Disposed

Tata Sky Limited v. M/S. Master Graphics and Others

Bombay HC3 Apr 2014NMS/442/2014

Case brief

AI extract

What is this about?

Plaintiff sought interim reliefs in a suit alleging fraud by former employees who siphoned company funds. Finding a strong prima facie case with uncontroverted allegations, the court granted ex parte directions for disclosure of assets, declaration of charge, continuation of injunction, and appointment of a court receiver over seized properties.

What did the court decide?

Defendants directed to disclose assets; declaration of charge and injunction continued; Court Receiver to hold seized properties and file reports; co-respondents directed to deposit amounts.

Tata Sky Limited Vs M/S. Master Graphics and Others — Property and Title | Bombay HC (2014)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

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NOTICE OF MOTION NO. 442 OF 2014

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SUIT NO. 303 OF 2014

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Tata Sky Limited … Applicant/Plaintiff

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IN THE MATTER BETWEEN :

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Tata Sky Limited … Plaintiff

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M/s Master Graphics and Ors. … Defendants

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Mr. Ankit Lohia alongwith Ms. Apeksha Sharma and Sanjeel Kadam i/b Kadam & Company, for Plaintiff.

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Mr. Anwar Landge i/b. S. Sawant & Co. for Co-respondent No. 2.

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Mr. Deepak Dhave for Co-respondent No. 6.

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Ms. Sapna Rachure i/b. T.N. Tripathi & Co. for Co-respondent No. 5.

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Mr. Birendra Nagia a/w. Mohan Tekavde for Defendant Nos. 3, 6 and 7. Mr. Gautam Raj Singh Chhibber, Assistant General Manager of IDBI Bank present.

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CORAM : KATHAWALLA J. DATE: 3RD APRIL,2014

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P.C. :

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By an Order dated 25^th March,2014, this Court had directed

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that the present Notice of Motion be heard finally alongwith Notice of

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Motion No. 441 of 2014. The Plaintiff was directed to forward a copy of

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the said Order dated 25^th March, 2014, to all the Defendants and to the Economic Offences Wing (EOW). Affidavit proving service of the Order dated 25^th March, 2014, on the Defendants, EOW and the CoRespondents is taken on record. The Notice of Motion did not reach hearing on 2^nd April, 2014, and was therefore taken up for hearing on 3^rd April,2014.

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Despite service, none appear for Defendant Nos. 1, 2, 4 & 5. Though service has been effected on Defendant Nos. 3, 6 and 7 since February, 2014, Defendant Nos. 3, 6 and 7 have not filed any reply. No appearance is filed till date on behalf of Defendant Nos. 3, 6 and 7. During earlier hearings none have appeared for Defendant Nos. 3, 6 and 7. However today, Advocate Birendra Nagia informs the Court that Advocate Mohan Tekavde (who has not filed his Vakalatnama till date) would be appearing for Defendant Nos. 3, 6 and 7. Mr. Nagia has informed the Court that he knows nothing about the matter and has been instructed to merely seek time. The request for time is therefore rejected. Co-respondent Nos. 2, 5 and 6 have appeared through Counsel and submitted to the orders of this Court. The representative of corespondent No. 3 is also present and submits to the orders of the Court. 3. I have perused the plaint along with its exhibits and have heard the Learned Counsel appearing for the Plaintiff.

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According to the Plaintiff, the Defendant Nos. 2 & 3 were

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employed with the Plaintiff in the Accounts Department in April, 2007 and November, 2008 respectively. Defendant No.1 is a fictitious company held by Defendant No.2. Defendant Nos. 4 & 5 are the mother and wife of Defendant No.2. Defendant Nos. 6 & 7 are the mother and wife of Defendant No.3. During their course of employment, Defendant Nos. 2 & 3 were responsible for handling various aspects relating to the purchase orders of the Plaintiff, processing of bills and issuing cheques to the suppliers of the Plaintiff.

