Major General Sudhir Chintamani ... vs The Union Of India
2023 Latest Caselaw 410 Bom

                                                                     903-OSWPL-34683-2022.DOC




                   Shephali



                        IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                               ORDINARY ORIGINAL CIVIL JURISDICTION
                                  WRIT PETITION (L) NO. 34683 OF 2022


                   Major General Sudhir Chintamani Nilkanth Jatar                ...Petitioner
                   (Retd)
                         Versus
                   The Union of India                                          ...Respondent


                   Mr Sangram Chinnappa, with Bhoomika Vyas, for the Petitioner.
                   Ms Shehnaz Bharucha, with Leena Patil, i/b AA Ansari, for
                        Respondent No. 1.
                   Mr AR Bamne, i/b AR Bamne & Co, for Respondent No. 2.



                                            CORAM        G.S. Patel &
                                                         S.G. Dige, JJ.

SHEPHALI DATED: 11th January 2023 SANJAY PC:-

MORMARE

Digitally signed by SHEPHALI SANJAY MORMARE Date: 2023.01.12 14:24:22 +0530 1. Rule. Rule is made returnable forthwith and the Petition is taken up for hearing and final disposal.

2. The Petition challenges an order dated 31st August 2021 of the National Company Law Tribunal ("NCLT") in so far as it pertains to the Petitioner. In the alternative an order is sought that the impugned order be read as not applying or operating as an

11th January 2023 903-OSWPL-34683-2022.DOC

attachment of the Petitioner's Pension Account No. 04500100019036 held with the Bank of Baroda.

3. The factual background runs like this. The Petitioner is an Ex- Armed Services Officer. He served with the Bombay Sappers, Corps of Engineers from 7th June 1954. He was a Commander with the Infantry Brigades in the Kashmir Valley and the Rajasthan Desert from 1977-1981. He served as a Staff Officer to an Expert Committee during 1975-76 for the reorganisation of the Indian Army and for assessing external threats to India in a 25-year period under the stewardship of the former Chief of Army Staff. He commanded an Engineer Regiment in the 1971 war against Pakistan in the Poonch Sector of Jammu and Kashmir. He was later deputed to Nigeria to train officers of that country's Defence Academy. He was then the CMD of Oil India Ltd, and ONGC Videsh Ltd, the Chairman of SCOPE (the apex body of central public sector enterprises), president of Petroleum Sports Promotion Board, etc. He has also been a consultant to Hindustan Petroleum Corporation Ltd, President of RPG Petrochem Ltd and Managing Director of Garware Shipping Ltd. He served on the governing board of the University Senate and the Pune Stock Exchange. He has also done public service work with Non-Governmental Organisations.

4. The Petition states that the State Bank of India through the Ministry of Corporate Affairs filed a Company Petition before the NCLT Mumbai Bench against Videocon Telecommunications Ltd ("VTL"). This Petition was admitted. An Interim Resolution Professional ("IRP") was appointed. Transaction reviews were

11th January 2023 903-OSWPL-34683-2022.DOC

ordered to be conducted by the IRP. Thereafter another person was appointed as the Resolution Professional. Following an audit report, an Avoidance Application dated 3rd February 2020 was filed before the NCLT. One of the applications filed before the NCLT was a prayer for attaching assets and freezing bank accounts of the respondents arrayed before the NCLT. The Petitioner was an independent director of VTL. As such, he was arrayed as a party respondent to the Petition.

5. Leaving aside the various allegations made in the Petition, the impugned order in question came to be passed on 31st August 2021. A copy of that order is to be found at Exhibit "C" at page 92 to 114. The relevant portion at the foot of page 113 is sub-clause (V) which reads thus:

"V. That the Indian Banks Association (IBA) is directed to facilitate disclosure of the details of the bank accounts, lockers owned by the Respondents (except companies) and such bank accounts and lockers also be frozen with immediate effect."

6. What the Petition alleges is that following this order of 31st August 2021, the pension account of the Petitioner was frozen by the 2nd Respondent, the Bank of Baroda, apparently under instructions of the office of the Regional Director, Western Region. We leave aside the various submissions and allegations made in regard to the NCLT. The Petitioner did file a Company Application for a modification of the 31st August 2021. It seems that this resulted in an interim order of 22nd April 2022 by which as an ad-hoc arrangement, the Petitioner was allowed to withdraw Rs. 2 lakhs per

11th January 2023 903-OSWPL-34683-2022.DOC

month from his savings account (also similarly affected) to meet his regular personal expenses. The Petitioner then wrote to the Bank of Baroda seeking that the account be released from freezing. The Bank of Baroda cited the order of 31st August 2021 and did not permit a withdrawal of more than Rs. 2 lakhs per month.

