Mulik Hotel Private Limited And ... vs Sicom Limited And Ors.
2002 Latest Caselaw 1191 Bom

JUDGMENT

C.K. Thakker, C.J.

1. This application is filed by the petitioners for the following relief;

"Grant permission to the petitioners to deposit the amount of Rs. 25 lakhs in cash in the Court today only in view of the facts and the circumstances mentioned above, in the interest of justice."

2. It may be stated that the applicants of this Miscellaneous Civil Application had filed substantive petition being Writ Petition No. 3008 of 2002, inter alia, praying therein that a writ of mandamus be issued against the respondents i.e. respondent Nos. 1 and 2 SICOM Limited and Maharashtra State Financial Corporation, respondent No. 3 directing them to provide a concrete proposal for "one time settlement of the dues" of the petitioners and to act upon it. A prayer was also made by directing respondent No. 1 not to accept a bid of Rs. 145.21 lakhs as disclosed by the respondent No. 1 in its communication dated 26th July, 2002. Other prayers were also made in the petition.

3. A term loan was advanced by the respondent No. 1 to the petitioner to establish a Hotel. The allegations of the respondents is that the amount was not repaid by the petitioner which resulted into sale of unit by the respondents for Rs. 145.21 lakhs which action was challenged by the petitioners. Notice was issued to the respondents and even ad interim relief was also granted by the Court by ordering not to confirm sale in the meanwhile.

4. On 29th October, 2002, after hearing the learned Counsel for the petitioners and the learned Counsel for respondent No. 2, the Division Bench passed the following order:---

"Heard.

Affidavit is filed by Shri D.B. Mulik, Managing Director of petitioner No. 1, stating that to demonstrate his bona fides and to make it more explicit, and with a view to make the repayment of outstanding amount of respondent Nos. 1 and 2, the petitioner, through this affidavit undertakes to deposit Rs. 1 crore (Rupees one crore) in this Court in the manner as has suggested by him in the affidavit. He states that an amount of Rs. 50,00,000/- (Rupees fifty lacs only) will be deposited in this Court on or before 20th November, 2002, and the balance amount of Rs. 50,00,000/- (Rupees fifty lacs only) will be deposited within a period of two weeks thereafter. The petitioner has stated it to be an unequivocal undertaking on his part. Keeping in view the contents of the affidavit and to know about the bona fides of the petitioners, we direct by this order that the petitioner shall immediately on or before 31st October, 2002, deposit Rs. 25,00,000/- (Rupees Twenty five lacs only) in this Court by way of a demand draft. Thereafter, the petitioner shall deposit Rs. 50,00,000/- (Rupees fifty lacs only) in this Court, on or before 20th November, 2002 and the remaining amount of Rs. 25,00,000/- (Rupees twenty five lacs only) to be deposited in this Court within two weeks thereafter.

It is made clear that necessary orders in this petition will be passed only after the abovesaid deposits are made in this Court. It is further, made clear that, if the petitioner fails to deposit the abovesaid amounts in accordance with the time stipulated, then the petition shall stand dismissed. Learned Counsel for the petitioner undertakes to make it clear to his client.

Undertaking filed on record is accepted.

We make it clear that if the amounts are deposited, the matter shall appear on the Board immediately on the next day, when the last deposit is made.

Appropriate orders as regards withdrawal of the amount by the respondents will be passed, after the whole amount is deposited.

Respondents are at liberty to move the Court for necessary permission for withdrawal."

5. The above order, in our opinion, was explicitly clear. It was ordered that an amount of Rs. 25,00,000/- (Rupees twenty five lacs only) was to be deposited by the petitioners on or before 31st October, 2002. Further amount of Rs. 50,00,000/- (Rupees fifty lacs only) was to be deposited on or before 20th November, 2002 and the remaining amount of Rs. 25,00,000/- (Rupees twenty five lacs only) was to be deposited within two weeks thereafter. It was also made clear that if the petitioners would fail to deposit the amounts as per the order of the Court within the time stipulated, "then the petition shall stand dismissed". Thus, the order was abundantly clear and self operative.

6. The Court also took into consideration an undertaking on affidavit filed by the Managing Director of petitioner No. 1 on 28th October, 2002 where it was stated that an amount of Rs. 50,00,000/- (Rupees fifty lacs only) would be deposited in the Court on or before 20th November, 2002 i.e. today and the balance amount of Rs. 50,00,000/- (Rupees fifty lacs only) would be deposited within a period of two weeks thereafter. It was stated, "this is an unequivocal undertaking given by the petitioners."

