Bombay High Court
Poonam Sandeepkumar Saraf vs Jagdish Bhagwandas Ahuja And Others on 24 June, 2022
Author: G.S. Kulkarni
Bench: G.S. Kulkarni
Digitally
signed by
PRAJAKTA
PRAJAKTA SAGAR
SAGAR VARTAK
VARTAK Date:
2022.07.05 1 902-inpt 32-19 grp
20:30:30
+0530
Prajakta Vartak
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
INSOLVENCY PETITION NO. 32 OF 2019
Poonam Sandeepkumar Saraf ..Petitioning Creditor
Vs.
Jagdish Bhagwandas Ahuja & Ors. ..Debtors/Insolvents
AND
INSOLVENCY PETITION NO. 33 OF 2019
Sandeepkumar Vinod Saraf (HUF) ..Petitioning Creditor
Vs.
Jagdish Bhagwandas Ahuja & Ors. ..Debtors/Insolvents
AND
INSOLVENCY PETITION NO. 34 OF 2019
Sharad Narayan Adurkar ..Petitioning Creditor
Vs.
Jagdish Bhagwandas Ahuja & Ors. ..Debtors/Insolvents
AND
INSOLVENCY PETITION NO. 35 OF 2019
Pranav Sharad Adurkar ..Petitioning Creditor
Vs.
Jagdish Bhagwandas Ahuja & Ors. ..Debtors/Insolvents
AND
INSOLVENCY PETITION NO. 36 OF 2019
Sharad Narayan Adurkar ..Petitioning Creditor
Vs.
Jagdish Bhagwandas Ahuja & Ors. ..Debtors/Insolvents
AND
INSOLVENCY PETITION NO. 38 OF 2019
WITH
NOTICE OF MOTION (L.) NO.15625 OF 2022
Asiatic Gases Limited ..Petitioning Creditor
Vs.
M/s. Ahuja Properties & Associates & Ors. ..Debtors/Insolvents
2 902-inpt 32-19 grp
AND
INSOLVENCY PETITION NO. 4 OF 2020
Sandeepkumar Vinodkumar Saraf ..Petitioning Creditor
Vs.
Jagdish Bhagwandas Ahuja & Ors. ..Debtors/Insolvents
AND
INSOLVENCY PETITION NO. 5 OF 2020
Nirmaladevi Vinodkumar Saraf ..Petitioning Creditor
Vs.
Jagdish Bhagwandas Ahuja & Ors. ..Debtors/Insolvents
AND
INSOLVENCY PETITION NO. 6 OF 2020
Kanta Harish Aswani ..Petitioning Creditor
Vs.
Ahuja Properties and Developers & Ors. ..Debtors/Insolvents
AND
INSOLVENCY PETITION NO. 7 OF 2020
Ashok Gobindram Aswani ..Petitioning Creditor
Vs.
Ahuja Properties & Ors. ..Debtors/Insolvents
AND
INSOLVENCY PETITION NO. 1 OF 2021
Deepenkarkumar Jitendra Ghosh ..Petitioning Creditor
Vs.
Ahuja Properties & Associates & Ors. ..Debtors/Insolvents
-----
Ms. Preeti Gada for Judgment Creditor in INPT 32/19, 33/19, 34/19,
35/19, 36/19, 4/20 and 5/20.
Mr. P. B. Kapadia for Supporting Creditors in INPT 32/19.
Mr. Mukul Taly with Ms. Sayali Gharpure i/b. S. Mahomedbhai & Co. for
Petitioner/Judgment Creditor in INPT 38/19.
Mr. Bhavin Gada for Applicant in INPT 6/20, 7/20 and 1/21.
Mr. Rajesh Shah with Mr. Rohit i/b. Legal Juris for Judgment Creditor in
NMISL 20090/21 in INOT 8/21.
