Madras High Court
G.Kalaiselvan vs The Registrar Of Company on 9 November, 2022
Author: V.Bhavani Subbaroyan
Bench: V.Bhavani Subbaroyan
1
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
DATED 09.11.2022
CORAM
THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN
W.P(MD)No.5453 of 2022
G.Kalaiselvan ..Petitioner
Vs
1.The Registrar of Company,
Office of the Registrar of Companies,
Sasthiri Bhavan, Second Floor,
26, HA, TTOWS Road, City
Chennai.
2.M.S.Natesan,
Housing Private Limited,
(U 45201 TN 1996 PTC 034308),
Trichy.
3.V.P.Seetharaman ..Respondents.
Prayer: Writ Petition filed under Article 226 of the Constitution of India,
praying this Court to issue a Writ of Mandamus directing the first
respondent to dispose of the Petitioner's representation, dated 28.8.2020
after affording personal hearing opportunity within the time frame fixed
by this Court.
For Petitioner :Mr.K.Baalasundharam
For Respondent-1 :Ms.L.Victoria Gowri
Asst.Soliciter General of India
For Respondents :Mr.S.K.Mani
2 and 3
https://www.mhc.tn.gov.in/judis
2
ORDER
The Petitioner has filed this Writ Petition seeking issuance of a Writ of Mandamus directing the first respondent to dispose of the Petitioner's representation, dated 28.8.2020 after affording personal hearing opportunity, within the time frame fixed by this Court.
2.Heard the learned counsel appearing on either side and perused the materials placed before this Court.
3.The case of the Petitioner is that the Petitioner and his family members are the joint owners of 1.60 acres of lands in S.F.Nos. 315/1,2,3 and 316/2 of Kottapatti Majra, Sembattu Village of Sub- Registrar Office, K.Sathanoor, Tiruchirappalli District.The Petitioner has entered into a Joint Development Agreement with the second respondent company for promoting the apartments/flats in their land and to get approval from the Government and to promote apartments, the Petitioner and family members executed a restricted conditional General Power of Attorney bearing No.1012/20145, dated 23.2.2015 to the third respondent, who is the Director and major share holder of the second respondent company and he is the Kingpin of the aforesaid second respondent company. The General Power of attorney was only for constructing and promoting the apartments in the petitioner's land and https://www.mhc.tn.gov.in/judis without the Petitioner's knowledge, the third respondent had sold an 3 extent of 44045 sqft UDS to his own company-Natesan Housing Private Limited, Tiruchirappalli, the second respondent herein, even before starting construction through sale deed No. 658 of 2018, dated 12.2.2018.The third respondent colluded with the other Directors of the Second respondent company, created the forged sale deed by misusing the limited power of attorney.Further the third respondent had received the sale consideration by way of three cheques for a sum of Rs. 1,17,73,277/- as a holder of power of attorney, however, the amount was not paid to the principal and the same was swindled by the third respondent and the source from where the aforesaid money was mobilized is also not disclosed by the third respondent in the books of accounts and there is no reference in the books of accounts as to how the said amount was not disbursed to the principal. Thus the second respondent company has also committed a grave error by violating the provisions of the Companies Act by by not disclosing the assets acquired through the registered sale deed. Further the second and third respondents have defrauded the Registration Department by undervaluing the property and by paying less stamp charges. The third respondent is bound to disclse the related parties transaction in respect of the assets acquired. Further the third respondent has gone beyond the scope of the registered power of attorney by selling the undivided share of property of the Petitioner without the knowledge of the principal and that the said power was executed only for a limited purpose for getting DTCP approval https://www.mhc.tn.gov.in/judis 4 for constructing and promoting the apartments. The third respondent with an intention to defraud, had sold the undivided share of the petitioner to his own company, the second respondent company and has acted himself as Vendor as purchasers.Therefore the Petitioner has given complaint to the District Registrar and DIG of Police in this regard. The District Registrar had given a finding that the third respondent had misused his power, however, directed the Petitioner to work out the remedy before the Court. Aggrieved by the same, the Petitioner filed an appeal before the DIG of Registration, Trichy, who in-turn had concurred with the District Registrar, Trichy and held that the third