Delhi High Court

Capital Land Builders (Pvt.) Ltd. vs M/S. Shaheed Memorial Society & ... on 20 April, 2009

Author: P.K.Bhasin

* IN THE HIGH COURT OF DELHI AT NEW DELHI

%    I.A. Nos. 4764/08, 3329/08, 10609/07 & 6938/07

                          IN

              C.S. (OS) No. 1906 of 2006

+                           Date of Decision: 20th April, 2009


#Capital Land Builders (Pvt.) Ltd.& Ors.          .....Plaintiffs
!                 Through: Mr. Rajive Sawhney, Sr. Adv. with
                            Mr. Vineet Jhanji, Advocate


                 versus

M/s Shaheed Memorial Society & Ors.        .....Defendants
^             Through: Mr. Sandeep Sethi, Sr. Adv. with
                       Mr. Nitin Soni & Anuradha
                       Chaudhary, Advocates

     CORAM:
*    HON'BLE MR. JUSTICE P.K.BHASIN

1. Whether Reporters of local papers may be allowed to see
   the judgment?(No)
2. To be referred to the Reporter or not?(Yes)
3. Whether the judgment should be reported in the digest?(Yes)

                            ORDER

P.K.BHASIN, J:

Blatant violation by defendants 1 to 6 and 8 of the order

dated 6.10.2006 passed in the present suit whereby these

defendants were restrained from representing themselves as

shareholders/representatives of plaintiff no.1, M/s Capital Land

Builders (Pvt.) Ltd.(hereinafter to be referred to as „the

Company), has been brought to the notice of the Court by the plaintiffs through four applications under Order XXXIX Rules 2A

CPC and all those applications are now being disposed of by

this common Order.

2. Relevant facts of the case, as reflected in the plaint and

documents filed therewith by the plaintiffs and the pleadings of

the defendants against whom action is being sought and about

which there is no dispute between the parties, are these: Plaintiff

no.1 M/s Capital Land Builders(Pvt.) Ltd.(hereinafter to be

referred to as „the Company‟) came into existence in the year

1959 with the issued Capital of Rs.1500/- only comprising of 15

equity shares of the face value of Rs.100/- each. At the time of

incorporation of the Company two persons had signed its

Memorandum of Association as the original subscribers. One of

them was Smt. Satya Chaudhary(defendant no.8) who held ten

shares. The other subscriber was one Mr. Kishor Lal Sachdeva

who held the remaining five shares. One of the objects for which

the Company was floated were to acquire, purchase and or take

on lease lands and develop the same into sites for residential,

industrial and other purposes and to sell or lease out such sites.

In the year 1962 Ch. Brahm Prakash, who was the husband of

defendant no.8 Smt. Satya Chaudhary and father of defendant

no.2 Ajay Chaudhary and defendant no.7 Siddhartha Chaudhary

I.A. Nos. 4764/08, 3329/08, 10609/07

and grand-father of defendant no. 3 Arjun Chaudhay and who

also the first Chief Minister of Delhi, acquired 500 shares of the

Company. In the year 1963 Ch. Brahm Prakash had formed a

Society by the name of "Shaheed Memorial Society", defendant

no.1 herein(hereinafter to be referred to as „the Society‟) for

undertaking some social activities besides various other

activities and in the year 1963 itself Ch.Brahm Prakash

transferred his 500 shares of the Company in the favour of the

said Society of which he was the President also. Ch. Brahm

Prakash‟s Society thus became the major shareholder in the

Company. In the year 1983, the Company allotted 150 additional

shares to the Society and that shareholding of the Society after

the death of Ch. Brahm Prakash in 1993 became the root cause of

the disputes not only between Ch. Brahm Prakash Group and

Kishor Lal Sachdeva Group, whose representatives were the

original two subscribers to the Memorandum of Association of

the Company, but also within the family members of Ch. Brahm

Prakash, namely, his widow defendant no.8 Smt. Satya

Chaudhary and his two sons, defendant no.2 Ajay Chaudhary and

defendant no.7 Siddhartha Chaudhary. Disputes also started

between Defendant no.3 Arjun Chaudhary and his father,

defendant no.2 Ajay Chaudhary inasmuch as the son had filed

two suits against his father, one of which was through his mother

I.A. Nos. 4764/08, 3329/08, 10609/07

Ms. Anuradha Chaudhary as his natural guardian.

3. Having noticed the undisputed facts, I now come to the

disputed facts leading to the filing of this suit for Permanent

Injunction, Mandatory Injunction etc. The plaintiffs claim plaintiffs

2-4 are the Directors of the Company. From 1968 onwards the

Society had been transferring its shares in the Company from

time to time to different persons and by the end of 1990 the

Society had transferred its entire share holding in the Company

to different persons and then it was left with no shares of the

Company. The plaintiffs have averred in the plaint that so long as

Ch. Brahm Prakash was alive he did not lodge any complaint

either with the Company or with the Registrar of Companies in

respect of recording of the transfer of the shares of the Society in

the names of different persons in the records of the Company

and also regarding the removal of its name from the Register of

Shareholders of the Company.

4. However, sometime in the year 1997 the family members of

late Ch. Chaudhary Brahm Prakash decided to stake their claim

in the Company‟s affairs on the basis of the original shares of the

Society in the Company, which according to the plaintiffs had

long back been transferred by the Society to different persons. A

I.A. Nos. 4764/08, 3329/08, 10609/07

petition under Section 111(4) of the Companies Act,1956(being

C.P.No. 15/111/97-CLB) was filed before the Company Law

Board by the Society through defendant no.7 herein Shri

Siddharth Chaudhary, claiming himself to be the Secretary of the

Society, against the Company and one of its Directors Shri

Janardhan Rai. It was, inter-alia, claimed therein that the name of

the Society had been wrongfully removed from the Register of

Members of the Company by its Directors to take over the total

control of the Company by showing the transfer of shares of the

Society, which was the major share-holder in the Company, in

their own names or their friends/nominees and their names had

been entered as shareholders in the Register of Members of the

Company. It was also claimed that the Society had never

transferred any shares to anybody. The prayer made in that

petition was for rectification of the Register of Members of the

Company by including therein the name of the Society as the

Company‟s shareholder. It appears to be the case of the

plaintiffs that during the pendency of that petition, which had

remained pending for almost six years, the prices of the lands

owned by the Company have been shooting up and so

defendants 2-6 allegedly decided sometime around December,

2005 to resort to illegal methods of entering into the management

of the Company without waiting for the decision on its Company

I.A. Nos. 4764/08, 3329/08, 10609/07

Petition. In March, 2006 they claimed to have become Directors

of the Company and then to have removed plaintiffs no.2-4 as the

Directors of the Company. These persons had also thereafter

started negotiating with general public for the sale of the

immovable properties of the Company by representing to the

public that they were the Company‟s Directors. The plaintiffs on

coming to know about that got a public notice published in

newspapers in April, 2006 informing the general public about the

actual Directors of the company and its shareholders and those

persons did not include Defendants. The public was warned that

in case they would deal with any other persons as

representatives of the Company they would be doing so at their

own risk and responsibility. The names of the persons who were

shown in the public notice to be the Directors of the Company

were Mr. Hari Chand Sachdeva, Gaurav Sachdeva, Mr. Ashish

Kishore and plaintiffs no. 2 to 4 herein.

