Document 1db668c0-fa5e-4db8-8912-d399a6c8e610

* IN THE HIGH COURT OF DELHI AT NEW DELHI

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% Reserved on : 14 May 2026
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Pronounced on : 01 July 2026
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Uploaded on : 02 July 2026
+ CO.APPL. 233/2012, CO.APPL. 234/2012, CO.APPL.2318/2014,
CO.APPL. 1168/2018, CO.APPL.1170/2018, CO.APPL.1172/
2018, CO.APPL.1174/2018, CO.APPL. 1176/2018 CO.APPL.
1178/2018, CO.APPL.1180/2018, CO.APPL.1194/ 2018,
CO.APPL.82/2021, CO.APPL.253/2021, CO.APPL.255/2021, CO.
APPL.1374/2018, CO. APPL.928/2024 and OLR 36/2025 in
CO.PET. 265/1998
RE-M/s. JVG FINANCE LIMITED ……Petitioner
versus
…….. ......Respondents
Through: Mr. Peeyosh Kalra, Mr. Dheeraj
Gupta, & Ms. Rita Singh, Advs. for
Ex-Management.
Mr. Ashutosh Dubey, Mr. Akshat
Vachher Ms. Abhiti Vachhcr Mr.
Aman Vachher & Mr. Dhiraj Mr.
Abhit Kumar, Advs. for Hyderabad
Applicants.
Rishabh Jain, Adv. For M/s GOGA
Foods, Ltd.
Dr. Bharat Nagar, Adv, for applicant
Mr. Rishi Manchanda, SC for OL
with Mr. Arun Kumar, Adv.
CO.APPL. 233/2012 & few other connected CAs Page 1/61

Signature Not Verified
Digitally Signed
By:MANISH KUMAR
Signing Date:02.07.2026
14:49:19

Mr. Krishna dev Jagarlamudi, Mr.
Vishnu Kanth Mundada & Bhabna
Das, Advs. for applicants in CA
Nos.1170/2018, 2318/2018,
1168/2018, 1172/2018, 1174/2018,
1176/2018, 1178/2018, 1180/2018 &
1194/2018
Mr. Rajeev Kumar, Mr. Vishal
Advocates for Applicant
Mr. Ramesh Babu Ms. Manisha
Singh & Ms. Tanya Chowdhary
Nisha Shanna Advs. for RBI.
Ms. Lucky Raghuvanshi, Ms. Eesha
Gupta, Mr. Ayush Verma, Mr.
Siddharth Raghuvanshi, Advs. For
applicants
Mr. B. Shravanth Shanker, K. Sai
Teja, Shivam Kunal, Advs. for
applicant.
CORAM:
HON'BLE MR. JUSTICE ANISH DAYAL
JUDGMENT
ANISH DAYAL, J.
1. The applicants in these applications have a common grievance. They
are all investors in a residential housing scheme floated by M/s. JVG Finance
Ltd. (‘ Company in liquidation ’) on 42 acres of land at Kondapur Village,
Hyderabad , known as JVG Housing Project . Having invested in this project
as far back as 1995, they are yet to obtain release of the plots allotted to them.
The process has been interrupted on account of the company having gone
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By:MANISH KUMAR
Signing Date:02.07.2026
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into liquidation, first upon the appointment of the Provisional Liquidator by
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this Court on 05 June 1998, and thereafter pursuant to the winding-up order
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dated 29 August 2003. Several other group companies, collectively referred
to as the JVG Group of Companies , were also directed to be wound up.
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2. It has been stated in the affidavit dated 14 February 2012 filed by the
erstwhile Director that the assets of the JVG Group of Companies had been
purchased from the funds of JVG Finance Ltd . The affidavit further records
that there would be no objection if the assets of the JVG Group of Companies
were utilized for satisfying the claims of creditors.
3. These companies have accepted a large number of deposits from
various investors, and after the winding-up orders, a large number of claims
were received.
4. Applications were moved seeking the appointment of a committee to
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scrutinise and adjudicate the claims. The Court, by order dated 22 July
2004, appointed a ‘One-Man Committee’ comprising of Mr. G. P. Thereja
(Retd. ADJ) for adjudication of claims.
5. Insofar as the JVG Housing Project is concerned, M/s JVG Finance
Ltd. launched the project in May 1995 as a proposed residential
self-financing housing scheme, inviting members of the public to invest in
and purchase residential plots of 200, 300 and 500 sq. yards through
brochures and advertisements. To make the scheme attractive, allottees were
offered the option of making payments through monthly or quarterly
installments spread over a period of three to seven years, or by way of cash
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Signing Date:02.07.2026
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down/outright purchase. Pursuant thereto, claimants/applicants booked plots
of the company as early as May, 1995. The scheme was primarily targeted at
persons belonging to low-income group, mostly belonging to the service
class, who invested their life savings.
6. The particulars of the applicants, including the CA (Company
Application) number, name of the applicant, date of booking, date of
execution of sale deed, plot number, plot size and total amount paid, are set
out in the table below:
Sr.
No.
CA No. Applicant Date of
Booking
Date of Sale
Deed
Plot
No.
and
Plot
Size
Amount
paid to
Total
amount
OMC
Report no.
and date
1. 233/2012 Shobha
Joshi
19.05.1995 20.03.1998
(Col.
Ganapathy)
F-211
(200
sq.
yds.)
JVG
Finance
Ltd. &
JVG
Projects
Rs.1,46,870/- 271
(13.06.2011)
2. 234/2012 Santosh
Joshi
18.05.1995 06.03.1998
(Col.
Ganapathy)
F-208
(200
sq.
yds.)
JVG
Finance
Ltd. &
JVG
Projects
Rs.1,29,946/- 274
(13.06.2011)
3. 2318/2014 S. Sangeetha 08.09.1997 20.03.1998
(Col.
Ganapathy)
E-311
(300
sq.
yds.)
JVG
Finance
Ltd. &
JVG
Projects
Rs.3,22,650/- 260
(03.06.2011)
4.
1168/2018 S. Susmitha 24.06.1995 27.03.1998
(S. Jai
Kumar)
F-213
(200
sq.
yds.)
JVG
Finance
Ltd. &
JVG
Projects
Rs.1,37,256/- 265
(06.06.2011)
5.
1170/2018 N. Sujatha 22.05.1995 30.12.1997
(S. Jai
Kumar)
C-329
(300
sq.
yds)
JVG
Finance
Ltd. &
JVG
Projects
Rs.2,04,921/-
219
(03.05.2011)

6.
1172/2018 I Ranga Rao
(Subsequent
purchaser
from
Mukhuyar
Ahmed)
22.05.1995 27.03.1998
(S. Jai
Kumar)

(20.11.2003)
F-206
(200
Sq.
yds)
JVG
Finance
Ltd.
Rs.83,079/- 264
(06.06.2011)
7. 1174/2018 T. Subba
11.09.1997 20.03.1998
(Col.
Ganapathy)
E-316
(300
Sq
JVG
Finance
Ltd. &
Rs.3,00,000/- 259
(02.06.2011)
Rao
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Signing Date:02.07.2026
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yds) JVG
Projects
8. 1176/2018 B.
Dandapani
25.05.1995 27.03.1998
(S. Jai
Kumar)
F-219
(200
sq
yds)
JVG
Finance
Ltd. &
JVG
Projects
Rs.1,19,368/- 269
(21.06.2011)
9. 1178/2018 T. Subba
Rao
08.09.1997 20.03.1998
(Col.
Ganapathy)
E-307
(300
sq
yds)
JVG
Finance
Ltd. &
JVG
Projects
Rs.3,35,100/- 258
(02.06.2011)
10. 1180/2018 Gaddipati
Sriniwasa
Rao
(subsequent
purchaser
from V V
Ratnakar
Reddy)
20.05.1995

27.03.1998
(S. Jai
Kumar)

(29.08.2003)
F-214
(200
Sq
yds)


JVG
Finance
Ltd. &
JVG
Projects
Rs.1,13,870/- 279
(21.06.2011)

11. 1194/2018 Karri
Padmaja
20.05.1995 16.02.1998
(S. Jai
Kumar)
C-371
(200
Sq
yds)
JVG
Finance
Ltd. &
JVG
Projects
Rs.2,04,920/- 220
(03.05.2011)
12. 82/2012 Ayodhya
Joshi
18.05.1995 31.03.1998
(S. Jai
Kumar)
F-210
(200
sq
yds)
JVG
Finance
Ltd. &
JVG
Projects
Rs.1,08,478/- 272
(13.06.2011)
13. 253/2021 Deepak
Joshi
18.05.1995 21.02.1998
(S. Jai
Kumar)
F-207
(200
sq
yds)
JVG
Finance
Ltd. &
JVG
Projects
Rs.1,54,378/- 270
(13.06.2011)
14. 255/2021 Santosh
Joshi
18.05.1995


31.03.1998
(S. Jai
Kumar)
F-212
(200
Sq
yds)
JVG
Finance
Ltd. &
JVG
Projects
Rs.1,34,947/- 274
(13.06.2011)

7. As regards the 14 applicants herein, registered sale deeds were
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executed prior to 05 June 1998, and possession of the plots was also handed
over to them.
Prohibition Order
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8. On 10 October 1997, the Reserve Bank of India (‘ RBI’ ) issued a
prohibition order restraining the Company from accepting any fresh deposits
CO.APPL. 233/2012 & few other connected CAs Page 5/61

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By:MANISH KUMAR
Signing Date:02.07.2026
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from the public. The company, attempting to damage control, stated to the
allottees that the prohibition order was only in respect of acceptance and
renewal of fixed deposits and did not affect the housing project since it was a
self-financing project, and that the layout approval had been received and
development was in full swing.
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9. On 23 October 1997, Hyderabad Urban Development Authority
(‘ HUDA’ ) revalidated the draft layout plan, and letters were issued to the
allottees to make the balance payment and have the sale deed registered. As
and when the allotees paid the entire sale consideration, the JVG Group of
Companies, through their authorized representatives executed registered sale
deeds. Between December 1997 and 2001, registered sale deeds in respect of
225 plots have been executed.
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10. RBI filed CO.PET No.265/1998 before this Court on 04 June 1998
under Section 45MC of the Reserve Bank of India Act, 1934. By order of
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05 June 1998, a Provisional Liquidator was appointed. Subsequently, by
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order dated 29 August 2003, the Company was directed to be wound up. On
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10 October 2003, the Official Liquidator took symbolic possession of the
225 plots forming part of the project. It is contended by the counsel
appearing on behalf of the 14 applicants that it was at this stage that the
applicants and other allottees became aware of the winding-up proceedings.
One-Man Committee
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11. By order dated 22 July 2004, this Court appointed a One-Man
Committee (‘ OMC’ ) to verify the claims of the applicants and other
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similarly situated persons. Between 03 May 2011 and 21 June 2011, OMC
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Signing Date:02.07.2026
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examined all documents of the applicants along with individual reports,
accepted claims, holding that they were entitled to lawful possession. Since
the Official Liquidator did not hand over the possession, applicants opposed
to the same by these applications for a direction to release their plots.
Submissions on behalf of applicants

