Tilak Raj & Ors. vs Nitl Mutual Benefit India Ltd.
2016 Latest Caselaw 437 Del

$~14
*    IN THE HIGH COURT OF DELHI AT NEW DELHI
+      CO.PET. 114/1998
       TILAK RAJ & ORS.                           ..... Petitioners
                     Through: Mr. R.K. Saini and Mr. S.B. Sinha,
                                Advs.

                          versus

       NITL MUTUAL BENEFIT INDIA LTD.              ..... Respondent
                    Through: Mr. Sunil Choudhary, Adv. for applicant
                    in CA 2553/2014.
                    Mr. Amit Singh, Adv. for auction-purchaser in CA
                    1898/2015
                    Mr. Mayank Mikhail Mukherjee, Adv. for DDA.
                    Ms. Ruchi Sindhwani, Adv. for the OL
       CORAM:
       HON'BLE MR. JUSTICE RAJIV SHAKDHER
                    ORDER

       %            20.01.2016

CO.PET. 114/1998
       List on 08.04.2016.

CO.APPL. 1360/2014 (directions for recalling of the orders dated 04.10.2012 and 24.04.2014)

1. This application has been filed on behalf of Ms. Senu Bharti, in which, the following prayers have been made:-

".....(a) Appropriate orders/directions recalling its orders dated 4.10.2012 and 24.4.2014 directing auction of the three immovable properties i.e. bearing Flats No. 8A & 9A Vikaspuri, New Delhi and LIG Flat No. 943, Hastsal, Vikaspuri, New Delhi and confirming the auction bids offered by 1\1/s Native Estates Pvt. Ltd., of Rs. 47,00,000/- for LIG Flat No. 8A, DG~I, Vikaspuri, New Delhi and Rs. 39,00,000/- for LIG Flat No. 9A, DG-

I, Vikaspuri, New Delhi and the bid offered by Ms. Aradhana Bhatnagar of Rs. 27,00,000/- for LIG Flat No. 943, Hastsal, Vikaspuri, New Delhi in respect thereof and set aside/cancel the sale notice/auction in respect thereof,' and in the meanwhile, stay further proceedings to be taken in respect of the sale of the above three immovable properties, such as acceptance of balance bid amount, grant of possession, execution of conveyance deed, etc;

(b) Appropriate orders/directions declaring that the aforesaid three immovable properties do not belong to and/or owned by the Company under Liquidation;

(c) Appropriate orders/directions declaring that the aforesaid three immovable properties are the personal properties of the Applicant.....".

2. The applicant i.e. Ms. Senu Bharti, is one of the ex Directors of the company (in liquidation).

3. What is apparent though on a bare perusal of the prayers extracted hereinabove, that the, subject matter of the application concerns three immovable properties, described as: Flat No. 8A, Vikas Puri, New Delhi (hereinafter referred to as property no.`8A‟); Flat no.9A, Vikas Puri, New Delhi (hereinafter referred to as property no.`9A‟); and LIG Flat no.943, Hastsal, Vikas Puri, New Delhi (hereinafter referred to as property no.‟943‟).

3.1 To be noted collectively the aforementioned properties will be referred to as the subject properties.

4. In support of the captioned application, Mr. R.K.Saini has addressed lengthy arguments. It is the contention of the learned counsel that, the subject properties ought not to have been sold, as this Court, itself, in

various proceedings directed the OL to examine as to whether or not they were bought from the funds of the company (in liquidation). 4.1 Mr. Saini further says that, as a matter of fact, this Court had also directed DDA to examine the issue and report as to who was the owner of the subject properties. For this purpose, Mr. Saini has drawn my attention to the orders dated 2.3.2006, 30.3.2006, 25.5.2006, 27.7.2006, 5.10.2006, 6.10.2009 and 4.7.2012.

4.2 It is also the contention of Mr. Saini that, at least, two out of three properties, i.e. property no.8A and property no.9A, were bought even before the company (in liquidation) was incorporated. Mr. Saini says that the company (in liquidation) was incorporated on 2.2.1996, and that, at the time of incorporation, there were three Directors on Board, i.e. Sh. R.D.Bharti; the husband of the applicant; the applicant i.e. Ms. Senu Bharti; and one, Mr. Subhash.

4.3 Mr. Saini thus states that in these circumstances clearly two out of the three properties, i.e. property no.8A and property no.9A, are concerned, they cannot be said to be the assets of the company (in liquidation). 4.4 In so far as the other property is concerned i.e. property no.943, Mr. Saini relies upon a copy of a GPA which, he says, was furnished to the OL. 4.5 As regards the other two properties, i.e. property no.8A and property no.9A, Mr. Saini relies upon documents filed along with his additional affidavit dated 4.12.2014. To be noted, along with the aforementioned affidavit, the applicant has filed, not any sale/conveyance deed executed in her favour but a chain of documents, which are in the nature of GPAs, agreements to sell and Wills.