respondent had misused the power. The Petitioner had filed a writ petition in this regard in W.P(MD)No.10433 of 2021 and the same was allowed with a direction to make endorsement on the foot of the alleged document, as it was executed fraudulently. The said order was challenged by the third respondent in Writ Appeal and an order of stay was also granted by referring to the point of jurisdiction and the matter is still pending. Further the Petitioner has given a complaint against the third respondent before the District Crime Branch, Trichy and on compromise the FIR registered against the third respondent was quashed with some conditions and after the same, the third respondent had deliberately failed to comply with the conditions that was agreed to by the third respondent before the Court.Hence the Petitioner filed a recall petition of the above said order and the same is pending.Thereafter, the Petitioner has given a https://www.mhc.tn.gov.in/judis 5 representation on 28.08.2020 making serious allegations and complaints about the second and third respondents about their fraud and cheating by suppressing the material facts and about their business transaction and other returns. On receipt of the representation, the first respondent requested the Petitioner to submit the supporting documents and in reply to the same, the Petitioner sent a detailed complaint along with supporting documents. On receipt of the same, the first respondent sent a notice to the second respondent calling for explanation tocuhing the Petitioner's representation. The third respondent on 15.12.2020 has given a vague explanation accusing the Petitioner. On receipt of the same, the first respondent called for para-wise remarks for the same from the Petitioner, within seven days of the receipt of the same. In response to the same, the Petitioner sent a rejoinder on 10.3.2021. As there is no final adjudication, the Petitioner sent a letter to the first respondent on 27.3.2021 seeking personal hearing and finally on 11.1.2021, sent a similar representation seeking final adjudication of the earlier representations. Left with no other alternative, the Petitioner has filed the present Writ Petition for the relief stated supra.
4.Notice was ordered to the first respondent, who had filed a counter, wherein, it has been stated that the second respondent was incorporated on 30.1.1996 and its registered office is at Tirunchirappalli and the status of the company is 'active' and also filed statutory returns https://www.mhc.tn.gov.in/judis 6 upto the financial year 2020-21.It is further submitted that the Petitioner or his family members are neither a Director nor a share holder in the second respondent company. It is further submitted that the Petitioner and his family is owning various properties and general power of attorney was given to the third respondent, who is one of the directors of the second respondent company, for development of 152 apartments in the Petitioner's land. The third respondent by misusing his power, had sold the land measuring an extent of 44,045 sqft undivided share of the Petitioner's property to his own company, the second respondent herein without the knowledge of the Petitioner. Further the sale amount was taken away by him without depositing the same into the principal's account.On the complaint of the Petitioner, dated 28.8.2020, complaint has been taken to the second respondent company by letter, dated 13.09.2020, for which, the the third respondent had replied with supporting documents, which in-turn was forwarded to the Petitioner vide letter, dated 3.2.2021, for his comments.The Petitioner has also submitted his comments/rejoinder on 15.12.2020 and after examination of the same, the first respondent sought for more clarifications from the Petitioner and respondents 2 and 3 regarding the transactions alledged to have been done by them, for which, they have given a detailed explanation. Based on the same, a detailed report was prepared and the same was forwarded to the Ministry of Corporate Affairs through Regionsl Directorate (Southern Region) for inquiry, under Section 206(4) of the https://www.mhc.tn.gov.in/judis 7 Companies Act, 2013 to ascertain the veracity of the allegations of the complaint given by the Petitioner against the second respondent company and its directors and also to ascertain whether any irregularities have been committed by them under the above Act. The instructions for further action from the Ministry is awaited by the first respondent.Therefore, sufficient steps have been taken on the representation of the petitioner and as such, the Writ Petition is a premature at this stage and hence, the same is liable to be dismissed.
