M/S Innovative Textiles Pvt. Ltd & ... vs Sh. Hem Chand Sharma & Anr
2015 Latest Caselaw 6184 Del

*              IN THE HIGH COURT OF DELHI AT NEW DELHI

%                           Judgment pronounced on: 24th August, 2015

+                     I.A. No.20925/2014 in CS(OS) 1079/2009
       M/S INNOVATIVE TEXTILES PVT. LTD & ANR. ..... Plaintiffs
                    Through Mr. Kirti Uppal, Sr. Adv. with
                              Mr. Salar M. Khan, Mr. Sidharth
                              Chopra,Ms. Sahiba Pantel & Mr.
                              Rohit Ratty, Advs.
                    versus

       SH. HEM CHAND SHARMA & ANR            ..... Defendants
                    Through Mr.Sudhir Nandrajog, Sr. Adv.
                            with Mr. Sanjay Katyal, Adv.

       CORAM:
       HON'BLE MR.JUSTICE MANMOHAN SINGH

MANMOHAN SINGH, J.

1. By this order, I propose to decide the above said application filed by the plaintiffs under Section 151 CPC seeking withdrawal of leave to defend and punishment for contempt of court.

2. Brief facts of the case are necessary to be mentioned in order to decide the present application. The same are :

i. The plaintiffs have filed the present suit under Order 37 CPC seeking recovery of a sum of Rs.2,20,50,000/- along with interim application under Order 39 Rule 1 and 2 CPC.

ii. On 29th May, 2009, the suit came up before the Court. The Court issued summons to the defendants and also passed an ex parte ad interim directions restraining the defendants, their agents or

servants from selling, transferring, mortgaging, leasing out or creating any third party interest in any manner whatsoever in two properties i.e. (i) 5203, DLF, Phase-4, Gurgaon, Haryana, (ii) Kothi No. 13, Sector-7, Panchkula.

3. On 9th January, 2013 at the suggestion of the defendants, the following order was passed :

"1. Learned Senior Advocate appearing for the plaintiffs states that he is held up before the learned Court Commissioner in an evidence matter and therefore he may not be in a position to address arguments in the suit.

2. Mr. Sudhir Nandrajog, Senior Advocate appearing for the defendants submits that the defendants are suffering irreparable loss on account of the fact that by the ex parte ad interim injunction order dated 29.5.2009, his clients have been restrained from selling, transferring or alienating two properties, one situated at Gurgaon and the other at Panchkula, collectively valuing about Rs.18.00 crores as against the claim of the plaintiffs, which is limited to `2,20,50,000/- with interest. He therefore states that it would be in the interest of justice if any one of the aforesaid properties is released from the injunction order, to start with.

3. On a query, learned Senior Advocate appearing for the defendants states that the premises situated at Panchkula is the sole residential premises of the defendants and at this stage, he suggests that the injunction order dated 29.5.2009 may continue to operate in respect of the commercial property situated at Gurgaon.

4. In the first instance, the defendants are directed to file their affidavits placing on record the status of the commercial property situated at Gurgaon and also confirming therein that the same is free from any lien, charge and mortgage. Needful shall be done within two weeks, with an advance

copy to the other side, who may file a response thereto, if any, within two weeks thereafter.

5. Limited to the aforesaid aspect, list for consideration th on 15 February, 2013.

6. Interim order to continue."

4. On 16th July, 2013, the suit came up for hearing before the Court and on that day, the Court granted conditional leave to defend. The extract of the said order is reproduced here as under :

"I.A. No. 17564/2011 (by Defendants u/Order 37 Rule 3 (5) r/w Section 151CPC for grant of leave to defend the suit)

By this application the Defendants seek leave to defend the suit.

Learned counsel for the Defendants submits that the factum of the property being encumbered with the bank was in the knowledge of the Plaintiffs as is evident from the Agreement to Sell dated 28th September, 2006. Though in Clause-1 it is stated that the land is free from all government, non-government encumbrance, charges, liens, impendence, attachments etc. however, Clause-4 itself states that the Defendants are the sole and absolute owner in possession of the land and encumbrances whatsoever are created or found to be on the land then the Defendants would be liable to clear the same at their own cost. Though learned counsel for the Plaintiffs refutes the same however, a reading of the agreement itself shows that there was an apprehension in the mind of the Plaintiffs regarding the property being free from encumbrances. Further it is a case of the Plaintiffs themselves that on 9th-10th October, 2006 the mortgage to the bank was recorded by the revenue authorities and despite having knowledge of the same the Plaintiffs entered into a further agreement/

nomination with the Defendants on 17th October, 2006.

