Delhi High Court
Rohan Mehta vs Shri V.K. Sharma & Ors. on 18 May, 2012
Author: Manmohan
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
3.
+ CCP(CO.) 17/2007
ROHAN MEHTA ..... Petitioner
Through: None.
versus
SHRI V.K. SHARMA & ORS. ..... Respondents
Through: Mr. Rajiv Bahl & Mr. Manish K.
Bishnoi, Advocates for Official
Liquidator.
Mr. Vikas Singh, Senior Advocate with
Mr. Shailendra Singh and Mr. Yashpal
Singh, Advocates for Mr. V.K. Sharma,
ex-Director along with Ms. Seema Singh
Malhotra, authorised representative.
Mr. Ramesh Babu MR, Advocate with
Ms. Swati Setia, Advocate.
Mrs. Avnish Ahlawat, Advocate in CCP
17/07.
Mr. C. Mohan Rao with Mr. Lokesh Kr.
Sharma, Advocate for Respondent No.3.
Mr. Nitin Sharma, Advocate for
Respondent No.16/Vimal Joshi.
AND
7.
+ CO.PET. 265/1998
RESERVE BANK OF INDIA ..... Petitioner
Through: Mr. Ramesh Babu MR, Advocate with
Ms. Swati Setia, Advocate.
versus
CCP(Co.)17/2007 & Co. Pet. 265/1998 Page 1 of 11
MS JVG FINANCE LTD. ..... Respondent
Through: Mr. Rajiv Bahl & Mr. Manish K.
Bishnoi, Advocates for Official
Liquidator.
Mr. Vikas Singh, Senior Advocate with
Mr. Shailendra Singh and Mr. Yashpal
Singh, Advocates for Mr. V.K. Sharma,
ex-Director along with Ms. Seema Singh
Malhotra, authorised representative.
Mr. M. Srinivas R. Rao, Mr. K.
Parameshwar, Advocates for Mr. K.
Madhava Reddy in C.A. 888/2011.
Mr. Aman Lekhi, Senior Advocate with
Mr. J.S. Bakshi and Mr. Salim A.
Inamdar, Advocates for Respondent
No.12 in CA 867/11.
Mrs. Avnish Ahlawat, Advocate in
applicant.
Mr. Abhay Kumar and Mr. Rupesh Kr.
Pandey, Advocates for applicant in CA
1818/2011.
Mr. Ashish Deep Verma, Advocate for
applicant in CAs 1000, 1003/2012
Mr. Rajkumar Sharawat, Advocate for
applicant/Devender Prasad in CA
1861/2010.
Mr. Garud M.V., Advocate for Mr. A.K.
Singh, Advocate for applicant in
CAs726,867/2011.
Mr. Karong Victor Kom, Advocate for
Mr. Anju Jain, Advocate for applicant.
% Date of Decision: 18th MAY, 2012
CORAM:
HON'BLE MR. JUSTICE MANMOHAN
CCP(Co.)17/2007 & Co. Pet. 265/1998 Page 2 of 11
JUDGMENT
MANMOHAN, J (ORAL):
At the outset, Mr. N.K. Bhola states that a typographical error has
crept in the order dated 30th April, 2012 inasmuch as the direction for
attachment of personal bank account of Mr. Satinder Dutta, brother-in-law
of Mr. Vijay Kumar Sharma, should be to the extent of 4 lakhs instead of Rs.
3.40 lacs. Accordingly, para 39 of order dated 30 th April, 2012 stands
corrected as under:-
"39.Since the SFIO in its report has stated that Flat No.38, second
floor, Jeevan Anand Cooperative Group Housing Society Ltd., Pitam
Pura, New Delhi was purchased out of the funds of JVG Finance
Limited and the said property had been fraudulently sold by Mr.
Satinder Dutta, brother-in-law of Mr. Vijay Kumar Sharma and the
sale proceeds had not been deposited with the JVG Finance Limited,
the personal bank account of Mr. Satinder Dutta is attached to the
extent of Rs. 4 lakhs with compound interest @ 12% per annum."
CCP(Co.)17/2007 & CA 884/2012
CA 888/2011 in CP 265/1998
1. From a perusal of the Serious Fraud Investigation Office (in short
„SFIO‟) report, it transpires that it has not examined the transactions
executed by the company in liquidation with regard to the Hyderabad
properties. Consequently, the SFIO team which had earlier investigated the
other transactions of the company in liquidation is directed to investigate all
the Hyderabad properties‟ transactions executed for and on behalf of the
company in liquidation and/or other group companies.
2. At this stage, Mr. Shailendra Singh raises an objection to the matter
being investigated by the SFIO team headed by Mr. N.K. Bhola. In this
connection, he has handed over in Court a photocopy of the affidavit dated
27th May, 2011 stated to have been filed in CA 867/2011 in CP 265/1998.
Mr. Shailendra Singh states that Mr. N.K. Bhola and his team members are
biased and vindictive towards Mr. V.K. Sharma and his family members.
