ADITYA BIRLA NUVO LTD Vs. UNION OF INDIA

JUDGEMENT

(1.) The First Petitioner, Aditya Birla Nuvo Limited, is stated to have merged with a company by the name of Birla Global Finance Limited pursuant to a scheme of amalgamation dated 27 January 2006 sanctioned by this Court. The case of the Petitioners is that on 18 June 1997 a leave and licence agreement was entered into between the Seventh Respondent, Exon Securities (India) Limited, and the predecessor-in-interest of the First Petitioner in respect of a residential flat being flat No. 1 on the 7th floor, B Wing of a building known as Lloyds Garden, Prabhadevi, Mumbai. The licence agreement was for an initial term of 11 months commencing on 1 July 1997 and ending on 31 May 1998 on a monthly licence fee of Rs. 15,000/- in respect of the premises and Rs. 2,000/- for two car packing spaces. A refundable security deposit was, according to the Petitioners, paid on the execution of the licence. Under clause 4 of the licence agreement the deposit was to be refunded by the licensor to the licensee upon the expiry or sooner determination of the agreement, after deducting amounts due and payable by the licensee and upon the licensee handing over to the licensor quiet, vacant and peaceful possession of the premises. In the event of the licensor failing to refund the security deposit, the deposit was to carry interest at 18% per annum from the date on which the licensee was in a position to handover vacant possession until actual receipt of the security deposit. Until then, the licensee was entitled to continue use of the premises without being liable to pay any compensation until the security deposit was refunded together with interest.

(2.) Admittedly, the alleged licence agreement was not renewed after the expiry of the original term on 17 May 1998.

(3.) The premises of the residential flat were attached on 19 June 1998 by the Customs Authorities for the recovery of amounts due and payable under Rule 5 of the Customs (Attachment of Property of Defaulters for Recovery of Government Dues) Rules 1995. According to the Customs Authorities a person by the name of Naval Kishore Bangard had fraudulently claimed a duty drawback of an amount approximately of Rs. 50 Crores without actually exporting any goods and had received the drawback in the name of his concerns or those of his family viz. M/s. Om Traders, M/s. Prime Agricom and M/s. Tropical Exotics. N. K. Bangard was one of the two partners of Om Traders, while his wife was stated to be the sole proprietor of Prime Agricom and Tropical Exotics. According to the Customs Authorities, during the course of the investigation N. K. Bangard, in a statement under Section 108 of the Customs Act 1962 confirmed that he was actually managing the three firms and that he had committed a fraud by submitting forged drawback documents in the total sum of Rs. 50.14 Crores. On 10 November 1997 show cause-cum-demand notices were issued under Rule 16 of the Customs and Central Excise Duties (Drawback) Rules, 1995 by the Drawback Department, Air Cargo Complex demanding the amount together with interest. According to the Customs Authorities, during the course of personal hearing of the case against Om Traders and Prime Agricom, N. K. Bangard admitted that he had claimed and received drawback payments by way of forged declarations and documents submitted from time to time in the name of his firm. Besides these statements, which have been made on affidavit in the reply filed by the Respondents, it has been stated that N. K. Bangard and his wife voluntarily surrendered various movable and immovable properties including the flat in question towards the recovery of the dues. An order of adjudication was passed on 27 December 1997 confirming a demand of duty drawback amounting to Rs. 16.61 Crores and Rs. 17.39 Crores against Om Traders and Prime Agricom together with interest. On the basis of the adjudication, an order and notice of attachment came to be issued on 19 June 1998 whereby the residential flat was attached.