus interest accrued thereon, we intend to release to Rommel Investments P Ltd. the following on or after October 25, 2004.
.............."
14. Hence, as per the National Stock Exchange of India Limited some shares belonging to CRB Trustee Limited A/c CRB Mutual Fund has been sold by Rommel in 1996. According to the above communication sale proceeds of 89,400 shares were directly received into the fund. Hence, National Stock Exchange of India Limited has proposed that out of the unsold shares, namely, 13,200/- shares alongwith accrued dividend may be released to the applicants and the balance be released to Rommel.
15. The applicants do not accept the said stand taken by National Stock Exchange of India Limited. In fact, they have written a letter to SEBI on 11.6.2007 stating that they have gone through the current account statement Co.Pet.379/2009 Page 8 obtained from the bank for CRB Trustee Limited A/c CRB Mutual fund but have not been able to verify receipt of any sale consideration by the fund on account of sale of the aforenoted shares that were delivered to Rommel.
16. It is also a matter of fact that Rommel has not also been able to show as to how payment was made to CRB Trustee Limited pursuant to sale of the said shares that were entrusted to it on behalf of CRB Trustee Limited A/c CRB Mutual Fund.
Clearly, there is no dispute that Rommel did deal with the shares belonging to CRB Trustee Limited A/c CRB Mutual Fund. There is, however, nothing on record to show that any payment subsequent to sale of shares was received by CRB Trustee Limited A/c CRB Mutual Fund. Rommel has not given any details of the manner by which the payments were allegedly made.
17. Apart from the above aspect for the reasons which I shall state hereinafter, in my opinion the non-applicant Rommel has failed to place on record the full relevant records/facts. Its defence regarding title to those shares appear to be make belief and cannot be relied upon.
18. Rommel's defence is around the agreements allegedly entered into with CRB Capital Market Limited dated 22.11.1995 and 24.4.1996 where it is stated that 1,02,000/- shares were pledged on account of loans given by Rommel for subscription to Arihant Mangal Scheme. This plea is bereft of material details. A perusal of the three agreements placed on record allegedly executed between Rommel and CRB Capital Markets Limited would show that there are no details mentioned of the share No., folios etc. of Reliance Industries Ltd. which were allegedly hypothecated to Rommel for alleged loans given to the said CRB Capital Markets Limited. There is no detail also Co.Pet.379/2009 Page 9 forthcoming as to through which instrument or method loan/consideration for purchase of units of the Arihant Mangal Scheme were paid by Rommel to CRB Capital Markets Limited. Rommel has also not given any details of the manner by which the payments were allegedly made for the Arihant Mangal Scheme.
It is also a matter of fact that the shares that were sold in 1996 belonged to CRB Trustee Limited a/c CRB Mutual Fund. CRB Capital Markets Limited did not own the shares and could not hypothecate the same.
19. Further, it is not clear as to why CRB Capital Market Limited would pledge shares in return for the Arihant Mangal scheme as is being claimed by Rommel. As per information made available by the Committee the Arihant Mangal Scheme was a success. The scheme generated Rs.299.28 crores which was subscribed by 19,396 investors. Given this background it is not clear as to why CRB Capital Markets Limited would enter into an Agreement with Rommel whereby a guarantee/security of shares is given for refund of money within six months.
20. Further the best evidence for this alleged transaction would be available with Rommel. This evidence has not been placed before the Court. I may note that this court on 17.4.2018 passed the following directions to Rommel:-
"Let Rommel Investment Pvt. Ltd. file an affidavit giving details of the shares including numbers, folio numbers, etc. along with documentary evidence to show that these shares belong to CRB Capital Market Ltd. which were subject matter of the four agreement as stated by Rommel. The affidavit be filed within four weeks from today. This may be treated as a last opportunity by Rommel as ordinarily, Rommel should have filed these details prior."
Co.Pet.379/2009 Page 10
21. In response to the above directions the respondent has filed an affidavit of Ms.Usha Devi Jain one of its Directors which merely reiterates the entire averments already made in the reply. Para 8 of the affidavit states as follows:-
"8. In so far as the folio numbers of the shares sold by the non applicant no.2 are concerned, the same can be revealed by the NSE. It is further submitted that since the transaction is very old and since the objection in this regard has been raised by the Applicant after many years, the non applicant did not retain the old records."
22. Clearly, the best evidence available with Rommel has been hidden from the court. An adverse inference is liable to be drawn against Rommel.
The defence of the non-applicant Rommel claiming that the share which are subject matter of the present application relate to 1,02,000 shares pledged on account of a loan given by Rommel for subscription to Arihant Mangal Scheme appears make belief.
