JUDGMENT S.U. Kamdar, J.
1. The present show cause notice was issued against Rajeev M Dixit for breaking open the lock and seal of the Official Liquidator which was placed on the premises of a company under Liquidation. Some of the material facts of the present case are as under:
2. In the said company petition, on 5.6.96 in company application no.182 of 1996 the liquidator was appointed as Provisional Liquidator in respect of machinery described in Exhibit (A) and (C). However, since it was not possible to separately identify those machineries nor was it possible to keep the said machineries separately the Liquidator with a view to safeguard the said properties locked the factory premises. On 10.6.98 the Liquidator sealed the said premises and took possession thereof.
3. Subsequently the State Bank of India, Juhu Tara Road Branch, Mumbai filed a suit being suit No.4593 of 1997 in this court and a Court Receiver High Court Mumbai was appointed as Receiver in favour of the Bank. The applicants in Company Application No.40 of 2002 are claiming that under Hire Purchase Agreement dt.5.11.93 executed by and between the applicants as well as the company known as Rohan Stampings India (P) Ltd., some of the machineries were given on hire purchase to the said company M/s.Rohan Stampings India (P) Ltd. The case of the applicants is that the machineries/equipments with fittings, tools, accessories and additions as described in First Schedule to the said agreement was agreed to be let out to the company by the applicants who were the owners thereof. The said machineries were worth Rs.4,28,575/-and the company agreed to repay the said amount in monthly instalments as specified in the agreement alongwith various finance charges and other amounts set out therein.
4. In view of the defaults in repayment of amounts of instalments under the said two hire purchase agreements dt.5.11.93 the applicants became entitled to possession thereof of the said accessories. In view of the fact that Provisional liquidator was appointed as Liquidator in respect of the said plant and machinery the applicants took out the present application for handing over possession of the various machineries to the applicant which according to them belonged to them. Under the said two hire purchase agreements dt.5.11.93 in the application no.40 of 2002 the applicants has prayed that the Liquidator be directed to release the machinery and hand over possession thereof to the applicants forthwith of the following machineries:
(i) 1 No. Electramatic CNC Retrofited HMT Vikram Lathe
(ii) 1 No. Generating Set Capacity 50 kva (50 HP)
5. In the said company application an ad-interim order came to be passed on 5.11.02 by which the Liquidator was directed to give inspection of the machineries described in the said prayer (a). The said order was not complied with. Subsequently, by an order dt.30.8.02 the learned single Judge of this court directed the Liquidator to hand over papers and proceedings in suit no.4593 of 1997 filed by State Bank of India to the applicant. It seems that when the Official Liquidator went to the premises for the purpose of giving the inspection of the said machinery it was found that the premises are locked by third party and possession is taken over by said third party. Accordingly by order dt.28.1.05 I directed the Official Liquidator to break open the lock of the premises. I also directed that before breaking open the lock the Official Liquidator will give notice to the company and to the petitioner along with the applicants. It was further directed that Official Liquidator will also give notice to the Government Valuer and keep the valuer present for the purpose of immediate inventory. It was provided in the order that they will take inventory of the machinery in question which is the subject matter of the present application and the said machineries will be identified and report to that effect will be made to the court.
6. Pursuant thereto notices were given to various parties and it was brought to my notice that the said premises along with machineries have already been sold of to one Reliable Disposable Glass Containers P. Ltd after breaking open the seal of the Official Liquidator which was placed on the said premises. Accordingly, by order dt.11.3.05 I directed Prothonotary & Senior Master, High Court, Mumbai to issue Show Cause Notice to the directors of the company as well as Reliable Disposable Glass Containers P. Ltd. showing cause why action should not be initiated against them for breaking the lock and seal of the official liquidator and disposing of the said properties when infact the Liquidator is appointed as Provisional Liquidator in respect of machineries lying therein.