5. It is alleged that in order to achieve their goal of usurping

the properties of the Company in an illegal manner the

defendant no. 4, Sh. Ajay Yadav, representing himself to be a

Director of the Company prepared one letter dated 26.5.2006

and signed it as a Director of the Company and addressed the

same to defendant no.2 Shri Ajay Chaudhary( who is one of the

I.A. Nos. 4764/08, 3329/08, 10609/07

sons of late Ch. Brahm Prakash and also happens to be the

brother-in-law of Ajay Yadav), as the President of the Society,

admitting therein the claim of the Society of its being a

shareholder of the Company. In view of that letter of defendant

no. 4 Ajay Yadav, the Society‟s counsel withdrew the pending

petition before the Company Law Board on 29/05/06. However,

because of certain inter-se disputes between the sons of late Ch.

Brahm Prakash that petition was revived for hearing on an

application moved by defendant no.7 Siddhartha Chaudhary on

behalf of the Society alleging therein that the petition had been

mischievously withdrawn by his brother Ajay Chaudhary in

collusion with his brother-in-law Ajay Yadav on 29.5.2006

unauthorisedly.

6. Since Mr. Ajay Chaudhary and party did not desist

themselves from dealing with the properties of the Company as

its Directors and the Registrar of Companies also did not show

any interest in the matter by taking no action in respect of the

illegalities committed by defendants 2-8, the plaintiffs filed the

present suit for various reliefs including a decree of permanent

injunction against defendants no. 1 to 8 restraining them "from

representing and or holding themselves out to be shareholders

of the plaintiff Company" and also for restraining them, their

I.A. Nos. 4764/08, 3329/08, 10609/07

agents and employees "from representing and/or holding

themselves out to be Directors, Agents or Authorised

Representatives of the plaintiff Company....". The Registrar of

Companies and Assistant Registrar of Companies were also

impleaded in the suit as defendants 9 & 10 and mandatory

injunction was sought against them for removal of all the

documents submitted in their office unauthorisedly by other

defendants on behalf of the Company. An application under

Order XXXIX Rules 1 & 2 read with Section 151 CPC(being

I.A.No. 11235 of 2006) was also filed by the plaintiffs alongwith

the plaint for an ex-parte ad-interim injunction restraining the

defendants from claiming themselves as the Directors,

shareholders or representatives of the Company. This Court on

06/10/06 passed the following order on the application for stay:

"This is an application under Order 39 Rules 1 and 2 read with Section 151 of the Code of Civil Procedure seeking an ad interim ex-parte order against the defendants restraining them from in any manner using the name of the plaintiff's company or holding out to the public at large that they are Directors or representatives of the company.

It is submitted that the defendants are neither the shareholders of the plaintiff's company nor its Directors yet they are so representing to the public at large. According to the counsel, the company has been filing Annual Returns as required under Section 159 of the Companies Act 1956 and in those Returns the defendants except defendant No.1 were neither shown as shareholders nor Directors. As regard defendant No.1, it is stated, that its shareholding

I.A. Nos. 4764/08, 3329/08, 10609/07

was shown for a brief period to the extent of 500 shares as thereafter it had sold its shares. It is also stated that the plaintiff has filed criminal complaints against the defendants for misrepresenting themselves as shareholders/ directors of the plaintiff company.

Having regard to what has been noticed above, I am of the view that the plaintiffs are entitled to ex-parte ad interim order. Therefore, I restrain the defendants from representing themselves as shareholders/ representatives of the plaintiff company till further orders.

List on 18th October, 2006.

The Registrar of Companies, i.e., defendant No.9, is directed to preserve the records of the plaintiff-Company."

7. All the defendants entered appearance in the suit after

being served with summons of the suit and notice of the

application under Order XXXIX Rules 1 & 2 CPC as also the ex-

parte injunction order passed by this Court on 06/10/06. On

behalf of the Society, defendant no. 7 Shri Siddharth Chaudhary,

who has been claiming himself to be its Secretary, filed written

statement. Defendants no. 4-6 together filed a joint written

statement. Other defendants did not file any written statement

within the time granted to them for filing the same.

8. The defence of the defendant no. 1 Society in its written

statement dated 01/12/06 filed by defendant no.7 Shri Siddhartha

Chaudhary was that it continued to be the shareholder of the

I.A. Nos. 4764/08, 3329/08, 10609/07

Company and its claim that its name had been wrongly removed

from the Register of the Members of the Company was still

pending adjudication before the Company Law Board. It was

further averred in the written statement that plaintiffs‟ real

grievance appeared to be against defendants no. 2 to 6 and not

against defendants no. 1 and 7 and so both had been wrongly

impleaded in the suit and further that if the plaintiffs wanted to

take any action against defendants no. 2 to 6 for their fraudulent

activities they had no objection to the same being taken.

9. Defendants no. 4 to 6 in their written statement have

challenged the claim of plaintiffs no. 2 to 4 of their being the

Directors of the Company. It has been pleaded that the Directors

of the Company were, in fact, defendants no. 3 to 6 and one Shri

Ashish Sachdeva. It has further been pleaded that plaintiffs no. 2

to 4 were removed as Directors of the Company on 10-03-2006

and on the same day defendants no. 3 to 6 were appointed as

Directors. These defendants have also claimed that the Society

never transferred its shares to anyone, as had been claimed by

the plaintiffs and further that defendant no.7 Shri Siddhartha

Chaudhary was not its Secretary and he was siding with the

plaintiffs 2-4 with ulterior motives and that defendant Ajay

Chaudhary was the President of the Society since the year 2005.

I.A. Nos. 4764/08, 3329/08, 10609/07

Some other objections were also taken but the same need not be

noticed for the present purpose.

10. When the application for injunction filed by the plaintiffs

and the one filed by the defendants 1-6 and 8 under Order XXXIX

Rule 4 CPC for vacation of the ex-parte injunction granted on

06/10/06 were still pending disposal, the plaintiffs moved four

applications, one after another, under Order XXXIX Rule 2A of

CPC alleging wilful and deliberate violation of the ex-parte

injunction order dated 06-10-2006 by the defendants 1-6 and 8.

11. IA No. 6938/2007 was the first application which came to be

filed against defendants no. 1-6 and 8. In this application it had

been alleged that defendant Ajay Yadav had entered appearance

before the Company Law Board on 12/03/07 in C.P.No.

15/111/97 as a Director of the Company and further that

defendant no.3 Arjun Chaudhary(who is the grandson of late Ch.

