Special Civil Application Nos. 18637, 18638, 18639 of 2015, Letters Patent Appeal No. 463 of 2015 in Special Civil Application No. 5724 of 2014, Letters Patent Appeal No. 464 of 2015 in Special Civil Application No. 5400 of 2014, Letters Patent Appeal No. 480 of 2015 in Special Civil Application No. 6012 of 2014 and Letters Patent Appeal No. 48.... Case: Ashita Nilesh Patel and Ors. Vs Deputy Secretary-Home Department and Ors.. Gujarat High Court
|Case Number:||Special Civil Application Nos. 18637, 18638, 18639 of 2015, Letters Patent Appeal No. 463 of 2015 in Special Civil Application No. 5724 of 2014, Letters Patent Appeal No. 464 of 2015 in Special Civil Application No. 5400 of 2014, Letters Patent Appeal No. 480 of 2015 in Special Civil Application No. 6012 of 2014 and Letters Patent Appeal No. 48...|
|Party Name:||Ashita Nilesh Patel and Ors. Vs Deputy Secretary-Home Department and Ors.|
|Counsel:||For Appellant: K.S. Nanavati, Senior Advocate assisted by Nandish Chudgar, Raheel Patel and Prateek Bhatia, Advocates for Nanavati Associates, Advocate and For Respondents: P.K. Jani, Senior Advocate and Avinash Avadh, Advocate|
|Judges:||R. Subhash Reddy, C.J. and V.M. Pancholi, J.|
|Issue:||Arbitration and Conciliation Act, 1996 - Section 9; Central Excise Act, 1944 - Section 35G; Code of Civil Procedure, 1908 (CPC) - Order XXXVII Rule 37; Code of Criminal Procedure, 1973 (CrPC) - Section 482; Constitution of India - Articles 136, 139A(2), 166(2), 226, 226(2), 227, 245, 32, 326; Forward Contracts (Regulation) Act, 1952 - Section 2...|
|Judgement Date:||March 29, 2017|
|Court:||Gujarat High Court|
V.M. Pancholi, J.
1. All the captioned petitions being Special Civil Application Nos. 18637 of 2017 to 18639 of 2017 are filed by the concerned petitioners under Article 226 of the Constitution of India, whereby the petitioners have challenged the notifications dated 12.03.2016 and 22.06.2015 issued by respondent No. 1 purportedly on behalf of the State of Maharashtra, stating that the properties enlisted therein are attached under Sections 4(1) and 5(1) of the Maharashtra Protection of Interest of Depositors (in Financial Establishment) Act, 1999 (hereinafter referred to as 'MPID Act'). Petitioners have also challenged the direction given by respondent No. 2 to respondent Nos. 5 and 6, whereby they were directed to make necessary entries in the revenue records regarding the properties of the petitioners.
2. Whereas, Letters Patent Nos. 463 of 2015 to 464 of 2015 and 480 of 2015 to 481 of 2015 are filed under Clause 15 of Letters Patent against a common CAV order dated 24.02.2015 passed by the learned Single Judge in Special Civil Application No. 4689 of 2014 and allied matters, whereby the learned Single Judge has dismissed the petitions without entering into the merits on the ground of 'forum conveniens' reserving liberty to the concerned petitioners to move the Bombay High Court or any Court subordinate thereto.
3. The issue involved in the aforesaid petitions as well as Letters Patent Appeals is similar and therefore this Court, by an order dated 03.03.2016, directed the Registry to place the papers of Letters Patent Appeal 464 of 2015 and allied matters along with the aforesaid petitions and with the consent of the learned advocates appearing for the parties, the aforesaid appeals are heard with the aforesaid petitions and are being disposed of by this common judgment. However, for the sake of convenience, the facts narrated in Special Civil Application No. 18637 of 2015 are recorded.
4. The facts in nutshell are as under:
4.1. That N.K. Proteins Private Limited, formerly known as N.K. Proteins Limited (hereinafter referred to as 'NKPL') is a Private Limited Company registered under the provisions of the Companies Act, 1956 and is engaged in the business of manufacturing, processing and marketing of vegetable edible oils, viz. Washed Cotton Seed Oil, Crude Palm Oil, Crude Degummed Soyabean Oil, Crude Sunflower Seed Oil, Groundnut Oil, etc. The same is also engaged in seed processing, solvent extraction and also trading in edible/non-edible oils. One Mr. Nilesh Patel is the Managing Director of the said company, whereas Mr. Nimesh Patel is Chairman of the said Company. Petitioner No. 1 of Special Civil Application No. 18637 of 2015 is wife of Mr. Nilesh Patel, whereas petitioner No. 2 is wife of Mr. Nimesh Patel and both are also holding shares of NKPL.
4.2. National Spot Exchange Limited (hereinafter referred to as 'NSEL') is a company registered under the provisions of the Companies Act, 1956, which was incorporated in May 2005. The main object of NSEL was of providing electronic platform for the purpose of trading of agricultural based commodities. The Government of India, vide notification dated 05.06.2007 issued under Section 27 of the Forward Contracts (Regulation) Act of 1952, exempted NSEL from the operation of the provisions of the said Act on certain conditions. The said Electronic Exchange of NSEL became operative from 15.10.2008. NKPL became a member of the said Exchange from October 2008. Thus, NKPL was permitted to carry out activities on the said Exchange for itself and/or on behalf of its clients. However, by communication dated 12.07.2013, the Central Government had directed the NSEL that no fresh contracts shall be launched on or through the Exchange Platform of NSEL until further instructions from the concerned Authority and therefore, NSEL, vide its Circular dated 31.07.2013, had suspended all the contracts until further notice. As a result of the aforesaid crisis, many investors, who claimed to have invested their funds with NSEL, through the mode of Electronic Exchange of NSEL, did not receive back their money. As a result of which, a complaint is filed by one Mr. Pankaj Saraf.
