Bombay High Court
Mr Jagdish Lal Gupta vs M/S Cameo Fabrics Ltd And 10 Ors on 12 July, 2017
Author: R.D. Dhanuka
Bench: R.D. Dhanuka
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HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
COMPANY APPEAL NO.12 OF 2014
IN
COMPANY PETITION NO.70 OF 2006
Mr.Jagdish Lal Gupta )
65/19, New Rohtak Road, Karol Bagh,)
New Delhi - 110 005. ) .. Appellant
VERSUS
1. M/s. Cameo Fabrics Ltd. )
having its registered office at )
101, Church Gate Chambers, )
5, New Marine Lines, )
Mumbai - 400 020. )
2. Mr.Nand Lal Gupta )
101, Church Gate Chambers, )
5, New Marine Lines, )
Mumbai - 400 020. )
Also at : C-16, MIDC, Kalva Industrial)
Estate, Thana Belapur Road, Digha, )
Thane, Maharashtra. )
3. Mr.Nand Lal Gupta HUF )
9,Singapore House, 2nd Hasnabad Lane)
Santacruz (W), Mumbai - 400 054. )
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101, Church Gate Chambers, )
5, New Marine Lines, )
Mumbai - 400 020. )
4. Ms.Usha Balaram Jaykar )
101, Church Gate Chambers, )
5, New Marine Lines, )
Mumbai - 400 020. )
Also at : Mukund Villa, 1st Carter Road)
Borivali (E), Mumbai - 400 066, )
Maharashtra. )
5. Mr.Sanjay Nand Lal Gupta )
(s/o Mr.Nand Lal Gupta) )
Address :101, Church Gate Chambers,)
5, New Marine Lines, )
Mumbai - 400 020. )
Also at : 46, World Trade Centre )
Cuffee Parade, Mumbai - 400 005. )
Maharashtra . )
6. Mrs.Shukla Gupta )
w/o. Mr. Nand Lal Gupta )
101, Church Gate Chambers, )
5, New Marine Lines, )
Mumbai - 400 020. )
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Also at : 9 Singapore House, )
2nd Hasnabad Lane, Santacruz (W), )
Maharashtra, Mumbai - 400 054. )
7. Mr.Shiv Raj Gupta )
Address : 645 B, Agar Nagar, )
Ludhiana, Punjab. )
8. Mr.Subhash Gupta )
287, Industrial Area )
Punjab. )
Also at : 652, Pakhowal Road, )
Ludhiana, Punjab. )
9. Mrs.Kiran Gupta )
(w/o. Mr.Subhash Gipta) )
Address : 652, Pakhowal Road, )
Ludhiana, Punjab. )
10. Mr.Prem Kumar Gupta )
Address : 652, Pakhowal Road, )
Ludhiana, Punjab. )
11. Tara Industries Ltd. )
having registered office at 46, )
World Trade Centre, Cuffee Parade, )
Mumbai - 400 005. ) .. Respondents
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---
Ms.Ankita Singhania a/w Ms.Shruti Sardesai i/by Mr.Kuldeep Nikam for
the appellant.
Ms.Meenakshi Arora, Senior Advocate a/w Ms.L.M. Jenkins for the
respondent nos.1 to 5.
Mr.Rajnish Sinha a/w Ms.Minakshi Surve i/by Mr.Satyan Israni for the
respondent no.10.
---
CORAM : R.D. DHANUKA, J.
RESERVED ON : 24th April 2017 PRONOUNCED ON : 12th July 2017 Judgment :-
. By this appeal under Section 10F of the Companies Act, 1956, the appellant (original petitioner no.1) has impugned the order dated 23rd September 2013 passed by the Company Law Board, New Delhi Bench, New Delhi in CA No.471 of 2012 in C.P. No.70 of 2006 dismissing the CA No.471 of 2012 filed by the appellant and another inter alia praying for forensic examination of various documents to determine whether those documents were forged and/or bear forged signatures and for other reliefs. Some of the relevant facts for the purpose of deciding this appeal are as under :-
2. It is the case of the appellant that some time in the year 1974-75, the respondent no.1 was purchased by 5 brothers of Gupta family namely Mr.Somdev Gupta, Mr.Nand Lal Gupta, Mr.Jagdish Lal Gupta (appellant herein), Mr.Subhash Gupta and Mr.Prem Gupta with joint family money. The shareholding of each brother was approximately 20% of the equity capital of the said company. The said company was incorporated on 28th September 1966 under the name and style of 'Mohan Textile Industries Private Limited' with authorised capital of Rs.15 lakh divided into 15000 equity shares of Rs.100/- each. The name of the said ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 5 coapp-12.14(j).doc company was changed to 'Cameo Fabrics Ltd.' on 21 st March 1968. The said company had taken a loan from Bank of Baroda to purchase the plant and machinery and for construction. The said company, however, failed to repay its loan installments and to meet the salary payment to its employees.
3. It is the case of the respondent nos.1 to 5 that Shri Chandratan Mohta, Smt.Ashalata Mohta and Smt.Pushpavati Harkisondas (original promotors) of Mohan Textile Industries Private Limited agreed to sell the respondent no.1-company to the respondent no.2 i.e. Nand Lal Gupta for only Rs.2 lakhs at 80% discounted share value. After the takeover, the first Board of Directors consisted of two directors namely Shri Nand Lal Gupta, Managing Director, the respondent no.2 herein and Smt. Rama Gupta. Thereafter, Mr.Nand Lal Gupta, the respondent no.2 herein subscribed to all the said 2600 shares and brought in capital of Rs.2.6 lakh. With the allotment of said 2600 shares, the shareholding of Shri Nand Lal Gupta was increased from 20% to 36.51% on 8 th January 1987 and the total issued and paid up capital of the company increased from Rs.10 lakh to Rs.12.60 lakh.
4. It is the case of the respondent nos.1 to 5 that the said increase was to full knowledge of the appellant and the respondent nos.8 to 10 as reflected in their Wealth Tax returns forming part of the record. It is the case of the respondent nos.1 to 5 that the money brought in by the promoter Mr.Nand Lal Gupta through the increase of share capital was used to discharge the liability of the respondent no.1 towards Bank of Baroda through one time settlement. The original lease deed between the respondent no.1-company and MIDC was returned to the ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 6 coapp-12.14(j).doc respondent no.1 by the Bank vide letter dated 12th January 1987. On 6th February 1987, the respondent no.1 re-commenced its manufacturing activity and gave a notice and declaration to the Excise Department of re-starting the factory. On 19th October 1993, the respondent no.1 imported spare parts in the form of needles and shuttles from PERFECTA, Switzerland valued Rs.5 lakh and paid the said amount after borrowing the amount.
5. It is the case of the respondent nos.1 to 5 that the respondent no.1 faced acute financial difficulty and required additional working capital to meet with its day to day requirements and thus the respondent no.1 resolved to issue further capital and made an offer to all its shareholders to subscribe for 1800 equity shares of the respondent no.1 company, at Rs.100/- each on pro rata basis in accordance with Articles 37 and 38 of the Articles of Association on 10 th January 1994. It is the case of the respondent nos.1 to 5 that due notice was given to all the shareholders. The appellant and the respondent nos.7 to 10 however chose not to subscribe in response to the said notice.
6. On 7th February 1994, the Board of Directors accepted the offer of Ms.Usha Jayakar, Director and resolved to allot 1800 shares of Rs.100/- each to her. On 6th May 1994, Mr.Sanjay Gupta, appellant no.2 was appointed as a Director of the appellant no.1-company. On 23 rd December 1994, the respondent no.1 received demand notice for payment of Excise duty for Rs.9,01,172/- and continued to receive the same for additional amounts from time to time. It is the case of the respondent nos.1 to 5 that on 1 st March 1995, a Board meeting was held calling an Extraordinary General Meeting (EGM) on 7th May 1995 to increase its ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 7 coapp-12.14(j).doc authorised share capital by Rs.25 lakh. On 7 th May 1995, a resolution was passed to increase the share capital by Rs.25 lakh at the said EGM.
On 16th May 1995, Form 23 and Form 5 were filed with the Registrar of Companies. On 6th January 1996, the Board of Directors in the meeting recorded their distress that none of the shareholders were willing to invest money in the company to meet with the Excise Demand.
7. On 4th March 1996, the Board of Directors resolved to increase its issued share capital through offer of 2600 shares to meet with the Excise Demand. It is the case of the respondent nos.1 to 5 that all the shareholders were duly informed. The appellant and the respondent nos.7 to 10 chose not to subscribe to the share capital. On 13 th May 1996, Ms.Usha Jayakar subscribed and was allotted 1300 shares each of Rs.100/-. On 25th July 1996, Mr.Nand Lal Gupta subscribed and was allotted 1300 shares each of Rs.100/-.
8. It is the case of the respondent nos.1 to 5 that since the respondent no.1 lacked the adequate working capital, business opportunities because of recession and old machinery, it faced a serious financial difficulty and because of huge recurring excise demand of over Rs.16 lakh, threat of penalty and it requires further additional capital. On 31st January 1997, the Board of Directors resolved to raise further share capital by offering 8000 shares of Rs.100/- each pro rata to all shareholders. All the shareholders of the respondent no.1 were duly informed of the proposed additional working capital.
9. It is the case of the respondent nos.1 to 5 that despite full opportunity to all the shareholders, none except Ms.Usha Jayakar ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 8 coapp-12.14(j).doc subscribed to the same. On 12th May 1997, the Board of Directors resolved to allot 8000 shares to Ms.Usha Jayakar. The Chairman of the respondent no.1 recorded that he had contacted all the shareholders by telephone requesting them to apply for the said issue of further capital but none of the other shareholders wished to invest in a loss making company.
10. It is the case of the respondent nos.1 to 5 that the respondent no.1 company again faced problem of shortage of working capital, labour shortage, machinery breakdown and low production and also the looming threat of excise demand, penalty, property tax demand etc. The Board of Directors in the meeting held on 23 rd March 1998 resolved to increase share capital further by issuing 2000 equity shares of Rs.100/- each on pro rata basis to all the existing shareholders.
11. On 15th April 1998, no offer was received from any of the existing shareholders. Mr.Nand Lal Gupta, however, offered to purchase the shares under HUF head. The Board of Directors accordingly passed a resolution on 15th April 1998 and allotted 2000 shares of Rs.100/- to Mr.Nand Lal Gupta (HUF). On 13th June 2003, Mr.Somdev Gupta, eldest brother in the Gupta Family who was also a shareholder in the respondent no.1 company passed away. It is the case of the appellant that in the month of June 2003, Mr.Nand Lal Gupta came to meet the family members during the funeral rites of Mr.Somdev Gupta. The appellant made an effort to convey to him that all the brothers were now getting old and it was better to resolve various family issues/properties since certain disputes had arisen among the family members.
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12. It is the case of the respondent nos.1 to 5 that the factory building of the company was old and extremely dilapidated and was in need of urgent rebuilding. The estimates for rebuilding the factory and installing new machinery was about Rs.4.3 crores and initial financial requirement was Rs.10 lakh. The Board of Directors accordingly passed a resolution on 23rd September 2004 resolving to raise share capital of the respondent no.1 by issuing 10000 shares of Rs.100/- in terms of Articles 37 and 38 of the Articles of Association of the respondent no.1. All the shareholders including the appellant and the respondent nos.7 to 10 were invited to subscribe to those shares. Mr.P.S. Nadkarni, Architects were retained to design and obtain approval from the development authorities.
13. On 4th December 2004, none of the shareholders offered to subscribe to 10000 equity shares of the respondent no.1-company. The application of Mr.Sanjay Gupta was accepted only after complete failure of its right issue. The respondent no.1 allotted 10000 shares to Mr.Sanjay Gupta.
14. It is the case of the appellant that in the month of February 2006, Mr. Nand Lal Gupta came to India with his family and met the other family members/shareholders including the appellant on the occasion of a family wedding. It is the case of the appellant that initially in February 2006, it seemed that issue would be resolved as the appellant was transferred certain shares in Tara Industries Ltd. and he was assured of equal right in the said company but unfortunately in the next batch of meetings, the Nand Lal Gupta group allegedly wanted to resile from the said commitment. It is the case of the appellant that in the Month of ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 10 coapp-12.14(j).doc March, 2006, Mr. Nand Lal Gupta had family meetings in which he out rightly refused to give any information about M/s.Cameo Fabrics Ltd., the respondent no.1 herein and threatened anyone taking interest in the said company. It is the case of the appellant that in the month of May, 2006, meetings were held between the family members of all the five brothers and again Mr.Nand Lal Gupta took the same stand.
