Committee - Golden Forest (India) Limited

Appointed by the Hon'ble Supreme Court of India


Case History

1. The Golden Forests (India) Ltd was incorporated in 1987 and between the years 1991 and 1997, the promoters of GFIL floated over 100 companies, important amongst them being Golden Tourist Resorts and Developers Ltd ( Incorporated in 1991 and further expanded in 1996), Golden Projects Ltd ( Incorporated in 1996), Golden Lease Finance Ltd (Incorporated in 1994), Himachal Country Resorts Ltd, etc. Golden Projects Ltd introduced a number of attractive investment schemes promising handsome returns and within a short span of 3 years collected hundreds of crores of rupees. Large areas of lands and properties were acquired in the name of Golden Projects Ltd. Similarly a large numbers of properties have been acquired in the name of Golden Tourist Resorts and Developers Ltd some properties also have been acquired in the name of Himachal Country Resorts Ltd and some other companies.

2. Golden Forests (India) Ltd. and all its subsidiary, associate, and sister companies are controlled by one family comprising of A. L. Syal, R. K. Syal, Neena Syal, Pamila Syal, Bimla Syal (Since dead), H. K. Sinha (Brother in Law of R. K. Syal).

3. An inquiry was initiated by the SEBI against Golden Forests (India) Ltd in the year 1997 and a Committee of two persons was constituted to inquire into the affairs of the company. A report was submitted on 21/04/1998 which brings out the financial and other irregularities committed by the company. A writ petition was filed in the Bombay High Court by SEBI in which an order was passed against GFIL restraining them from alienating the properties; a similar order was passed by the Delhi High Court in the same year. SEBI on 9/1/1998 itself passed an order prohibiting the company from alienating its properties. Mr. Justice M. L. Pendse was appointed as Receiver and certain properties were earmarked for sale, but the Receiver could not sell the properties. The management of the company kept on accepting deposits, doing business and alienating properties.

4. A Company Petition No 60 of 2001 titled National Investor Forum vs. Golden Forests (India) Ltd. was filed in the Hon’ble Punjab & Haryana High Court at Chandigarh in the year 2001. The same prayed for the winding up of the Golden Forests (India) Ltd. The Hon’ble Company Judge vide order dated 18.6.2003 directed that all properties of the company shall be managed, controlled, regulated by a provisional liquidator, who shall have power to sell the moveable and immovable property. Further, vide order dated 20.6.2003, Justice R.N. Aggarwal was appointed “Provisional Liquidator”.

5. The above matter along with all other matters against the company pending in various High Courts throughout the country were transferred to the Hon'ble Supreme Court vide order dated 12.9.2003, on a transfer petition filed by SEBI being Securities and Exchange Board of India Vs Golden Forests (India) Ltd. & Anr. - Transfer Petition No. 696 of 2002. CP 60/2001 was also transferred to the Hon'ble Supreme Court and numbered as T.C. (Civil) No. 68 of 2003.

6. The Hon'ble Supreme Court vide order dated 19.08.2004 constituted a committee consisting of Justice K. T. Thomas (Retired Judge of Hon'ble Supreme Court) and an officer to be nominated by the Reserve Bank of India (RBI) and an officer to be nominated by the Securities and Exchange Board of India (SEBI), and further ordered the committee to take into its custody all assets of the company, wherever they may be, to issue advertisement in Newspapers calling upon all the creditors of the company to submit the claim(s) before the Committee.

7. Shri Justice K. T. Thomas (Retd.) requested the court for being relieved and accepting the request of Justice Thomas, the Hon'ble Supreme Court on 10/09/2004 appointed in place of Justice K. T. Thomas, Justice R. N. Aggarwal (Retd.) who was earlier the Provisional Liquidator as the Chairman of the Committee. The Reserve Bank of India appointed Mr. K. N. Rupani, DGM (Retd.) as its whole time nominee on the committee but this order of appointment of Mr. K. N. Rupani was not approved by the Hon'ble Supreme Court and in his place RBI appointed Mr. P. K. Arora, DGM, RBI, Chandigarh as its whole time member on the committee. The SEBI appointed Ms. Raj Rani Bhalla, Dy. Legal Advisor, as its whole time member on the committee, subsequently, the SEBI appointed Mr. S.K. Sharma as a member on the Committee in place of Ms Bhalla.

8. On 05.09.2006, Mr. P. K. Arora, DGM, RBI and Mr. S.K. Sharma, DGM, SEBI were relieved by the Hon'ble Supreme Court and in their place Mr. H. L. Randev and Mr. B. S. Bedi, both former District and Sessions Judges were appointed Members on the Committee by the Hon'ble Supreme Court.


Status of Case (Updated On 12th June 2009)

1. That on 05.09.2006, in T.C.(C). 2 of 2004, Securities and Exchange Board Of India vs. Golden Forests (India) Ltd, the Hon’ble Mr. Justice Ashok Bhan and Hon’ble Mr. Justice Sirpurkar were pleased to pass the following order in para no. 37 ibid :-
“37. The Committee is put at liberty to put to sale the properties at Village Jharmari, lands at Village Kot Billa, Jaswantgarh and other adjoining villages and a Resort at Nalagarh and other properties of GFIL, possession of which has already been taken by the Committee, by auction after due publicity. The sale shall be subject to the confirmation by this Court. After the properties are put to sale, the Committee shall report to this Court about the auction sale effected which shall be subject to the final orders of this Court.”

