Bombay High Court
The Custodian vs M/S. T. H. Vakil And Ors on 9 June, 2020
Author: A. K. Menon
Bench: A.K. Menon
SPMP-2-1996
Wadhwa
IN THE SPECIAL COURT (TRIAL OF OFFENCES RELATING TO
TRANSACTIONS IN SECURITIES) ACT, 1992 AT BOMBAY
MISCELLANEOUS PETITION NO.2 OF 1996
A.K. Menon Custodian appointed under
The provisions of the Special Court
(Trial of Offences Relating to Transactions
In Securities) Act, 1992 and having his
Office at 9th floor, Nariman Bhavan,
Nariman Point, Bombay-400 021. .. Petitioner
V/s.
1) M/s. T.H. Vakil, a firm having
their address at 1002, 10th floor,
Stock Exchange Building, P.J. Towers,
Dalal Street, Bombay-400 001.
2) Dhanraj Mills Private Limited,
A company incorporated under the
provisions of the Companies Act, 1956,
and having its office at Block 19, 1st floor,
Dhanraj Mills Compound, Sitaram Jadhav
Marg, Lower Parel, Bombay-400 013.
3) T.B. Ruia of Bombay, Indian Inhabitant,
Residing at Samudra Gaurav Apts.,
6-A, Worli Seaface, Worli,
Bombay-400 025.
3A) Asha Tejkumar Ruia
1/96
SPMP-2-1996
3B) Vidhi Darsh Ruia
3C) Gagan Darsh Ruia
3D)Hriday Darsh Ruia
3E) Vibha Ashish Khandelwal.
4) Suresh Jajoo,
Indian Inhabitant, residing at
Dinar, 4th floor, Station Road,
Santacruz (W), Mumbai-400 054. .. Respondents
Mr. J. Chandran a/w Ms. Shilpa Bhate i/b. Leena Adhvaryu for the
Custodian.
Mr. Dikshak Soni i/b. Kiran Jain & Co. for respondent no.2.
Mr. Dipen Furia i/b. Shah & Furia for respondent no.3 (legal heir).
Mr. Gautam Mehta a/w Aziz Khan a/w Anagha Pradhan i/b. Divya
Shah Associates for respondent no.4.
CORAM : A.K. MENON
JUDGE, SPECIAL COURT
RESERVED ON : 27th SEPTEMBER, 2019
PRONOUNCED ON : 9TH JUNE, 2020.
JUDGMENT
1. The applicant in the above petition is the Custodian appointed under the Special Court (Trial of Offences Relating to 2/96 SPMP-2-1996 Transactions in Securities) Act 1992 ("Torts Act"). The respondent no.1 is a proprietary concern engaged in the stock broking business. Respondent no.2 is a notified party under the said Act. Respondent no.3 was at all times the Managing Director of respondent no.2 and a notified party. Respondent no.4 was believed to be engaged in transactions with respondent nos.1 to 3 and is also said to be liable thereunder.
2. As originally filed the Custodian sought various reliefs against respondent nos.1 to 3. Respondent no.4 has been impleaded in December 2001 pursuant to an order passed by the Special Court on 27th November, 2001. The petitioner-Custodian sought an order and decree against respondent no.1 directing him to pay to the Custodian on behalf of respondent no.2 a sum of Rs.3,44,12,538/- and interest thereon @ 24% p.a. from 5th August, 1992 or such earlier date when the said sum was believed to have been received by respondent no.1 from respondent no.2. Subsequently, post amendments and impleading respondent no.4, similar prayer clauses were directed against respondent no.3 and respondent no.4 jointly and severally. These reliefs are sought in the event the Court comes to the conclusion that respondent no.1 is not liable to 3/96 SPMP-2-1996 pay the amounts claimed by the Custodian.
3. Having briefly dealt with the nature of the Petition, it will be appropriate to narrate the facts as set out by the Custodian. According to the Custodian, respondent no.1 is a debtor of respondent no.2. Respondent no.2 was notified under the Act on 5th August, 1992. Upon such notification, all his properties are deemed to be attached. The Custodian had filed Misc. Application no.86 of 1993 against respondent no.2 in which the Custodian sought disclosure of assets. An order came to be passed on 7th October, 1993 whereby a sum of Rs.3,44,12,538/- was shown as receivable by respondent no.2 from respondent no.1 as of 5th August, 1992. Vide a letter dated 30th July, 1994 Exhibit A to the application respondent no.1 was called upon to furnish the following information;
(i) cheque numbers, dates, names of banks, branches, full postal address under which the amounts were received from respondent no.2;
(ii) Full details of the transaction towards which the amount had been received;
(iii) If the amount had been received by way of loan the terms and 4/96 SPMP-2-1996 conditions of the loan;
(iv) Whether the amount had been repaid and if so, mode of such repayment with particulars of bank date and payment and
(v) Lastly, if the amount had not been paid back, the Custodian sought reasons from respondent no.1 for not intimating the Custodian of the fact that the amount was due to be repaid despite notifications issued by the Custodian and the public notice issued on 10th December, 1992 pursuant to the promulgation of the ordinance and the Act which followed.
4. Upon receipt of the letter dated 30th July, the respondent no.1 replied vide his Advocate's letter dated 3rd September, 1994 (Exhibit B) admitting that during April 1991 and 31st March 1992 the respondent no.1 had received a total number of 21 cheques for "cheque discounting". The respondent no.1 admitted having received credit of these amounts in its bank account(s). According to respondent no.1 the amounts received from respondent no.2 were withdrawn in cash and these amounts were paid over to respondent no.4 one Suresh Jajoo after respondent no.1 deducted discounting commission of 1%. The respondent no.1 further contended that the cheques had been brought to him by respondent no.4 and the cash was also collected by respondent 5/96 SPMP-2-1996 no.4-Jajoo. According to the respondent no.1, Jajoo has also admitted this fact of having paid cash to the respondent no.3 during an investigation conducted by the Income Tax Authorities. In the Advocates' reply, the respondent no.1 provided details of the cheques received from the respondent no.2 and contended that these particulars had also been provided to the Income Tax Authorities. According to the Custodian, the respondent no.1 having admitted receipt of funds, it was liable to make good the amount and therefore pay over the same to the Custodian. It is appropriate to mention that according to respondent no.1, the amounts received were not by way of loan and therefore there is no question of repaying the loan. In this behalf, it is the case of the Custodian that even assuming the contentions of the respondent no.1 were correct, the transfers and the discounting facility would have been illegal and would amount to fraudulent diversion of funds and therefore respondent no.1 would not get a valid discharge.
5. The Custodian has further contended that large amounts have been diverted from banks and financial institutions by respondent nos.2 and 3 through respondent no.4 and even assuming respondent no.1 is treated as discharged, respondent nos.3 and 4 6/96 SPMP-2-1996 must be jointly held to be liable to pay the said sum of Rs.3,44,12,538/- and interest thereon. It is also contended that respondent no.3 was at all material times the Managing Director of respondent no.2 and therefore respondent no.2 owes monies to notified parties which have been so diverted by respondent no.2 in collusion with respondent nos.1 & 3. As a consequence, the Custodian seeks the following reliefs;
6. Firstly a decree in sum of Rs.3,44,12,538/- and interest against the 1st respondent failing that, decree against respondent no.3 and in the alternative, a decree against respondents nos.3 and 4 jointly and severally. In the meantime an interim order of deposit against 3rd respondent had been sought, however, I understand that no application was made to the Court at the material time. During the pendency of the application, 3rd respondent expired on or about 12th February, 2019. As a result, respondent no.3A to 3E being the heirs and legal representatives of respondent no.3 have been brought on record and therefore the reference to respondent no.3 in the present application would now refer to the heirs.
7. The petition is supported by an affidavit of one M.P. Purushu on behalf of the Custodian which affirms the truth of the contents of 7/96 SPMP-2-1996 the petition. As far as the pleadings are concerned, the original respondent no.3 T.B. Ruia has filed an affidavit dated 18 th January, 1996. According to him the subject matter of this application was also subject matter of Misc. Petition no.64 of 1994 filed by the 2 nd respondent company against the Custodian. He reiterates the contents of Misc. Petition no.64 of 1994 and without prejudice to the contentions therein, Ruia has denied the contents of the Custodian's letter dated 30th July, 1994 addressed to the 1st respondent. The 3rd respondent denies that any cash was paid by 4th respondent to the deponent T.B.Ruia. He further states that he has not entered into any illegal transaction directly or indirectly. The affidavit is filed only for self i.e. on behalf of 3rd respondent. On behalf of respondent no.2 one N.C. Dangarwala has filed an affidavit dated 19th January, 1996. He repeats the contents of Misc. Petition no.64 of 1994 filed the 2nd respondent against the Custodian and the 1st respondent herein T.H.Vakil and Company. Respondent no.2 claims that it came to learn of its notification only on 10th September, 1992 through newspaper reports. While the affidavit of Dangarwala admits the contents of paragraph 3 and 4 of the application, he denies the contents of the letter dated 3rd September, 1994 addressed by 1st respondent's Advocate. In paragraph 6 of the affidavit Dangarwala reiterates that the sum of 8/96 SPMP-2-1996 st Rs.3.44 crores was indeed advanced to the 1 respondent. He denies that the 1st respondent had paid over these amounts to the 2nd respondent. Dangarwala's affidavit proceeds to deny that monies were withdrawn in cash or paid in cash to Jajoo. According to the deponent, 1st respondent/Vakil is trying to avoid liability and 1st respondent will not get the valid discharge since in any event the dealings as contended by the 1st respondent would be illegal. The deponent further states that the 1st respondent is liable to pay over the amounts to the respondentno.2.
8. One Rajen C. Vakil who claims to be the proprietor of T.H. Vakil has filed an affidavit dated 3rd March, 1999. The contentions in the affidavit are as follows:
(i) The application is not maintainable.
(ii) In Misc. Petition no.64 of 1994 the 1st respondent had
reiterated that cheque discounting business had been carried out and that the deponent had received funds from these cheques and had paid over the same in cash to respondent nos.2 and 3 through respondent no.4.
(iii) In Misc. Petition no.64 of 1994 respondent no.2 alleged that sum of Rs.3.44 crores was paid to respondent no.1 at the instance of one Manubhai Maneklal. According to 9/96 SPMP-2-1996 Vakil he had sufficient funds of his own. He had not borrowed any funds from respondent no.2 or 3.
According to him, respondent no.2 has changed his version of the facts in the rejoinder. It is further contended that the 1st respondent had paid the cash after retaining 1% commission and receipt of cash had been admitted by the said Suresh Jajoo-respondent no.4.
(iv) Fourthly, it is contended that the petitioner has no cause of action. He had commenced the discounting business at the instance of the aforesaid Manubhai Maneklal.
9. According to the deponent he was introduced to the said Maneklal by one Suresh N. Shah. Suresh N. Shah was the brother-in-law of Vakil. Maneklal introduced Jajoo to Vakil. At that stage, Suresh Shah was already engaged in the business of cheque discounting through Suresh Jajoo. The said Suresh Shah requested Vakil also to enter into the cheque discounting business. In view of the recommendation of his brother-in-law, Vakil agreed to deal with Jajoo who was introduced to him as the authorized signatory of respondent no.2 and respondent no.3. According to the deponent it is in these circumstances that T. H. Vakil & Company dealt with Suresh Jajoo and earned 1% commission. Between 11th June, 1991 10/96 SPMP-2-1996 th and 6 December, 1991 Vakil is said to have received 21 cheques. The particulars of these cheques ( have already been provided in Vakil's Advocate letter dated 3rd September, 1994 Exhibit B.) The deponent states that the cheques were encashed, cash was withdrawn and handed over to Suresh Jajoo who would collect the same within 2-3 days after the cheques were encashed. According to the deponent, no claims/demands were made against T.H. Vakil & Co. He did not maintain separate books of account in relation to these transactions. The cheques were deposited in the account of T.H. Vakil and these particulars were revealed by him to the Income Tax Authorities pursuant to an enquiry carried on by them following a raid upon the respondent nos. 2 & 3. Vakil's statement was recorded on 20th January, 1993 under Section 131 of the Income Tax Act. According to Vakil, Jajoo was also summoned and his statement was also recorded on 29th January, 1993.
10. According to Vakil, Jajoo had apparently admitted dealing with respondent no.2 & 3 and also admitted that apart from Vakil other parties such as Suresh N. Shah and M/s. V Krishnakant both brokers had also discounted cheques for respondent no.2. Jajoo is said to have admitted collecting cash from Suresh Shah and V. Krishnakant as well. Jajoo is believed to have deposed that cash 11/96 SPMP-2-1996 was paid over to respondent no.3 at his residence and at his office. The deponent has further stated that the 2nd respondent and 3rd respondent were subjected to an enquiry by the Enforcement Directorate as well. Summons was issued to Vakil on 23rd March, 1993. He attended the offices of the Enforcement Directorate in response to the summons and his statement has been recorded by the authorities. He however contends that thereafter no action has been taken against him.
