H.N. Nawab Mirza Hussain Anwar ... vs Anand Finance Private Ltd.
2013 Latest Caselaw 2466 Del

        IN THE HIGH COURT OF DELHI AT NEW DELHI

                                          Reserved on: April 29, 2013
                                          Decision on: May 24, 2013

           CO. APPL Nos. 88 of 1982 in CO.PET. No. 34 of 1966

        ANAND FINANCE PRIVATE LTD.                ..... Petitioner
                    Through: Mr. D.S. Narula, Senior Advocate with
                    Mr. Angad Singh Narula, Advocate for Applicant.

                               versus

        R.P. ANAND                                ..... Respondent
                          Through: Mr. Mayank Goel, Advocate for the
                          Official Liquidator.


                               With

                          CO.PET. No. 34D of 1966

        H.N. NAWAB MIRZA HUSSAIN ANWAR
        KHAN                                     ..... Petitioner
                     Through: Mr. D.S. Narula, Senior Advocate with
                     Mr. Angad Singh Narula, Advocate for Applicant.

                               versus

        ANAND FINANCE PRIVATE LTD.          ..... Respondent
                    Through: Mr. Mayank Goel, Advocate for the
                    Official Liquidator.

                               With

          CRL. (O) CO. No. 2 of 1985 in CO.PET. No. 34 of 1966

        ANAND FINANCE PRIVATE LTD.                     ..... Petitioner

Co. Pet. No. 34 of 1966                                         Page 1 of 25
                           Through: Mr. D.S. Narula, Senior Advocate with
                          Mr. Angad Singh Narula, Advocate for Applicant.

                               versus

        R.L. ANAND                                ..... Respondent
                          Through: Mr. Mayank Goel, Advocate for the
                          Official Liquidator.

                               With

           CO. APPL. No. 1590 of 1986 in CO.PET. No. 34 of 1966

        ANAND FINANCE PRIVATE LIMITED            ..... Petitioner
                    Through: Mr. D.S. Narula, Senior Advocate with
                    Mr. Angad Singh Narula, Advocate for Applicant.

                               versus

        SULTAN SINGH                                ..... Respondent
                          Through: Mr. Mayank Goel, Advocate for the
                          Official Liquidator.
                                And

        CO. APPL Nos. 232 of 1982, 368. 982 of 1985 and 1093 of 1985
                       in CO.PET. No. 34 of 1966

        I.M. LAL                                        ..... Petitioner
                          Through: Mr. D.S. Narula, Senior Advocate with
                          Mr. Angad Singh Narula, Advocate for Applicant.

                               versus

        R.L. ANAND                                ..... Respondent
                          Through: Mr. Mayank Goel, Advocate for the
                          Official Liquidator.

        CORAM: JUSTICE S. MURALIDHAR

Co. Pet. No. 34 of 1966                                       Page 2 of 25
                                 JUDGMENT

24.05.2013

1. With this judgment curtains will hopefully be drawn on one of the earliest cases of this High Court, fifty seven years after its commencement.

2. The main petition, Co. Petition No. 34 D of 1966, was filed praying for the winding up of Anand Finance Private Limited ('AFPL'), a company incorporated in 1953 by Mr. G.M. Anand. After the death of Mr. G.M. Anand, his eldest son Mr. R.L. Anand became its Managing Director ('MD'). The head office of AFPL was at New Delhi. There was a branch office in Bombay which was looked after by Mr. R.P. Anand, the brother of Mr. R.L. Anand. It was stated that for every purchase of property, whether it was movable or immovable asset, resolutions had to be passed by AFPL prior to and after the event.

3. By Resolution dated 23rd May 1963 Lokmanya Cooperative Housing Society ('LCHS') which owned lands at Versova in Bombay decided to sell a parcel thereof to Mr. R.P. Anand and 16 other joint purchasers. Permission for the said sale was given by the Registrar of Societies, Bombay on 11th June 1963. On 22nd August 1963 an agreement to sell was entered into between the LCHS and 17 purchasers. Mr. R.P. Anand was a buyer to the extent of 30% of the said land and he paid Rs. 30,000 as earnest money. It was stated that Mr. R.P. Anand took a sum of Rs. 12,400 from AFPL on 10th September 1964.