12. Various counsel appeared for the applicants, mostly led by Mr.
Ashutosh Dubey , Advocate and Mr. Krishna Dev Jagarlamudi , Advocate,
who filed a common submission on behalf of all the applicants, some of
which are culled out for reference.
12.1 It was submitted that the OMC, after examining the entire record,
accepted the claims of the applicants. On this basis itself, it was submitted
that the present applications ought to be allowed, particularly as neither the
OMC reports nor the registered sale deeds have been challenged to date.
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12.2 By order dated 02 August 2018 and 12 October 2018, the Court
directed release of seven plots in favour of similarly situated applicants.
Objections raised by ex-management and of the Official Liquidator were
considered and rejected. The Court also considered SFIO report, whereby
purchasers were held to be bona fide , having no knowledge of the order
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dated 05 June 1988.
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12.3 Statements of Mr. V. K. Sharma, ex director, dated 17 May 2004 and
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03 June 2004, also confirmed that the plots were sold to those persons who
paid full sale consideration, and he had authorised Col. Ganapathy to
execute the sale deeds.
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Signing Date:02.07.2026
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12.4 Aggrieved by order dated 12 October 2018, Mr. V. K. Sharma filed a
company appeal, being CA No. 24.2018, which was dismissed by the
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Division Bench of this Court by order dated 16 November 2018 on the
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ground that he had no locus to file the appeal. The order dated 02 August
2018 was never assailed by the aggrieved party.

12.5 Despite the dismissal of the aforesaid appeal, Ms. Aneeta Sharma ,
wife of Mr. V.K. Sharma , claiming to be a creditor of the Company, filed CA
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No. 1374/2018 on 22 November 2018, seeking review of the order dated
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12 October 2018, which is pending adjudication. Upon objections being
raised regarding its maintainability, CA No. 928/2024 was filed seeking
amendment of the review petition, which application is also pending
consideration.
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12.6 OLR No. 36/2025 dated 01 August 2025 has been filed by the
Official Liquidator, recording that the present applicants stand on the same
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footing as the applicants covered by the order dated 02 August 2018 and
giving no objection to a similar order being passed in their favour.

Submissions on behalf of Ms. Aneeta Sharma and the Ex-management
13. Revision Petition and the application for amendment filed by Ms.
Aneeta Sharma were pressed by Mr. Peeyosh Kalra , Advocate, and the
following submissions were made.
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13.1 RBI’s prohibition order dated 10 October 1997 restrained the
Company from dealing with its assets or creating third-party rights. Reliance
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was placed on the order dated 31 January 2012, wherein this Court held that
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any sale effected after 10 October 1997 was void. The said judgment was
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affirmed by the Division Bench by judgment dated 17 April 2023.
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13.2 Reliance was placed upon the Division Bench judgment dated 06
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September 2012, wherein it was observed that sale deeds executed after 10
October 1997 were void and that payments made to Col. Ganapathy were
inconsequential.
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13.3 It was further submitted that, by order dated 05 June 1998, a
Provisional Liquidator had been appointed with directions to take charge of
the assets of the Company and restrain it from dealing with the same. The
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Official Liquidator subsequently took possession of the land on 10 October
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2003 and again on 02 February 2004 pursuant to the winding-up order
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dated 29 August 2003. It was therefore argued that the transactions in
question were void under Section 531 of the Companies Act, 1956, which
provides that any transfer of property made by or against a company within
six months preceding the commencement of winding-up shall be deemed
fraudulent and invalid.
13.4 Accordingly, it was submitted that all the same deeds executed after
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10 October 1997 would be void in terms of judgment dated 06 September
2012.
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13.5 Reliance was also placed upon the SFIO Report dated 07 March
2014, concerning the Hyderabad transactions, wherein it was observed that
Col. Ganapathy committed fraud against the company. Reference was made
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to the order dated 01 August 2018, whereby this Court directed the Official
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Signing Date:02.07.2026
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Liquidator to initiate criminal proceedings against Col. Ganapathy for
offences including cheating and criminal breach of trust.
13.6 Mr. Kalra further relied upon the decision in Smt. Benu Berry vs JVG
Finance Ltd. (Under Lqdn.) 2012:DHC:2367-DB to contend that
transactions undertaken during the pendency of winding-up proceedings
require validation by the Company Court and that the purchaser’s
knowledge or lack of knowledge of such proceedings is irrelevant. Relevant
paragraphs of Benu Berry ( supra ) with respect to this aspect are extracted as
under:
“ 9. Be that as it may, we have otherwise looked
into the matter. The counsel for the appellant has
argued that the learned Company Judge erred in
not considering that the appellant was a bona fide
purchaser for value and in proceeding on the
premise that the transaction was void merely for
the reason of having been effected after the order
of winding up. It is contended that it was
incumbent upon the Company Judge to record a
finding whether Smt. Anita Jain was a bona fide
creditor of the Company or not and that the
preference shown to Smt. Anita Jain as a creditor
could have been held to be bad only if found to be
fraudulent and of which there is no finding. It is
contended that the subject transaction is in good
faith and for valuable consideration within the
meaning of Sections 531A and 536(2) of the
Companies Act, 1956 and is not a nullity. It is
further argued that the appellant had paid the then
prevalent market price for the flat. The appellant in
this regard has also filed an additional affidavit
along with documents being the Sale Deeds of the
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other flats and valuation reports with respect to the
property.
10. The purported transfer of the flat aforesaid in
the present case is admittedly after the order of
winding up and appointment of the provisional
liquidator. Upon such happening, the
ex-management of the Company, which is alleged
to have transferred the flat, lost any right to act on
behalf of the Company or to transact any of the
properties of the Company. The transfer thus
claimed by the appellant has not been effected by
any person authorized to do so. Section 531A of the
Companies Act deals with transfers within a period
of one year before the presentation of a petition for
winding up and has no application to the facts of
the present case. Section 536(2) declares transfers
of the property of the company after the
commencement of winding up as “void” unless
otherwise ordered.
11. The question which thus arises is as to in what
cases the Court should order the transfer effected
(of the property of the company), after the
commencement of winding up, as otherwise than
void. The learned Company Judge in this regard
has already referred to J. Sen Gupta Private Ltd.
(In Liquidation) (supra) and The Sidhpur Mills
Ltd. (supra). We find that the Supreme Court in
Pankaj Mehra v. State of Maharashtra, (2000) 2
SCC 756, laid down the test of “whether the
transfer was under compulsion of circumstances
or other commercial compulsion to enable the
company in liquidation to run its business”. We
further find that a Division Bench of the Bombay
High Court in Shri Laxman Yeswant Prabhudesai
v. NRC Ltd., (2010) 2 Comp LJ 380, after noticing
a large volume of case law on the subject, deduced
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that the transaction undertaken by a company in
liquidation can be validated under Section 536(2)
if it was under compulsion of circumstances, in
order to save or protect the company, provided
evidence is produced about such compulsion. It
was further held that the assets of the company (in
liquidation) cannot be disposed of at the mere
pleasure of the company and only such disposal
shall be validated which is found to be for the
benefit and interest of the company. It is for
enabling the company to continue as a going
concern and to protect the interests of the
shareholders and creditors that the power of
validation under Section 536(2) should be
exercised. We also find that a Division Bench of
this Court in H.L. Seth v. Wearwell Cycle
Company (India) Ltd., 46 (1992) DLT 599,
observed that the test to be applied for validating a
transaction in exercise of powers under Section
536(2) is of “good faith in the ordinary course of
trade, for the benefit of the company”. Similarly, in
Reserve Bank of India v. Crystal Credit
Corporation Ltd., 121 (2005) DLT 375, the
following principles for exercise of powers under
Section 536(2) were laid down:
(i) Transactions bona fide entered into and
completed in the ordinary course of trade
must be protected.
(ii) If the disposition is made for the
purpose of preserving the business as a
going concern, then also the discretion of
the Court must be exercised.
(iii) A disposition must not be validated
merely because the party bona fide entered
into the transaction.
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(iv) Knowledge of the presentation of the
winding-up petition is immaterial .
A reference with benefit in this regard may also be
made to M.L. Gupta & Anr. v. M/s Ceat Financial
Services Ltd., 136 (2007) DLT 308, and Kamani
Metallic Oxides Ltd. v. Kamani Tubes Ltd., (1984)
56 Comp Cas 19 (Bom) (DB). ”
(emphasis added)
13.7 It was further contended that, though receipts had been filed by the
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applicants, the Court, on 05 August 2025, directed the applicants to place
on record proof of payments showing actual movement of funds from their
accounts. According to Mr Kalra , the applicants have not produced any bank
statements reflecting the movement of funds but have merely produced
receipts.
13.8 It was further contended that the draft layout plan revalidated on 23
nd
October 1997 was subsequently cancelled by HUDA by orders dated 02
rd
March 1999 and 03 March 1999, on the basis of which the sale deeds had
been executed.
13.9 It was submitted that Col. Ganapathy challenged these orders before
the High Court of Andhra Pradesh. Considering the fact that the company is
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in liquidation, the High Court of Andhra Pradesh set aside the order of 2
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March 1999 and 13 March 1999 and directed the issuance of the final
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layout. The final layout was issued on 21 February 2003 in the name of K.
Madhav Reddy.
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Signing Date:02.07.2026
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13.10 Col. Ganapathy’s authority was also questionable since the SFIO had
already recorded findings against him, and therefore, the transfers executed
by him would also stand disputed. Reliance was also placed by Mr. Kalra on
yet another decision of the Supreme Court in Rishabh Agro Industries Ltd.
v. PNB Capital Services Ltd. (2000) 5 SCC 515, where it was held that,
despite appointment of a provisional liquidator, the ex-management
continues to hold residuary powers for the benefit of the company, as stated
in paragraphs 10 & 11 , which are extracted as under:
“ 10. It has been further suggested on behalf of the
respondent Bank that the action of the appellant
was mala fide inasmuch as it sought time from the
Court to make the payment of the amount due and
after seeking indulgence mala fidely made the
reference to BIFR on 30-9-1997. It is contended
that after the order of the winding up and
appointment of the Liquidator, the Board of
Directors had no jurisdiction to move BIFR by
passing a resolution. Such a submission cannot be
accepted. In a winding-up petition the Liquidator
is appointed to protect the assets of a company for
the benefit of its creditors, secured and unsecured
and others. It is not the function of the Official
Liquidator to start the process of rehabilitation of
the company as is aimed at under the Act. Despite
appointment of the Official Liquidator, the Board
of Directors continue to hold all residuary powers
for the benefit of the company which includes the
power to take steps for its rehabilitation. The
Board of Directors in the instant case were not in
any way by any judicial order debarred from
taking recourse to the provisions of the Act for the
purposes of rehabilitation of the Company. If there
existed a power, its exercise cannot be termed to be
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mala fide only because it was initiated after
availing the opportunity to make the payment of
the amounts due and passing of the order of
winding up of the Company.
11. It may also be noticed that winding-up order
passed under the Companies Act is not the
culmination of the proceedings pending before the
Company Judge but is in effect the commencement
of the process. The ultimate order to be passed in
such a petition is the dissolution of the Company in
terms of Section 481 of the Companies Act. The
words “shall be deemed to commence” in Section
441 of the Companies Act clearly show the
intention of the legislature that although the
winding up of a petition does not in fact commence
at the time of presentation of the petition itself but
it shall be presumed to commence from that stage.
The word “deemed” used in the section would thus
mean, “supposed”, “considered”, “construed”,
“thought”, “taken to be” or “presumed” .”
Submissions in rejoinder
14. Submissions in rejoinder were placed by counsel for the applicants on
behalf of the claimants and are culled out hereinafter.
14.1. On the issue of sale deeds being invalidated under Section 531(1) of
the Companies Act, 1956, it is submitted that OMC has examined the
documents of the applicants and accepted their claims vide individual reports
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dated between 03 May 2011 and 21 June 2011, holding them entitled to
allotment and release of the respective plots.
14.2. It is submitted that all these actions were completed prior to the filing
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of the winding-up petition, i.e. before 04 June 1998. To qualify as
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‘ fraudulent preference ’, it must be demonstrated that the dominant motive in
the mind of the company was to prefer a particular creditor over other
creditors in order to defer other creditors of the Company in liquidation.
14.3. Applicants are not creditors of the company but purchasers of
residential plots, having booked the plots since May 1995, paid the entire
sale consideration, sale deeds having been executed and been placed in
physical possession of the plots.
14.4. There is no question of collusion of the applicants with the
ex-management to alienate assets of the company to defer other creditors.
The applicants are unconnected with and are at odds with the
ex-management of the company.
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14.5. The SFIO in report dated 07 March 2014, after thorough
investigation, absolved all third-party purchasers, like the applicants, of any
wrongdoing and concluded that the purchasers are bona fide and did not
have knowledge of the winding up proceedings till 2003.
14.6. Mr. V. K. Sharma , Ex-Chairman, himself made a statement before the
th
SFIO on 17 May 2004, accepting that plots were sold by the company in
favour of purchasers, who paid full consideration.
14.7. There is no challenge to the OMC reports in favour of the applicants
and the Official Liquidator, as per OLR 36/2025 , has no objection.
14.8. Even Section 531A of the Companies Act, 1956 cannot be used to
interdict the release of plots of land to the applicants, considering that the
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purchase of these lands was made in the ordinary course of business pursuant
to a brochure issued by the company and the transfers were made in good
faith and for valuable consideration. In fact, the applicants acted in good
faith, without knowledge of impending winding-up of proceedings, and paid
adequate and fair sale considerations.