Brahm Prakash) had written a letter dated 08-05-2007 to the

Manager, Mohan Co-operative, Mathura Road, New Delhi as the

Director of the Company requiring certain information about the

ownership of plot no. H-7/B-1, Mohan Co-operative Industrial

Area, Mathura Road, New Delhi. In that letter Arjun Chaudhary

had also claimed that management of the Company had changed

I.A. Nos. 4764/08, 3329/08, 10609/07

and all the previous Directors(plaintiffs 2-4) were facing criminal

charges for cheating the shareholders and the Company of its

assets and that those Directors were trying to sell off the

properties of the Company in clandestine manner. The prayer

made was to initiate action for comtempt against the comtemners

and also to strike off their defence.

12. The second application under Order XXXIX Rule 2-A CPC is

I.A. no. 10609/2007 in which also action was sought against

defendants no. 1-6 and 8. This application was taken up by the

Court on 14-09-2007 when defendants no. 4-6 were only

represented through their counsel Ms. Anuradha Chaudhary and

on that date the application was ordered to be listed on 18-09-

2007 for consideration. However, on 18-09-2007 it does not

appear to have been brought to the notice of the Court that the

said application was to be taken up for consideration and so it

was not taken up on that date and on subsequent dates also this

application was not taken up. However, when the application of

the plaintiffs under Order XXXIX Rules 1 and 2 CPC was being

heard arguments were advanced on all the four applications

under Order XXXIX Rule 2-A CPC also and on 09-05-2008 the

counsel for defendants 1-6 had stated that even though formal

notice of the said application had not been issued as also of

I.A. Nos. 4764/08, 3329/08, 10609/07

another application under Order XXXIX Rule 2-A CPC which had

also been filed subsequently (being IA No. 4764/08) but on that

date he was accepting notice of those applications also and

further that no formal replies to those two applications were to be

filed since common submissions had been made on all the four

applications under Order XXXIX Rule 2-A CPC and formal replies

to two of them had already been filed which could be treated as

the replies to these two applications as well . In this application it

was alleged that in utter disregard to the injunction order dated

06-10-2006 defendant 4 Ajay Yadav acting as the agent and at the

behest of defendants 1-3, 5 and 6 had sold a number of plots

owned by the Company in Kailash Nagar colony, Loni Road,

Delhi to various persons and the Sale Deeds in respect of those

transactions had been executed by defendant Ajay Yadav

describing himself as its Director having been authorized by the

Board of Directors of the Company to execute the Sale Deed.

The plaintiffs had given the details of the plots in respect of sale

deeds were executed by Ajay Yadav and have also placed on

record photostat copies of those sale deeds. The details of the

properties sold, as given in the application, are as under:

i. Plot No. A-6 (Block A, Plot No. 6), measuring 500 Sq. Yds.

out of Khasra No.s 853, 854, 855, 861,1017/865, 875,876, 877, 878, 879, 1132/892 situated in the area of Village Gokal Pur, in the abadi of a Residential Colony known as Kailash Nagar Colony, Loni Road, Delhi in favour of Rama Devi.

I.A. Nos. 4764/08, 3329/08, 10609/07

ii. Plot no. A-21 (Block A, Plot no. 21), measuring 200 Sq. Yds.

out of Khasra No.s 853,854, 855, 861, 862, 863, 1017/865, 875, 876,877, 878, 879, 1132/892 situated in the area of Village Gokal Pur, in the abadi of a Residential Colony known as Kailash Nagar Colony, Loni Road, Delhi in favour of Satyendra Singh Bhora.

iii. Plot no. A-22 (Block A, Plot no. 22), measuring 200 Sq. Yds.

iv. Plot no. A-23 (Block A, Plot no. 23), measuring 200 Sq. Yds.

v. Plot no. A-29 (Block A, Plot no. 29), measuring 200 Sq. Yds.

vi. Plot no. A-33 (Block A, Plot no. 33), measuring 226.67 Sq.

Yds. out of Khasra No.s 853,854, 855, 861, 862, 863, 1017/865, 875, 876,877, 878, 879, 1132/892 situated in the area of Village Gokal Pur, in the abadi of a Residential Colony known as Kailash Nagar Colony, Loni Road, Delhi in favor of Sudesh Verma

vii. Plot no. A-34 (Block A, Plot no. 34), measuring 226.67 Sq.

viii. Plot no. A-35 (Block A, Plot no. 35), measuring 226.67 Sq.

ix. Plot no. A-36 (Block A, Plot no. 36), measuring 226.67 Sq.

I.A. Nos. 4764/08, 3329/08, 10609/07

x. Plot no. A-38 (Block A, Plot no. 38), measuring 346.67 Sq.

xi. Plot no. A-42 (Block A, Plot no. 42), measuring 226.67 Sq.

xii. Plot no. A-48 (Block A, Plot no. 48), measuring 226.67 Sq.

xiii. Plot no. A-51 (Block A, Plot no. 51), measuring 252.78 Sq.

xiv. Plot no. A-52 (Block A, Plot no. 52), measuring 177.78 Sq.

xv. Plot no. A-54 (Block A, Plot no. 54), measuring 150 Sq. Yds.

xvi. Plot no. A-55 (Block A, Plot no. 55), measuring 177.78 Sq.

xvii. Plot no. B-2A (Block B, Plot no. 2A), measuring 200 Sq. Yds.

I.A. Nos. 4764/08, 3329/08, 10609/07

xviii. Plot no. B-2B (Block B, Plot no.2B), measuring 200 Sq. Yds.

xix. Plot no. B-2D (Block B, Plot no. 2D), measuring 200 Sq. Yds.

xx. Plot no. B-2E (Block B, Plot no. 2E), measuring 200 Sq. Yds.

xxi. Plot no. B-16 (Block B, Plot no. 16), measuring 200 Sq. Yds.

xxii. Plot no. B-18 (Block B, Plot no. 18), measuring 200 Sq. Yds.

xxiii. Plot no. B-20 (Block B, Plot no. 20), measuring 200 Sq. Yds.

xxiv. Plot no. B-21 (Block B, Plot no. 21), measuring 220 Sq. Yds.

xxv. Plot no. C-6 (Block C, Plot no. 6), measuring 200 Sq. Yds.

I.A. Nos. 4764/08, 3329/08, 10609/07

xxvi. Plot no. C-7 (Block C, Plot no. 7), measuring 200 Sq. Yds.

13. IA No. 3329/2008 was the third application under Order

XXXIX Rule 2-A CPC in which initiation of contempt proceedings

against defendant no. 2 Ajay Chaudhary and his co-defendant

and brother-in-law defendant no. 4 Ajay Yadav only had been

prayed for because of certain fresh acts of violation of the

injunction order committed by them. That application was taken

up on 17-03-2008 when notice of that application was accepted

by Ms. Anuradha Chaudhary, Advocate on behalf of these

defendants. In that application the plaintiffs brought to the

notice of the Court the fact that despite this Court having

restrained the defendants from claiming themselves as

representatives/shareholders of the Company, defendant Ajay

Yadav at the behest of defendant Ajay Chaudhary had filed a

civil suit in May, 2007(being suit no.105/07) in the Court of

Additional District Judge, Delhi on behalf of the Company as its

Director and having been authorized by the Company to file that

suit vide resolution dated 12-05-2007 which had been

fraudulently signed by defendant Ajay Chaudhary as a Director

of the Company. It was alleged that Ajay Chaudhary was also

I.A. Nos. 4764/08, 3329/08, 10609/07

falsely and wrongly claiming himself to be a Director of the

Company. A copy of the plaint of that suit was annexed with the

application and its perusal shows that that suit had been filed by

Ajay Yadav on behalf of the Company as its Director having been

authorized vide resolution dated 12/05/07 of the Board of

Directors against plaintiffs no. 2-4 herein and one M/s. S.C.S.