4. On 17th September 1964 LCHS executed a sale deed in favour of 17

purchasers including Mr. R.P. Anand in respect of the land at Versova for a sum of Rs. 2,93,975 which included Rs. 30,000 already paid to the LCHS by 17 purchasers as earnest money. On the same date M/s. Ambabhai Diwanji, Solicitors acknowledged receipt for Rs. 1,10,000 from Mr. R.P. Anand towards sale consideration and another receipt was executed by them a sum of Rs. 14,000 towards expenses. The possession of the said land was handed over to the purchasers on that date.

5. On 11th May 1966 Co. Pet. No. 34D of 1966 was filed by H.H. Nawab Mirza Hussain Yawar Khan before the Circuit Bench of Punjab High Court at Delhi seeking the winding up of AFPL. It was stated in the petition AFPL owes more than Rs. 1.70 crores to its creditors and was incapable of meeting its liabilities. On 20th May 1966 Company Application No. 39 D of 1966 was filed under Sections 443 and 550 of the Companies Act, 1956 ('Act') read with Rule 9 of the Companies (Court) Rules, 1959 ('Rules') seeking the appointment of a Provisional Liquidator ('PL'). It was alleged in the application that despite notice being issued in the petition and the undertaking by learned counsel for AFPL that the directors of AFPL would not transfer the immovable properties, shares and securities of the company till the next date of hearing, the income from the cinemas at Bombay and Delhi owned by AFPL were being used partly or wholly for the benefit of the directors and their relatives. An order was passed on 20th May 1966 by the learned Company Judge appointing Mr. S. Gian Singh Vohra, Advocate of the Court as Court Commissioner to proceed to the office of AFPL and sign the books of the company which were produced before him by AFPL and such other books as learned counsel for the Petitioner who wanted to

sign. At the hearing on 25th May 1966, the Court perused the report of Mr. Vohra and appointed a Committee of three persons to take over the entire management of AFPL and to exercise all powers of the Board of Directors. The MD, Mr. R.L. Anand, was asked to work as General Manager under the control of the Committee appointed by the Court. The present directors were asked to hand over all assets, books of the company etc. which are in their possession to the Committee appointed by the Court. Further detailed directions were issued by the Company Court regarding management of the company.

6. On 27th May 1966 a Scheme of Arrangement ('Scheme') was filed by the Managing Committee of the AFPL. The said Scheme was sanctioned on 29th July 1968 in terms of which unsecured depositors were to be paid 65% in cash generated from sale of assets of the company and 35% in the form of shares. The Scheme was to be implemented in 2-1/2 years. The Court appointed a Board of Directors to implement the Scheme.

7. In a report filed in the Court in 1974, Mr. K.K. Mehra, the then Chairman informed the Court that all the fixed assets of AFPL had been sold, but money was still required to be paid to the unsecured creditors. In the meanwhile, directions were issued regarding shares of AFPL in Mazda Theatres. In a court auction Mr. R.P. Anand had purchased the shares of Mazda Theatre despite the opposition of Mr. K.K. Mehra, Mr. I.M. Lal, Administrator and Mr. R.L. Anand.

8. CA No. 156 of 1979 was filed by the Committee under Section 446 of the

Act in which it was claimed that plot of land at Versova, Bombay was purchased by Mr. R.P. Anand on behalf of AFPL and that money for the said purchase had been given by AFPL. An objection was raised by Mr. R.P. Anand regarding the maintainability of that application. It was contended that since no winding up order had been passed the said application was not maintainable. Accepting the said objection, the Company Judge dismissed CA No. 156 of 1979 by an order dated 3rd February 1982. On the administrative side, an order was passed by the Company Judge on 3rd February 1982 in which it was noted that with the dismissal of CA No. 156 of 1979 "there is no claim in any court of law to the aforesaid land at Versova which partly standing in the name of Mr. R.P. Anand." The learned Company Judge then proceeded to observe in the order dated 3rd February 1982, as under:

"If the funds of the company had in fact been utilized for purchasing the said interest in that land then, prima facie and subject to what may be said by Mr. R.P. Anand the company would be entitled to the benefits of that asset. This cannot be done till the company is ordered to be wound up because it is only then that this Court would get jurisdiction under Section 446 (2) to adjudicate on that issue.