23. Reference in this context may be had to the judgment of the Supreme Court in Union of India vs. Ibrahim Uddin, (2012) 8 SCC 148 where the Supreme Court held as follows:-
12. Generally, it is the duty of the party to lead the best evidence in his possession, which could throw light on the issue in controversy and in case such material evidence is withheld, the court may draw adverse inference under Section 114 Illustration (g) of the Evidence Act notwithstanding, that the onus of proof did not lie on such party and it was not called upon to produce the said evidence. [Vide Murugesam Pillai v. Manickavasaka Pandara: AIR 1917 PC 6, Hiralal v. Badkulal: AIR 1953 SC 225, Co.Pet.379/2009 Page 11 A.Raghavamma v. A. Chenchamma: AIR 1964 SC 136, Union of India v. Mahadeolal Prabhu Dayal: AIR 1965 SC 1755, Gopal Krishnaji Ketkar v. Mohd. Haji Latif: AIR 1968 SC 1413, BHEL v. State of U.P.: (2003) 6 SCC 528, Mussauddin Ahmed v. State of Assam: (2009) 14 SCC 541, and Khatri Hotels (P) Ltd. v. Union of India: (2011) 9 SCC 126] ....
24. Thus, in view of the above, the law on the issue can be summarised to the effect that the issue of drawing adverse inference is required to be decided by the court taking into consideration the pleadings of the parties and by deciding whether any document/evidence, withheld, has any relevance at all or omission of its production would directly establish the case of the other side. The court cannot lose sight of the fact that burden of proof is on the party which makes a factual averment. The court has to consider further as to whether the other side could file interrogatories or apply for inspection and production of the documents, etc. as is required under Order 11 CPC. Conduct and diligence of the other party is also of paramount importance. Presumption of adverse inference for non-production of evidence is always optional and a relevant factor to be considered in the background of facts involved in the case. Existence of some other circumstances may justify non-production of such documents on some reasonable grounds. In case one party has asked the court to direct the other side to produce the document and the other side failed to comply with the court's order, the court may be justified in drawing the adverse inference. All the pros and cons must be examined before the adverse inference is drawn. Such presumption is permissible, if other larger evidence is shown to the contrary."
Hence, this court would be justified in drawing an adverse inference against Rommel.
Co.Pet.379/2009 Page 12
24. Apart from the above, another aspect that one notices is that as per Rommel the defaults in receiving payment from Triumph occurred in 1997. It was in April 1997 that 1 lac shares that had been purchased by Rommel were sold through Triumph for a consideration of Rs.1,87,43,559/-. Rommel has woken up only sometimes in 2006 to initiate legal proceedings when a Writ Petition was filed in the Bombay High Court being W.P.242/2006. The said Writ Petition was withdrawn with liberty to file a suit. Rommel has then filed a suit two years later in 2008 in Delhi High Court being CS(OS) No.2158/2008 seeking mandatory injunction against NSE for the release of 1 lac share and the FD amount. This suit was withdrawn on account of territorial jurisdiction. Thereafter a suit has now been instituted before the Bombay High Court in 2016. Clearly, Rommel has been lackadaisical in pursuing its claim for 1 lac shares of RIL and for return of the FD amount. The approach shows a half hearted attempt to try and get the money which was stuck since 1997 with Triumph/NSEIL.
25. Before proceeding further, I may look at the legal position in this regard. A Coordinate Bench of this court in the case of M.R. Bakshi vs. Fintra Systems Ltd., 2008 (151) DLT 1 while dealing with section 542 of the Companies Act, 1956 held as follows:-
"10. Having considered the respective submissions I am, as at present advised, inclined to agree with the submissions of Mr. Rajiv Shakdher, Sr. Advocate the learned Amicus Curiae.
Keeping in view the purpose for which Section 542 has been enacted, and the fact that timely action is of the essence, not only to prevent the presentation of a fiat accompli by the fraudulent Directors of the company, but also to provide relief to the victims of the fraud, it seems that the establishment of the fraudulent conduct for attracting the provision of Section 542 of the Companies Act does not require the same standard of proof as in Co.Pet.379/2009 Page 13 a criminal trial and the rigours of the law of evidence as apply to a criminal trial would not apply to establish the commission of fraudulent acts and omissions by the Directors and managers of a company. It has also to be kept in mind that by its very nature, fraud is not easy to establish. This is even more so, when the fraudulent conduct is undertaken by the Directors of a company, sitting in their own office, with a view to defraud the creditors/investors who, though the victim of the fraud, are not involved in the transactions which constitute such conduct, and may have no personal knowledge of the same. In K.T. Dharanendrah v. R.T. Authority AIR 1987 SC 1321 the Supreme Court, while dealing with a case under the Customs Act, 1962 observed that "An economic offence is committed with cool calculation and deliberate design with an eye on personal profit regardless of the consequence to the Community. A disregard for the interest of the Community can be manifested only at the cost of forfeiting the trust and faith of the Community in the system to administer justice in an even handed manner without fear of criticism from the quarters which view white collar crimes with a permissive eye unmindful of the damage done to the National Economy and National Interest.
