Nafed vs Rajesh Khanna & Ors.
2009 Latest Caselaw 2286 Del

     *            IN THE HIGH COURT OF DELHI AT NEW DELHI


                                            Date of Reserve: May 13, 2009
                                               Date of Order: May 27, 2009

+CCP No.124/2007 in OMP No. 291/2006
%                                             27.05.2009
    NATIONAL AGRICULTURAL CO-OPERATIVE Marketing
    Federation of India Ltd. (NAFED)                  ...Petitioner
    Through : Mr. T.K. Ganju, Sr. Adv. with Mr. A.K. Thakur,
              Mr. R.K. Mishra & Mr. Rajeev Arora, Advs.

         Versus

         RAJESH KHANNA & Ors.        ...RespondentS/Contemnors
         Through: Mr. D.K. Rustagi with Md. Niyazuddin, Adv. for R.1
                  Mr. Saket Sikri, adv. for R.4-6 & 8


         JUSTICE SHIV NARAYAN DHINGRA

1.       Whether reporters of local papers may be allowed to see the
         judgment?

2.       To be referred to the reporter or not?

3.       Whether judgment should be reported in Digest?

         JUDGMENT

1. This Court on 6th July, 2006 in OMP No. 291/06 wherein the

contemnor Rajesh Khanna was respondent no. 1 passed an order

attaching the immovable properties mentioned in para 10 and 11 of the

petition. The properties so attached included plot no. 1, Special Economic

Zone (SEZ), Noida, UP, a plot measuring 2118 square meters allotted to

Rajesh Khanna. The total numbers of properties attached were 13

belonging to different respondents. The petitioner had sought attachment

of the properties since the petitioner had to recover an outstanding

admitted balance of Rs. 47,80,90,896/- as on 30th May, 2006. Vide order

dated 16th May, 2007, this Court lifted the attachment in respect of

property no. E-19, East of Kailash in view of the fact that the parties

wanted to settle the dispute and this property was to be sold to enable

the respondent to pay part of the dues to the petitioner. This Court on

14th December, 2007 at request of the parties further lifted attachment in

respect of properties namely E-18, East of Kailash, E-16, Block B-1, Mohan

Cooperative Industrial Area so that the properties could be sold by the

public auction and the claims of the petitioner be settled. This Court also

appointed a court observer for carrying out public auction of the

properties. The petitioner thereafter learnt that the respondent Rajesh

Khanna had clandestinely sold property of Noida attached by the Court

vide order dated 6th July, 2006 and filed this application for Contempt of

the Court.

2. The petitioner submitted that the admitted liability of the

respondent as on 30th April, 2007 was Rs.61.67 crore and the respondent

was supposed to discharge this liability within a definite time schedule as

per the settlement arrived at between the parties and recorded in the

Court's order. Out of the due amount, Rs. 5 crore was to be paid within

30 days from the date of the permission granted by the Court for sale of

the property no. E-19, East of Kailash, a further amount of Rs. 20 crore

was undertaken to be paid within next 60 days and an amount of Rs.18

crore within 90 days.

3. The settlement as arrived at between the parties is on record.

A perusal of this settlement would show that the settlement arrived at

between the petitioner and the respondents no. 1 to 8 was recorded on a

non-judicial stamp paper of Rs. 100/-. It was signed by all the parties and

was submitted in the Court along with affidavits and undertakings of all

the respondents undertaking to comply with this settlement. The

affidavits of respondents showed that all the respondents had also given

personal guarantee for repayment of the loan in terms of the settlement.

In fact, the respondents were also facing criminal case lodged against

them by the petitioner because of a fraud played by the respondents upon

the petitioner and criminal proceedings were simultaneously going on.

The parties made IA No.5743/2007 in OMP No. 291/06 wherein a

submission was made by the respondents that they shall be bound by the

undertakings given to the Court for implementation of the settlement and

to comply with the terms of the settlement. Be it noted that the orders of

this Court of attachment of respondent of the properties continued and

was not lifted. After recording of settlement attachment was only lifted in

respect of the three properties which the respondents expressed their

desire to sell to discharge their liability.

4. The conduct of the respondent shows that the respondent no.

1 and others respondents had different design and they wanted to take

Court for a ride. The court observer Justice Sharda Aggarwal (retd.)

appointed by this Court in WP(Crl.) 785/07 and WP(Crl.) 461/07 on

4.4.2008 gave her report to the Court dated 5th July, 2008 and she

recorded that the respondent no. 1 and other respondents resisted the

auction of the properties and had a non-cooperative attitude. It is

specifically recorded that the respondents herein did not produce title

deeds of the properties despite the statement given by them before the

Court that they would produce the title deeds, instead they informed that

a loan had been raised against the property No. E-11, East of Kailash and

property no. 469-470, Katra Ishwar Bhawan from State Bank of Patiala

and Indian Overseas Bank. The properties were thus not free from

encumbrances. This information was not given to the Court when the

respondents were asked to file affidavits in the Court. Regarding property

in Mohan Cooperative Industrial Area, the contemnors took a plea that

they were the second purchaser and original lease deed had been lost by

them. The contemnors resisted auction of the properties by moving

applications in the WP(Crl.) No.6027/08 and WP(Crl.) 785/07 seeking

recalling/modification of the order dated 4.4.2008 regarding Mohan

Cooperative Industrial Area property. The contemnors did not write to

State Bank of Patiala and Indian Overseas Bank that the property

encumbered was being put to auction. Rather the contemnor informed

the auctioneer that they had raised a loan against Mohan Cooperative

Industrial Area property from a private financer and an FIR was registered

with EOW with regard to that property.