I am, therefore, satisfied that the compromise or scheme is sanctioned under Section 391 cannot be worked with or without modifications and I hereby make an order winding up the company. The Official Liquidator of the company shall forthwith take charge of the records and assets of the company. As it will take some time for the Official Liquidator to take over the assets of the company and to take further action with regard to the land at Versova, I hereby restrain Mr. R.P. Anand, for a period of one month from today, from alienating his right, title and interest in the plot

of land situated Versova, Bombay which had been purchased vide sale deed dated 17th September 1964 from Lokmanaya Cooperative Society Ltd. The office premises are not to be surrendered nor the possession of the same parted without the prior permission of this Court. Let formal orders of the winding up be drawn up in accordance with the rules. In view of this order C.A. 128/68 and C.P. 34-D/66 stand disposed of."

9. Following the above order, on 17th February 1982 Mr. M.M. Arora, Official Liquidator ('OL') filed CA No. 88 of 1982 on behalf of AFPL against Mr. R.P. Anand, his son Mr. Sanjiv Anand and 15 others under Section 446 of the Act. It was prayed that the title of AFPL to the extent of 30% of the Versova plot, purchased by a sale deed dated 17th September 1964, be declared and that Mr. R.P. Anand and Mr. Sanjiv Anand be restrained by an appropriate injunction from in any manner posing themselves as owners of the land or dealing with, selling or otherwise disposing of the 30% interest in the said plot.

10. It was stated in C.A. 88 of 1982 that by a sale deed dated 17th September 1964 a plot of land in Versova to the extent of 38681 sq. yards was purchased from Lokmanya Cooperative Housing Society (Regd.), Bombay for a consideration of Rs. 2,93,975.90 at Rs. 7.60 per sq. yard and a sale deed was executed by LCHS in favour of Respondent No. 1, Mr. R.P. Anand, and Respondents 3 to 16 jointly who had defined shares in the plot as stated in the sale deed. It was asserted that the land was purchased in the name of Mr. R.P. Anand and 16 others with the funds of AFPL for the benefit of AFPL. It was further asserted that 30% interest in the said land "ever remained the property of the company". A reference was made to the

Minutes of Meeting held on 30th April 1966 by which "the action of Shri R.P. Anand, Director of the Company in investing company's funds in the plots of land at Champur Khar, Kandla, Versova and Thana" was confirmed. A reference was also made to the minutes of the meeting of Board of Directors of AFPL purportedly held on held on 27th January 1970 wherein a decision was taken for settlement with the unauthorised tenants in the "company's property". It was stated that Board also noted that Mr. R.P. Anand had given a declaration on 30th April 1967 that he had no right, title or any interest in the said land and that 'the said land has been purchased by him for and on behalf of and as representative" of AFPL. The Board of Directors of AFPL then passed the further resolution authorizing the Chairman to sign any agreement, other papers and documents etc. pertaining to the "Company's property at Versova Andheri, Bombay" and 'to pay company's seal and to do all acts as may be necessary to give effect to any agreement entered into on behalf of the company in regard to the said property".

11. It was further stated in C.A. 88 of 1982 that at the meeting of the Board of Directors of AFPL held on 28th June 1971, the Chairman was authorised to call for offers for the Versova property. It was asserted that "this land belongs to the company and the Respondent was only its nominee and benamidar is further apparent form the fact that the Respondent No. 1 has on the 30th April 1966 given a declaration that he had no right, title or interest in the said land and the said land had been purchased by him for and on behalf of and as a representative of the Applicant company." It was

further stated that the plot of land was shown as an asset of the company in the balance sheets from 1966 onwards.

12. A reply was filed to the said application by Mr. R.P. Anand and Mr. Sanjiv Anand denying that the land at Versova was one of the assets of AFPL. It was pointed out that according to the Chartered Accountant, the plot of land at Versova was mentioned in the balance sheet under the heading of 'Investments'. It was asserted that AFPL has no title, claim or interest in the said plot of land. It was not possible to make such purchase by the company in the name of the individual. Thus, AFPL was debarred from claiming any benami interest in the plot in Versova. On merits, it was pointed out by Mr. R.P. Anand that he had no role to play in the functioning of the AFPL but was "looking after the affairs of Mazda Theatres Pvt. Ltd." It was asserted that the funds were borrowed by Mr. R.P. Anand from AFPL for the purchase of the land for himself. The genuineness of the minutes of the alleged meeting of the Board of Directors of AFPL held on 27th January 1970 was challenged. Mr. R.P. Anand denied receiving notice of such meeting. It was stated that there could not have been any such meeting on 27th January 1970 when the management of the AFPL was in the hands of the Committed appointed by the Court under the Scheme. Mr. R.P. Anand contended that he was not aware of any money being paid to the solicitors namely Vakil Dadabhoy & Bharaucha.