14.9. Benu Berry ( supra ) judgment cannot be used to invalidate the sale
deeds executed in favour of the applicants and is distinguishable on facts. In
Benu Berry ( supra ), the issue arose in respect of a flat in Mumbai for an
th
agreement to sale dated 13 December 2001 executed by Ms . Aneeta
Sharma in her favour. The agreement was entered post the date of
th
commencement of winding up proceedings, i.e. 05 June 1998, while the
sale deeds executed in favour of the applicants were prior.
14.10. Section 536 (2) of the Companies Act, 1956 applies only to transfers
effected after the commencement of winding-up proceedings and, therefore,
has no application to the sale deeds in question.
st
14.11. The reference to judgment dated 31 January 2012, taking note of the
th
order dated 10 October 1997 passed by the RBI and rejecting the claims of
the wife and daughter of Col. Ganapathy cannot be equated to that of the
applicants. None of the applicants is related to Col. Ganapathy nor is there
any evidence to prove that they were in collusion with him. The SFIO had
found that all the applicants were kept in the dark about the winding-up
proceedings by Col. Ganapathy .
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14.12. SFIO has found that 62 out of 225 plots were sold by the company in
favour of Col. Ganapathy and his family and friends. None of the applicants
forms part of the 62 plots . Sale deeds executed in favour of 9 applicants out
of 14 were executed by the company through Mr. S. Jai Kumar, and not by
Col. Ganapathy .
th

14.13. Pursuant to order of this Court dated 04 August 2025, the applicants
have filed affidavits with respect to payments made by them, along with
relevant documents and have fully complied with the directions issued by
this Court.
14.14. Ex-management cannot belatedly seek to invalidate sale deeds by
alleging that the money was not received by the company, particularly when
the sale deeds were executed prior to the commencement of the winding-up
proceedings.
14.15. It was submitted that pre-validation of the draft layout plan in 1997
was followed by the receipt of entire sale consideration and execution of
registered sale deeds. Simultaneously, plots were demarcated and handed
over to the applicants. So, the argument of cancellation of the draft layout
would, therefore, have no meaning since this issue was considered by this
th
Court in its order dated 12 October 2018 and cannot now be re-agitated.
14.16. An additional and critical submission which has been made pertains
to the locus standi of Ms . Aneeta Sharma to oppose the applications and
maintain the review petition. Ms . Aneeta Sharma , who has filed the review
petition, is the wife of Mr . V.K. Sharma, Ex-director of company in
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liquidation , whose Company Appeal No. 24/2018 was dismissed by the
th th
Division Bench vide order dated 16 November 2018. The Order dated 12
October 2018 had directed release of 7 plots in favour of similarly situated
applicants.
14.17. It was further submitted that Ms . Aneeta Sharma, who claimed to be a
creditor of the company, was also shown as one of Directors of Flying
th
Colours Pvt. Ltd . As per the report dated 11 December 2020 submitted by
the Committee appointed by this Court, the Official Liquidator has placed
the claims received till date, which include the claims of Flying Colours Pvt.
Ltd. of which Ms . Aneeta Sharma happens to be the Director. In any event,
considering that a corporate entity Flying Colours Pvt. Ltd. is a creditor, it
would be highly suspected that Ms . Aneeta Sharma, in a private capacity, can
call herself a creditor as well.
14.18. It was also contended that the issue of locus standi stands
substantially addressed by the Division Bench of this Court in V. K. Sharma
v. JVG Finance Limited (In Liquidation) 2026:DHC:355-DB, while
dealing with disputes concerning the Mumbai properties. Division Bench
held that “… The appellant cannot obstruct the lawful discharge of these
obligations under the guise of alleged surplus funds or delay in
crystallization of claims ”. It further stated that “ As far as the extraneous
matters are concerned, any attempt by the Appellant to traverse into
unrelated schemes of revival lies outside the scope of company law
proceedings and is impermissible. The liquidation process and asset
realization must proceed unimpeded ”.
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14.19. This judgment has been upheld by the Supreme Court by order dated
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16 March 2026 in SLP(C) no. 6139/2026, whereby the SLP was dismissed.
14.20. Further, it was pointed out that Mr . V.K. Sharma has been repeatedly
th
castigated by this Court. Reference was made to the order dated 04
November 2011 passed in CCP (CO) no. 5/2006 , where the Court has listed
various situations showing the persistent non-cooperative attitude of Mr.
V.K. Sharma .
14.21. Reliance has been also placed in rejoinder on the following
judgments:
I. Monark Enterprises v. Kishan Tulpule 1991 SCC OnLine
Bom 461 ( paragraph no. 30).
II. Official Liquidator, Victor Chit Fund v. Kanhaiya Lal
1971 SCC OnLine Del 179 ( paragraph nos.6 & 7)
III. IDBI Bank v. Official Liquidator (2020) 15 SCC 517
( paragraph no.20. 2)
IV. Rakesh Jaganmohan Pandey v. JVG Finance 2017 SCC
OnLine Del 11129 ( paragraph nos.15-21 )
V. BOI Finance Ltd. v. Custodian (1997) 10 SCC 488
( paragraph nos.29-34 & 62)
VI. Sirmur Chemical & General Industries Ltd. v. Union of
India [1962] 32 Comp Cas 826(SC)
VII. Dahiben v. Arvindbhai Kalyanji Bhanusali (2020) 7 SCC
366 ( paragraph nos.29.6-29. 9)
14.22 It is further pointed out that, in Benu Berry ( supra ), the Division
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Bench noted that the Company (in liquidation) had engaged Ms . Aneeta
Jain to carry on the business of an advertising agency under the name and
style of Flying Colours Pvt. Ltd. for promotional work and allegedly
owed her a sum of Rs.1,25,00,000/- towards the services rendered. To
clear that part of debt owed to Ms . Aneeta Jain , it was claimed that the
company agreed to sell the flat in question to Ms. Aneeta Jain , pursuant
to which the housing society recognised her as the bona fide owner of the
flat.
14.23 Ms . Aneeta Jain then agreed to sell the flat to one Benu Berry, and
the flat soon mutated in the name of Benu Berry . The Committee, in its
th
order dated 17 March 2006, dismissed the claim of Benu Berry , noting
that the dues of the Company (in liquidation) to Ms . Aneeta Jain were not
clearly established and the transaction in favour of Ms . Aneeta Jain could
not be said to be a bona fide .
14.24 It was further pointed out that, in paragraph 8 of the said order, it
was recorded that counsel, upon making enquiries and obtaining
instructions, had stated that there was no relationship between Ms.
Aneeta Jain (now Ms. Aneeta Sharma ) and Mr. V.K. Sharma . However,
it subsequently came to light that Mr. V.K. Sharma had indeed married
Ms. Aneeta Jain in the year 2005. The Court expressed its surprise at the
categorical statement made on instructions that no such relationship
existed and that counsel was unaware of the same, and observed that the
situation was disturbing.
14.25 The appeal filed by Benu Berry was dismissed by the Court, noting
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that “ Though we have found the appellant to be in collusion with the
company in liquidation and Smt. Anita Jain but we refrain from imposing
any cost on the appellant ”.
Analysis
15. These applications relate to 14 investors (whose applications were
filed between 2012 and 2021) in the JVG Hills Residential
Self-Financing Scheme , who seek release of their respective plots, which
are in symbolic possession of the Official Liquidator. Sale deeds in their
th
favour were executed prior to 05 June 1998, i.e. before the appointment
of the Official Liquidator. Since the company subsequently went into
liquidation and the Official Liquidator took symbolic possession of the
land in 2003, the applicants seek release of their respective plots on
grounds which may be summarised as follows:
nd
i. Pursuant to Court’s order of 22 July 2004, the OMC has
verified their claims and passed individual reports between May
2011 and June 2011.
nd
ii. This Court, by order dated 02 August 2018, adjudicated
th
applications of similarly placed applicants and, by order dated 12
October 2018, directed release of seven plots in their favour.
iii. While considering the claims of the said seven purchasers, the
Court examined and rejected all objections raised by the
ex-management and the Official Liquidator.
iv. Company Appeal No. 24/2018 filed by Mr. V.K. Sharma against
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the order directing release of plots in favour of the seven similarly
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situated purchasers was dismissed by the Division Bench on 16
November 2018, thereby making the said order final.
v. This Court has previously considered the SFIO report, wherein all
such purchasers were found to be bona fide purchasers.

