Smt. Surajben Navalchand Shah And ... vs Asian Food Products Ltd. And Ors.
2004 Latest Caselaw 90 Bom

ORDER

R.M.S. Khandeparkar, J.

1. Heard the learned Advocates for the petitioners and the respondents/contemners.

2. The complaint of the petitioners relates to non compliance of the direction issued by this Court on 7-3-2000 in relation to inspection of share registered of the respondent No. 1 contemner and also regarding non-compliance of the order dated 4-5-2000 of this Court giving direction to the respondents No. 2 to deposit 250000 shares as well as 19500 duplicate shares of the first respondent. Though the original complaint also related to some other grievances, the same were specifically given up by the petitioners in the course of hearing of the matter.

3. By order dated 7-3-2000, the respondent No. 1 herein, who was the respondent No. 2 in Chamber Summons No. 1366 of 1999 in Execution Application No. 329 of 1997 in Arbitration Petition No. 112 of 1997 in relation to the Award No. 79 of 1997, it was directed that the respondent No. 2 should give inspection of the share registers to the petitioners for verification of the facts stated by the second respondent herein in his affidavit dated 3-3-2000, filed in the said chamber summons. It is the case of the petitioners that the said direction was not complied with by the respondents and therefore they have committed contempt of Court. The learned Advocate for the petitioners. drawing attention to the further orders passed by this Court in the said chamber summons, has submitted that in spite of repeated opportunities, being given to produce the said share registers, the respondents failed to comply with the said direction. In this regard, attention was drawn to the order dated 1-3-2001, 19-4-2001 as well as 13-6-2003 in the present petition. Undoubtedly, by order dated 13-6-2003 passed in this contempt petition, it was directed to the respondent No. 2 herein to produce in the Court the share registers in order to enable him to comply with the order dated 7-3-2000. However, the learned Advocate appearing for the respondents, referring to the order of the learned single Judge of 19-4-2001 in Chamber Summons No. 1366 of 1999, submitted that inspection in terms of the order dated 7-3-2000, was already given and this fact is reflected from the said order dated 19-4-2001. Indeed, the relevant portion of the order dated 19-4-2001 reads thus :--

"In these proceedings, by order dated 1st March 2001, this Court issued certain directions in respect of issuance of advertisement for the purpose of issuance of duplicate shares of Asian Food Products Ltd., and in respect of production of share registers as maintained, according to law, by the respondents.

Accordingly, the said share registers are brought by the respondents before the Court. It is stated at the bar that the inspection thereof is already taken..........."

The above recording apparently disclose that the respondents had produced the records pertaining to the registers of the shares for inspection by the petitioners and, in fact, they were inspected. Undoubtedly, it is sought to be contended that those registers were fabricated documents and in that regard grievance was made by the petitioners even at the time when the order dated 19-4-2001 was passed. No doubt, the learned Advocate appearing for the petitioners at the time of passing of the order dated 19-4-2001 appears to have alleged several defects in the documents. However, the fact remains that the respondent had produced the records for inspection of the petitioners. If there is any defect in the said documents or the records, certainly the petitioners are entitled to bring the said fact to the notice of the Court in appropriate proceedings. However, that cannot be a subject matter for adjudication in contempt proceedings. At the same time, it is also a matter of record that by order dated 13-6-2003, the respondents were directed to produce the, share registers in terms of the order dated 7-3-2000. Once there is a categorical statement on behalf of the respondents that they had produced the share registers for inspection of the petitioners and the fact of production of such registers for inspection by the petitioners is also revealed from the order passed on 19-4-2001, it cannot be said that there is violation of the order dated 7-3-2000 by the respondents. In case there is any defect in the registers produced for inspection of the petitioners, the point in that regard can be raised by the petitioners in appropriate proceedings but that cannot by itself be taken as non compliance of the said order, at this stage. There has to be an adjudication on the said point in appropriate proceedings and only thereupon it can be ascertained whether there was proper compliance of the order dated 7-3-2000 or not. At this stage, it is too premature to observe and/or to hold, merely on the accusation on the part of the petitioners that the registers are defective and that therefore there was no compliance of the order dated 7-3-2000 by the respondents.

