Full Text
HIGH COURT OF DELHI
Date of Decision: 2nd February, 2024
SURESH KUMARI ..... Petitioner
Through: Mr. Sunil Dalal, Sr. Advocate
Ms. Manisha Saroha, Mr. Nikhil Beniwal, Mr. Mahabir Singh & Mr. NavishBhati, Advocates.
Through: Ms. Jyoti Taneja, Advocate for R-11.
Mr. Nalin Kohli, Ms. Nimisha Mennon, Ms. Vijeta Singh &
Mr. Arnav Behari, Advocates for IRP
JUDGMENT
1. This is an application moved on behalf of the petitioner seeking permission to file uncertified and dim/untyped annexures, which are otherwise quite legible.
2. Heard. The petitioner is granted exemption from filing certified copies for now, with directions to place the same on the record at the earliest, preferrable on or before the next date of hearing.
3. The application stands disposed of accordingly. CM APPL. 6518/2024
4. None present for respondents, particularly respondents Nos. 1, 2 and 3 despite advance notice.
5. The petitioner is invoking extraordinary jurisdiction of this Court under Article 226 read with Article 227 of the Constitution of India praying for certain directions apparently in the nature of mandamus to respondent No. 1-Registrar of Companies and respondent No.2-Union of India, through Ministry of Corporate Affairs, for initiating and carrying out appropriate inquiries and investigation against the management of „Three C Shelters Private Limited‟, i.e., respondent No.3 and sister group of companies, for the alleged acts of manipulating of records and siphoning off funds of the said company to certain shell companies based in Kolkata and elsewhere, freeze the assets of such unscrupulous companies including respondent no. 3 and thereby preserve the legal rights of the investors/home buyers like the petitioner.
6. The petitioner is a home buyer, who claims that she has been sold a plot by respondent No.3 in the Real Estate project by the name of „Greenopolis‟, that was envisaged to be brought up at Sector 89, Gurgaon, Haryana. It is alleged that respondent No.3 and the Ex- Management/Directors have raised hundreds of crores from innocent homebuyers including her but the funds collected have been siphoned off to various shell/sister concerns of respondent No.3 and they have been defrauded and deprived of their hard earned money that was invested in the project, which project was never intended to be completed by the promoters/ex-directors of respondent no. 3.
7. Shorn of unnecessary details, learned Senior Counsel for the petitioner, during the course of elaborate arguments submitted that as of now there about 138 investors/claimants /home buyers and as many as 498 claims have been lodged before the Interim Resolution Professional[1] in CP IB No. 2721/2019, which has been instituted at the behest of the operational creditors. Evidently, there have been several stakeholders to such proceedings under the Insolvency and Bankruptcy Code[2] and several interim orders have been passed from time to timein matters shuttling from NCLT[3] to NCLAT[4], this court and even the Supreme Court.
8. It is urged by the learned Senior counsel for the petitioner that the promoters/Ex-Management/Directors, who were kingpins of fraudulent siphoning of funds of respondent No.3 in collusion with some unscrupulous sham secured creditors brought about a situation that culminated in passing of order dated 28.08.2023 by the NCLAT, thereby setting aside the entire CIRP proceedings, which order has since been challenged in Civil Appealsviz. No. 6797/2023 as also NO. 774/2023. Suffice to state that in Civil Appeal No. 6797/2023, preferred by some operational creditors, interim directions have been passed by the Supreme Court vide order dated 13.10.2023, whereby 1 IRP 2 IBC
3 National Company Law Tribunal 4 National Company Law Appellate Tribunal the parties have been directed to maintain status quo including with regard to assets of the company (in liquidation) i.e., respondent NO. 3/‘Three C Shelters Private Limited’.
9. On being queried, learned Senior counsel for the petitioner submitted that this writ petition is per se maintainable as does not tread into the territory of the Civil appeals pending before the Supreme Court since the present petitioner is not a party in the proceedings before the Supreme Court and that the petitioner is invoking constitutional jurisdiction of this Court so to initiate legal action against the promoters/ex-directors of respondent no. 3 and its sister companies for protecting her legitimate interest. It is urged that in any case the matter before the Supreme Court is pertaining to the legality of the CIRP[5] with respect to the company in liquidation, which has been brought to a complete halt in a dubious manner. It is submitted that the petitioner has approached this Court so as to seek legal action based on the three reports submitted by the IRP before the NCLT each dated 09.08.2023, that have shockingly been brought to the fore that the Ex-Management/Directors of respondent No.3, after raising funds from the investors/home buyerswithout any intention to complete the project, have altogether abandoned the project, and in order to shield themselves from any civil and criminal prosecution, they have got into strategic collusive insolvency proceedings in order to reap benefits of moratorium under Section 14 of the IBC thereby pre-empting stalling of any legal proceedings against the promoters and Ex-Directors of the company in liquidation.