Mr. Girish Kedia for Applicant in NMISL 25591/21 in INOT 10/21,
NMISL 7118/22, 7119/22, 7120/22, 7121/22, 7122/22, 7123/22 and
7303/22.
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Mr. Naved Chawdhary for Respondent in all matters.
Mrs. Kanchan Rane, OA, Mr. D.R. Talekar I/C Insolvency Registrar, Mr.
Subodh Patil, 1st Asstt. to O.A. present.
-----
CORAM : G.S. KULKARNI, J.
DATE : JUNE 24, 2022.
P.C.:
1. This is a batch of insolvency petitions filed by the petitioning
creditors against the judgment debtors who are common in all the
proceedings. The facts in all these proceedings are more or less similar,
except for the amounts of the different decrees, which have been passed
in the summary suits filed by the petitioning creditors against the
judgment debtors.
2. Briefly the facts are :- The judgment debtors are respondent Nos.1
and 2 who are partners of M/s. Ahuja Properties and Developers
(respondent No.3) who is also arrayed as a judgment debtor. The
judgment debtors are stated to be engaged in the business of real estate.
It is the common contention on behalf of the petitioning creditors that
the judgment debtors had received huge amounts from the petitioning
creditors as loans, which were to be utilised in the real estate business of
the judgment debtors and repaid to the petitioning creditors with
interest. The judgment debtors defaulted in making repayment of the
amounts to the petitioning creditors, much less the interest on such
amounts. Consequently, in all these proceedings, the petitioning
creditors had filed summary suits under the provisions of Order 37 Rule
2 of the Code of Civil Procedure. The summary suits instituted by all the
petitioning creditors came to be decreed in terms of the consent terms as
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entered between the parties. The following statement would indicate
the details of the present petitions, the date of the decree and the
decretal amounts.:-
"
Sr. Insolvency Petition Suit No. and the date of Decretal Amount
No. the Decree
1. INPT 36/2019 Commercial Summary Rs. 1, 51,28,225/-
Jagdish Bhagwandas Ahuja Suit No. 185 of 2018
Gautam Jagdish Ahuja (High Court of Bombay)
M/s. Ahuja Properties and Associates Consent Decree dated 3
(For Short: Judgment Debtors) September 2018
V
Sharad Narayan Adulkar
2. INPT 34/2019 Commercial Summary
Judgment Debtors Suit No. 186 of 2018 Rs. 1,35,61,429/-
V (High Court of Bombay)
Sharad Narayan Adulkar Consent Decree dated 3
September 2018
3. INPT 35/2019 Commercial Summary
Judgment Debtors Suit No. 139 of 2018
V (High Court of Bombay)
Pranav Sharad Adulkar Consent Decree dated 3
September 2018
4. INPT 5/2020 Commercial Summary
Judgment Debtors Suit No. 906 of 2017 Rs.1,09,86,660/-
V (City Civil Court,
Nirmala Devi Vinodkumar Saraf Dindoshi)
Consent Decree dated 21
August 2018
5. INPT 4/2020 Commercial Summary
Judgment Debtors Suit No. 907 of 2017 Rs. 1,04,13,754/-
V (City Civil Court,
Sandeepkumar Vinodkumar Saraf Dindoshi)
Consent Decree dated 21
August 2018
6. INPT 33/2019 Commercial Summary
Judgment Debtors Suit No. 914 of 2017 Rs. 37,23,880/-
V (City Civil Court,
Sandeepkumar Vinodkumar Saraf HUF Dindoshi)
Consent Decree dated 21
August 2018
7. INPT 32/2019 Commercial Summary
Judgment Debtors Suit No. 913 of 2017 Rs. 75,12,527/-
V (City Civil Court,
Poonam Sandeepkumar Saraf Dindoshi)
Consent Decree dated 21
August 2018
8. INPT 38/2019 Commercial Summary
Judgment Debtors Suit No. 437 of 2018 Rs. 4,72,00,000/-
V (High Court of Bombay)
Asiatic Gases Ltd. Consent Decree dated 25
September 2018
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9. INPT 6/2020 Commercial Summary
