Northern India Jvg Investors & ... vs Vk Sharma & Ors.
2011 Latest Caselaw 5355 Del

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*      IN THE HIGH COURT OF DELHI AT NEW DELHI

+      CCP(CO.) 5/2006 & CO. APPL. 1031/2009 IN CO. PET. 265/1998

       NORTHERN INDIA JVG
       INVESTORS & DEPOSITORS
       WELFARE ASSOCN.        ..... Petitioner
                      Through None
               versus

       VK SHARMA & ORS.                         ..... Respondents

Through Mr. Shailendra Singh with Mr. Rajesh Kumar, Advocates for respondent-

Mr. V.K.Sharma.

Mr. Rajiv Bahl with Mr. Manish Bishnoi, Advocates for Official Liquidator.

Ms. Swati Setia, Advocate for Reserve Bank of India.

Mr. Mayur R. Shah, Advocate for applicants in CA 1031/2009.

%                                             Date of Decision: 04th November, 2011


       CORAM:
       HON'BLE MR. JUSTICE MANMOHAN

1. Whether the Reporters of local papers may be allowed to see the judgment? Yes.

2. To be referred to the Reporter or not? Yes.

3. Whether the judgment should be reported in the Digest? Yes.

CCP(CO.) 5/2006 IN CO. PET. 265/1998

1. On 28th March, 2000, the Hon'ble Supreme Court was pleased

to grant bail to Mr. V.K. Sharma, former Managing Director of

M/s. JVG Group of Companies. The relevant portion of the aforesaid

order as culled out from (2000) 9 SCC 449 is reproduced

hereinbelow:-

"4. Nonetheless, we exercised our judicial considerations seriously to find out a solution in the peculiar situation. We were benefitted by the arguments addressed by all the learned Counsel in this case. We, therefore, persuade ourselves to grant the following reliefs to the petitioner:

1. If the petitioner is arrested in connection with any criminal case in his capacity as Managing Director/Director of JVG Group of Companies the arresting officer shall release him on bail on his executing a bond to the satisfaction of the arresting officer.

2. Such relief shall be made after getting an assurance from him that he will be present in the court concerned on the days when his case is posted. However, we make it clear that it is open to the petitioner to apply to the court concerned for exempting him from personal appearance on condition that a counsel on his behalf would be present on such posting dates and he would not dispute his identity as the particular accused in that case, and further that he would make himself available on any date when his presence is imperatively needed in that court.

3. We permit the petitioner to move the appropriate High Courts for bringing all the cases pending in different courts within the territorial jurisdiction of that High Court to

one single court or more than one court (depending upon the number of cases or the width of the area of the State is concerned).

4. This order will come into effect only if the petitioner would surrender his passport in this Court. Shri Shanti Bhushan, learned senior counsel expressed a doubt that petitioner would have already surrendered his passport before another court pursuant to the order passed. In that case he can satisfy the Registrar General of this Court by an affidavit of the situation and the Registrar General can intimate the jail authorities concerned of that position.

5. We make it clear that it is open to the investigating agency in any case to move for cancellation of bail if any such investigating agency finds that petitioner is misusing the liberty granted by this order."

2. However, as Mr. V.K. Sharma is not cooperating in the present

proceedings, this Court is not able to discharge its function inasmuch

as it is neither able to adjudicate the claims of the hundred of

claimants nor able to sell any asset of the company in liquidation or

repay the investors.

3. This Court has been informed that Dy. Commissioner of Police,

Economic Offences Wing (EOW), Crime Branch, Delhi Police, New

Delhi has filed an affidavit dated 13th January, 2011 before Hon'ble

Supreme Court in Crl. M.P. 5792/2007 in W.P.(Crl.) 256/1999

mentioning various cases in which FIR against Mr. V.K. Sharma is

lodged. The EOW in its affidavit has stated that the accused Mr. V.K.