13. In the rejoinder it was reiterated by the Applicant in C.A. No. 88 of 1982 that question was not whether the land was purchased benami but who was the real owner of the property. The determination of such question

necessarily involved determination of the question as to whose money was utilized for the acquisition of 30% interest in the said property at Versova. Reliance was again placed on the meeting of the Board of Directors of AFPL held on 27th January 1970 and the declaration purportedly given by Mr. R.P. Anand that he had no right, title or interest in the land at Versova and that the same was purchased for and on behalf of AFPL. It was claimed that the said declaration was in the custody of Mr. M.N. Kaul, Sardar Singh, Rai Bahadur Ganga Saran, Maj. Partap Singh and Mr. R.L. Anand who had been inducted into the management and had attended the meeting of the Board of Directors on 27th January 1970. It was pointed that there was no resolution of AFPL permitting Mr. R.P. Anand to borrow money for the purchase of the land in question nor was any promissory note executed for repayment of the money borrowed from AFPL. It was further submitted that in light of the resolutions dated 30th November 1963 and 31st December 1963 there was no need for the resolution of 30th April 1966 to have ratified the act of Mr. R.P. Anand. It was stated that originals of the documents would be in the custody of Committee of the Management appointed by the High Court.

14. On 6th October 1983 a set of documents was filed by Mr. R.P. Anand which included inter alia a receipt issued by Municipal Corporation of Greater Bombay on 31st March 1981 assessing the property tax of Versova property at Street No. 118, J.P. Road, Versova; copy of the entry in the revenue record, mutation entry appearing in favour of Mr. R.P. Anand, statement under Section 6 (1) of the Urban Land (Ceiling and Regulation), Act 1976 furnished by Mr. R.P. Anand, certificate dated 10th March 1983

issued by M/s. Ambubhai & Dewanji Solicitors, Bombay, copy of the Khasra Girdawari showing possession of Versova land in favour of Mr. R.P. Anand and a copy of the sale deed dated 17th September 1964 executed by LCHS.

15. Mr. R.P. Anand filed an affidavit dated 19th February 1985 stating that he along with Respondent Nos. 3 to 16 had purchased 38681 sq. yards, i.e., 32342.344 sq.m of land at Village Versova in Bandra in Greater Bombay on 17th September 1964 from LCHS. He stated that he had a 30% share in the said land. It was asserted that "30% of the sale consideration was paid by me for myself out of my owner personal resources" and "not benami for anyone else". In para 4 of the affidavit he stated as under:

"4. The previous Board of Management did not make any recoveries from the debtors of the company. They raised monies by sale of company's property from 1966 to 1972. From 1972-1978 neither did they pay any money to creditors nor did they collect any money. The companies claim in the share of Mazda company were settled by my paying to the company Rs. 18 lakhs and paid about Rs. 14 lakhs to let the shares released from New Bank of India. After my paying money to the Company as well as to the New Bank of India, Chairman and the Administrator of the Management realized that out of all the Directors, I had the best resources and therefore, on the basis of fabricated documents, they started blackmailing and pressuring me. After I did not accede to their demands, a letter dated 8th February 1979 was sent to my by the Directors claiming Versova land to be that of the Company. I denied that the allegations and sent a letter dated 7th March 1979 to which the company did not file any reply, but instead filed CA No. 156 of 1979."

16. In para 8 of the affidavit it was stated as under:

"8. The alleged resolution dated 30th April 1966 was in fact never passed. The entry relating to the same in that minute book is a patent forgery. In regard to the properties which were purchased in the name of or on behalf of the company, their sale/purchase was always brought up before the Directors and Resolutions in that regard were passed. Some of the properties which belong to the company and their sale etc. has been confirmed by the Board of Directors are:

(i) Plot No. 5, Hauz Khas, New Delhi.

(ii) 88, Sunder Nagar, New Delhi.

(iii) 889 shares of Mazda Theatres Pvt. Ltd.

(iv) Flat in Embassy Apartment, Bombay.

(v) 19, Curzon Road, New Delhi.

(vi) Partnership in Eastern Engineering Company.

(vii) Napences Road, Bombay.

(viii) Property at Prahland Flat, Bombay.

(ix) Jal Darshan Apartments."