15. It is the case of the appellant that from the year 2006 onwards, the appellant faced with advancing age and the conduct of Mr.Nand Lal Gupta and thus the appellant decided to enquire about the status of the respondent no.1-company. On 14th June 2006, the appellant has alleged to have inspected the records of the respondent no.1-company on a website maintained by Tata Consultancy Services where under a government scheme, certain records of the companies were being uploaded. It is the case of the appellant that he was able to obtain a copy of the memorandum and Article of Association. It is further the case of the appellant that on 20th July 2006, the appellant got physically inspected the records of the company at office of the Registrar of Companies in Mumbai and obtained additional informations. The appellant learnt that the Nand Lal Gupta group (the respondent nos.2 to 5) had completely changed the shareholding pattern by raising their shareholding from 20% to around 78% and there were reducing shareholdings of the appellant and his wife from 35% to about 5%. The shareholdings of other three brothers were also reduced from somewhere around 20% to 5%.
16. It is the case of the appellant that the shareholdings of all other four brothers together were reduced from majority of 80% to minority of 22%. The appellant was also able to peruse the balance sheets ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 11 coapp-12.14(j).doc of the respondent no.1 and it was clearly evident that the additional equity shares were issued only to the Nand Lal Gupta group at par just for changing the shareholding pattern and creating an illegal majority in favour of the Nand Lal Gupta group.
17. It is the case of the appellant that in the balance sheet of the respondent no.1 for the years 2001-02, 2002-03, 2003-04 and 2004-05, there was Bank FDR & Cash of Rs.21 lakh, Rs.24 lakh, Rs.33 lakh and Rs.33 lakh respectively and thus the respondent no.1- company had no need for funds. According to the appellant, the balance sheet of the respondent no.1 showed that no purchases were made for plant and machinery of the respondent no.1 for two decades. Salaries were being paid to the Directors of Nand Lal Gupta group. It is the case of the appellant that the said salary amount along with funds siphoned off from the company had been used to subscribe to additional shares by "round tripping." The authorised share capital of the respondent no.1 was illegally raised from Rs.15 lakh to Rs.40 lakh. The issued share capital was illegally raised from Rs.10 lakh to Rs.37 lakh. It is the case of the appellant that the contesting respondent nos.2 to 6 of Nand Lal Gupta group issued this share capital only to themselves to increase their shareholding and take control of the company.
18. On 8th August 2006, the appellant and another filed a Company Petition (70 of 2006) before the Company Law Board, New Delhi under Sections 397 and 398 of the Companies Act, 1956 alleging oppression and mismanagement and alleging illegal increase of share capital and issued and paid up share capital of the respondent no.1 against the respondent no.1-company and others. An advance copy of the ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 12 coapp-12.14(j).doc company petition was served upon the respondent nos.1 to 6 on 7 th August 2006. On 8th August 2006, the said company petition was mentioned by the appellant. Mr.Prem Gupta, the respondent no.10 who was supporting the cause of the appellant remained present. The Company Law Board passed an ex parte order against the respondent nos.1 to 5 in terms of prayer clauses 9(e) and 9(g) of the company petition thereby directing the respondent nos.1 to 6 not to sell, transfer, alienate, dispose or create third party interest in the assets and properties of the respondent no.1 and to only conduct normal day to day activities and directing the Bench Officer, Company Law Board, Mumbai to authenticate the statutory records of the respondent no.1 forthwith and submit a report to the Principal Bench, Delhi immediately.
19. On 10th August 2006, 5 persons including Bench Officer of the Company Law Board, Mumbai, the appellant herein, his advocate and two other unidentified persons went to the office of the respondent no.1 to carry out serach, seize and authenticate the statutory records of the respondent no.1. It is the case of the respondent nos.1 to 5 that since the appellant had not given notice of the order passed by the Company Law Board, they were not aware of the said order passed by the Company Law Board and thus they being not sure as to the identity of the persons accompanying the appellant and his advocate, they denied the said inspection to the appellant. However, upon realizing their mistake, the respondent nos.1 to 5 through their counsel tendered unconditional apology on 4th October 2006 before the Company Law Board and expressed readiness and willingness to comply with the order passed by the Company Law Board on 8th August 2006.
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20. It is the case of the respondent nos.1 to 5 that the respondents filed a reply in the Company Petition No.70 of 2006 and placed on record material evidence to the extent available with them in the form of Income Tax and Wealth Tax Returns of the appellant and the respondent nos. 8, 9 and 10, for the assessment years 1986-87, 1989-90, 1992-93 and 1996-97 showing their respective shareholding in M/s.Cameo Fabrics Ltd. and valued the said shares as declared from year to year in the balance sheet of the respondent no.1. It is the case of the respondent nos.1 to 5 that for the period after 1993, the returns of the appellant and the respondent nos.8 to 10 were not available with the respondent nos.1 to 5 because of exemptions introduced. The appellant and his wife held 10.40% shares in Sabina Woollen Mills Pvt. Ltd., a company which was making handsome profits and had assets worth Rs.40 crores. It is the case of the respondent nos.1 to 5 that the appellant was an Executive Director in the said company and had stripped and transferred the assets of the said company to one APS International Pvt. Ltd. and thus the appellant did not wish to invest in a loss-making entity.
21. In the hearing held on 15 th November 2006, the appellant vehemently opposed the request of the respondent nos. 1 to 5 to direct the Bench Officer, Company Law Board, Mumbai to authenticate the records of the respondent no.1. On 1st December 2006, the respondent nos.4 and 5 filed an application (CA No.15 of 2007) before the Company Law Board tendering unconditional apology and seeking leave to purge their contempt by complying with the order dated 8 th August 2006. On 11th January 2007, the Company Law Board allowed the said company applications (CA Nos.15 of 2007 & 16 of 2007) and directed that the ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 14 coapp-12.14(j).doc statutory records of the respondent no.1 be produced in the Court room of the Company Law Board on 31st January 2007 at 10.30 a.m. for authentication by Bench Officer, New Delhi.
22. It is the case of the respondent nos.1 to 5 that on 18 th January 2007, the appellant and Smt.Rama Gupta made a false statement on oath in the rejoinder filed by them to the Company Petition No.70 of 2006 which statement was made not only false to their knowledge but also contradictory to the statutory records filed by them with the Registrar of Companies.
23. The appellant filed rejoinder and made bald allegation that the signatures of the appellant were forged. It is further alleged by the appellant that the appellant was pushed out of Sabina Woollen Mills Pvt. Ltd. by the end of 1980 and he also denied all workings thereof. He also denied that he was working as Director of Sabina Woollen Mills Pvt. Ltd. It was the case of the appellant that he had been denied the access to the registered office of Cameo Fabrics Ltd. for many years. On 31 st January 2007, the statutory records of the respondent no.1 were produced in the Court room of the Company Law Board and was authenticated by the Bench Officer, New Delhi. No objection was taken by the appellant to the production of such statutory records of the respondent no.1.
24. In the month of March 2007, the respondent nos.1 to 5 filed sur-rejoinder. It is the case of the respondent nos.1 to 5 that to establish that the appellant had full knowledge of the affairs of the respondent no.1 at all material times and his statements were patently false and the appellant having denied his signatures on wealth tax returns though not ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 15 coapp-12.14(j).doc having denied the contents, the respondent nos.1 to 5 annexed certain documents to the sur-rejoinder.
25. On 2nd August 2007, the appellant filed a petition before Delhi High Court regarding alleged manipulation of the records of the respondent no.1 company by the contesting respondents. On 2 nd August 2007, the Delhi High Court passed an order in L.P.A. No.1118 of 2007 and thereafter Reserve Bank of India (RBI) had referred the matter for investigation to Directorate of Enforcement against the complainant by letter dated 23rd February 2010. It is the case of the appellant that Mr.Nand Lal Gupta (father of the respondent no.2) did not join the investigation being conducted by RBI.
26. On 16th August 2007, the appellant and his wife filed an application being Company Application No.425 of 2007 in Company Petition No.79 of 2006 inter alia praying for impleadment of M/s.Tara Industries Ltd. as the respondent no.12 in the Company Petition No.79 of 2007 and also prayed for addition of one of the prayer clause to the effect that the appellant should be given equal shareholding/effective right in the assets of M/s.Tara Industries Ltd. equal to that of Nand Lal Gupta group and Prem Gupta group and/or 1/3 rd share in the unencumbered assets of Tara Industries Ltd. The appellant also prayed for an order and direction that the Company Law Board shall direct an investigation in the affairs of Cameo Fabrics Ltd.-respondent no.1 and Tara Industries Ltd. and other sister concern of Gupta family or concerns in order to ascertain the siphoning off money and source of investments in the said concerns under Sections 235 to 248 of the Companies Act for adjudication and for other reliefs.
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27. On 8th January 2008, Mr.Prem Kumar Gupta, the respondent no.10 filed Company Petition No.02 of 2008 against the respondent no.1 and others before the Company Law Board. The Company Law Board passed an interim order that no general meeting was to be held without leave of the Company Law Board till the said company petition was disposed of. On 11th January 2008, the respondent nos.1 to 5 filed a reply to the said Company Application No.425 of 2007 and objected to the reliefs claimed on the same grounds. It is the case of the respondent nos.1 to 5 that the documents which were filed by the respondent nos.1 to 5 along with the sur-rejoinder in Company Petition No.70 of 2006 were also filed by the respondent nos.1 to 5 along with the affidavit-in-reply to the Company Application No.425 of 2007. It is also the case of the respondent nos.1 to 5 that the documents filed with sur-rejoinder were admissible since either they has been specifically mentioned in the counter affidavit or they had been filed to rebut the averments made in the rejoinder and in any event, were already forming part of the record as Annexure II to the affidavit-in-reply filed in Company Application No.425 of 2007.
28. On 9th June 2008, the respondent nos.1 to 5 filed an application (CA No.513 of 2008) inter alia praying for permission to carry out repairs/renovations/construction of the factory premises of the respondent no.1 since the said building had fallen into utter disrepair and had suffered serious damage from the monsoons of 2006 and 2007.
29. On 13th August 2008, the respondent nos.1 to 5 filed a company application being No.514 of 2008 against the appellant and his ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 17 coapp-12.14(j).doc wife inter alia praying for dismissal of the Company Petition No.70 of 2006 with exemplary costs on the ground that the appellant and his wife had made false statements on oath in the rejoinder filed by them in the Company Petition No.70 of 2006 which statements were not only false to the knowledge of the appellant and his wife but also contradictory to the statutory records filed by them with the Registrar of Companies. The respondent nos.1 to 5 also brought on record that a complaint under Sections 628 and 629 of the Companies Act had been filed before the Additional Chief Metropolitan Magistrate, 8 th Esplanade, Mumbai who had passed an order dated 24 th April 2008 and had issued process for the offence upon the said persons.
30. On 1st October 2008, the Company Law Board passed an order in CA No.513 of 2008 and clarified that the order dated 8 th August 2006 did not restrain the respondent no.1 from carrying out renovations, improvements etc. to the fixed assets of the respondent no.1.
31. On 24th February 2009, the appellant and his wife had filed a contempt petition being No. 1144-45 of 2006 before the Delhi High Court in respect of the incident dated 10 th August 2006 of denial of inspection by the respondent nos.1 to 5. The Delhi High Court passed an order on 24th February 2009 disposing of the said contempt petition and observed that the respondent nos.1 to 5 had tendered unconditional apology and had complied with the order dated 8th August 2006.
32. On 4th March 2010, Mr.Subhash Chander Gupta and Shri Shiv Raj Gupta filed a company petition being No.N21 of 2010 against Sabina Woollen Mills Pvt. Ltd. and others for various reliefs. On 16 th ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 18 coapp-12.14(j).doc March 2010, the Company Law Board referred the issues in Company Petition Nos.70 of 2006, 79 of 2006 and 84 of 2006 in respect of Tara Industries Ltd, Company Petition No.2 of 2008 in respect of Cameo Farbrics Ltd. and Company Petition No.21/ND/2010 in respect of Sabina Woollen Mills Pvt. Ltd. for mediation.
33. On 30th June 2010, the respondent nos.1 to 5 filed a company application (372 of 2010) before the Company Law Board inter alia praying that the order dated 8 th August 2006 be clarified permitting the respondent nos.1 to 5 to rent/lease out its fixed assets situated at 46, World Trade Centre, Cuffe Parade Centre, Mumbai and also situated at C- 16, MIDC, TTC Industrial Estate, Rabale. By an order dated 7 th July 2010, the Company Law Board directed the parties to complete the pleadings in CA No.372 of 2010 and ordered that the applications will be heard if the mediation would fail and directed that the matter to be listed on 9th August 2010. On 24th January 2011, the mediation report dated 14th January 2011 of failure was filed by the learned mediator before the Company Law Board which came to be taken on record on 24th January 2011.
34. The Company Law Board directed the appellant and his wife to file their reply to CA No.372 of 2010 within four weeks from the date of the said order and listed the said company application for arguments on 4th March 2011. On 20th April 2011, the Company Law Board disposed of the Company Application No.372 of 2010 recording that in view of there being strong objections from the appellant and his wife claiming 80% of the shareholdings of the respondent nos.1 to 5 in CA No.372 of 2010, the Company Law Board directed that the arguments ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 19 coapp-12.14(j).doc in Company Petition Nos.2 of 2008 and 70 of 2006 would be heard in the month of July 2011 on day to day basis from 25 th July 2011 to 29th July 2011.