11. Vakil's affidavit further states that after receiving the summons from the Income Tax Authorities which was also dated 23rd March 1993 he attended the office of the Dy. Commissioner of Income Tax (Special Range) (Central Bombay) and a statement under section 133 of the Act was recorded. The enquiry pertained to allegations against respondent nos.2 and 3. According to him vide a letter dated 21st March, 1995 these facts were conveyed to the Dy. Commissioner of Income Tax. According to the deponent, Jajoo has admitted having acted as agent of respondent nos.2 & 3 in his statement to the income tax authorities.
12. It is the case of the 1st respondent that in Misc. Petition no.64 of 1994 Maneklal confirmed that respondent no.2 had not paid 12/96 SPMP-2-1996 st monies to the 1 respondent Suresh Sharma or V. Krishnakant as a loan. Maneklal confirmed that respondent nos.2 & 3 received cash from Vakil, Suresh Shah and V. Krishnakant. The deponent Dangarwala was the Secretary of respondent no.2 and was in the knowledge of the fact that the cheques were issued, encashed by Vakil and that cash was paid to Jajoo. Respondent nos.2 & 3 were therefore falsely denying the transaction. The receipt of cash by Jajoo as agent for disclosed principal viz. respondent nos.2 is very clear evidence of the fact that respondent no.2 & 3 have no claim against respondent no.1. It is contended that cheques were signed by defendant no.3 who was in control of the business and the finances of the 2nd respondent. It is further averred by the deponent that the Joint Parliamentary Committee had found that defendant no.2 had advanced monies to Suresh N. Shah, V. Krishnakant and T.H.Vakil-respondent no.1. Respondent no.3 received the foreign remittance of US Dollars 400,948 which he declared as income under the amnesty scheme. It is further contended that respondent no.2 is a deemed public company but no resolutions had been passed in order to lend monies to T.H.Vakil. Respondent no.2's auditors had reported large payments being made by the 2nd respondent without appropriate documentation. As far as allegations in the petition itself are 13/96 SPMP-2-1996 concerned, he claims that the petitioner himself has no personal knowledge. The deponent has denied being a debtor of the respondent no.1 and reiterates that respondent nos.2 & 3 have received cash equivalent of the cheques after the 1 st respondent has retained the discounting commission of 1%.
13. Vakil further states that he is not aware of MA 86 of 1993 and the orders passed therein. He reiterates the contents of his Advocate's reply dated 3rd September,1994 admitting receipt of the cheques signed by the respondent no.3 which he claims were handed over to respondent no.1 by the respondent no.4-Suresh Jajoo. He denies that the cheque discounting was fraudulent or illegal. He further denies that he has not discharged in the transaction. He reiterates that the cheque discounting business and denies liability, inter alia, he contends that Suresh Jajoo is a necessary party. Respondent nos.2 & 3 are stated to have made false statements on oath.
14. Without prejudice to these contentions, Vakil states that the claim against the 1st respondent's firm is barred by the law of limitation because respondent nos.2 & 3 were notified on 5th August, 1992. The petition was filed only on 1st February, 1996. Misc. Petition 14/96 SPMP-2-1996 th no.64 of 1994 came to be filed on 5 August, 1992 and even on that date substantial part of the claim as against respondent no.1 and in relation and to the allegedly due to respondent no.2 or 3 were barred by the law of limitation.
15. I may make specific reference to Exhibit A to the affidavit of Vakil which is an order dated 5th October, 1996 passed by the Special Court. This order records that the 2nd respondent has provided information to the Custodian as a result of which the petition came to be filed. The onus of producing evidence is fixed on the 2nd respondent in view of the defence taken it is stated that T.B Ruia, 3rd respondent would have to step into the box and that he may have also prove the claim if it is true his knowledge. That apart any other evidence that respondent no.2 DMPL may want to lead will also be required to prove the claim. This having been said the matter was adjourned on 17th October, 1996. The record does not indicate that any such evidence was led by defendant no.3 or defendant no.2.
16. The record indicates that on or about 3rd August, 1999 Vakil filed an affidavit of documents pertaining to the bank statements, certified copy of bank statements preliminary statement under 15/96 SPMP-2-1996 sections 131, the summons from the Income Tax Department and the assessment order, summons issued by the Enforcement Directorate and certified copy of an affidavit August 1995 said to have been filed by Manubhai Maneklal in Misc. Petition no.64 of 1994 as also certified copy of affidavit dated 8th November, 1995 in rejoinder filed by N.C Dangarwala in MP -64 of 1994. Certain references are also made to documents signed by S.K.Jajoo respondent no.4, relevant extract of the Joint Parliamentary Committee and Advocates correspondence. He has also disclosed record and proceedings in Misc. Petition no.64/94 filed by respond 2 against the Custodian, Vakil and others.
17. Narendra C. Dangarwala, Director of respondent no.2 has filed an affidavit of documents dated 13th August, 1999. He discloses in Part-I of the schedule, copies and proceedings in MP-64/94, the ledger A/c, cash book A/c for the years 1990-91, 91-92 and the original ledger account and cash book for year 92-93. Disclosure of bank statements is made generally without any specifics. Dangarwala has also filed an affidavit dated 2nd June, 2000 on behalf of the 2nd respondent dealing with Rajen Vakil's affidavit dated 3rd March, 1999 in which he claims that the affidavit is being made on the basis of the records of the company and none of 16/96 SPMP-2-1996 the averments in the affidavit of Vakil are deemed to be admitted. He has reiterated the case of the Custodian against respondent no.1 denied that the petition is not maintainable and reiterated that MP -64/1994 had been filed and he reiterates the contentions taken up by the 2nd respondent in that petition. Dangarwala however avers that respondent no.1 had not paid back any of the amounts advanced to him through Suresh Jajoo as alleged. He has denied that Jajoo is or was an agent for respondent no.2. In ordinary course of business respondent no.2 had advanced diverse amounts to Jajoo and members of his family which were duly repaid and respondent no.2 had also purchased and sold and otherwise dealt in shares and debentures quoted on the stock exchanges in India and had advanced short term finances against security of shares, debentures bonds and other commercial papers during the year 1991 through the aforesaid Maneklal. In order to facilitate these transactions, the deponent claims that at respondent no.2 granted a special power of attorney to various persons including one to Suresh Jajoo. He reiterates that respondent no.2 had lent an advance a sum of Rs 3.44 crores to the 1st respondent at the instance of Maneklal and as set out in MP-64. He reiterates that the respondent no.1 was desirous of borrowing these funds and denies the contentions of respondent 17/96 SPMP-2-1996 no.1 that he had sufficient bank balances lying with him and that there was no need to borrow any amount. The deponent Dangarwala denies that Suresh Jajoo had carried out any other transaction for and on behalf of respondent no.2 and reiterates that during 11th June, 1991 to 6th December, 1991 diverse amounts aggregating to Rs. 3.44 crores were lent an advanced by the respondent no.2 to respondent no.1 at 24% interest and that the amounts were advanced at the instance and request of the said Maneklal who had guaranteed repayment of the amount with interest. It is denied that cheques were given through Jajoo or that Jajoo would deliver the cheques to respondent no.1. The encashment of the cheques and withdrawal of the cash and payment of cash by respondent no.1 to respondent no.2 and or 3 through respondent no.4 Jajoo has been denied. The deponent has also denied receipt of any cash or the cheques either from Suresh Jajoo or any other person. Furthermore, it is contended assuming while denying Jajoo acknowledged receipt of cash, it cannot be treated as an acknowledgment of receipt of any amount in cash by the 2nd respondent. The allegation that Jajoo had paid over the cash amounts to respondent nos.2 & 3 has been denied. The loan advanced to respondent no.1 was allegedly secured by a pledge of shares and Maneklal had guaranteed repayment thereof. No 18/96 SPMP-2-1996 particulars of the pledge of shares are forthcoming in this affidavit. The rest of the affidavit contains repetitive averments which I have already substantially dealt with. One important denial is that Jajoo acted as agent or as authorized signatory of respondent no.2 & 3 but in the very same affidavit, the deponent admits that Jajoo been granted a special power of attorney by respondent no. 2. The deponent denies having engaged in any cheque discounting business as contended by the respondent no.1. In this manner, the deponent contends that the 1st respondent is bound to pay back a sum of Rs.3,44,12,538/- along with interest. The 2nd respondent thus supports the case of the Custodian.
18. Interestingly it appears that MP -64/94 filed by Dhanraj Mills Pvt.Ltd. (DMPL) (respondent no.2 in this application) was withdrawn on 8th October, 1997. The counsel appearing on behalf of the DMPL stated that since the Custodian already filed MP -112/95, 117/95 and 2/96 (the present petition) 3/96 and 4/96 for recovery of money from the respondents DMPL was not pursuing its petition. The additional relief claimed in MP- 64/94 was to the effect that respondent no.2 therein, the said Maneklal had guaranteed repayment of the money and also for claiming a pledge of certain shares. Maneklal expired and the application 19/96 SPMP-2-1996 for setting aside abatement was not allowed. In these circumstances DMPL sought withdrawal of the petition since only recovery of money was contemplated and that could have been done in the petitions filed by the Custodian.
19. In paragraph 4 of his affidavit dated 11th July, 2000 Respondent no.3 T.B. Ruia states that he has no claim against the 1st respondent-Vakil in his individual capacity. The rest of the affidavit is a repetition of the stand taken by the 3rd respondent in his earlier affidavit. However, certain additional averments are to the effect that Jajoo was not his agent. Respondent no.3 had not advanced any monies to Jajoo or his family members. That respondent no.2 had granted special power of attorney to various persons including Jajoo to enable the dealings in shares securities and commercial papers through Manubhai Maneklal. According to the respondent no.3, Jajoo had no other connection with him. It is further stated that at the instance of Maneklal the 2nd respondent company advanced the said sum of Rs.3.44 crores to Vakil. He denies having engaged in any cheque discounting business. The deponent further states that he has sought inspection of the statements recorded before the Income Tax Authorities by Jajoo but the same were not forthcoming. He states that he was not 20/96 SPMP-2-1996 given an opportunity to cross examine Jajoo before the Income Tax Authorities. He denies having received any amounts in cash from Vakil, Suresh Shah or V. Krishnakant through Jajoo or anyone else. In the absence of inspection of this statement reportedly made to the enforcement directorate by Jajoo, 3rd respondent had refuted the contentions of Vakil and Jajoo when he recorded his own statement before the Enforcement Directorate.
20. Ruia further states that Vakil, Jajoo, Maneklal and Suresh Shah as also V. Krishnakant had adopted a common defence of discounting cheques and having paid cash to DMPL and the deponent only to avoid liability to DMPL and to avoid repayment of the monies advanced. He states that the fact that monies were advanced to these persons has not been denied and repayment has not been proved. To that extent it is contended that his claim for repayment should be sustained and the Custodian must succeed in the application. According to the deponent the Joint Parliamentary Committee does not record any findings against DMPL. The deponent denies having received any foreign remittance and states that even if he had received the foreign remittance the value of the same in rupee terms is only 1.3 crores whereas respondent no.2 had advanced a sum of Rs.3.44 crores to Vakil and had collectively 21/96 SPMP-2-1996 advanced Rs.6.31 crores to Vakil, Suresh Shah and V. Krishnakant. The foreign remittance he states has no relevance to these transactions of loan. Ruia further states that he has not affirmed any affidavit dated 17th October, 1993. This denial appears to be correct in view of the fact that affidavit dated 17 th October, 1993 by way of disclosure is believed to have been filed by the 2 nd respondent.
21. Suresh Jajoo, Respondent no.4 has filed a written statement dated 23rd October, 2002. He has denied that any of the amounts allegedly given between 11th June, 1991 and 6th December, 1991 and claims he was joined as a party to the above petition only after an order dated 23rd October, 2001 and all along the petitioner found no reason to claim any reliefs as him. According to the respondent no.1 and the petitioner, Jajoo was only acting as an agent of a disclosed principal viz T.B. Ruia and since Ruia is a party to the proceedings, the 4th respondent Jajoo cannot be personally liable. The petitioner sues through and under the 2nd respondent DMPL and if the cheque discounting transactions were illegal the petitioner could not have filed the present petition. Jajoo states in his defence that it is corroborated by respondent nos.2 and 3 who have not sought to recover any money from Jajoo. He 22/96 SPMP-2-1996 submits that there is no cause of action against him. Jajoo is neither the payee of the cheques and nor the recipient of the monies said to have been withdrawn after the cheques were encashed. The petitioner's case is that Jajoo was only the agent of respondent no.3 does not make respondent no.4 "a beneficiary of the cheques".
