TMI Blog2016 (11) TMI 1461X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the document on 02.07.2014. We thus find the Company and its Directors/servants namely alleged Contemnor Nos.1, 4, 5, 6, 7 and 8 guilty of having violated the Order of 08.05.2014. In our view, ends of justice would be met if fine is imposed on the Contemnors. We impose fine of ₹ 2,000/- on the Company. Further, fine of ₹ 2,000/- each is imposed on Contemnor Nos.4, 5, 6, 7 and 8. Fine shall be deposited with the Registry of this Court within four weeks from today. In case of failure by Contemnor Nos.4, 5, 6, 7 and 8 to deposit the amount of fine within the time stipulated, they shall undergo sentence of simple imprisonment for one month. With these observations, we close Contempt Petition - Contempt Petition (Civil) No.338 Of 2014, 24-25/2015, 375/2014, 307/2015, Civil Appeal No.10221 OF 2014, 10224-10225/2014, 10223/2014, - - - Dated:- 18-11-2016 - Anil R. Dave And Uday Umesh Lalit, JJ. JUDGMENT Uday Umesh Lalit, 1. Contempt Petition (Civil) Nos.338 of 2014 and 375 of 2014 at the instance of Ghanshyam Sarda, appellant in Civil Appeal No.10221 of 2014 and J.K. Jute Mills Mazdoor Ekta Union, appellant in Civil Appeal No.10223 of 2014 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he BIFR had constituted Assets Sale Committee ( ASC for short) in respect of properties of the Company including Katihar property. The proceedings of ASC dated 08.11.2012 of which Shri R.N. Lahoti, CEO of the Company was also a member show that the sale of Katihar property was engaging the attention of ASC. 4. The proceedings of the BIFR dated 07.02.2013 show that in compliance of the earlier directions, the Operating Agency was in the process of finalizing a Draft Rehabilitation Scheme ( DRS for short) and in furtherance of the directions of sale of certain assets, notices were already sent to the Company, secured creditors and State of Bihar to nominate their representatives in ASC. The proceedings further show that the Operating Agency by letter dated 29.01.2013 had requested the BIFR to grant permission to proceed further for sale of assets of the Company situated in Bihar. The next proceedings of the BIFR dated 18.02.2013 indicate that the Operating Agency had got the assets valued and had sent notices to all parties to nominate their representatives in the ASC. 5. While the matter stood thus, Auditors Report dated 15.02.2013 for the period ending 31.12.2012 stated th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed positive, it was no more covered under the Act. The proceedings of the BIFR dated 16.04.2013 disclose that the BIFR had observed that manipulation of accounts had been alleged against the Company and the BIFR would examine the same and enquire whether the Net Worth of the Company had turned positive or not. 8. At this stage, various proceedings including those at Gauhati were instituted, as detailed in the Judgment of this Court dated 13.11.2014. In Title Suit No.166 of 2013, Civil Court at Kamroop, Gauhati by an interim order dated 13.05.2013 restrained the defendants therein including the BIFR from proceeding with Reference No.149 of 1994. This Order and subsequent proceedings taken up in Gauhati High Court led to the filing of Special Leave Petitions giving rise to aforementioned Civil Appeal Nos.10221 of 2014 and 10223 of 2014 and other connected matters in which this Court passed the Order of 08.05.2014. 9. During the pendency of the aforesaid Civil Appeals in this Court, aforementioned Contempt Petition Nos.338 of 2014 and 375 of 2014 were filed alleging alienation of Katihar property vide Conveyance Deed dated 02.07.2014 in violation of the Order of 08.05.2014. Cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the Circle Officer, Katihar who is taking steps to mutate the Katihar capital assets of the Contemnor No.1 Company in favour of Contemnor No.14 which is transferred by the illegal registered Conveyance Deed dated 02.07.2014. The Contemnor No.13 is Mr. Pankaj Kumar, IAS who was occupying the post of Divisional Commissioner, Purnia Division at the relevant point of time and to whom letter was sent on 10.06.2014 (and duly served on 11.06.2014) informing of the orders dated 08.05.2014 passed by this Hon ble Court and did not take any steps or issue any directions to the Contemnor Nos.9 to 12 to restrain the sale and registration of the Katihar capital assets of the Contemnor No.1 Company. 