5. Despite all hurdles being put by the contemnor, the court

auctioneer proceeded with the auction in terms of the order of the Court

and M/s Niadarmal Jai Kishan was selected and approved as auctioneer.

The court observer records that the contemnors no. 1, 7 and 9 moved

application on 9th June, 2008 for recalling the directions dated 2nd June,

2008 and put notice dated 6th June, 2008. They moved another

application dated 3rd June, 2008 and prayed for deletion of property no. E-

16, B-1 Mohan Cooperative Industrial area from the auction schedule. The

learned court observer had given details of different other hurdles created

by the contemnors and had ultimately recorded that the auction of the

properties could not take place.

6. It is to be noted that on 4th April, 2008 when this Court passed

order of auction in WP(Crl.) 461/07, the Court had recorded statement of

all the contemnors and recorded their undertakings. The statement of

each contemnor shows that he had no objection if the property mentioned

in the affidavit was sold away by way of a public auction. An undertaking

was given that they would allow inspection of the properties to the

interested bidder. Despite this undertaking given by the different

respondents including contemnor Rajesh Khanna they defied the orders of

the Court and the undertaking given before the Court and tactically saw to

it that these properties were not auctioned.

7. Mr. Rajesh Khanna in defiance of attachment order sold away

property of Noida attached by the Court, clandestinely without permission

of the Court by a sale deed datd 23rd May, 2007. After service of

contempt notice, in reply to contempt notice, Mr. Rajesh Khanna pleaded

before the Court that what he sold to M/s. J.S. Export vide conveyance

deed dated 23rd May, 2007 was 'malba' (rubbles of a demolished

structure). It was strenuously argued in the Court by learned counsel for

the petitioner that the malba of the building at the plot in SEZ zone was

sold by the contemnor vide sale deed dated 23rd May, 2007. The very fact

that the contemnor first defied the order of the Court and sold the

property attached by this Court clandestinely and then justified the sale

by calling an 'A' class building as malba shows contemptuous attitude and

the contempt with which contemnor treated the orders of the Court.

8. It is contended by counsel for the contemnor that the

property in SEZ zone is given to a person for a limited lease period. He

has placed on record the sub-lease executed between Okhla Industrial

Development Authority and the contemnor, Rajesh Khanna showing that

the plot no.1 in the Noida Special Economic Zone, measuring 2118 square

meters was given on lease for 15 years computed from first day of month

in which possession is taken on quarterly rent of Rs. 32,300/-. He

submitted that the land underneath the building could not be sold and

only building constructed over the plot by the petitioner could be sold,

therefore he has described the building as a malba/super structure.

9. This Court while passing order of attachment of the property

had attached only the interest of the contemnor. It is obvious that this

Court had not attachéd the interest of Noida Authority or superior lessor,

i.e. President of India. If the contemnor had interest only on super

structure and building, it is the building which was attached by this Court.

The contemnor had no authority to sell this building so long as it was lying

attached by this Court. Moreover, the perusal of conveyance deed

executed by contemnor in favour of M/s. J.S. Export shows that the

petitioner had sought permission from Noida Authority for sale of this

building. It is also apparent from the sale deed that the deal in respect of

the sale of this property was done after the attachment order was passed

and the contemnor was very well aware of the attachment order.

10. The conduct of the respondent Rajesh Khanna clearly goes to

show that the respondent, Rajesh Khanna had deliberately and with a

design to play fraud upon the Court and upon the petitioner, sold out this

property clandestinely without permission of the Court. He had also been

making deliberate false representation in the Court and conducting

himself defiantly. After accepting the liability to the tune of more than

Rs.60 crore and despite giving undertaking of discharging liability by sale

of part of the property to be sold by public auction Rajesh Khanna and

other respondents did not allow the auction to proceed further. It seems

that they had entered into the compromise and filed the same in the

Court with their undertakings only to escape the criminal liability and to

get the FIR quashed. Once the Court had given them protection they saw

to it that the compromise was frustrated. The role of Rajesh Khanna in

this was most prominent in defiance of the order of the Court in selling the

property attached by the Court. There had been a continuous

contemptuous conduct of the respondent in defiance of the orders of this

Court, at every stage. Rajesh Khanna substantially interfered with due

course of justice. In the additional affidavit Mr. Rajesh Khanna has

tendered apology but this apology is not bona fide and is motivated to

escape punishment under contempt. The nature of defiance and conduct

of contemnor of frustrating the compromise and efforts of court to put

properties to auction calls for imposition of sentence of civil imprisonment

on him.

11. I consider that it is a fit case where contemnor Rajesh Khanna

should be sentenced to 6 months simple imprisonment and a fine of

Rs.2,000/-. Regarding other contemnors, the Court reserves its order for

punishment in view of their case being on different footing. The

contemnor, Rajesh Khanna be taken into custody and sent to jail.

May 27, 2009                          SHIV NARAYAN DHINGRA, J.
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