22. Respondent no.4 does not admit that Vakil has obtained a valid discharge in the manner set out in the pleadings. In any event he denies liability to reimburse the petitioners or respondent no.2. The record indicates that apart from the written statement, Jajoo has filed an Affidavit of documents dated 11th October, 2005. In the schedule to that affidavit, he relies upon only two documents; one is a certified copy of MP-64 of 1994 and the orders passed therein and copy of an affidavit of N.C. Dangarwala filed on behalf of respondent no.2-DMPL dated 8th November, 1995 in the aforesaid MP-64 of 1994. The record also indicates that Rajen Vakil who at the material time was a proprietor of the 1st respondent-T.H.Vakil has filed an affidavit of evidence. In that affidavit of evidence, he states that cheques amounting to Rs.3,44,12,538/- had been issued to him by respondent no.2. These cheques were deposited in two current accounts with Federal Bank 23/96 SPMP-2-1996 Ltd. Thereafter these amounts had been withdrawn by cash. He has annexed with the affidavit a statement of cheques received from respondent no.1 as Exhibit-1. He annexed two statements of cash withdrawn at Annexures 2 and 3. Exhibit 3 reveals that between 13th June, 1991 and 14th August, 1991 a sum of Rs.1,75,10,774/- has been withdrawn. The Annexure as Exhibit 2 reveals that between 16th August, 1991 and 11th December, 1991 a total sum of Rs.1,71,001,040/- was withdrawn in cash through diverse cheques on various dates. A Statement of account discloses that between 11th June, 1991 and 9th December, 1991 a total of Rs.3,40,68,412.62 was withdrawn in cash, Rs.3,44,125.38 being 1% of the total receipts were retained and the balance amounting to Rs.34,06,841.62 was paid over to respondent no.4-Jajoo.
23. The 4th Exhibit is a letter addressed by the Advocates for the deponent of the affidavit Rajen C. Vakil to Federal Bank Ltd. enquiring about the statements of account in respect of "two current accounts" held by the deponent in which the proceeds of the cheques were deposited wherein these cheques were realized and from which the cash was withdrawn. The bank has vide letter dated 10th October, 2006 informed the Advocate for the deponent that in respect of both the current account nos. 2518 and 2349 the 24/96 SPMP-2-1996 statements of account for the period 1991 till 1994 had been destroyed. In this manner, the bank confirmed that it was unable to provide the copies requested.
24. In the light of the aforementioned in the form of the petition and affidavits, as was the practice followed by the Special Court and the Written Statement of Respondent no.4, collectively constituting the pleadings the Special Court framed 22 issues on 17th March 2003 which are reproduced below:
(1) Whether respondent no.1 proves that the claim in this petition is barred by law of limitation? (2) Whether the petitioner and/or respondents nos.2 and 3 prove that respondent nos.2 and 3 had advanced to respondent no.1 a loan of Rs.3,44,12,538/- as alleged in paragraph 9 of the affidavit dated 19.1.1996 on behalf of respondent no.2?
(3) Whether the petitioner and/or respondents nos.2 and 3 prove that respondent nos.2 and 3 advanced the said amount to respondent no.1 against pledge of shares as 25/96 SPMP-2-1996 alleged in paragraph 7 of the affidavit of respondent no.2 dated 2.6.2000?
(4) Whether respondent no.1 proves that respondent no.1 was doing business of discounting cheques with respondent nos.2 and/or 3 as alleged in paragraph 5(o) of the affidavit of respondents nos.1 dated 3.3.1999?
(5) Whether respondent no.1 proves that respondent no.4 was the agent of respondent nos.2 and/or 3 as alleged in the affidavit-in-reply of respondent no.1 dated 3.3.1999? (6) Whether respondent no.1 proves that respondent no.4 issued a writing acknowledging receipt of the cash amounts paid by respondent no.1 as alleged in paragraph 5(i) of the affidavit of respondent no.1 dated 3.3.1999? (7) Whether the petitioner proves that respondent no.1 illegally or fraudulently diverted moneys from respondent no.2 and paid them over to respondent no.2 and/or 3 and if so, whether such illegal transaction would not give a valid discharge to respondent of his liability to respondent no.2 26/96 SPMP-2-1996 as alleged in paragraph 6 of the petition? (8) Whether the petitioner is entitled to recover any amount from respondent no.1 and if so, what amount? (9) Whether respondent no.1 received the cheques drawn by respondent no.2 in favour of respondent no.1 as set out in the annexure to Exhibit "B" to the petition aggregating in all to Rs.3,44,12,538/- for discounting or as an advance/loan repayable with interest at 24% p.a.?
(10) Whether respondent no.4 was an agent/representative of respondent no.2?
(11) Whether respondent no.1 after encashing the said cheques paid or repaid the amounts of the respective cheques to respondent no.4 less discounting commission of 1%?
(12) Whether respondent no.1 paid or repaid the said amounts to respondent no.4 as an agent/representative of respondent no.2?
27/96
SPMP-2-1996 (13) Whether respondent no.4 paid the said amounts alleged to have been received by him from respondent no.1 to respondent no.2 and/or to respondent no.3 as director of respondent no.2 or in any other capacity?
(14) Whether the respondent no.1 is entitled in law to contend that respondent no.1 had paid/repaid the respective amounts of the said cheques to respondent no.2 in cash in view of the prohibition contained in Sec.269T of the Income Tax Act against repayment in cash?
(15) Does respondent no.1 prove that respondent no.2 or respondent no.3 had appointed respondent no.4 as the authorized signatory or agent of respondent nos.2 and 3 and that respondent no.4 had been engaged to collect cash amounts upon the cheques in question being discounted? (16) Does respondent no.1 prove that the cheques in question were received from respondent no.4 on behalf of respondent nos.2 and 3 for the purpose of cheque discounting?
28/96
SPMP-2-1996 (17) Is it proved that the disputed transactions are fraudulent and a mode of diverting monies from respondent no.2 to respondent no.3?
(18) Does the petition disclose a cause of action against respondent no.4?
(19) Whether in view of the petitioners contentions in para 6 of the petition that the transactions were illegal, the petitioner/ respondent no.2 are entitled to see* for the monies under such illegal transactions? (*Sic) (20) Whether the present petition is maintainable and is not barred by the principles of res-judicata or constructive res- judicata?
(21) Notwithstanding the respondent no.2 never having claimed a sum of Rs.3,44,12,538/- as being outstanding and receivable by respondent no.2 from respondent no.4 whether the petitioner can still claim the said amount from respondent no.4?
29/96
SPMP-2-1996 (22) Whether the petitioner is entitled to any relief, and if so, what relief?
25.Submissions of counsel were very brief. The learned counsel for the Custodian Mr. Chandran took me through the facts and submitted that since Rajen Vakil has filed an affidavit of evidence the ratio in the case of Banganga Co-op Hsg. Society Lts V/s Vasanti Gajanan Nerurkar 2015(5) Bom CR 813 can be pressed into service and the admissions therein could be relied upon. Being unable to gather any evidence on account of the reluctance of respondent 2 to support the claim by evidence in support, Mr. Chandran submitted to the orders of the court.
26.On behalf of respondent no.2/DMPL Mr. Gaonkar the learned counsel who appeared at the material time placed reliance on an order dated 23rd October 2001 in M.A. 133 of 2000 in the above petition directing Suresh Jajoo to be impleaded in this and the companion petitions. He also placed before the court photocopies of (i) a two page extract Ledger account of DMPL /Respondent no.2 for the period 1991-1992, (ii) Extracts of the Cash Book DMPL for the same period (iii) a few bank 30/96 SPMP-2-1996 statements of State Bank of India said to be of an account held by DMPL and (iv) a solitary page extracted from Ledger Account of DMPL for 1992-1993. None of these are certified copies. He submitted that save and except for these documents Respondent no.2 had no other evidence with them. Mr.Gaonkar however sought to take advantage of the admission relied upon by Mr.Chandran and submitted that receipt of funds had been admitted but Vakil had failed to prove that funds were paid out or repaid and hence the second leg not being established, relief may be granted to the Custodian. According to him the Respondent no. 2 had proved his case by relying on the admissions of Vakil.
27.Ms. Pawar learned counsel who appeared at the material time for Respondent no.3 submitted that Vakil had not produced any evidence of Respondent no.4 being an agent of Respondent no.3. Besides the transaction being illegal no relief could be granted. She relied upon the statement made by Vakil to the Income Tax Department in support of her plea that the cheque discounting transactions were not permissible in law and hence no benefit can be derived therefrom. She reiterated that Vakil had not proved his case against Respondent no.3 and 31/96 SPMP-2-1996 Respondent no,3/Ruia has no claim in his individual capacity against Vakil. Ms.Pawar therefore submitted that the claim as against respondent no.3 is liable to be rejected. Mr. Pandya who later appeared on behalf Respondents 3(A) to 3(E) submitted to orders of the court since he had no specific instructions from the heirs except to adopt the submissions of Ms. Pawar. The Advocates for the Respondents 2 and 3 have since changed but no other submissions were made by the Advocates who appeared at the time of closing this arguments.
28.As far as respondent no.4 is concerned, Mr. Mehta learned counsel appearing on his behalf submitted the first respondents case had not been tested much less proved. Moreover the Custodian had not pleaded that respondent no.4 was an agent of respondent 2 or 3. The role of Maneklal has also not been questioned by the Custodian. According to Mr. Mehta the petition did not disclose a cause of action against the 4 th respondent because no party has contended that the respondent no.4 had retained the money for himself.
29. Mr.Mehta further submitted that by virtue of Section 230, the respondent no.4 cannot be held liable and in support of his 32/96 SPMP-2-1996 contention he relied upon the decision of the Supreme Court in Vivek Automobiles v/s. Indian Inc [(2009) 17 SCC 657] which held that in the absence of contract of the contrary as agent cannot be sued by the respondent specially when the principal had been disclosed. Dealing with the provisions of Order 47 Rule 1 and the order passed in review relying upon the decision of the Supreme Court in Sushil Kumar Sen v/s. State of Bihar [1975 (1) SCC 774] Mr. Mehta submitted that allowing of an application for review of a decree would mean that the decree stood vacated and that the decree subsequently passed under review whether it is modified, reversed or confirmed, the decree originally passed, is the new decree superseding the original one. It must be borne in mind that it is Respondent no.4 who had filed a Review Petition which resulted in the above Petition being restored for trial. No Civil Appeal was filed by any party questioning the order in the Review. Reiterating the effect in law of an order on review Mr. Mehta submitted that the original order which was reviewed ceased to be operative and that once a Court is satisfied that the order under review was erroneous, on the face of it, the Court is not precluded from allowing the review petition and setting aside the findings. This he submitted had found favour in the 33/96 SPMP-2-1996 case of Most Rev. P.M.A. Metropolitan and Others V/s. Moran Mar Marthoma and another [1995 suppl. (4) SCC 286] Mr. Mehta also sought to rely upon the decision of a Supreme Court in Kunhayammed and others v/s. State of Kerala and Anr. [2006 SCC 359] in support of his submission that a review could be preferred in the High Court before Special Leave is granted by the Supreme Court but not after it is granted. Reliance was sought to be placed on the decision of the Supreme Court in Chandi Prasad and others V/s. Jagdish Prasad and Others on the aspect of limitation and Mr. Mehta has also placed reliance on several orders passed in these proceedings including in MP-3 of 1996 and 4 of 1996. The relevant ones have already dealt with in this judgment. He submitted that since no evidence was led in the petition and respondent no.1's witness did not step into box despite several opportunities and notices, the trial had not effectively commenced in the petition. He submitted that the parties to the Misc. Application would never heard nor were any arguments advanced before the Court and being aggrieved by the impugned order dated 11th December, 2015 dismissing the petition the respondent no.4 had filed a review being review petition no.1 of 2016. This review petition is admitted and 34/96 SPMP-2-1996 th came to be allowed on 11 August, 2017. Mr. Mehta further submitted that he was aggrieved by the dismissal of the petition at that stage in view of the fact that the respondent no.4 was keen on a trial being held and in order to enable his client the respondent no.4 to make appropriate submissions in support of his contention that the respondent no.4 was not liable in any manner. Mr.Mehta also submitted that the claim against Jajoo would be barred by the law of limitation.
