Case: Estate Officer Ut Chandigarh  Vs. M/S. Esys Information Technologies Pvt. Ltd

respect to charge by Teledata Informatics Ltd., over the assets of M/s. Esys Singapore, it has been mentioned that general charge of Teledata remains. Following facts have been mentioned : "10. I have at paragraphs 16-17 of my 2nd Affidavit referred to Esys Global Holdings Ptd ("Esys Dubai") being prepared to buy certain of Esys Singapores subsidiaries at those subsidiariess book values/fair market value, without any pre-conditions. I expand on the circumstances of this offer below.11. Esys Dubai was prepared to buy over Esys Singapore shares in its subsidiaries, and make a loan to Esys Singapore up to the total value of about USD48m. However, Esys Dubai could only buy the subsidiaries once those subsidiaries had been properly valued, and any regulatory approvals required for the transfer of those shares had been obtained.x x x x x19. Teledata essentially recommended the same kind of restructuring for Esys Singapore to deal with its financial situation, in that it recommended a holding company to hold 100% of the shareholding in Esys Singapore. However, instead of proposing the issue of convertible bonds from the holding company like Credit Suisse, Teledata was prepared to invest directly in the holding company. Furthermore, Teledata was prepared to give Corporate Guarantees to Esys Singapores Suppliers and bankers, in return for a charge over Esys Singapores assets in order to keep Esys Singapore operating.x x x x x21. As part of the Teledata deal, and as previously set out in my 2nd Affidavit, I transferred all my shares in Esys Singapore and in Esys Holdings Pte Ltd (collectively referred to herein as "Consideration Shares") to Rainforest, and received Rainforest shares in return. On completion of the transaction, as set out in paragraph 29 of my 2nd Affidavit, I owned 58,888,000 shares in Rainforest (representing 49% of Rainforest) and Teledata owned 61,120,000 shares in Rainforest (representing 51% of Rainforest).22. Teledata paid valuable consideration to Rainforest to subscribe for its shares in Rainforest. All of Rainforests assets, including the subscription monies received from Teledata, and the Consideration Shares, are subject to the control of the Board of Rainforest, which is controlled by Teledata as the majority shareholder. As minority shareholder of Rainforest, I am certainly in no position to dissipate its assets." 12. A copy of Enterprise IT, 2008 has also been filed with rejoinder in which it has been reported that Teledata has acquired Esys. 13. In view of the aforesaid statement made in the affidavit of Mr. Vikas Goel, it is apparent that in spite of the clear direction made by this Court, the respondent has suppressed the facts with respect to its deal with M/s. Teledata Ltd. There is concealment of material facts by the respondent in spite of having been directed to disclose the full facts in the counter affidavit by specific order passed on 16.7.2015. It is apparent from the affidavit dated 2.7.2008 of Mr. Vikas Goel extracted above that in order to raise the fund to pay to its creditors, M/s. Esys Singapore considered its option to raise it through the sale of its assets and subsidiaries and M/s. Esys Global Holding Ltd. was prepared to buy subsidiaries including M/s. Esys India based on book value. It has been mentioned in para 17 that sale of its subsidiaries to M/s. Esys Global Holding meant that these liabilities were transferred to the buyer. Thus there is sale of assets and subsidiaries and the denial that there is no sale is incorrect statement. In the affidavit dated 24.7.2008 in paras 10 and 11, it is apparent that purchase by M/s. Esys Dubai of the assets of M/s. Esys Singapore and its subsidiaries after taking regulatory approvals which were required for transfer of shares. Thus, under the garb of transfer of shares, the respondents have completed the sale and is creating a screen to conceal this aspect. Deal with Teledata is also apparent from the aforesaid paras 19 to 21 of the affidavit of Mr. Vikas Goel. Unfortunately, the respondent has concealed the facts with respect to Teledata and has not come out with clean hands. It is also apparent that Teledata in its unaudited results has published that Teledata along with its subsidiary M/s. Esys Technologies is setting up a six acre TBO facility in Rajeev Gandhi Information Technology Park in Chandigarh. 14. In Juggilal Kamlapat v. Commissioner of Income-tax, U.P. AIR 1969 SC 932 , it has been laid down that the doctrine of lifting of corporate veil can be applied by court and it is entitled to lift the mask of corporate veil when it is used for perpetrating fraud or for evasion of tax. Corporate veil can also be lifted where promoters act in furtherance of their dishonest and fraudulent design as laid down in Jai Narain Parasrampuria (Dead) & Ors. v. Pushpa Devi Saraf & Ors. 2006 (7) SCC 756 , State of U.P. & Ors. v. Renusagar Power Co. & Ors. AIR 1988 SC 1737 . Lifting of the veil has been held to be permissible in Life Insurance Corporation of India v. Escorts Ltd. & Ors. AIR 1986 SC 1370 . In the instant case task is made easy as such facts on lifting veil are writ large from affidavits of respondent filed in Singapore High Court. 15. It is apparent that M/s. Esys Singapore has entered in such transactions with Dubai company and it appears prima facie from the affidavit of Mr. Vikas Goel and there was a further right created in favour of Teledata though dispute with Teledata has to be decided in pending cases. The provisions of Rule 9 of the Rules and Clause 15 of the allotment letter have been clearly violated. Thus, we are of the considered opinion that the order passed by the High Court is not sustainable and resumption of the allotted land by the appellant was legal and proper. The respondent is guilty of suppressio veri and suggestio falsi and has violated order dated 16.7.2015 passed by this Court as to disclosure.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]15. It is apparent that M/s. Esys Singapore has entered in such transactions with Dubai company and it appears prima facie from the affidavit of Mr. Vikas Goel and there was a further right created in favour of Teledata though dispute with Teledata has to be decided in pending cases. The provisions of Rule 9 of the Rules and Clause 15 of the allotment letter have been clearly violated. Thus, we are of the considered opinion that the order passed by the High Court is not sustainable and resumption of the allotted land by the appellant was legal and proper. The respondent is guilty of suppressio veri and suggestio falsi and has violated order dated 16.7.2015 passed by this Court as to disclosure.