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

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 16.7.2015notice.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.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 partiesVikas 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 -the counter affidavit, it is contended that Rule 9 has not been technically violated by the respondent. Though, the respondents 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.

Court's reasoning:
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.