Shri V.K. Sharma vs M/S Jvg Finance Ltd & Ors.
2012 Latest Caselaw 3180 Del

*       IN THE HIGH COURT OF DELHI AT NEW DELHI
                               Date of decision: 11 May, 2012
+                              Co.App.51/2012

%       SHRI V.K. SHARMA                                           ....Appellant
                      Through:              Mr. Vikas Singh, Sr. Adv. with Mr.
                                            Shailendra Singh & Mr. Yashpal
                                            Singh, Advs.
                                         Versus
    M/S JVG FINANCE LTD & ORS.                ..... Respondents
                  Through: Mr. Rajiv Bahl, Adv. for Official
                           Liquidator with Mr. Gautam, Official
                           Liquidator.
                           Mr. Ramesh Babu MR, Mr. Srinjoy
                           Banerjee & Ms. Swati Setia, Advs.
                           for R-3.
CORAM :-
HON'BLE THE ACTING CHIEF JUSTICE
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
                                      JUDGMENT

RAJIV SAHAI ENDLAW, J.

1. This appeal under Section 483 of the Companies Act, 1956 impugns the order dated 30th April, 2012 of the learned Company Judge of this Court,

(i) passed in exercise of powers under Section 542(2) of the Act;

and,

(ii) to preserve and protect the rights and interests of the creditors and investors of the Companies in liquidation and of which the appellant was earlier in management; and,

(iii) after holding the appellant and other persons mentioned in the order (who have chosen not to appeal) personally liable, without any limitation of liability for the debts and liabilities of

the Companies in liquidation.

attaching their properties and directing the Official Liquidator to take possession thereof.

2. The order clarifies that the same is without prejudice to the rights and contentions which may be heard at the time of final hearing of the application.

3. It also needs to be mentioned that the order has been made after investigation had been directed as far back as on 30 th July, 2007 and after perusing and hearing on the report of the Serious Fraud Investigation Office (SFIO). The learned Company Judge has also noticed that though the winding up proceedings have been pending since the year 1998 but no serious progress with regard to payment to the innocent investors/depositors had been achieved, largely due to the appellant and others earlier in management having embroiled most of the properties of the Companies in liquidation in multiple title disputes. It was further noticed that with the passage of time, the number of small investors/claimants was dwindling, thereby frustrating the very purpose of the proceedings.

4. In view of the detailed order of the learned Company Judge and which to say the least, depicts a dismal state of affairs, we are of the opinion that any interference by us at this stage as is sought in this appeal, if made would prove true what the Supreme Court observed in S.P. Chengalvaraya Naidu v. Jagannath AIR 1994 SC 853 i.e that the process of the Court is being abused and the property-grabbers, tax-evaders and other unscrupulous persons from all walks of life find the court-process a convenient lever to retain the illegal-gains indefinitely. The Supreme Court

again in Ramniklal N. Bhutta v. State of Maharashtra AIR 1997 SC 1236 held that whatever may have been the practices in the past, a time has come where the Courts should keep the larger public interest in mind while exercising their powers of granting stay/injunction. It was further held that the powers of the Courts (in that case in the context of Article 226 of the Constitution) should be exercised only in furtherance of interest of justice and not merely on the making out of a legal point and the Court should weigh the public interest vis-à-vis private interest and there are many ways of affording appropriate relief and redressing a wrong.

5. When we apply the aforesaid principles, what we find is that while the small investors, who were lured by the appellant to invest their life's savings in the corporate entities/vehicles launched by the appellant, remain out of pocket, the appellant continues to enjoy his assets, which the SFIO and the learned Company Judge have found to have been acquired through illegal means and from the monies of the Companies in liquidation.

6. The learned Company Judge having already clarified that the attachment and taking into possession of such assets/ properties is subject to final adjudication of the rights and contentions which may be urged including by the appellant, we do not feel any need to entertain this appeal and dismiss the same. We refrain from imposing any costs on the appellant.

RAJIV SAHAI ENDLAW, J

ACTING CHIEF JUSTICE MAY11, 2012/pp..