5. Pertinently, it is, however, conceded by Mr. Saini that even the copies

of documents, which have been filed alongwith the aforementioned additional affidavit, stand executed in the name of Sh. R.D.Bharti, the husband of applicant, save and except, the Wills.

5.1 Mr. Saini, however, tried to explain away the deficiency by saying that since the relationship between Mr. R.D. Bharti and the applicant was that of a husband and wife, this Court should look at it liberally and, therefore, not feel constrained to grant relief as prayed for in the application.

6. As regards the query, which arose during the course of arguments, as to why, original of documents filed had not been placed before this Court, Mr. Saini sought to rely upon the order dated 13.08.2014. Based on the said order, it was contended that originals of documents filed had been brought to court. Mr. Saini though claimed that originals were shown to the OL. 6.1 Ms. Sindhwani vehemently disputed this submission of Mr. Saini. 6.2 Notwithstanding the aforesaid, Mr. Saini did concede that an NCR was filed, on 4.4.2008 with police, in which, the factum of loss of title documents, concerning the subject properties was put forth. Pertinently, though the copy of NCR has been placed on record, the complaint made to the concerned police station, has not been placed on record. 6.3 Therefore, I must note that the arguments advanced by Mr. Saini that only some documents were lost while others remained in possession of the applicant, is a submission, which can only be labelled as tenuous and, therefore, unreliable.

7. As is evident from the above, what is missing in respect of all three transactions concerning the subject properties, qua which documents have been filed by the applicant, is the receipt evidencing payment of consideration by Sh. R.D.Bharti, who has indicated above, is not of the

applicant.

8. On the other hand, in so far as Ms. Sindhwani is concerned, she says that the applicant is taking a chance after her husband failed in securing the necessary relief from this Court. Ms. Sindhwani says that Sh. R.D.Bharti, in the first instance, had filed an application bearing no.883/2006 in which, inter alia, the claim was made with respect to two, out of three properties, i.e. property no.9A and property no.943. That application, according to the learned counsel, was disposed of, on 18.12.2008, without any relief being accorded to Sh. R.D.Bharti.

8.1 According to the counsel, a second application, bearing CA no.314/2008, was, filed by Sh. R.D.Bharti. It appears, in the said application Sh. R.D.Bharti had sought relief of de-sealing vis-a-vis property no.943. One of the averments, according to Ms. Sindhwani, made in the application, was that, it was Sh. R.D.Bharti‟s personal property. In this application, though Ms. Sindhwani points out, an order dated 6.10.2009 was passed, wherein an observation was made, to the effect, that the OL will examine the issue.

8.2 Ms. Sindhwani also pointed out that, as a matter of fact, qua the subject properties, three applicants by the name of Shama Trehan; Harish Trehan; and Bhawana Trehan approached this court for relief. These persons had preferred applications bearing no.CA 918/2011, CA 919/2011 and CA 920/2011. By virtue of these applications, the said persons had claimed that they had purchased the subject properties, from the applicant herein/Ms. Senu Bharti. These applications, Ms. Sindhwani says, were dismissed as withdrawn with leave to file a better application on 20.5.2011. 8.3 There was according to Ms. Sidhwani yet another attempt by Sh.

R.D.Bharti, ex-Director to secure the subject properties when CA No.2378/2012, was filed in this court. The said application was however, disposed of on 10.12.2012 and, once again, no relief was given qua the subject properties. In this application, the stand taken by Sh. R.D.Bharti, was that, according to the learned counsel that the aforementioned properties were his „self made‟ properties (by which, I understand, he meant „self acquired‟ properties).

8.4 Ms. Sindhwani, thus, submitted that Sh. R.D.Bharti was in fact claiming the same relief though via his wife by putting her up as an applicant.

8.5 Ms Sindhwani has also drawn my attention to the fact that the OL had filed an application: being CA no. 2249/2013, whereby he had, sought permission of this Court to publish a notice inviting objections from the public at large in respect of the subject properties. Ms. Sindhwani says based on permission granted by this court, on 17.1.2014, public notices were published in "The Indian Express" and "Jansatta".