5.The third respondent filed a counter affidavit stating that a joint Development Agreement was entered into between the second respondent and the Petitioner on 6.12.2017 and a general power of attorney was executed on 23.2.2015 in favour of the thrid respondent and it is not a restricted conditional one.The third respondent is one of the Director of the second respondent company. Yet, the Petitioner has given power of attorney to the third respondent knowing fully well that there will not be any confict of interest in the matter of joint Development Agreement between the Petitioner and the second respondent company. The petitioner is often a Court bird and a dishonest person. The General Power of Attorney was given for construction and promotion of apartments in the Petitioner's land. The third respondent sold an extent of 44.045 sq.ft of undivided share to his company, the second respodnent herein, is wrong.The said sale has been well informed to the petitioner https://www.mhc.tn.gov.in/judis 8 and the sale deed has been acknowledged by the Petitioner after release of the same from the Sub-Registrar Office on 12.3.2018. It is further submitted that the third respondent had misused his power, is false and baseless and it is only for the purpose of construction and promotion of the apartments. As per the General Power of attorney permission was granted by the Petitioner to sell the property without any permission being obtained from the Petitioner or other land owners.The Petitioner has played a foul play by stating that the land has been sold by the third respondent without his knowledge. The sale consideration for the same has been validly audited.The allegation that the third respondent had swindled the sale consideration is meaningless and it was truly accounted. As per clause 2, it is clear that the sale consideration is unnecessary in the matter of undivided share and the Petitioner is suppressing the materials facts in this regard.The fact that the power of attorney was given for the purpose of DTCP approval for promoting the apartments, is a clear misunderstanding and clause 4,5, and 6 of the power of attorney would clearly establish that the sale transaction is quite ordinary and lawful.The allegation that the District Registrar as well as the DIG of Registration had not found the sale considerartion valid, is absolutely false. The Writ Petition filed by the petitioner in W.P(MD)No. 10433 of 2021 is allowed at the admission stage itself without providing an opportunity of hearing to the second respondent and the same has been challenged in the Writ Appeal, which in-turn had objected to the https://www.mhc.tn.gov.in/judis 9 order of the learned Single Judge and that the entire description of the Petition about the sale is wrong and unacceptable. The FIR registrered against the third respondent in Crime No.5 of 2019 is quahed based on the mediation report and shall form part and parel of the order of quashment of the FIR.To solve all these problems Lordship Mr.Shanmugam(Retired) Judge was appointed as a Sole Arbitraror, who passed an order on 18.8.2021.The Petitiner had actively partiipated in the artbitrary proceedings and hence prayed for dismissal of the Writ Petition with exemplary costs.
6.The learned counsel for the Petitioner submitted that in the arbitration proceedings, an award has been passed.
7.This Court is of the view that all these aspects cannot be considered by this Court at this juncture.The first respondent can very well consider all these aspects while disposing of the representation of the Petitioner. The first respondent has awaited report/instructions from the Ministry of Corporate Affairs through Regional Directorate(Southern Region) proposing to inquiry under Section 206(4) of the Companies Act, 2013 to ascertain the veracity of the allegations of the Petitioner against the seond respondent company and its Directors and also to ascertain the irregularities committedby them under the Companies Act, 2013. Unless permission is obtained by the first respondent, he cannot proceed further https://www.mhc.tn.gov.in/judis 10 in disposing the representation.
8.Considering all these aspects, the first respondent is given six months time from the date of receipt of a copy of this order, to obtain permission from the Ministry of Corporate Affiars as stated supra and pass appropriate orders on the representation of the Petitioner, dated 28.8.2020, on merits and in accordance with law, after affording an opportunity of hearing to the Petitioner and all other parties concerned.The entire above said exercise shall be carried out within a reasonable time, preferably within a period of six months..
9.With the above direction, the Writ Petition stands disposed of.No costs.
09.11.2022
Index : Yes/No
Internet:Yes/No
vsn
To
The Registrar of Company,
Office of the Registrar of Companies,
Sasthiri Bhavan, Second Floor,
26, HA, TTOWS Road, City
Chennai.
https://www.mhc.tn.gov.in/judis
11
V.BHAVANI SUBBAROYAN,J
vsn
ORDER MADE IN
W.P(MD)No.5453 of 2022
09.11.2022
https://www.mhc.tn.gov.in/judis
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