GREENFIELD RESIDENTS WELFARE ASSOCIATION Vs. UNION OF INDIA

JUDGEMENT

(1.) This batch of appeals have been preferred by the aforesaid appellants on various grounds, that would be discussed hereinafter, under Sec. 10F of the Companies Act, 1956, assailing the impugned order dtd. 24/5/2011, passed by the Company Law Board [CLB], whereby the petition bearing CP No. 50(ND)/2006 was disposed of along with applications being CA No. 23/2009, CA No. 55/2009 and CA No. 105/2009.

(2.) The facts giving rise to the instant appeals are that M/s. Urban Improvement Company Pvt. Ltd. (hereinafter 'the Company' as also 'UICPL') was incorporated to do business in real estate with the primary obligation of development of land at Faridabad, State of Haryana, whereat a large chunk of land was bought and plots were allotted to different plot-holders at the rate of Rs.12.00 per sq.yd, including development charges and the said colony was named 'Greenfields Colony' in Sector 41-43, Faridabad and the project encompassed land measuring 438 acres. In the background of certain allegations of large-scale financial irregularities by the promoters/directors coming to the fore in the year 1976, a Show Cause notice dtd. 6/2/1976 was issued by the Union of India (Ministry of Corporate Affairs) to the board of Directors of the Company, and thereafter, an order was passed by the Company Law Board dtd. 23/6/1976 vide which the existing board of Directors of the company were substituted by the directors appointed by the Central Government. Such appointment of Directors by the Central Government has been carried out every three years subject to the approval of the Company Law Board since apparently the Directors and shareholders literally abandoned the company and the said practice continued till 2009.

(3.) An order dtd. 29/10/1982 came to be passed by the Department of Company Affairs, Company Law Board, wherein it was directed that the property of the company was to be disposed of by public auction after giving due public notice and on sufficient publicity of the same by the company. The said order was passed in the background that it was noticed that the Directors of the company were disposing of the property of the company in a clandestine manner and to the prejudice of the company. It has been alleged by the applicants in CO.A(SB) No. 36/2011 viz., Greenfields Resident Welfare Association, that between 1982 and 2008, a substantial portion of the Company's land was sold by means other than public auction.