10. It is pertinent to mention that learned Senior counsel alluded to the damning findings and observations reported by the IRP before the NCLT, which report is Annexure P-16 wherein vide paragraph (31) onwards it has been brought to the fore that during the time leading to respondent No.3 becoming involved in the insolvency proceedings up to 16.10.2020 and thereafter, various dubious/suspicious transactions had been carried from the bank account of the corporate debtors maintained with State Bank of India, whereby inter alia a sum of Rs. 200 crores have been transferred by way of multiple transactions on the very same day from one company to the another ostensibly to buy shares of some Kolkata based shell companies in the name of the corporate debtor and the money trail led to the following revelations:-
11. Alluding to the IIIrd status report at PDF page No. 995 of the paper-book, it is pointed out that vide paragraph (7.1) & (7.2), the following findings and observations have been brought to the fore as well:- “7.1. It is respectfully submitted that the records have revealed that there is another group of company viz. Ace Group, wherein there is a direct connection / commonality between the promoters of the Three C Group and the Ace Group. The records demonstrate that the management of Ace Group and Three C group is inter-related with each other. This is also clearly established from the fact that one Mr.Pratap Singh Rathi, Director of Ace Infracity Developers Pvt Ltd. (one of the flagship companies of Ace Group) has been a common director in M/S Ace Infracity Developers Pvt. Ltd. since 30.01.2015 till present and in Three C Residency Private. Ltd. (one of the companies of Three C Group) from 30.10.2019 to 09.03.2021. Furthermore, Mr. Pratap Singh Rathi is also a director in one more Three C Group company i.e. Three C City Developers Pvt Ltd. from December, 2019 till date.
7.2. It is respectfully submitted that even Bright Buildtech Pvt. Ltd. and the Ace Group have been working in close relation, and the management of both the companies are inter-related to each other. As elaborated in Para 6.2. herein above- M/s Bright Buildtech Pvt. Ltd. is 100% owned by M/s Three C Town Planners Pvt Ltd. ↓ In 2012, 100% shareholding of Three C Town Planners Pvt Ltd was held by M/s Three C Universal developers Pvt Ltd. From 2012-2015 funds were siphoned off from the Corporate Debtor to M/s Bright Buildtech Pvt Ltd ↓ 100% shares of M/s Three C Town Planners Pvt Ltd. were transferred to Lotus Green LLP at merely Rs. 1 Lakhs (M/s Lotus Green LLP is held by Mr. Harakaran Singh Uppal son of Mr. Nirmal singh) ↓ 100% shareholding of M/s Three C Town Planners Pvt Ltd (renamed as M/s Mega Town Planners Pvt Ltd.) was reported to be transferred to M/s Ace Landcraft LLP at a consideration of merely Rs. 1 lakhs.
7.2. It is respectfully submitted that the undersigned has identified that funds from the Corporate Debtor have been diverted into Bright Buildtech Pvt. Ltd. for the Project Ace Palms Floors, Gurgaon. It is significant to note that the project Ace Palms Floors, Gurgaon is owned by M/s Bright Buildtech Pvt. Ltd and Three C group has close connections/ commonality of control with the Ace Group.”
12. Referring to the relevant documents on the record, it has been further pointed out by the learned Senior Counsel for the petitioner that not only the names of some of the shell companies stood struck off from the record but also over a short period of time as many as 10 sister concerns/shell companies of respondent No.3 have been admitted to insolvency proceedings, which have been of collusive nature and in this regard ld senior counsel lamented about the dubious role played by the previous IRP, namely Mr. Chandra Prakash, who allegedly submitted fabricated reports before the NCLT leading to his suspension by IBBI[6].
13. Further, learned Senior counsel for the petitioner referred to an email dated 15.10.2019 by Mr. Surpeet Suri, one of the promoters of respondent No.3, a bare reading of which would show that he highlighted that about Rs. 500 crores having been siphoned off from the respondent No.3 to its sister concerns and there is tabular depiction of the names of the companies besides the trail of money/funds that have been siphoned off including the details as to the date of the transfers and amounts involved. It was also pointed out that there has
6 Insolvency and Bankruptcy Board of India been a conspicuous common connection between the promoters of the „Ace Group‟ and respondent No. 3 „Three C Groups of Management‟ having common Directors and likewise with „M/s. Bright Buildtech Pvt. Ltd‟ and other shell companies so much so that huge parcel of land in YEIDA area (Yamuna Expressway Industrial Development Area) as well in Gurgaon and other places have been transferred to M/s. ACE Infracity for nominal value of Rs. 1 lac. This Court has been taken through several documents on the record with respect to transfer of shell companies to ACE Group. It is also submitted that Ace Infracity Pvt. Ltd. is a proxy of respondent no. 3 and Resolution Plan which has been submitted by the IRP is assailed before the Supreme Court which has been stayed in Civil Appeal NO. 007762/2023 vide order dated 08.01.2024.