Properties Pvt. Ltd. for cancellation of a Sale Deed which had

allegedly been executed by Shri Ankur Sachdeva, plaintiff no. 2

herein, illegally in favour of the said M/s. S.C.S. Properties Pvt.

Ltd.(which was impleaded as defendant no.1 in that suit) in

respect of some agricultural land owned by the Company. In

respect of that sale one FIR was registered at PS Mehrauli on

28/02/07 on the complaint of Ajay Yadav, who in his complaint

had also claimed himself as one of the Directors of the Company.

14. I.A. no. 4764/2008 is the fourth application filed by the

plaintiff under Order 39 Rule 2-A CPC filed on 23-04-2008 and in

this application action for violation of the ex-parte injunction

order was sought against defendant no. 2 Ajay Chowdhry,

defendant no. 4 Ajay Yadav, defendant no. 6 Surender Pal and

defendant no. 9, the Registrar of Companies. As has been noticed

already, notice of this application also was accepted on 09-05-

2008 by Shri Nitin Soni, Advocate appearing for the

I.A. Nos. 4764/08, 3329/08, 10609/07

defendants/contemners except defendant no.9. The grievance

made by the plaintiffs in this application was that the defendants

Ajay Chaudhary, Ajay Yadav and Surinder Pal were continuing to

flout the injunction order dated 06-10-2006. Ajay Yadav and

Arjun Chaudhary filed a petition under Section 482 Cr.P.C.(being

Crl.M.C.No.142/2008) in this Court as Directors of the Company

for certain directions the police to take action against the

plaintiffs 2-4 herein under the FIR No.158/07 dated 28/02/07

registered on the complaint of Ajay Yadav as the Director of the

Company. That petition was however dismissed by the learned

Single Judge(Sanjay Kaul,J) on 01/04/08 with exemplary costs of

Rs.15,000/- on the ground that the petitioners had been

restrained in suit no.1906/06 i.e. the present suit, from

representing the Company which fact had been suppressed from

the Court. It was also alleged in this fourth contempt application

that after the dismissal of Crl.M.C. No.142/08 also the

contemners did not desist from disobeying the injunction order

of this Court and in utter disregard to that order defendants Ajay

Chaudhary and Surender Pal filed Annual Return of the Company

for 2007 as its Directors in the office of Registrar of Companies

and that the Registrar of Companies also in total disregard to the

said injunction order was taking on record the documents

illegally submitted by these persons. In that Return Ajay

I.A. Nos. 4764/08, 3329/08, 10609/07

Chaudhary, Arjun Chaudhary and Ajay Yadav, all of whom

admittedly been claiming themselves as the Directors of the

Company, had shown themselves as the shareholders also of the

Company although they had been restrained from claiming

themselves as the shareholders also of the Company vide order

dated 06/10/06 of this Court. Action was sought against the

Registrar of Companies also for accepting these documents.

However, during the course of arguments it was submitted by the

learned counsel for the plaintiffs that they were not pressing the

application against the Registrar of Companies.

15. Defendants no.1 to 6 and 8 had filed a joint reply dated

10/07/07 to IA No.6938/07, which was the first application under

Order XXXIX Rule 2A CPC. Separate replies dated 23/04/08 to

IA No.3329, which was the third application under Order XXXIX

Rule 2A CPC, were filed by defendants/comtemners Ajay

Chaudhary and Ajay Yadav. As noticed already, these replies are

to be read as replies to the other two applications also filed by

the defendants/contemners.

16. In both the replies to the IAs No. 6938/07 and 3329/07 the

main plea raised was that the ex-parte injunction dated 6-10-

2006 had been obtained by the plaintiffs from this Court by

I.A. Nos. 4764/08, 3329/08, 10609/07

misrepresentation made by plaintiffs 2-4 that they were the

Directors of the Company while, in fact, all three of them stood

removed as Directors of the Company on 10th March, 2006. It

was also claimed that a criminal case had also been registered

against Ankur Sachdeva, plaintiff no. 2, and others at P.S.

Mehrauli on 28/02/07 vide FIR No.158/07(reference to which has

been made earlier also) for having fraudulently sold a valuable

property of the Company representing themselves as its

Directors and consequently this contempt application was liable

to be dismissed on that ground also. It was, however, admitted in

both the replies and even during the course of arguments by the

counsel for defendants/contemners that the various properties

which the plaintiffs claimed to have been sold on behalf of the

Company by these defendants were in fact sold vide various Sale

Deeds executed by defendant no. 3 Shri Ajay Yadav

representing himself to be a Director of the Company. It was

also admitted that Arjun Chaudhary had written a letter dated

08/05/07 as a Director of the Company to the Manager, of Mohan

Co-operative Society at Mathura Raod and that letter was written

seeking certain clarification in respect of some property because

plaintiffs 2-4 were attempting to grab some property of the

Company in Mohan Co-operative Industrial Area claiming

themselves as the Directors which they actually were not. Their

I.A. Nos. 4764/08, 3329/08, 10609/07

further stand was that they had sold various plots of land for the

benefit of the Company and also to meet the litigation expenses.

It was also not denied that after service of the ex-parte injunction

order the defendant Ajay Yadav had represented himself as the

Director of the Company before the Company Law Board where

the petition under Section 111(4) of the Companies Act filed by

the Society was pending. The defendants/contemners have also

not denied the filing of civil suit on behalf of the Company by

Ajay Yadav against M/s. S.C.S. Properties Pvt. Ltd. and plaintiffs

2-4 herein. The justification given by the defendants for their

having continued to represent themselves as the representatives

of the Company while filing certain documents with the Registrar

of Companies, selling the properties owned by the Company and

also in some judicial proceedings was that vide order dated 6-10-

2006 this Court had not restrained defendants 2-8 from claiming

themselves as the „Directors‟ of the Company even though in the

application under Order XXXIX Rules 1&2 CPC injunction had

been prayed for restraining the defendants 2-8 from claiming

themselves as „Directors‟ also. Not only that, the plaintiffs had

also moved one application in this case(being IA No.11671/2006)

seeking, inter alia, an order from the Court clarifying that vide

order dated 06-10-2006 the defendants had been restrained from

representing themselves or acting as „Directors‟ also but still this

I.A. Nos. 4764/08, 3329/08, 10609/07

Court had not passed any order on that application. Therefore,

according to the defendants/contemners, all the four contempt

applications filed by the plaintiffs 2-4 were not only totally

misconceived but, in fact, an abuse on the process of the Court

and had been moved only to continue with their own illegal

activities of selling of the valuable properties of the Company

and pocketing the Sale proceeds. Defendants/contemners also

claimed that, in fact, plaintiffs 2-4 were looting the Company to

promote themselves and their fictitious companies. It was also

claimed that the new Board of Directors of the Company

comprised of Ajay Yadav, Arjun Chaudhary, Surender Pal and

Abdul Haq Farhan.