vi. Statements of Mr. V.K. Sharma , Ex-director, recorded in May
2004 and June 2004, confirmed that he had sold the plots to such
persons who had paid full sale consideration and that Col.
Ganapathy had been authorised to execute the sale deeds.
st
vii. Official Liquidator, in OLR No. 36/2025 dated 01 August 2025,
has accepted that all the 14 applicants herein should be treated
nd th
similarly with applicants in orders dated 02 August 2018 and 12
October 2018 ( The 7 buyers’ order ).
16. All 14 applicants are requesting the Court to pass similar orders as
have been passed previously with respect to the 7 other buyers. There is
no change of circumstances; the factual matrix is identical, and the
appeal against the orders has attained finality after consideration by the
Division Bench, and the Official Liquidator has categorically expressed
his ‘ No Objection ’.
17. The only impediment as per counsel of applicants, is the review
petition filed by Ms. Aneeta Sharma , the wife of Mr. V K Sharma (which
is also being considered by this Court in the latter portion of this
judgment).
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18. Aside from the analysis in respect to the review petition, which
will be dealt with subsequently in this judgment, this Court is constrained
to observe that ex facie attempt by Ms. Aneeta Sharma to intervene in
these proceedings through a review petition, despite not being a party to
the appeal, being the wife of Mr. V.K. Sharma , lacking any independent
locus standi , and not being a creditor in her individual capacity, appears
to be a desperate effort to delay satisfaction of the claims of investors
who had entrusted their hard-earned savings to a company effectively
controlled and managed by Mr. V.K. Sharma and which ran aground due
to various issues raised by the RBI.
19. The company being in liquidation, this Court does not see any
reason for the ex-directors, or even Ms. Aneeta Sharma , who appears to
be acting as a proxy for them, to be heard opposing the transfer and
objecting to the devolution of the assets of the company in favour of
persons whose claims and identities have already been duly verified.
20. Even during the course of hearings, repeated attempts have been
made to obstruct these claims despite the fact that the Official Liquidator
has categorically expressed no objection and has recorded the same on
affidavit as well.
21. As per the Official Liquidator, a large number of investors had
invested their money either through the purchase of property or
otherwise in JVG, and they have been left high and dry for more than two
decades. The plight of these claimants has compelled this Court to make
the above observations. However, the issues argued before the Court
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shall be dealt with in accordance with law.
The 7 Buyers’ Order
nd
22. On 02 August 2018, a decision was delivered by the
predecessor Company Bench in Co.Appl. no. 2080/2014 filed by Mrs. G.
Bharathi seeking directions to the Official Liquidator to hand over
possession of plot No. E313 , located in the JVG Hills Complex basis that
she was a bona fide purchaser and the registered owner of the property
vide sale deed executed in May 1998 through Col. Ganapathy , as
authorized signatory of JVG.
23. The Court took note of the appointment of the OMC in July 2004
and recorded that the OMC had upheld the title of Mrs. G. Bharathi .
24. The Official Liquidator opposed the application primarily on two
grounds. First , it was contended that the OMC was required to examine
the original sale deed and verify all supporting documents before
possession could be handed over and that no Board Resolution
authorising Col. Ganapathy to execute the sale deeds had been produced.
Secondly , there was no demarcation of plot in existence.
25. Critically, the Court noted that Ms. Aneeta Sharma , acting as the
authorised representative of the ex-directors, made the submission
recorded in paragraph 5 of the said order. She stated, on behalf of the
ex-directors and the company, that payments had not been received, that
the transactions were not bona fide , and that only genuine buyers ought
to be allotted plots in a consolidated area so as to facilitate a better price
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for the remaining land.
26. This submission was objected to on the ground that demarcation
had already taken place at the time when the sales were effected and that
the same stood confirmed by HUDA.
nd
27. The Court took note of the 262 Report of the OMC, which
th
recorded that the sale deed had been executed on 15 May 1998. The
OMC observed that the transaction relating to the plot had taken place
more than six months prior to the commencement of the winding-up
proceedings and, therefore, would not fall within the ambit of Section
531 of the Companies Act, 1956. Moreover, there was nothing on record
to show that the vendor had been accorded preferential treatment over
other similarly placed persons, and the plot had been transferred in the
ordinary course of business for valuable consideration.
28. The Court also considered the SFIO Report, which confirmed that,
as on the date of winding up, Col. Ganapathy had sold 72 plots, which
were no longer part of the assets of the company on the winding-up date,
and that title thereto stood registered in favour of the plot holders.
29. The issue regarding the existence of a Board Resolution in favour
of Col. Ganapathy was considered irrelevant by this Court, considering
that the documents and receipts of consideration and sale deed
registration were before the Sub-Registrar. Moreover, the SFIO did not
come to a conclusion that Col. Ganapathy was not authorized
representative of the Company (in liquidation). Statement of Mr. V K
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Sharma, recorded earlier, wherein he had stated that the plots had been
sold and consideration received, was also taken into account by the
Court. Accordingly, directions for release were passed.
th
30. In a subsequent order dated 12 October 2018, the Court once
again noted the submissions of the counsel for the ex-directors, whose
appearance was recorded along with Ms. Aneeta Sharma , authorised
representative of the ex-management.
31. The submission raised was that the plots had not been demarcated
at the time the sale deeds were executed and, therefore, could be allotted
in a consolidated manner so that the remaining property could be utilised
more effectively. The Court noted that the sale deed in favour of Mrs. G.
Bharathi had been executed in May 1998 and clearly described the plot
along with a site plan. The Court, therefore, observed that the issue of
demarcation could make no difference to the legality or validity of the
transaction. The Court further held that “ there are no reasons to annul
the sale deeds merely to enhance the value of assets of the respondent
company. The settled legal position is that once the title of the property is
vested in the transferee by sale of the property, it can be divested back to
the transferor on the ground of fraud etc. only. No such allegation
exists .”
32. Ex-Director Mr. V K Sharma went up in appeal against the said
order. The Court observed as under in paragraphs 4 to 7:
“ 4. Mr. Neeraj Malhotra, learned Senior Counsel,
who is appearing on behalf of the Appellant, is
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unable to show any provision of law, either in the
Companies Act or elsewhere permitting a former
Director to question, in his individual capacity, the
order passed by the Company Court in winding up
proceedings dealing with the claims of creditors.
In other words, this Court is not shown what the
locus standi of the Appellant is in preferring this
appeal.
5. Way back on 29th August, 2003, the winding up
order was passed with reference to the company in
question. The Official Liquidator (OL) had taken
over the entire assets of the company in question
many years ago. Thereafter, the learned Single
Judge has been dealing with the claims of
creditors.
6. To entertain, at this stage, any appeal by one of
the former Directors on the basis that he was a
major shareholder, cannot be legally
countenanced.
7. In these circumstances, the Court is not inclined
to entertain this appeal.”
(emphasis added)
33. It is important to emphasise that the Division Bench was clear and
categorical in holding that objections raised by the ex-director in his
individual capacity could not be entertained, as he had no locus standi .
The Official Liquidator had taken over assets of the company many years
earlier, and the Company Court was dealing with the claims of investors.
34. Merely on the basis of the 7 Buyers' Order attaining finality
(subject to the fate of the review petition filed by Ms. Aneeta Sharma ),
the Court finds that the case of the present 14 applicants stands on an
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identical footing and arises from the same factual matrix. Furthermore, in
the present case, the Official Liquidator, in OLR No. 36/2025 , has
categorically stated that he has ‘ no objection’ if similar orders are passed.
th
The OLR specifically records that this Court, by order dated 10 January
2019, had directed the Official Liquidator to take expeditious steps to
hand over the plots to all buyers, which direction was duly complied
with.
35. Mr. Rishi Manchanda , counsel for the Official Liquidator, on
instructions, has categorically stated that the Official Liquidator has no
objection to these applications being allowed and the plots being duly
handed over/released in favour of the 14 applicants. The status and
particulars of each applicant, including the dates of booking, execution of
sale deeds, and payments made by them, have already been tabulated in
paragraph 6 above.
36. It is easily discernible from the tabulation that the sale deeds of the
th st
14 applicants range from as early as 30 December 1997 to 31 March
1998. It is also noted that the sale deeds were executed through Col.
Ganapathy , acting as the authorised representative, or through Mr. S. Jai
Kumar .
37. The first booking amount was paid as far back as 1995-1996, with
subsequent payments being made thereafter. Further, all 14 applicants
have been cleared by the OMC through individual reports, particulars
whereof have been reflected in the tabulation extracted above.
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38. It is also noted that, in two cases, the plots were subsequently
purchased in the year 2003 from the original allottees.
OMC Reports
39. A brief word be said regarding the assessment by the OMC
regarding the buyers under the JVG Hills Project . The OMC accepted
and verified the claims of 21 applicants, seven of whom were granted
nd th
release by orders dated 2 August 2018 and 12 October 2018, while the
remaining 14 are the applicants before this Court. There are, however,
several other applicants in whose favour sale deeds had been executed
prior to June 1998 but whose claims were rejected by the OMC, namely
25 ( deposit adjustment ), 55 ( instalment category ), 16 ( deposit
adjustment category ) and 16 ( investor category ).
th rd
40. The 219 Report of the OMC dated 3 May 2011, concerning Smt.
N. Sujatha , wife of Shri N. Pulla Rao , one of the present applicants, has
been examined by this Court. The OMC recorded the following:
“ That from the facts stated above it seems quite
clear that though the property in question was
transferred on 30.12.1997 within six months
before the commencement of its winding up, yet the
transaction does not appear to be of fraudulent
preference. The claimant booked a plot on
22.05.1995 long before the commencement of
winding up proceedings. Thereafter, the claimant
continued to pay the sale consideration and got the
same deed executed in her favour on 30.12.1997.
The process of transfer of property was started in
good faith and for valuable consideration long
before the stipulated period as mentioned in
Section 531. Moreover, there is nothing on record
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to show that the claimant was a creditor or the
company gave him a favour of treatment and
preference of other creditors who were similarly
placed. It does not appear that the vendor
transferred the property voluntarily. Thus, the
same deed executed on 30.12.1997 by Mr. S. Jai
Kumar in favour of Smt. N. Sujatha, does not
amount to be a fraudulent preference u/s 531 of the
Companies Act, 1956. ”
(emphasis added)
41. The OMC, therefore, concluded that the claimant was entitled to
allotment and possession and that the Official Liquidator was required to
verify the original sale deed before handing over possession. The other
OMC Reports examined by this Court are substantially on the same lines.
Affidavits on behalf of applicants
th
42. The affidavits filed by the applicants pursuant to the order dated 4
August 2025 have also been examined. Taking the example of Smt. N.
Sujatha , the affidavit sets out the details of booking of the subject plot,
payments made through cheque and subsequent instalments through
demand drafts. Receipts issued by JVG Projects have been annexed. The
Plot Buyer Agreement and the registered sale deed have also been
perused by the Court. Significantly, the schedule of property contains a
specific demarcation, complete with dimensions and a site plan. The
affidavits filed by the remaining applicants are on similar lines, and the
Court has had occasion to examine the same.
SFIO Report
43. Counsel has drawn attention to the Investigation Report of JVG
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th
Finance Limited filed by the SFIO dated 07 March 2014. It is noted that
the Ministry of Corporate Affairs had ordered the SFIO to conduct an
investigation under Section 235 of the Companies Act, 1956. The
th
investigation was completed and the report was submitted on 11
February 2010.
th rd