Learned counsel for the Defendants also raises the issue of jurisdiction in the matter. According to learned counsel for the Defendants the property is situated in Himachal Pradesh, the Agreement to Sell dated 28th September, 2006 was entered into between the parties at Solan and thus no cause of action arises at Delhi and this Court has no territorial jurisdiction to try the suit.

Learned counsel for the Plaintiffs has sought to make out a case of jurisdiction in Delhi for the present suit in view of the nomination/agreement dated 17th October, 2006 between the parties whereby it was agreed between the parties that the Defendants will transfer the property in favour of the Plaintiff No. 2.

Learned counsel for the Defendants has also taken me through the Agreement dated 28th September, 2006 whereby a notice was required to be given to the Defendants before any action was required to be taken against them, in case any defect was found and the same was not cleared in 115 days seeking refund of the earnest amount. Though learned counsel for the Plaintiffs submits that the Defendants were orally informed of the same however, it is an admitted fact that no written notice was given.

In view of the contentions raised by the parties, the Defendants have raised triable issues and thus leave to defend is required to be granted.

Faced with this situation learned counsel for the Plaintiffs submits that in case leave to defend is granted to the Defendants it should be a conditional one. Needless to state that this court had already passed injunction qua residential house and the Gurgaon property of the Defendants. Thus at this stage, this Court does not deem it fit to ask for any further security from the Defendants.

Application is disposed of granting the Defendants leave to defend."

5. In pursuance to the order made by this Court concerning confirmation of ad interim injunction, counsel for the plaintiffs sent a letter dated 6th December, 2013 to M/S Amoco Enterprises Pvt. Ltd. The counsel reproduced the order in her letter to M/S Amoco Enterprises Pvt. Ltd and also attached a certified copy of the order dated 16th July, 2013. True copy of the letter sent by the counsel for the plaintiffs dated 6th December, 2013 has been filed.

6. The counsel for the plaintiffs received a response from M/S Amoco Enterprises Pvt. Ltd. in letter dated 3rd February, 2014 wherein it was stated that M/S Amoco Enterprises Pvt. Ltd. was not related to the defendants in any manner and the defendants did not have anything to do with the company or its property in any manner whatsoever. A true copy of the letter dated 3rd February, 2014 of M/S Amoco Enterprises Pvt. Ltd has been filed.

7. As per the plaintiffs the enquiries revealed that the defendants and other shareholders of M/S Amoco Enterprises Pvt. Ltd entered into a deal in order to defeat the order of this Court pertaining to the property situated at Gurgaon. The defendants on 27th September, 2013, resigned from the directorship of M/S Amoco Enterprises Pvt. Ltd. True copies of the resignation letters and Form 32 submitted by M/S Amoco Enterprises Pvt. Ltd. have been filed.

8. As per the plaintiffs, the information contained in the statutory documents concerning M/S Amoco Enterprises Private Ltd. Mr. Hem Chand Sharma, Mr. Anmol Sharma, Mr. Mohinder Kumar Verma and Pramod Kumar Misra were directors of the company till 22nd September, 2012 (i.e., Annual General Meeting (AGM) for the financial Year 2011-2012). As per the said documents, the shareholding of M/S Amoco Enterprises Private Ltd. as on 22-09- 2012 was as follows:

     a) Mohinder Kumar Verma          - 20 Shares
     b) Hem Chand Sharma              - 2509 Shares
     c) Anmol Sharma                  - 2509 Shares
     d) Majestic Holdings Pvt. Ltd.   -5008 Shares
     e) Pramod Kumar Misra            - 5018 Shares

The interest of the defendants in M/S Amoco Enterprises Private Ltd. totalled at 33 % shareholding of the company. Further, both of them were directors since incorporation of the Company. The defendants i.e. Hem Chand Sharma and Anmol Sharma, resigned from directorship and also transferred shares as on 27th September, 2013, a day before the AGM on 28th September, 2013 for the financial year 2012-2013.