Judgment Debtors Suit No. 487 of 2018 Rs. 21,21,419/-
V City Civil Court,
Kanta Harish Aswani Dindoshi)
Consent Decree dated 6
September 2018
10. INPT 1/2021 Commercial Summary
Judgment Debtors Suit No. 489 of 2018 Rs.14,19,085/-
V City Civil Court,
Deepankerkumar Jitendra Ghosh Dindoshi)
Consent Decree dated 6
September 2018
11. INPT 07/2020 Commercial Summary
Judgment Debtors Suit No. 488 of 2018 Rs. 14,19,081/-
V (City Civil Court,
Ashok Gobindram Aswani Dindoshi)
Consent Decree dated 6
September 2018
Total Amount Rs. 10,55,44,277/-
3. There is no dispute whatsoever that the above decrees subject
matter of the debts due and payable by the judgment debtors to the
judgment creditors have attained finality, as there are no subsequent
proceedings adopted by the judgment debtors, after such consent
decrees are passed. It is contended by the learned counsel for the
petitioning creditors that in pursuance of the consent decrees, the
judgment debtors purported to issue cheques to some of the petitioning
creditors which came to be dishonoured.
4. As the facts in all these proceedings are common (except for the
amounts) illustratively it would be appropriate to refer the facts in the
lead matter i.e. Insolvency Petition No.32 of 2019. The consent decree is
dated 21 August, 2018. There was a default on the part of the
judgment debtors in honouring the decree, despite being called upon to
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make payments under the decree. The petitioning creditors, hence,
issued an insolvency notice to the judgment debtors on 09 September,
2019 within the statutory period as permissible. However, although such
notice was received, the judgment debtors failed to pay the decretal
amount.
5. In such circumstances, on 23 October, 2019, the present
insolvency petition came to be filed. The petition was served on the
judgment debtors on 29 November, 2019. On 17 December, 2019, this
Court (S.C.Gupte J.) passed the following order:-
". This petition has been filed on the basis of a decree
passed on 20 December 2017 and an insolvency notice issued
in pursuance thereof. The petition has been duly served on the
Judgment Debtors. Learned Counsel appearing for the
Judgment Debtors seeks time to file a reply. Reply, if any, to be
filed within four weeks. Stand over to 21 January 2020. To be
placed on the next date along with Insolvency Petition Nos.33,
34, 35 and 36 of 2019."
6. At such hearing, the judgment debtors were represented by Ms.
Archana Tiwari i/b. Ms. Sabita Bhowmik. The learned counsel for the
petitioning creditors have stated that the date of decree as mentioned in
the said order as 20 December, 2017 is an inadvertent error and the
decree is dated 21 August, 2018 as annexed to the petition at Exhibit "A"
as rightly pointed out by learned counsel for the petitioning creditors.
7. Thereafter the proceedings appeared before this Court (S. C.
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Gupte, as his Lordship then was) on 04 February, 2020, when, at the
request of learned counsel for the judgment debtors, the proceedings
were adjourned to 18 February, 2020 with a direction that no further
accommodation would be given to the judgment debtors, on the
adjourned date of hearing, granting an opportunity to the judgment
debtors to file a reply. The said order reads thus:-
". At the request of learned Counsel for the Judgment
Debtors, stand over to 18 February 2020. It is made clear
that no further accommodation will be given to the
Judgment Debtors on the next date. In case Judgment
Debtors propose to file any reply, a copy must be served on
the Petitioning Creditor latest by 14 February 2020."
