Madras high court confirms CLB order vesting Coimbatore asset to Singapore NRI – Times of India

CHENNAI: In a setback to Coimbatore-based Cheran Enterprises Private Limited, the Madras high court has refused to interfere in an order passed by the Company Law Board (CLB) vesting ownership of 25 acres of land owned by Cheran’s subsidiary Vasantha Mills Limited in favour of a Mauritius-based investor and a Singapore based NRI.
CLB ordered transfer of the property to ORE Holdings Limited and a Singapore based NRI N Athappan since Cheran defaulted to pay back Rs 79 crore investment made by the duo with interest as orders by the board.
“This court is of the view that these appeals are yet another act of oppression exercised by Cheran against the investors, by re-agitating the same cause in a different form through its subsidiary Vasantha Mill to delay the inevitable,” said Justice G Jayachandran, passing the order while dismissing appeals moved by Vasantha Mills challenging the CLB order.
The issue pertains to an order passed by the CLB, Chennai on plea moved by the investors – ORE Holdings Limited and N Athappan, a Singapore-based NRI, alleging mismanagement, misappropriation and diversion of funds by Cheran and its managing director K C Palanisamy.
On August 13, 2008 the CLB ordered Cheran to return Rs 75 crore and Rs 4 crores invested by ORE and Athappan respectively, together with simple interest at 8% per annum from the date of investment till the date of repayment within a period of 12 months in one or more instalments, commencing from November 1, 2008.
On default, Cheran was directed to convey 25 acres of land owned by Vasantha Mills in favour of ORE Athappan.
Aggrieved, Cheran moved the high court challenging the order. Disposing of the plea, a division bench of the court directed transfer of the land to the investor subject to approval from the authorities as there was a bar for a foreign entity to own immovable property in India.
To enforce the order of the CLB, ORE moved execution petitions in 2011. Challenging the same Cheran once again moved the CLB which in turn rejected the applications.
Allowing the execution petitions CLB vested the ownership of the 25 acres of land in favour of the investors. “In case, Cheran fail to execute the sale deed in favour of the investors, the jurisdictional registrar is directed to register the sale deed vesting the land in favour of the investors,” the CLB added.
Aggrieved by the CLB order dated December 13, 2015 Vasantha Mill has moved the present appeals.