7. Pursuant thereto a show cause notice no.3 of 2005 was issued to the aforesaid four persons namely (1) Shri Rajeev M. Dixit, (2) Shri Vijay R. Garge and (3) Shri Dilip Kumar Das. Three of whom are the directors and the 4th person is the purchaser of the said premises. Notice which was sought to be served on Rajeev Dixit could not be served because of non-cooperation and non-furnishing of details by his son Rohan Dixit and accordingly by order dt.15.4.05 a Non Bailable Warrant was issued against the said Rajeev Dixit. In so far as Dilip Kumar Das is concerned the same has not been served as none has been found at the address given. I have also issued a Non Bailable Warrant against the said Dilip Kumar Das but the same has also come un-executed. In so far as Vijay R. Garge is concerned who was the director of the company it was pointed by him that he was only a director during the period 1991-92 which is much prior to appointment of Provisional Liquidator and has ceased to be director of the company much in advance. In view thereof, in so far as Vijay R. Garge is concerned, show cause notice is discharged as against him. Pursuant to show cause notice, both Rajeev Dixit and Reliable Disposable Glass Containers P. Ltd. has appeared before me and has inter alia contended as under:
8. Reliance Disposable Glass Containers P. Ltd. has filed an affidavit dt.11.4.05 in reply to show cause notice. The said affidavit has been filed by Mr. Zulfikar Ladji Momin claiming to be the Managing Director of the said company. It has been contended by him that he is not guilty of any contempt because he was unaware of the fact that Liquidator has been appointed as Provisional Liquidator of the assets of the said company. He has stated in his affidavit that the factory premises which is a shed which is existing on Plot No.27 belongs to the State Government and Government has given it on lease to Vasai Taluka Industrial Co-op.Estate Ltd. which is a co-operative Society registered under the provisions of Maharashtra Co-operative Societies Act, 1960. He has stated that sometime in or about 2002 company was looking for a premises for setting up a plant for manufacturing disposal containers. and in course of the same they came across present premises. It was further stated that in the said premises there was no manufacturing activity. The boundary wall of the said plot was totally broken in many places and people were passing through the said land. Even the shed was in a ruinous condition and the rolling shutter fixed on the door was broken, the roof of the shed was also broken and no kind of manufacturing or industrial activity was carried on there. It was contended that on the said premises there were no locks or seals at all. He has further stated that he thereafter made enquiries with the Co-operative Society and found that the said premises is subleased by the Co-operative Society to Rohan Stampings Pvt. Ltd. and it was informed by the Society that the said premises are mortgaged with State Bank of India and the State Bank of India has registered the particulars of the charge with the Co-opeative Society.
9. It is their further case that the said company being purchaser of the premises enquired with the society of the said premises but the said Co-operative Society never informed them about the filing of winding-up petition and or appointment of Official Liquidator or placing any seals or locks on the said premises. He has further stated that he had detailed discussion with Rajeev Dixit, Contemnor No.1 and he informed the purchaser that the State Bank of India has filed the suit against the company in the Debt Recovery Tribunal. However, they are willing to accept Rs.14.0 lacs in full and final settlement of their claim and are willing to release their mortgage in respect of the said premises. Accordingly, purchaser company signed Deed of Assignment with Mr. Rajeev Dixit on behalf of Rohan Stampings P. Ltd. in respect of the said Plot No.27. One of the clauses in the deed of assignment indicates that the purchaser of the company were aware of the fact that the proceedings were pending in the Debt Recovery Tribunal being DRT-III, Mumbai which was filed by the State Bank of India and in the said proceedings Official Liquidator was brought on record on behalf of the company known as Rohan Stampings P. Ltd. It is further the case that sometime in or about 10.2.05, Mr. G.M. Mujawar, an employee of the purchaser who was on site informed him that the Official Liquidator had visited the said premises and had drawn up certain panchnama and subsequently on 29.3.05 the present show cause notice has been served on him. It is his case that the company purchased the said company in good faith and without any knowledge of any winding up proceeding and / or locks or seals having been placed on the plot no.27 by the Official Liquidator.