7. The Petition invokes Section 11 of the Pensions Act 1871 to say that a designated account maintained as per that Act for pension cannot be subjected to such attachment.

8. On a further enquiry, we find that there is also a freezing by the Bank of Baroda of other accounts of the Petitioner including a savings account No. 04500100019510 and the term deposit account No. 04500300030301.

9. In addition, the Bank of Baroda has frozen all accounts where the Petitioner is the second holder, or which are HUF accounts. There is an account No. 04500100013574 in the name of the Petitioner's wife to which the Petitioner is the second account holder and an HUF account No. 04500100013804 of the HUF. There is also another ICICI Bank Account in the joint names of firstly the Petitioner and secondly his spouse.

10. Lastly, there are four charitable trusts accounts all with the Punjab and National Bank that are similarly said to be frozen.

11. A list of all these accounts is tendered, taken on record and marked "X" for identification with today's date.

11th January 2023 903-OSWPL-34683-2022.DOC

12. We confine ourselves for the present to the pension account and third party accounts. We are not prepared to accept that the NCLT could have passed an order that is not contemplated by law or is forbidden by law. We say nothing about the savings account or the term deposit. We are also not concerned with the account with ICICI Bank because that bank is not a party to this Petition.

13. It seems to us self-evident that whether it is under the Pension Act or under Section 60 of Code of Civil Procedure 1908 (even assuming that there was a decree), the pension of the Petitioner could not be frozen or attached or have the effect of an attachment. It certainly could not have the effect of an attachment before judgment.

14. Section 11 of the Pension Act reads thus:

"11. Exemption of pension from attachment.-- No pension granted or continued by Government on political considerations, or on account of past services or present infirmities or as a compassionate allowance, and no money due or to become due on account of any such pension or allowance shall be liable to seizure, attachment or sequestration by process of any Court at the instance of a creditor, for, any demand against the pensioner, or in satisfaction of a decree or order of any such Court.

This section applies also to pensions granted or continued, after the separation of Burma from India, by the Government of Burma."

15. No order could have been passed by any court or tribunal contrary to the plain language of the statute.

11th January 2023 903-OSWPL-34683-2022.DOC

16. To the extent of the pension account, therefore, it is clarified that the order of the NCLT of 31st August 2021 cannot and will not apply.

17. The question remains of the restriction imposed by the NCLT of a withdrawal of Rs. 2 lakhs from the savings account. Since the Petitioner has made an application on merits to the NCLT regarding that account, and that has not yet been finally disposed of, it is open to the Petitioner to pursue that application. We only request the NCLT to take up their application as early as possible.

18. As to the HUF account and the accounts on which the Petitioner's spouse is the first holder and the Petitioner is the joint holder, we do not see how the NCLT order could operate against either the HUF which is a distinct legal entity, or against the Petitioner's spouse.

19. We therefore clarify that the impugned order dated 31st August 2021 will not apply or operate against the account of Petitioner's spouse' or against the HUF account.

20. The four trust accounts with the Punjab National Bank are all bank accounts of public charitable trusts. The fact that the Petitioner is a trustee cannot impress those accounts with the character of being personal funds or assets or accounts of the Petitioner. Plainly read, the order of the NCLT was never intended to and cannot extend to trust accounts. Those trusts were not parties to the Company Petition. They could not have been. How

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the functioning of a public charitable trust could be adversely affected in this manner is unclear. The trust accounts are all held with the Punjab National bank.

21. We direct the Branch Manager of the Punjab National Bank, Fergusson College Road, Pune to unfreeze the four accounts noted below as these are also outside the purview of the NCLT order. He will act on production of an authenticated copy of this order and will not insist on production of a certified copy.

22. There is another account with ICICI Bank. On this, the Petitioner is the first holder. He is at liberty to make an appropriate application in regard to that account to the NCLT.

23. A scan of the list of accounts marked 'X' is appended to this order.

24. Rule is made partly absolute in these terms and the Petition is disposed of accordingly. No costs.

(S. G. Dige, J)                                          (G. S. Patel, J)





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