9. It is submitted by the plaintiffs that the defendants, in collusion with the other shareholders of M/S Amoco Enterprises Pvt. Ltd, have played a fraud upon the Court. The acts of the defendants and other shareholders of the company are not only a flagrant violation of the restraint order of the Court but are also contumacious. It is submitted

that the shareholders of M/S Amoco Enterprises (P) Ltd. were aware of the order of this Court granting injunction vide order dated 29th May, 2009, which was made absolute till the decision of the suit vide order dated 16th July, 2013, in respect of the property bearing number 5203, DLF, Phase-4, Gurgaon, Haryana.

As such, the defendants ought not to have sold and transferred the shares and the transferee of shares (who are existing shareholders and one of them is also existing Director) must not have accepted transfer of shares from them. It is submitted that the transfer of entire shareholding effected transfer of rights and interest in the properties of the company including in property number 5203, DLF, Phase-4, Gurgaon, Haryana, put under restraint by this Court. As such, both the defendants, the management of the company and the transferees have committed contempt of this Court, and are liable to be punished for the same.

10. In reply, it is submitted by the defendants that the claim of the plaintiffs is limited to Rs.2,20,50,000/- with interest and the defendants having being restrained from selling/transferring two properties at Panchkula and Gurgaon together valuing about Rs.18 Crore, one of the properties be released from the injunction order, to start with. The Court was pleased to observe inter alia that the defendants will file affidavits placing on record the status of the property at Gurgaon and confirm that the same is free from any lien, charge and mortgage.

11. It is submitted that in compliance of the said order the defendant No.1 filed an affidavit, the relevant contents of which are reproduced herein below:-

"That the property situated at Gurgaon bearing No.5203, Phase-VI, Gurgaon, Haryana, is owned by M/s Amoco Enterprises Pvt. Ltd. which company has besides the defendants three other Directors also. It is respectfully submitted that when the defendant No.1 contacted the other three Directors and after apprising them of the contents of the order dated 09.01.2013, requested them that an appropriate resolution be passed thereby empowering the defendants to file the affidavits, they have shown their unwillingness in this regard on the ground that the property does not belong to the, defendant No.1 or defendant No.2 and rather it belongs to the said Company. It is submitted that the factum of ownership of the said property vesting in the company being in the knowledge of the defendants has been so stated in the various pleadings filed on their behalf The defendant No.1 was hopeful that he and his son (defendant No.2) being the Directors of the company, the other three Directors will agree and give their consent, however, the said other Directors have refused to do so and as such the defendants are unable to file the requisite affidavit, which was sought to be filed by them, before this Hon'ble Court".

It is urged that the relevant facts have been so stated in the affidavit as well as the ground reality which has been existing per se the defendants, their control with respect to the property in question i.e. 5203, DLF Phase-IV, Gurgaon, Haryana even prior in time to the date i.e. 27th September, 2013 when the defendants resigned from the directorship of Amoco Enterprises.

12. It is stated that on 13th July, 2013 the defendant No.2 visited the aforesaid property but was not allowed to enter the same and was

threatened by certain anti social elements present at site who had been employed by Sh. P.K. Mishra, the Chartered Accountant of Sh. Mahinder Verma (one of the directors of Amoco Enterprises). The defendant No.2 tried his best to enter the said property, he being one of the directors of Amoco Enterprises but he was prevented from doing so. When the defendant No.2 contacted Sh. P.K. Mishra on phone, the said Sh. Mishra threatened him of not trying to enter the property at all. The defendant No. 2 apprehending a threat to his life lodged a complaint with the SHO, Police Station, Sector 29, Gurgaon, Haryana vide diary No.38-5 P2 dated 14th July, 2013. In this regard the defendant No.2 was issued a receipt by the concerned duty officer in the said police station. Subsequently, both the defendant No.1 and 2 followed up with the police authorities who even called the aforesaid Sh. P.K. Mishra in the local Police Station.

13. It is submitted that earlier while filing an application under Order 39 Rule 4 CPC being I.A. No. 594/2010 the defendants contended inter alia in para 9 that -

"It is further submitted that the property bearing No.5203, DLF, Phase-IV, Gurgaon, Haryana, is owned by M/s Amoco Enterprises, which company has besides the defendants three other Directors also. It is further submitted that though the plaintiff(s) have not provided the address of Kothi No. 13, Sector-7, Panchkula, Haryana in the Memo of Parties of the plaint but has by misrepresentation of facts obtained an ex- parte injunction against the defendants in respect of the said property".