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According to the Plaintiff, in July,2012, one of their ex-business associates Mr. Prakash Chande approached the Plaintiff with a query as to why TDS in the sum of Rs. 2,30,762/- was credited in his account for the year 2011-2012 though he had not received any amount from the Plaintiff in the year 2010-2011. Around that period, Defendant Nos. 2 & 3 had abruptly stopped attending the Office of the Plaintiff. The Plaintiff thus carried out enquiries which revealed that Defendants Nos. 2 & 3, had forged and fabricated several documents and got several cheques issued in favour of Defendant No. 1 for services allegedly provided by Defendant No.1 to the Plaintiff. The said cheques had been deposited

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and encashed by the Defendant No. 1 in its account with Saraswat Bank. Upon enquiry, the Plaintiff realized that no services were ever rendered by the Defendant No. 1 to the Plaintiff. In this manner the

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Defendant Nos. 2 & 3 had fraudulently siphoned away from the Plaintiff a sum of Rs 7,68,03,893/-. In August 2012, the Plaintiff terminated the services of Defendant Nos. 2 & 3 and filed a complaint with the EOW. Necessary enquiry and investigation has been carried out by EOW. FIR and charge sheet have been filed against Defendant Nos. 2 & 3. Defendant Nos. 2 & 3 were arrested and are presently on bail.

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Learned Counsel appearing for the Plaintiff submitted that the remuneration earned by the Defendant Nos. 2 & 3 does not justify the assets owned by them and the Defendant Nos. 4 to 7, and/or the lifestyle lived by them. Defendants Nos. 4 to 7 have no independent source of income and are dependent on the Defendant Nos. 2 & 3.

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To support his submissions, the Learned Counsel for the Plaintiff has drawn my attention to various findings in the charge sheet. Statements of witnesses as recorded in the charge sheet and annexed as pages 78, 81, 84 to 88 to the Affidavit in support of the Notice of motion reveal that the Defendant No.2 has lent monies ranging from Rs 1 lakh to Rs 15 lakhs to various people, from time to time. Page 83 of the Affidavit in support of the Notice of Motion records that Defendant No. 2 has travelled abroad more than 5-6 times. Page 90 of the Affidavit in support of the Notice of Motion records that the Defendant No.2 has spent approximately Rs. 5.50 to Rs.6 lakhs for interiors in his residence.

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Pages 92 to 96 of the Affidavit in support of the Notice of Motion reveal EOW’s investigation that Defendant No.2 has spent lakhs of rupees on bar girls. All the above findings are based on the statements of witnesses as recorded in the charge sheet after investigation.

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Learned Counsel for the Plaintiff has further drawn my attention to the charge sheet at Page 96 of the Affidavit in support of the Notice of Motion and has submitted that a total of 59 cheques were fraudulently received by the Defendants from the Plaintiff and credited in Saraswat Bank. These monies in turn have been transferred / withdrawn from time to time. The Defendant No.2 has purchased 2 cars by making more than half the payments through cheques drawn on Defendant No.1’s Saraswat Bank account as stated in the charge sheet at Page 82 of the Affidavit in support of the Notice of Motion. The Defendant No.2 has also purchased 3 flats by paying a sum of Rs. 1,08,50,000/- , as per column 18 of the charge sheet on page 79 of the of Affidavit in support of the Notice of Motion.

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Learned Counsel for the Plaintiff also drew my attention to Pages 99 to 102 of the Affidavit in support of the Notice of Motion and submitted that it is evident from column Nos. 59,61,62 & 68 thereof that Defendant No.3 has purchased various immovable properties in and around the year 2011 by paying considerable amounts in cheque as well

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as in cash. My attention was also drawn to the charge sheet at Page 102 of the Affidavit in support of the Notice of Motion stating that a sum of Rs 2.75 lakhs was forwarded by Defendant No. 3 to one Ms. Dipa Ranpara for meeting expenses of his wife being Defendant No. 7 to the Notice of Motion.

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Learned Counsel for the Plaintiff has also drawn my attention to the averments in the plaint stating that the amounts that have been siphoned away from the Plaintiff have been utilized, inter alia , to acquire the assets which are mentioned in Exhibit “J” to the Affidavit in support of the Notice of Motion and amounts have also been deposited in various bank accounts in the name of the Defendant Nos. 1 to 7, a list of which accounts is annexed at Exhibit “I” to the Affidavit in support of the Notice of Motion. The Learned Counsel for the Plaintiff also submitted that monies have been spent by the Defendant No.2 in bars and international tours.

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The Learned Counsel for the Plaintiff also submitted that the siphoning of monies by the Defendants is more than evident from the record as well as the investigation carried out and reflected in the charge sheet and the number of assets held by them as against their source of income. The Defendant No.1’s bank account with Saraswat Bank which

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was opened and operated by Defendant No.2, is also clearly brought out in the investigation carried out by EOW and has been accordingly reflected in the charge sheet. The EOW have also sought attachment of properties and bank accounts of the Defendants. In view of the facts of the case and investigation as carried out, all assets and bank accounts of the Defendants were sealed / frozen by the EOW.

