National Investor Forum Regd. vs Golden Forests India Ltd.
2014 Latest Caselaw 6375 Del

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*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                                   Decided on : 02.12.2014

+      C.M. NO.5459/2014 IN W.P.(C) 1399/2010
       NATIONAL INVESTOR FORUM REGD.                  ............Petitioner

                    Versus

       GOLDEN FORESTS INDIA LTD.         .................Respondent

Through: Sh. Harpawan Kumar Arora, Advocate, for Committee - GFIL.

None for the respondents.

CORAM:

HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE VIPIN SANGHI

MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT)

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1. This application has been filed by the Committee specially appointed by the Supreme Court by order dated 19.08.2004 in T.C. No. 2/2004 and connected cases, in respect of Golden Forests (India) Limited. The Committee seeks confirmation of its order dated 02.04.2014 and consequently seeks warrants of possession with respect to land measuring 15 Bigha -10 Biswa comprised in Khasra Nos. 1891/501 (2-0), 1892/501 (2-0), 500 (4-0), 1854/509 (2-0), 524min (1-10), 1889/498 (1-0), 1890/498 (1-0) and 1848/499 (2-0) situated in Village Malikpur, Tehsil - Derabassi, District

- Mohali (Punjab) (hereafter "the property").

2. The Committee urges that the property was sold to one Sh. Rajinder Mittal, Respondent No. 1 herein, vide sale deed dated 07.09.2000.

W.P.(C) 1399/2010 Page 1 Apparently, Sh. Rajinder Mittal, the Respondent No.1 herein, subsequently sold the said property to M/s Society for Professional Education and Lifelong Learning, Village Malikpur, Tehsil Derabassi, District Mohali, Respondent No.2 herein, vide registered sale deed No.4772 dated 26.08.2004. The Committee states that the case in hand falls within the mischief covered in Para 39 of the Supreme Court order dated 05.09.2006, which is reproduced below:

"39. Insofar as the period prior to the appointment of provisional liquidator in the winding up petition in the Punjab and Haryana High Court and Delhi High Court is concerned, the Bombay High Court in its order dated 23rd November, 1998 had restrained the company, its subsidiary as well as directors not to dispose of the properties of the respondent company or its subsidiaries or its directors till further orders. It would be to the Committee to make appropriate recommendations to this Court regarding the status of sales made after the restraint order passed by the Bombay High Court on 23rd November, 1998. Any application putting a claim for settlement of properties after the restraint order passed by the Bombay High Court should be made to the Committee which shall be at liberty to make appropriate recommendations to this Court for its consideration."

Therefore, the Committee issued notices to the Respondents asking them to show cause as to why recommendation be not made to this court for declaring the said two sale deeds null and void and ordering the same to be ignored and why possession of this land, illegally sold to Respondent No.1 by the Company - GFIL and subsequently sold by him to Respondent No.2, be not recovered from them. Despite service of notice, Respondent No.1 did not appear before the committee and so he was proceeded against ex parte. Notice under registered cover to Respondent No.2 was received back unserved with the report of the postal authorities that the person of such

W.P.(C) 1399/2010 Page 2 description was not found in Village Malikpur. Thereafter, the show cause notice was served on Respondent No.2 by beat of drum in the village and affixation of the notice at a public place in Village Malikpur, Tehsil Derabassi. However, Respondent No.2 did not appear and he was proceeded against ex parte. After considering the facts and materials on record, the Committee concluded that the sale deeds dated 07.09.2000 and 26.08.2004 in favour of the first and second Respondents were liable to be set aside and ignored and that they were liable to be evicted from the land.

3. Notice on this application was issued. The service report states that the first respondent could not be found at his premises since he has left it. It was stated by the counsel for the applicant that the second respondent is a non-existent entity. Therefore, this court shall proceed to dispose this application by considering the facts of the case and relying on the submissions of the applicant.

4. The relevant reasoning of the Committee, in regard to setting aside the sale deeds (supra), in favour of the respondents, with respect to the former's order dated 02.04.2014 is as follows:

"It is uncontroverted that the Hon'ble Bombay High Court vide its order dated 23.11.1998 restrained the company - GFIL and its Directors from alienating or transferring its property. The Company GFIL fell on bad days towards end of year 1998, if not earlier. The existence of the restraint orders passed against it by the Hon'ble High Court of Delhi, and Hon'ble High Court of Bombay was given wide publicity and therefore, to deemed to be known to the public. The management of Company GFIL, by its acts of omission and commission and by its financial misadventures, had become notorious throughout India and more particularly in Punjab, Haryana, Chandigarh, Himachal

W.P.(C) 1399/2010 Page 3 Pradesh, J & K and Delhi and neighbouring areas. Restraint orders against it were talk of the town. Therefore, it would not be unreasonable to presume that the Respondent No.1 had the knowledge of restraint order dated 23.11.1998 passed by the Hon'ble Bombay High Court, before it purchased the property from the company GFIL on 07.09.2000.