7. It is not disputed even by the petitioners that the order passed by this Court had not been complied with and on or before 31st October, 2002, an amount of Rs. 25,00,000/- (Rupees twenty five lacs only) was not deposited. Similarly, an additional amount of Rs. 50,00,000/- (Rupees fifty lacs only), which was to be deposited by 20th November, 2002 i.e. today, has also not been deposited. Since the order was not complied with and there was a breach of the order, the Assistant Registrar, on 1-11-2002, passed an order stating that since the Counsel for the petitioners had not deposited Rs. 25,00,000/- (Rupees twenty five lacs only) in Court on or before 31st October, 2002, the writ petition "stands dismissed at the end of 31st October, 2002".

8. In the circumstances, the petitioners have approached this Court by filing the present Miscellaneous Civil Application for restoration of the main order and for consequential reliefs.

9. We have heard the learned Counsel for the petitioners as well as the learned Counsel for respondent Nos. 1 and 2 SICOM Limited and learned Counsel for respondent No. 4, Purchaser of Unit.

10. The learned Counsel for the petitioners raised several contentions. It was submitted that the respondent Nos. 1 and 2 SICOM Limited could not have exercised the powers under section 29 of the State Financial Corporations Act, 1951 and hence the entire action of holding auction was illegal and contrary to law. The said contention, submitted the learned Counsel, goes to the root of the matter and all proceedings would be null and void and on that ground alone, the petition deserved to be allowed.

11. Regarding the order of the Court, it was submitted that the petitioners were and are prepared to comply with the order of the Court. Because of the circumstances beyond their control and the fact that the Unit in question was already sold to respondent No. 4 and the other property of the petitioners was notified for acquisition under the provisions of Land Acquisition Act and the notification was issued on October 17, 2002 received by the petitioner on 31st October, 2002, they could not pay the amount. It was submitted that this is an eminently a fit case which deserves acceptance of prayer and the matter may be restored to file.

12. Learned Counsel for the respondents, on the other hand, submitted that sufficient indulgence was shown by the Court to the petitioners and order was passed after hearing the learned Counsel for the petitioners and directions were issued. It was, therefore, incumbent on the petitioners to deposit the amount as per the time schedule mentioned in the order. There was a failure by the petitioners in paying the amount. It was also submitted that though the petitioners were aware that on or before 31st October, 2002, an amount of Rs. 25,00,000/- (Rupees twenty five lacs only) was to be paid and it was not paid, no action was taken by the respondents either to pay the amount or to get an extension from the Court. No application whatsoever was made either before 31st October, 2002 or on 1st November, 2002, which was working day. It was only after that the matter was dismissed for default and further proceedings were taken by the respondent No. 3, Corporation for selling of the property that now the petitioners have come to this Court by filing the present Miscellaneous Civil Application for restoration. It was, therefore, submitted that this is not a fit case to grant indulgence in favour of the petitioners.

13. On behalf of the respondent No. 4, it was submitted that he has purchased the Unit and that the entire payment has been made by him. If, at this stage, any order would be passed, it would seriously prejudice the said respondent. It was, therefore, submitted that the application deserves to be dismissed.

14. In our opinion, no case has been made out by the petitioners to get the matter restored to file. So far as the question raised on merits and the authority of respondent Nos. 1 and 2 is concerned, we express no opinion in view of the fact that in our view, this Miscellaneous Civil Application deserves to be dismissed and the order of dismissal for default passed by the Assistant Registrar deserves no interference. As already mentioned earlier, the order was explicitly clear and self operative. The petitioners were bound to deposit Rs. 25,00,000/- (Rupees twenty five lacs only) on or before 31st October, 2002. It has not been done. No application for extension was made either on 31st October, 2002 or on 1st November, 2002. Hence, the Assistant Registrar was right in taking action in terms of the order wherein it was mentioned that in case of default, the petition would stand dismissed.

15. Even now, the petitioners are not paying any amount. It may be that there is difficulty on the part of the petitioners in making the payment, but when the order was passed after hearing the learned Counsel for the parties and it had not been complied nor the petitioners are not in a position to pay the amount for which an undertaking was filed by the Managing Director of the petitioner No. 1 that he would pay an amount of Rs. 50,00,000/- (Rupees fifty lacs only) on or before November 20, 2002, in our opinion, this is not a proper case to exercise discretion in their favour. To us, it also appears to be clear that after issuing public notice and after calling for negotiations of bidders, the property was sold to respondent No. 4. It would not be appropriate now to exercise our powers to set aside that sale which may adversely affect respondent No. 4. There was a stay operating for about six months, in spite of that, nothing had been done by the petitioners.

16. For all these reasons, in our opinion, Miscellaneous Civil Application deserves to be dismissed and is accordingly dismissed. In the facts and circumstances, there shall be no order as to costs.