44. The report, which was presented on 16 April 2012 and 23 April
2012 before the Court, did not include the real estate project of
Hyderabad, since the books are not being signed.
th
45. On 18 May 2012, in CCP (C) 17/2007 , the Court directed that
this aspect be considered in the asset-filing exercise. The SFIO Report
records that statements were obtained from Mr. V.K. Sharma ,
Ex-Managing Director, Col. M.J. Ganapathy , Project Manager of JVG
Finance Limited at Hyderabad , and others. The SFIO team also
interacted with various stakeholders of the plot.
46. The SFIO noted that the lands in the JVG Hills layout were
acquired from pattedars by JVG Finance Ltd . through Sh. K. Madhava
Reddy . It was noted that the project was launched in May 1995 as a
self-financing housing scheme, and that booking of plots started from
1995 onwards.
47. It was further recorded in the report that JVG Finance Limited
th
passed board resolutions on 04 January 1996, authorising inter alia Col.
Col. Ganapathy , Mr. Jai Kumar, to sign, execute, correct, verify and do
all acts and deeds in connection with the land at Kondapur Village .
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48. In paragraph 112 of the Report, the plots sold by the company
through Col. Ganapathy, Shri Jai Kumar and Col. A.J. Rao were
th
tabulated, totalling 225 plots. It was observed that plots sold after 5 June
1998 were void, as the company lacked authority to affect such transfers
after the winding-up order. The Sub-Registrar, however, continued to
register sale deeds even thereafter. HUDA granted final layout approval
in 2003.
49. It was noted that, in ignorance of the winding-up orders, plot
buyers had invested their hard-earned money in the bona fide belief that
they would receive the plots. Significantly, paragraph 115 records that
“ However, around 14 investors who had booked plots much before
5.6.98 and have been given plot buyers agreement have unregistered
plots. Their names are not included in the above list of 225 plots… ”.
Submission of Ex-management
50. Submissions of the ex-management, presented through the written
submissions which have been filed, essentially revolve around the
contention that the transactions are void in terms of Section 531 of the
Companies Act, 1956, the alleged fraudulent actions of Col. M.J.
th
Ganapathy; the fact that the sale deeds were executed after 10 October
1997, when the prohibition order had been passed by the RBI; the
applicants having placed only payment receipts and no other proof of
th
payment despite the order dated 04 August 2025 passed by this Court;
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HUDA's cancellation of the draft layout dated 23 October 1997 in the
year 1999. Reliance was placed on Rishabh Agro Industries Limited
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( supra ), claiming residual powers of the ex-management for the benefit
of the company.
51. As regards the objections raised by the ex-management, the same
have already been dealt with in relation to the 7 buyers whose
nd th
applications were disposed of by orders dated 02 August 2018 and 12
October 2018. The appeal preferred by the ex-management was also
dismissed by the Division Bench of this Court and, subsequently, by an
th
order dated 04 September 2025, directions were issued for release of the
plots to the said seven buyers. The issue, therefore, stands concluded
insofar as the ex-management is concerned.
52. Apart from the above, what is more important is that the Division
Bench specifically noted that the ex-management has no locus standi in
the matter, the company already being in liquidation, as extracted above
in paragraph 14.18.
53. A similar situation applies to the ex-management even today, and,
in light of the Division Bench judgment, this Court is not inclined to
reconsider the said objections. As noted above, the ex-management has
consistently sought to obstruct the release of the plots, which is also
exemplified by the filing of the review petition through Ms. Aneeta
Sharma , wife of Ex-Director Mr. V.K. Sharma , which is being dealt with
hereinafter.
53.1. The Court notes the recent decision of the Division Bench of this
Court in V.K. Sharma v. JVG Finance Limited (In Liquidation)
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2026:DHC:355, wherein, while dealing with a challenge to orders passed
by the Company Judge relating to the sale of a property situated in
Mumbai , it observed as under:
“16…Having heard the rival submissions
advanced by the learned counsel for the parties
and upon careful consideration of the material on
record, this Court on the issue of financial
exigencies, notes that it is clear that outstanding
liabilities, including those to statutory bodies,
financial creditors, and investor deposits, far
exceed the available funds. The auction proceeds
are essential to discharge claims and ensure
protection of public deposits. The Appellant cannot
obstruct the lawful discharge of these obligations
under the guise of alleged surplus funds or delay in
crystallization of claims.
17…As far as the extraneous matters are
concerned, any attempt by the Appellant to
traverse into unrelated schemes of revival lies
outside the scope of company law proceedings and
is impermissible. The liquidation process and asset
realization must proceed unimpeded.
19…Moreover, there is no dispute with respect to
the subject property located in Mumbai. It is also
pertinent to note that the sale of the assets of the
CIL has become imperative in order to discharge
its outstanding liabilities. In these circumstances,
the various properties of the CIL are required to be
sold in accordance with law, and the Appellant
cannot be permitted to dictate or determine which
of the several properties is to be sold first or given
priority in point of time.
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20… As far the as the argument raised by the
Appellant, with respect to the failure of the LCJ to
refer to a chart produced during the course of
arguments, it is noted that mere failure to advert to
the chart cannot, by itself, constitute sufficient
ground to set aside the IO of 2023, particularly,
when the perusal of record sufficiently establishes
that the financial requirement for meeting the
liabilities of the CIL was taken into consideration
and duly examined.”
(emphasis added)
53.2. Aforesaid order of the Division Bench was appealed again by Mr. V.K.
Sharma , before the Supreme Court, and the Supreme Court has also
considered the matter. In light of the observations of the Division Bench, the
various objections raised by the ex-management on different grounds, with a
view to obstructing rights that have already crystallised in favour of the
applicants, would equally apply to the present proceedings.
53.3. Division Bench has categorically noted that “ the liquidation process
and asset realisation must proceed unimpeded ”. The Division Bench
judgment having been given imprimatur of the Supreme Court, there can be
no other discussion in this regard.
53.4. Yet another noting has been made by a Single Judge of this Court in
CO. Pet. 123/2010, where the Court noted that a Status Report submitted had
a severe indictment of the manner in which Mr. V. K. Sharma and his family
members had been managing the companies. The Court noted as under:
“18… From the aforesaid status report, it is
apparent that Mr. Vijay Kumar Sharma and his
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second wife, Mrs. Anita Sharma have no regard for
law. Mr. Sharma is perpetrating one scam after
another. While in the 1990’s, Mr. Vijay Kumar
Sharma and his family members had floated ‘ponzi
investment schemes’ wherein they duped a large
number of small and middle class investors by
promising high returns, in the decade of 2000, they
once again duped a large number of small and
middle class flat buyers by promising them
residential accommodation. As pointed out in the
SFIO report, in JVG Group of Companies, Mr.Vijay
Kumar Sharma and his second wife Mrs. Anita
Sharma, promoter and director of company in
liquidation had purchased personal jewellery, farm
house and various other valuable immovable
properties in their personal names as well as in the
names of their close relatives from the funds of JVG
Finance Company. After the JVG finance scam
was detected by Reserve Bank of India, Mr. Sharma
went on to perpetrate the land scam by
incorporating and promoting M/s Vian
Infrastructure Ltd. besides many other companies.
The interconnection between companies floated by
Mr. Vijay Kumar Sharma and his second wife is as
an admitted position inasmuch as the company in
liquidation’s defence is that its liability to pay debts
was taken over by company’s promoter Mr. Vijay
Kumar Sharma.
19… Further, in view of the aforesaid facts, the
SFIO is directed to investigate the affairs of
companies, namely, M/s. Vijay Associates, M/s.
Ayushi Buildestates Pvt. Ltd., M/s. Mauve Farms
Pvt. Ltd., M/s Yusaf Properties and M/s. Sajjad Pro.
Pvt. Ltd. in which either Mr. Vijay Kumar Sharma or
his two wives or his associates had been Directors
or had been managing its affairs. The inquiry must
be completed expeditiously and in a time bound
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manner because, given the past conduct of Mr. Vijay
Kumar Sharma, by the time the scam is unearthed,
the valuable assets and funds of companies in
question, already stand siphoned off. After
completion of inquiry, the report must be submitted
to this court, preferably within a period of eight
weeks.
20.. This Court is of the opinion that Mr. Vijay
Kumar Sharma and his family members are
targeting small and middle class investors as they
know that they are unorganized and do not have
resources to defend themselves. Even the statutory
authorities like the Official Liquidator’s office who
are entrusted with the duty to bring the culprits to
book are not able to keep pace with the scams
perpetrated by Mr. Vijay Kumar Sharma and his
family members. In fact, the Official Liquidator’s
office is ill-equipped, under-staffed, untrained and
manned by non-professionals. Had it not been for
the SFIO police inquiry, Official Liquidator would
never even have come to know about the real
diversion of funds even in JVG Finance Company,
despite lapse of more than ten years.
21… Consequently, this Court is of the opinion that
in order to effectively prevent Mr. Vijay Kumar
Sharma from committing any future financial scam,
Mr. Vijay Kumar Sharma and his two wives cannot
be permitted to incorporate or manage any
company till the proceedings in JVG Group
Companies and M/s. Vian Infrastructure Limited are
brought to a logical conclusion. Accordingly, the
Central Government is directed to ensure that
Director’s identification number issued to Mr. Vijay
Kumar Sharma and his two wives namely,
Mrs.Veena Sharma and Mrs. Anita Sharma are
immediately revoked and the statutory authorities
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are directed to ensure that they are not issued any
such number without taking prior permission of this
Court .”
(emphasis added)