9. The counsel for the Petitioner by his letter dated 10.06.2014 was sent to Contemnor No.11 with a copy endorsed to Contemnor Nos.9,12,13 and to Registrar of Assurance, Katihar and to the Chief Minister and a letter dated 13.06.2014 was sent by the counsel for the petitioner to Contemnor Nos.9,11,12 and to the Finance Minister, Chief Secretary and Asstt. I.G. of Registration and all of them given full and complete knowledge of the orders dated 08.05.2014 passed by this Hon ble Court but all of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nor No.17 before the Contemnor No.9 (District Magistrate Collector, Katihar) being Registration Appeal Case No.235/13-14 the Collector, Katihar, inter-alia, passed the following orders on 21.03.2014 (English translation):- From the aforesaid facts it is clear that the land under reference is Reyati Land (belonged to Juggi Lal Kamlapati Company, Katihar). Therein the Government has no vested interest. Accordingly, there appears to be no purpose for stay of its registration. Therefore the District Sub-Registrar, Katihar is free for conducting the proceedings under the Registration Act and the Rules framed under it. With this order the present case hereby disposed off. .. (iii) As stated above, this Hon ble Court by orders dated 08.05.2014 directed that till further orders, capital assets of the company shall not be disposed of without taking permission of this Hon ble Court. (iv) On 31.05.2014, the Contemnor No.10, Deputy Collector, District Legal Branch, Katihar made the following endorsement (English translation) on the orders dated 21.03.2014 passed by the Contemnor No.9 to the Contemnor No.11:- Memo 1346/Law, dated 31.05.2014 Copy to Distri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Contemnor No.1 Company but as on the date of the signing and/or execution of the Conveyance Deed, he had on 17.02.2014 resigned as a Director of the Contemnor No.1 Company. The said Mr. Sobhanand Jha long back changed his name to Mr. Ravishankar Prabhakar and got his name changed in the records with the Registrar of Companies but he still signed the Conveyance Deed on behalf of the Contemnor No.1 Company as a Director with his name written as Mr. Sobhanand Jha. 13. That the Contemnor Nos.1 to 17 have thus willfully, consciously and contumaciously and with full and complete knowledge violated and disobeyed the orders dated 08.05.2014 passed by this Hon ble Court in SLP(Civil) No.5249 of 2014 and as such each one of Contemnors have made themselves jointly and severally liable to be punished for the contempt of the orders passed by this Hon ble Court. 14. That the subject matter of the Katihar capital asset is part of the scheme before the BIFR and in respect of the permissions granted for sale of the Katihar capital assets and other assets of the Contemnor No.1 Company on an appeal being Special Appeal No.539 of 2013 filed before the Allahabad High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so satisfied, it shall deregister the Company and upon such declaration the Company will be out of the supervisory jurisdiction of BIFR under the Act. Needless to say that if BIFR is not satisfied that the net worth of the Company has turned positive, it shall go ahead and consider the scheme for revival of the Company. We direct BIFR to complete this exercise within two months from the date of receipt of this order. We have refrained from dealing with the matter concerning the merits or demerits of the claim that the net worth has turned positive nor have we dealt with the report made by State Bank of India in its special investigative audit. We leave these issues to be considered by BIFR at an appropriate stage. We have also not dealt with the submissions alleging bias as the matters in that behalf are still pending consideration before the authorities and we leave these issues to be dealt with at an appropriate stage. 38. Since in our view the Company continues to be a sick company and it was not competent for anyone except BIFR to determine whether the net worth of the Company had turned positive, we hold the sale of Katihar property effected by the Company without express ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atter was pending adjudication. It is only thereafter, that this Hon ble Court had passed the interim Order dated 08.05.2014 restraining the Company from disposing off capital assets of the Company without taking permission from the Hon ble Court. By this time, the property in question had for all practical purposes already been transferred. Only, the ministerial act of actual registration by the Authority concerned was remaining which also was being pursued by the purchaser, it is submitted that vide board resolution dated 06.02.2013 an authority had been given by the Company to the alleged Contemnor No.7 herein to sign and execute the sale