35. On 16th June 2011, the respondent nos.1 to 5 pressed reliefs in CA No.514 of 2008 inter alia praying for dismissal of the Company Petition No.70 of 2006 in view of the alleged false statements made by the appellant and his wife. The Company Law Board, however, directed that all contentions of the parties would be taken up at the time of final arguments which were to be commenced from 25 th July 2011. The matter was thereafter listed on 25th July 2011. It is the case of the respondent nos.1 to 5 that the appellant herein and his wife addressed their arguments in Company Petition Nos.70 of 2006 and 2 of 2008.
36. After conclusion of their arguments, the respondent nos.1 to 5 commenced their reply. The matter was heard from 25 th July 2011 to 29th July 2011, 18th August 2011, 6th and 7th September 2011, 20th and 21st October 2011 and thereafter on 20 th December 2011 and 27th January 2012. The appellant and his wife had already concluded their submissions. The respondent nos.1 to 5 were present with their reply. The appellant and his wife, however, suddenly insisted that their pending CA No.425 of 2007 for impleadment of Tara Industries Ltd in Company Petition No.70 of 2006 be taken up for hearing in view of the order passed by this Court on 12th January 2012.
37. In the month of March and April 2012, the Company Application No.514 of 2011 and Company Application No.425 of 2011 were listed for hearing on 5th March, 2012. Company Application No.514 ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 20 coapp-12.14(j).doc of 2011 was part heard and was adjourned to 27 th March,2012. On 27th March,2012, the applications were adjourned to 17 th April, 2012 and thereafter to 21st May, 2012. Learned member Ms.Vimla Yadav of the Company Law Board who had heard the company petitions partly came to be transferred out of Delhi. On 24th November,2011, the respondent nos. 1 to 5 filed additional affidavit in Company Petition No. 70 of 2006 placing letters of Bank of Baroda dated 4th January,1994 on record. It is the case of the respondent nos. 1 to 5 that the said documents had been already filed in Company Petition No.21ND of 2010 which was filed by Mr.Subhash Chander Gupta and another against Sabina Woollen Mills Pvt. Ltd. and others.
38. It is the case of the respondent nos. 1 to 5 that since the company petitions would no longer be heard expeditiously and that there was no likelihood of the company petition heard at an early date, the respondent nos. 1 to 5 filed company application bearing no. 250 of 2012 inter alia praying for recall of the ex-parte order dated 8 th August,2006 passed by the Company Law Board in Company Petition No.70 of 2006 and sought permission to lease out the fixed assets of the company i.e. 46, World Trade Centre, Cuffe Parade, Mumbai and C-16, MIDC, Kalwa Industrial Estate, Thane.
39. On 10th September,2012, the appellant and his wife filed an application bearing Company Application No.471 of 2012 in Company Petition No.70 of 2006 inter alia praying for forensic examination of various documents annexed to the sur-rejoinder filed by the respondent nos.1 to 5 to determine its authenticity and the date when they were ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 21 coapp-12.14(j).doc created and to determine whether they were forged and/or bear the forged signatures etc.
40. On 7th January,2013, the appellant and his wife insisted that the pending Company Application No.425 of 2007 for impleadment of Tara Industries Ltd. and Company Application No.471 of 2012 for forensic examination being taken first, the said request of the appellant was opposed by the respondent nos. 1 to 5 on the ground that at that advanced stage of proceedings after the parties had addressed their arguments, the appellant and his wife could not press for hearing of pending Company Application No.425 of 2007 and could not have filed a company application for forensic examination. On 7th January,2013 the Company Law Board directed the parties to make their submissions in Company Application Nos.425 of 2007, 514 of 2008 and 250 of 2012 on the next date of hearing and directed that the affidavit in reply be filed in Company Application No.471 of 2012 within four weeks from the date of the said order and listed the matter on 5th February, 2013.
41. On 5th February, 2013 the Company Law Board passed an order directing the parties to complete their pleadings in all the applications as well as in the main petition if they were not completed and to get ready for hearing in the main petition for the reason that the hearing in the main petition could not be taken up so far despite the same were filed in the year 2006. It was made clear by the Company Law Board that during the course of hearing in the main petition, if the Company Law Board was of the view that if hearing in any of those applications were required to be decided alongwith the main petition, ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 22 coapp-12.14(j).doc then such application would also be heard along with the main petition. The Company Law Board adjourned the hearing in the company petition to 28th March, 2013.
42. On 6th March, 2013, the respondent nos. 1 to 5 filed Company Appeal No.48 of 2014 challenging the order dated 7th January, 2013. On 6th May, 2013, the appellant and his wife challenged the order dated 5th February, 2013 by filing an Company Appeal (27 of 2013) in this court. By the consent order dated 6 th May, 2013, this court directed that on 17th May, 2013 the company application for forensic examination of documents being Company Application No.471 of 2012 and Company Application No.425 of 2007 for impleadment be heard first and thereafter proceed with final hearing of Company Petition No.70 of 2006. It was made clear that if the Company Law Board would grant any reliefs in the said application, consequent to which time was required to be given to the parties, the same shall be granted. However, if the applications were rejected, the applicant shall not be entitled to seek time on the ground that they want to prefer an appeal from the order of rejection. The parties should be at liberty to challenge the said order at the time of challenging the final order passed by the Company Law Board if necessary. It was directed that the final hearing of the company petition shall commence not later than 10th June, 2013 and shall be concluded on or before 31 st August, 2013.
43. During the period between 17th May, 2013 and 27th June, 2013, the Company Application No.471 of 2012 was heard and was reserved for orders. On 23rd September, 2013, the Company Law Board ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 23 coapp-12.14(j).doc passed a detailed judgment and order and rejected the Company Application No.471 of 2012 filed by the appellant and his wife inter alia praying for forensic examination of some of the documents.
44. In the month of November 2013, the appellant and his wife filed an application before the Company Law Board seeking recusal of the learned member Mr.B.S.V.Prakash Kumar. The learned member of the Company Law Board recused himself from the matter. On 1 st December, 2013, the appellant filed the Company Appeal No.12 of 2014 under section 10F of the Companies Act, 1956.
45. Ms.Singhania, learned counsel for the appellant invited my attention to some of the documents annexed to the compilation of the documents, some of the paragraphs of the affidavits filed by both the parties before the Company Law Board, averments from Company Petition No. 70 of 2006 filed by the appellant and his wife and also the order passed by this court on 23 rd June, 2014. She also invited my attention to the impugned order and judgment delivered by the Company Law Board dismissing the company application filed by the appellant and his wife. Learned counsel also filed written submissions on behalf of her client for consideration of this court.
46. It is submitted by the learned counsel that the respondent no.1 is the closely held family run company in the nature of a quasi partnership that was purchased by five brothers of Gupta family along with their spouses with joint family business to do together based on mutual understanding. She submits that the shareholding of each brother ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 24 coapp-12.14(j).doc was approximately 20% of the equity capital of the company. For all practical purposes, in essence and in reality, the respondent no.1 is a glorified partnership amongst the brothers. The appellant has been permanently based in New Delhi. The other brothers except Mr.Nand Lal Gupta were based in Amritsar, Ludhiana in Punjab. The registered office of the company is located at 101, Churchgate Chambers, 5 Marine Lines, Mumbai.
47. It is submitted that Mr.Nand Lal Gupta, respondent no.2 was based abroad but was frequently visiting Mumbai. The respondent no.1 company came under exclusive management of Mr.Nand Lal Gupta based on the mutual understanding between the brothers that he would manage the respondent no.1 for the benefit of all the brothers/ shareholders. She submits that though Mr.Nand Lal Gupta and Ms.Usha Jaykar who was a close companion of Mr.Nand Lal Gupta were appointed as directors of the respondent no.1. They continued as directors and appointment of Mr.Nand Lal Gupta as managing director/ chairman was without consent and knowledge of the appellant and other shareholders of the respondent no.1. She submits that the respondent no.1 never held any shareholders' meeting, directors' meeting whatsoever and did not dispatch any notices to the shareholders/directors as Mr.Nand Lal Gupta had convinced the appellant and the other brothers that such formalities were not required and he would manage the company in the best interest of all the brother, the shareholders and the respondent no.1.
48. It is submitted that the appellant and the other brothers believed and had full faith and trust that the affairs of the respondent no.1 ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 25 coapp-12.14(j).doc would be managed and looked after by Mr. Nand Lal Gupta in the best interests of all the brothers. She submits that her client was not actively involved in the management and affairs of the respondent no.1 and was never a director of the said company. He was also not aware of any statutory filings of the respondent no.1. He had no control over the company and the records of the company were never shown to him. He had no hand in any aspect of the running of the company and/or control over the records of the company. Mr.Nand Lal Gupta was thus in a position to forge and fabricate or to back date any documents.
49. It is submitted by the learned counsel that Mr. Somdev Gupta, the eldest brother in the Gupta family died on 13 th June, 2006. The remaining brothers decided to distribute the company amongst themselves. Mr.Nand Lal Gupta consented to the family settlement in the meeting held in February 2006 and assured equal distribution of assets of the company however resiled from his commitment subsequently and refused to share information with respect to the appellant and other members of the family. She submits that the appellant conducted an online inspection of the records of the company on 14th June, 2006 on the website maintained by Tata Consultancy Services. The said TCS had started uploading certain records of companies under a government scheme since around March 2006. The appellant accordingly obtained a copy of the Memorandum and Articles of Association of the company and financial statement and annual returns for the year 2002-03 and 2004-05 available on the website.
50. The appellant noticed the illegal increase in shareholding of Nand Lal Gupta Group and dilution of the shareholding of the appellant ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 26 coapp-12.14(j).doc in the respondent no.1. She submits that on 20 th July, 2006, the appellant conducted further inspection of the limited records available with the Registrar of Companies and learnt of illegal change in the shareholding pattern of the respondent no.1 and mismanagement of the affairs of the said company over the previous 10 to 20 years by the Nand Lal Gupta Group. She submits that the respondent nos. 1 to 5 did not annex any company records/minutes of the meeting in their affidavit in reply to the company petition. She submits that though the Company Law Board had passed an order dated 8th August,2006 for authentication of the statutory records of the respondent nos.1, 2, 4 and 5 who were present at the office, they refused the authentication of the records of the company.
51. It is submitted that in the affidavit in reply, Nand Lal Gupta Group for the first time annexed the documents at serial nos. 5 and 6 i.e. purported tax returns. Her client therefore in the affidavit in rejoinder disputed the signatures of the appellant on the purported tax returns which signatures were forged by Nand Lal Gupta Group. She submits that the appellant was thus required to file a Company Application (406 of 2006) inter alia praying that the reply filed by Nand Lal Gupta Group may not be taken on record as the same was filed without any supporting documents and prayed that an adverse inference be drawn against the Nand Lal Gupta Group. She submits that on 31 st January,2007, Company Law Board directed Nand Lal Gupta Group not to file any new documents which were inadmissible in nature.
52. On 31st January,2007, Nand Lal Gupta Group produced purported statutory records of the company for the first time in pursuance ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 27 coapp-12.14(j).doc of the order dated 8th August,2006. She submits that Nand Lal Gupta Group filed a sur-rejoinder dated 12th March,2007 annexing voluminous new documents in breach of the order dated 31st January,2007. It is submitted that the appellant accordingly filed a Company Application No.427 of 2007 for seeking direction that the sur-rejoinder filed by Nand Lal Gupta Group annexing disputed statutory record of the company and other fabricated documents, could not be taken on record. She submits that Delhi High Court passed an order on 26 th February,2009 in the contempt petition filed by the appellant recording that the appellant was granted liberty to urge before the Company Law Board that the Nand Lal Gupta Group had used five months time to forge and fabricate the documents and that the Company Law Board should decide the same in accordance with law.
53. It is submitted that though the company petition as well as various applications were listed for arguments from July 2011 to March 2012, the same remained unconcluded. She submits that the respondent nos. 1 to 5 filed additional affidavits dated 25 th November 2011, 26th November 2011 and 17th March 2012 annexing further disputed documents before the Company Law Board. She submits that in view of this conduct on the part of the respondent nos. 1 to 5, her client filed Company Application No.471 of 2012 before the Company Law Board in the month of September 2012 for seeking forensic examination of the documents and statutory records of the company.