53.5. Not only are these observations by the Single Judge scathing
indictments, but also prophetic, considering that even till date, more than a
decade and a half since these observations were made, Mr. V. K. Sharma and
his wife, Ms Aneeta Sharma, continue to obstruct and delay the adjudication
of the applications.

Review Petition ( CA No. 1374/2018)
54. Ms. Aneeta Sharma , wife of ex-director Mr. V.K. Sharma , seeks
th
review of the order dated 12 October 2018. It is important to note that, in
the context of the present review application, this Court is of the view that
the same constitutes a proxy litigation on behalf of Mr. V.K. Sharma ,
instituted through his wife, and is an attempt to unsettle and displace
concluded orders of this Court. The objections raised pertain to the RBI
th
prohibition order dated 10 October 1997, the alleged absence of
demarcation of land, the issue of fraudulent preference under Section 531 of
the Companies Act, 1956, and the role of Col. Ganapathy .
55. Most importantly, the applicant's averment in paragraph ‘ Y ’ of the
grounds of the review is under:

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“Y…The interest of the applicant by way of the
present application is nothing personal but to
ensure that this Hon'ble Court is properly assisted
and all relevant facts are brought before this
Hon'ble Court prior to passing of judicial orders
affecting the rights and interests of the creditors
and contributories and additionally, necessary
actions be taken in time to protect and secure the
interest of all concerned. It is made clear that the
applicant has no interest and neither does the
applicant intend to take over the powers or duties
of the Official Liquidator by way of the present
application. It is submitted that even though the
applicant is a creditor of the company to an extent
of Rs. 1.50 Cr. and the claim of the applicant has
already been filed, however, other than that the
applicant has no personal interest in the process of
winding up of the company.”
(emphasis added)
56. It is evident that the applicant states that the Court was not properly
assisted, that too by the ex-director previously and “ right and interest of
creditors and contributors ” have not been secured. Further, the applicant
makes it clear that “ applicant has no interest and neither does the applicant
intend to take over the powers and duties of the OL ”. She claims to be a
creditor to an extent of Rs. 1.5 crores , having filed the claim.
57. The following aspects have been pointed out by the counsel for the
applicants, which are necessary to highlight:
i. The affidavit filed by Ms. Aneeta Sharma is substantially similar to
the affidavit earlier filed by Mr. V.K. Sharma . In fact, the affidavit
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accompanying the review petition refers to ‘ the present appeal ’
instead of the review petition.
ii. In paragraph 'Y' (as extracted above), she herself states that she has
no personal interest in the matter and claims only to be a creditor to
the extent of Rs. 1.50 crores .

iii. The Official Liquidator has filed a OLR No. 105/2023 in which it has
been stated that the claims have been received from the creditors, in
which Flying Colours Pvt. Ltd . ( Ms . Aneeta Sharma ) is stated to be a
creditor, even if she is not a creditor in her own right but through a
company which has a different corporate personality.
iv. Ms . Aneeta Sharma had represented the management as the
nd
authorized representative in both the orders dated 02 August 2018
th
and 12 October 2018, which have been noted above, thereby
disclosing her role as far as the company was concerned.
v. The attempt by Ms. Aneeta Sharma to file the review petition, on the
slim ground that she was a creditor and a contributor, has no bearing
whatsoever and is completely untenable. She was neither an applicant
in the original petition nor an appellant along with Mr. V. K. Sharma ,
whose appeal has already been dismissed. Her proximity to Mr. V.K.
Sharma as his spouse, coupled with her role as the authorised
representative of the ex-management and the absence of any
independent personal claim, takes her outside the category of persons
entitled to seek review of the orders in question.
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vi. Moreover, all the objections which have been taken in the review
petition have already been dealt with by the 7 Buyers' Order and have
since attained finality.
58. Further, it is noted that in the order in the case of Benu Berry ( supra )
wherein the appellant had challenged the report of the Committee in relation
to a flat situated in Mumbai, the Division Bench recorded detailed findings
regarding the transfer of the said flat in favour of Ms. Aneeta Jain , describing
it as nothing short of a ‘ mother of all smokescreens ’. The Court also found it
disturbing that though counsel had submitted, upon instructions, that no
relationship existed between Ms. Aneeta Jain (now Ms. Aneeta Sharma) and
Mr. V.K. Sharma , the submission was later found to be incorrect. The appeal
was accordingly dismissed, and it was noted that the appellant was acting in
collusion with the company in liquidation and Ms. Aneeta Jain . The Court,
therefore, refrained from imposing any cost.
59. Ms. Aneeta Sharma , has, therefore, repeatedly come under the
crosshairs of this Court and does not deserve any further benevolence of this
Court in any manner.
60. It is clear that Ms. Aneeta Sharma is essentially an alter ego of Mr. V.
K. Sharma , the grounds of the appeal and the review being identical. The
adjudication, which has already crystallised, cannot now be entertained in an
indirect challenge. The review petition actually seeks to reopen the release
and possession of the 7 plots directed to be handed over under the 7 Buyers'
Order passed more than 8 years ago.
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th
61. As regards the RBI prohibition order dated 10 October 1997, the
same merely restrained the company from alienating its assets without prior
permission of the RBI, except for the purpose of repayment of deposits. The
order, issued under Section 45MB of the RBI Act, remained operative for a
period of six months and was never extended. Bona fide purchasers of
property cannot be brought within its scope, nor can the order be construed
so as to invalidate duly executed sale deeds. In BOI Finance Ltd. v.
Custodian (1997) 10 SCC 488, the Supreme Court held as under:
“ 30. It is not in dispute that the said circulars which have
been issued were not made public. The said circulars were
confidential documents and required the banking
companies to transact their businesses in a particular
manner namely they should not enter into any buy-back
contracts which were not according to the terms of the
circulars. The Act itself does not provide that, where the
directions issued by the confidential circulars are violated
by the bank, the contracts entered into with the third parties
would in any way be invalidated. The said circulars also,
did not say that the consequence of the directions contained
therein not being followed by the Banking Companies will
result in such transaction being regarded as void. Indeed,
no such stipulation could be made which would adversely
affect third parties to whom no direction have been or could
be issued and who were not aware of such directions issued
to the banks.
64. The following conclusions from the aforesaid
discussion :
[A] Infringements of the instructions issued by the
Reserve Bank of India under Banking Regulations Act
prohibiting the banks from entering into buy-back
arrangements do not invalidate such contracts entered
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into between the banks and it’s customer'.
[B] The ready forward contract is severable into two
part, namely, the ready leg and the forward leg. The
ready leg of the transaction having been completed, the
forward leg, which alone is illegal, has to be ignored.
[C] With the ready leg having been performed the
illegality of the forward leg contained in the
agreements cannot affect that the transfers which had
already taken place.
(emphasis added)


62. Some of these aspects have been taken into account in Rakesh
th
Jagmohan Pandey v. JVG Finance Ltd , 2017:DHC:6284 dated 25
October 2017, where the Court, noting the objections under Section 531A
and the RBI Order, noted that even if a sale was in contravention of
prohibitory orders, the consequence could only have been penal action
against the company's officials under Section 58B of the RBI Act. The Court
also observed that the One Man Committee had taken an unduly narrow
view of the matter and held that the transaction was not hit by Section 531A
of the Companies Act, 1956.
63. The statement made by Mr. V.K. Sharma before the Official
Liquidator, wherein he admitted that the sales had been effected in order to
make payments to creditors and depositors of the company was referred to
and the Court in Rakesh Jagmohan ( supra ) concluded as under:
“ 29…Thus, a) where the appellant did not have
knowledge of the prohibitory orders dated
10.10.1997 or of the company going in liquidation
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in the ensuing months; b) where the appellant
acted honestly and did not share common intention
to defraud the creditors; c) where due
diligence/verification was done by the employees
of Official Liquidator; d) where Official Liquidator
failed to prove the appellant did not act in good
faith; and e) where the sale being for valuation
consideration; the intention of the appellant
cannot be doubted with and hence in the
circumstances, the sale transactions for flat
Nos.402 and 502 are neither hit by Section 45MB
of the Reserve Bank of India Act nor by Section
531A of the Companies Act, 1956, as alleged.
Hence, I allow the appeal and set aside the report
dated 22.08.2014 of the One Man Committee to
this extent as also the order/notice dated
13.11.2014 of the Official Liquidator .”
(emphasis added)
64. As regards the contention that Col. Ganapathy was not authorised,
this Court has perused the brochure of the JVG Hills Project , wherein Col.
Ganapathy was described as an Additional Director of the company. The
th st
Board Resolutions dated 04 January 1996 and 01 September 1997, the
th
statement made by Mr. V.K. Sharma before the Official Liquidator on 17
st
May 2004, and the affidavit dated 21 February 2002, all of which confirm
that Col. Ganapathy had been authorised and that the plots had been
transferred.
65. The SFIO also in its report has stated that “ all purchasers are bona
fide, and knowledge of winding up ”. However, the ex-management cannot
raise an issue relating to their indoor management to object to a release of the
land to bona fide purchasers for value.
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66. The Court has noted the statement recorded by Mr. V. K. Sharma on
behalf of the company, where he had stated that the land was bought through
cheques/bank draft/cash and that Col. Ganpathy, was the Project Director of
the companies and “ person who applied and paid full consideration amount,
the land was registered/transfer in their names and those persons in their
names ”. The applicants have rightly objected to any objections being taken
at this stage, which cannot be permitted.
67. On the issue of fraudulent pre-reference, certain decisions have
been cited by the applicants which have been noted as under for
reference:
i. Monark Enterprises v. Kishan Tulpule 1991 SCC OnLine Bom
461:
“ 32. The next question which arises for
consideration of the court is whether the impugned
transaction is liable to be treated as a "fraudulent
preference" within meaning of section 531(1) of
the Act. Shri S. D. Puri, learned counsel for the
petitioners, admitted that every transaction of
transfer of property effected within six months
before the commencement of winding up of the
company without anything more is liable to be
treated as a fraudulent preference within the
meaning of section 531(1) and nothing more need
be investigated once it is shown that the impugned
transaction was effected within six months prior to
August 12, 1987, when the winding-up petition
herein was filed. Shri Puri submitted that,
admittedly, the date of the impugned transaction
was February 18, 1987, i.e., within six months
prior to filing of the winding-up petition and this
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fact by itself was sufficient to nullify the
transaction. It is not possible to accept this
interpretation of section 531(1) of the Act. If the
transaction of transfer amounts to a fraudulent
preference under the bankruptcy law or the
insolvency law and if it is entered into within a
period of six months prior to the commencement of
winding up, then alone the transaction is question
can be treated as void under section 531(1) of the
Act or otherwise. It appears to me to be
well-settled that the law does not presume the
transaction to be a fraudulent preference merely
because it was entered into within a period of six
months prior to the commencement of winding up.
In my humble view, no authority is required to
support the above proposition of law. ”
(emphasis added)