17. In para 9 of the affidavit it was pointed out by Mr. R.P. Anand that "out of my share of 30% in the land to the extent of 38681 sq. yards, nearly 50% of the land has already been acquired and its possession has already been taken by the Government. Now there is only about 7000 sq. yards of land which falls to my share." In para 12 it was stated as under:

"12. The claim of the company regarding the said land is based on forged documents and forged entries in the minute books. The resolution dated 30th April 1976 in regard to the right, title and interest in the Versova land is a forged one and has been written much after the original resolution which does not mention the Versova land. The alleged balance

sheets in which the Versova land is suppose to be mentioned as an investment of the company were concocted long after the liquidation proceedings had been initiated. The balance sheet for the year ending 31st May 1966 was prepared in the year 1972. Subsequently balance sheets were also prepared thereafter. I made enquiries in the office of Registrar of Companies to find out the dates on which the balance sheets for the year ending 31st May 1966 were filed in his office. I was told that no such balance sheet was filed. I then got the official records inspected and found that in none of the balance sheet filed with the Registrar my Versova land has been shown to belong to the company. Therefore, no credibility can be given to those balance sheets. These balance sheets do not represent true facts at least to extent of the mention of Versova land. The auditors appointed by the Court prepared their report on the basis of the record shown to them by the then Management against whom I had complained in writing and prayed for their removal. Those applications are on record."

18. An affidavit by way of evidence was filed by the OL on 2nd February 1985. A reference was again made to resolution dated 30th April 1966, in support of the plea that Versova land was purchased by Mr. R.P. Anand with the fund of AFPL and that the balance sheets for the year 1966 onwards showed the Versova land among the assets of the company.

19. In light of the above evidence one of the key issues that requires to be determined is the genuineness of the minutes of the meeting of the Board of Directors of AFPL held on 30th April 1966. They purported to read thus:

Shri R. L. Anand was voted to be the chair and he commenced the proceedings

1. To confirms the minutes of the last meeting: The minutes of the last meeting were read and confirmed.

2. To review the working of the company The working of the company was reviewed and it was unanimously resolved that more efforts should be made to effect the recoveries from the hirers. The managing director assured the board that the work of recovering will be vigorously pursued.

The question of travelling allowance was briefly discussed, M.D. authorized to deal with it.

Information of purchase of land at Bombay.

Resolved that action of Shri R. P. Anand, Director, in investing company's funds in the plots of land at Chambur, Khar, Kandla, Versua and Thana be and are hereby confirmed.

There being no other matter the meeting ended with a vote of thanks to the chair

While the portion in the top beginning with "the minutes of the meeting...." and ending with "... the recovery will be vigorously pursued" was marked as "B", the lower portion beginning with "the question of travel allowance..." and ending with "...thanks to the chair" was marked as "A".

20. The copy of the minutes book which was produced in original to the Court (Ex. PW-1/2) shows that the two portions of the minutes marked 'A' and 'B' are not in the same handwriting. Also, significantly, a large part of the 'A" portion has been written below the signature of Mr. G. S. Vohra, Commissioner appointed by the Court by order dated 20th May 1966 to sign the minutes book. Mr. Vohra appears to have affixed his signatures on 23rd May 1966. There is a scoring out of a line above his signature. Mr. R. L.

Anand's signature appears at the foot of the page below portion "A" which is in a different ink and handwriting when compared with portion "B".

21. Mr. R.L. Anand was subjected to cross-examination on the above minutes on 4th August 1986. He made a clear admission that "the latter portion marked A in the resolution was written by me sometime in May 1966." This constitutes an admission of tampering the minutes as the inclusion was subsequent to the preparation of the minutes of the meeting held on 30th April 1966. Section 145 (1) of the Act requires minutes to be kept of all proceedings of meeting of the directors. Minutes are required to be signed by the Chairperson of the meeting. Minutes once made and signed can never be altered by striking out or adding anything. The only way the minutes of a meeting can be altered is to have a decision taken to that effect at a subsequent meeting. The Court is satisfied that there has been a tampering of the minutes of the meeting of the Board of Directors of AFPL held on 30th April 1966. The said minutes do not inspire confidence and cannot be relied upon to conclude that the property at Versova was purchased by Mr. R.P. Anand for and on behalf of AFPL.