2. Pursuant to the above order certain properties, details of which are contained in I.A. No. 68 of 2007 in T.C.(C) No. 2 of 2004 and I.A. no. 27 of 2007 in TC.C. No. 68 of 2003, were put to sale by auction subject to confirmation by the Hon'ble Supreme Court. The successful bidders deposited 25% of the bid amount as per the terms and conditions of the auction and balance of the amount was to be deposited within 30 days of the confirmation of the sale by the Hon'ble Supreme Court. The parties were verbally given the assurance that the matter of confirmation of sale in all probability would be decided within two to three months. But, so far there is no final order of the Hon'ble Supreme Court regarding confirmation of the sale or otherwise.

3. Meanwhile, there was a fresh development, a company by the name M/s Vavasi Telegence (Pvt.) Ltd filed applications I.A. No. 31 and I.A. 35 in T.C.(C) 68 of 2003 in the Hon'ble Supreme Court for merger of the Golden Forest (India) Ltd and its subsidiary/associate Companies with M/s Vavasi Telegence Pvt. Ltd. The said Company had signed Memorandum of Understanding with the Golden Forest (India) Ltd management and had proposed to meet the liabilities of investors and other creditors of Golden Group Companies. The said applications also are pending for decision before the Hon'ble Supreme Court.

4. Another fact that needs to be mentioned is that M/s D. S. Constructions through Mr. I. P. S. Chadhha, who also is a successful bidder for some of the properties put to sale by auction, made an offer in Court and filed I.A. No. 87-88 in T.C. (C). 2 of 2004 offering his bid for the entire assets of the Golden Group of Companies.

5. Another post sale development which needs mention is that M/s Amartex Industries Ltd (a bidder) filed I.A. Nos. 82 & 84 for withdrawal of 25% of the bid amount deposited and participation money which was allowed by the Hon’ble court, accordingly the party was refunded the amount deposited, subject to an undertaking that the amount will be re-deposited as and when ordered by the Court.

6. Another party by the name “M/s Skate Traders and Agencies Pvt. Ltd” has also moved an application on the lines of the application filed by the M/s Amartex Industries Ltd.

7. The next important order is dated 15.10.2008 and the Hon'ble Supreme Court was pleased to pass the following order:

“……..As regards the sale of properties is concerned, the Committee may make appropriate publication regarding the sale and sufficient notices be issued to the prospective purchasers by publishing the same in the local newspapers having wide circulation in the area where the property is situated. Any sale conducted by the Committee shall be based on valuation made by either by the Committee or by other approved valuer and upset price is fixed before sale is finalized. The sale is, however, subject to the confirmation by this Court. As soon as the sale is over, the details including the purchase price and all the details shall be made over to this Court for the purpose of confirmation.

As soon as the bid is over the applicant/the prospective purchaser shall deposit 20% of the amount in a nationalized bank in the account maintained by the Committee. If there is any difficulty in getting the possession of any property owned by the respondents, the matter shall be reported to this Court and/or the Committee can also itself request for police aid or any other assistance from the governmental authorities. On all the pending applications, the Committee shall pass appropriate orders subject to confirmation by this Court.

As regards the pending claim of the petitioners/applicants the Committee may pass appropriate orders and a gist of these orders be made available to this Court for further orders.”

8. On 09.01.2009, M/s Vavasi Telegence Pvt. Ltd withdrew its offer of taking over the assets and liabilities of Golden Group of Companies. Similarly another party M/s Khalani International Corporation who made the offer to take over the assets and liability of the Golden Group of Companies before the Committee through Mr. M.C. Dhingra, Advocate, also did not pursue its application. Mr. IPS Chadha also did not pursue the offer made by him before the Hon'ble Supreme Court for taking over the entire assets and liability of Golden Group of Companies.

9. The Committee, in view of the above developments, heard the pending IAs after giving notices to the parties and forwarded its recommendation to the Hon'ble Supreme Court.

10. The aforesaid applications along with the other applications came up for hearing before Hon'ble Supreme Court (First Bench) and their lordships passed the following order:

“Heard learned counsel for the Committee appointed by this Court.

We are told that fourteen properties were put on auction in December, 2006 and out of fourteen properties, 25 per cent of their bid money has been received in respect of twelve properties and one bidder has already got refund of the amount subject to the further confirmation.

Notice be issued to all the fourteen parties for the purposes of confirmation of sale, if any and list this matter for confirmation of sale in respect of fourteen properties only on 14th Apri, 2009.”

11. So far, the Committee has received only one objection against the aforementioned sale and that is form R.K. Syal. The case was listed for 14th April 2009 and on that date the Hon'ble Supreme Court was closed because of the Birth Anniversary of Sh. B.R. Ambedkar. The next date now fixed is 29.07.2009.

12. The Committee is planning to move the SC for an early hearing. The Committee would like to note here for the information of the investors that because of delay in the disposal of the application for confirmation of the sales filed by the Committee, as for back as 9th Jan 2007 and also sale of properties by auction made subsequently, the Committee has not been able to proceed further with the sales of the properties which are in possession of the Committee.

13. The Committee is receiving repeated inquiries from the purchasers (highest bidders) regarding the fate of the alleged sales. But the Committee has been informing them of the developments in the Hon'ble Supreme Court.

14. The Company under a resolution dated 05.12.2000 had settled a number of land and properties. The resolution dated 05.12.2000 was held by the Committee to be illegal and invalid. This contention of the Committee was upheld by the Hon'ble Supreme Court in some of the cases and the Committee has successfully recovered possession of those properties. But, there are many more such cases and the Committee is making every effort to recover possession of those properties. The Committee is facing lot of problems of various natures in recovering the possession.

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R.N. Aggarwal          H.L. Randev

Chairman                 Member

Note: The IA Nos. 80 & 83 of the applicants (S. Harbans Singh & Smt. Surinderjit Kaur) have been heard but are pending consideration.