54. It is submitted by the learned counsel that there was no delay on the part of the appellant to file any application for forensic ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 28 coapp-12.14(j).doc examination. Mr.Nand Lal Gupta Group had filed its sur-rejoinder only on 12th March, 2007 annexing the disputed documents. His client was thus required to file Company Application No.427 of 2007 inter alia praying for rejection of the documents annexed to the sur-rejoinder and for not taking the same on record. She submits that respondent nos. 1 to 5 filed further forged fabricated and ante-dated documents along with additional affidavits on 25th November 2011, 26th November 2011 and 17th March, 2012. She submits that the principles of delay and latches are not applicable to the proceedings under sections 397, 398 of the Companies Act, 1956 and thus the applications filed by the appellant could have been rejected on that ground. In support of this judgment, learned counsel placed reliance on the judgment of Delhi High Court in case of A.P.Jain vs. Faridabad Metal Udyog, reported in (2005) 123 Comp.Case 785 (Delhi).
55. It is submitted by the learned counsel that insofar as purported minutes of the meetings of the board of directors of the respondent no.1 from year 1986 upto 2004 are concerned, the same were filed by Nand Lal Gupta Group for the first time in the sur-rejoinder dated 12th March, 2007 and were not furnished or produced by the said group at the time of filing of the affidavit in reply dated 13 th October, 2006 without stating any good or justifiable reason for not filing the said document along with reply.
56. It is submitted that by an order dated 9 th March,2012 passed by the Company Law Board in Company Petition No.21(ND) of 2010 filed by Mr.Subhash Chander Gupta against Sabina Woollen Mills Private ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 29 coapp-12.14(j).doc Limited where Mr.Nand Lal Gupta was respondent no.8, the said Nand Lal Gupta Group had admitted that they were in control of management of the company as well as in possession of the office of the respondent no.1. She submits that the signature of Mr.Nand Lal Gupta on the purported minutes can be compared with admitted signatures of Mr. Nand Lal Gupta in Company Petition No.84 of 2007. She submits that both the sets of signatures are admitted on behalf of Mr.Nand Lal Gupta. She submits that in view of the aforesaid circumstances brought to the notice of this court, her client has reasonable apprehensions that the purported minutes relied upon by respondent nos. 1 to 5 are ante-dated and fabricated documents which were not signed and filed contemporaneously by Nand Lal Gupta Group.
57. Insofar as documents listed at serial nos.2, 3, 6 and 7 are concerned, those documents are pertaining to Sabina Woollen Mills Private Limited. The documents at serial nos. 2 and 3 were filed by Nand Lal Gupta Group along with sur-rejoinder dated 12 th March,2007. The documents at serial nos. 6 and 7 were filed by Nand Lal Gupta Group along with additional affidavit dated 26th November, 2011 and 17th March 2012. She submits that it is admitted that the office of Sabina Woollen Mills Private Limited and the respondent no.1 is common office located at 101, Churchgate Chambers, 5 Marine Lines, Mumbai. She submits that Nand Lal Gupta Group was in possession of the registered office of the two companies where all statutory filings were done.
58. Prem Gupta Group and his spouse and two sons were based in Ludhiana and were looking after day to day affairs of Sabina Woollen ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 30 coapp-12.14(j).doc Mills Private Limited. The appellant was not actively involved in the management of the affairs of Sabina Woollen Mills Private Limited. She submits that Nand Lal Gupta Group and Prem Gupta Group were in control and management of affairs of Sabina Woollen Mills Private Limited in Mumbai and Punjab during the relevant time. It is submitted that Nand Lal Gupta Group in collusion with Prem Gupta Group had forged, fabricated and falsified statutory records of the company and forged the signatures of the appellant on various documents without his knowledge. Nand Lal Gupta Group had full access to the records of Sabina Woollen Mills Private Limited during the relevant time. She invited my attention to the order dated 9th March 2012 passed by the Company Law Board in Company Petition No.21(ND) of 2010 filed by Mr.Subhash Gupta against Sabina Woollen Mills Private Limited recording that all the records had been taken away of the management of Sabina Woollen Mills Private Limited and were not there at the registered office nor had been maintained there.
59. Learned counsel appearing for the appellant invited my attention to the order dated 23rd June, 2012 passed by Shri Justice S.J.Kathawalla in Company Appeal No.14 of 2014 filed by the appellant in respect of Sabina Woollen Mills Private Limited appointing an independent handwriting expert to examine the documents of Sabina Woollen Mills Private Limited which are listed at serial nos. 2,3, 6 and 7 of the tabular chart. She submits that the said handwriting expert Mr.J.S.Langade has submitted his report dated 18 th July, 2014 and after conducting forensic examination of the said document has opined that the signatures of the appellant on the documents of Sabina Woollen Mills ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 31 coapp-12.14(j).doc Private Limited which are listed at serial nos. 2, 3, 6 and 7 of the tabular chart were forged. She submits that the order dated 23rd June, 2012 passed by this court having not been challenged by any of the respondents has attained finality. The report dated 18 th July, 2014 submitted by the handwriting expert not having been challenged has also attained finality.
60. Learned counsel invited my attention to the prayers in Company Application No.59 of 2014 in Company Petition No.109(ND)/ 2013 seeking cross examination of the handwriting expert by one of the contesting respondents. She submits that since the statutory records in both the companies as well as Sabina Woollen Mills Private Limited have been fabricated and forged and the affairs of the company had been mis- managed by Nand Lal Gupta Group in collusion with Prem Gupta Group to the prejudice of the shareholders and to the detriment of the company, it is vital to send the said documents for forensic examination which would demonstrate as to how the statutory records in both, the company and Sabina Woollen Mills Private Limited have been fabricated and forged.
61. It is submitted by the learned counsel that insofar as the documents listed at serial nos. 4 and 5 of the tabular chart are concerned, the said documents are the purported letters to the banks which had been filed by Nand Lal Gupta Group for the first time along with their additional affidavits dated 24th November,2011 which were not furnished or produced by the Nand Lal Gupta Group at the time of filing of the affidavit in reply dated 13th October,2006 or were not even filed along ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 32 coapp-12.14(j).doc with sur-rejoinder dated 12th March, 2007. No reasons are furnished by the respondent nos. 1 to 5 as to why such documents were not brought on record earlier. She submits that the signatures of the appellant on the purported letters produced by the respondent nos. 1 to 4 are forged and thus deserves to be sent for forensic examination.
62. It is submitted that the documents at serial nos.8 and 9 of the tabular chart are purported wealth tax returns and income tax returns of the appellant which were filed by Nand Lal Gupta Group along with their affidavit in reply dated 13th October, 2006. She submits that the appellant has disputed the signatures of the appellant on the purported letters and the same have been forged by Nand Lal Gupta Group and thus an handwriting expert ought to have been appointed by the Company Law Board. It is submitted that the appellant has already contended in the affidavit in rejoinder that he had not filed any independent income tax, wealth tax returns because all the filings were done from Mumbai through the office of respondent no.1 which was in possession of Nand Lal Gupta Group and the payments were also made from Mumbai Office itself.
63. It is submitted that the appellant has been based in New Delhi for last more than 35 years even before purported returns were filed by Nand Lal Gupta Group which are annexed to the affidavit in reply. It is submitted that the appellant being the brother of Mr.Nand Lal Gupta and entrusted the entire filing of the documents including taxation to his brother and since the filings were at Mumbai, the documents were sent to Mumbai and dealt with at Mumbai. The appellant has no access to the ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 33 coapp-12.14(j).doc returns filed by Nand Lal Gupta Group. The purported returns being fabricated, did not contain the signatures of the appellant and were purported to have been filed from the registered office of the respondent no.1 situated at Mumbai. She submits that Nand Lal Gupta Group could not explain anywhere as to how they came in possession of the personal returns of the appellant and other family members and/or assessment orders.
64. It is submitted that two other brothers viz. Mr.Prem Gupta and Mr.Shivraj Gupta have also made allegations of forgery and fabrication of statutory records of the respondent no.1 by Nand Lal Gupta Group. Nand Lal Gupta Group was exclusively filing the purported returns without knowledge of the appellant and was responsible for forging the signatures of the appellant and fabricating the purported returns. She submits that the issue of forgery of the signatures of the appellant on the purported wealth tax returns and income tax returns has been raised before various authorities including the banks, Economic Offence Wing, Reserve Bank of India, Enforcement Directorate and Ministry of Corporate Affairs. She submits that the admitted signatures were placed by the appellant before the Company Law Board and the signatures of the appellant are on the company application as well as the affidavit accompanying the petition. She submits that the details of the disputed documents are in the application as well as the written submissions.
65. Learned counsel for the appellant placed reliance on the report of the Central Forensic Science Laboratory, Ministry of Home ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 34 coapp-12.14(j).doc Affairs, Government of India dated 1st October, 2012 on the basis of the complaint filed by the appellant against Nand Lal Gupta Group and the respondent no.10 group. She submits that in the said report, it was found that the questioned signatures were different from those of the standard signatures leading to the opinion of different authorship. She submits that instead of relying on the Central Forensic Science Laboratory's Report dated 1st October,2012, the Investigating Officer who has submitted the closure report dated 26th August, 2014 has allocated to himself the role of a handwriting expert. She submits that even the said closure report is inconsistent and contradictory insofar as comments on the signatures of the appellant is concerned.
66. It is submitted that the said report of Central Forensic Science Laboratory has not been challenged by any of the contesting respondents whereas the closure report relied upon by the respondent nos. 1 to 5 has been challenged by the appellant by way of Protest Petition No.678/MISC/2014 before the Magistrate Court at Esplanade, Mumbai. No orders have been however passed by the learned Magistrate in the said petition. Learned counsel placed reliance on the judgment of this court in case of HSBC PI Holdings (Mauritius) Limited vs. Avitel Post Studioz Limited and others, reported in 2014 SCC Online Bom. 102 and in particular paragraphs 90 to 92 holding that since the opinion of the Economic Offence Wing has not been accepted by the learned Magistrate at that stage, this court did not consider the correctness of the report submitted by the Economic Offence Wing at that stage. She submits that the closure of Economic Offence Wing heavily relied upon by the respondent nos. 1 to 5 thus cannot be considered by this court.
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67. It is submitted by the learned counsel that by an order dated 16th February, 2017 passed by this court in Criminal Application No.140 of 2014 and Criminal Application No.135 of 2014, the said criminal proceedings filed by Nand Lal Gupta Group against the appellant company are stayed. It is submitted that the learned Company Law Board has failed to appreciate and apply the well-settled principles applicable to a quasi partnership/family company. In support of this submission, learned counsel placed reliance on the judgment of Supreme Court in case of Sangramsinh Gaekwad vs. Shantadevi Gaekwad, reported in (2005) 11 SCC 314.
68. It is submitted by the learned counsel for the appellant that in paragraphs 8.14 of the impugned order, the Company Law Board has made observations on the merits of the matter in the impugned order and has expressed its final opinion on the matter at the interlocutory stage which is not permissible in law. She submits that the Company Law Board has not given any finding in the impugned order as to why the documents cannot be sent for forensic examination.
69. It is submitted by the learned counsel for the appellant that though the impugned order dated 23rd September, 2013 was pronounced on 27th September 2013 it was signed on 17th October, 2013. In such circumstances, the appellant was constrained to file an application being Company Application No.15 of 2013 seeking recusal of the learned member of the Company Law Board. The learned member had accordingly recused himself by an order dated 3 rd December, 2013. She submits that the appellant was not responsible for any delay or did not make any attempt to delay the proceedings.
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70. It is submitted by the learned counsel that since the respondents sought to rely upon the new documents only in the sur- rejoinder filed before the Company Law Board in the year 2007, there was no occasion for the appellant to file any application to refer the documents for forensic examination earlier. She submits that the respondent nos. 1 to 5 deliberately did not produce any financial records of the respondent no.1 before the Company Law Board earlier. Various minutes of the meeting were not annexed to the affidavit in reply but were annexed to the sur-rejoinder.
71. Learned counsel for the appellant invited my attention to the part of the pleadings in Company Appeal No.14 of 2014 in support of her submissions that the appellant had made allegations of manipulation and forgery even in those proceedings and more particularly in paragraphs 6.18, 6.27 and 6.29. She submits that out of nine documents in Company Appeal No. 14 of 2014, Shri Justice S.J.Kathawalla had already passed an order for referring four documents to forensic expert for examination. She placed reliance on the order passed by Shri Justice S.J.Kathawalla and the findings of the said forensic expert including in respect of four documents in support of her submission that even the said expert found that the signatures of the appellant on those four documents were different than the admitted signatures of the appellant.
72. It is submitted by the learned counsel that this court has stayed the proceedings before the Company Law Board by an order dated 27th March,2014. She invited my attention to various averments made in the company petition filed by her client and also to the grounds raised by ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 37 coapp-12.14(j).doc the appellant in this appeal. Learned counsel for the appellant placed reliance on the judgment of Supreme Court in case of Uttamrao Shivdas Jankar Vs. Ranjitsinh Vijaysinh Mohite Patil reported in (2009) 13 SCC 131 and in particular paragraph 51 on the issue of waiver of statutory right under section 10F of the Companies Act, 1956 and would submit that there was no waiver on the part of the appellant of the statutory rights conferred under the said provision. She submits that the forensic examination is necessary only in respect of five documents.
