National Investor Forum Regd vs Golden Forests India Ltd.
2018 Latest Caselaw 1083 Del

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*      IN THE HIGH COURT OF DELHI AT NEW DELHI

                                         Date of decision: 15.02.2018
+      W.P.(C) 1399/2010


       NATIONAL INVESTOR FORUM REGD            ..... Petitioner
                    Through: Mr. Deepak K. Singh, Adv. for
                             applicant in CM 28385-86/2017
                             Mr. Amol Kokane, Adv. for applicant
                             in CM 12506//2017, 18045/2017

                         versus

       GOLDEN FORESTS INDIA LTD.              ..... Respondent

Through : Ms. Suruchi Aggarwal, Adv. for Committee GFIL.

Mr. Keshav Mohan, Adv. with Mr. Piyush Chaudhary, Adv. for EPFO.

Mr. Abhishek Baid, Adv. for SEBI.

CORAM:

HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE A. K. CHAWLA

HON'BLE MR. JUSTICE S. RAVINDRA BHAT (ORAL) % CM 12506/2017 (For setting aside order dated 08.07.2016)

1. The applicants are aggrieved by an order of the Committee appointed to oversee the finances and affairs of the Golden Forest Group Companies by the Supreme Court. The mandate inter alia of

WP(C) 1399/2010 the Committee was to identify the properties of the group companies, put them to sale and realize the consideration. Thereafter, the Committee had to formulate the scheme to disburse the amount to genuine investors whose claims it had to consider. By the order of the Supreme Court dated 05.09.2006, a cut-off date for receiving the claims from the investors/applicants was indicated. Relevant extract of that order is as under:-

"47. Counsel appearing for the Committee has stated before us that the claims have been received even after 20th May, 2005 and the Committee has included all the claims filed before it up to 10th of August 2006. Cut off date is fixed as 10th August, 2006. Hence, all claims filed before the Committee by the cut off date fixed, i.e., 10th August, 2006 be taken into consideration for disbursement of the assets of the GFIL after verification of the claims. The Committee should accept the claims of only those claimants, who have original authenticated receipts issued by the GFIL. The Committee shall categorise the range of investment by depositors and treat the small, medium and big investors in separate categories. Appropriate orders regarding disbursement of the amount among the small, medium and big investors shall be passed at a later date, after the total amount of sale of the properties is received. The Committee shall not entertain claims passed on alleged deposits accepted by any agents in the year 2001 till date after the closure of the business of the GFIL. No claim without clear proof of deposit of money with the company shall be considered."

2. The present applications are said to be on behalf of 125 investors all of whom are members of an organization styled as Adhyatmik Ishwariya Vishwa Vidyalaya (AIVV). They had earlier preferred the claims which were considered by the Committee and

WP(C) 1399/2010 rejected on 24.01.2007. 267 members of the Vidyalaya had filed a joint application; the Committee by its previous order had accepted 142 of them based upon an analysis of facts and the materials placed on the record which included the circumstance that such 142 applicants had filed original receipts of the amounts deposited with the erstwhile Golden Forest Group of Companies. The order of 24.01.2007 was challenged and on 16.11.2010, this Court had recorded the Committee's statement that the balance claims would be considered on the footing that they were investors; as to whether they were entitled to be included in the list of genuine investors would be examined on their merits, without taking technical view of the matter.

3. Apparently, on 25.01.2016 i.e. nearly six years after the disposal of the applications (by order dated 16.11.2010 in CM 4369- 71/2010 and connected applications) consolidated applications were filed. They were supported by a common power of attorney, said to have been executed by each of the applicants. The power of attorney was dated 29.10.2010 and given to the "applicants' spiritual father" Baba Virendra Deo Dixit resident of Rithala. The applicants stated that they were genuine and bona fide investors and that in each of their cases, the amounts were deposited with each one of the Group Companies and that they had in fact approached the Committee before the cut-off date i.e. 10.08.2006. After considering the record and the claims of the applicants as well as the 125 original receipts received on record, a consolidated common order was made on 08.07.2016 by the Committee rejecting the request. The Committee took into