8.6 Thus, the learned counsel says that this attempt by the applicant, who is the wife of Sh. R.D.Bharti, should fail as no material has been brought on record which would establish that she is the owner of the subject properties. 8.7 It is also her contention that despite opportunity being granted, none of the ex Directors, which includes the applicant /Senu Bharti or her husband (i.e. Sh. R.D. Bharti), filed their statement of affairs with the O.L. I have been informed by Ms. Sindhwani that though Sh. R.D.Bharti had got his statement recorded under Rule 130, the applicant/Senu Bharti had not come forward to do even that.

8.8 In so far as the documents filed by the applicant are concerned, based

on which title to the subject properties is claimed, Ms. Sindhwani says that none of the documents are in original. She further states that none of the documents show that the title to the subject properties vests either in the applicant or her husband (i.e. Sh. R.D. Bharti).

9. Having heard counsel for the parties and perused the record, two things emerge: First, that this Court, vide order dated 2.3.2006, did direct the OL to examine as to whether the subject properties were purchased from the funds of the company (in liquidation). As indicated above, the DDA was also required to examine this very issue.

9.1 Ms. Sindhwani brought to fore the fact that the DDA in its report had taken the stand that the subject properties belonged neither to the Ex Directors nor to the company (in liquidation).

9.2 Mr. Saini, during the course of his arguments has laid great emphasis on this aspect of the matter. Mr. Saini says that since the OL has not come forward with the relevant material, which would indicate that the subject properties are owned by the company (in liquidation), no orders for sale could have been passed by this Court.

9.3 According to me, as correctly argued by Ms. Sindhwani, the initial onus, at least, if not in its entirety, would be on the ex Directors. The OL when empowered by the court, to take charge of the books and the records of the company (in liquidation) can only go by the material made available to him. If any interested party places evidence before him, it is only then, that the OL can return a finding one way or the other.

9.4 Having examined the documents, which have been placed on record by the applicant, I have been persuaded by Ms. Sindhwani‟s submission that the said onus has not been discharged by the applicant or her husband and,

therefore, it cannot be said that the subject properties are owned by the applicant.

9.5 Though in the DDA‟s record the subject properties are not shown as being owned by the Company (in liquidation), no one with credible evidence has come forward to claim ownership in the subject properties. Therefore, the ownership of the subject properties on balance of probabilities must rest with the company (in liquidation).

10. This leaves me with the other submission, which was that two out of the three properties which are in issue were bought prior to the date of incorporation. According to me, this plea made on behalf of the applicant begs the question for the reason that it is only after the court is convinced about the veracity of documents placed on record based on which title is claimed, that such a submission if at all can be entertained. There is, as noticed above, apart from anything else, a vital flaw in the chain of documents placed before me, which is evidence with regard to the consideration paid by the applicant to purchase the subject properties. 10.1 Mr Saini attempted to place on record a receipt pertaining to the property bearing no.9A, during the course of arguments. Mr Saini says that the receipt was handed over to him by the representative of the applicant, who is present in court.

10.2 A bare perusal of the receipt would show, a fact which Mr Saini concedes that though it alludes to the fact that consideration in the sum of Rs. 60,000/- was paid to Ms Rakhi Balani via a banking instrument, the details of banking instrument are not adverted to in the receipt. The receipt, according to me, is not worth, the paper, on which it is printed. 10.3 As a matter of fact, this document, obviously was never placed before

the OL. Accordingly, I deem it fit not to accept the document attempted to be placed before me across the bar.

11. For the foregoing reasons, I am not inclined to grant any relief in the application. I may also note, a fact which is not disputed and which was brought to fore, as discussed hereinabove, by Ms Sindhwani that several attempts have been made by Sh. R.D. Bharti to secure the subject properties all of which have failed. Orders passed in Sh. R.D. Bharti‟s application have not been carried in appeal. This is especially evident from the order dated 10.12.2012, passed in CA 2378/2012. For the sake of convenience, the prayer made in the application and the relevant portion of the order is extracted hereinbelow:

Prayer:

(a) Stay the proceeding of bids which shall be open in the next date of hearing on 11.1.2013 in the interest of justice for administration of justice.

(b) Objection of bids on the ground of proceeding proceeded against the applicant before this Hon‟ble Court....."

Order Dt: 10.12.2012 "..... This is an application filed by the ex-director of the Company (in liquidation), namely, R.D. Bharti seeking a stay of the opening of the bids qua the properties bearing Flat Nos. 8A and 9A, Vikas Puri, Delhi and 943, LIG Flats, Hastal, Vikas Puri, Delhi for which draft sale notice had been approved on the last date and 11.01.2013 has been fixed as the date for the opening of the bids.

Notice.