22. Even as regards the sum advanced by AFPL to Mr. R.P. Anand, the answers given by Mr. R.L. Anand shows that he did not know what the total sale consideration was. This is what he said in cross-examination:

"I might have come to know about the negotiations regarding purchase of this land sometime in October or November 1963. I did take part in the negotiations regarding purchase of this land from the very beginning itself. The price of the land was settled at the time of the purchase. I do not

remember how many days prior to the purchase the price was settled. As to how much advance was given is mentioned in the books of the company. My role in the negotiation was that the deal was almost finalized by me and also by Mr. R.P. Anand. As far as I remember the negotiations were finalized in November 1963 and the sale deed was executed in April 1964. I was not present in Bombay on the date when the sale deed was executed. The amount for the purchase of this land was sent to Bombay from the Delhi Office. This amount was sent by means of bank draft so far as I remember but I do not remember if the draft was sent by post or through some messenger. The money from Delhi office on occasions was being remitted to Bombay office.

Question: Was it mentioned anywhere as to why money was being sent each time?

Answer: As far as I know there is no such procedure in accounting system to mention the purpose for which the money was being sent.

I cannot say if I ever brought to the notice of the Board that the negotiations purchase of the land in question had been finalized. I cannot say if it was not the practice of the company to record the finalization regarding a deal of any immovable property. I do not remember how much total sale consideration was paid in respect of the land in question roughly I would say that it was about or over a lac of rupees."

23. The above answers show that Mr. R.L. Anand was not clear as to the facts concerning the sale consideration and the date of the sale deed. It is unsafe therefore to place any reliance on his evidence.

24. As regards the alleged disclaimer letter written by Mr. R.P. Anand, Mr. R.L. Anand stated as under in cross examination on 3rd October 1986:

"The disclaimer letter was not written in my presence but was sent by R.P. Anand to us. I did see the disclaimer letter. It was not on the letter head of R.P. Anand. I do not remember if it was on a plain paper or on a stamp paper. I cannot say if the disclaimer letter was registered with the Sub-Registrar. I do not remember the contents of the disclaimer letter in extensor but I can tell the zist of the letter.

Q: In your statement dated 29th July 1986 in Court you had reproduced in verbatim the contents of the disclaimer letter but today you are stating that you can given only the zist of the letter, what have you to say?

A: I reproduced the contents of that letter as far as I could remember but I cannot repeat the full letter.

This letter was addressed to the company. I cannot say in particular if this letter was addressed to the Managing Director or to the company. I do not know if any other thing was written in that letter. I cannot say if this letter was received by post or was handed over to the company in person.

Q: Was this letter ever shown to the Board of Directors of the company?

A: I can answer this question only after reference to the minutes book of the Board. I have seen the minutes book Ex. PW-1/2 but I do not find any reference of the disclaimer letter in any of the minutes in this register. It might be in the

minutes after the company was taken over by the Board of Directors appointed by the Court.

This letter was shown to the auditors in 1966 and it was lying in the office of the company. It is wrong to suggest that there was no such disclaimer letter ever in existence as deposed by me.

Q: Did you ever mention this disclaimer letter in any court proceedings or in document or affidavit filed by you?

A: Since, I am not a party to the proceedings the question of referring to this disclaimer letter did not arise.

I might have filed reply in the proceedings connected with the Scheme proposed by R.P. Anand if I was a party therein. R.P. Anand who was a director of the company was, however, not present when resolution dated 30th April 1966 was passed. Part A and Part B of the Board proceedings dated 30th April 1966 and Ex.PW-1/2A are not in the handwriting of one individual. The first part of the resolution encircled red and marked B could be in the writing of Radhey Sham but I am not quite sure. The second part encircled red and marked A is, however, in my writing. The latter portion marked A in the resolution was written by me some time in May, 1966.

Q: Why did you not mention the date when you wrote portion encircled red and marked A?

A: This part of the resolution mentioned in portion marked A was discussed in the Board meeting held on 30th April 1966. Somehow it was forgotten to be included in the proceedings. In the minutes of the proceedings dated 30th April 1966 the

portion marked B had not been signed at the time when the books were to be handed over to the Board of Directors appointed by the Court. It was at that time that I noticed that it did not record the whole of the proceedings inasmuch as the portion marked A had been discussed and not added, therefore, I added portion marked A and signed the minutes. Whole of the proceedings will be taken to be of the date 30th April 1966."

25. In his cross-examination on 8th October 1986 Mr. K.K. Mehra admitted that Mr. R.P. Anand paid around Rs. 20/30 lakhs for shares of Mazda Theatre Pvt. Ltd. He admitted that there was litigation between him and Mr. R.P. Anand. As regards the Versova land, he answered as under:

"Q.: What steps did you take to dispose of the Vasua land?

A: We could not do anything about it as the land was in the name of Mr. R.P. Anand.

