The Chandigarh administration has won a major legal battle involving a global IT firm, and thus wrested back six acres of prime land allotted to the company ten years ago. Ruling that the company had violated the allotment rules, the Supreme Court last week held the resumption of plot by administration as “legal and proper.”
The piece of land is located in the upscale IT Park here and had been allotted to the firm in 2006 at a concessional price of Rs 4.59 crore. The UT’s case was that Esys Information Technologies Pvt. Ltd., Singapore, had transferred a major portion of shares to another company Esys Global Holdings, Dubai, without informing it or seeking necessary permission as provided in the Rules of the allotment letter.
While the administration resumed the plot, the company obtained a favourable order from the Punjab and Haryana High Court. The administration appealed against this in the Supreme Court.
It argued that it was not only a case of transfer to the Dubai company but transfer of assets to Teledata, a Chennai based IT company. “The actual facts regarding transfer of shares to Teledata have been suppressed. Teledata had published unaudited results mentioning that Teledata along with its subsidiary is setting up a six acre TBO facility in Rajeev Gandhi Information Technology Park in Chandigarh. The affidavit filed by Vikas Goel (of eSys) in Singapore court indicates that he has signed an agreement to sell 51 per cent stake to Teledata,” it said.
It added that Vikas Goel wanted to dupe Teledata and therefore surreptitiously transferred shares to Esys Global Holding, Dubai. “It is a clear cut violation of the rules,” the administration further said, adding “Esys India had ceased its operations after 2010 as all its businesses were closed down and all the employees were laid off. The company has no business transaction, no employees, never deposited any PF nor filed sales-tax returns. It is a clear case of transfer of property.” The firm however contended that there was no violation of rules. “It is not a case of allottee company being merged with other company or a case of split. The allottee company was subsidiary of M/s. Esys Singapore,” it said.
Ruling in favour of the administration, the apex court held that the High Court’s order wasn’t sustainable and resumption of plot was legal and proper.