4-5. As regards the grievance pertaining to non compliance of the order dated 4-5-2000 and further direction in that regard on 9-8-2000 and 19-9-2000 for deposit of 250000 shares as well as the shares of the respondent No. 1 as well as 19500 duplicate shares of the first respondent, it is seen that by order dated 4-5-2000 ad interim relief in terms of prayer Clause (a)(i) and (ii) in Chamber Summons No. 1366 of 1999 was confirmed the extent of 14 lakhs shares. The relief in terms of prayer Clause (a)(i) and (ii) of the said chamber summons reads thus :--

"(a) that pending the sale of 14 lakhs shares belonging to 1st respondent of the 2nd respondent in execution of the decree dated 29-9-1997, the Court Receiver, High Court Bombay, be appointed Receiver of the said shares which stand attached pursuant to the Warrant of Attachment dated 5-2-1998 and or of the assets of Respondent No. 2 together with all powers under Order XL, Rule 1, of the Civil Procedure Code with further directions to the Court Receiver and or to the Respondents;

(i) to take physical possession from the 1st respondent of the said 14 lakhs shares of the 2nd respondent standing in the name of 1st respondent;

(ii) to issue duplicate Share Certificates in lieu of the shares in the event of respondent No. 1 failing to deliver the share certificates in respect of the shares of which Receiver is appointed and to deliver the same to the Court Receiver;"

Apparently in terms of the said order, 14 lakhs shares standing in the second respondent herein in relation to the respondent No. 1 which were in physical possession of the respondent No. 2 herein were required to be delivered to the Court Receiver and further the respondents were directed to issue duplicate share certificates in the event the respondent No. 2 fails to deliver the said certificates to the Court Receiver. Consequently, various meetings were held to enable the respondents to comply with the said direction from 5-6-2000 till 10-10-2000. However, the respondents did not produce the said share certificates on one count or the other. It is, therefore, the contention of the petitioners that there has been violation of the said direction of the Court by the respondents. The learned Advocate appearing for the respondents, however, drawing attention to the order dated 5-9-2000 in Chamber Summons No. 1366 of 1999 has submitted that the direction in relation to deposit of the 14 lakhs shares was consequently reduced to 808150 shares of which the Court Receiver was already in possession of 538650 shares. As regards the 250000 shares and another 19500 shares, it is the contention of the respondents that the said shares of 250000 are not in the name of the respondent No. 2 but the respondent No. 3 and the said shares are misplaced and are not traceable and therefore the petitioners were free to obtain duplicate shares and even the respondents in that regard had applied for issuance of duplicate shares and such an application was filed on 27-3-2001 and in that regard attention is drawn to a letter dated 10-4-2001 by the authorised signatory of the respondent No. 1 wherein it was informed to the respondent No. 2 that the matter was to be placed in the Board of Directors meeting which was to be held on 7-5-2001. The learned Advocate for the respondents has further submitted that even today the respondents have no objection if the Court Receiver or the petitioners obtain the said duplicate share certificates in the name of the Court Receiver.

6. It was also sought to be contended that the entire company is under the administration of the Court Receiver and that the same has been revealed from the order dated 5-9-2001 wherein it was recorded that in relation to the land at Nasik the Court Receiver was appointed. According to the learned Advocate for the respondents, in the facts and circumstances of the case, therefore, there is no wilful disobedience of the Court's order by any of the respondents.

7. As regards the order relating to direction for delivery of the shares certificates to the extent of 269500 shares in original, the same is very clear from the said order dated 4-5-2000 read with the order dated 5-9-2001 in Chamber Summons No. 1366 of 1999. Undoubtedly, in the original order dated 4-5-2000 the direction was in relation to 14 lakhs shares but considering the defence raised it was restricted to 808150 shares out of which 538650 shares were already in the custody of the Court Receiver and therefore the respondent were required to produce and deliver to the Court Receiver the remaining 269500 shares. It is also not in dispute that the said certificates were never delivered by the respondents to the petitioners. Perusal of the proceedings before the Court Receiver during the meetings held from 5-6-2000 onwards till 10-10-2000 discloses that various excuses were being given on behalf of the respondents for non production and non delivery of the said certificates to the Court Receiver. On 5-6-2000 the Advocate for the respondents stated that he wanted to verify the distinctive numbers with regard to 269500 shares of the respondents and therefore the meeting was adjourned. Therefore, the meeting was held on 13-7-2000 wherein contention was sought to be raised that the share certificates were not required to be delivered to the Court Receiver as the same stands in the joint names of the respondents Nos. 2 and 3 herein and only those shares which stands exclusively, in the name of the respondent No. 2 were required to be deposited with the Court Receiver. The respondents were thereupon directed to deposit the said certificates within the specified time. Again meeting was held on 18-7-2000 wherein the Advocate for the respondents expressed the readiness and willingness on the part of the respondents to deposit the said share certificates but applied for time to deposit the same, while contending that 19500 shares were lying at Delhi. Again, the meeting was held on 19-8-2000. It was informed that 19500 shares were not traceable despite search and the duplicate share certificates would be issued in respect thereof, and for that purpose one months time was required, and at the request of the respondents time to deposit the remaining 250000 shares was extended to 19-9-2000. Again the meeting was held on 19-9-2000. However, the respondents did not comply with the direction of the Court regarding deposit of the share certificates with the Court Receiver.