73. Learned counsel for the appellant invited my attention to the averments and prayers in Company Application No.59 of 2014 filed by the respondent nos. 9 to 14 in Company Appeal No. 14 of 2014 inter alia praying for liberty to cross examine the handwriting expert who was appointed pursuant to the order passed by Shri Justice S.J.Kathawalla and who had submitted a report. She submits that even in the said company application, there was no prayer for setting aside the said report submitted by the said handwriting expert appointed by this court pursuant to the order dated 23rd June, 2014. She submits that the said order dated 23 rd June, 2014 passed by Shri Justice S.J.Kathawalla also is not admittedly impugned by any party and has attained finality. She submits that in the said Company Application No.59 of 2014, the respondent nos. 9 to 14 have sought to place reliance upon another alleged report obtained by those respondents from another handwriting expert which is not permissible.
74. Learned counsel for the appellant invited my attention to a letter addressed by HDFC Bank to the appellant (at page 821 of Volume ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 38 coapp-12.14(j).doc IV) showing that the signatures of the appellant does not tally with the signatures on record. Learned counsel placed reliance on the judgment of Supreme Court in case of Bhanu Kumar Jain Vs.Archana Kumar & Anr., reported in (2005) 1 SCC 787 at page 798. She also placed reliance on the judgment of Delhi High Court in case of A.P.Jain vs.Faridabad Metal Udyog, decided on 4th July, 2006 and in particular paragraph 14 in support of her submission that since the petitioner was not responsible for any delay in making an application for referring the document for forensic examination and in any event had explained such alleged delay, the Company Law Board could not have refused to exercise its discretionary power in favour of the appellant. She submits that the respondent no.10 is supporting the appellant and has filed a separate Company Petition (2 of 2008) before the Company Law Board. She submits that Mr.Shivraj Gupta, respondent no.7 is also supporting the appellant and has filed a separate company petition against Nand Lal Gupta Group before the Company Law Board.
75. Learned counsel for the appellant invited my attention to the prayers and the pleadings in the company petition filed by Mr.Subhash Chander Gupta (21 of 2010) and would submit that the reliefs claimed by him are different and against different persons. All parties in that company petition filed by him are not the same in the company petition filed by her client. There are additional parties in the company petition filed by the appellant. The interim reliefs prayed by the appellant in the company petition filed by him are also different.
76. Ms.Arora, learned senior counsel for the respondent nos. 1 to 5 on the other hand submits that Nand Lal Gupta Group and Prem Gupta ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 39 coapp-12.14(j).doc Group are the shareholders in Tara Industries Limited. Learned senior counsel invited my attention to the averments made by the appellant in Company Petition No.70 of 2006 and also in Company Application No.471 of 2012 in which the appellant had inter alia prayed that the documents listed therein be sent for forensic examination and would submit that the said application was made after more than 5 and ½ years of the filing of the documents before the Company Law Board in respect of the documents which were alleged to have been forged. She submits that all these documents were extensively referred to and relied upopn at the stage of final hearing in the Company Petition No.70 of 2006 which took place on 25th July, 2011 to 28th July, 2011, 18th August 2011, 6th September 2011, 7th September 2011, 20th October 2011, 29th October 2011, 28th November 2011 and 27th January 2012.
77. It is submitted that on 27th January, 2012, the appellant and his wife had already concluded their arguments and the contesting respondents were on the verge of conclusion of their submissions. The appellant at that stage filed Company Application No.425 of 2007 on 16 th August, 2007 seeking impleadment of Tara Industries Ltd. to the Company Petition No.70 of 2006 and insisted that the said application be heard and decided first. She submits that while the said Company Application No.425 of 2007 was pending, and all those documents were filed with counter affidavit dated 13th October,2006 and 5 and ½ years after filing of sur-rejoinder on 10th March,2007 and after the matter was partly heard and the hearing was substantially complete, the Company Application No.471 of 2012 was filed on 9th September, 2012 by the appellant alleging that the annexures to the counter affidavit, sur-
::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 :::ppn 40 coapp-12.14(j).doc rejoinder and additional affidavit dated 24th November,2011 were forged and be sent for forensic examination. She submits that those documents had been also filed in Company Petition No.21ND of 2010 which was filed by Mr.Subhash Chander Gupta and another vs. Sabina Woollen Mills Pvt. Ltd. and others to which the appellant was impleaded as respondent no.6.
78. It is submitted by the learned senior counsel that though most of the documents annexed to the sur-rejoinder bear the signatures of the appellant, the same have been now alleged to be forged by the appellant. She submits that though the sur-rejoinder was filed on 10 th March, 2007 and though the appellant had filed the Company Application No.429 of 2007 on 29th September 2007, inter-alia praying that the sur- rejoinder filed by the respondent nos.1 to 5 be rejected on the ground that new documents cannot be permitted to be filed, after more than five years from filing of the said documents, the appellant filed the said company application for referring some of the documents for forensic examination alleging that those documents were forged with a view to derail the final hearing and over reach the criminal complaint filed by the respondent no.5 in the Court of the Additional Chief Metropolitan Magistrate in July, 2007 against the appellant under sections 628 and 629 of the Companies Act, wherein the documents signed by the appellant in his capacity as the Executive Director of Sabina Woollen Mills Private Limited are in issue.
79. It is submitted that in the said criminal proceedings, the petition under section 482 of the Criminal Procedure Code filed by the appellant for quashing those proceedings has been withdrawn on 1st ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:09 ::: ppn 41 coapp-12.14(j).doc February, 2010. Subsequently the appeal for discharge has been also dismissed. She submits that in the application filed in the year 2012 by the appellant, he has denied that he was the Executive Director of Sabina Woollen Mills Private Limited. She submits that similar wealth tax returns were also filed by the other respondents. No such allegations of forgery were ever made by the other respondents.
80. It is submitted that the appellant has failed to disclose any material particulars of forgery save and except to state that some of the documents were forged and/or bear forged signature and therefore, should be sent for forensic examination. She submits that the appellant lacks material particulars and ingredients as to how such alleged forgery has been committed by the respondent nos.1 to 5. She submits that the allegations of the appellant are totally vague, devoid of particulars and are bald statements. Even in the pleadings filed by the appellant, no such particulars have been mentioned. She submits that any allegations of fraud, forgery and coercion requires that the pleadings in that regard should state all necessary particulars to establish such allegations of fraud, forgery or coercion. Learned senior counsel placed reliance on the judgments of the Supreme Court in case of Vishnu Deo Narayan vs. Seogeni Rai, reported in (1951) SCR 548 and in particular paragraphs 27 and 28, in case of Santi Budhiya Westa Patil & Ors. vs. Nirmala Jaiprakash Tiwari & Ors., reported in (2010) 5 SCC 104 and in particular paragraphs 32 and 33 and in case of Sangramsingh P. Gaikwad & Ors. vs. Shantidevi P. Gaikwad, reported in (2005) SCC 384 and in particular paragraphs 182.
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81. It is submitted by the learned senior counsel that pursuant to the order passed by the Company Law Board on 11th January, 2007, the records of the respondent no.1 were authenticated at Delhi. She submits that though the appellant was not a shareholder of Tara Industries Limited, he filed a frivolous Company Application (425 of 2007) on 16 th August, 2007, inter-alia praying for impleadment of Tara Industries Limited as a party respondent to the Company Petition No.70 of 2006 filed by him. She submits that Premkumar Gupta has filed a company petition against Tara Industries Limited. The application of the appellant for intervention in the said company petition was admittedly rejected by the Company Law Board. The company appeal filed by the appellant was admittedly dismissed by this Court and the Special Leave petition filed by the appellant was dismissed by the Supreme Court against the said order.
82. Learned senior counsel placed reliance on the documents forming part of Convenience Compilation Volume - I and particularly various wealth tax returns filed by the appellant in support of her submission that increase in the share capital of the respondent no.1 was all through out to the knowledge of the appellant. She submits that the appellant is an advocate. His son is also an advocate. The appellant had considered the market value of the shares in the year 1991-92 onwards. The other members of the family also had filed wealth tax returns. Mr.Subhash Chander Gupta also filed a similar wealth tax returns disclosing the same rate of market value of shares. She also invited my attention to the wealth tax returns filed by Mr.Subhash Chander Gupta, Mrs.Kiran Gupta and Mr.Prem Gupta for various periods. Reliance is also ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:10 ::: ppn 43 coapp-12.14(j).doc placed on the minutes of the meeting of the Board of Directors of the respondent no.1. She submits that the appellant has also made various payments to the banks and also towards the tax liabilities disclosed in those tax returns. She submits that most of the documents were already referred to in the affidavit in reply filed by the respondent nos.1 to 5 but were filed along with the sur-rejoinder. The appellant did not ask for inspection of those documents.
83. It is submitted by the learned senior counsel that admittedly the appellant had already taken inspection of the records of the Registrar of Companies relating to the records filed by the respondent no.1.
84. Learned senior counsel placed reliance on the closure report filed by the Investigation Officer on 25th August, 2015 and submits that the said report would clearly indicate that the signatures of the appellant were not forged. She submits that ad-interim order of injunction obtained by the appellant against the respondent nos.1 to 5 is in force since 8 th August, 2006 causing prejudice to the interest of the respondent nos.1 to
5. The appellant has filed various frivolous applications though the matter was substantially heard finally by the Company Law Board with an intention to cause delay in those proceedings causing tremendous prejudice to the interest of the respondent nos.1 to 5.
85. Insofar as the allegations of the appellant that the respondent nos.1 to 5 had not filed the company records along with the reply to the affidavit in reply to the company petition is concerned, on 13 th August, 2006, the respondent nos.1 to 5 filed their reply to the company petition ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:10 ::: ppn 44 coapp-12.14(j).doc and placed on record the complete details of the meetings of the Board of Directors and all other contemporaneous evidence and documents showing financial need of the respondent no.1 and necessity for increase of the share capital.
86. The Delhi High Court dismissed the contempt petition filed by the appellant observing that no useful purpose would be served in the proceedings for contempt petition filed by the appellant leaving it open to the appellant to urge his contention with respect to forging and fabricating all certain documents before the Company Law Board and leaving it open to the Company Law Board to decide the issue in accordance with law. The Delhi High Court did not adjudicate upon the said controversy in the said contempt petition. She submits that though the Delhi High Court had passed the said order in the contempt petition on 24th February, 2009, the appellant filed the Company Petition No.471 of 2012 only on 5 th September, 2012 much after final hearing of the petition that already commenced and the parties had been heard extensively and the respondents had almost finished its arguments.
87. It is submitted by the learned senior counsel that inadvertently the minutes of the meeting of the Board of Directors were not filed with the counter affidavit. However, complete and full reference was made to the minutes of the meeting of the Board of Directors in the counter affidavit, including contemporaneous evidence and documents showing financial need of the company from time to time leading to the allotment of shares of augment financial resources.
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88. Insofar as the allegations of appellant that the minutes of the meeting of the Board of Directors were forged and fabricated is concerned, it is the case of the appellant himself that he had taken inspection of the record at the Company Law Board. The appellant has relied upon the financial report and the final statements of the company beginning 1992-1993 until 2004. She invited my attention to the annual returns Form-II, financial statements annexed at various pages of compilation. She submits that the documents annexed by the respondents clearly reflect the extent of the information available with the appellant about the respondent no.1 and thus there was no purpose of filing of those documents when the appellant and his wife had all material information with them about the respondent no.1.
89. It is submitted by the learned senior counsel that the share capital of the company was increased from time to time to meet with its financial requirements to the knowledge of the appellant. The share capital was increased only to meet with the financial requirements of the company, which is established from the material facts and documents contemporaneous with the increase of the share capital.
90. The respondent nos.1 to 5 also filed copies of the wealth tax and income tax returns of the appellant reflecting full knowledge of the appellant of the affairs of the respondent no.1 company in as much value of his shareholding reflected in such wealth tax returns which could have only been obtained from the annual report / balance sheet of the respondent no.1 of the respective years. She invited my attention to those ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:10 ::: ppn 46 coapp-12.14(j).doc nine documents annexed to the sur-rejoinder which were annexed at Annexure R-9 collectively.
91. Learned senior counsel submits that the minutes of the meeting of the Board of Directors also supported that all the statutory returns in the form of Form-II were filed by the respondent no.1 with the Registrar of Companies. In paragraph 6.94 of the company petition at page 262-263, the appellant has admitted that he had inspected Form-II available with the Registrar of Companies. She submits that in these circumstances, the intention of the appellant to file such application seeking forensic examination of such minutes of the meeting and other documents was evident and after thought and was made with a view to further delay the hearing of the company petition. She submits that it is not the case of the appellant that the appellant had filed any different returns from the one produced by the respondent nos.1 to 5 with reply affidavit nor has produced any material or documents to show that different returns had been filed by the appellant with the Income Tax Department.
