9911796707
TMI Blog2000 (12) TMI 840X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant situated at Regent Chambers, Nariman Point, Bombay-400 021, on 2nd floor bearing unit Nos. 3 & 4 admeasuring approximately, 2030 sq. ft. came to be rejected. 2. The relevant facts insofar as they are necessary for a proper apprecia-tion of the issues raised before us, need a brief mention before adverting to the grievance of the parties. Dhanraj Mills P. Ltd., the 5th respondent in this appeal, is a notified party under the Act. On the information furnished by the Income-tax Department that public money belonging to Banks and Financial Institutions have been siphoned out into the accounts of the notified party and which, in turn, came to be successively siphoned to Kenilworth Investment Co. (P.) Ltd. the 6th respondent herein, and from them to CIFCO Properties Private Ltd., CIFCO Finance Ltd. and Champaklal Investments (Respondents 2, 3, 4 & 6), the Custodian filed Miscellaneous Petition No. 30 of 1995 against all those respondents. When the petition reached the stage of hearing by consent of parties, Minutes of the order dated 5-7-1995 came to be filed and recorded as per which, among other things Kenilworth Investment Co. submitted to a decree in favour of Dhanraj Mil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anies mentioned in the Schedules "B" and "C" and the said employee will within one week from today file separate affidavits declaring that they have no right, title or interest in the premises mentioned in Schedules 'A-1 to A-3', hereto as also giving the undertaking to this Hon'ble Court to vacate the premises in their occupation in the event happening as stated above." 4. Pursuant to the above, the Chairman of the appellant-company Mr. Milan Dalal filed on 28-7-1995 an affidavit of undertaking not to alienate, encumber or part with possession of or create third party right, title or interest in the aforesaid property of the appellant-company, till the decree is satisfied and in case of events happening as provided in Clauses 12 and/or 13 of the Minutes of the Order further undertaking to vacate the premises in the occupation of the appellant. 5. Since there was a default, the custodian filed Miscellaneous Application No. 280 of 1987 by way of execution proceedings against the respondent-companies which suffered a decree (of course not including or specifically initiating against the appellant and their property) and the Special Court passed an order on 24-9-1997 appointing a re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be immovable property. Consequently, the application of the appellant came to be dismissed. Hence, this appeal. 7. Dr. Rajeev Dhavan, the learned senior counsel appearing for the appellant, strenuously contended, while reiterating the stand taken before the special court, that the appellant is an utter third party to the proceedings before the special court it being neither a notified party nor claiming through any of the parties and, as a fact, also not having been arrayed as one such, its properties cannot be made liable for the recovery of the dues in question. It is also further contended that neither the appellant gave any undertaking nor it stood as surety for the realisation of the amount secured in the minutes of the order dated 5-7-1995 and, therefore, cannot be said to have encumbered its property by any specific thing in writing and the undertaking, if any, given on its behalf is not only an unauthorised one not binding upon the appellant but that it has been given also under a mistaken view of facts and, therefore, the same could not adversely affect the rights of the appellant. Argued the learned senior counsel further that in the absence of registration as envisaged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any or some benefit for any one or more of the parties from the Court, the facts such as the appellant not being itself a party in the proceedings before the Court and it was only a third party and that the property in question is of the appellant and that the appellant is neither a notified party nor one claiming through such notified party or the judgment debtor pale into insignificance and are rendered wholly irrelevant in determining the actual issues arising. 10. The minutes of the order dated 5-7-1995 came to be passed as a consent order, decreeing for the recovery of Rs. 11,82,81,316 with interest at the rate of 20 per cent and the manner in which such decree has to be satisfied as well as proportionate liabilities, inter se, of the parties thereto. The permission for payment in instalments sought for has been countenanced. Clauses 8, 12 and 13 make it abundantly clear that Respondents 2 and 3 before the Special Court declared that they will not claim any right, title or interest in the premises in question (Schedule A3 properties) and the Respondent Nos. 2 and 3 before the Special Court as well as the appellant undertook to the Special Court, not to alienate, encumber or p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chairman of the appellant-company was seriously questioned by another director of the appellant at a later stage, the rejoinder filed in this appeal by the very same Milan B. Dalal, in support of the stand of the appellant-company patently betrays the sinister motive of all those who are fighting under the shadow of the appellant-company harping upon some technicalities of law or otherwise unmindful of the fact realities staring at them, who cannot disown their own responsibilities too in the matter. We are constrained to observe that both the parties as well as their advisers who have been responsible for the respective roles they seem to have played in misguiding and misleading the Special Court to pass a particular order, assuring the existence of certain obvious facts, ought not to be allowed to either retrace their steps or derive, retain or enjoy the fruits of their own machinations and manipulations by now assuming different postures and asserting facts which they deliberately withheld from the Court and were found to be giving a different picture altogether when such orders came to be passed. This condemnable conduct of the parties alone, in our view, is more than sufficien ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n present or in future any right title or interest, whether vested or contingent in the immovable property of the value of Rs. 100 and upwards. On the other hand, the terms as well as the tenure of the above proceedings make clear the dominant intention and purpose of them to be merely an undertaking given by a third party to the proceedings to the Court to abide by a particular course of action if the judgment-debtor fails to satisfy the decree. Even in cases of such default by the judgment-debtor in this case, the undertaking as well as the consent decree only enables the custodian to initiate execution proceedings against the properties in question of the appellant-company and it is only in the event of such sale, the question of coming into existence any document which would require compulsory registration under section 17 would arise and not at this stage. In substance and effect what has been undertaken to the court is to preserve the properties intact for being proceeded against in a given eventuality and deliver peaceful possession of the property in the event of such action becoming necessary. Declaration or undertaking conceding such liberty of action cannot be construed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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