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The Learned Counsel for the Plaintiff submitted that in view of the above, the Defendant Nos. 2 & 3 have failed to discharge their responsibility towards the Plaintiff and have defrauded them by siphoning huge amounts of the Plaintiffs which did not belong to Defendant Nos. 2 and 3 and to which they were not entitled to. They have failed to discharge their fiduciary responsibility and have committed breach of trust reposed in them by the Plaintiff being the employees of the Plaintiff. The conduct of the Defendants and the manner in which the monies have been siphoned and appropriated by them warrants the right of tracing action.

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Having considered the plaint along with its exhibits and also considering the Affidavit in support and the submissions made by the Learned Counsel on behalf of the Plaintiff, in my opinion a strong primafacie case has been made out by the Plaintiff that Defendant Nos. 2 and

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3 have siphoned huge amounts from the Plaintiff through Defendant

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No. 1 and have appropriated the same as set out hereinabove. The Plaintiff has prima-facie correctly traced the proceeds of the fraud to the assets listed and mentioned in Exhibit “J” to the Affidavit in support of the Notice of Motion and the bank /demat accounts as mentioned in Exhibit “I” to the Affidavit in support of the Notice of Motion. The Defendants though served have failed to make out any defense in their favour. The allegations made by the Plaintiff have remained uncontroverted. The Learned Counsel for the Plaintiff is correct in his submission that if the reliefs sought by the Plaintiff are not granted the Defendant Nos. 2 and 3 may before disposal of the Suit dispose of all that is left with them from the funds siphoned by them from the Plaintiff, in the aforestated manner. The Plaintiff is also correct in its submission that there is a strong likelihood that the Defendants may be holding assets other than those disclosed in the charge sheet and the plaint.

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In the circumstances, in my view, the Plaintiff is entitled to interim reliefs during the pendency of the Suit and an order is thus passed in the following terms:

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(i) Order in terms of prayer clause (a) to the Notice of

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Motion is granted. Defendants are directed to file an affidavit

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within 2 weeks from today disclosing all their assets

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including immovable & movable properties, bank accounts fixed deposits etc owned and possessed by each of the Defendants either singly or jointly with each other and/or with any other person;

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(ii) A declaration of charge as prayed in prayer clause ( c) of the Notice of Motion and an injunction as prayed in prayer clause (g) of the Notice of Motion and also continuation of the earlier Orders dated 4^th February,2014 read with Order dated 14^th February,2014.

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(iii) The Court Receiver as appointed by this Court on 4^th February,2014 shall continue to hold the properties mentioned in Exhibit “J” to the Affidavit in support of the Notice of Motion, except the 2 cars for which separate orders

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are passed in the Notice of Motion No. 441 of 2014, till the final disposal of the Suit. The Court Receiver shall within 4 weeks file reports before this Court and seek necessary directions for letting out the immovable properties mentioned in Exhibit “J” to the Affidavit in support of the Notice of Motion;

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Respondents 2 to 5 & 7 to 12 were directed to deposit in this Court to the credit of this Suit all amounts of Defendant Nos. 1 to 7, in single or joint accounts as shall be lying with the aforesaid Co-Respondents. All Co-Respondents are directed to comply with the Order dated 14^th February, 2014 within three weeks from today. The Counsel appearing for the CoRespondents undertake to deposit the amounts as directed by this Court. The Plaintiff is directed to serve the copy of the order to other Co-Respondent Banks. The Prothonotary & Senior Master, High Court, Bombay to invest the amount so deposited with a nationalized bank initially for a period of 6 months and to renew the same thereafter for similar periods, till the disposal of the Suit.

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The Co-Respondent No.6 is directed not to make or permit any transfer or any encumbrance on any shares lying in the depositary account of Defendant No.2 maintained by Co-Respondent No.6, till further orders of this Court.

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The Learned Counsel for the Plaintiff seeks liberty to approach the Court for appropriate reliefs in respect of the assets upon

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the Defendants disclosing their assets as directed in paragraph 14 (i) of the order. Liberty as sought is granted.

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Notice of Motion stands disposed off in terms of the aforesaid reliefs.

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( S.J. KATHAWALLA J.)

Tata Sky Limited v. M/S. Master Graphics and Others

Case brief

What is this about?

What did the court decide?

Tata Sky Limited v. M/S. Master Graphics and Others

Case brief

What is this about?

What did the court decide?

What the court decided

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