8. In the intervening period, the proceedings were sought to be
moved by the petitioning creditors before this Court on praecipe/
applications at which point of time, the judgment debtors were
represented. On every such occasion, the judgment debtors purported
to take a position that they intended to settle all the decrees by making
payments to the petitioning creditors. However, all such assurances
were empty assurances. On 17 June, 2022, to ascertain as to whether
there was a real intention on the part of the judgment debtors to honour
the decrees and make payments, the Court directed the judgment
debtors to remain present before the Court. However, consistently the
judgment debtors have failed to remain present before the Court, albeit
showing utter disregard to the orders passed by this Court. This more
particularly as it is a case of not one of the petitioning creditors, but of
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all of the petitioning creditors who are before the Court to contend that
the decrees passed in their respective suits are being rendered paper
decrees, by such conduct of the judgment debtors. It is a common
contention that in fact, this is a case of a serious financial fraud being
practiced by the judgment debtors on the petitioning creditors not only
in all these cases, but concerning several others who had lent money to
the judgment debtors, which in fact, requires a serious action to be
taken even under the criminal law. However, such is not the concern and
jurisdiction of this Court in the present proceedings.
9. Reply affidavits are placed on record by the judgment debtors.
Learned counsel for the petitioning creditors submit that the theme of
the reply affidavit and the contents thereof in all the proceedings is
identical. Thus a reference to the reply affidavit (dt. 24 February 2020)
in Insolvency Petition No. 32 of 2019 can be made.
10. The reply affidavit admits that the amounts were received by the
judgment debtors from the petitioning creditors. It is also admitted that
the judgment debtors are not in a position to repay such amounts
including the interest on such amounts. It is stated that the judgment
debtors had all intention to pay the judgment creditors. It is stated that
the judgment debtors had approached various investors to invest in their
business and in pursuance thereto in October 2017, the judgment
9 902-inpt 32-19 grp
debtors began their negotiations with a Chinese group "Fosun Hive" for
investment in their business. That Fosun Hive had agreed to invest in
the business of other entities of the judgment debtors. It is stated that
the judgment debtors were of the view/belief that the investment
transaction would have materialized prior to December, 2018 and
accordingly, had executed the consent terms. However, such transaction
with the foreign entity could not materialize although the documents
were executed to that effect in May, 2019 and some amounts were
received under the said transaction from Fosun Hive in September, 2019.
It is stated that the amount is to be received from Fosun Hive and after
receipt of such amount which is stated to be an amount of Rs.100
Crores, the debts due and payable to the petitioning creditors and other
unsecured creditors would be settled. It is also stated that an advance
was demanded by the judgment debtors from Fosun Hive and a part
advance of Rs.30 Crores was received, however, the judgment debtors
could not pay the petitioning creditors in the manner as agreed in the
consent terms. It is stated that so far an amount of Rs.60 Crores was
paid to some of the unsecured creditors. It is stated that in these
circumstances, the judgment debtors had demanded the petitioning
creditors to accept a revised schedule of payment, to which some of the
unsecured creditors had agreed, however, none of the petitioning
creditors have entered into any revised schedule of payment.
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11. It is thus seen from the reply affidavit that the reply
affidavit is not confined to the case of the petitioning creditors but some
other unsecured creditors. In paragraph 13 of such affidavit, the
judgment debtors have stated that the Court needs to grant an
opportunity to the judgment debtors to comply and pay the outstanding
payment in the manner as what is placed on record as per the revised
schedule for repayment.
12. It is contended by the petitioning creditors that although the
affidavit is filed on 24 February, 2020 and almost a period of more than
2 and ½ years has lapsed after filing of the said affidavit, it was proved
that the assurances which were made in the affidavit were absolutely
false and hollow and put up as a sham defence to the present
proceedings. Also it is a common contention on behalf of the petitioning
creditors that at all material times there was no intention whatsoever, on
the part of the judgment debtors to make payment and honour the
decrees.