10. It is further his case that the seals were put by the Liquidator after two years of the passing of the order indicating lack of urgency on the part of the Liquidator. Liquidator did not place any security guards though they called upon the petitioner in company petition to provide funds for the same. It is his case that in view of the aforesaid circumstances the purchaser cannot be blamed and they have not broke open the lock or seal of the said premises. It is further contended that they had no knowledge of any such case till show cause notice was served. In view thereof, it is contended that the said contemnor in show cause notice should be discharged
11. Rajeev Dixit has also filed two affidavits one dt.27.4.2005 and another dt.3.5.05. The said Rajeev Dixit has interalia stated that he has lost his entire business and is now a pauper. According to him, State Bank of India, Juhu Tara Branch, Mumbai has filed 3 suits against him being Suit no.4523 of 1997 against the company Rohan Stampings P. Ltd., Suit no.3790 of 1997 against Apro Exports and Suit No.3791 of 1997 against the Apro Exim P. Ltd with total Liability of Rs.1.5 crores and Receiver was appointed by this court. It is his case that in the proceedings which is related to the present company namely Rohan Stampings P. Ltd. being suit no.4523 of 1997 State Bank of India has filed Contempt Petition being Contempt Petition No.54 of 2001. On 2.8.01 the learned single Judge passed an order in the said contempt petition no.54 of 2001. By the said order, the Commissioner was appointed and was directed to submit report within 4 weeks. Accordingly, on 22.8.01 the Commissioner filed a report. In the said report Commissioner has stated as under:
Mrs. Bhattacharya pointed out to me the industrial shed of M/s. Rohan Stamping Pvt. Ltd. The said industrial shed was having 2 iron-gates. Mrs. Bhattacharya opened one of the Iron gate and I entered into the industrial shed. The main entrance of the industrial shed is on the eastern side of the property. I noticed that there was a rolling shutter. The said rolling shutter was under lock and key. Mrs. Bhattacharya told me that there is entrance from the rear side of the said property. Accordingly, I went to the rear side of the said property and I noticed that on the southern and northern side walls of the said property there were entrances. The said entrances were without any door. The said entrances were simply covered by putting C.I.C. Sheets. Mrs. Bhattacharya told me that the said C.I.C. Sheets which were put for covering the entrances by removing the C.I.C. Sheets from the roof of the mazanine floor and the roof of the sanitary block of the said property.
After entering in the said industrial gala, I noticed that the said industrial gala is admeasuring about 3000 sq.ft and the same was divided into 2 parts by putting bricks massionary wall. The entire structure of the said industrial gala was having C.I.C. Sheet roof.
On the rear portion of the said industrial Gala, there was a wall about 6 ft. in height with iron-grills thereon about 3 ft. in height. The said position was on the 3 sides of the said rear portion of the industrial gala with two entrance without any door. I noticed that the rear portion of the said industrial gala was empty.
12. It has been further stated in the affidavit that the said State Bank of India withdrew the contempt petition being 54 of 2001. It has been stated that as per report of the Commissioner the inspection was carried out by Shri R.G. Devrukhar and the machineries and properties which were physically available are set out in the report of the Commissioner. It has been contended that this machinery which are of the applicant were not in the premises. It has been further stated in the affidavit that State Bank of India, Juhu Tara Road Branch decided to sell the property and accordingly sale of the machinery as well as the premises was effected in favour of purchaser M/s. Reliance Disposable Glass Containers P. Ltd. It has been stated in the said affidavit in reply that the said properties were disposed of by State Bank of India by private treaties and by obtaining consent order of Mumbai Debt Recovery Tribunal III. It has been contended that the said sale has been directly effected in favour of the said company by the State Bank of India and thus, the said Rajeev Dixit is not liable for any of the alleged contempt.
13. In an additional affidavit dt. 3.5.05 it has been further stated that the Official Liquidator has not been appointed as "Provisional Liquidator" for the entire assets of the company and thus Liquidator has wrongfully put seal on the said premises. It was further stated that Liquidator was appointed as Provisional Liquidator only in respect of machinery described in Exhibit (A) and (C) belonging to the petitioner in the said company petition. It has been further stated that in view thereof, question of any contempt by breaking open the lock and seal of the premises does not arise as Liquidator has wrongfully put the seal and lock on the said premises of the company. In any event it has been submitted that Liquidator did not give due and proper notice to the company before the sealing of the locks and that company has never seen the premises being locked.
14. It has been contended that the alleged seal was put after two years thus indicating the lack of urgency on the part of the Official Liquidator. No watchman or guards were posted to protect the premises and that the action on the part of the Liquidator to seal the premises is totally wrong and unwarranted. It has been contended that there is a gross negligence on the part of the Official Liquidator. The entire machinery and movables of premises were in danger. It has been submitted that in view of wrongful sealing of the premises the present show cause notice must be dropped.
