DR VP MAINRA vs M/S DAWSONS LEASING LTD. & ORS.

* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on : 02 February 2024
Judgment pronounced on: 08 February 2024
+ CO.PET. 323/1999
DR VP MAINRA ….. Petitioner
Through:
Versus
M/S DAWSONS LEASING LTD. & ORS. ….. Respondents
Through: R-2 in person.
Mr. Gaurav Gupta, Advocate
for R-6 & R-7.
CORAM:
HON’BLE MR. JUSTICE DHARMESH SHARMA
CO.APPLs. 1195/2012 & 2735/2014 and OLR 91/2023

1. These applications are moved on behalf of the Official
Liquidator seeking certain directions against the Ex-
Management/Directors of the respondent company (in liquidation),
who are arraigned as respondent Nos. 1 to 4 besides respondent No. 5,
who had initially purchased the property in question of the company
in liquidation and later sold it to respondent Nos. 6 & 7. This is as per
the memo of appearance in CO. APPL. 1195/2012 & 2735/2014.
2. The present winding up petition under Section 433(e) and 435
of the Companies Act, 19561 was moved on behalf of the petitioner
against the respondent company (in liquidation) and the winding up

1 The Act

proceedings were ordered to be initiated in terms of the order dated
16.02.2000, leading to the appointment of a Provisional Liquidator
vide order 09.11.2022, and eventually, the final order for the
liquidation of the company was passed by this Court vide order dated
23.11.2000.
3. The Co. Application 1195/2012 is in the nature of a status
report filed by the Official Liquidator to the effect that on inspection
of the records of the company maintained with the office of the ROC2,
it was found that following persons were the Directors of the
company, namely Mr. Mukesh Hans, Mrs. Rashmi Hans, Mr. Sanjeev
Hans, Mr Harsh Bhasin, Mr. Kapil Bhasin, Mr. Hardeep Oberoi and
Ms. Hema Oberoi; and during the course of winding up proceedings
undertaken by the Official Liquidator, notices were issued to the Ex-
Directors to file the statement of affairs, which were responded by Mr.
Mukesh Hans and Mrs. Rashmi Hans, who had appeared on
16.04.2002, 18.03.2003 and 16.10.2006 before the OL and their
statements were recorded in terms of Rule 130 of the Companies
(Court) Rules, 1959. The OL states that inter alia, it was revealed that
the company (in liquidation) had been running its Head Office from
the premises situated at 198/12-13, Ramesh Market, East of Kailash,
New Delhi. Apart from finding several blemishes on the part of the
Ex-Directors/Management, it was found that the aforesaid property at
Ramesh Market had been sold by way of a registered Sale Deed dated
10.03.1999 for a total consideration of Rs.3,60,000/- to respondent
No.5, but the sale consideration was not reflected in the books as well

2 Registrar of Companies

in the bank statements that were being operated by the company in
liquidation.
4. Subsequently, Co. Application No. 2735/2014 was filed seeking
action against the instant set of opponents under Section 531-A, 536,
537 and 538 of the Act and Rule 9 of the Companies (Court) Rules,
1959 on behalf of the Official Liquidator along with another
application seeking condonation of delay of 43 days in filing the
application. This application for condonation of delay has remained
pending for long and since there is no objection to this, the same is
allowed.
5. Evidently, it was found that the sale of the aforesaid property
had been effected within a year of the presentation of the winding up
petition on 07.09.1999 and further, the status that came forth was that
one part of the property was later on sold by respondent No.5 to
respondent No.6 vide registered Sale Deed dated 15.12.1999 and the
other part of the property was sold to respondent No.7 vide registered
Sale Deed dated 08.07.1999. However, the amount of sale
consideration was not reflected in any of the bank accounts of the
respondent company in liquidation, although details of as many as 14
bank accounts were submitted with the Official Liquidator by
respondent No.1 & 2. Hence, the OL has prayed for prosecution of the
Ex-Directors/Management of the company (in liquidation) under
Section 538 of the Act and/or other appropriate directions.
6. Shorn of unnecessary details, evidently, respondent No.1 to 4
were the directors of the company in liquidation at the time of sale of
the property in question to respondent No. 5 on 10.03.1999. It is also