Mr. Shailendra Singh referred to certain contemporaneous letters written by
Mr. V.K. Sharma to senior officials of the Ministry of Corporate Affairs
wherein it has been stated that the entire approach of the SFIO is flawed and
the Investigating team has been threatening and putting pressure on Mr.
V.K. Sharma and his family members. In some of the letters, it has also
been stated that the Investigating team has been demanding money from Mr.
V.K. Sharma.
3. The law on the issue of bias is well settled. The Supreme Court in a
catena of cases has held that the test of bias is based on "real likelihood" of
bias and "reasonable apprehension" of a reasonable man fully cognizant of
the fact. In S. Parthasarthi vs. State of AP (1974) 3 SCC 459 the Supreme
Court has held as under:
"13. .......There must be real likelihood of bias and that
means there must be a substantial possibility of bias. The
Court will have to judge of the matter as a reasonable
man would judge of any matter in the conduct of his own
business."
4. In Kumaon Mandal Vikas Nigam Ltd. vs. Girja Shankar Pant &
Ors. (2001) 1 SCC 182 the Supreme Court after considering Pinochet Ugarte
case has held that biasness would be presumed if there exists a real danger of
bias and not a mere fanciful apprehension and surrounding circumstances
must and ought to be collated and necessary conclusion drawn therefrom.
5. It is pertinent to mention that this Court has been hearing this matter
for the last one and a half year. On a number of occasions, this Court has
placed on record the factum of non-cooperation by Mr. V.K. Sharma during
the Court‟s proceeding as well as in the investigation. In fact, due to
persistent non-cooperative attitude of Mr. V.K. Sharma, this Court had been
constrained to ask the Official Liquidator to bring to the notice of the
Supreme Court the various occasions on which Mr. V.K. Sharma had not
cooperated with this Court. Subsequently, the Supreme Court even
cancelled the earlier protection of bail granted to Mr. V.K. Sharma.
6. It is also pertinent to mention that this Court, after hearing the SFIO
presentation with regard to the properties situated in and around Delhi had
passed a detailed order dated 30th April, 2012. By the said order, this Court
has prima facie agreed with the findings of SFIO that Mr. Vijay Kumar
Sharma and his wives had purchased personal jewellery, farm house and
various other valuable immovable properties in their personal names as well
as in the names of their close relatives from the funds of JVG Finance
Company. The findings of SFIO are primarily based upon the withdrawals
from the current account of JVG Finance Company. The SFIO through its
meticulous investigation correlated the withdrawal entries with the assets
purchased. It was only on the basis of the said report that this Court had
been able to take some substantive action, fourteen years after the scam was
first detected by the RBI.
7. Further, this Court vide order dated 8th May, 2012 passed in Co. Pet.
123/2010 had, after analyzing the report of Economic Offences Wing held
that Mr. V.K. Sharma is perpetrating one scam after another. While in the
1990‟s, Mr. Vijay Kumar Sharma and his family members had floated
„ponzi investment schemes‟ wherein they duped a large number of small and
middle class investors by promising high returns, in the decade of 2000, they
once again duped a large number of small and middle class flat buyers by
promising them residential accommodation.
8. After examining and collating the surrounding circumstances, this
Court is of the opinion that the bald allegations made in the affidavit of Mr.
V.K. Sharma are a fanciful apprehension and an attempt to ensure that
diligent officers do not uncover the scam perpetrated by him and his family
members in a scientific manner with cogent evidence. In fact, this Court
believes that scandalous and mischievous allegations have been deliberately
made in the affidavit to thwart investigation.
9. Consequently, SFIO team headed by Mr. N.K. Bhola is directed to
investigate the Hyderabad transactions in its entirety. They are also given
liberty to interrogate any person they deem fit and proper. Mr. V.K. Sharma
is directed to appear before SFIO on 5th June, 2012 at its office at CGO
Complex. SFIO is directed to complete its investigation within a period of
sixteen weeks. If the need so arises, the time for completing the
investigation shall be extended.
10. List on 31st July, 2012.
CA 229, 292/2012 in CP 265/1998
11. The Tehsildar Tauru has handed over three letters dated 16th May,
2012. According to him, the extent of the land of JVG Group of Companies
situated at Revenue Estate of Village Rangala, District Mewat, Haryana is as
under:-
Sr. Name of the Kila No. Share of Extent Share
No. Company Company
1. M/s. JVG Securities 13// 9/2, 11, 12, 7/40 7 Kanal 19
Ltd., 1/20, JVG 13/1, 18, 19, 20/1 Marla
Pentary Chemical total 45 K 7 M
Ltd. 1/8
2 M/s. JVG Securities 13// 10/2, Total 9 9/80 1 Kanal 2
Ltd., 1/20, JVG Kanal 13 Marla Marla
Pentary Chemical
Ltd. 1/16
3 M/s JVG Leasing Ld. 3// 16, 17, 18, 19/1, 11/50 8 Kanal 15
1/50 M/s JVG 23, 24/1, 25/1, 7// Marla
Securities Ltd. 9/50 2/2, 3,22/2, total 39
JVG Finance 1/50 Kanal 17 Marla
4 M/s JVG Leasing 64// 19/120 16 Kanal 2
Ltd. 1/120 JVG 12/2, 13,14,15, 16, Marla
Departmental Stores 17, 18, 19, 24, 25
Ltd. 3/40, M/s. JVG 65//11,12,19,20,
Securities Ltd., 3/40 21,66//1
Total 101 K-18M
12. According to Tehsildar Tauru, the land of the JVG Group of
companies situated at Revenue State of Uton, Distt. Mewat, Haryana is as
under:-
Sr. Name of the Kila No. Share of Extent Share
No. Company Company
1. M/s. J.V.G. 31// 18/1, 23, 24 2/5 8 Kanal
Departmental Stores Total 20 Kanal
1/5 & JVG Financial
Services Pvt. Ltd. 1/5
share.
