Earthcon Constructions Pvt. Ltd. v. State of NCT of Delhi & Ors.

1. The petitioners have filed the present petition, inter alia, impugning FIR bearing no. 149/2018 under Sections 420/409/467/468/471/120B ofthe IPG lodged with PS Economic Offences Wing. The said FIR was lodged at the instance ofone MrN.K.Arora(hereafter'the Complainant'). ^ 2. The Complainant claims that at the material time, he was a shareholder of Khoobsurat Resorts Pvt. Ltd.(hereafter 'Khoobsurat'). He, along with his mother and other family members, held 50%-shares in the said company. The balance 50% shares of Khoobsurat were held by Mr Waseem Ahmad Khan. The Complainant alleges that they had identified a plot ofland (described as Gulawati land at Ghaziabad). The said land was under the control of Wise Infrastructure Pvt. Ltd. and M/s Wise Industrial Park Pvt. Ltd. and the same was required to be developed into a Special Economic Zone(SEZ). The Complainant alleges that a sum of ^12.[5] lacs had been paid as advance for purchase ofthe said land to one Mr Sanjay M. Kalatkar(ashareholder and director ofWise InfrastructurePvt.Ltd.and M/s ■ Wise Industrial Park Pvt. Ltd.). The total consideration for purchase ofthe said land was agreed at?12.[5] crores.

3. The said deal had been finalised by Mr Waseem Ahmad Khan and the necessary documentation for purchase ofthe said land was prepared, the Complainant alleges that Mr Waseem Ahmad Khan had informed the Complainantthatit wasnotpossibleto purchasethe said land inthename of Khoobsurat,as the turnover ofthe company was not sufficient.He proposed fi thatthe documentation for purchase ofthe said land be made in the name of M/s Multiwal Pulp and Board Mills Pvt. Ltd.(hereafter 'Multiwal'). The Complainant also states that the necessary funds for purchase of the said land were not available with Khoobsurat and, therefore, the loan for purchase of the said property was taken by Multiwal from SREI Infrastructure Pvt. Ltd.(hereafter 'SREI'). Khoobsurat agreed to stand as a guarantor and mortgaged its property (9.6625 acres at Moradabad - ^ hereafterthe'Moradabad Land')as a collateralforthe said loan.Itis stated thatthereafter,a loan of?17.[5] crores was arranged by Multiwal from SREI.

4. It is, thus, an admitted case that the Complainant was fully aware of the loan availed by Multiwal. He fully participated in the alleged scheme of availing the loan for purchase ofthe land at Gulawati, Ghaziabad. He was instrumental in creating the mortgage ofthe Moradabad Land in favour of SREIfor the loan availed by Multiwal.

5. It is also alleged that Mr Waseem Ahmad Khan had obtained the Complainant's signatures on the loan documents. It is, thus, admitted that the Complainant had signed the loan documents of SREI as a director of ^ Khoobsurat.

6. In view ofthe above,there is no dispute thatthe Moradabad Land had been mortgaged. It is alleged that the said transaction was done at the instance ofMr Waseem Ahmad Khan and the Complainant was cheated into entering those agreements. It is also alleged by the Complainant that the officials ofSREIare complicitininducing him to enterinto the transaction.

7. This Court has reservations as to whether any of the allegations f against SREI are maintainable.The principal ground urged for alleging that the officials ofSREIare complicitis thatthey did not verify thatthe lease of the Gulawati Land had been cancelled and thus the principal reason for availing the loan-developing the same into a SEZ-was non-existent. It is also alleged that the officials of SREI did not verify the use of the.loan availed by Multiwal. Both the aforesaid reasons do not indicate any complicity on the part ofofficials ofSREI and at any rate,the Complainant being a party to inducing SREIto grant the said loan,cannot urge the same. Any doubts that one may have are put to rest by reading the appeal filed under Section 17 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (hereafter 'the SARFAESI Act') against SREI's action to enforce its security interest in respect of the Moradabad Land. The said appeal was instituted by the Complainant on behalf of the appellants therein, which included Multiwal and Khoobsurat.In that appeal,the Complainant had made a grievance that SREI was not supporting the borrower by extending a further loan for working capital.

8. However,it is not necessary to examine the above in any detail since it is stated that there is no dispute that as far as the mortgage of the Moradabad Land is concemed, the same had been validly executed by Khoobsurat in favour ofSREI.

9. Admittedly, Multiwal failed and neglected to repay the loan and this has led SREIto enforce its security interest under the SARFAESIAct.SREI took possession ofthe Moradabad Land and thereafter,took steps to auction the same. A notice for auction was issued and the said auction took place on 19.08.2015.The petitionerin W.P.(CRL)2396/2018(Earthcon Consmctions Private Limited)is the auction purchaser,who had purchased the Moradabad Land in an open auction for a consideration of ^11,96,08,984/-. A sale certificate was issuedinfavourofthe petitioneron 01.09.2015 by SREI.

10. The Complainant filed an appeal under Section 17 of the SARFAESIAct before the Debt Recovery Tribunal challenging the auction ofSREI under Section 13(4)ofthe SARFAESIAct. It is material to note ^ thatthe Complainanthad signed the said appeal on behalfofKhoobsuratas well as the principal borrower-Multiwal.

11. The said appeal was dismissed by the Debt Recovery Tribunal on 23.01.2017. The appellants (including Khoobsurat) therein had preferred a further appeal impugning the order dated 23.01.2017 before the Debt Recovery Appellate Tribtinal (DRAT), which was also dismissed on 20.09.2017. The said order ofDRAT was challenged in a Writ Petition NO. 2482/2017 before the Allahabad High Court. However, the same was also dismissed.

12. The principal allegation against the petitioner is that Mr Waseem ^ Ahmad Khan in conspiracy with officials ofSREI and the petitioner, had arranged thatthe Moradabad Land be auctioned to the petitioner atafraction ofits value.

13. In the given facts,itis apparentthatthe aforesaid allegation is without merit and the said claim has been made only with the view to prolong the proceedings and somehow, to create a cloud on the said sale. The Complainant has been all along aware on the mortgage ofSREI. Although I) the Complainant stated that he was not aware ofthe auction,there is enough material on record to indicate thatthe said contention is also unmerited.

14. Nonetheless, since an allegation had been made that the Moradabad Land has been sold at an undervalue; Mr Dutta, leamed senior counsel appearing for the petitioner in W.P.(Crl.) 2396/2018, had offered that the. petitioner would be ready and willing to assign all its rights under the certificate ofsale to the Complainant,on receipt ofthe entire consideration actually paid by the petitioner along with all expenditure (including stamp duty and registration charges), along with simple interest at the rate of9% per annum on the all amounts paid by it.

15. Mr N.K. Arora (the Complainant) is present in Court and he states that he is ready and willing to pay the entire amount paid by the petitioner for the purchase of the Moradabad Land, plus all expenses (including.expenses for registration) along with simple interest at the rate of9% per annum.He,however,states that he would require some time to pay the said amount. r

16. He undertakes that he will deposit the said amount with the Registry ofthis Court within a period ofsix months from today,that is,on or before 13.06.2020. With the consent ofthe petitioner, his undertaking is accepted. He is bound down to the same. The import of giving the undertaking has been explained to MrN.K.Arora andhe fully understands the consequences for breaching an undertaking to this Court.