Chandigarh Information Services Park, Rules, 2002 – Rule 9 – Allotment of Small Campus Site – Resumption of the allotted land.
Allotment of Site
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
(V. Gopala Gowda) and (Arun Mishra) JJ.
May 11, 2016
CIVIL APPEAL NO. 3765 OF 2016
Estate Officer UT Chandigarh & Ors. .. Appellants
M/s. Esys Information Technologies Pvt. Ltd. .. Respondent
For Appellant(s) Mr. Chandra Prakash, Adv.
For Respondent(s) Mr. Tarun Gupta, Adv.
J U D G M E N T
Arun Mishra, J.
1. The appeal has been preferred by the Estate Officer, Union Territory of Chandigarh, aggrieved by the judgment and order passed by the High Court of Punjab & Haryana at Chandigarh thereby setting aside the orders passed by the Estate Officer, appellate and revisional authorities on 24.9.2008, 14.2.2011 and 14.12.2012 respectively, thereby resuming the plot which was allotted to the respondent. Facts in short indicate that in the year 2002, Chandigarh Administration notified the rules called Allotment of Small Campus Site in Chandigarh Information Services Park, Rules, 2002 (hereinafter referred to as ‘the Rules’). Rule 9 of the Rules provided that transfer of the campus site by the allottee shall not be allowed for a period of 10 years from the date of allotment or till all dues are fully paid up whichever is later. Similar condition was incorporated in the allotment letter dated 1.6.2006 by which 6 acres of land was allotted to the respondents. It was necessary to make the construction within 3 years from the date of allotment.
2. On 2.1.2008 it came to the notice of the Director, Information Technology that the respondent company namely M/s. Esys Information Technologies Pvt. Ltd., Singapore had transferred a major portion of shares to other company namely, M/s. Esys Global Holdings, Dubai, without informing the appellant or seeking necessary permission as provided in Rule 9 and clause 15 of the allotment letter. Consequently, Director, IT, sought following clarifications from the respondent on 2.1.2008: (i) what is the business plan of the company for its activities; (ii) what are the business activities of M/s. Esys Information Technologies Ltd. from the campus site; (iii) what was the holding structure of the shareholding of the company at the time of making request for allotment; (iv) what was the holding structure of the company at the time of allotment; and (v) what is the shareholding structure of the company at present. Reply by the respondent was not satisfactory, as such show cause notice was issued on 18.1.2008 by the Estate Officer as to why due to violation of Rule 9 of the Rules and clause 15 of the allotment letter, action be not taken and allotment be cancelled and further why whole or part of the premium, EDC calculated till date of cancellation be not forfeited. The Estate Officer by order dated 24.9.2008 cancelled the allotment and ordered resumption of the site and ordered to forfeit 10% of the total premium, interest earned and other dues payable in respect of the site. Aggrieved by the same, the respondent preferred an appeal under section 10(1) of the Capital of Punjab (Development and Regulation) Act, 1952. The appeal was dismissed vide order dated 14.2.2011 passed by the Chief Administrative Officer, UT Chandigarh. The respondent preferred a revision before the Advisor to Administrator, UT Chandigarh. Same had been dismissed vide order dated 24.9.2008. It is pertinent to mention that the affidavit filed by Mr. Vikas Goel in the High Court of Singapore was placed on record and was referred to in the order passed by the revisional authority. Before the appellate authority, it was argued that the allottee company had transferred a major portion of shareholding changing its control to another company i.e. Esys Global Holdings, Dubai which in turn sold its stake to Teledata Informatics Ltd., a Chennai based company.
3. The High Court by the impugned judgment and order has allowed the writ petition. This Court while entertaining the special leave petition had passed an order on 16.7.2015 directing the respondent to file a counter affidavit containing certain information specified in the order. Following order was passed by this Court on 16.7.2015 :-
The respondent has appeared on caveat. The respondent-company shall file a counter affidavit within six weeks from today. Rajoinder affidavit, if any, be filed by the petitioner within two weeks thereafter. Counter affidavit shall apart from answering the averments and contentions raised in the special leave petition also specifically state whether the share-holding in the allottee company has been transferred to any other company and if so which is the consideration paid for such transfer. The affidavit shall further indicate whether the transferee of such holding has, in turn, further transferred the shares to Teledata Informatics Ltd., Chennai, if so, the consideration for such transfer shall also be indicated. Audited balance sheets of the allottee company from the year 2007 onwards and those of the transferee company, shall be filed along with the counter affidavit. Status quo, as it exists today, shall be maintained by the parties, pending further orders from this Court.”
4. In short, in the counter affidavit of the respondent, the shareholding pattern has been given as on 1.6.2006, 31.3.2007, 3.5.2007 and it is not disputed that M/s. Esys Information Technologies Pvt. Ltd., Singapore had transferred 1,97,55,188 shares to Esys Global Holdings, Dubai owned by one Niraj Goel. It is further stated in the counter filed by the respondent that EZY Global Holding FZE, Dubai has not further transferred the shares to Teledata Informatics Ltd., Chennai. It is also stated that on 29.11.2006 a shareholder agreement was executed between Mr. Vikas Goel, M/s. Esys Information Technologies Pvt. Ltd. Singapore and M/s. Teledata Informatics Ltd., Chennai. This agreement could not be implemented due to the fraud perpetrated upon Mr. Goel and M/s. Esys Information Technologies Pte., Singapore by M/s. Teledata Informatics. Following are the cases pending inter se parties :-
“(i) Vikas Goel and Rainforest v. Teledata Informatics and Others – Arbitration in SIAC Singapore.