15. I have heard the counsel at length. It is an admitted position that pursuant to order dt.5.6.96 Official Liquidator sealed the premises of the company because he could not segregate and identify all the machineries of which he was appointed as Official Liquidator. It is also not in dispute that without the permission of the Liquidator and without the permission of this court the premises of the said company was broke open and the said premises is sold to said Reliance Disposable Glass Containers P. Ltd. It is also an admitted position that the machineries being Exhibit "A" and "C" to the Company Application in respect of which liquidator was appointed has also disappeared from the said premises. Even the machineries which were given on hire purchase by the applicant in C.A. No.40 of 2002 has also disappeared from the said premises.
16. It seems that the contemnors are taking advantage of the fact that State Bank of India initiated the proceedings for recovery of their claim and is seeking to recover the amount of loan from the company namely, Rohan Stampings (P) Ltd. In the said proceedings the company i.e. Rohan Stampings India (P) Ltd. through their directors and with the intervention of State Bank of India has disposed of their assets in favour of the said Reliable Disposable Glass Containers P. Ltd and whilst doing so they broke open the lock and seal of Official Liquidator. It is also clear from the record that the machineries which were lying in the said premises has been disposed of in respect of which claims are made by the applicants herein. It is also not in dispute even the machineries of which Provisional Liquidator was appointed has disappeared from the premises. It is the case of the director that State Bank of India has removed the said machineries and / or sold of. However, it is not in dispute that it is the company, Rohan Stampings (P) Ltd. through the director Rajeev Dixit has entered into the deed of assignment with the purchaser i.e. the Company, Reliable Disposable Glass Containers P. Ltd., and has handed over vacant and peaceful possession of the said premises to them. In view thereof, I find Mr. Rajeev Dixit guilty of contempt of court by breaking open the lock and seal of the Official Liquidator as well as by disposing of the machineries laying therein in respect of which Official Liquidator was appointed by this court.
17. The counsel appearing for the purchaser has raised only one contention that he is the purchaser of the premises bonafide and without any notice. I am unable to subscribe to the said contention for the simple reason that company was unable to show any reasonable steps having undertaken as bonafide purchaser including giving of the advertisement and or making search with the Registrar of Companies before effecting purchase of the said property. I am also unable to accept the contention of bonafide purchaser because the company was aware of the fact that the Provisional Liquidator has been appointed of the some of the assets of the said company because in DRT proceedings the Liquidator was already representing the said company. In view thereof, the contention that the said company is bonafide purchaser without any notice cannot be accepted.
18. In the light of the aforesaid circumstances of the case I hold both Rajeev Dixit and the said company Rohan Stampings (P) Ltd. as guilty of contempt of court for breaking open the lock and seal of the premises which was placed by Official Liquidator and disposing of the plant and machinery in respect of which Liquidator was appointed by this court. I defer the hearing of the show cause notice as against Dilip Kumar Das till Non Bailable Warrant is executed as against him. In so far as Vijay R. Garge is concerned, he is discharged as he was director only during the period of 1991-92. In the aforesaid circumstances, I pass the following order:
19. The said Rajeev Dixit is held guilty of contempt of court and I impose simple imprisonment of 2 months and fine of Rs.2,000/-In view of conduct on his part and on the part of his son, Rohan Dixit to avoid the service of show cause notice and fixing this court to issue Non Bailable Warrant. I impose cost on Rohan Dixit quantified at Rs.5,000/-
20. In so far as Company, Reliable Disposable Glass Containers P. Ltd. is concerned, I hold the said company guilty of contempt of court to interfere with the possession of the Liquidator by entering into the possession of the premises which has been handed over to them by breaking open the seal of the Official Liquidator and I impose fine of Rs.2,000/-. I also impose cost of the proceedings of Rs.3,000/-as against the said company.
21. Show cause notice is disposed of accordingly save and except as against contemnor no.3, Dilip Kumar Das. Notice to appear on board against contemnor no.3 after the period of 12 weeks and on execution of Non Bailable Warrant.
22. The learned counsel appearing for Reliable Disposable Glass Containers (P) Ltd. seeks stay of the Order. Stay granted on their depositing a fine imposed on them of Rs.2,000/- in the Court within 1 week from today. Stay of the present order is granted upto 15.07.2005.