deed. Subsequently, the alleged contemnor No.7 had resigned from the directorship of the Company. The alleged Contemnor No.7 was called upon by the purchaser for getting the sale deed registered. Therefore, there was no willful or deliberate violation of the interim Order dated 08.05.2014 passed by this Hon ble Court. B. In his reply, alleged Contemnor No.2 Govind Sarda submitted that he was not a party to the proceedings disposed of by this Court vide Judgment dated 13.11.2014. It was denied that the Company belonged to or was being manag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d was also not served by a copy of the said order. In any event the entire exercise of sale was completed in 2013 itself when the deed was executed, payment received and possession handed over. In his supplementary affidavit Shobhanand Jha further submitted:- 1. That on 02.07.2014 at the time of registration of the conveyance deed I had produced the authorization being board resolution of 06.02.2013 given in my favour by the Board of J K Jute Mills Co. Ltd. 2. That although the sale deed of 2014 mentions my designation as Director, it is a typographical error and which has been carried forward from the earlier sale deed of April 2013 and nothing more. It was not my intention to show myself as Director of JK Jute Mills Co. Ltd. at the time of registration as I had resigned from the Board of Directors in February, 2014. The only authorization in my favour was the one mentioned in para 1 above. D. Alleged Contemnor No.10, Mohammad Istaba Husain, Senior Deputy Collector, Gaya submitted that soon after receipt of the letter dated 10.06.2014 sent by the Counsel for the appellant along with copy of the order dated 08.05.2014 passed by this Court, he had ensured that the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctor in the transferee company. Reliance was placed on the authority letter dated 17.06.2013 issued by the Company authorizing said alleged Contemnor No.17 to collect certified copies of the orders from the office of the BIFR. It was submitted that he being privy to the proceedings before the BIFR and being aware of the Order of 08.05.2014, ought not to have registered the document on 02.07.2014. In his subsequent affidavit dated 27.01.2016, alleged Contemnor No.17 submitted that he directly worked under alleged Contemnor Nos.2 and 3 and that he used to sign documents on their instructions. He submitted as under: I wish to further state that I, under instructions from Mr. Aditya Sarda, had visited Katihar twice. My first visit was in the month of May, 2014 for 15 days and second time in the last week of June 2014. The first time in May 2014 I was accompanied by Mr. Sashi Kant Jha and second time in June 2014 with Shobhanand Jha, both employees of Mr. Govind Sarda. In June 2014, on reaching Katihar I and Mr. Shobhanand Jha met by Shri. Damodar Prasad Bhatter another employee of Mr. Govind Sarda and Mr. Aditya Sarda. I stayed in Katihar for a week. During both my visits I was tol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of 08.05.2014 and what was done on 02.07.2014 was a mere ministerial act. According to the alleged contemnors, the documents presented for registration in April 2013 were not accepted for want of adequate stamp and registration fees. This infirmity was removed and the documents were then presented for registration. In such circumstances the order of 08.05.2014 was not in any way violated by them. 17. The Order of 08.05.2014 had directed .capital assets of the company shall not be disposed of without taking permission of this Court . The expression shall not be disposed in the context connotes action or process of sale of assets. Going by Section 54 of the Transfer of Property Act, 1882, transfer of any tangible immovable property of the value of Rupees hundred and upwards can be made only by a registered instrument. The expression only in the Section is significant. The transfer comes into effect and becomes valid and effective only by a registered instrument. It is true that the document was sought to be registered in April, 2013 but the registration in question was duly effected only on 02.07.2014. In the eyes of law, it is this document registered on 02.07.2014 which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd Jha in pursuance of the authority given to him by the Company way back on 06.02.2013. As on 06.02.2013, the company was definitely a sick company and the Reference was pending before the BIFR. Around that time the ASC was constituted which was considering sale of assets including Katihar property. It was only after the Auditors report dated 15.02.2013 that