92. Learned senior counsel submits that the respondent nos.1 to 5 had also produced similar tax returns of the other respondents also evidencing the same value towards their respective shareholding in the respondent no.1 which have not been challenged as forged or fabricated by those respondents. My attention is invited to several such documents relating to the income tax and wealth tax returns of the various parties, including the appellant and other respondents for several years.
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93. It is submitted by the learned senior counsel that there was deliberate and gross delay on the part of the appellant in filing the Company application No.271 of 2012 which could not be mixed up with the consent order dated 6th May, 2013 passed by this Court. By the said order dated 6th May, 2013, this Court had only recorded the consent of the parties for hearing of the company petitions by the Company Law Board so as to ensure that the company petitions were heard and decided expeditiously. By the said order, the delay in filing the Company Application No.471 of 2012 by the appellant was not condoned. She submits that it is an admitted case of the appellant that the alleged fabrication had come to his knowledge as of 18 th January, 2007 after the date of filing rejoinder before the Company Law Board however, the appellant waited for more than five and half years to file the company application which clearly establishes the gross delay on the part of the appellant.
94. It is submitted by the learned senior counsel that merely because the matter was referred to mediation on 5th July, 2010, which was pending for a period of one year, it is of no avail and had no bearing on the contention raised in the company application. No action was taken by the appellant either before the matter was referred to mediation or even thereafter for more than one year.
95. It is submitted by the learned senior counsel that the appellant himself had filed a Criminal Complaint No.97/Misc./2008 in the year 2008. The very same documents formed the documents of the said criminal complaint which had been investigated by the Economic ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:10 ::: ppn 48 coapp-12.14(j).doc Offence Wing for over six years of which report dated 26 th August, 2014 running over 9000 pages had been filed by the Investigating Officer.
96. Learned senior counsel submits that in the year 2008, the appellant had submitted an application for making the change in the form submitted for getting his income tax pan card. The signatures on the same were similar to the signatures in respect of which he had alleged that the same had been forged. The appellant had again made an application in the year 2012 to change the pan card, wherein the appellant had made his new signature. She submits that it is thus clear in the investigation that the appellant was in habit of making the signatures by changing the style of writing. She submits that the appellant had been changing his signatures from time to time and getting the new pan card and passport issued during the pendency of the proceedings. The closure report discredits the allegations of the appellant that his signatures on various documents were forged and fabricated by the respondent nos.1 to 5. She submits that the proceedings before the Company Law Board being similar in nature any complicated disputes and the allegations of forgery, manipulation of the record and cannot be resolved on the strength of the averments made in the affidavit simplicitor and can only be decided by proper evidence.
97. Insofar as reliance placed on the order dated 23 rd June, 2014 passed by this Court in Company Appeal No.14 of 2014 filed by the appellant against Sabina Woollen Mills Private Limited and others in support of the contention that the documents at serial nos.2, 3 and 7 had been sent for hand writing export's opinion and it had been reported that ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:10 ::: ppn 49 coapp-12.14(j).doc there were different authorship is concerned, it is submitted by the learned senior counsel for the respondent nos.1 to 5 that veracity of the said report has been already questioned by one of the respondent seeking to cross-examine the said handwriting expert appointed by an ex-parte order and the said application is still pending before this Court. She submits that the subsequent report of the Economic Offence Wing dated 26th August, 2014 which had considered the documents sent for forensic examination has rejected the allegations of forgery and held that no definite opinion could be given. Though the appellant had alleged that the signatures were forged, he did not furnish information as to whether the original tax returns were prepared by him and were filed. She submits that the report thus submitted by the hand writing export pursuant to an order passed by this Court cannot be relied upon as authentic unless the said private expert is tested through cross-examination.
98. It is submitted by the learned senior counsel that insofar as the statutory records of the respondent no.1 are concerned, the appellant has already taken inspection of the records at the Company Law Board and himself has relied upon the annual reports and financial statements of the respondent no.1. Each of the pages of those documents reflected the knowledge of the appellant and that the information was available with him. She submits that the application thus filed by the appellant for referring some of the documents for forensic export itself was mischievous and filed with an oblique motive with a view to delay the out come of the proceedings filed by the appellant and to enjoy the benefit of the ad-interim ex-parte order obtained by the appellant against the respondent nos.1 to 5.
::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:10 :::ppn 50 coapp-12.14(j).doc 99. Ms.Meenakshi Arora, learned senior counsel and
Ms.L.M.Jenkins, learned counsel for the respondent nos.1 to 5 submits that the appellant was the Director of the respondent no.1-M/s. Sabina Wollen Mills Private Limited. The reliefs claimed by Mr.Subhash Chander Gupta in Company Petition No.21 of 2010 in which the appellant was the respondent no.6 and the reliefs which were claimed by the appellant in Company Petition No.109(ND)/2013 were almost identical. She submits that even the issues involved in both the proceedings were same. The Company Law Board thus rightly did not grant any relief in favour of the appellant in this case.
100. Learned counsel appearing for the respondent nos.1 to 5 invited my attention to the averments made by the appellant in paragraph 6.165 in Company Petition No.109(ND)/2013 filed by the appellant before the Company Law Board, New Delhi against M/s.Sabina Woollen Mills Pvt. Ltd. It is submitted that it was the case of the appellant himself that income tax returns were compiled in Ludhiana and filed at Mumbai. The appellant himself had filed an affidavit dated 16th December 1997 stating that Wealth Tax returns were filed by the appellant as Karta of his HUF. He and his family members had also availed of the benefits under Section 68(2) of the Voluntary Disclosure of Income Scheme, 1997 and had filed various returns on 9 th January 1998. The wife of the appellant i.e. Mrs. Rama Gupta had also filed income tax returns and also the returns under Voluntary Disclosure of Income Scheme. Son of the appellant had also declared purchase of jewellery under Voluntary Disclosure of Income Scheme. It is submitted that the averments made by Mr.Subhash Chander Gupta in the ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:10 ::: ppn 51 coapp-12.14(j).doc proceedings filed by him against M/s.Sabina Wollen Mills Pvt. Ltd. were admittedly confirmed by the appellant herein.
101. Learned counsel for the respondent nos.1 to 5 also invited my attention to the letter dated 4 th January 1994 addressed by M/s.Sabina Woollen Mills Pvt. Ltd. to the Bank of Baroda which was signed by the appellant alleging forgery by one of the Directors as far back as on 4th January 1994. She also invited my attention to the letter at page 1434 of compilation of documents showing five signatures of the appellant on the same letter addressed to the Bank of Baroda. She also relied upon the letter addressed by Unit Trust of India to the Economic Offence Wings (EOW) annexed at page 139 of the compilation of documents showing that the appellant had been issued two pan cards. Reliance is also placed on the said two applications made by the appellant at pages 140 and 145 of the compilation for issuance of two pan cards. She submits that signatures of appellant differ on both these applications admittedly made by the appellant for issuance of two separate pan cards.
102. Learned senior counsel placed reliance on the findings rendered by the EOW against the appellant. It is submitted by the learned senior counsel that the order passed by Shri Justice S.J. Kathawalla was an ex parte order. The report submitted by so called hand writing expert is not binding and conclusive. She also invited my attention to various affidavits filed by the respondent nos.1 and 2 before the Company Law Board in the Company Petition No.109(ND)/2013.
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103. Learned senior counsel for the respondent nos.1 to 5 strongly placed reliance on Closure Report dated 24th August 2015 filed by the Investigation Officer opining that the signature of the appellant was differed from time to time.
104. Ms.Singhania, learned counsel for the appellant in rejoinder submits a chart showing the details of the documents in support of her submission as to why the forensic examination of the remaining five document was necessary. She submits that the examination of the documents by forensic expert was necessary in view of the serious allegations of the appellant made against the respondents such as siphoning of money, illegal increase in the shareholding, though the respondent no.1 company was in the nature of glorifying partnership, no meeting were held by Nand Lal Gupta Group who was managing the respondent no.1, no notices were sent to the appellant and his wife, no board resolutions were passed. All the records of the respondent no.1 were in the custody and control of Nand Lal Gupta Group. The appellant had no access or knowledge of the records of the respondent no1. Learned counsel invited my attention to some of the averments made in the company petition relating to these allegations.
105. It is submitted that the appellant came to know about such fabrication and fraud committed by the respondent nos.1 to 5 only after the inspection of the records from the Registrar of Companies. She submits that not a single notice of any meeting of the Board of Directors were served upon the appellant nor the same were annexed to affidavit in reply though several other documents were annexed by the respondent ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:10 ::: ppn 53 coapp-12.14(j).doc nos.1 to 5. Though the minutes and resolutions alleged to have been passed by the respondent no.1 were referred in the affidavit in reply, the same were deliberately not annexed. The respondent nos.1 to 5 have also not produced any proof of delivery of any of notices or copy of the resolution passed by the respondent no.1 upon the appellant. The records of the respondent no.1 were not produced and whatever was produced, was not genuine.
106. It is submitted that the delay tactics was played by the respondent no.1 and not by the appellant. She submits that the respondent nos.1 to 5 had not sought any leave in the affidavit in reply to refer to and produce those documents in future. She submits that in the rejoinder filed by the appellant, the appellant had already averred that the wealth tax returns were forged by the respondent nos.1 to 5. She submits that the documents annexed to the sur-rejoinder came to be filed only in the year 2013 in view of the order passed by S.J. Kathawalla, J. She submits that in the returns of the appellant filed by the respondent nos.1 to 5 also addressed of the appellant was shown of Mumbai though the appellant was admittedly settled down in Delhi. She submits that apart from the appellant and his wife, some other family members of Gupta family are also disputing the documents.
107. Insofar as the closure report relied upon by the respondent nos.1 to 5 is concerned, it is submitted by the learned counsel that even the said closure report shows inconsistency and does not show correct conclusion. She submits that there is no conclusive report on the signature of the appellant in the said report. The findings are confusing ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:10 ::: ppn 54 coapp-12.14(j).doc and inconsistent. She submits that in any event since the said closure report has been challenged, the same cannot be relied upon. She submits that it is not the case of the appellant that the report of the hand writing report relied upon by the appellant is final and binding. The order passed by S.J. Kathawalla, J. appointing the said hand writing export is final and binding in view of the fact that none of the parties have challenged the said order.
108. It is submitted by the learned counsel that the respondent nos.1 to 5 have not made any submissions as to how the impugned order passed by the Company Law Board can be sustained. She submits that the findings recorded by the Company Law Board are totally erroneous and not based on any documents on record. The Company Law Board has totally ignored the case of the appellant pleaded in the company petition and in the company applications. The appellant was not in the management of Sabina Woollen Mills Private Limited. The appellant has already filed a complaint alleging forgery with the Registrar of Companies and the concerned Magistrate.
109. It is submitted that the appellant had not participated in the business of the respondent no.1 even according to the respondents in the affidavit in reply. She submits that the report of hand writing expert relied upon by the appellant has not been dealt with in the closure report. The remarks of the Investigating Agency in the closure report is of no significance and cannot be considered by this Court. The closure report has been challenged before the learned Magistrate by the appellant which application is pending.
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110. Ms.L.M. Jenkins, learned counsel for the respondent nos.1 to 5 in sur-rejoinder dealt with the chart submitted by the learned counsel for the appellant in rejoinder and would submit that it is not the case of the appellant that no records of the respondent no.1 exist or that no returns were filed by the appellant at all. She invited my attention to the averments made by the appellant in rejoinder before the Company Law Board and more particularly paragraph 15 and would submit that the appellant had himself given details of fixed deposits from March, 1992 till March, 2005. These records were not on the website of the Registrar of Companies for all these years. Unless the appellant had these documents available with the appellant, the appellant would not have given such details of the fixed deposits from March, 1992 to March, 2005. The appellant had thus all records of the respondent no.1 company with him all through out.
111. It is submitted that pursuant to the order passed by the Company Law Board on 31st January, 2007, the respondent nos.1 to 5 had produced statutory records. The appellant did not raise any objection or challenge the authenticity of such statutory records. She submits that some of the documents annexed in Company Appeal No.14 of 2014 would indicate that even according to the appellant, the income tax returns of the appellant were compiled in Ludhiana but were filed in Mumbai. She submits that the appellant himself has admitted in his affidavit that the tax returns were filed by the appellant as Karta of his HUF in the affidavit filed on 16th December, 1997. He also referred to Voluntary Disclosure Scheme of 1997 which he had availed of as disclosed in the affidavit dated 9 th January, 1998. The wife of the ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:10 ::: ppn 56 coapp-12.14(j).doc appellant had filed an affidavit admitting that the jewelleries were purchased by her. She had also availed of Voluntary Disclosure Scheme. The son of the appellant had also declared purchase of vehicles in Voluntary Disclosure Scheme and had filed the income tax returns which documents were not disputed by the appellant.