ii. Official Liquidator, Victor Chit Fund v. Kanhaiya Lal 1971 SCC
OnLine:
“ 6. Similarly, the decision of the Allahabad High
Court in Official Liquidators, Gorakhpur
Electricity Supply Co. Ltd. v. Siemens (India) Ltd.
[1941] 11 Comp. Cas.17 : A.I.R. 1940 All.514 also
does not help the petitioner. That was a case in
which payment was made to the company after the
winding up petition had been filed. It was held that
preferring some creditors over the other was no
doubt undesirable, but where the business of the
company is continued in good faith, either because
it is hoped that it may not be necessary eventually
to wind up the company or because in the interests
of all concerned, it is better that the company
should, on being wound up, be transferred as a
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going concern, it is necessary for the company to
enter into various transactions and it would be
impossible for it do so if it was not able to make
any transfers. Observation was made by the
learned single judge that payment to one creditor
in preference to the other was violation of some
rule but, respectfully, it must be said that the mere
payment to one creditor in preference to the other
would not amount to fraudulent preference. I am
fortified in coming to this conclusion by a Bench
decision of the Andhra Pradesh High Court in
Official Liquidator, Eluru Motor Transport Ltd.
v. Venkineni Rajagopala Venkataralnam [1996]
36 Comp. Cas.888 : A.I.R. 1996 A.P. 157. P.
Chandra Reddy, C.J., speaking for the court,
observed that if a debtor prefers one creditor to
another on account of pressure that is put upon
him the payment cannot be regarded as fraudulent
preference. It is the dominant motive that impels a
debtor to make a transfer of some property of his in
favour of one of the creditors that decides the issue
whether the transfer amounts to fraudulent
preference or not. The onus is upon the person who
impugned a transaction as being a fraudulent
preference to make it out and not for the alienee to
disprove that is a fraudulent preference.
7. The principles applicable to insolvency
proceedings would be attracted in company
proceedings also but, in order to set aside a
transaction as a fraudulent preference, fraud must
be clearly alleged, proved and established. I do not
find anything of the kind in the present case. Issue
No.2 is also accordingly decided against the
petitioner. ”
(emphasis added)