30.I have since considered the facts as pleaded, documents filed and an affidavit of evidence of One Rajen Chandrakant Vakil on behalf of the respondent no.1 stated to be his proprietary concern. Although the said Rajen Vakil filed the affidavit, he did not offer himself for cross examination. Nevertheless I shall briefly deal with the statements therein since some statements may be relevant for considering the factual matrix. Vakil has deposed that Manubhai Maneklal was in the share business and had dealt in voluminous quantities of shares till his death on 18th December, 1995. DMPL had used Maneklal for trading in shares that apart their other business dealings. Respondent no.3/Ruia also had other business dealings with Maneklal and Ruia was controlling DMPL signing cheques on behalf of DMPL 35/96 SPMP-2-1996 as well. Respondent no.4 Jajoo is said to be a close confidante of Ruia and also an authorized signatory of respondent nos.2 &
3. The deponent repeats the statements made by him in his earlier affidavits and as regards involvement of Suresh N. Shah as to how Suresh N. Shah who is his brother-in-law along with Vidyut K. Shah and other partners of M/s. V. Krishnakant, share brokers were also engaged in the cheque discounting business. Suresh Shah is said to have dealings with respondent no.4 and had informed Vakil that respondent no.4/Jajoo, Suresh Shah through Jajoo would hand over the cheques to Vakil on the understanding that Vakil should encash the cheques, retain 1% of the value of the cheque towards his commission and handover the balance in cash to Jajoo. He has deposed that he received several cheques and between 11th June, 1991 to 16th December, 1991 these were all encashed through the two current accounts in Federal Bank Ltd. to which I have made reference above. Rajen Vakil is thereafter claims to have issued several bearer cheques to Suresh N.Shah. These bearer cheques were given by Suresh N. Shah to his employees Dashrath Patel and V.V. Shah who signed on the reverse of these cheques presented them for encashment and withdrew cash. The cash so withdrawn was said to have been given to 36/96 SPMP-2-1996 Rajen Vakil who then handed it over to Suresh Shah at the offices of Suresh Shah. The deponent further states that the bank had sent him statements of account at the material time but these have been misplaced while shifting his office. Thereafter he had made a request to the bank to issue copies, however has seen from the correspondence to which I have already referred to. The bank responded contending that these have been destroyed. The deponent however, states that in 1993 when he was summoned by the Income Tax Authorities, he had in his possession photocopies of the bank statements. He has relied upon these photocopies which are now said to be filed along with the document volumes at Annexure A & respectively. At Annexure A, he claims are the photocopies of statements of current account no.2518 for the period 13th August, 1991 to 31st March, 1994. These he submits are at volume-1 page 82 to 124. He further states that statements of account in respect of current account no.2349 for the period 6th February, 1991 to 29th August, 1991 have also been filed at Annexure C. It makes reference to the relevant entries of these pages ( pages 1 to 62, relevant entries at pages 80, 81, 83, 84, 87 to 91, 93 to 95 and 97 to Annexure A and pages 42 to 46, 48 to 50, 56 to 61 to Annexure C).
37/96
SPMP-2-1996
31. The witness further deposed that respondent no.2 DMPL had sent many cheques for encashment and payment of the cash equivalent to Suresh Jajoo which Jajoo was to pay over to DMPL or to T.B. Ruia-respondent nos.2 & 3. That Suresh Shah had informed him that after receiving some of these amounts the receipt was to be confirmed by Ruia. These aspects appear to be hearsay since Vakil does not appear to have personal knowledge of what had transpired. He has deposed that Maneklal had told Suresh Shah that Shah should inform Maneklal on telephone of every occasion that cash was handed over by him to Suresh Jajoo and that Mankelal would contact Ruia to seek confirmation from Ruia that Jajoo had handed over the amount in cash. According to the deponent, from June 1991 Suresh Shah informed Maneklal on telephone of every occasion when the amount of cash was handed over by him to Jajoo and Maneklal would in turn inform Suresh Shah telephonically that Ruia had confirmed to Maneklal of the fact that he had received the amount in cash from Jajoo on that day. Soon after Shah received such confirmation, Shah has reportedly informed Vakil of the same. Vakil has further deposed that discounting transactions of DMPL with Vakil's firm and that of V. Krishnakant and Suresh Shah aggregated to more than 6 38/96 SPMP-2-1996 crores and an equivalent amount of cash had been handed over to Suresh Jajoo on behalf of DMPL. He deposed that Suresh Shah obtained acknowledgments of Jajoo in respect of these amounts and that a copy of one acknowledgment is sought to be brought on record at item 6 in Annexure A under Vol.I.
32. The witness further deposed that in the course of investigation by the Income Tax Authorities against DMPL and T.B. Ruia, enquires were made under Section 131 of the Income Tax Act regarding the cheques for Rs.3.44 crores received by Vakil from DMPL. The deponent's statement was recorded on oath on 25th January. He has produced a copy of the said statement. Jajoo was also reportedly summoned and the statement said to have been made by Jajoo on oath on 29th January, 1993 is sought to be produced at item 13 to Annexure A. This document is in handwritten form and typed copies are also annexed. According to the deponent, Jajoo has admitted this document in his preliminary statement in the written stamen filed by him on 23rd October, 2002.
33. The Income Tax Authorities are said to have recorded a further statement of Jajoo on 22nd February, 1995 when Jajoo confirmed 39/96 SPMP-2-1996 th his earlier statement dated 29 January, 1993. Copy of this statement dated 22nd February, 1995 is also sought to be produced at item 15 of Annexure A in Vol.I. The deponent states that he received a summons dated 23rd March, 1993 from the Dy. Commissioner of Income Tax(Special Range) Central Mumbai to which he replied on 2nd April, 1993. He relies upon a copy of the acknowledgment in that respect. He further deposes that the Enforcement Directorate had in the enquiry against DMPL and Ruia under the Foreign Exchange Regulation Act, 1973 and summoned the deponent Vakil on 2nd April, 1993 to produce documents relating to the transactions between DMPL, Suresh Jajoo and Vakil's firm. He confirms as having attended the office of the Enforcement Directorate when his statement was recorded. A copy of the said statement is sought to be produced at item 24. He has deposed that thereafter no further communication was received from the Enforcement Directorate nor was any action taken against him. The deponent has further stated that in his income tax assessment for the year 1992-93 he had included the amount of commission received by him from discounting the cheques. That in 1993 there was a raid conducted by the Income Tax Department at his firm and in the course of search and seizure operation certain documents pertaining to DMPL were 40/96 SPMP-2-1996 seized and thereafter in the course of assessment proceedings, vide an order dated 20th March, 1995, he was called upon to pay income tax on the basis of the income disclosed by him in the return. He also claims to have filed a Kar Vivadh Samadhan Scheme Declaration on 30th December, 1998 and having paid the requisite tax. The deponent makes reference to the case of Harshad S.Mehta which was discussed in Parliament and the constitution of the Joint Parliamentary Committee. Reference is made to portions of the said report on the fact that several persons deposed before the Joint Parliamentary Committee which included representatives of the Central Bureau of Investigation, Central Board of Direct Taxes and the Enforcement Directorate. The deponent states that Ruia also deposed before the Joint Parliamentary Committee. He relies upon the statement made before the Joint Parliamentary Committee by the aforesaid persons. I may observe here that the Supreme Court has since taken a view that the Joint Parliamentary Committee report cannot be treated as evidence and being bound by that view I do not propose to deal with the aforesaid disclosures made by the deponent as the same will not be treated as evidence.
34. The deponent then goes on to state that auditors of DMPL made 41/96 SPMP-2-1996 st remarks in the annual accounts for the period ended 31 March, 1992 that large amounts had been paid by DMPL without any documentation. Certified copies of the balance sheet and profit and loss account of DMPL for the year ended 31st March 1992 along with auditor's report is annexed at item 36. It is further contended that neither DMPL nor T.B. Ruia or any other person on behalf of the DMPL has made any claim or demand on the deponent or Suresh N.Shah or M/s. V. Krishnakant for repayment of the amount of the cheques or interests thereon. The Custodian had then filed MA-86 of 1993 against DMPL seeking disclosure of assets and liabilities and that is when the DMPL filed the affidavit dated 7th October, 1993 disclosing the amounts allegedly receivable by DMPL from the 1st respondent, M/s. V.Krishnakant and M/s. S. Shah. The deponent states that though such a disclosure was made, DMPL did not disclose in the affidavit the nature of business transactions and how the amount claimed was recoverable.
35. The affidavit then refers to the demand notice issued by the Custodian dated 30th July, 1994 to which I have already adverted to at the outset and the reply filed by the deponent through his Advocate which is also annexed to the petition. The deponent then 42/96 SPMP-2-1996 makes reference to the petition MP- 64 of 1994 filed by DMPL against the Custodian, Manubhai Maneklal, Suresh N. Shah, V. Krishnakant, T.H.Vakil (respondent no.1) and one Loknath Shroff and one A.B. Shah and some others. In this application, the petitioner sought certain reliefs against these named respondents who are allegedly jointly and severally liable to pay to DMPL amounts of certain cheques issued to them along with interest. The claim is said to have been made on the basis that all the aforesaid respondents had also been recipients of amounts advanced by DMPL which were liable to be returned along with interest @ 24% p.a. As we have seen this petition has since been withdrawn and reference to this petition did not engage or attention any further.
36. The witness Vakil has made reference to correspondence in MP-64 of 1994 between the attorneys of the parties and to the effect that DMPL had admitted that there was no correspondence addressed by DMPL for recovery of amounts said to have been paid by them to T. H. Vakil or any of the other brokers Krishnakant or Suresh N. Shah and that DMPL had not debited their accounts any amount of interest of these brokers including Vakil's firm. He further deposes that the attorneys of DMPL have vide a letter dated 27th June, 1995 43/96 SPMP-2-1996 had also admitted that there were no badla bills or invoices issued to T.H.Vakil or M/s. V. Krishnakant or M/s Suresh Shah. A copy of the letter dated 27th June, 1995 is at item 18 of Annexure B filed along with the affidavit. The deponent states that notice to admit documents dated 23rd August, 2005 was served by his attorneys upon the attorneys for DMPL who had responded to the team with the same. A second notice to admit documents dated 23 rd August, 2005 was also served by Vakil's attorneys upon the attorneys for Suresh Jajoo but no reply has been received. A third notice to admit documents dated 1st September, 2005 was also served upon the Custodian but has met with no response. The deponent further states that T.B.Ruia (respondent no.3) had in his affidavit dated 18th January, 1996 in MP-4 of 1996 admitted that he was in control of the affairs of DMPL and aware of the transactions between his firm and DMPL in relation to the discounting of cheques. Copy of the affidavit of 18th January is also sought to be filed as an annexure to Vol.II and the documents sought to be tendered along with the affidavit. In conclusion, the deponent states that the cheques in question were issued by DMPL in favour of his firm M/s. T.H.Vakil , in favour of M/s. V. Krishnakant and in favour of M/s. Suresh N.Shah by way of loans. He denies that his firm or those of V. Krishnakant or Suresh Shah were liable to pay 44/96 SPMP-2-1996 interest @ 24% p.a. and he denies that Maneklal had given any guarantee to DMPL in respect of the returns of the amounts or interest. According to the deponent the cheques were not issued by DMPL in respect of any badla transactions between DMPL and his firm of M/s. T.H. Vakil. The deponent has not stepped into the witness box to tender the documents. The affidavit however remains to be on file.
37. At this stage, it is appropriate that a mention be made to the manner in which this matter has proceeded. The record indicates that when this matter was listed before the Special Court on 10th August, 2012, the Court observed that recording of evidence before the Commissioner was underway. Time to complete recording of evidence was extended by 12 weeks. The matter was then listed on 21st December, 2012 when the Commissioner was directed to file the report. These orders were passed in the above petition. In the meanwhile it transpires that recording of evidence was in fact proceeding not in this petition but in other connected matters such as MP-4 of 1996 filed by the Custodian against Suresh Shah and others. On 27th June, 2014, certain applications made by the Custodian for payment of fees of the Commissioner appear to have been allowed on that date and these applications 45/96 SPMP-2-1996 made by praecipe were disposed. The petitions were listed by filing the Commissioner's report on 26th September, 2014 the Court extended time to record evidence by the Commissioner. The matter was then listed on 13th February, 2015 when the Court observed that cross examination of 1st respondent was underway and affidavit of said to be that of Manubhai in MP-64/94 which was in the English language was shown to the witness who depose that he is not conversant with the English and therefore a copy of the affidavit translated into Gujarati was permitted to be shown to him. Time for recording of evidence was extended for 8 weeks. This order also seen to be passed in 3 petitions as a common order viz. MP- 2 of 1996 with which we are now concerned and MP- 3 and 4/ 96 filed by the Custodian against V. Krishnakant and Suresh Shah. It appears that the observation that recording of evidence in the above matter had commenced was erroneous. The incorrect recording was not brought to the notice of the Court at the material time and all parties continued to act upon the earlier orders. On 11th September, 2015 time to complete recording of evidence was once again extended. That order is passed in the above petition. On 11th December, 2015 the matter was listed before the Court. When court observed that the above misc. petition had been pending since almost 20 years and that 46/96 SPMP-2-1996 respondent no.1 had acknowledged having receiving the amounts and that these amounts paid over in cash to respondent no.4. The Court concluded thus;
"In my view there is no reason to disbelieve the statement made by respondent no.1. The claim against respondent no.1 is waived. The Custodian may take such steps to recover the amount from respondent nos.3 or 4. No further time will be granted since the matter has remained pending before this Court for almost 2 decades. Hence, MP is dismissed."