Sharma keeps on floating number of interconnected/linked companies

and is a director of companies, namely, M/s. Yusuf Eng., M/s. Ayushi

Buildestates Pvt. Ltd., Authorised signatory of M/s. Vian

Infrastructure Ltd. and is involved in conspiracy with M/s. PSG

Developers & Engineers Ltd.

4. The persistent non-cooperative attitude of Mr. V.K. Sharma

would be apparent from the following facts :-

(i) This Court on 19th January, 2011 had directed Mr. V.K.

Sharma, ex-Director of company in liquidation to appear before Md.

Shakeel, Assistant Official Liquidator on 8th February, 2011 at 11.00

a.m. and subsequently on each and every subsequent date fixed by the

Official Liquidator till all clarifications were furnished and all defects

in statement of affairs were removed. This direction was felt

necessary in view of the fact that last statement of affairs filed way

back in 2005, was found defective by the office of the Official

Liquidator.

(ii) However, Mr. V.K. Sharma in utter disregard to this Court's

order did not appear on 8th February, 2011 before the Assistant

Official Liquidator. He also did not appear on any other subsequent

date.

(iii) This Court is informed that the office of Official Liquidator had

also written several letters and requested Mr. V.K. Sharma to appear

and extend cooperation. In fact, pursuant to the order dated 27 th

November, 2010 passed by this Court, the Official Liquidator vide its

letters dated 14th December, 2010 and 13th January, 2011 had

requested Mr. V.K. Sharma to produce before it necessary documents

like audited balance sheets, profit and loss account, title deeds and

other statutory records with regard to various properties. Mr. Sharma

has till date not furnished the said documents to the Official

Liquidator.

(iv) This Court vide order dated 20th May, 2010 had appointed

Mr. J.P. Aggarwal as one man Claim Committee. Mr. Aggarwal also

issued several notices to Mr. V.K. Sharma to remain personally

present before the said Committee on 26th May, 2010, 7th June, 2010,

10th June, 2010, 5th July, 2010, 19th July, 2010, 27th July, 2010, 12th

August, 2010, 26th August, 2010, 6th September, 2010, 21st September,

2010, 23rd September, 2010 and 5th October, 2010. Out of the

aforesaid dates, Mr. V.K. Sharma remained personally present before

the Committee only on 27th July, 2010 and 26th August, 2010.

(v) It is pertinent to mention that this Court vide order dated 18th

July, 2011 was constrained to remand claims of 200 investors from

Hyderabad to a fresh Committee only on the ground that principles of

natural justice had been violated inasmuch as the investors had not

had an opportunity to cross-examine Mr. V.K. Sharma. As a

consequence, the painstaking efforts of earlier Committee in

adjudicating the claims were rendered totally futile and this Court was

constrained to constitute a fresh Committee at the expense of

significant time and costs.

(vi) In fact, this Court is informed that even as of today, Mr. V.K.

Sharma is not cooperating with the new Committee. As a result, the

matter with regard to Hyderabad properties has been delayed and this,

in turn, has resulted in hardship to the poor investors who have not

received a single penny till date because till the numerous claims with

respect to various properties of the company (in liquidation) are

settled, this Court cannot proceed further.

(vii) In a bid to further expedite the resolution of the matters, this

Court on 20th July, 2011 had constituted a Committee consisting of

Mr. Rajiv Bahl, Mr. Manish K. Bishnoi, Advocates for Official

Liquidator, Official Liquidator attached to this Court and Mr. Anand

Verma, Company Secretary for the purpose of ascertaining details of

properties which can be put to immediate sale and had also directed

Mr. V.K. Sharma to appear along with his counsel, Mr. Shailendra

Singh before the said Committee.

(viii) Pursuant to the aforesaid order, the said Committee has so far

held seven meetings but Mr. V.K. Sharma did not appear on any date

before the Committee. However, Mr. Shailendra Singh along with

Ms. Seema Malhotra, Company Secretary appeared before the

Committee but complete information could not be given to the

Committee as it appears to this Court that JVG Group was being

closely managed by Mr. V.K. Sharma and only he could provide the

relevant information.