17. In the reply of defendant Ajay Chaudhary to IA No. 3329/08

it has been stated that the entire application related to the filing

of a suit by defendant Ajay Yadav and he(Ajay Chaudhary) had

nothing to do with that case and further that mala fides on the part

of the plaintiffs in filing this application were evident from the fact

that the suit filed by Ajay Yadav was instituted in May, 2007 and

plaintiffs had received its summons for the date in October, 2007

but the present application had been filed only in March, 2008.

18. In his reply to IA No. 3329/08 defendant Ajay Yadav also

I.A. Nos. 4764/08, 3329/08, 10609/07

claimed that plaintiffs 2-4 had disposed of valuable property of

the Company illegally thereby causing wrongful loss to the

Company for which he had rightly filed a suit in the civil Court as

a Director of the Company seeking cancellation of the Sale Deed

executed by them. It was further stated in the reply that this

Court had not restrained Ajay Yadav from acting as Director of

the Company and, therefore, he being one of the Directors of the

Company was entitled to take necessary steps as required under

the law. It was further stated that, in fact, the plaintiffs 2-4 were

misusing the injunction order and under the garb of that order

they were trying to dispose of the valuable properties of the

Company and they had also attempted to dispose of the property

owned by the Company situated at Mohan Co-operative

Industrial Area.

19. Having noted the background facts and respective stands

of the parties I now proceed further to consider the submissions

made from both the sides by their counsel. At the outset it had

been submitted at the Bar by the counsel from both sides that

since there is no dispute on facts, which are the basis for the

filing of these applications under Order XXXIX Rule 2A CPC the

same could be disposed of on the basis of pleadings only without

any evidence. Accordingly, I had proceeded to hear the

I.A. Nos. 4764/08, 3329/08, 10609/07

arguments of the learned senior counsel for the parties.

20. It was submitted by the learned senior counsel for the

defendants/contemners that defendants 3-6 being actually the

Directors of the Company could lawfully sell the properties of the

Company and so defendant Ajay Yadav having signed and

executed various sale deeds in question as a Director of the

Company pursuant to the authority given to him specifically by

the Board of Directors of the Company comprising of defendants

3-6 had not committed any violation of the injunction order of this

Court. It was also contended that the defendant Ajay Yadav was

also within his right to initiate any judicial proceedings on behalf

of the Company as its Director and also to appear before the

Company Law Board where the Society‟s petition for the

rectification of the Register of Members of the Company was

pending and also to lodge complaints with the police against the

acts of cheating committed by plaintiffs 2-4 and similarly

defendant no.3 Arjun Chaudhary was also competent to write the

letter dated 08/05/07 to Mohan Co-operative Society as the

Director of the Company. It was also submitted that since the

injunction order itself did not specify that the

defendants/contemners had been restrained from claiming

themselves as „Directors‟ also there was no violation of the

I.A. Nos. 4764/08, 3329/08, 10609/07

injunction order committed by them by acting as „Directors‟ of

the Company. Learned counsel also submitted that, in any case,

these defendants being under the bona fide impression that they

could claim themselves to be the Directors of the Company

because of their having not being restrained by this Court from

claiming themselves as Directors and so the impugned acts of the

defendants cannot be said to be wilful and deliberate. Learned

counsel further contended that even the plaintiffs were also

under the same impression and that is evident from the fact they

themselves had filed an application wherein they had sought a

clarification from this Court that the injunction order dated 06-10-

2006 had restrained the defendants from claiming themselves as

„Directors‟ also and so it is clear that both the parties were

harboring under the genuine impression that there was no stay

against the defendants/comtemners from claiming themselves

as the „Directors‟ of the Company. In these circumstances,

learned senior counsel submitted, no action as contemplated

under Order XXXIX Rule 2-A CPC is called for against any of the

defendants.

21. On the other hand, it was submitted on behalf of the

plaintiffs by their learned senior counsel that the order dated 06-

10-2006 is crystal clear and could not be misunderstood at all by

I.A. Nos. 4764/08, 3329/08, 10609/07

anyone and particularly in the present case by any of the

defendants/contemners who have all along been taking the

services of very learned advocates for the present suit and the

defendants had committed the impugned acts in utter disregard

to the order of this Court.

22. From the foregoing narration of the respective stands of

the plaintiffs and defendants 1-6 and 8 in the applications under

consideration and replies thereto as also the oral submissions

made at the Bar by the learned counsel for the parties it is clear

that as far defendant no.1(the Society), defendant no. 7

Siddhartha Chaudhary and 8 Smt. Satya Chaudhary are

concerned, except for general averment that they had violated

the injunction order of this Court no specific act of violation of the

injunction order by them has been pleaded either in the

applications or shown from any of the documents filed in support

thereof. There is nothing on record that the Society had been

claiming itself to be the shareholder/representative of the

Company after receipt of the injunction order in any fresh

matter/proceedings which might have been initiated by it after

service of the injunction order. Since there are penal

consequences of violation of any order of the Court violation

thereof has to be established beyond reasonable doubt which

I.A. Nos. 4764/08, 3329/08, 10609/07

has not been done in the present case as far as these three

defendants are concerned. So, merely on the basis of general

allegations of violation of the injunction order by defendants

no.1, 7 and 8 no action can be taken against them.

23. Now, I proceed to consider the cases of other

defendants/contemners. The defendants 3-6, who admittedly

have been claiming themselves as the Directors of the Company

even after the receipt of the injunction order dated 06/10/07,

have admitted that properties belonging to the Company have

been sold vide various Sale Deeds mentioned in para no.12 of

this order and also in IA No. 10609/07, and that those Sale Deeds

were signed and executed by defendant no. 4 Ajay Yadav as a

Director of the Company and pursuant to the authority given to

him by the Board of Directors of the Company which according

to them comprised of defendants 3-6 out of the defendants in the

suit. As far as defendant no.2 Ajay Chaudhary is concerned, it

was alleged by the plaintiffs in IA No. 3329/07 that he had also

been falsely claiming himself to be a Director of the Company

and had also fraudulently signed the resolution dated 12/05/07

as a Director of the Company authorizing Ajay Yadav to file the

civil suit for cancellation of some sale deed executed by plaintiffs

2-4 in respect of some property of the Company. In reply to that

I.A. Nos. 4764/08, 3329/08, 10609/07

application filed by defendant Ajay Chaudhary he had not

denied those allegations and had simply been claimed that he

had been unnecessarily arraigned as contemner. According to

the plaintiffs the defendants/contemners have not only violated

the injunction order of this Court for which they are liable to dealt

with as provided under Rule 2A of Order XXXIX CPC but their

acts complained of in the four application also amount to

„contempt of court‟. Now, it is to be seen whether the acts

complained of admittedly committed by these defendants

amount to violation of injunction order of this Court as well as

contempt of the Court or not.