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iii. IDBI Bank v. Official Liquidator (2020) 15 SCC 517:
“ 20.2. Be that as it may, in light of the contentions
raised by both the parties on whether the
agreement to sell in question amounts to a
fraudulent preference, we consider it necessary to
address the same. We differ with the Division
Bench inasmuch as the said agreement cannot be
termed as a fraudulent preference under Section
531. Under Indian company law, Section 531 of
the 1956 Act (now Section 328 of the Companies
Act, 2013) is the cornerstone provision that lays
down the requirements for a transaction to amount
to a fraudulent preference. Framed along the lines
of Section 320 of the English Companies Act of
1948, it provides that any act relating to the
property of a company may qualify as a fraudulent
preference if two conditions are met. First, the
dominant motive in the mind of the company (as
represented by its directors or general body of
shareholders) should be to prefer a particular
creditor [see Jayanthi Bai v. Popular Bank Ltd.,
AIR 1966 Ker 296; Official Liquidator, Victor
Chit Fund (P.) Ltd. v. Kanhiya Lal & Ors., (1972)
42 ComCas 196 (Del)]. Second, the said act must
be undertaken during the period of six months
preceding the filing of the winding up petition of
the company. While the first requirement ensures
that the dominant intention to defraud creditors is
detected, the second ensures that there is a level of
commercial certainty and finality of transactions
for those interacting with the company .”
(emphasis added)
68. Some decisions have also been quoted in context of the RBI’s
prohibitory order and the invalidation of pleadings, which are as under
for reference:
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i. BOI Finance Ltd. v. Custodian (1997) 10 SCC 488:
“ 30. It is not in dispute that the said circulars
which have been issued were not made public. The
said circulars were confidential documents and
required the banking companies to transact their
businesses in a particular manner namely they
should not enter into any buy-back contracts which
were not according to the terms of the circulars.
The Act itself does not provide that, where the
directions issued by the confidential circulars are
violated by the bank, the contracts entered into
with the third parties would in any way be
invalidated. The said circulars also, did not say
that the consequence of the directions contained
therein not being followed by the Banking
Companies will result in such transaction being
regarded as void. Indeed, no such stipulation could
be made which would adversely affect third parties
to whom no direction have been or could be issued
and who were not aware of such directions issued
to the banks.
64. The following conclusions from the aforesaid
discussion :
[A] Infringements of the instructions issued by the
Reserve Bank of India under Banking Regulations
Act prohibiting the banks from entering into
by-back arrangements do not invalidate such
contracts entered into between the banks and it’s
customer'.
[B] The ready forward contract is severable into
two part, namely, the ready leg and the forward
leg. The ready leg of the transaction having been
completed, the forward leg, which alone is illegal,
has to be ignored.
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[C] With the ready leg having been performed the
illegality of the forward leg contained in the
agreements cannot affect that the transfers which
had already taken place.”
(emphasis added)
69. In certain judgments, the Courts have noted that the transfer
alleged as void under Section 531A of the Companies Act, 1956 is void
only against the Liquidator and the Court will invalidate or ignore the
transfer only if the relief is sought by the right person, namely, the
Liquidator. In this regard, it is instructive to consider the observation
made by Madhya Pradesh High Court in the judgment of Virendra Singh
Bhandari v. Nandlal Bhandari and Sons P. Ltd ., 2019 SCC OnLine MP
6437, and Kerala High Court Judgment in the matter of K.N. Narayana
Iyer v. CIT, (1993) 202 ITR 774, wherein it has been clarified that a
transfer falling under Section 531A of the Companies Act, 1956 is not
void ab initio but is merely void against the Official Liquidator and
therefore voidable at his option. Unless the Official Liquidator chooses
to challenge or disregard such a transaction, it remains valid and
operative between the parties. Relevant paragraphs of Virendra Singh
Bhandari ( supra ) are extracted as under:
“ 14. Since transfer made in violation of conditions
mentioned in section 531-A are void against the
liquidator, hence they are not in nullity in absolute
but voidable at the option of the OL. Kerala High
Court in the matter of K.N. Narayana
Iyer v. Commissioner of Income Tax, reported in
(1993) 78 Comp Cas 156 (DB) taking note of its
earlier Full Bench judgment in this regard has
held:—
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“13. The section forms part of a series of
section s relating to the effect of the winding
up on certain antecedent transactions of
which we will refer to only three. Section 531
deals with fraudulent preferences, namely,
transfers of property, movable or immovable,
and the like made on the eve of the winding up
of a company with a view to favour some
creditors over others. Such transfers were
deemed to be fraudulent preference of the
creditors and are invalid accordingly. We
have already extracted section 531-A under
which transfers within a period of one year
before the presentation of the petition for
winding up or the passing of a resolution for
voluntary winding up of the company are
deemed void against the liquidator. Section
532 deals with another category of transfers,
namely, the transfer by a company of all its
property to trustees for the benefit of its
creditors; it is provided that such transfers
shall be void. Thus, while section 531 treats
certain transactions as invalid and section
532 treats another category of transfers as
void, section 531-A stands in between
treating the transfers covered thereby as void
against the liquidator. These transfers
covered by section 531-A are not rendered
totally void or non-est or non-existent as
assumed by the Appellate Tribunal. They are
declared void only as against the liquidator.
In other words, they are valid inter partes and
against the rest of the world, except the
liquidator. It is open to the liquidator to treat
them as void and of no effect, and,
accordingly, seek to recover the property
covered thereby ignoring the transfers. He
need not seek to have the transfers set aside
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or cancelled. The transfers are voidable at his
option so that it will be equally open to the
liquidator to honour the transfers and deal
with them as such. All that the section implies
is that the transfers will not bind the
liquidator, and it will be open to him either to
treat them as non est or void, or to affirm
them. Since the option is with the liquidator, if
he does not choose to disown them, they will
continue to be valid and operative.
14. A Full Bench of this Court had an
occasion to deal with the purport and
meaning of the expressions “void”,
“voidable” and “void as against…” in the
decision, Chacko Mathew v. Ayyappan Kutty,
AIR 1962 Ker 164; (1962) 1 KLR 413, while
dealing with assignments in violation of the
provisions of section 21 of the Travancore
Ezhava Act. Madhavan Nair J., with whom
Velu Pillai J., concurred dealt with this point
in paragraphs 5 to 13 of his judgment. Inter
alia, he referred to In re Vansittart, Ex parte
Brown, [1893] 2 Q.B. 377. In re Brail, Ex
parte Norton, [1893] 2 Q.B. 381, both of
which dealt with the expression “void against
the trustee in bankruptcy”, in section 47 of
the English Bankruptcy Act, 1883, as
also Mariappa Pillai v. Raman Chettiyar, ILR
(1919) 42 Mad 322; AIR 1919 Mad 161
and Rukhmanbai v. Govindram, AIR 1946
Nag 163, besides analogous provisions in
section 54 of the Provincial Insolvency Act,
1920, and section 64 of the Code of Civil
Procedure, 1908, and observed (at page
168):
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“The expression is often used:‘void as
against’ a person or persons. In strict
terminology, a thing cannot be void and valid
at the same time. As Void’ denotes a nullity, a
thing which is void must be a nullity for all. It
is totally non-existent. Therefore, ‘void as
against A’ can mean only that A can treat it as
void; or, in other words, A can avoid it. It is,
strictly speaking, voidable at the option of
A…. It is thus clear that the use of the
expression ‘void as against the tarwad’
means only that the involved transaction is
‘voidable by the tarwad’, and not void as
regards the tarwad. If a transaction by the
kamavan is not a nullity and is not
challengeable by any one other than the
members of the tarwad, in strict legal
terminology we must say ‘it is voidable at the
instance of the tarwad’, and not ‘void as
against the tarwad’; but we find many
learned Judges have used the latter
expression; and it is that loose usage that
gave rise to this reference.”
15. Reference may also be made to the
observation of Subba Rao J., in Ramaswami
Chettiar v. Official Receiver, AIR 1960 SC 70,
where, after referring to section 54 of the
Provincial Insolvency Act, 1920, which uses
the expression “void as against the receiver”,
the learned judge observed that the transfer
in question was not absolutely void and that
in the context the expression “void” only
meant “voidable”.
16. The fact that a transfer falling within
section 531-A is void as against the liquidator
implies that it is not a nullity in the absolute
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sense. Since it is void only as against the
liquidator, it means the Court will invalidate
or ignore the transfer only if the relief is
sought by the right person, namely, the
liquidator and in appropriate circumstances.
For instance, it may be avoided only if it is
necessary to satisfy the creditors of the
company, or to the extent necessary for that
purpose as held by the Madras High Court
in Official Receiver v. Palaniswami Chetti
alias Ponnuswami Chettiar, AIR 1925 Mad
1051, a case under the Provincial Insolvency
Act, 1920. A void transfer is no transfer at all
and is completely destitute of any legal effect.
A voidable transaction is otherwise a valid
transaction and continues to be good until it
is avoided by the party aggrieved Johrilal
Soni v. Bhanwari Bai, (1977) 4 SCC 59 : AIR
1977 SC 2202. The transfers hit by section
531-A are voidable in the above sense, the
avoidance being only at the instance of the
liquidator.”
15. In view of the above judgment, if the OL does
not choose to disown such transactions, they will
continue to be valid and operative. Even otherwise
they are void as against OL but they are valid inter
parties and against the rest of the world.
16. While deciding the objection, this Court is
required to see if transfer was in good faith.
Bombay High Court in the matter of Monark
Enterprises v. Kishan Tulpule, reported in (1992)
74 Comp Cas 89 (Bom.) while considering the
meaning and scope of “good faith”, has held:—
“43. ……………………… Before I analyse
this submission, I consider it necessary to
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refer to the leading judgment of the Supreme
Court indicating the approach which the
Court is enjoined to follow in cases of this
kind. In the case of N. Subramania
Iyer v. Official Receiver, the Apex Court dealt
with an identical question under insolvency
legislation. It was held by the Apex Court that
the burden of proof was entirely on the
official liquidator who impugned the
transaction of transfer. In paragraph 10 of his
judgment, Sinha J; speaking for the Bench of
the Hon'ble Supreme Court, observed that it
was not necessary for upholding the
transaction that the transferor who had been
subsequently adjudged as an insolvent should
have been honest and straightforward in the
matter of the transaction impeached. It was
observed in paragraph 11 of the said
judgment the both the transferor and the
transferee must have shared a common
intention to defraud the creditors. It was held
that unless the conduct of the transferee was
blameworthy, the transaction could not be
annulled. In that case, the High Court had
accepted the submission of the official
liquidator who represented the estate of the
insolvent that the burden of proof was on the
transferee to prove that the transaction was
bona fide. Relying on several judgments of the
Privy Council, the Apex Court negatived this
proposition of law propounded in the
judgment of the High Court under appeal.
The definition of “good faith” in the General
Clauses Act (X of 1987) is in these terms:
“A thing shall be deemed to be done in good
faith where it is in fact done honestly, whether
it is done negligently or not.”
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44. The same definition of “good faith” is not
adopted under the Indian Limitation Act,
1963. The definition of “good faith” as set out
in the Limitation Act, 1963, states that a thing
shall not be deemed to be done in good faith if
not done without due care or caution. The
definition of good faith as enacted in the
Limitation Act was erroneously adopted in
the High Court's judgment in support of its
finding that the impugned transaction of
transfer or usufructuary mortgage was not a
transaction in good faith. The High Court
held that the mortgagee had not acted with
due care and caution and, therefore, the
transaction could not be considered to have
been effected in good faith. Overruling this
approach of the High Court and its ultimate
decision, our Supreme Court held that the
definition of “good faith” given in the
General Clauses Act (X of 1987) shall have to
be read in all Central statutes unless some
other definition was provided in the specific
statute. It was, therefore, held that the act of
the transferee shall have to be held to have
been done in good faith if it was done
honestly, whether it was done negligently or
without due care and caution. No definition of
“good faith” is to be found in the Companies
Act I of 1956”
Hence, if an act is done bona fidely with honest
intention, it is done in good faith.
20. In light of provision contained under section
531-A, a transaction can be held to be void if it is
found to be in violation of conditions mentioned
therein.
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17. Patna High Court in the matter of Shivshakti
Builders and Financial Co. Ltd; In re, (2010) 158
Comp Cas 237 after taking note of section 531-A
has held as under:—
“It is evident from a perusal of the aforesaid
provision that two types of transactions by the
application of the said provision would be
void against the official liquidator. The first
requirement for either of those transactions is
that it should be made within one year before
the presentation of a petition for winding up.
Once that condition is satisfied, the said
transaction must be a transfer or delivery
which has not been made in the ordinary
course of its business. Alternatively, even if
the said transfer or delivery has been made in
the ordinary course of business, the same has
not been made in favour of a purchaser or
encumbrancer in good faith and for valuable
consideration. Thus, the two parts of the said
section are clearly distinct. The second part
as to the person being a purchaser in good
faith and for valuable consideration only
comes into picture if the transfer itself has
been made in the ordinary course of business.
If the allegation is that the transfer or delivery
has not been made in the ordinary course of
business, i.e.; it is not a transaction or
transfer which the company could have
entered into in the ordinary course of
business, then there is no requirement for
further proving that the purchaser was a bona
fide purchaser and for valuable
consideration.”
(emphasis added)
70. Reliance was placed on M/s Rishabh Agro ( supra ) by the
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ex-management. It was dealing with a situation where, after the order of
winding up, the Board of Directors had moved the BIFR by passing a
resolution. Since, this was objected to, the Court, in that context, noted
that proceedings were deemed to be commenced under Section 441 of
the Companies Act, which culminated in dissolution of company under
Section 481 of the Companies Act and, therefore, the appointment of the
OL did not take away power of the Board of Directors who continue to
hold residuary powers for the benefit of the company, which includes the
power to take steps for its rehabilitation.
71. The scathing observations which the Courts have made repeatedly
against Mr. V.K. Sharma and their repeated obstructive tactics are noted.
The ex-management’s obstruction, either directly or through the proxy of
Ms. Aneeta Sharma, militates against the crystalized rights of the buyers.
Mr. Kalra’s reliance on this judgment does not give them any legal
crutch.
Conclusions

72. In view of the aforementioned analysis, this Court arrives at the
following conclusions:

nd
I. The 7 Buyers’ orders dated 02 August 2018 and the order
th
dated 12 October 2018 have attained finality, the appeal
preferred by the ex-management having been dismissed by the
Division Bench. Accordingly, the 14 applicants herein stand
on the same footing as discussed in paragraphs 22 to 38 .
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II. OMC, in its reports, has concluded that the transactions in
favour of applicants were bona fide , for valuable
consideration, and did not constitute fraudulent preference
under Section 531 of the Companies Act, 1956. Accordingly,
the claims of applicants have been duly verified by the OMC,
and the OMC has concluded that the claimants are entitled to
allotment and possession and has recommended the same to
the Official Liquidator, as discussed in paragraphs 39 to 41 .
III. Sale deeds were executed and registered prior to winding-up of
proceedings, and there is no material to establish any
fraudulent preference under Section 531 of the Companies Act,
1956.
IV. Col. Ganapathy as recorded in the 7 Buyers’ order also, was
the authorised representative of the Company in liquidation.
V. Affidavits and documents placed on record substantiate the
applicants' claims and establish the genuineness of the
transactions, as discussed in paragraph 42 .
VI. SFIO Report corroborates the applicants' case by confirming
that the project was launched prior to the winding-up order and
the authorised representatives were duly empowered to
execute sale deeds, as discussed in paragraphs 43 to 49 .
VII. The Official Liquidator, in OLR No. 36/2025 , has
categorically stated that she has ‘ no objection’ to the release of
the plots in favour of the present applicants, as discussed in
paragraphs 34 and 35.
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VIII. Objections raised by the ex-management are unmerited and
have been also addressed by earlier decisions of this Court and
the Division Bench. The same has been extensively discussed
hereinabove in paragraphs 50 to 53.5 .
IX. Ms. Aneeta Sharma does not have any independent locus
standi to maintain the present review petition. She was neither
a party to the original proceedings nor an appellant in the
appeal proceedings. Besides, her attempt to reopen issues
which have already attained finality is just to prolong the
proceedings and is severely detrimental to the interests of bona
fide investors. The same has been dealt in detail by this Court
in paragraphs 54-71 hereinabove. The review petition, i.e. CO.
APPL.1374/2018, is devoid of any merit and is accordingly
dismissed and CO. APPL.928/2024 is rendered infructuous.
73. In view of the above, applications filed by the 14 applicants, as
mentioned above, and OLR 36/2025 are allowed and disposed of
accordingly.
74. Official Liquidator will take steps to hand over the plots belonging
to the applicants within 3 weeks from today.
CO.APPL.1369/2018
th
1. List on 10 July 2026.
2. Judgment be uploaded on the website of this Court.

ANISH DAYAL
(JUDGE)
JULY 1, 2026/ sm/ak/rk/bp
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