2. M/s JVG Securities 31// 16, 17/1, Total 1/2 4 Kanal 1/2
Pvt. Ltd. 8 Kanal 1 Marla Marla
13. According to him, the land of the JVG Group of companies situated at
Revenue State of Rathiwas, Distt. Mewat, Haryana is as under:-
Sr. Name of the Kila No. Share of Extent Share
No. Company Company
1. M/s JVG Steels Ltd. 11// 12/2, 20/1, 19, 7/40 17 Kanal 18
1/32, JVG Overseas 7//24, 16, 17, 25, Marla
Ltd. 1/32, JVG 20//3/1,8,13,
Securities Ltd., 1/16 19,20/1, 22,
JVG Petrochemicals 9// 5/2, 159, 356,
Ltd. 1/20 357, 358, 355, 81,
Total 102 Kanal 7
Marla
14. In CA 229/2012, though a valuation report has been filed but as no
demarcation has been done till date, this Court is of the opinion that in
absence of the same, fair market value would not be realized in the auction
proposed to be conducted by this Court.
15. Consequently, this Court directs the Tehsilders Gurgaon, Mewat and
Tauru to demarcate the land of the JVG Group of Companies in liquidation
situated in Gurgaon, Mewat and Tauru Districts. The Official Liquidator is
directed to furnish photocopy of the sale deeds pertaining to 60 acres of land
as well as copies of CA 292/2012 filed by Mr. V.K. Sharma to the said three
authorities.
16. The demarcation would be done by the concerned Tehsildar under the
supervision of Mr. K.S. Nagar (a nominee of the SFIO), Mr. Sudhir Kapoor,
(Assistant Official Liquidator) assisted by Mr. Shiv Pal Singh (Inspector),
Manish Joshi (Inspector, EOW) and Mr. Shailendra Singh on behalf of Mr.
V.K. Sharma.The revenue authorities are also directed to file a report with
regard to status and possession of the land owned by JVG group of
companies in their respective Tehsils within eight weeks.
17. After the reports of Tehsildars are received, this Court would either
amend or approve the draft sale notice prepared by the Official Liquidator.
18. List on 27th August, 2012.
CA 1818/2011 in CO. PET. 265/1998
19. A copy of the present application has been handed over to Mr.
Shailendra Singh, learned counsel for ex-director Mr. V.K. Sharma. He
prays for and is granted four weeks‟ time to file a reply-affidavit. Rejoinder,
if any, be filed before the next date of hearing.
20. List on 4th September, 2012.
CA 867/2011 in CO. PET. 265/1998
21. Mr. Aman Lekhi, learned senior counsel appearing for respondent
No.12, Mr. D.K. Kapoor prays for and is granted four weeks‟ time to file a
reply-affidavit. Mr. Shailendra Singh and Mr. Rajiv Bahl are granted further
period of four weeks‟ time to file a rejoinder-affidavit.
22. List on 31st July, 2012.
CA 1000, 1003/2012 in CO. PET. 265/1998
23. Present applications have been filed seeking condonation of delay in
filing the claims before the Official Liquidator.
24. Issue notice. Mr. Shailendra Singh, learned counsel accepts notice on
behalf of the ex-director Mr. V.K. Sharma. Mr. Rajiv Bahl, learned counsel
accepts notice on behalf of the Official Liquidator. They both have no
objection to the present applications being allowed.
25. Keeping in view the aforesaid consent as well as the averments in the
applications, the delay in filing the claims before the Official Liquidator is
condoned. Accordingly, the applications are allowed.
26. The applicants are directed to file their claims in Form 66 in
accordance with Companies (Court) Rules, 1959. Upon the said claims
being filed by the appellants within the stipulated period, the committee
appointed by this Court is directed to dispose of the same on merits within a
period of eight weeks.
27. Accordingly, the applications stand disposed of.
CO. APPLS. 1861/2010, 726/2011, 514/2012, 518/2012, 900/2012,
2429/2010 in CO. PET. 265/1998 & Report No. 229 & 235/2012
28. List on 31st July, 2012.
MANMOHAN, J.
MAY 18, 2012/NG/dk