24. However, before proceeding to express my views on the

respective submissions on these applications in respect of other

defendants I consider it appropriate to first of all make a useful

reference to two decisions of the Apex Court wherein also

violation of Court‟s injunction order was the subject matter of

consideration. In a recent decision rendered by the Hon‟ble

Supreme Court in "C. Elumalai and Ors. Vs. A.G.L.

Irudayaraj and Anr.", JT 2009 (4) SC 241 while dealing with a

contempt petition it was observed by the Apex Court that

"Misunderstanding or own understanding of the Court‟s

order would not be a permissible defence".

I.A. Nos. 4764/08, 3329/08, 10609/07

25. In an earlier judgment in "Patel Rajnikant Dhulla Bhai &

Anr. Vs. Patel Chandrakant Dhulla Bhai & Ors.", JT 2008

VOL VIII SC 634 the matter for initiation of contempt action had

come up before the Hon‟ble Supreme Court against an order of

the High Court whereby the appeal filed by the plaintiffs against

the refusal of the trial Court to grant an interim injunction against

the defendants restraining them from creating any third party

interest in respect of the suit property during the pendency of the

suit, which was for partition, had been dismissed. The High

Court had initially granted interim injunction against creation of

any third party interest in the suit property by the

respondents/defendants but ultimately the appeal itself was

dismissed. However, stay order granted in favour of the

plaintiffs-appellants earlier was allowed to continue for a period

of four weeks to enable them to approach the Supreme Court.

The Supreme Court initially extended the stay granted by the

High Court but at the time of the final disposal of the Special

Leave Petition passed the following order:

"The dispute in these special leave petitions pertains to the construction on certain properties which are claimed to be the joint family properties.

By the impugned interim order, the High Court has permitted construction Page 3170 to be made on the suit properties. We have considered the reasoning of the High Court. while not affirming the correctness of the prima facie opinion expressed therein, we are of the view that the

I.A. Nos. 4764/08, 3329/08, 10609/07

interest of the parties will be adequately protected if a conditional order is passed. The special leave petitions, are, accordingly, disposed of by making it clear that any construction which is made by the respondent - purchasers on the disputed properties will be subject to the outcome of the suit. Any third party right which is created shall be done after notice to the petitioners. They pendency of the proceedings shall also be notified to each of the third parties so involved. The trial Court is directed to dispose of the suit expeditiously, preferably within a period of six months from the date of the communication of this order."

After the disposal of the Special Leave Petition by the afore-

said order the petitioners filed contempt petition before the

Hon‟ble Supreme Court alleging violation of the above quoted

order by the respondents by transferring the suit property and

executing Sale Deeds in favour of third parties without notice to

the petitioners. The petitioners claimed that the respondents

had not given them „prior‟ notice of the intended sales. The plea

raised in defence by the respondents was that the Supreme Court

had never ordered to give „prior‟ notice to the petitioners

before selling the suit property to a third party and so they were

justified in giving notice to the petitioners after entering into

agreement/ transaction. The Supreme Court while rejecting the

defence of the respondents/contemners considered the said

stand in defence and gave its decision in paras no. 43 and 44 and

60 of the judgment which are re-produced below:

"43. The Learned Counsel for the contemners half-heartedly submitted that this Court had not

I.A. Nos. 4764/08, 3329/08, 10609/07

ordered that „prior‟ notice should be given to the petitioners regarding creation of third party rights and hence, there was no violation of the direction of the Court.

44. We are unable to agree with the submission. This Court has stated; "Any third party right which is created shall be done after notice to the petitioners." In our view, the direction has only one meaning and it is that third party interest can only be created after notice to the petitioners. Admittedly, that was not done, at least, in few cases. It is, therefore, clear that there is violation and disobedience of the orders of the Court and the contemners are responsible for such act.

60. Now, in the instant case, both the orders passed by this Court on April 26, 2004 and January 10, 2005 were explicitly clear. The first order totally prohibited/restrained the respondents/ contemners from creating any interest whatsoever in the suit property. As held by us, in spite of the said order, interest had been created by the contemners in the suit property. But even otherwise there is intentional disobedience and wilful breach of the subsequent order dated January 10, 2005 inasmuch as transactions had been entered into without issuing notice to the petitioners. We have already held that they could not have been entered into by the respondents before issuance of notice to the petitioners. The respondents were clearly aware of the order. In fact, the action was sought to be defended and justified on the ground that the Court had not directed „prior‟ notice, and as such, non-issuance of notice before entering into sale transactions would not amount to disobedience of the order of the Court. we are unable to uphold the contention. In the circumstances it must be held that the disobedience of the order by the contemners was wilful, intentional and deliberate."

26. So, in the present case also I find no force in the plea taken

in defence by the defendants 1 to 6 that they could represent

themselves as the „Directors‟ of the Company since in the stay

order the word „Directors‟ was not included. The defendants

I.A. Nos. 4764/08, 3329/08, 10609/07

were restrained from claiming themselves as „shareholders/

representatives‟ of the Company and so there could be no

question of the defendants being under an impression that they

could claim themselves to be the „Directors‟ of the Company

since the order of this Court did not specifically include the word

„Directors‟. Directors of a Company undoubtedly represent the

Company in any transaction/matter where the Company is

involved and so Directors are clearly „representatives‟ of the

Company. A Director of a Company is also in the capacity of its

agent while dealing with any person. The dictionary meaning of

the word „representative‟ is „the agent of a person or society‟ and

the dictionary meaning of „agent‟ is „a person who acts for

another in business, politics etc.‟. So, there is really no

difference between the expressions „ Director‟, „Representative‟

or „Agent‟ in the context of the present controversy and if in the

order dated 06/10/06 the expression „representative‟ only was

included and not the other two expressions which had also been

mentioned in the prayer made by the plaintiffs in their

application under Order XXXIX Rules 1 & CPC that would not

make any difference at all. In these circumstances, the question

of any bona fide understanding of the injunction order to the

aforesaid effect, thus, cannot arise in the facts of the present case.

This is totally a sham defence and an ingenuous effort to avoid

I.A. Nos. 4764/08, 3329/08, 10609/07

the rigors of the order of this Court. The order dated 6-10-2006

cannot possibly be interpreted as the defendants/contemners

claim to have interpreted the same. This order is not capable of

more than one interpretations nor there is any ambiguity in the

same and is categorical and clear and having one and only one

meaning that the defendants shall not represent the Company in

any capacity. This kind of defence raised by the

defendants/contemners, in fact, confirms deliberate attempt to

overreach this Court‟s order and wilful disregard of the order

dated 6-10-2006 is apparent on the face of it and that is more than

evident from the fact that during the marathon hearing not even a

tear was shed as a gesture of remorse by any of the

defendants/contemners.