Learned counsel for the Official Liquidator accepts notice. She opposes the prayer made in the application; submission being that R.D. Bharti had been directed to appear in the office of the Official Liquidator on 15th and

16th October, 2012 to get his statement recorded under Rule 130 of the Company Court Rules but he has not complied with the order; there is no explanation furnished by the applicant for this aforenoted non-compliance. That apart, the reason for the stay as also the locus standi of the applicant is not depicted in the body of the application, The bids qua these properties are to be opened on 11.01.2013 and initiation of the sale process has already commenced.

Publication for sale is ordered in the "Indian Express" (English Edition) and "Amar Ujjala" (Hindi Edition).

Application is accordingly dismissed....."

11.1 Having regard to the aforesaid, it is clear the applicant/ Ms Senu Bharti has been put up by her husband, Sh. R.D. Bharti. 11.2 Therefore, for the foregoing reasons, in my view, there is no merit in the application and t he same is, accordingly, dismissed.

12. I am also inclined to impose cost on the applicant for the following reasons. I am informed that the applicant/ Ms. Senu Bharti via her counsel wrote a letter dated 4.6.2014 to two auction purchasers i.e. M/s Native Estate Pvt. Ltd. (NEPL) and, one, Ms Aradhana Bhatnagar informing them that an application had been filed with respect to the properties in which they were interested, and that, the bids offered by them will be subject to the decision in her application in view of the doctrine of lis pendens. Mr. Saini concedes that no such order was passed by the court in the captioned application. Therefore, the applicant had no reason to dispatch such a communication to the bidders, except to achieve indirectly, what she could not do directly, which was, to stymie the auction process. 12.1 While there is no doubt that the doctrine of lis pendens would apply but that to my mind did not give a free-pass, so to say, to applicant / Ms.

Senu Bharti to correspond with the auction purchasers with the help of her counsel. The damage the said communication caused was this: one of the auction purchaser i.e. NEPL did not deposit the balance bid amounts vis-a- vis property no.8A and 9A.

13. Accordingly, I am inclined to impose costs on the applicant / Ms. Senu Bharti, in the sum of Rs.10,000/-. The said cost will be deposited with by the applicant with the Common Pool Fund of the OL. The proof of cost will be placed before the Court. The OL will inform the Court on the next date of hearing as to whether or not the cost imposed has been deposited. CO.APPL. 2454/2014 (by OL seeking modification of order dt. 25.09.2014), CO.APPL. 2513/2014 (by Mukesh Goyal seeking directions for the OL to release the earnest money), CO.APPL. 2553/2014 (by Madhu Raghuvanshi, Director of NEPL for exemption from depositing the balance payment) & CO.APPL. 1898/2015 (by the 2nd highest bidder for release of the earnest money amount)

14. CA No. 2454/2014, as indicated above, has been filed by the OL to seek modification of order dated 25.09.2014. Ms Sindhwani says that the reason that the said application has been moved was, because NEPL had not deposited the balance bid amount. In fact, Ms Sindhwani says that the OL seeks forfeiture of 25% of the bid amount which amounts to Rs. 11.75 lacs. 14.1 The aforementioned application has to be examined in the light of prayers made by NEPL in CA 2553/2014. By this application NEPL seeks exemption from depositing the balance bid amount till there is security as regards the title with respect to property no. 8A and property no. 9A. A further prayer is also made that pending the decision with regard to the aforesaid aspect, the earnest money paid by NEPL should be invested in a fixed deposit.

14.2 During the course of the arguments, I had put to Ms Sindhwani,

whether the time could be extended for payment of the balance bid amount by NEPL upon payment of interest for the period of delay. Ms Sindhwani said, as long as interest is paid, it would meet the ends of justice. This suggestion was put to Mr Choudhary. The learned counsel, thereafter, sought instructions from his client and reverted to the court that NEPL would pay the balance bid amount with interest, provided time for payment is extended till middle of the first week of March, 2016.

15. Accordingly, the captioned applications are disposed of with the following direction: NEPL is granted further time to pay the balance bid amount till 31.03.2016, with a caveat that it shall pay simple interest on the said amount at the rate of 9% per annum for the period 24.06.2014 till 02.03.2016.

16. In so far as CA Nos. 2513/2014 and 1898/2015 are concerned, these are disposed of with a direction : that in case the OL receives the amount, as indicated above, from NEPL, the OL will return the earnest money qua these applicants, as prayed, within a period of ten days from that date. However, in case there is failure on the part of the NEPL to deposit the money, as indicated above, the OL will move the court for appropriate orders in respect of earnest money deposited by these applicants. The said applications are disposed of accordingly.

RAJIV SHAKDHER, J JANUARY 20, 2016 RN