The company used to send money to the co-owners or to the solicitors for payment of all taxes in respect of this land including Chowkidar. These payments were made by means of vouchers about which I deposed in my earlier statement. I did not file any objections or statements before the Competent Authority under the Urban Land (Ceiling & Restoration) Act during my tenure as the Chairman of the company. No separate chowkidar was employed by the company on this land in question but there was a chowkidar employed jointly by all the co-owners and the company contributed its share for the same. The letter of the co-owners mark Ex. CW-2/PX gives the detail of the charges paid by the company. I did not see the original title deeds of the land

in question."

26. Mr. Mehra did not know much about the purported disclaimer statement of Mr. R.P. Anand. The original of the said document was never produced. That Mr. Mehra's memory of it was unreliable is evident from the following answer:

"I cannot say if the release/disclaimer deed was on a plain paper or on non-judicial stamp paper. I cannot say if it was typed or handwritten. I think it was signed by Mr. R.P. Anand only. I do not remember if this deed bore any other signatures."

27. Mr. I.M. Lal fared no better in cross examination. He stated that he saw the disclaimer statement in the office of the solicitor but it is nobody's case that the solicitor retained the declaration. Mr. Lal admitted that he came to know about Versova land after the litigation regarding Mazda Theatre shares was over. He was unable to deny the balance sheet for the year 1964 was prepared in 1971-72.

28. In light of the above answers, the statement conferred in the minutes of the Board meeting of AFPL held on 27th January 1970 that Mr. R. P. Anand made a declaration on 30th April 1966 loses significance. No such declaration was in fact seen by the Board even on that date i.e. 27th January 1970.

29. An analysis of the above evidence renders the version of Mr. R.P. Anand that the Versova land was purchased by him in his own name by borrowing the funds in part from AFPL more probable. On the other hand, the OL has been unable to produce credible evidence in support of the plea

that the Versova land had in fact been purchased by Mr. R.P. Anand as a benami for AFPL or that the Board of Directors of AFPL had resolved the land in Versova should be purchased by AFPL in the name of Mr. R.P. Anand. The declaration alleged to have been given by Mr. R.P. Anand was not produced and was unable to be proved. The minutes book produced before the Court showed that the crucial part of the minutes 30th April 1966 was admittedly written by Mr. R.L. Anand in his hand writing later on and not counter-signed by the Chairman of the meeting. Consequently, this Court rejects the case forthwith by the OL that the land at Versova actually belongs to AFPL.

30. During the course of arguments Mr. Mayank Goel, learned counsel for the OL sought to place reliance on the plaint in Suit No. 183 of 1963 titled Anand Finance Private Limited v. Lokmanya Co-operative Housing Society filed in the High Court of Judicature at Bombay. The said document was also filed in these proceedings as part of an application (Co. Appl. No. 208 of 2004) filed by Mr. Vijay Mehra in September 2003. However, that application itself was not entertained. The prayer in the said application was for the Applicant to be impleaded as a party in CA No. 88 of 1982. Clearly, that the said application was not entertained. The documents were not brought on record by the OL. The documents were not put to Mr. R.L. Anand in his cross-examination. The suit is stated to have been disposed of as withdrawn long ago. In the circumstances, the Court declines to permit the OL to rely upon the said documents at this stage.

31. For the aforementioned reasons, the Court rejects the plea forthwith by

the OL that the land ad measuring 38681 sq. yards at Versova at Rs. 7.60 per sq. yd under a sale deed dated 17th September 1964 which has remained in possession of Mr. R.P. Anand in fact belongs to AFPL.

32. The next question that arises is what is the amount that should be directed to be paid by Mr. R.P. Anand to AFPL, treating the money advanced to him by AFPL as a loan that has remained unpaid till date? Mr. D.S. Narula, learned Senior counsel submitted certain calculations of interest on the amount advanced to Mr. R.P. Anand for different years as will be discussed hereafter but left it to the Court to fix the appropriate amount. In Mr. R.P. Anand's calculation simple interest @ 9% per annum on Rs. 1 lakh from 1st April 1964 onwards till 31st March 2013 for a period of 49 years works out at Rs. 4,90,000. If the interest is compounded for the period from 1st April 1964 to 31st March 2013, total sum works out at Rs. 19,19,434.20. The OL's calculation of compound interest @ 12% per annum for 49 years on Rs. 1 lakh worked out to Rs. 2,58,03,766. Mr. Goel states that the total land at Versova was about 39,000 sq. yards and 30% thereof worked out to 11,700 sq. yards. The current market value ought to be applied to determine the sum to be paid by Mr. R.P. Anand.