8. The sole defence of the respondent appears to be that 269500 shares are either misplaced or not traceable and that therefore, the petitioners should take appropriate steps to get duplicate share certificates and for custody thereof, by the Court Receiver, in terms of the order dated 4-5-2000. It was also sought to be contended that an application in that regard was filed even by the respondents on 27-3-2001. However, the company has not issued the said certificates and that therefore the respondent Nos. 2 and 3 cannot be blamed for non compliance of the order dated 4-5-2000. In other words, the respondent Nos. 2 and 3 want to contend that inspite of their efforts, they are unable to comply with the order dated 4-5-2000, in relation to delivery of the share certificates to the Court Receiver.

9. Undoubtedly, in the order 4-5-2000, as already observed above, there is direction for delivery of the original shares and in case the same are not available, to procure duplicate share certificates and to deliver the custody thereof to the Court Receiver. The direction in that regard was specifically to the respondent No. 2 herein, who was the respondent No. 1 in the Chamber Summons No. 1366 of 1999. However, there is nothing placed on record, apart from the mere statement by the respondent No. 2, that the original share certificates are either misplaced or non traceable and notice in that regard was published in the newspaper. There is nothing on record to disclose as to at what point of time the respondents realised about the misplacement or non trace-ability of the said certificates and what efforts were made by the respondents to trace those original share certificates. There being a specific direction issued by the Court on 4-5-2000 to the knowledge of the respondents for production of the original share certificates and to deliver the same to the Court Receiver, and at the time or prior to the issuance of the said order, there was no grievance made by the respondents about the non availability or non traceability of the said share certificates in any manner and further that till 19-9-2000 there was no complaint about the non availability of the said 25000 shares and further that there was a specific contention raised in the meeting of 3-7-2000 that since the shares worth 250000 were in the joint names of the respondent Nos. 1 and 2 and therefore they need not be produced, in those facts, it was necessary for the respondents to disclose as to when the respondents came to know about the alleged non traceability or misplacement of the certificates and what efforts were made by them to search those certificates, The reply of the respondents in that regard is totally silent.

10. The contention that the respondents tried to apply for duplicate share certificates is sought to be made good by referring to the letter dated 19-4-2001, stated to have been addressed by the authorised signatory of the respondent No. 1 to the respondent No. 2. The said letter reads thus :--

"We have received your letter dated 27-3-2001 along with two newspapers cutting, in respect of misplaced/lost of 2,69,500 shares of our company.

Please note that your matter shall be placed in the meeting of Board of Directors of the company which shall be held on 7-5-2001 till then you are requested to bear with us."

Apparently the said letter nowhere refers to any request for issuance of duplicate share certificates but it merely refers to intimation of misplacement/loss of 269500 shares of the company along with two newspaper cuttings in that regard. The learned Advocate for the respondents was neither been able to point out any copy of the application or letter addressed to the respondent No. 1 for issuance of duplicate share certificates nor any other materials in support of the contention that the respondents tried to procure duplicate shares certificates in order to comply with the directions issued by this Court under the order dated 4-5-2000.

11. It is not a matter of non compliance of the direction issued by this Court. The conduct of the respondents, more particularly revealed from the representation made in the course of the meetings before the Court Receiver from 5-6-2000 to 19-9-2000 as well as the contents of the affidavit in reply that would reveal wilful disobidence of the direction issued by the Court. Certainly such an act on the part of the respondents cannot be allowed to go without being punished. In my considered opinion, therefore, this is a clear case of patent wilful violation of the Court's direction issued under the order dated 4-5-2000. It is a also to be noted that in spite of further opportunity being given in that regard to comply with the said order by passing further order on 5-9-2001, the respondents failed to comply with the said order.

12. However, there is no case made out for holding the respondent No. 1 or the respondent No. 3 to be guilty of violation of the orders passed by this Court. At this stage, the respondent No. 2 was heard in person. He stated that he is 64 years of age and is not keeping good health and he has produced various medical reports for the perusal of the Court which were perused and returned to the respondent No. 2. It is also submitted that there was no intention on his part to flout the Court's order and inspite of best of the efforts he could not comply with the order. He has also submitted that his wife was not keeping well and he had to attend to his wife.

13. Taking into consideration the facts and circumstances of the case, and the age of the No. 2 and the ill-health disclosed from the reports submitted to this Court, in my considered opinion, punishment in the nature of fine of rupees two thousand with civil imprisonment till the rising of the Court will be just and proper in the matter. Further, the respondent No. 2 should apply for duplicate share certificates of the respondent No. 1 within a period of six weeks from today and shall take every such step necessary to obtain the same and deliver the same to the Court Receiver. Order accordingly. The petition accordingly stands disposed of. The amount of fine shall be paid within a period of two weeks from today.