4.3. On the basis of the complaint received from Mr. Pankaj Saraf, Senior Police Inspector, Unit-V, Economic Offences Wing, Crime Branch, Mumbai - respondent No. 2, registered FIR being No. 216 of 2013 against the Directors and key management personnel of NSEL, its borrowers and others under Sections 409, 465, 467, 468, 471, 474, 477A and 120B of Indian Penal Code. Thereafter, during the course of investigation, Sections 3 and 4 of Maharashtra Protection of Interest of Depositors (in Financial Establishment) Act, 1999 (hereinafter referred to as 'MPID Act') were added. Investigation of the said FIR has been carried out by the respondent No. 2.
4.4. It is the case of the petitioners that certain disputes arose between NSEL and NKPL and therefore NSEL preferred an application being Arbitration Petition (L) No. 1524 of 2013 under Section 9 of the Arbitration and Conciliation Act, 1996 before the High Court of Bombay seeking interim orders for recovery of dues of NSEL from NKPL. However, it is the say of the petitioners that the Bombay High Court has declined to grant ad interim relief in favour of NSEL. Subsequently, NSEL has withdrawn the said petition which was subsequently numbered as Arbitration Petition No. 27 of 2014.
4.5. Petitioners submitted that in pursuant to the FIR registered against the Director and office bearers of NKPL, they have cooperated with the Investigating Agency and Mr. Nilesh Patel has been enlarged on bail by the Bombay High Court vide order dated 28.01.2014.
4.6. In the meantime, the respondent No. 2 issued notices/orders dated 09.11.2013 under the provisions of the MPID Act to the Collector, Ahmedabad, Collector, Mehsana and Collector, Patan, directing them not to create any third party interest in respect of the properties mentioned in the said order without permission of Special Sessions Court, Mumbai, designated under the MPID Act, and also directed to make necessary entries in the record to that effect. Petitioners therefore filed Special Civil Application No. 4689 of 2014 and allied matters before this Court against the action of respondent No. 2. That the learned Single Judge of this Court, by common judgment dated 24.02.2015 passed in the said petition, dismissed all the petitions on the ground of 'forum conveniens' without deciding on the merits of the case. At this stage, it is relevant to note that against the said order, the petitioners preferred Letters Patent Appeal No. 463 of 2015 and allied matters under Clause 15 of the Letters Patent, which are also heard along with these petitions.
4.7. It is the say of the petitioners that NSEL has filed a suit for recovery of the alleged outstanding amount of Rs. 969.89 crores against NKPL and 50 others including the petitioners before the Bombay High Court by filing Suit No. 432 of 2015 along with Notice of Motion No. 749 of 2015. As per the case of the petitioners the said suit is still pending.
4.8. Even as per the case of the petitioners, NSEL had filed writ petition challenging the addition of provisions of MPID Act in the First Information Report by filing Writ Petition No. 1403 of 2015 before the Bombay High Court. The said petition is dismissed.
4.9. Mr. Nilesh Patel and Mr. Nimesh Patel of NKPL have preferred Writ Petition (Criminal) No. 3342 of 2014 under Article 226 of the Constitution of India and Section 482 of the Code of Criminal Procedure, 1973 before the Bombay High Court seeking quashing of FIR being CR No. 89 of 2013 qua them and as per the say of the petitioners the said matter is pending.
4.10. Yet another proceeding is pending at Bombay High Court being Suit No. 173 of 2014 filed by one Modern India as a representative suit against NSEL, Future Technologies India Limited and other sister concerns including their promoter for recovery of approximately Rs. 5600 crores. In the said suit, third party notices were issued to several entities as per the procedure laid down under the Bombay High Court Rules. The learned Single Judge of the Bombay High Court passed an order on 02.09.2014 appointing three members committee purporting to facilitate settlements between the parties and NSEL and to ensure speedy recovery of the alleged dues. NKPL was not a party in the said proceedings and therefore NKPL challenged the order dated 02.09.2014 by filing Appeal(L) No. 741 of 2014 along with Notice of Motion (L)2744 of 2014 before the Division Bench of Bombay High Court. The said appeal has been admitted and the Division Bench has stayed the operation of the order dated 02.09.2014 passed by the learned Single Judge qua NKPL.
4.11. In the aforesaid background of the matters, the grievance of the petitioners is that the respondent No. 1 while exercising powers under Section 4(1) and Section 5 of MPID Act issued notifications dated 12.03.2015 and 22.06.2015, copies of which are sent to respondent Nos. 5 and 6 i.e. the statutory authority of State of Gujarat with a direction by respondent No. 2 to make necessary entries in the register in respect of the properties of the petitioners by way of letter dated 05.09.2015. The respondent No. 2 has also addressed a letter dated 05.09.2015 to NKPL, wherein the directions were issued by respondent No. 2 not to dispose of or create any third party rights over the properties described in the annexure therein. By way of the aforesaid notifications dated 12.03.2015 and 22.06.2015 various properties of NKPL and other entities including the petitioners of Special Civil Application No. 18637 of 2015 have been attached. It is the grievance of the petitioners that property includes the petitioners' land, bungalow and office premises situated at Ahmedabad, Mehsana and Patan. Petitioners have therefore filed the present petitions challenging the notifications...
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