38. It appears that thereafter Review petitions were filed by the Custodian being Review Petition nos.1 of 2016, 2 of 216 and 3 of 2016 in the above MP-3 & 4 of 1996 respectively. On 5th February, 2016 all these matters were tagged together and replies were directed to be filed. The matter was stood over to 11th March, 2016 for hearing. Thereafter it transpires that the review petitions were allowed. In the above petition, the respondents took no objection to the Review being allowed and the Misc. Petition being restored. However, in MP-3/96 and 4/96, the respondent Suresh N. Shah and M/s. V.Krishnakant filed statutory appeals against the order dated 11th August, 2016 passed by the 47/96 SPMP-2-1996 Special Court allowing the review applications. They sought that the impugned orders dated 11th August, 2016 passed by the Special Court in Review Petition Nos. 3/16 and 4/16 be set aside. On 28th April, 2017 the Supreme Court passed the following order in both the civil appeals filed against the orders in the review petitions ;
"Delay condoned Issue notice.
Status quo, existing as on today, shall be maintained until further orders."
The order of the Supreme Court operates in two of these matters viz. the MP-3/96 and 4/96. The respondent in MP-2/96 did not file any statutory appeal and as such this matter is being ripe for hearing has been taken up for hearing.
39. In a similar matter viz Miscellaneous Petition No.112/95, the Custodian sought a decree against the 1st respondent one Loknath Shah-stock broker in sum of Rs.1,95,63,567/-. Respondent no.2 was DMPL and the application is similar to the present application. The respondent no.2 had contended that it had advanced certain monies to one Loknath Shah which had not been repaid. The 48/96 SPMP-2-1996 th matter was disposed by an order dated 8 February, 2002 (S.H. Kapadia, J. as he then was) in paragraph 3 of the order, the Court recorded as follows:
"At the outset, it may be mentioned that learned counsel for the notified party pointed out that except for entries in the books of accounts, there are no supporting documents in support of their claim for Rs.1.95 crores. In the present matter, the narrow controversy is whether the transactions in question for which payments are reflected in the books of the notified party as well as in the books of respondent no.1, pertain to a loan transaction or whether they pertain to security transaction. According to respondent no.1, the entries in their books of account are in respect of the transactions of purchase and sale of shares and that no amount was advanced as loan by the notified party to respondent no.1. In support of their contention, respondent no.1 has relied upon 7 bills indicating purchase and sale of shares during various settlement periods from 16th March, 1991 to 21st June, 1991. Respondent no.1 is a broker. The bills reflect sale and purchase of the shares. To my mind, in the absence of any documents coming forth from the 49/96 SPMP-2-1996 notified parties in support of their case that they had advanced a loan of Rs.1.95 crores, the claim of the notified party remains unsubstantiated. Merely on the basis of entries in the books of accounts of the notified party, this Court cannot pass a decree against respondent no.1. As against the above, respondent no.1 has produced the bills which in turn indicate the various transactions which have taken place during the relevant period. They have also produced the assessment orders for Accounting Year 1991-92 and 1992-93 passed by the Income Tax Authorities which show trading in shares. There is no reference to monies borrowed by respondent no.1. In the circumstances, the petition fails."
40.The facts in the present case are also very similar inasmuch as respondent no.2 contends that amounts were advances of loan. Respondent no.1 states that the entries in the books of account are pertaining to purchase and sell of shares. The slight difference is that the business of cheque discounting does not form a feature of this application but the principle that the 2nd respondent / notified party should produce evidence that they had advanced a loan is relevant and commends itself to me. 50/96
SPMP-2-1996 th This is precisely what the order dated 5 October 1996 passed in this petition directs. Meanwhile I find that in yet another companion Misc. Petition no.177/95, the Custodian sought a decree in a sum of Rs.52,32,933/- against one M/s. A.B.Shah c/o Manubhai Maneklal. The 2nd respondent in that application was DMPL. In that case notice was issued to the respondent no.1, however, the respondent no.1 chose to remain absent vide an order dated 20th October, 1999, (S.H.Kapdia, J. as he then was) the application came to be allowed on the basis that the respondent no.2 had pursuant to an order passed in MP -86/93 disclosed on oath that a sum of Rs.52,32,933/- was outstanding and receivable by the 2nd respondent from M/s. A.B. Shah. Later a demand was made upon the M/s. A.B.Shah seeking confirmation that the payment was due and directing the 1st respondent to make payment into the attached a/c of DMPL. However, M/s. A.B shah failed and neglected to reply and based on the books of account of respondent no.2, a decree came to be passed for want of written statement since the averments in the petition were uncontroverted.
41.The factual background in that matter was different from the present one. In the present case, the books of account of 51/96 SPMP-2-1996 respondent no.2 thought not proved, do not reflect any amount as outstanding as loan owing from Respondent no.1. We are today concerned with only MP-2/96. As far as MP-3/96 and 4/96 are concerned, those will have to be considered separately and in the light of the order passed by the Supreme Court in the aforesaid Civil appeal 6076 of 2017 and 6072 of 2017. The above petition can therefore be disposed since all parties have made their submissions and have closed their respective cases. During the pendency of the 3 Miscellaneous petitions, it appears that on 24th July, 2006 the 1st respondent filed MA - No. 318 of 2006 (lodging no.162/06 in the above MP) seeking an order that the MP 2/96, 3/96 and 4/96 be consolidated and heard together and that upon consolidation in the three petitions, issues be settled therein. On 25th October, 2013, the MA no.318 of 2006 came to be disposed by passing the following order:
"In the present case, the applicants are seeking direction that MP-4/96, MP-3/96 and MP-2/96 may be heard together for settlement of issues. It appears that thereafter the matter has been referred to the Commissioner for recording the evidence and these applications have been filed at the interlocutory 52/96 SPMP-2-1996 stage. Hence, these Miscellaneous Application do not survive and are, accordingly, disposed of."
Thus the application for consolidating the matter has not been allowed.
42. On 13th February, 2015, when this Court observed that cross examination of respondent no.1 was still underway, the reference being made was not to witness on behalf of M/s.T.H. Vakil but to the evidence of Suresh Nandlal Shah who was Respondent no. 1 in the companion petition. In the present case the respondentno.1 has not entered the witness box yet. He has only filed affidavit of evidence to which I have made reference above. On 7th October, 2016 counsel appearing for respondent no.1 sought time to obtain instructions as to whether they intend to lead any evidence. On 21st October, 2016 counsel appearing for the 1st respondent submitted that he had no instructions and sought leave to take discharge. On that date counsel for respondent no.1 in MP-3/96 stated that they would be leading evidence and that respondent no.1 therein would file examination in chief on 2nd December, 2016, Advocates for respondent no.1 stated that they have applied for discharge. On 53/96 SPMP-2-1996 th 7 April, 2017 a new Advocate appearing on behalf respondent no.1 contended that he had received fresh instructions to come on record and he sought time to intimate all the parties whether 1st respondent intended to lead evidence. Time was accordingly granted. However, on 21st April, when the matter was listed the 1st respondent's Advocate were absent. Upon notice they appeared and stated that the 1st respondent will be leading evidence and then affidavit would be filed. However, unknown to the learned counsel, the affidavit of evidence on behalf of the 1st respondent was already on record. Strangely on 9th June, 2017 she sought further time to file an affidavit of evidence. Time was extended and later it was found that an affidavit of 14th November, 2016 is already on record and the learned counsel for respondent no.1 stated that the 1st respondent did not intend to lead any further evidence. The matter was thereafter listed on 14th July 2017. On 18th August, 2017, the Advocate for the 1st respondent who were then recently appointed, again sought leave to seek discharge since they had not been receiving any instructions from the 1st respondent. On 22nd September, 2017, while the respondent no.1 was not represented,respondent nos.2, 3 and 4 were all represented. In 54/96 SPMP-2-1996 that view of the matter and the continued absence of respondent no.1, the Court observed that the matter would have to be proceeded with, after intimation was issued to the respondent no.1 at all addresses available with their erstwhile Advocates. Thereafter it appears that notices were issued to the 1st respondent at all known addresses including to one Mr.Kunal Vakil who is believed to be the constituted attorney and son of the sole proprietor Rajen C. Vakil. Affidavits of service of these notices have been filed by all parties. These affidavits of service are on record. On 25th January, this Court once again observed that Rajen C. Vakil having filed an affidavit dated 14th November, 2006, it would be appropriate that he presents himself for cross examination. In order to enable him to do so, notice was directed to be issued to remain present in person and /or through Advocates.
43. At the request of parties made on mentioning, on 30th January, 2018 time to issue notice to respondent no.1 including at email addresses provided by the applicants, time was extended upto 22nd February, 2018. Thereafter on 22nd February, parties were given time to file affidavits of service. Respondent no.1 was however absent on call. The court recorded that respondent 55/96 SPMP-2-1996 no.1 did not appear to be desirous of contesting the application although an Advocate had been engaged in the past. However, one more opportunity was granted to him by directing the registry to issue notice to respondent no.1 enclosing a copy of the order. The matter was then posted on 8th March. Advocates for all parties were also directed to address similar notices and filed affidavits of service. This procedure has been completed on 8th March, 2018. The respondent no.1 was absent on call. On behalf of the Custodian, it was submitted that email sent to addresses provided to them and believed to be that of respondent no.1 had been returned undelivered. This indicated that the notice had probably not been served. Time was once again extended and repeatedly to enable respondent no.1 to remain present. Finally the matter was taken up for hearing on 5th July, 2018 and has been regularly heard from time to time.
44.On 3rd August, 2018, in the midst of hearing parties, it was pointed out by counsel that they had not sought inspection of documents filed by one another. Although two parties had filed affidavits of documents referred to above, they did not offer inspection of documents to the others. The documents 56/96 SPMP-2-1996 had not even been filed in Court. In the compilations as required, respondent no.1 did not present himself for cross examination and the Advocates concerned had withdrawn their appearance. The Court recorded that on 25th January, respondent nos.2 to 4 had made a statement that they did not intend to lead any evidence. Respondent no.1 did not thereafter appear despite several attempts to serve him. Thus, further notices were issued to the respondent no.1 informing him that the Court would be constrained to issue warrant to secure his presence. Fresh notice was directed to be served through Commissioner of Police and through local police station at Bopal, Gujarat whereby he was believed to be having his address. On 25th September, 2018, an email was received by the Officer on Special Duty of the Court from Kunal Vakil and on behalf of Rajen C. Vakil, proprietor of T.H. Vakil.
45.The contents of the email reveal that it is sent by one Tushar Vakil with copies to one Kunal Vakil and Rajen Vakil. The author of the email claimed that the respondent no.1 does not have the means physical and financial to keep appearing in Court and that the Court could hear the matter. Obviously the respondent no.1 was not inclined to remain present and agitate 57/96 SPMP-2-1996 th his case in person or through Advocate. On 27 September 2018, having taken note of this communication the matter was set down for hearing and further submissions were heard on behalf of the parties appearing before the Court. On 11th October 2018, on behalf of respondent no.2 a compilation of documents were tendered, certified copies have not been filed, and the parties proceeded on the basis of these documents. No evidence was led by the Respondents. In the meantime, Ruia expired. Meanwhile Mr. Pandya appearing on behalf of respondent no.2 had made a grievance that certain documents were available with the State Bank of Hyderabad/State Bank of India which bank had not provided the copies sought. The Court was constrained to issue notice to the said bank and the Asst. Commissioner of Income Tax, Central Range-4, pursuant to such notice, the Income Tax Department has expressed willingness to produce documents. They sought time. The learned counsel for the Income Tax Department thereafter appeared on 8th March, 2019 and submitted that ledger accounts for the period 1st April, 1991 to 31st March, 1993 were not traceable and they requested that the Income Tax Department be relieved from further appearance, that request was allowed. In the meantime, the registry was in a receipt of 58/96 SPMP-2-1996 th the letter from the State Bank of India dated 28 February, 2019 informing the registry that the records being maintained manually. Further time was required to submit these records as requested on behalf of the respondent no.2. Respondent no.3 having expired, respondent nos.3(a) to 3(e) were brought on record. Finally on 7th May, 2019 State Bank of India addressed a communication to the Officer on Special Duty in the registry informing the registry that the bank was unable to provide the statement for the account as requested for the period 1 st April, 1991 to 31st January, 1992. On 14th June, 2019, the Court recorded that after hearing counsel that no further documents were expected from either SBI or the Income Tax Department save and except, copy of the cash book, which was provided to respondent no.2 by the Income Tax Department on 7th May, 2019 and which compilation had been filed in Court on behalf of respondent no.2. On 26th July, 2019, Mr. Mehta appearing on behalf of the 4th respondent, had submitted that upon scrutiny of the documents, the 4th respondent had no further submission to make except that none of the documents relied upon by the respondents were admitted in particular cash book for financial year 1991-92 and that since no evidence had been led, these documents could not be read in evidence. The 59/96 SPMP-2-1996 th parties concluded their submissions on 27 September, 2019.