Besides this, it appears that Sh. Rajinder Mittal respondent No.1 was a man in hurry; because he purchased not one, but many parcels of land from Company GFIL, one after the other, in a short span of time. On the heels of these purchases, he sold off these properties to make a quick buck. From all these circumstances his knowledge of the restraint order passed by the Hon'ble Bombay High Court may reasonably be inferred. This prima facie is indicative of his knowledge of distress of the Company GFIL, who was on a spree to dispose of its properties to circumvent the restraint orders passed by various High Courts including the one passed by the Bombay High Court. Alleged payment of sale consideration also casts a shadow of doubt on the sale in favour of Respondent No.1. Sale deed in his favour states that entire sale consideration had been received "at home". Nothing was paid in presence of the Sub-Registrar. No receipt of the alleged payment is forthcoming. It is highly improbable that a huge amount of Rs.2,35,000/- would be paid in cash sans even a formal receipt. Hence, the passing of sale consideration is not proved."

The Committee reiterates the above grounds, and urged that the sale deeds (supra) are liable to be set aside.

5. It is pertinent to note that this court in CWP No.3352/1998, S.D. Bhattacharya v. SEBI had restrained M/s GFIL and its subsidiary/associate companies from selling, disposing of and/or alienating immovable properties or parting with the possession thereof; the Directors of these Companies were also placed under the same restriction. Likewise, the Bombay High Court by order dated 23.11.1998 in CWP No. 344/1998 restrained the

W.P.(C) 1399/2010 Page 4 company - GFIL and its subsidiaries from disposing of their properties. Apparently, sale deeds were executed even after these orders. The sale deeds (supra) executed in favour of the respondents on the basis of resolution dated 11.03.2000 is part of such series of transactions which were clearly meant to defeat the rights of investors and ostensibly confer title and rights upon third parties. The Committee, has, in the application listed a number of cases of similar character, wherein sale deeds were set aside since they were based on the above mentioned resolution by placing reliance on the restraint orders passed by this court and the Bombay High Court. This court has confirmed the action of the Committee, setting aside the illegal sale deeds in the following matters:-

(1) CM No.18353/2011 (Ram Rattan & Ors.) decided on 01.11.2012

(2) CM No.19571/2012 (Narata Ram & Ors.) & CM No. 19572/2012 (Jagir Singh & Anr.) decided on 14.12.2012

(3) CM No. 595-96 (Krishna Devi & Ors.) decided on 01.04.2013

(4) CM No.5733/2013 (Manpreet Singh & Ors.) decided on 06.11.2013

6. In the present case, it is evident that the first Respondent had knowledge of the fact that the company - GFIL was restrained by the court from alienating its properties. This may be implied from the fact that he had purchased not one, but several properties from the company - GFIL, one after the other during the subsistence of the restraint orders and immediately sold the said properties, possibly to circumvent the restraint orders. Further,

W.P.(C) 1399/2010 Page 5 the fact that the alleged sale consideration of `2,35,000/- was paid, not in the presence of the Sub Registrar, and that the transaction was without a formal receipt, sale deed in favour of the the first Respondent No.1 is defeasible and suspect. Therefore, Sale deed No. 2803 dated 07.09.2000 executed in favour of the first respondent on the basis of the resolution dated 11.03.2000 and the subsequent Sale deed No.4772 dated 26.08.2004 executed in favour of the second respondent are liable to be set aside and ignored as it is violative of the restraint order dated 23.11.1998 passed by the Bombay High Court and order dated 07.10.1998 passed by this court. Consequently, the order of the Committee dated 02.04.2014 is hereby confirmed. The second respondent, M/s Society for Professional Education and Lifelong Learning, Village Malikpur, Tehsil Derabassi, District Mohali is directed to deliver possession of the property to the Committee within 15 days. If the second respondent fails to deliver possession to the Committee, the Deputy Commissioner, Mohali, Punjab is hereby directed to provide reasonable assistance to the Committee.

7. The application is allowed in the above terms.

S. RAVINDRA BHAT (JUDGE)

VIPIN SANGHI (JUDGE) DECEMBER 2, 2014

W.P.(C) 1399/2010 Page 6