112. Learned counsel also invited my attention to the submissions made by Mr.Subhash Chander Gupta in Company Appeal No.14 of 2014 which averments are admittedly confirmed by the appellant. She also invited my attention to a letter addressed by the appellant to the Bank of Baroda annexed at page no.1434 showing five signatures of the appellant on the said letter, which do not match with each other. She also invited my attention to a letter dated 30th March, 2013 from the Unit Trust of India to the Economic Offence Wings showing that the appellant was issued two separate pan cards with two different signatures. She submits that till sur-rejoinder was filed by the respondent nos.1 to 5 before the Company Law Board, the appellant did not file any application for forensic examination though similar documents were already on record in one or other proceedings, to which the appellant was a party before the Company Law Board. The appellant had full knowledge of these documents all though out but waited for twenty years. She submits that the findings recorded by the Company Law Board in the impugned order are not perverse and thus cannot be interfered with by this Court. No question of law arises in this appeal filed by the appellant.
113. Ms.Singhania, learned counsel for the appellant submits that the Delhi High Court had granted specific liberty to the appellant to seek directions from the Company Law Board regarding forensic examination ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:10 ::: ppn 57 coapp-12.14(j).doc while disposing of the contempt petition filed by the appellant. She submits that the reasons which are not rendered by the Company Law Board cannot be supplanted by the respondent nos.1 to 5 while opposing the company appeal filed by the appellant.
REASONS AND CONCLUSIONS :-
114. There is no dispute that the appellant and the respondent no.2 are brothers. The respondent no.1 was acquired by five brothers of Gupta family including the appellant and the respondent no.2. It is the case of the appellant that when the respondent no.1 was acquired the shareholding of each brother was approximately 20% of the equity capital of the said company. It is the also the case of the appellant that in the year 1987, Mr.Nand Lal Gupta started increasing his shareholdings in the respondent no.1-company from time to time and diluting of the shareholding of the appellant. According to the appellant, such increase in the share capital of the respondent no.1 by the Nand Lal Gupta Group was made on several occasions.
115. On the other hand, it is the case of the respondent nos.1 to 5 that the equity share capital of the respondent no.1 was required to be increased from time to time due to various reasons such as, the respondent no.1 company was facing financial difficulty, for making repayment of loan installments, for meeting the salary payment to its employees, for making provision of adequate working capital, for meeting with the excise demand of over Rs.16 lakh, threat of penalty and for various other reasons to the knowledge of the appellant and the other shareholders. The appellant, however, neither raised any objection to ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:10 ::: ppn 58 coapp-12.14(j).doc increase the share capital nor agreed to buy any additional shares offered by the respondent no.1 to all the shareholders including the appellant. It is also the case of the respondent nos.1 to 5 that all such increased equity share capital of the respondent no.1 was duly reflected in the balance sheet of the respondent no.1 from time to time based on which the appellant and his family members had filed their personal income tax and wealth tax returns.
116. In so far as the submission of the learned counsel for the appellant that in the month of February 2006, Mr.Nand Lal Gupta came to India with his family members and met the other family members/ shareholders including the appellant and assured that the appellant would be given equal right in the respondent no.1 company but the said Mr.Nand Lal Gupta resiled from the said commitment and refused to give any information to M/s.Cameo Fabrics Ltd. is concerned, a perusal of the record prima facie indicates that no such grievance has been made by the appellant alleging such alleged assurances given by Mr. Nand Lal Gupta to the appellant. On the contrary, it is the case of the appellant that Mr.Nand Lal Gupta had assured the appellant that he would manage the respondent no.1-company properly and the appellant need not worry about the said company.
117. In support of the submission of the learned counsel for the respondent nos.1 to 5 that the appellant was fully aware of the assets, liabilities and increase in the equity share capital of the respondent no.1 since 1987, however, did not make any grievance as sought to be made for the first time in the company petition (70 of 2006) filed by the ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:10 ::: ppn 59 coapp-12.14(j).doc appellant on 8th August 2006 before the Company Law Board, New Delhi under Sections 397 and 398 of the Companies Act, 1956 alleging oppression and mismanagement and alleging increase of share capital and issued and paid up share capital of the respondent no.1, the respondent nos.1 to 5 filed their reply to the said company petition and placed reliance on the income tax and wealth tax returns of the appellant and the respondent nos.8, 9 and 10 for the assessment years 1986-87, 1989-90, 1992-93 and 1996-97 showing their respective shareholding in M/s.Cameo Fabrics Ltd. and valued the said shares as declared from year to year in the balance sheet of the respondent no.1. The respondent no.1 was the Executive Director in M/s.Sabina Woollen Mills Pvt. Ltd.
118. In so far as the company application made by the appellant (471 of 2012) in Company Petition No.70 of 2006 filed by the appellant inter alia praying for forensic examination of various documents to determine whether those documents were forged and/or bear forged signatures and for other reliefs is concerned, it is not in dispute that the final arguments in the Company Petition No.70 of 2006 had taken place between 25th July, 2011 to 28th July, 2011, on 18th August 2011, 6th September 2011, 7th September 2011, 20th October 2011, 29th October 2011, 28th November 2011 and concluded their arguments on 27th January 2012. The respondent nos.1 to 5 also commenced their arguments and had substantially completed. On 16th August 2007, the appellant filed the Company Application No.427 of 2007 seeking impleadment of Tara Industries Ltd. to the Company Petition No.70 of 2006 and insisted that the said application be heard and decided first.
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119. On 9th September, 2012, after the arguments of the appellant and his wife were already concluded and the arguments of the respondent nos.1 to 5 were substantially completed, the appellant filed the said Company Application No.427 of 2007 alleging that the annexures to the counter affidavit, sur-rejoinder and additional affidavit dated 24th November 2011 were forged and be sent for forensic examination. The last affidavit i.e. affidavit in sur-rejoinder was filed by the respondent nos.1 to 5 on 10th March 2007 whereas the Company Application No.471 of 2012 was filed by the appellant after five and half years i.e. on 9 th September 2012. The documents which were annexed to the sur-rejoinder were already filed by the respondent nos.1 to 5 in Company Petition No.21/ND/2010 which was filed by Mr.Subhash Chander Gupta and another against M/s.Sabina Woollen Mills Pvt. Ltd. to which the appellant was impleaded as party-respondent no.6 and was fully aware of those documents.
120. A perusal of the averments made in the Company Petition No.70 of 2006 filed by the appellant insofar as the allegations of fraud, forgery and coercion made by the appellant are concerned, it clearly indicates that such averments are totally vague and without any particulars. Based on such averments of fraud, forgery and coercion made in the company petition, the appellant filed the company application (471 of 2012) inter alia praying for forensic examination of various documents referred to and relied upon by the respondent nos. 1 to 5. In my view the court cannot refer the documents for forensic examination based on vague pleadings bereft of any particulars. Supreme Court in case of Vishnu Deo Narayan (supra) and in case of Santi Budhiya Westa Patil & Ors. (supra) and in case of Sangramsingh P. Gaikwad & Ors. (supra) ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:10 ::: ppn 61 coapp-12.14(j).doc has dealt with this issue and has held that the allegations of fraud, forgery and coercion are required to be pleaded with all necessary particulars to establish such allegations.
121. In my view since the allegations of fraud, forgery and coercion made by the appellant in the company petition as well as in the company application were totally vague and without particulars, the Company Law Board was right in dismissing the company application filed by the appellant inter alia praying for referring the documents for forensic examination to determine whether those documents were fraud, bear forged signatures and for other views. In my view principles of law laid down by the Supreme Court in the aforesaid three judgments are applicable to the facts of this case. I am respectfully bound by the principles laid down by the Supreme Court in those judgments.
122. A perusal of the record indicates that the appellant herein had already filed an application for intervention in the company petition filed by Mr.Prem Kumar Gupta against Tara Industries Ltd.. It is not in dispute that the said application for intervention made by the appellant in the said company petition was dismissed by the Company Law Board. The company appeal filed by the appellant impugning the said order passed by the Company Law Board was dismissed by this court. The Special Leave Petition filed by the appellant impugning the order passed by this court came to be dismissed by the Supreme Court.
123. Though the said Tara Industries Ltd. was not at all concerned, the appellant filed the company application in the year 2007 ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:10 ::: ppn 62 coapp-12.14(j).doc in Company Petition No.70 of 2006 inter alia praying for impleadment of the said Tara Industries Ltd. as a party respondent in the year 2007, did not pursue that application till the arguments of the appellant and his wife were concluded and the arguments of the contesting respondents were substantially concluded in Company Petition No.70 of 2006. At that stage, the appellant appears to have deliberately insisted the Company Law Board to hear the said company application filed by the appellant for impleadment of the Tara Industries Ltd. in Company Petition No. 70 of 2006 which was unwarranted with a view to delay the outcome of the company petition filed by him before the Company Law Board and that also at the belated stage after about above five years.
124. A perusal of the record further indicates that the respondent nos.1 to 5 had referred to and relied upon various statutory returns and minutes of the meeting of the board of directors of the respondent no.1 in the affidavit in reply. The appellant had all the details and particulars of various decisions taken by the board of directors of the respondent no.1 from time to time including the decision for increase in the share capital of the respondent no.1. The respondent nos. 1 to 5 however annexed some of those documents along with sur-rejoinder. The appellant had not disputed similar documents which were already relied upon by the respondent no.1 herein in the proceedings filed by Mr.Subhash Chander Gupta and others to which the appellant was party respondent much earlier.
125. It is not in dispute that admittedly the appellant had already taken inspection of the records of the Registrar of Companies relating to ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:10 ::: ppn 63 coapp-12.14(j).doc the record filed by the respondent no.1 sometime on 14th June, 2006. The appellant never raised any dispute about his signatures on those documents for last several years. The appellant has not disputed that the market value of the shares mentioned in the financial documents of the respondent no.1 had been considered by the appellant in the wealth tax returns filed by the appellant and his family members in the returns filed in the year 1991-1992 onwards. The appellant and his son are advocates and were fully aware of their rights, duties and obligations.
126. This Court cannot accept that for a period of about 20 years, the appellant was totally kept in dark about various decisions taken by the respondent nos.1 to 5 in respect of the respondent no.1 company including increase in equity shares of the respondent no.1, the offer of the additional shares to the existing shareholders and various statutory returns including income tax and wealth tax returns filed by the respondent no.1 all these years. It is clear that based on the returns filed by the respondent no.1 for last several years, the appellant and his family members had filed their personal wealth tax and income tax returns. Unless the appellant had access to such income tax returns and other financial documents on record of respondent no.1 company, the appellant could not have filed their personal wealth tax and income tax returns for all these years. It is not the case of the appellant that the appellant and his other family members had filed any other wealth tax and income tax returns returns other than those returns, copies whereof were produced by the respondent nos.1 to 5 before the Company Law Board.
127. A perusal of those personal returns of the appellant produced by the respondent nos. 1 to 5 which are now disputed by the appellant ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:10 ::: ppn 64 coapp-12.14(j).doc indicates that various payments of taxes were made under those returns by the appellant and his family members. It is not the case of the appellant that the payment of taxes were also fraudulently made by the respondent no.1 or by Mr.Nand Lal Gupta group. Those payments were made by cheques. The appellant could not produce any income tax or wealth tax returns filed by the appellant before this court in support of his allegation of fraud, forgery and fabrication or in support of his case that those returns were filed by Mr.Nand Lal Gupta on behalf of the appellant fraudulently and without his consent. The appellant was also represented by chartered accountants before the assessing officer in respect of those returns as is apparent from some of the assessment orders produced on record.
128. In my view the appellant and his son being advocates, would not have kept quiet for 20 years and would not have permitted Mr.Nand Lal Gupta group to file any statutory returns on behalf of the appellant and that also by forging his signature on those returns and that also without knowledge of the appellant and his family members. If the appellant would have produced some other wealth tax and income tax returns in respect of those assessment years which the appellant would have filed separately, the allegation of fabrication and forgery made by the appellant would have some bearing subject to further scrutiny by the Company Law Board or by this court. In my view, the allegations of fraud, forgery and fabrication thus made by the appellant were prima facie after thought, has no basis and were made with a view to delay the company petition filed by the appellant and that also when the matter was substantially argued and was at the verge of conclusion of arguments.
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129. A perusal of the record further indicates that the appellant had already obtained ex-parte interim injunction against the respondent no.1 from the Company Law Board which was affecting the rights of the respondent no.1. The matter was grossly delayed due to filing of the one or the other application by the appellant and due to pressing of frivolous application for impleadment of Tara Industries Ltd. when the matter was at the advance stage of arguments. In view of such gross delay on the part of the appellant, the ex-parte interim order passed by the Company Law Board against the respondent no.1 continued to be in force. The respondent no.1 had accordingly filed an application for vacating the said interim order passed by the Company Law Board. A perusal of the record produced before this court which was forming record before the Company Law Board makes it clear that the appellant deliberately delayed the matter before the Company Law Board with a view to continue to enjoy the ex-parte interim order passed by the Company Law Board against the respondent no.1.