(ix) It is pertinent to mention that on various occasions this Court

had granted indulgence to Mr. V.K. Sharma requiring his appearance

either in this Court or before claim Committee or any other

Committee appointed by this Court. Each and every date was fixed

after consulting his counsel, who promised on each occasion that

Mr. V.K. Sharma would appear on the appointed date. Mr. V.K.

Sharma appeared on none of the said dates.

(x) This Court vide its order dated 9th August, 2011directed that on

the next date of hearing, that means, on 12th September, 2011

Mr. V.K. Sharma should be personally present in Court failing which

this Court would initiate steps for cancellation of his bail. It is also

recorded in the said order that date has been fixed with the consent of

Mr. V.K. Sharma's counsel. The order dated 9th August, 2011 is

reproduced hereinbelow for ready reference:-

"Mr. Sandeep Sethi states that he has only yesterday filed some documents. However, the same are not on record. Let the same be brought on record after copies of the same have been furnished to the counsel for the Official Liquidator.

It is pertinent to mention that Mr. V.K. Sharma, Ex. Chairman/Managing Director of the JVG Group of Companies is not personally present in Court despite the categorical order dated 13th July, 2011. Learned counsel for

Mr. V.K. Sharma states that Mr. V.K. Sharma is unwell and is undergoing treatment for Arthritis in Calicut. But neither any application for exemption nor any medical record has been filed.

I may mention that today's date had been fixed with the consent of counsel for Mr. V.K. Sharma. Though, I was inclined to cancel the bail of Mr. V.K. Sharma, but as the counsel for Mr. V.K. Sharma has assured this Court that Mr. V.K. Sharma would be personally present in Court on the next date of hearing, I defer my orders.

List the matter for further consideration on 12th September, 2011. On the next date of hearing, Mr. V.K. Sharma would be personally present in Court, failing which this Court would be constrained to initiate steps for cancellation of bail of Mr. V.K. Sharma on the ground of non- cooperation."

(xi) But in utter disregard to this Court's order, Mr. V.K. Sharma

remained absent in Court on 12th September, 2011.

(xii) Thereafter in the criminal petition filed by the Official

Liquidator under Section 454(5) of the Companies Act, 1956 this

Court was constrained to issue non bailable warrants against Mr. V.K.

Sharma as he did not appear on the date when the charges/accusations

were to be framed under Section 251 of Cr. P.C.

5. In fact, on a perusal of the report of Serious Fraud Investigation

Office (SFIO), a Central Government investigating agency constituted

under Section 237 of the Companies Act, 1956 and after going

through the claims preferred by various claimants with regard to

properties of company in liquidation, prima facie this Court finds that

the business modus operandi of M/s. JVG Group under the

management of Mr. V.K. Sharma was to buy very valuable properties

but at the same time create multiple title disputes with regard to the

same. Without active cooperation of Mr. V.K. Sharma none of the

properties can be sold and no money can be repaid to the investors.

6. In view of aforesaid, this Court is convinced that Mr. V.K.

Sharma is clearly misusing the liberty granted to him. Further, this

Court is of the opinion that it will not be able to make any purposive

headway in the proceedings unless Mr. V.K. Sharma appears before

this Court as well as Official Liquidator and offers full cooperation.

7. Consequently, the Official Liquidator attached to this Court is

directed to bring the aforesaid facts to the notice of the Hon'ble

Supreme Court which is seized of the matter.

List on 29th February, 2012.

Order dasti under the signatures of Court Master.

CO. APPL. 1031/2009 IN CO. PET. 265/1998

This is an impleadment application filed on behalf of a group of

investors of company in liquidation, But as the Official Liquidator is

already representing the investors, this Court is of the opinion that

there is no necessity to implead any particular group of investors in

the present proceedings.

It is, however, clarified that the pleadings filed by the present

applicants can be relied upon by the Official Liquidator or by any

other party in proceedings pending against the JVG Group of

companies.

With the aforesaid observations, the present application stands

disposed of.

MANMOHAN,J NOVEMBER 04, 2011 rn