13. It needs to be observed that this Court on 22 April, 2022 had
heard the learned counsel for the parties. It was then brought to the
notice of the Court that there was a likelihood that the judgment debtors
intend to leave the country and defeat not only the decrees, and the
present insolvency proceedings as also several other proceedings which
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are pending against the judgment debtors. Accordingly, this Court on 22
April, 2022 had passed an order recording the statement as made by
learned counsel for the judgment debtors that the judgment debtors
intend to settle all claims and that they shall not leave the country
without permission of the Court. Thereafter it appears that a notice of
motion was filed by the judgment debtors seeking permission of this
Court to travel abroad, however, no order was passed on the said notice
of motion.
14. It is informed by learned counsel for the judgment debtors that in
some criminal proceedings, the judgment debtors were arrested and
were subsequently released on bail and as on date, they are on bail. It is
contended that despite the judgment debtors being on bail, they have
not honoured the orders of this Court passed in the present proceedings
to remain present and show any of their bonafides, hence, a consistent
impression is that the judgment debtors intend to avoid making their
stand clear and are avoiding the orders passed by the Court.
15. Learned counsel for the judgment debtors was put to notice on the
earlier occasion that the Court would now take up the proceedings and
pass appropriate orders on these insolvency petitions. Reply affidavits
being filed as noted above, submissions are made by learned counsel for
the judgment debtors. His submissions are to the effect that the
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proceedings be adjourned to enable the learned counsel for the
judgment debtors to take proper instructions. It appears that except
what has been contended by the judgment debtors in the reply affidavit,
there is no other contention. Learned counsel for the respondents/
judgment debtors is not in a position to argue any plea which can weigh
with the Court not to proceed to pass the appropriate orders as the law
would require this court to pass on these proceedings. This more
particularly when the judgment debtors and their different advocates
who had appeared from time to time are aware that the petitioning
creditors for quite sometime are not agreeable for the proceedings to be
adjourned any further at the behest of the judgment debtor.
16. Ms. Gada and Mr. Taly have appeared for the petitioning creditors
and have made detailed submissions. Learned counsel for the petitioning
creditors have drawn the Court's attention to the various decrees which
are passed and the absolute failure on the part of the judgment debtors
to honour the decrees as also to respond to the insolvency notices. It is
their contention that it is crystal clear that the judgment debtors have no
means whatsoever to satisfy the decrees, hence, an order needs to be
passed in the present proceedings, adjudging the judgment debtors as
insolvents. It is their contention that enough opportunity was granted to
the judgment debtors to show their bonafides. It is also their contention
that as the proceedings are pending for almost more than three years
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and they ought not to be delayed any further as during the intervening
period, the judgment debtors are dealing with their assets to defeat the
decrees and orders which may be passed by this Court. Learned counsel
for the petitioning creditors would also contend that all the amounts due
and payable by the judgment debtors were received for commercial
ventures.
17. Having heard learned Counsel for the parties and having perused
the record of the present proceedings, it is apparent from the record that
the judgment debtors for a long period of time, as noted above, have
failed to make payments of the petitioning creditors of the legitimate
decretal amounts. They also did not reply to the insolvency notices. The
judgment debtors have also failed to comply and honour the insolvency
notices. A defence as put up by the judgment debtors in their reply
affidavit, in no manner whatsoever, is acceptable to be any defence in
the present proceedings. Only a paper assurance to clear the debt due
towards the petitioning creditors, is no good. It clearly appears that the
judgment debtors are unable to make payments of their debts to the
claimants-petitioning creditor. Thus, all essentials for the judgment
debtors to be declared as insolvent, is clearly made out.
18. It needs to be observed that Ms. Gada, learned counsel for the
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petitioning creditors has invited the Court's attention to an
advertisement which is found on the front page of "The Times of India"
dated 30 November, 2019 whereby despite the decrees, a new venture
appears to have been advertised by the judgment debtors along with
Fosun Hive. The said advertisement is taken on record and marked "X"
for identification. It is her contention that the project which is
advertised is of "Premium 2, 2.5 & 3 bed residences starting Rs. 1.55
Crores. It is her contention that such issuance of advertisement is also
suppressed from the reply affidavit which was filed.