130. The appellant had himself relied upon the financial report and the financial report of the company beginning from 1992-93 until 2004. I am inclined to accept the submission of the learned senior counsel for the respondent nos.1 to 5 that the documents annexed by the respondents clearly reflected the extent of the information available with the appellant about the respondent no.1.
131. A perusal of the record further indicates that the respondent nos. 1 to 5 had produced similar tax returns filed by the other respondents evidencing the same available towards their respective shareholding in ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:10 ::: ppn 66 coapp-12.14(j).doc the respondent no.1 which had not been challenged by any of the respondents as forged or fabricated or otherwise. The respondents have produced a copy of the application which was filed by the appellant for making the change in the form submitted for getting his pan card. The appellant had made an application again in the year 2012 to change the pan card with a different signature. It is not the case of the appellant that Mr.Nand Lal Gupta had forged his signature on the different applications for pan card made by him.
132. One of the document placed on record i.e. the letter addressed by him to the Bank of Baroda annexed at page 1434 of the compilation shows five signatures of the appellant which are different from each other. It is not the case of the appellant that the said application containing five signatures were forged and fabricated by Mr.Nand Lal Gupta. I am therefore of the prima facie view that the signatures of the appellant on various admitted documents signed by him were not matching with each other. In these circumstances, the application filed by the appellant for forensic examination of some of the documents belatedly made was rightly not entertained by the Company Law Board for the reasons recorded in the impugned order. I do not find any perversity in the findings rendered by the Company Law Board in the impugned order and thus no interference with the impugned order is warranted in this appeal filed under section 10F of the Companies Act, 1956. No question of law arises in this appeal.
133. A perusal of the record indicates that it is not the case of the appellant that no records of the respondent no.1 exist or that no returns ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:10 ::: ppn 67 coapp-12.14(j).doc were filed by the appellant at all. The appellant himself had given the details of the fixed deposits from March 1992 till March 2005 which information was not on the website of the Registrar of Companies for all these years. In my view, the learned senior counsel for the respondent nos.1 to 5 is right in her submission that unless the appellant had each of such documents available with him, he could not have given such details of the fixed deposits from March 1992 till March 2005. Admittedly the appellant has not raised any objection about the authenticity of the statutory records of which the inspection was taken by the appellant from the Office of the Registrar of Companies. A perusal of the documents annexed in Company Appeal No.14 of 2014 also indicates that even according to the appellant, the income tax returns of the appellant were compiled in Ludhiana and were filed in Mumbai. The appellant himself had admitted in his affidavit that the tax returns were filed by him as Karta of HUF in the affidavit filed on 16th December, 1997.
134. It is not in dispute that the petitioner, his wife and son had availed of the benefits of Voluntary Disclosure Scheme introduced by the Central Government in the year 1997 by filing an affidavit of disclosure dated 9th January, 1998. Those documents would clearly indicates that the appellant and his family members had various information forming part of the financial documents and returns filed by the respondent no.1. The appellant was thus fully aware of the earlier returns filed by the appellant under the Income Tax Act, 1961 and also Wealth Tax Act.
135. A perusal of the record further indicates that the Unit Trust of India had written a letter dated 30th March,2013 to Economic Offence ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:10 ::: ppn 68 coapp-12.14(j).doc Wing showing that the appellant was issued two separate pan cards with two different signatures. In my view in these circumstances, the appellant could not have waited for more than 20 years to raise an issue of fraud, forgery and fabrication when the arguments in the company petition filed by him were at the verge of completion.
136. A perusal of the record indicates that by a letter dated 4th January, 1994 addressed by Sabina Woollen Mills Pvt. Ltd., to advocate of Bank of Baroda which was signed by the appellant alleging forgery by one of the directors as far back as on 4th January, 1994. The appellant however never proceeded with such allegation of fraud, forgery and fabrication.
137. In so far as the submission of the learned counsel for the appellant that the respondent no.1 is the closely held family run company in the nature of a quasi partnership is concerned, such contention can be raised before the National Company Law Tribunal and can be considered at the stage of final hearing of the company petition.
138. In so far as the submission of the learned counsel for the appellant that the respondent no.1 came under exclusive management of Mr.Nand Lal Gupta based on the mutual understanding between the brothers that he would manage the respondent no.1 for the benefit of all the brothers/shareholders is concerned, in my view, the appellant had not made out a case about alleged breach of such alleged understanding between Mr.Nand Lal Gupta and the appellant. Be that as it may, such alleged breach is not relevant for the purpose of deciding the issue ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:10 ::: ppn 69 coapp-12.14(j).doc whether certain documents were required to be referred for forensic examination.
139. In so far as the submission of the learned counsel for the appellant that no notices of any meeting were sent to the appellant and no notices of the directors' meeting were dispatched to the appellant for last several years is concerned, a perusal of the record indicates that no such grievance was ever made by the appellant in last 20 years. Be that as it may, the National Company Law Tribunal can decide this issue. Similarly, the appellant did not make any grievance against Nand Lal Gupta Group that the appellant had no control over the company or that the records of the company were never shown to him. Be that as it may, that cannot be a ground for referring the documents for forensic examination at such belated stage.
140. The appellant has already taken inspection of statutory records of the company on 14th June 2006 from the Registrar of Companies admittedly. Though it is the case of the appellant himself that the Nand Lal Gupta group (the respondent nos.2 to 5) had completely changed the shareholding pattern by raising their shareholding and there were reducing shareholdings of the appellant in the respondent no.1 in the year 2006 when the inspection of the records of the company was taken by the appellant from the Registrar of Companies, no application for referring the documents for forensic examination was made till 2012. The appellant had already disputed the signature of the appellant on the purported tax returns in the affidavit in rejoinder filed by the appellant in the year 2007 itself and thus the application for referring the documents for forensic examination made in the year 2012 was ex facie ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:10 ::: ppn 70 coapp-12.14(j).doc after thought and with a view to delay the outcome of the Company Petition No.70 of 2006 filed by the appellant. Even according to the appellant, Nand Lal Gupta Group had already produced the statutory records of the company on 31st January 2007 pursuant to the order dated 8th August 2006 passed by the Company Law Board, the application thus filed by the appellant for referring the documents for forensic examination was made in the year 2012 belatedly.
141. In so far as the reliance placed on the judgment of the Delhi High Court passed on 26th February 2009 in the contempt petition filed by the appellant granting liberty to the appellant to urge before the Company Law Board that the Nand Lal Gupta Group had used five months time to forge and fabricate the documents is concerned, it is not in dispute that much prior to the order passed by the Delhi High Court, the appellant had already taken inspection of the statutory records of the respondent no.1 from the Registrar of Companies on 14th June 2006. Be that as it may, by the said order passed by the Delhi High Court, it was made clear that if any such application would be made by the appellant, the same shall be decided by the Company Law Board in accordance with law. Though the said order was passed by the Delhi High Court on 26th February 2009, the appellant proceeded with the arguments before the Company Law Board without making any such application pursuant to the liberty granted by the Delhi High Court and chose to make such application much after the arguments were concluded and the arguments of the respondent nos.1 to 5 were substantially completed. The appellant thus cannot explain the gross delay in making the application for referring the documents for forensic examination. In my view, the judgment of the ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:10 ::: ppn 71 coapp-12.14(j).doc Delhi High Court in the case of A.P. Jain Vs.Faridabad Metal Udyog (supra) would not assist the case of the appellant.
142. In so far as the submission of the leaned counsel for the appellant that the minutes of meeting of the Board of Directors of the respondent no.1 from the year 1986 upto 2004 were annexed by the respondent nos.1 to 5 for the first time in the sur-rejoinder dated 12 th March 2007 is concerned, if according to the appellant, he had never participated in the management of the respondent no.1, the respondent nos.1 to 5 cannot be blamed for the same. In my view, since the application for referring the documents for forensic examination was filed in the year 2012 after more than five and half years and it was sufficient for the Company Law Board to dismiss the said company application made by the appellant for referring such documents for forensic examination.
143. In so far as the reliance placed on the order dated 24 th June 2012 passed by Shri Justice S.J.Kathawalla referring some of the documents to handwriting expert is concerned, the said order was passed by this Court ex parte in another company petition bearing no.14 of 2014. There was no prayer for referring the documents for forensic examination made by the appellant in that case either before the Company Law Board in the company petition or in the company application filed therein. The said order passed by this Court in the Company Appeal No.14 of 2014 thus would be of no assistance to the appellant in this case. Be that as it may, it is a common ground that the report of the said handwriting expert was not final, conclusive and binding on any of the parties. In my view, ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:10 ::: ppn 72 coapp-12.14(j).doc in view of gross delay on the part of the appellant in this case, the appellant cannot place reliance on the said ex parte order passed by this Court in Company Petition No.21(ND) of 2010 in case of Sabina Woollen Mills Private Limited.
144. A perusal of the record indicates that it is the case of the appellant before this Court that the appellant being the brother of Mr.Nand Lal Gupta had entrusted the entire filing of the documents including taxation to his brother Mr.Nand Lal Gupta and since the filing were at Mumbai, the documents were sent to Mumbai and dealt with at Mumbai. The appellant having taken such stand cannot raise a plea of forgery or fabrication against the Nand Lal Gupta Group.
145. In so far as the objection to the closure report relied upon by the respondent nos.1 to 5 is concerned, it is not in dispute that the said closure report has been challenged by the appellant by way of Protest Petition No.678/MISC/2014 before the Magistrate Court at Esplanade, Mumbai. However, no order has been passed by the learned Magistrate in the said petition. The learned counsel for the appellant has rightly placed reliance on the judgment of this court in case of HSBC PI Holdings (Mauritius) Limited (supra) in support of her submission that since the opinion of the Economic Offence Wing had not been accepted by the learned Magistrate at that stage, this Court could not consider the correctness of the report submitted by the Economic Offence Wing at that stage. Be that as it may, both the parties have been relying on the separate forensic report or closure report. This Court need not go into the validity and correctness of these reports in this appeal at this stage in view of this Court having held that the application of the appellant for ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:10 ::: ppn 73 coapp-12.14(j).doc referring the documents for forensic examination was misconceived and grossly belated.
146. In so far as the grievance of the appellant that the Company Law Board had made various observations on merits of the matter in the impugned order is concerned, it is made clear that the observations, if any, made by the Company Law Board in the impugned order on merits of the Company Petition No.70 of 2006 is concerned, the same are prima facie in nature. The National Company Law Tribunal shall decide the matter on its own merits without being influenced by the observations made by the Company Law Board in the impugned order in so far as observation, if any, on the merits of the matter is concerned.
147. A perusal of the record indicates that the appellant had filed a Company Application No.429 of 2007 on 29th September 2007, inter- alia praying that the sur-rejoinder filed by the respondent nos.1 to 5 be rejected on the ground that new documents cannot be permitted to be filed, after more than five years from filing of the said documents. The appellant, however, did not pursue the said company application in the year 2007 and belatedly chose to file an application in the year 2012 to refer some of the documents annexed to the sur-rejoinder for forensic examination.
148. A perusal of the averments made in paragraph 6.94 of the company petition filed by the appellant clearly indicates that the appellant has admitted that he had inspected Form-II available with the Registrar of Companies. It is the case of the appellant that the appellant came to know about the alleged fabrication and fraud committed by the ::: Uploaded on - 12/07/2017 ::: Downloaded on - 13/07/2017 00:53:10 ::: ppn 74 coapp-12.14(j).doc respondent nos.1 to 5 only after inspection of the records of the company from the Registrar of Companies was taken. It is thus clear that the application filed by the appellant for referring some of the documents for forensic examination in the year 2012 was after though and was filed with an intention to delay the outcome of the Company Petition No.70 of 2006 filed by the appellant. In my view, for the reasons recorded aforesaid, there is no infirmity with the impugned order passed by the Company Law Board. Appeal is devoid of merit.
149. I therefore pass the following order :-
(i) Company Appeal No.12 of 2014 is dismissed.
(ii) Hearing of the Company Petition No.70 of 2006 is expedited.
(iii) The National Company Law Tribunal, Delhi shall make an endeavour to dispose of the Company Petition No.70 of 2006 within six months from the date of communication of this order by the parties.
(iv) The National Company Law Tribunal shall also dispose of all pending company applications filed by the parties before disposing of the said company petition.
(v) Parties are directed to co-operate with each other and with the National Company Law Tribunal in disposing of the said company petition and all interlocutory proceedings pending if any therein.
(vi) The National Company Law Tribunal shall not grant any unnecessary adjournment to any of the parties.
(vii) There shall be no order as to costs.
R.D. DHANUKA, J.
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150. At the request of the learned counsel for the appellant, interim protection granted by this Court in this appeal to continue for a period of four weeks from today. If any special leave petition is filed, a copy thereof along with notice shall be served upon the respondents in advance.
R.D. DHANUKA, J.
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