46.The issues in the above MP are largely identical to the issues framed in MP-4 of 1996. The main difference being the names of the parties and the amounts to which reference is made. The 1st issue is whether the respondent no.1 proves that the claim was barred by the law of limitation. No submissions have been made on behalf of respondent no.1 on this aspect. Although Mr.Mehta did support the Respondent no.1's plea of the claim being barred, the issues have not been recast but considering the defence in Respondent no.4's written statement, although the claim against Respondent no.4 may appear to be barred, the issue as framed will have to be answered in the negative. Save and except for the 4th Respondents contention in the written statement no submissions with reference to facts have been made on this aspect on behalf of Respondent no.1 or Respondent no.4. The issue has not been seriously pursued by Respondent no.4 probably in view of the lack of evidence on behalf of respondent no.1. Issue no.1 must therefore be answered in the negative.
60/96
SPMP-2-1996
nd rd
47.The 2 and 3 issues require the petitioner and/or respondent
nos.2 and 3 to prove that respondent nos.2 and 3 had advanced to the 1st respondent Vakil the amount of Rs.3,44,12,538/- as set out in paragraph 9 of the affidavit dated 19th January, 1996 filed on behalf of DMPL. The petitioner and respondent nos.2 and 3 are also required to prove that respondent nos.2 and 3 advanced the amounts to Vakil against pledge of shares as set out in an affidavit dated 2nd June, 2005 filed by DMPL. Both these issues in my view are liable to be answered in the negative.
48.The respondent nos.2 & 3 have not led any evidence. The petitioner being the Custodian has no source of any evidence by himself. He is dependent upon the notified party to provide the requisite evidence. In support of the case, the Custodian is just what his title suggests, a person in custody of the assets and attached properties of notified parties. Respondent nos.2 & 3 have no doubt filed affidavits in reply to the petition and largely supporting the petition. However, there is no proof that has been provided in support of their contention that the amount of Rs.3,44,12,538/- was advanced as loans in different installments as set out in the Annexure to the demand letter 61/96 SPMP-2-1996 th dated 30 July, 1994 which we have already had occasion to consider above.
49.The 2nd respondent is a limited company, the affidavits on behalf of the 2nd respondent have been filed by one Narendra Dangarwala who is said to have been the Secretary of the Company. It was obligatory for the 2nd respondent to lead evidence and establish the claim against the 1st respondent. No such effort has been made save and except to state that the amounts had been advanced by loan and to file affidavits in reply through their Advocates. Copies of certain records seized by the Income Tax Department even these consists of cash book for the relevant period. Neither the Cash Book nor its contents have been proved save and except to state that copies have been produced by the Income Tax Department at the direction of this Court. There is no primary evidence. Even assuming the entries to be correct, in the course of the submissions, the Advocates for respondent no.2 have only relied upon certain entries in the cash book. These entries appear on various dates. A perusal of these entries reveal that the description of the amounts said to have been paid to T.H. Vakil by the 2nd respondent do not figure under the caption of "Loans and 62/96 SPMP-2-1996 advances". The cash book for the period December 1991 and in particular 9th December to 11th December, 1991, reveals several entries under a heading "loans and advances". The name of TH Vakil does not figure in that list. On the other hand, on page between June 17 and June 22, 1991 the cash book entries makes a mention of T.H. Vakil's account and a remark which reads as following;
"Following cheques issued".
The particulars of 3 cheques are then mentioned total into Rs.19,13,205/- but save and except for mentioning that the cheques were issued, there is no indication as to why these cheques were issued. We have therefore to scrutinize other similar entries and these we find for the period June 24 to 29, 1991 where once again 3 cheque numbers are mentioned under the heading "T.H.Vakil's Account". No other particulars are mentioned.
50.Similarly for the period of July 2012 to July 2014, reference is made to T.H. Vakil's Account and one cheque for Rs.25 lakhs issued to him. In August 1991 also a cheque for Rs.15 lakhs is shown to be issued to T.H Vakil. Similarly on 12th August as well a sum of Rs.12 lakhs is issued to him. Other entries on 63/96 SPMP-2-1996 these pages of the cash book having headings such as travel expenses, bank charges, repair expenses reference is also found to Suresh Jajoo's Account which shows that a cheque was issued to Jajoo in a sum of Rs.5,50,000/-. Around the same date i.e. 5 to 7th August, the sum of Rs.15 lakhs is seen to be issued in T.H Vakil's account. Around the same period, one of the headings on the cash book mentions the caption "Int. on loans receivable". There is no mention of either T.H Vakil or Rajen Vakil or any of the respondents in the above Misc. Petition or companion Misc.Petition nos. 3 or 4 to be found under that heading. Between August 12 to August 14 after the opening balances are set out, warehouse charges are referred to, several other payees' names are mentioned and once again the heading of "Int. on loan receivable" describes debit notes issued to a third party. There is no reference to either T.H Vakil or any of the other respondents. For the same period, the cash book does contain reference to T.H Vakil's account and a cheque no.284 dated 12th August, 1991 issued to him for Rs.25 lakhs and drawn on State Bank of Hyderabad but nothing in the entry discloses this to be a loan. Between 9th to 23rd August, 1991, a cheque for RS.15 lakhs seen to be issued to T.H Vakil. Reference is also made to one cheque issued to A.D Narottam 64/96 SPMP-2-1996 another Notified party but none of these are shown as loans. Between 26 to 31st August, 3 further cheques dated 26th August are seen to be issued to T.H Vakil. First 2 cheques for Rs.20 lakhs each and the 3rd cheque of Rs.15 lakhs. Thus, a total of Rs.55 lakhs is believed to be paid by cheque. Between October 21 and October 26, a cheque for Rs.15 lakhs is seen to be issued under the heading T.H Vakil's Account bearing cheque no.820 dated 22nd October, 1991. Cheques are also seen to be issued to V. Krishnakant and A.B Shah. In December 1991, 2 cheques for Rs.5 lakhs and 9 lakhs each are seen to be issued on 6th December, 1991 to T.H Vakil. Several other payments are also made on the said date. The entry of 9 th December to 11th December, 1991, in the cash book, does make reference to the heading "loans and advances" 9 party's names appear. These are small figures of loans and advances ranging from Rs.100 to 1000/- seems to have been deducted from staff salary of November 1991. Nevertheless, these are under the heading "loans and advances". No mention is made of the 1st respondent under this heading. Thus, it seems that although the respondent nos.2 & 3 sought to rely upon the cash book, it is of no consequence the cash book has not been proved as required in law.
65/96
SPMP-2-1996
51.The requirement of proving books of account is well recognized. The burden of proof lies on the party who would fail if no evidence was led by either side. It is also a cardinal rule of evidence and as embodied in Section 34 of the Evidence Act that entries in books of account, regularly kept in the course of business, are relevant whenever they refer to a matter into which the Court has to inquire, but such statements shall not alone be sufficient evidence to charge any person with liability. In the case at hand merely producing the copy of the Cash Book will not suffice. Respondent no.2 was required to prove by leading evidence of the purported "loan" transaction. It has failed to do so. For the aforesaid reasons, issue nos.2 and 3 are answered in the negative.
52.As far as issue no.4 and 5 are concerned, these require the respondent no.1 to prove that it was engaged in the business of discounting cheques with respondent no.2 and/or 3 and that respondent no.4 Jajoo was an agent of respondent no.2 and 3. No evidence has been led by the first respondent on these aspects. True evidence has been led by Suresh Shah in MP-4 of 1996 and several orders of preliminary nature and procedural 66/96 SPMP-2-1996 nature passed jointly in MP nos.2, 3 and 4 referred to recording of evidence of respondent no.1 continuing over a long period of time from 2007 till 2015 when the petition eventually came to be dismissed only to be restored by recalling that order in the review petitions. The respondent no.1 in the present case has not challenged the order in the Review and that is how this petition was set back on the rails for final hearing. It was incumbent upon the 2nd respondent DMPL to lead evidence. The 1st respondent Vakil did file an affidavit of evidence purporting to be his examination in chief but he not offered himself for cross examination. The question therefore to be considered is; whether mere filing of the affidavit of evidence could constitute proof of the facts that the 1 st respondent's witness has deposed to ?. In this respect the Custodian through his counsel Mr. Chandran relied upon Banganga Co-op. Hsg. Soc. Ltd. and others v/s. Vasanti Gajanand Nerulkar and Others (2015 (5) BCR 813). In that judgment this Court has considered in detail the provisions of Order 6 order 9 Order 8, 18, Section 151 of the CPC as also Section 114 of the Evidence Act. Question that arose is whether it was permissible for a court to order expunging or reduction of any part of an affidavit of evidence filed as 67/96 SPMP-2-1996 examination in chief under Order 18 Rule 4 of the CPC. The court held that needless material in an affidavit of evidence would not constitute evidence and if any portion of the affidavit did not confirm to be exact requirements, it was not examination in chief and could not form part of the evidentiary record. That apart the Court also considered whether an affidavit filed pursuant to Order 18 Rule 4 could be ordered to be withdrawn and this aspect was answered in the negative and rightly so. Once an affidavit is filed, there is no question of withdrawing the same. It is a statement on oath by the witness deposes to facts and in support of his plea and the issues that he seeks to prove. The judgment in terms holds vide order 18 Rule 4 states firstly what is stated must constitute examination in chief and must be stated in the form of an affidavit. The affidavit cannot contain issues and references to fact which do not conform to these requirements. The reliance placed on this judgment by Mr. Chandran is on the basis that no evidence affidavit under Order 18 Rule 4 can be allowed to be withdrawn. This aspect does not arise in the present case. The affidavit is very much on record but the witness has not identified his signature or deposed to the truth of the contents. The decision further holds that evidence affidavits cannot 68/96 SPMP-2-1996 contain matters which are irrelevant and inadmissible or in the nature of arguments, submissions of the prayers. That portions of evidence which are unnecessary and seen to be likely to protract cross examination on such irrelevant aspects can be struck off. Importantly what the judgment holds is that where any affidavit of evidence is filed, and the witness or deponent is not made available for cross examination, the consequences in law must follow and that is the opposite party will be entitled to submit, then an adverse inference be drawn against the witness or the party who fails to produce that witness for cross examination. Further, if that affidavit contains admissions these may be used by the other party but the evidence to the extent it is against the other party who was entitled to cross examine the witness, but could not for want of the witness' presence is liable to be ignored. This decision holds the field as on date but it is not really helpful for the Custodian inasmuch as it is only admissions which the respondents may take advantage of that are to be read in evidence and not otherwise. The admissions in the affidavit of evidence to the extent it concerns, the respondents' case will need to be identified. I therefore propose to consider this aspect of Mr. Chandran's argument.
69/96
SPMP-2-1996
53.The affidavit of Rajen Chandrakant Vakil by way of examination in chief is dated 14th November, 2006. The deposition of Rajen Vakil reveals that that he is a sole proprietor of respondent no.1. M/s. T.H Vakil and he has been carrying on business in the said name and style as a share broker since 1985. Respondent no.2 DMPL was also respondent no.2 in other MP- 3 and 4 and T.B Ruia respondent no.3 was a respondent in all these petitions as well. He was a Director of DMPL. Respondent no.4 Jajoo is also described as a member of the Bombay Stock Exchange. The affidavit goes on to describe the other parties allegedly engaged in cheque discounting business viz. Vidyut Shah partner of V Krishnakant, Suresh N Shah, share broker who is also said to be the brother- in-law of Rajen Vakil. The affidavit makes reference to certain documents annexed to the MP and documents filed along with evidence by way of examination in chief dated 21st September, 2005 filed by Suresh N Shah in MP-4 of 1996. The deposition is to the effect that one Manubhai Shah of M/s. Manubhai Maneklal carrying on business as sole proprietor of the said firm had dealings with respondent nos.2 & 3. It was apparently Manubhai Maneklal who caused Rajen Vakil to get into the 70/96 SPMP-2-1996 discounting business along with Suresh N Shah and M/s. V. Krishnakant. Suresh Shah is said to have managed these businesses on behalf of T.H Vakil and the others as well using bank accounts held by T.H Vakil. Inter alia T.H Vakil to deposit cheques issued by respondent no.2 and facilitating withdrawal of cash through the employees of Suresh Shah. The cash was then said to have been delivered to Suresh Jajoo and so on and so forth in each of these cases. The affidavit does not in any manner contain admissions except to the extent that Rajen Vakil, Suresh Jajoo, and T.B. Ruia were all summoned by the Income Tax Authorities and the Enforcement Director in relation to business of respondent no.2.