the Company started projecting that its net worth had become positive on which account it ceased to be governed under the provisions of the Act and was outside the jurisdiction of the BIFR. Though this Court rejected such submission in its judgment dated 13.11.2014, at this stage we are considering the bonafides and tenability of the assertions made by the alleged contemnors. There could not have been any occasion for the Company before 19.02.2013, even accepting the submission that it ceased to be a sick company as alleged, to enable the Company to execute an authority on 06.02.2013 in favour of alleged Contemnor No.7. That authorization is wholly defective and unsustainable. It is not the case of the alleged contemnors that after the adoption of the Auditors Report and Directors Report dated 19.02.2013 a decision was take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transfer the assets of the Company in the teeth of the Order of 08.05.2014 is thus apparent and clear. 21. We now turn to the involvement of those officials concerned with registration, who went ahead and registered the document on 02.07.2014 despite having been put to notice and served with a copy of the Order of 08.05.2014. Our attention has been invited to the opinion rendered by the office of the Advocate General, Bihar to the effect that even if there be any order passed by a civil court in connection with a private dispute between the parties, the registering authorities are bound to register a document presented for registration. This opinion was relied upon by the Government Advocate who then opined that the document in the present case could be registered. The request was allegedly made on 30.06.2014 and the opinion of the Government Advocate was promptly given on 01.07.2014. There is no register maintained diarizing the inward and outward letters and prima facie the entire theory appears to be suspicious and designed to confer a favour. However, since these are government servants, we grant them benefit of doubt and would only caution them. It is shocking that an o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat such documents and the affidavit of Dinesh Sarda are conveniently brought on record, would also require assessment of facts. Thus, though there is room to suspect the involvement of said Contemnor Nos.2 and 3, the material on record is not conclusive enough to hold them guilty of violation of Order of 08.05.2015. We, therefore, close these proceedings as against them. 24. We now come to the crucial question as to the effect of transfer or alienation of Katihar property in violation of the Order of 08.05.2014. The law on the point is well settled in the decision of this Court in D.D.A. v. Skipper Construction Co. (P) Ltd. (1996) 4 SCC 622) that legal consequences of what has been done in breach of or in violation of the order of stay or injunction can be undone and the parties could be put back to the same position as they stood immediately prior to such order of stay or injunction. Paragraphs 18 to 21 of the decision in D.D.A. v. Skipper Construction Co. (P) Ltd . (supra) are quite instructive and are:- 18. The above principle has been applied even in the case of violation of orders of injunction issued by civil courts. In Clarke v. Chadbur (1985)1 All ER 211 Sir Robe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... technicality can prevent the court from doing justice in exercise of its inherent powers. It held that the object of Rule 2-A of Order 39 will be fulfilled only where such mandatory direction is given for restoration of possession to the aggrieved party. This was necessary, it observed, to prevent the abuse of process of law. 21. There is no doubt that this salutary rule has to be applied and given effect to by this Court, if necessary, by overruling any procedural or other technical objections. Article 129 is a constitutional power and when exercised in tandem with Article 142, all such objections should give way. The court must ensure full justice between the parties before it. 25. In the present case the Company and its Directors/servants were certainly guilty of transgressing or violating the Order of 08.05.2014 but as found hereinabove, the transferee and its Directors/servants have not violated the Order of 08.05.2014. The transferee and its Directors/servants were neither parties to the proceedings nor were they served with the Order of 08.05.2014. In para 38 of the judgment of this Court dated 13.11.2014, this Court had found the transfer in favour of the transferee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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