brought to the fore that there were two shops at 198/12-13, Ramesh
Market, Garhi, East of Kailash, New Delhi, which were sold for a total
consideration of Rs. 3,60,000/-. At the cost of repetition, this amount
has not been accounted for, and therefore, a prayer has been made to
set aside the sale of the shops No. 198/12-13 in favour of respondent
No. 5 and later to respondent No. 6 & 7 in terms of Section 531-A of
the Act as well as launching prosecution against the Ex-Directors
under Section 5383 of the Act.

3 538. Offences by officers of companies in liquidation.-

(i) If any person, being a past or present officer of a company which, at the time of the commission
of the alleged offence, is being wound up, whether by [the Tribunal] or voluntarily, or which is
subsequently ordered to be wound up [by the Tribunal] [ Substituted by Act 11 of 2003, Section 98,
for ” by the Court” .] or which subsequently passes a resolution for voluntary winding up,- (a) does
not, to the best of his knowledge and belief, fully and truly discover to the Liquidator all the
property, movable and immovable, of the company, and how and to whom and for what
consideration and when the company disposed of any part thereof, except such part as has been
disposed of in the ordinary course of the business of the company; (b) does not deliver up to the
Liquidator, or as he directs, all such part of the movable and immovable property of the company
as is in his custody or under his control, and which he is required by law to deliver up; (c) does not
deliver up to the Liquidator, or as he directs, all such books and papers of the company as are in
his custody or under his control and which he is required by law to deliver up; (d) within the
twelve months next before the commencement of the winding up or at any time thereafter,
conceals any part of the property of the company to the value of one hundred rupees or upwards,
or conceals any debt due to or from the company; (e) within the twelve months next before the
commencement of the winding up or at any time thereafter, fraudulently removes any part of the
property of the company to the value of one hundred rupees or upwards; (f) makes any material
omission in any statement relating to the affairs of the company;(g) knowing or believing that a
false debt has been proved by any person under the winding-up, fails for a period of one month to
inform the Liquidator thereof; (h) after the commencement of the winding up, prevents the
production of any book or paper affecting or relating to the property or affairs of the company; (i)
within the twelve months next before the commencement of the winding up or at any time
thereafter, conceals, destroys, mutilates or falsifies, or is privy to the concealment, destruction,
mutilation or falsification of, any book or paper affecting or relating to, the property or affairs of
the company; (j) within the twelve months next before the commencement of the winding up or at
any time thereafter makes, or is privy to the making of, any false entry in any book or paper
affecting or relating to the property or affairs of the company; (k) within the twelve months next
before the commencement of the winding up or at any time thereafter, fraudulently parts with,
alters or makes any omission in, or is privy to the fraudulent parting with, altering or making of
any omission in, any book or paper affecting or relating to the property or affairs of the company;
(l) after the commencement of the winding up or at any meeting of the creditors of the company
within the twelve months next before the commencement of the winding up, attempts to account
for any part of the property of the company by fictitious losses or expenses; (m) within the twelve
months next before the commencement of the winding up or at any time thereafter, by any false