54.Contents of this affidavit of evidence have already been dealt by me in detail and none of the statements therein would be supportive of the case of respondent no.2 or 3. The only material admission is the statement of cheques received from respondent no.2 and these are set out in Exhibit 1. The fact that these cheques were received cannot be disputed but the case of the respondent no.2 that these monies were advanced to respondent no.1 by way of a loan is seriously disputed. This loan had not been repaid. On the other hand the case of the 1 st 71/96 SPMP-2-1996 respondent and the witness Rajen Vakil is that all these amounts were withdrawn in cash and paid over to respondent no.3 T.B Ruia through his constituent Suresh Jajoo. None of these statements in the affidavit otherwise assists the respondent no.2 in proving its case that the amounts were advanced as of loan and was repayable by M/s. T.H Vakil to DMPL. Indeed no advantage can be gained by the Custodian from this affidavit or the admissions therein. In my view the Custodian was clearly handicapped for want of evidence from respondent nos.2 & 3. Vakil not having offered himself for cross examination cannot seek benefits of his deposition and to that extent his evidence must be ignored. In that view of the matter, issues no.4 & 5 wherein the burden of proof is cast upon the 1st respondent must be answered in the negative since in my view respondent no.1 has failed to discharge this burden. Issue nos. 4 and 5 are answered in the negative.
55. Issue no.6 requires the respondent no.1 Vakil to prove that respondent no.4 Jajoo issued a writing acknowledging receipt of amounts in cash said to have been paid by 1st respondent -Vakil as stated in the 1st respondent's affidavit dated 3rd March, 1999. There is absolutely no evidence on this aspect. The 1 st respondent 72/96 SPMP-2-1996 not having proved the document, it is not possible to accept this plea or come to any conclusion. The 1st respondent has not presented himself for cross examination. A bald statement to the effect that respondent no.4 had issued an acknowledgement would have to be tested by the 1st respondent being made available for cross examined by respondent no.4. This not having occasioned. It is not possible to hold in favour of the 1st respondent on this issue. Issue no.6 must and therefore is answered in the negative.
56. Issue no.7 requires the petitioner -Custodian to prove that M/s. T.H Vakil illegally and fraudulently diverted monies from DMPL and paid them over to DMPL and or Ruia and whether that transaction if proved would give the 1st respondent a valid discharge. For reasons set out above, the petitioner is unable to establish the transaction as set out in paragraph 6 of the petition. It is for the 2nd respondent and/or the 3rd respondent to have provided the petitioner with sufficient material on the basis of which this claim could proceed. Let me hark back to the order dated 5th October 1996 in the above petition in which the Court observes that the claim of the Custodian is based on a disclosure made by the 2nd respondent DMPL and it is for the 2nd respondent to come up with such evidence as appropriate in order to establish that claim. 73/96
SPMP-2-1996 nd The 2 respondent has not led any evidence. The affidavits of Dangarwala filed in these proceedings are of no avail. The only attempt in all these affidavits is to obfuscate and that will not help the petitioner to prove the allegations of illegal fraudulent diversion of monies from DMPL and its payment if any to respondent nos.2 or 3. The question of the 1st respondent therefore getting a valid discharge based on these averments cannot arise. In the circumstances the answer to issue no.7 must be in the negative and it is accordingly answered in the negative. In view of the answer to issue no.7 above, I am unable to find in favour of the petitioner -Custodian on issue no.8. As a result, I am of the view that the petitioner is not entitled to recover any amount from the 1st respondent.
57. Issue no.9 require the 1st respondent to establish whether he received the cheques drawn by DMPL in its favour as set out in Annexure B to the petition. There should be no difficulty in answering this issue in affirmative. Since the respondent no.1 as in his Advocate's reply dated 3rd September, 1994 to the demand notice by the Custodian admitted receipt of these cheques. Furthermore, even in the affidavits filed in reply to the petition particularly affidavits dated 3rd March, 1999 of Rajen C. Vakil and 74/96 SPMP-2-1996 th in the affidavit of evidence dated 14 November, 2006 admitted the fact that cheques had been received and enchased in his current account. This admission also inures to the benefit of respondent no.2 to the limited extent that receipt of the cheques and encashment of the cheques is not in dispute. That being the case the deposition and the affidavit to the extent of such admission can be read in evidence in view of what I have observed above, however, the fact whether the amount was received for discounting or as an advance/ loan repayable with interest at 24% p.a. has not been established. It is only receipt of Rs.3,44,12,538/- that has been established. Whether this was for the purpose of discounting or as an advance/loan has not been established let alone liability to pay interest. Issue no.9 is therefore answered partly in the affirmative to the above extent and partly in the negative.
58. Issue no.10 requires the petitioner to establish that the respondent no.4 is an agent or representative of respondent no.2 and issue no.13 whether the respondent no.4 paid amounts alleged to have been received from respondent no.1 to respondent nos.2 or 3 in any capacity. As far as issue no.10 is concerned, there are admissions by respondent no.2 in his affidavit which indicates 75/96 SPMP-2-1996 that respondent no.4 was a constituted attorney of the 2nd respondent. To the extent that he was an attorney there can be no doubt that respondent no.4 was indeed an agent to that extent. Furthermore, respondent no.4 has himself in his written statement stated thus in paragraph 3; "Without prejudice to the aforesaid, this respondent submits that on the facts as averred in the petition itself, it is the petitioners and respondent no.1's own case that this respondent was acting as an agent on behalf of a disclosed principal viz. respondent no.3. In the aforesaid circumstances, Ruia himself being a party respondent to the present proceedings. This respondent as the agent of disclosed principal is therefore not personally liable for the debts of respondent no.3." (emphasis supplied). This limited admission helps in establishing the fact that respondent no.4 was indeed an agent to the extent admitted. However the consequences of such agency are something that we will have to consider. Meanwhile Issue no.10 is answered in the affirmative.
59. Issue nos.11 & 12 can be conveniently dealt with together. Issue no.11 requires the 1st respondent to establish that after encashing the cheques it had paid or repaid the amounts of cheques to respondent no.4-Jajoo after deducting the discounting 76/96 SPMP-2-1996 commission of the rate of 1%. Issue no.12 requires the 1 st respondent -Vakil to establish that he had paid/ repaid the amounts to respondent no.4-Jajoo as an agent/representative of respondent no.2. Effectively the burden is upon T.H. Vakil to establish that the amounts of the cheques were parted with to the respondent no.4 after deducting his commission. Issue no.12 would depend on the answer to issue no.11 inasmuch as if there is no evidence of the respondent no.1 having paid or repaid the amounts of the respective cheques to respondent no.4 after deducting the discounting commission, there is no question of establishing whether the payment by respondent no.1 to respondent no.4 was in the Jajoo's capacity of an agent or representative of DMPL.
60. No doubt, respondent no.4 has admitted being a power of attorney holder but whether or not as such agent, he received monies from the 1st respondent, is a matter to be established by evidence. Given the state of the evidentiary record, it is not possible to hold that the 1st respondent T.H.Vakil had paid or repaid any amounts to respondent no.4 after deducting discounting commission. There is an admission on the part of T.H.Vakil that the amounts of the cheques had been encashed. However, beyond such evidence in 77/96 SPMP-2-1996 st the form of an admission, the 1 respondent had not established payment of these amounts. It may be that the 1 st respondent was anticipating the trial of Misc. Petition no.4 of 1994 wherein Suresh Nandlal Shah appears to be supportive of the case pleaded by T.H.Vakil. Suresh Shah has attempted to establish that various amounts encashed by the respondent no.1 in its current accounts in Federal Bank had been withdrawn on various dates. Such an attempt is seen from the evidence in MP-4 of 1994 but that by itself will not be of any assistance to T.H.Vakil in the present case. Simply put, the 1st respondent has not proved payment or repayment of the amounts, so also apart from his bare statement that the discounting commission at 1% was deducted by him, there is nothing to show what had actually transpired. This is not to suggest that 1st respondent is still holding on to these funds. There is no evidence of that either. Respondent no.2 or 3 have not led evidence or assisted the Custodian in this respect. In my view, issue no.11 is liable to be answered in the negative. In view of the answer to issue no.11, the answer to issue no.12 must necessarily be in the negative. Issue no.12 was accordingly answered in the negative.
61. Issue no.13 which requires proof that respondent no.4 paid the 78/96 SPMP-2-1996 amounts allegedly received by him from respondent no.1 to respondent no.2 or respondent no.3 would require evidence on two aspects. Firstly, whether respondent no.4 did in fact receive the amounts which respondent no.1 alleges were paid to him. In this behalf, respondent no.1 has not led evidence to establish his positive case that any amount was paid by him to respondent no.4 in cash and for being paid to respondent no.2 and/or 3. Only if respondent no.1 establishes payment of cash to respondent no.4 to the extent withdrawn by him from the proceeds of the cheques said to have been issued to the respondent no.1 firm by respondent no.2 would the second part of issue no.13 arise inasmuch as, if such payment was established respondent no.4 would be require to establish the utilization of those funds but in the case at hand, there is no evidence of respondent no.4 having received these funds. Thus, in this petition, absent any such direct evidence it is not possible to hold that respondent no.4 paid over the amounts to respondent nos.2 and/or 3 in any capacity. Issue no.13 is therefore answered in the negative for want of any evidence. In this behalf, it may be apposite to mention that although counsel before me have repeatedly made submissions to the effect that the trial of MPs-nos.2,3 and 4 were being carried out or was proceeding in common what the record reveals is that the evidence is not 79/96 SPMP-2-1996 common it is only that MP-2 was ordered to be "tagged along with MP-nos.3 and 4". Mere tagging is of no consequence. The order dated 21st August, 2015 in Miscellaneous Petition no.4 of 1996 reads thus;
"Stand over to 25.9.2015. Misc. Petition nos.2 of 1996 and 3 of 1996 be tagged together along with this petition".
62.In these circumstances the evidence led by respondent no.1 in MP-4 of 1996 over past several years and which was subject to cross examination is of no avail in the present case. The evidence of respondent no.1 in MP-4 Suresh Shah does make several references to the respondent no.1 in the present case and the 1st respondent in MP-3 of 1994 viz. V. Krishnakant. However, the emphasis of this case is on how he has discharged his liability qua respondent nos.2 & 3. The evidence of Suresh Shah therefore is of no assistance to the 1st respondent in the present case. Tagging of MP-nos.2 and 3 with MP- nos.4 of 1996 was purely for administrative purposes and to ensure that the trial in these matters proceeds together in view of several issues being similar but affecting different brokers. Probably the scope of the trial would 80/96 SPMP-2-1996 have been curtailed by virtue of such tagging specifically since the petitioners and respondent nos.2, 3 and 4 were common. It is only the 1st respondent in each of these matters which were different. Thus, in my view, the evidence of respondent no.1 Suresh Shah is of no assistance.
63.Issue no.14 requires a finding whether respondent no.1 is entitled to contend that it paid/repaid the respective amounts in cash in view of the prohibition contained in Section 269 T of the Income Tax Act which prohibits repayments in cash. In this respect, there is no evidence of such amounts being paid in cash. There being no factual basis the issue is rendered academic and hence Issue no.14 in my view does not fall for consideration on facts and hence in my view issue no.14 does not arise.
64.We now consider issue no.15 and 16. These pertain to the role of respondent no.4. Issue no.15 is required to consider whether respondent no.4 was appointed authorized signatory or agent of respondent nos.2 & 3 and that he had been engaged to collect cash amounts in respect of the said cheques that were 81/96 SPMP-2-1996 st encashed by the 1 respondent. Issue no.16 requires us to consider whether the cheques were received by respondent no.4 on behalf of respondent nos.2 & 3 for cheque discounting. In my view, absent any direct evidence that respondent no.4 had been engaged to collect cash amounts and also acted as authorized signatory it is not possible to hold in favour of the petitioner. The only admission of respondent no.4 which comes to the assistance the petitioner is that the respondent no.4 admits to having been a power of attorney holder and to that limited extent an agent. However, his stated case is as is the case of the respondent no.4 is that respondent no.4 was agent for disclosed principal viz. respondent no.2. In which case he may not be liable by virtue of the law of agency and in particular Section 230 of the Contract Act. The presumption of contract to the contrary may not arise in view of disclosure as aforesaid. There is no evidence on record to establish that respondent no.4 had been engaged to collect amounts in cash from the cheques being discounted. I must observe here that the discounting of cheques itself has not been established by the 1st respondent. It was incumbent upon 1st respondent to establish that he had indulged in cash discounting business at the instance of Suresh N. Shah & Others and in that process had 82/96 SPMP-2-1996 paid over the proceeds of the cheques admittedly received by the respondent no.1 from respondent no.2 to respondent no.4 in cash. This has not been established and hence issue no.15 is answered in the negative.
65.Issue no.16 though inappropriately worded requires respondent no.1 to prove that the cheques were received from respondent no.4 on behalf of respondent no.2 & 3 for cheque discounting. This arises from the contention of the respondent no.1 that the cheques were handed over by respondent nos.2 to Suresh Jajoo respondent no.4 who would then hand over the cheques to respondent no.1 for being encashed through his bank accounts, for the cash to be withdrawn and paid over to respondent no.4. There is absolutely no evidence to support this plea and for want of evidence this issue is liable to be answered in the negative and is accordingly answered.