11. I also find merit in the submission of Mr. Shakdher that it is not necessary that each transaction/instance of funds being siphoned or fraudulent conduct needs to be established from the beginning to the end to invoke Section 542 of the Act. That is because it would be reasonable to assume, that directors/managers who are shown to have indulged in even a single act of fraud in the discharge of their duties towards the company, its shareholders and creditors, would have generally resorted to such conduct. Traits of greed and dishonesty amongst men are known to manifest whenever the opportunity presents itself. This is even more true, when such conduct is displayed by the relatively affluent members of society, as their conduct is not driven by their need or undertaken in desperation. The pattern that emerges from the conduct of Mr. & Mrs. Shakt shows that their actions were focused on collecting funds in the company from the public by promising huge returns, and then siphoning Co.Pet.379/2009 Page 14 them out in one way or another. That seems to have been the true "business activity" of the promoter Directors and managers of the company. No other business appears to have been conducted by the company with a view to earn profits for the company, its shareholders and creditors. In the aforesaid process, the entity of the company has been misused and exploited.
12. From the aforesaid reports of the CBI, prima facie it appears to me that this is a fit case for holding the directors of the company in liquidation personally liable, without any limitation of liability. Section 542 is an exception to the general rule that in a limited liability company, the liability of the shareholders and directors is limited. The purpose and object of Section 542 is to catch up with the fraudulent directors and other persons responsible for defrauding the creditors and shareholders of the company, who deliberately conduct the affairs of the company in a manner as to rob the company of its resources and allow it to bleed. Conduct, which does not appear to be bona fide or innocent, or a mere judgmental error, but which personally enriches the Directors/managers of the company directly or indirectly at the expense of the company, permits the Courts to take away the protective shield that the directors/manager enjoy under the law. The shield of corporate entity with limited liability of the shareholders/Directors, provided by the law is not meant to protect fraudsters. They cannot be permitted to defraud the shareholders and the public through the instrumentality of a corporate entity with limited liability, and then mock at their shareholders and creditors and the Courts, and seek to protect themselves behind the veil of the Corporate Entity. The law is not toothless, but empowers the Courts with authority to deal with such situations."
26. The Supreme Court in Official Liquidator vs. Parthasarathi Sinha and Others, (1983) 1 SCC 538 held as follows:-
"18. The liability arising under the misfeasance proceedings is founded on the principle that a person who has caused loss to the company by an act amounting to breach of trust should Co.Pet.379/2009 Page 15 make good of the loss. Section 543 of the Act does not really create any new liability. It only provides for a summary remedy for determining the amount payable by such person on proof of the necessary ingredients. The section authorises the court to direct such persons chargeable under it to pay a sum of money to the company by way of compensation. This is not a provision intended to punish a man who has been found guilty of misfeasance but for compensating the company in respect of the loss occasioned by his misfeasance. Whenever there is a relationship based on contract, quasi-contract, some fiduciary relation or a failure to perform a duty, there is no abatement of the liability on the death of the wrong-doer. When once the liability is declared it is open to the Official Liquidator to realise the amount due by resorting to Section 634 of the Act and Section 50 of the Code of Civil Procedure. In Tendolkar case [(1973) 1 SCC 602] this Court did not consider the effect of Section 634 of the Act which made the relevant provisions of the Code of Civil Procedure relating to execution of decrees applicable to orders passed by the court under the Act."
27. Clearly, given the manner in which fraudulent acts are undertaken under deceit and camouflage, if done with the affairs of a company/trust etc., the standard of proof required to prove such fraudulent conduct would necessarily be less stringent.
28. In view of the above, it is manifest that Rommel has failed to place on record material facts without any plausible explanation.
Rommel has failed to show that pursuant to sale of shares of Reliance Industries Limited which belonged to CRB Trustee Limited A/c CRB Mutual Fund the consideration was paid to CRB Trustee Limited.
Rommel has also failed to give details, namely, folio no./share Nos. of the shares of Reliance Industries Limited allegedly belonging to CRB Capital Markets Limited that were allegedly pledged to Rommel as claimed Co.Pet.379/2009 Page 16 by Rommel. Hence, the defence sought to be given by Rommel about alleged execution of agreements dated 22.11.1995 and 24.4.1996 with CRB Capital Markets Limited cannot be accepted and appears to be make belief.
Even otherwise, the alleged agreements have no connection with the shares which were in the name of CRB Trustee Limited A/c CRB Mutual Fund. There is no merit in the defence raised by Rommel/respondent No.2.
29. In view of the above, the present application is allowed. NSEIL is directed to transfer 1,02,000 shares of Reliance Industries Limited with accumulated benefits including dividend, bonus shares etc. in favour of the applicant Committee formed by the court. The Fixed Deposit amount of Rs.43.75 lacs lying alongwith accumulated interest will also be transferred to the Special Committee.
30. Application stands disposed of accordingly.
JAYANT NATH, J.
DECEMBER 05, 2019/n/v Co.Pet.379/2009 Page 17