19. Mr. Taly has also brought to the notice of the Court a reply
affidavit filed on behalf of the judgment debtors in the execution
proceedings as filed by one of the petitioning creditors (Asiatic Gases
Limited Vs. M/s. Ahuja Properties & Associates & Ors.) being
Commercial Execution Application (L.) No.11069 of 2021. The Court's
attention is drawn to a contention of the judgment debtors as contained
in the disclosure affidavit dated 15 September, 2021 wherein the
judgment debtors have stated as under:-
"4. I say that the Judgment Debtors are not in the
ownership and possession of any other moveable and
immoveable assets, jewellery, fixed deposits, units, bonds,
securities, bank accounts, mutual fund investments, other
than those mentioned in the Exhibits "A", "B", "C" and "D"
hereto.
5. I say that there are no receivables from FOSUN Group
by the Judgment Debtors. I say that there are no unsold
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flats, shops, unsold residential flats and shops, units owned
or belonging to the Judgment Debtors. I say that the
Judgment Debtors do not have any other rights (including
any leasehold, tenancy or possessory rights) to the
immoveable properties. I say that the Judgment Debtors are
not in the ownership and/or possession of any other assets
other than those mentioned in the Exhibits "A", "B", "C" and
"D" hereto."
20. It is Mr. Taly's contention that such fact has not been brought to
the notice of the Court in the present proceedings by way of any
subsequent affidavit. It is thus quite clear that the assurances as made
to this Court in the present proceedings on behalf of the judgment
debtors were brazenly false. The judgment debtors could not have
taken a contrary stand that amounts are likely to be received from the
investors and on such receipt, the debts would be settled in the light of
a categorical statement made on affidavit by the judgment debtors as
far back as on 15 September, 2021, before the executing Court that
there are no receivables from FOSUN Group by the Judgment Debtors.
It, therefore, clearly appears from the said stand taken by the judgment
debtors in the execution proceedings and the stand taken in the present
proceedings that there is a clear attempt on the part of the judgment
debtors to misguide the Court and in fact file false affidavit. In any
event there is no defence whatsoever on record which can be said to be
acceptable and persuade the Court not to pass any order in the present
proceedings.
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21. This is not a case of the judgment debtors who are illiterate; as
they are hard core business persons/entity, who are involved in large
scale business activity who have indulged in substantial borrowings and
who have defaulted on the repayment commitments to large number of
investors. This is alleged to be a larger fraud and a systematic modus
operandi by the petitioning creditors, be that as it may, the Court would
be required to confine itself to the proceedings in hand.
22. For the above reasons, I am certainly not satisfied on the defence
as raised on behalf of the judgment debtors which appears to be
untenable, and practically a moonshine. Thus, this is a fit case where an
order under Section 13(5) read with Section 10 is required to be passed
to hold the judgment debtors to be insolvents. Hence, the following
order:-
ORDER
i. The judgment debtors are adjudged to be insolvent. ii. The petitions are accordingly allowed in terms of prayer clause (a) which reads thus:-
"(a) As Order of adjudication may be made by this Hon'ble Court against the Debtors."
iii. The properties of the insolvents wherever situated shall vest in the Official Assignee and shall become divisible among the insolvent's creditors.
17 902-inpt 32-19 grp iv. The Official Assignee to take necessary steps to realize the assets of the insolvents as per law.
23. At this stage, it is informed by learned counsel for the petitioners that the order dated 22 April, 2022 whereby the insolvents have been directed not to leave the country, needs to be continued. The submission is required to be accepted.
24. The insolvents are directed not to leave the jurisdiction of this Court unless and until the claimants of all the petitioning creditors as also of any other creditors in respect of any claims as received by the Official Assignee are satisfied. The insolvents are directed to deposit their passports with the Official Assignee. The Official Assignee shall take further appropriate steps as per law.
25. Disposed of in the above terms. No costs.
[G.S. KULKARNI, J.]