27. No doubt IA No. 1161/06 was filed by the plaintiffs wherein

one of the prayers made to this Court was to clarify that the

defendants had been restrained from acting as Directors also but

I am of the view that by the filing of that application by the

plaintiffs also it cannot be said that that the injunction order dated

06-10-2006 was in any way ambiguous and capable of more than

one interpretation and the defendants cannot take any shelter

under that action of the plaintiffs. IA No. 11671/06 was filed in

October, 2006 itself because at that time the defendants who

I.A. Nos. 4764/08, 3329/08, 10609/07

were claiming themselves to be the Directors of the Company

were going to convene Extraordinary General Meeting to

remove some other Directors of the Company who appear to be

belonging to the side plaintiffs 2-4, namely S/Shri Hari Chand

Sachdeva, Ashish Sachdeva and Gaurav Sachdeva. In that

application the plaintiffs had prayed for restraining the

defendants from holding the notified meeting. It was alleged that

in that way defendants were continuing to represent themselves

as the Directors of the Company and were creating further

complications. So, filing of that application appears to have been

necessitated because of the holding of EGM by the defendants

and not because the plaintiffs were in any way in any doubt that

the defendants could claim themselves to be the Directors of the

Company. So while praying for the main relief of stay against the

holding of the EGM incidentally it was also prayed that the

Court should clarify that vide order dated 06-10-2006 the

defendants had been restrained from representing themselves or

acting as Directors also. In fact even if the defendants were

earlier to the filing of that application under the impression as is

being claimed now as a defence that impression clearly got

removed from their minds after the filing of that application. They

must have been advised by their legal advisors that they should

not do anything as Directors also of the Company and that is

I.A. Nos. 4764/08, 3329/08, 10609/07

evident from the fact that the defendants themselves had

submitted before this Court on 30-10-2006 that they shall not hold

any Extraordinary General Meeting of the Company and in view

of that undertaking only no formal orders on the application of

the plaintiffs appear to have been passed and now it does not lie

in the mouth of the defendants to contend that since this Court

did not pass any order on the said application of the plaintiffs it

confirms that this Court was also of the view that the defendants

could claim to be the Directors of the Company. In case there

was any confusion in the minds of the defendants/contemners

about the scope of the order dated 06/10/06 they would have

claimed so on 30th October itself that since this Court had not

restrained them from claiming themselves as the Directors of the

Company they were within their rights to hold the contemplated

EGM of the Company but they did not do that and instead chose

the right path of volunteering that they would not hold the

contemplated meeting of the Company in their capacity as

Directors. Therefore, they cannot now be permitted to say in

defence to these contempt applications that it was their bona fide

understanding of the order dated 6-10-2006 that because of the

absence of specific word „Directors‟ in that order passed by this

Court they could claim themselves as the Directors.

I.A. Nos. 4764/08, 3329/08, 10609/07

28. The blatant disrespect and wilful disobedience of the order

of this Court shown by the defendants 3 and 4 becomes more

evident from the fact that a petition was filed on behalf of the

Company against plaintiffs 2-4 herein in the beginning of 2008

in this Court under Section 482 Cr.P.C. by the defendants 3 and 4

as Directors of the Company for directions to the police for

taking some action against plaintiffs 2-4 herein. In that petition

when an objection was raised by the accused(plaintiffs 2-4

herein) that the petitioners had been restrained in the present

suit from representing the Company these defendants had in

reply taken the same stand there also that this Court had in this

suit not restrained the them from claiming themselves as the

„Directors‟ of the Company. However, the learned Single

Judge(Sanjay Kaul,J) hearing that petition rejected this plea of

the petitioners there and taking into consideration the fact that in

the present suit they had been restrained from representing the

Company and dismissed that petition vide order dated

01/04/08(copy of which is filed on record) with costs because of

this fact having been suppressed from the Court. At least then the

impression which these defendants were having regarding the

injunction order should have got washed off from their minds but

that was not to be so. In the Return which was filed by them after

01/04/08 Ajay Chaudhary, Arjun Chaudhary and Ajay Yadav, all

I.A. Nos. 4764/08, 3329/08, 10609/07

of whom admittedly been claiming themselves as the Directors of

the Company, had not only shown themselves as the Directors of

the Company but had also shown themselves as the shareholders

also of the Company although they had been restrained from

claiming themselves as the shareholders also of the Company

vide order dated 06/10/06 of this Court. Therefore, there cannot

be a more blatant violation of the order of a Court than the one

committed by these defendants.

29. So, the conclusion of this Court is that defendant no.2 Ajay

Chaudhary, defendant no.3 Arjun Chaudhary, defendant no.4

Ajay Yadav, defendant no. 5 Abdul Haq Farhan and defendant

no.6 Surender Pal have all committed wilful and deliberate

violation of the order dated 06/10/06 of this Court passed in the

present suit and their impugned acts, in the facts and

circumstances of the present case noted above, would also

amount to „contempt of the Court‟ which, of course, would be

„civil contempt‟ as defined under Section 2(b) of the Contempt of

Courts Act, 1971 which is punishable under Section 12 of the

same Act and so appropriate action for that deserves to be taken

against them. In Patel Rajnikant Dhullabhai‟s case(supra) also

the Hon‟ble Supreme Court had held that when an injunction

order of the Court is violated by any party the provisions of not

I.A. Nos. 4764/08, 3329/08, 10609/07

only Order XXXIX Rule 2-A CPC get attracted but also the

provisions of Section 2 read with Section 12 of the Contempt of

Court Act, 1971 as well as Section 94(c) of the Code of Civil

Procedure can also be invoked against the person found guilty

of disobedience of the order of the Court. In that case also one of

the parties had transferred his rights in the suit property in

favour of some third party in violation of the injunction order

which had been passed by the Hon‟ble Supreme Court.