66.Issue no.17 requires proof that the disputed transactions are fraudulent and a mode of diverting monies from the 2 nd respondent to the 3rd respondent. Absent any evidence on behalf of 1st respondent and or on behalf of respondent nos.2 83/96 SPMP-2-1996 & 3 there is no occasion to come to the conclusion that the disputed transactions were fraudulent and for diverting monies. The entire scheme of operations does allude to a plan which has not been fleshed out in evidence and in fact there is not even an attempt to establish the case that the transactions were fraudulent. No doubt the transactions were questionable and do not appear to be regular arms-length transactions. The receipt of cheques by respondent no.1 is admitted but thereafter the trail has gone cold. Respondent no.1 has failed to establish his case against respondent nos.2, 3 or 4 in this petition. Respondent nos.2 and 3 also have failed to establish their case against respondent no.1. It is the case of respondent no.2 that the Custodian is concerned about and in view of the fact that the respondent no. 2 appears to have distanced itself from the transaction and the initial claim and the disclosure made by them, it appears that the attempt to obfuscate operates across the board. However staying focused on the issue, I am of the view that the disputed transactions have not been established. Issue no.17 is answered in the negative.
67.Issue no.18 requires a finding on whether the petition discloses a cause of action against respondent no.4. This issue is liable to 84/96 SPMP-2-1996 be answered in the affirmative in view of the numerous averments in relation to the role played by the 4th respondent Suresh Jajoo considering the fact that he is admittedly power of attorney holder of respondent no.2/3 has been involved in the share trading transactions of respondent no.2 a fact that this admitted by respondent no.2 as well in his affidavit filed in these proceedings in particular.
68.In fact Narendra Dangarwala has in his affidavit dated 19th January, 1996 denied that 1st respondent had paid back any amounts in respect of the cheques to the company or to its director Ruia through Suresh Jajoo the respondent no.4. He denies that Suresh Jajoo is was or had ever acted as agent of the company DMPL in respect of the transactions in question viz. the encashment of the cheques and alleged payment by cash. The deponent further states that in the ordinary course of business DMPL had advanced diverse amounts to Suresh Jajoo and members of his family which were duly repaid and respondent no.2 had purchased and sold shares, stock debentures and advance short term finance and securities through the aforesaid Manubhai Maneklal and for the purposes of those transactions, respondent no.2 company had 85/96 SPMP-2-1996 granted a special power of attorney to various persons including Suresh Jajoo. No further evidence has been led on this aspect. However, the statement of Dangarwala is of some relevance. Considering the allegations that respondent no.2 was a recipient of cash sourced from the encashment of cheques issued by respondent no.2 and read with the fact that respondent no.2 has not proved the fact that these cheques were issued towards repayable advances made by the 2nd respondent to the 1st respondent in installments collectively amounting to Rs.3,44,12,538/- and in the absence of any interest liability on that account, I am of the view that the petition does disclose a cause of action against respondent no.4 since the funds are allegedly routed through respondent no.4 who was reportedly the last recipient of these funds. The fact that Jajoo himself has denied the transaction is of no consequence. Pleadings do point to the possible involvement of Suresh Jajoo and hence, in my view issue no.18 must be and is answered in the affirmative.
69.Issue no.19 invites a finding on whether the petitioner or respondent no.2 are entitled to sue for the monies claimed in the petition on the basis that the transactions were illegal. If 86/96 SPMP-2-1996 the transactions were illegal, respondent no.2 was very much party to the transaction. Respondent no.2 has however, failed to lead evidence and bring out the truth before the Court in these proceedings. Merely contending that a sum of Rs.3.44 crores was repayable by respondent no.1 and that the said amount was a loan advanced at 24% is of no consequence. There is no documentary or oral evidence to support the 2nd respondent's claim. All that we have are admission that a certain number of cheques as disclosed in these proceedings were issued that these cheques were in favour of the 1st respondent . The 1st respondent encashed these cheques through current accounts maintained in his name. Beyond this there is no documentary or oral evidence to support that these amounts were paid over in cash to any other person. Withdrawal of these amounts is also seen to be part of the record however, the deponent on behalf of 1st respondent has not offered himself for cross examination. The affidavit of evidence to the extent it concerns admission in favour of the respondents or any of them can only be considered since the evidence affidavit has been filed in Court and having been taken on record forms part of the evidentiary record. However, his positive case that the amounts had been paid over in cash to the other respondents have not 87/96 SPMP-2-1996 been established. In that view of the matter, I find that the petitioner and/or respondent no.2 are not entitled to sue on the basis of such a plea that the transactions were illegal specially since the transactions have not been clearly established. There is no evidence of what the transaction really was. The true nature of the transaction is not brought out, apparently in order to layer and shield purpose of routing of funds. Issue no.19 is therefore answered in the negative.
70.As far as issue no.20 is concerned, the plea that the petition is barred by principles of res judicata or constructive res judicata has not been made out. It is only to be stated to be rejected. Nothing on record indicates that the issues in the present petition were substantially in issue in other proceedings between the same parties. Merely because MP 64 of 1994 was filed and was withdrawn is no reason to question the maintainability of the present petition. In any event Manubhai Maneklal was a party in the petition no.64 of 1994. That petition was withdrawn upon his demise and in view of pendency of this petition there is no substance in the plea of any objection to maintainability nor has this been urged by any of the parties before me. The issue is therefore answered partly 88/96 SPMP-2-1996 in the affirmative and partly in the negative inasmuch as the petition is maintainable but is not barred by principles of res judicata.
71. Issue no.21 requires the petitioner to establish that it can claim the amount of Rs.3,44,12,538/- from respondent no.4 notwithstanding the fact that respondent no.2 DMPL has not claimed the amount as receivable from respondent no.4. In my view, there is no evidence on this aspect. The petition came to be filed on the basis of a disclosure by respondent no.2 that the 1st respondent owed certain monies to the 2nd respondent since these amounts were advanced as a loan by 2nd respondent to the 1st respondent, there was no mention of the 4th respondent at that stage. However, in the course of proceedings, it transpires that the name of the 4th respondent surfaced and allegations were made against him to the extent that the entire process of collection of cheques and collection of cash and payment of cash to respondent nos.2 and 3 has been attributed to respondent no.4. The machinations of the concerned parties involved collection of the cheques through bank accounts in the name of the 1st respondent and the respondents in other similar matters. Respondent no.2 may not have admitted the role of respondent no.4. However if that were 89/96 SPMP-2-1996 true, the amount could obviously be claimed from respondent no.4. In principle merely because respondent no.2 has not named the respondent no.4 as recipient of funds or being liable to repay these funds, if these funds belong to notified parties they stood attached in the hands of whosoever may have been on possession thereof. A specific role has been attributed to respondent no.4, however, in the absence of evidence, it is not possible to indict the 4th respondent in the facts of the present case. In the facts of the case no effective relief can be granted to the Custodian, on that basis for want of evidence. The issue is now academic and is answered in the affirmative for that limited purpose only. In view of the above I am of the view that the petitioner is not entitled to any relief. Issue no.22 therefore must be answered in the negative.
72. Before concluding, I may make reference to the deposition of Suresh Nandlal Shah in companion Miscellaneous Petition no.4 of 1996. Shah is said to be the brother-in-law of Rajen C.Vakil proprietor of respondent no. 1 in this petition. The evidence of Suresh Shah is prolix, commenced in 2007 and concluded only on 27th October, 2015. It will be useful to make brief reference to that case since the parties have made several references to the 90/96 SPMP-2-1996 transaction forming subject matter of these petitions. Issues in MP- 4/96 framed on 22nd April, 2003 are also 22 in number and largely mirror the issues in this petition. On 24th November, 2006, 1st respondent therein Suresh Shah stated that he wished to lead evidence and the Court appointed a Commissioner on that date. Thereafter the matter was repeatedly adjourned between 24th November, 2006 and 13th February, 2015. On several occasions time to complete recording of evidence was extended. On 21st August, 2015, the mater was adjourned to 25th September. On that date, the above MP was tagged with MP-3 and 4 of 1996 on 11th December, 2015 when the Court observed that recording of evidence was still not complete all petitions which were then listed were dismissed.
73. On 7th October, 2016, when MP-4 of 1996 came up for directions, none of the parties pointed out that this matter had once been dismissed and that revisions application had been filed and which were allowed thereby restoring the applications. Meanwhile, being aggrieved by the order in the review petitions it appears that civil appeals were filed in MP-3 and 4 of 1996. No review petition was filed by the respondents in the above Misc. Petition. In the circumstances, the dismissal of the above MP 91/96 SPMP-2-1996 having been set aside, the matter was listed for hearing from time to time. Apart from the formal tagging of the matters on 21 st August, 2015, no progress has been made in terms of leading evidence in the above petition. In fact no application was made on the basis that evidence would be common evidence in the three petitions. Evidence led in MP-4 of 1996 is certainly not in common being led as common in these petitions. The evidence of Suresh Nandlal Shah which has since concluded commenced with the filing of an affidavit of evidence dated 21 st September, 2005 it refers to the involvement of T.H Vakil who is proprietor was the brother-in-law of Suresh Shah. It also refers to the involvement of Manubhai Maneklal and V. Krishnakant. References to T.H. Vakil are to be found in numerous paragraphs alluding to the fact that TH Vakil agreed to carry on the business of cheque discounting at the instance of Suresh Shah and Manubhai Maneklal. Reference is made to the Current accounts held by M/s. T.H. Vakil in Federal Bank. The payment of Rs.3.44 crores to Vakil and payment of other amounts in the case of V. Krishnakant and the transactions with that firm. References are also made to acknowledgments issued by Suresh Jajoo in favour of Vakil and Krishnakant.
74. In fact the evidence of Suresh Shah goes on in great length to make 92/96 SPMP-2-1996 reference to the transaction involving T.H Vakil and respondent no.2 with references to the case of T.H Vakil. Suresh Shah seeks to draw a parallel on facts in an attempt to establish the cheque discounting transaction that have been referred to in these set of matters. Certain questions put to the witness Suresh N. Shah in cross examination are relevant. These are reproduced below for ease of reference:
"Q.401. Was anybody from M/s. T.H.Vakil involved in any manner in respect of the cheque discounting transactions?
A. No person from M/s. T.H Vakil was involved. Q.402. Was anybody from M/s. V. Krishnakant involved in any manner in respect of the cheque discounting transactions? A. No person from M/s. V. Krishnakant was involved. Q. 403. Apart from you, in your office who was involved in these cheque discounting transactions relating to M/s. T.H. Vakil and M/s. V. Krishnakant?
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SPMP-2-1996 A. No one. V.V. Shah, D.B. Patel and K.C. Shah were depositing cheques and withdrawing monies from the bank. Q. 500. Was D.H. Nanavati, your Advocate in Petition no.64 of 1994?
A. Yes.
Q.501. Do you remember who were the Advocates for Manubhai Maneklal, T.H.Vakil and V. Krishnakant in Petition no.64 of 1994?
A. D.H. Nanavati.
Q.502. Can you tell us who gave the instructions to D.H. Nanavati to prepare the affidavits and to contest Petition no.64 on behalf of the respondents i.e. Manubhai Maneklal, T.H.Vakil, V. Krishnakant and yourself?
A. I used to give instructions for myself, T.H.Vakil and V.Krishnakant. I do not know who used to give instructions for Manubhai Maneklal.
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SPMP-2-1996 Q. 513. Were the transactions of T.H. Vakil and V. Krishnakant conducted from your office premises or the premises of Manubhai Maneklal?
A. The cheques were received by the respective persons and the amount withdrawn used to be handed over to me and I used to send the same to Manubhai Maneklal's office through Suresh Jajoo. Q.523. Did T.H.Vakil and V.Krishnakant have their own offices?
A. Yes in Jeejeebhoy Tower."
73. The cross examination concluded on 27th October, 2015. No other evidence has been adduced in the matter. On 23rd August, 2005 it appears that the 1st respondent Advocate's served notice to admit certain documents under Order 12 Rule 3. Three documents were admitted. The respondent no. 2 & 3 reiterated the contents of their affidavit. Respondent no,1 has chosen not to appear. No reliance can be placed by the respondent no.1 on the evidence of Suresh Shah In the present case as well no evidence has been led by respondent no.2 & 3. There is studied silence on the part of the respondent no.2 & 3 as far as leading evidence is concerned. The 95/96 SPMP-2-1996 fact that respondent no.3 has since expired, left no scope for any evidence to be led on behalf of Ruia since the legal heirs have made no attempt to contest the claim. So also respondent no.2 has made no attempt to pursue the claim by assisting the Custodian and providing the evidence required to establish the claim. In these circumstances the petition must fail and accordingly I pass the following order;
(i) Misc. Petition no.2 of 1996 is dismissed.
(ii) Costs to be the cost in the cause.
(A. K. MENON, J.)
Sneha A. Digitally signed by
Sneha A. Dixit
Dixit Date: 2020.06.09
19:30:43 +05'30'
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