WP(C) 1399/2010 account certain facts such as the establishment of two offices of the Golden Forest Group of Companies - one of which was at the residence of the spiritual father Virendra Deo Dixit. It was noted that between 1996-2000, the said Shri Dixit and his team members had invested money in the Golden Forest Group of Companies. The documents produced also revealed that officials were working as agents and sales officers and had made investments; they were withdrawing office expenses, electricity expenses, business development expense etc. It was also noticed that on 28.04.1998 Income Tax Authorities searched the premises of Shri Virendra Deo Dixit at the premises including the one in Delhi. The seizure memos indicated that the documents and papers were realized from both the offices; the Deputy Commissioner of Income Tax thereafter initiated assessment proceedings against Shri Dixit and Smt. Kamla Dixit and brought to tax substantial amount as concealed income.

4. The Committee then went on to segregate the applications into three lots. The discussion in this regard is contained in paras 21 to 28 of the impugned order; ultimately the request for treating the applicants as bona fide investors was rejected.

5. Learned counsel for the applicant urges that originally 267 applicants had approached the Committee of which 142 were accepted and considered to be genuine. Thus, it was submitted that the rationale for rejection of the applications after the order of the Court dated 16.11.2010 i.e. that the documents were furnished beyond the time cannot be applied validly in this case. In this regard, learned

WP(C) 1399/2010 counsel has relied upon an advertisement issued on 26.10.2004 by the Committee and stated that pursuant to that advertisement all applicants had approached it. He secondly relied upon an order of the Supreme Court dated 07.01.2005, which stated that it was not necessary for investors to approach the Committee with original receipts. Having regard to these facts, the circumstance that some applicants were able to furnish original receipts and the others furnished - but slightly later could not have been a determining factor. It was also stated that on 19.01.2005, the Committee acknowledged receipt of the 125 claims. It was submitted that in these circumstances the applicants' claims could have been considered and their names included in the list of genuine and bona fide investors.

6. The impugned order in this case has carefully analysed the different sets of applications including as to whether original receipts were in fact furnished; whether they were discharged and had matured or whether they indicated extant liability etc. The Committee further noticed the other relevant circumstances such as the fact that the consolidated applications were supported by affidavit of Shri Virendra Deo Dixit who claimed to be the special power of attorney holder through a deed of 2010. A copy of that power of attorney is on the record. It does not bear the names of the applicants; it vaguely purports to be collective General Power of Attorney which states that 'We, the investors of M/s Golden Forest ....... as mentioned in attested signature hereby nominate, constitute and appoint our spiritual father Baba Virendra Deo Dixit'. The power of attorney is in two pages;

WP(C) 1399/2010 names of the applicants appear in 10 separate sheets. There is nothing to show proof of the identities of these applicants beyond a broad description of their father's names. They are also shown to be the resident of Ishwariya Vishwa Vidyalaya at Farooqabad.

7. The ground on which the applications were rejected in this case is that the original receipts accompanying them were filed late beyond the cut-off date of 10.08.2006. In this regard, the attempt made by the applicants to persuade the Court that the claims were on the same footing as to 142 claims accepted by the Committee is unfounded. The Committee had earlier as well as in the later order recorded that the original receipts had not been placed on record. Furthermore, the consistent view of the Committee and endorsed by this Court in its various orders has been that so long as applications complete in all respects were received on or before 10.08.2006, they would be considered on their merits and any deficiencies said to be recovered thereafter, especially with regard to vital aspects such as original receipts, would not be taken into account. In this case clearly such rule followed consistently, would follow. Furthermore, the Court notices that despite liberty granted, the applicants approached the Committee only on 25.01.2016 - though they were permitted to approach the Committee by an order on 16.11.2010.

8. Having regard to the above discussion, this Court is of the opinion that there is no merit in this application. It is accordingly dismissed.

WP(C) 1399/2010 CM Nos.18045/2017, 19674/2017, 28386/2017

List on 17th April, 2018.

S. RAVINDRA BHAT, J

A. K. CHAWLA, J FEBRUARY 15, 2018 SRwt

WP(C) 1399/2010