14. Thus, there is no malafide intention on the part of the defendants. It is stated that the defendant No.1 although tried his

level best by regular follow-up with the police authorities as also with other directors of the company but all his efforts failed to produce any positive results and the dispute between the directors of the Company did not seem to be getting resolved at all. As such on finding that no other alternative was available and in order to buy peace, the defendant No.1 acting entirely against his wishes and in the compelling and unfortunate circumstances decided to resign from the directorship of the company. Therefore both the defendant No.1 and 2 resigned on 27th September, 2013. It is submitted that the defendants are law abiding citizens and have greatest respect for the orders passed by the Court. Their resignation from the company precipitated from the unusual turn of events as stated above and not with any malafide intention as is being contended by the plaintiffs in the application under reply. It is admitted that an injunction order is in operation against the two properties located at Panchkula and Gurgaon (Haryana).

15. The property at Panchkula being the sole residential property of the defendants, the defendant No.1 in order to secure the ends of justice and to show his bonafide is willing to place as a security during the pendency of these proceedings, the village property owned by him whose valuation has also been obtained by the defendant No.1 which has been filed along with the said reply. As per the valuation conducted by Mr. Sapna Sharma, the concerned valuer, the said property owned by the defendant No.1

and located at Village Sunhi, Tehsil Rakkar, District Kangra, H.P. is worth Rs. 2,01,00,000/-.

16. It is submitted that the said property is free from any lien, charge or mortgage and the title deed of the said property are in possession of the defendant No.1. It is also stated while placing the said property as a security in these proceedings, the defendants who have their sole residential property bearing No. 13, Sector-7, Panchkula be released from the purview of the injunction order dated 16 th July, 2013 which will be in the interest of justice, fair play and equity.

17. The defendant No.1 appeared personally before Court in person who has not disputed the fact that the defendant had shareholding of 33% in the company and the same have been transferred on 27 th September, 2013 and the defendants did not take any permission from this Court despite of interim order.

18. It is apparent that defendants have transferred their shareholding in M/s Amoco Enterprises Pvt. Ltd. contrary to the spirit of injunction order of the Court which is in the nature of condition and security for granting leave to defend the present suit and the same was done after passing of the order dated 16 th July, 2013 The defendant No.1 transferred his shares to a company controlled by Mr. Mahendra Kumar Verma, another Director and shareholder in M/S Amoco Enterprises Private Ltd. In the similar manner, the defendant No.2 transferred his shares to another Director Mr. Promod Kumar Mishra. The defendants

were fully aware about the conditions. True copies of the documents showing the transfer of shareholding in M/S Amoco Enterprises Private Ltd. have been filed.

19. Hence the transfer of shareholding by the defendants was under the restraint order by this Court. The restraint order was in the nature of condition and security for grant of leave to defend to the defendants as appears from the orders passed by the Court.

20. The injunction granted by this Court by the order dated 16 th July, 2013 was in fact the condition imposed for granting the defendants the leave to defend the suit. Therefore, the transfer of the shareholding in the company owning the Gurgaon property under restraint order of this Court is a violation of the condition imposed for grant of leave to defend. The explanation given by the defendants now is unacceptable. The suggestion made on behalf of the defendants pertaining to another property owned by defendant No.1 is not acceptable to the plaintiff due to past conduct of the defendants. There is a force in the submission of Mr.Uppal, learned Senior counsel appearing on behalf of the plaintiff.

21. The defendants' acts would show that they have no respect for the Court orders despite of having full knowledge about the interim order passed by this Court in the presence of defendants, they have given no valid reason for transfer of all their shares of the Company in respect of 5203, DLF Phase VI, Gurgaon,

Haryana without permission of the Court. The hide and seek policy cannot work in the Court.

22. It appears that the defendants are unreliable parties and they cannot be believed any further. Thus, in the interest of justice, equity and fair play one last opportunity is granted to the defendants to furnish the bank guarantee for the amount of Rs.2,20,50,000/- within the period of four weeks from today to the satisfaction of the Registrar General of this Court. In failure to do so, the application of the defendants for leave to defend shall be treated as dismissed. It is clarified that after accepting the bank guarantee by this Court, the residential property No. 13, Sector-7, Panchkula would be released immediately.

23. The application is accordingly disposed of.

24. List the matter before the Registrar General on 8th October, 2015 for compliance.

CS (OS) No.1079/2009

25. The matter be listed before Court on 15 th October, 2015 for directions.

(MANMOHAN SINGH) JUDGE AUGUST 24, 2015