33. The factors that weigh with the Court are in the first place with the land not belonging to AFPL but to Mr. R.P. Anand, at the highest the sum advanced to him by AFPL for its purchase can be treated as an unpaid loan. There was no agreement at any point in time that he would pay AFPL compound interest of the sum. On the other hand as a result of pendency of the present petition for over 47 years, Mr. R.P. Anand has effectively been

deprived of the right of dealing with the property. The extent available is about 7,000sq.yds and not 11,700 sq.yds as contended by the OL. At one stage of proceedings Mr. R.P. Anand himself offered to pay a sum of Rs. 50 lakhs and this fact was noticed in the order by the Court in its order dated 6th May 2002. However, even before the said offer could be acted upon, a higher offer was made.

34. In light of the above factors the Court considers it appropriate to direct Mr. R.P. Anand to pay to the OL in the account of AFPL a sum of Rs. 65 lakhs by 15th July 2013 in full discharge of all of his liabilities towards AFPL and all interim orders operating against him as well as the property in question will stand vacated. Mr. R.P. Anand will be free to deal with his portion of the Versova property. With the above directions, CA No. 88 of 1982 is disposed of.

35. With the payment of Rs. 65 lakhs by R.P. Anand, the final curtain would be drawn on this beleaguered litigation that has persisted for well over four decades. Upon such payment being made, nothing would remain to be examined as there are no claims to be settled, no assets to be realised and none of the contributories other than Mr. R.P. Anand surviving. Thus in exercise of its powers under Section 481 of the Act, the Court directs that upon payment of Rs. 65 lakhs by Mr. R.P. Anand, the OL will transfer a sum of Rs. 10 lakhs to the Common Pool Fund of the OL to defray the expenses incurred over the years in this matter by the OL and after settling any other statutory dues transfer the balance sum to the Reserve Bank of India within thirty days thereafter. With that event happening, AFPL will

stand dissolved and its name will be struck off from the register of companies. Within thirty days of the transfer of the sum as directed to the RBI, the OL will file a certified copy of this order with the Registrar of Companies for compliance. Co. Petition No. 34-D of 1966 and all other connected pending petitions and applications are disposed of in the above terms.

36. In the event of Mr. R.P. Anand failing to make the above payment within the time as directed, the further consequential directions issued in paras 34 and 35 above will not become operative and in that event the OL will apply to the Court to revive Co. Petition No. 34 D of 1966 and C.A. 88 of 1982.

Co. Appl. No. 1590 of 1986 in Co. Pet. No. 34 of 1966

37. This is an application by OL seeking direction to the Respondent, Mr. Sultan Singh, Jajjhar Motor Roadways (P) Ltd., Jajjar, District Hissar, Haryana, to pay a sum of Rs. 27,557.50 being the hirer money which was due.

38. It appears that the last payment was made on 20th June 1964 and the claim was alive at the commencement of the winding up of AFPL. However, by an entry dated 31st May 1964 the former management wrote off the said amounts as abandoned.

39. Considering the long lapse of time, this Court does not consider it appropriate to reopen this issue. The application is accordingly dismissed.

Co. Appl. No. 232 of 1982 in Co. Pet. No. 34 of 1966

40. This is an application under Sections 541, 542 and 543 of the Act filed by the Applicant, Mr. I.M. Lal, seeking directions to the Respondent Mr. R.P. Anand to deliver the office land situated at Versova, Bombay. In view of the above determination by the Court, there is no merit in this application and it is dismissed as such.

Co. Appl. No. 181 of 2006 , Co. Appl. Nos. 208 of 2004, 343 of 2004 (filed by Mr. Vijay Mehra seeking to join as a party), Co. Appl. No. 668 of 2002 Co. Appl. No. 982 of 1985 (filed by Mr. Hans Raj Anand seeking impleadment as a co-Petitioner), Co. Appl. No. 1093 of 1985 [for staying the petition till the decision of Co. Appl. No. 88 of 1982], Crl. O. (Co.) No. 2 of 1985 in Co. Pet. No. 34 of 1996 and Co. Appl. No. 368 of 1985 in Co. Pet. No. 34 of 1966

41. In light of the order passed above, these applications do not survive and are disposed of as such.

S. MURALIDHAR, J May 24, 2013 rk