30. It had been submitted by the learned counsel for the

plaintiffs that the real damage that has been caused to the

Company by these contemners by violating the injunction order

was by selling many plots of land of the Company to different

persons and so something should be done in that regard

specially. In my view, when the plaintiffs say that the contemners

had in total disobedience to the order of this Court dated

06/10/06 „sold‟ plots of land belonging to the Company by

executing the sale deeds by representing themselves as the

Directors/Authorised Representatives of the Company which

they had been restrained from claiming, there is a basic fallacy

in this contention since when the contemners had been

restrained by this Court from representing the Company they

had been left with no right whatsoever in the affairs/properties of

I.A. Nos. 4764/08, 3329/08, 10609/07

the Company which could be transferred to any third party

during the subsistence of the injunction order. It is now too well

settled by the pronouncements of the Apex Court rendered in

almost similar situations where properties in suit were sold by

some parties to the litigation who had been restrained from

selling the same or creating any third party interest in those

properties that no transfer of title/right gets transferred so long

as there is a restrain order of the Court in operation. In all those

cases Hon‟ble Supreme Court, while disposing of contempt

applications, had observed that nothing needed to be done in

respect of those sales except to declare in contempt proceedings

itself that all those transfers of properties were void and were to

be simply ignored and the sale documents did not pass over the

title in the suit properties to any third party. In "Surjit Singh &

Anr. v. Harbans Singh & Ors.", (1995) 6 SCC 50 the Hon‟ble

Supreme Court had observed that whenever there was some

transaction of transfer of right in an immovable property during

the subsistence of a restrain order of the Court prohibiting such a

transfer then that transaction is to be treated as non est. It is also

significant to note that in this case the Hon‟ble Supreme court was

also considering the order of the trial Court affirmed by the High

Court whereby the transferee of the property in question during

the subsistence of the restrain order of the Court had on his

I.A. Nos. 4764/08, 3329/08, 10609/07

application being impleaded in the proceedings and the Hon‟ble

Supreme Court observed that the transferees having got no

interest by virtue of the so called transfer/assignment in their

favour by one of the parties to the suit in violation of the restrain

order of the Court could not be impleaded as parties on the basis

of the assignment of rights in the suit property relied upon by

them and further that in these kind of situations the principle of

„list pendens‟ was also not attracted. It was further observed that

the impleadment of the assignees by the Courts below was, thus,

out of their bounds and consequently their impleadment orders

were set aside. The assignees of that case had claimed

assignment of right in the suit property after passing of the

preliminary decree in the suit, which was for partition, in their

favour by one of the parties to the suit. That assignment was also

considered to be a transfer of rights in favour of a third party

creation of which by any of the parties to the suit had been

restrained by the trial Court while passing the preliminary

decree.

31. I may also make a reference to one judgment of the

Calcutta High Court in "Punjab National Bank v. Delite

Properties Pvt. Ltd. & Ors.", AIR 2004 Calcutta 114 wherein

the Calcutta High Court has also taken the view that when some

I.A. Nos. 4764/08, 3329/08, 10609/07

transfer of right in an immovable property which is the subject

matter of a suit takes place during the subsistence of an

injunction order prohibiting the transfer no right gets created in

favour of the third party. For coming to this conclusion the

Calcutta High Court had placed reliance upon one judgment of

the Hon‟ble Supreme Court in "Krishan Kumar Khemka v.

Grindlays Bank", (1990) 3 SCC 669. A perusal of the said

judgment of the Hon‟ble Supreme Court relied upon by the

Calcutta High Court shows that the Supreme Court had, in fact,

accorded approval to an earlier judgment of Calcutta High Court

wherein the same view had been taken. The paragraph of the

Supreme Court‟s judgment dealing with that judgment of

Calcutta High Court reads as under:

"In an unreported judgment of the Calcutta High Court in Smt. Ashrafi Devi and Anr. v. Satyapal Gupta and Ors. Suit No. 966/58 dated 9th Sept. 1977 Justice Sabyasachi Mukharji, as he then was, dealt with the question of cancelling the tenancy of lease created in respect of a room and kitchen by the Official Receiver. In that case it was found that the Official Receiver violating the order of the injunction granted lease which the Court found it to be illegal. Then the learned Judge proceeded further to consider whether such an illegality can be rectified in the proceedings before the Court and it was held that "Therefore, by acting in violation of the order of the court, no right, in my opinion, can be created in favour of a third party. Indeed the court has not acted. The action was in breach of the order of the court."

The Supreme Court made a further reference to the

judgment in Ashrafi Devi‟s case and that paragraph is also being

I.A. Nos. 4764/08, 3329/08, 10609/07

reproduced below:

"In such a situation the question is whether the Tatas can invoke the benefit of the provisions of the Act. In 5m/. Ashrafi Devi‟s case this is precisely the question that is decided, and we have already referred to some of the observations made therein. Justice Sabyasachi Mukharji held further:

On behalf of the transferee of the said property, it was contended that the West Bengal Tenancy Premises Act, 1956 protects such transferee. If however, a valid lease or a tenancy had been created then of course, such a lease or a tenant would be protected but that, in my opinion, begs the question.

Secondly, it was contended that no party should be made to suffer because of an Act of the Court, I have not been able to appreciate this contention. The court specifically prevented the transfer or creation of the tenancy. The tenancy which is created was in derogation and in violation of the order of the court. therefore, by acting in violation of the order of the court, no right, in my opinion, can be created in favour of a third party. Indeed, the court has not acted. The action was in breach of the order of the court."

Then, in the concluding paragraph of the judgment while

noticing the fact that transfer of property in that case, which was

by way of tenancy created in favour of one of the parties by the

receiver, in violation and contrary to the injunction order

observed that "Therefore, the tenancy created in favour of the

Tatas was in breach of the order of the Court and consequently

the Tatas cannot claim any protection under the provisions of the

Act and they are liable to be evicted........ In any event as

observed above, the new tenancy created in their favour

contrary to the orders of the Court does not create a right and is

I.A. Nos. 4764/08, 3329/08, 10609/07

liable to be cancelled."

32. In one judgment of Allahabad High Court in "Smt. Savitri

Devi v. Civil Judge & Ors.", AIR 2003 All 321, also it was held

that the Sale Deeds executed by any party to a suit in favour of a

third party in disobedience of the interim order passed by the

Court are nullity.

33. Therefore, in the present case also nothing more needs to

be done in respect of the Sale Deeds executed by contemner

Ajay Yadav as a Director of the Company with the approval of its

Board of Directors comprising of defendants 2-6 except to

declare that all the Sale Deeds, copies of which have been

placed on record and details whereof have already been noticed

in this order, are non est and they passed over no right in favour

of any person.

34. I, therefore, allow the four applications under Order XXXIX

Rule 2-A CPC but only in respect of defendant no. 3 Arjun

Chaudhary, defendant no. 4 Ajay Yadav, defendant no. 5 Abdul

Haque Farhan and defendant no. 6 Surinder Pal and they are held

to have brazenly violated the injunction order dated 06-10-2006

passed by this Court in the present suit and their acts also

I.A. Nos. 4764/08, 3329/08, 10609/07

amount to „civil contempt‟. The applications, as far as defendants

1, 7 and 8 are concerned, stand dismissed.

35. Now comes the question of consequential orders in the

matter as to the punishment to be awarded to the contemners

who have been found guilty. However, before any orders in this

regard are passed I would like to give an opportunity to the

guilty persons to make their submissions on the question of

punishment also. For that purpose, the matter be listed on 24th

April, 2009.

P.K.BHASIN,J

April 20, 2009 sh

I.A. Nos. 4764/08, 3329/08, 10609/07

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Capital Land Builders (Pvt.) Ltd. vs M/S. Shaheed Memorial Society & ...
2009 Latest Caselaw 1472 Del

LatestLaws Partner Event : Smt. Nirmala Devi Bam Memorial International Moot Court Competition

Capital Land Builders (Pvt.) Ltd. vs M/S. Shaheed Memorial Society & ...2009 Latest Caselaw 1472 Del

LatestLaws Partner Event : Smt. Nirmala Devi Bam Memorial International Moot Court Competition

Capital Land Builders (Pvt.) Ltd. vs M/S. Shaheed Memorial Society & ...
2009 Latest Caselaw 1472 Del