representation or other fraud, obtains on credit, for or on behalf of the company, any property
which the company does not subsequently pay for; (n) within the twelve months next before the
commencement of the winding up or at any time thereafter, under the false pretence that the
company is carrying on its business, obtains on credit, for or on behalf of the company, any
property which the company does not subsequently pay for; (o) within the twelve months next
before the commencement of the winding up or at any time thereafter, pawns, pledges or disposes
of any property of the company which has been obtained on credit and has not been paid for,
unless such pawning, pledging or disposing is in the ordinary course of the business of the
company; or (p) is guilty of any false representation or other fraud for the purpose of obtaining the
consent of the creditors of the company or any of them, to an agreement with reference to the
affairs of the company or to the winding up, he shall be punishable, in the case of any of the
offences mentioned in clauses (m), (n) and (o), with imprisonment for a term which may extend to
five years, or with fine, or with both, and, in the case of any other offence, with imprisonment for a
term which may extend to two years, or with fine, or with both: Provided that it shall be a good
defence-(i)to a charge under any of the clauses (b), (c), (d), (f), (n) and (o), if the accused proves
that he had no intent to defraud; and (ii) to a charge under any of the clauses (a), (h), (i) and (j), if
he proves that he had no intent to conceal the true state of affairs of the company or to defeat the
law.(2) Where any person pawns, pledges or disposes of any property in circumstances which
amount to an offence under clause (o) of sub-section (1), every person who takes in pawn or
pledges or otherwise receives the property, knowing it to be pawned, pledged, or disposed of in
such circumstances as aforesaid, shall be punishable with imprisonment for a term which may
extend to three years, or with fine, or with both. (3) For the purposes of this section, the expression
“officer” shall include any person in accordance with whose directions or instructions the Directors
of the company have been accustomed to act.

7. On notice, separate replies have been filed on behalf of the
respondent Nos.5, 6 & 7 besides respondent Nos. 2 and 3 and the
position that emerges is that the amount for sale consideration of Rs.
3,60,000/- had been credited in the account of the company (in
liquidation) at Bank of Rajasthan, Karol Bagh Branch, New Delhi, the
details of which (bank account) had not been disclosed by the Ex-
Directors/Management pursuant to the inquiries, which were initially
conducted by the Official Liquidator.
8. Having heard the learned counsels for the respondent Nos. 5, 6
& 7 as well as respondent Nos. 1 and 2/Ex-Directors, namely Mr.
Mukesh Hans and Mrs. Rashmi Hans, it is categorically brought out
that the true and correct information had not been supplied by

respondent Nos. 1 to 4 during the course of winding up proceedings
by the Official Liquidator in as much as the aspect of the sale and its
consideration, that had been deposited in the Bank of Rajasthan, Karol
Bagh Branch, New Delhi, was not disclosed.
9. All said and done, it stares on the face of the record that in so
far as the property in question is concerned, third party rights have
already been created much before the initiation of the instant winding
up proceedings. There is no iota of allegations by the Official
Liquidator that there was any collusion between the Ex-Directors of
the company (in liquidation) and respondent No.5 and/or for that
matter, the respondent Nos.6 and 7 in any manner and by all means,
that they bonafidely purchased the property in question when there
was pending no winding up petition.
10. However, respondent Nos. 1 to 4, namely Mr. Mukesh Hans,
Mrs. Rashmi Hans, Mr. Hardeep Oberoi and Ms. Hema Oberoi, who
were the Ex-Directors during the relevant time of the company (in
liquidation), are guilty of fraudulent concealment and have
misappropriated the funds as well. Resultantly, such an amount has
not been made available for the satisfaction of the outstanding dues of
the secured creditors etc.
11. Taking on record the OLR No. 91/2023 and in view of
provisions of Section 538 of the Act, it is directed that the aforesaid
respondent Nos. 1 to 4 are held accountable and liable to pay Rs.
3,60,000/- with penal interest @ 12% per annum from the date of
execution of the Sale Deed i.e. 10.03.1999, jointly and severally,
which shall be paid to the Official Liquidator within 30 days from

today. Failing which, the Official Liquidator shall be at liberty to
initiate an appropriate complaint for the prosecution of the respondent
no. 1 to 4, namely Mr. Mukesh Hans, Mrs. Rashmi Hans, Mr. Hardeep
Oberoi and Ms. Hema Oberoi under Section 538 of the Companies
Act.

DHARMESH SHARMA, J.
FEBRUARY 08, 2024
Sadique