(ii) Vikas Goel and Rainforest v. Ramachandran (Teledata CEO) and Others in New York.
(iii) Esys India v. Teledata – Perjury Application in Chennai.
(iv) Esys India v. Teledata – Winding up application in Chennai.
(v) Baytech and Teledata v. Vikas Goel and Rainforest – BVI.”
In the counter affidavit, it is contended that Rule 9 has not been technically violated by the respondent. Though, the respondent’s shareholding pattern has undergone a change after allotment but it could not be a ground for the resumption of the allotment. Approximately one year out of three years has remained for raising the construction and before that order of resumption had been passed. The allotment was not speculative transaction. It was not intended to get unjust enrichment from the allotment at a concessional rate. The respondent fully satisfied the eligibility criteria. Office has been rented, furnishing cost has been incurred, Managers were relocated from Singapore and Delhi. Esys has relocated its key global functions to Chandigarh. There was delay of 5 to 6 months in handing over possession of the campus site. The respondent was entitled to mortgage the site for raising loan by way of trading security. In this regard, permission was sought but was not given. The site was resumed on 24.9.2008 before the expiry of 3 years from the date of allotment.
5. Along with the rejoinder, the appellant has filed two affidavits filed by Mr. Vikas Goel in the High Court of Republic of Singapore in Suit No.854/2006/H. It is submitted that the holding company was the Singapore Company and Dubai and India based companies were its subsidiary companies. The allotment was made in favour of M/s. Esys Information Technologies. M/s. Esys, Singapore could not have transferred assets as per clause 15 of the allotment order for a period of ten years. The stake of Dubai company by virtue of 95% shares transfer has raised to 98%. M/s. Esys Global Holdings Ltd., Dubai further sold these stakes to Teledata, a Chennai based company. Facts stated in Affidavit dated 2.7.2008 of Mr. Vikas Goel which was part of the record of the Estate Officer have been concealed in spite of the categorical order dated 16.7.2015 passed by this Court. The way in which the transaction has been made is a transfer which is not permissible as per rules and conditions of allotment letter. In fact there is transfer of plot from one company to the other company. The respondent is using the land for increasing valuation of assets and thereby improving financial worth. The holding company and its subsidiaries are two distinct legal entities. This Court should lift the veil so as to unearth mala fide, dishonest and fraudulent design of the respondent. Teledata is claiming to have acquired M/s. Esys Singapore and showing the plot in question as its asset.
6. It was submitted on behalf of the appellant that transfer without permission was not permissible as per Rule 9 and clause 15 of the allotment letter for ten years. It is not a case which is covered by Condition No.15-b of the allotment letter. It is not only a case of transfer to Dubai company but transfer of assets to Teledata, a Chennai based IT company. Affidavit of Mr. Vikas Goel mentions various facts though it was filed before the Estate Officer as well as the DIT Office. However, in spite of the direction issued by this Court the respondent has not filed it nor has stated the facts mentioned in the same in the counter affidavit and wrong averments have been made. Reliance has been placed by the appellant on certain portions of the affidavit of Mr. Vikas Goel indicating that there had been transfer of assets of subsidiary in India. The actual facts regarding transfer of shares to Teledata have been suppressed. Teledata had published unaudited results mentioning that Teledata along with its subsidiary is setting up a six acre TBO facility in Rajeev Gandhi Information Technology Park in Chandigarh. The affidavit filed by Mr. Vikas Goel in Singapore court indicates that he has signed an agreement to sell 51% stake to Teledata. Vikas Goel wanted to dupe Teledata and therefore surreptitiously transferred shares to Esys Global Holding, Dubai. It is a clear cut violation of the rules. Esys India had ceased its operations after 2010 as all its businesses were closed down and all the employees were laid off. The company has no business transaction, no employees, never deposited any PF nor filed sales-tax returns. It is a clear case of transfer of property. Transfer means transfer in any form whatsoever and howsoever styled. A prayer was made by respondent on 24.9.2007 to change the zoning plan. The prayer was declined on 25.10.2007 and a letter dated 25.10.2007 was issued. No construction had been made till the cancellation. No step had been taken to raise the construction also. Thus, their intention was never to start the construction.
7. It was submitted on behalf of the respondent that there is no violation of clause 15 of the allotment letter. The allottee remains the same. Clause 15 is not attracted as transfer of site is not to the other entity. It is not a case of allottee company being merged with other company or a case of split. The allottee company was subsidiary of M/s. Esys Singapore. The shares have been transferred to M/s. Ezy Global Holding, Dubai, company owned by Mr. Niraj Goel, brother of Mr. Vikas Goel. There is no occasion to lift the corporate veil in the instant case. There was no transfer of shares of the allottee by M/s. Ezy Dubai to M/s. Teledata, Chennai. The respondent is a reputed company and has not indulged in a speculative land deal.
8. Clause 15 of the allotment letter reads as follows :-