14. In the backdrop of the aforesaid scenario, what becomes evidently clear is that despite the fact that the entire damning information having been brought to the knowledge of respondent No.1 & 2, they are failing to perform its statutory duties in terms of Chapter XIV of The Companies Act, 2013 to the detriment of large homebuyers and financial institutions. In this regard, it has been pointed out that the petitioner and several investors have already written to respondent No.1 and respondent No.2 to initiate action against respondent No. 3 and its promoters and Ex-Directors but they are sitting over the matter.
15. During the course of arguments, it was also canvassed that although IRP is seized of the assets of the respondent No.3 but in view of the order dated 28.07.2023 passed by the NCLAT, which is now under challenge before the Supreme Court, the IRP is not able to take any further actions so as to inquire into the various facets of siphoning of the funds by the culprits and retrieving the funds since the entire CIRP proceedings have come to a complete halt.
16. Prima facie the facts and circumstances brought on the record demonstrate a sordid state of affairs at the behest of unscrupulous promoters/Ex-Directors running the affairs of respondent No.3 and its group of companies who evidently, brazenly committing repeated or multiple acts of siphoning of funds from one end to another and thereby causing irreparable hardships to the petitioner and similarly placed investors.
17. This Courts finds it unfathomable that the information about the state of affairs of respondent No.3 and its group of companies have not reached the ears of respondent No.1& 2, and yet shockingly no action has been taken in terms of Chapter XIV of the Companies Act,
2013. It is but imperative that they must exercise their statutory and public duties in arresting pilferage, siphoning off of the assets of respondent company (in liquidation)/respondent No.3 and its group of companies and safeguard the legitimate interests and rights of the petitioner and those similarly placed. It is surprising that despite issuance of advance notice and having a battery of lawyers on their panel, no one has bothered to even appear for respondent No.1 and 2 today during the hearing.
18. There is no gainsaying that Chapter XIV of the Act provides for a detailed mechanism to inspect, call for the accounts and record of the company, inquire and investigate into the financial affairs of the company. Further, where the Registrar or inspector has reasonable grounds to believe that the books or documents with regard to the company under investigation are likely to to be destroyed, mutilated, altered, falsified or secreted, an order can be prayed for from the Special Court for the seizure of such books and papers in the manner provided vide section 209 of the Act and proceed for freezing of the accounts of the company under investigation.
19. Considering the prayer made in the interim application moved on behalf of the petitioner, unhesitatingly there are compelling and justifiable grounds to pass certain directions so as to safeguard the paramount interests of the petitioner and those who are similarly placed in larger „public interest‟.
20. Accordingly, following interim directions are passed:-
(i) Respondent Nos. 1 and 2, are hereby conjointly directed to initiate action and ensure step-wise compliance in terms of Section 206 to 210 of the Companies Act, 2013 and other analogous provisions in Chapter XIV of the Companies Act, 2013, and thereby inspect the affairs of „Three C Shelters‟ and the related companies of „Three C Shelters‟ in terms of the Status Reports of the IRP before the NCLT as brought out in his reports dated 9th August, 2023 and submit an Inspection Report within four weeks from today before this Court;
(ii) Initiate appropriate legal action against respondent Nos. 6,[7] and 8 thereby calling upon them to explain the diversion of funds from respondent No.3 i.e., Three C Shelters Private Limited to other shell companies/sister concerns of its group in terms of the three Status report filed by the IRP dated 9th August, 2023 and take appropriate decision as per the law; and
(iii) Respondent No.1 & 2 are hereby conjointly directed to call for the record of the and/or seize the Books of accounts of all related companies of Three C Shelters Private Limited, where the funds have been diverted for the purposes of inspection and ascertain the diversion/siphoning of the funds, and arrest further exhaustion of such funds as per the law;
(iv) To trace the companies in which or to which the funds have been further transferred and initiate action in terms of Section 209 and 221 of the Companies Act,2013 for freezing of the assets of such companies, if so warranted, in a time bound manner; and
(v) To undertake all such necessary measures so as to preserve the assets of the respondent company in liquidation besides the sister concerns/shell companies to safeguard the interest of the homebuyers and other secured & operational creditors.
21. A copy of this order be served immediately upon respondent Nos. 1 an 2 for information and necessary compliance with directions to submit their replies/ status report before the next date of hearing.
22. Notice of the present application as well as Writ Petition be issued to all the parties afresh by all permissible modes including email as well as dasti. Notice be also issued to the standing counsel for respondent No. 1 and 2 along with a copy of this order for information and necessary compliance.
23. Re-notify for hearing on 14th March, 2024.
24. Copy of this order be given dasti to the petitioner for necessary compliance.
DHARMESH SHARMA, J. FEBRUARY 02, 2024