Comm. Ajay Sood and Others vs State and Others

S. Ravindra Bhat, J.—This revision is directed against an order dated 27.8.2004 where the trial court declined the request to release amounts seized in exercise of power u/s 102 of the Code of Criminal Procedure, from the accused. Briefly, the facts of the case are that the accused allegedly committed offences under Sections 409/120-B/34 IPC in as much as they allegedly induced numerous persons to invest substantial amounts with them or their sister concerns. It is claimed that the amounts were subsequently mis-appropriated and not put to use as was initially promised.

During the course of investigation, the police seized some amounts, from the premises and the accounts of the accused. In the course of the proceedings, the petitioners claiming to be investors/creditors of the said companies staking enforceable claims against the accused, approached the court for adjustment towards their claim. The court declined the application.

Learned counsel contended that the trial court committed an error in treating the claims of the petitioners along with those of other investors and creditors. Reliance was placed upon a few documents to say that the accused had agreed to convey properties and therefore the petitioner''s claim stood on entirely different footings.

Learned counsel took me through the copies of the agreements as well as the documents, issued by the accused, members of the Kuber Group of Companies to say that the petitioners were not investors but had a separate right in as much as they were entitled to properties. The petitioners had paid valuable consideration and even purchased stamp papers, for execution of the sale deeds.

The order of the trial court rejecting the request for release of the amounts inter alia recorded that the company in question namely M/s Kuber Mutual Benefits Limited was directed to be wound up. The court held as follows:

Investors have also moved separate applications for release of the property seized vide order dt. 19.08.1999 and for adjusting the same against their claims. Some investors are appearing in person some investors are appearing through their counsel and some investors are appearing through their association. Their application have also been considered as similar question of law and facts is involved. Vide order dt. 19.08.1999 of the Ld. predecessor of this court the property of the accused had been seized v/s 102 Cr.PC. I have also perused the order dt. 13.08.1998 whereby the High Court of Delhi had restrained the accused from transferring or disposing of their assets except in normal course of business. Vide order dt. 24.9.2002 of the High Court of Delhi the accused Kuber Group had been directed to submit a fresh scheme within a period of 8 weeks. Vide order dt. 13.01.2002 of the High Court of Delhi it had been directed that the order dt. 13.08.1998 will not survive as regards the Kuber Group.

I find that order dt. 13.01.2002 the High Court has observed.

Respondent No. 43 is M/s. Kuber Mutual Benefits Ltd. And respondent no. 44 is Mr. P.K. Sharma (Chairman) Kuber Group of Companies. In view of the fact that Allahabad High Court has already passed an order of winding up the matter will have to be dealt with in accordance with the orders passed by the Allahabad High Court. Kuber Auto General Finance & Leasing Ltd. was not separately included as a party to this petition. In any case any person aggrieved may approach the company Judge of this Court in so far as Kuber Auto General Finance & Leasing ltd. is concerned.

In view of these subsequent developments and in view of the order passed on 24.09.2002 no further direction deserves to be issued qua respondents 43 & 44. It is made clear that in view of the aforesaid developments the order passed on 13.08.1998 will not survive as regards respondents 43 and 44 are concerned.

Since nobody is present on behalf of the petitioner, list for direction on 25th November, 2002.

It is clear from the said order that the order of the winding up is to be dealt with in accordance with the order passed by the Allahabad High Court. It is needless to mention that the property in question has been seized u/s. 102 Cr.PC and a revision is required in respect of the said order in case any person is aggrieved by the same and same cannot be agitated before this court. Even if it is taken with the order u/s 102 Cr.PC is in respect of the present case then also in view of the order dt. 13.11.2002 as the matter is subjudice it is not appropriate for this court to pass any orders of allowing the adjustment of the claims of the depositors....

Accused as well as the investors are at liberty to approach the appropriate forum in respect of their prayer, if so advised.

Keeping in view the order dt. 13.11.2002 the application of the investors as well as accused are hereby dismissed.

The documents relied upon by the petitioners are for the purpose of stating that the M/s Kuber Mutual Benefits Ltd. along with a sister concern ostensibly sold some properties and they had deposited the some amounts as consideration. In the meanwhile the first information report was lodged; further the Reserve Bank of India issued a prohibitory order on 29.9.1999, enjoining the company from accepting deposits and alienating its assets in terms of Section 45MB (1) and Section 45MB(2) of the Reserve Bank of India, 1934. During the pendency of the proceedings, the Allahabad High Court, by an order had directed winding up of M/s Kuber Mutual Benefits Ltd. On account of these factors, the trial court declined to vary the order of attachment/seizure u/s 102 Cr. P.C.

The petitioners might well be innocent investors. In a sense, their claims might be legitimate; they could well be the victims. However, at this stage during the subsistence of the winding up order and also the prohibitory order of the Reserve Bank of India which had directed the company in question not to alienate the properties, it was not open to the court to have dealt with the assets. Once a winding up order is made in exercise of jurisdiction under the Companies Act, the Official Liquidator deemed to be in charge of the properties and is under a duty to collect the assets for appropriation and distribution to the concerned creditors who can establish their claims in accordance with law. The trial court in this case has in my opinion correctly assessed the legal position and declined the request.

In view of the above discussion I find no reason to interfere with the order of the trial court. However, it is made clear that all the rights of the petitioner to approach the official liquidator and/or the court concerned in relation to their claims are reserved. The petitions are dismissed, subject to the reservation in the preceding paragraph.