Rajesh Khanna vs National Agricultural ...
2016 Latest Caselaw 4991 Del

*IN THE HIGH COURT OF DELHI AT NEW DELHI
                                      Reserved on: 12.05.2016
%                                   Decided on: 01.08.2016
+       CONT.APP.(C) 9/2009
        RAJESH KHANNA                              ..... Appellant
                         Through:     Mr. Divyanshu Goyal with
                                      Ms. Swati Jain, Advocate.
                      versus
    NATIONAL AGRICULTURAL CO-OPERATIVE
    MARKETING FEDERATION OF INDIA LTD. .. Respondents

Through: Mr. A K Thakur, Mr. R K Mishra and Ms. Rajeshwari Jha, Advocate.

CORAM:

HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MS. JUSTICE DEEPA SHARMA HON'BLE MS. JUSTICE DEEPA SHARMA (JUDGMENT)

1. The appellant has challenged the order dated 27.05.2009 whereby he was sentenced to 6 months simple imprisonment with fine of ` 2000/- for committing contempt of court. National Agricultural Co-operative Marketing Federation of India Ltd. (NAFED) moved an application under Section 2(4) of the Contempt of Court Act against various persons, including the present appellant, alleging that they had committed contempt by not adhering to their undertakings given in the Court and willfully violating the Court's attachment of properties, in OMP No. 291/2006, causing hindrance in the compliance of the court's order and also that the present appellant had disposed of the property - Plot No. 1, Noida Special Economic Zone, Noida, UP to M/s J.S. Exports.

Cont App (C).9/2009 Page 1

2. The brief facts of the case are that the NAFED and the appellant, the proprietor of M/s Rital Impex, had entered into a MOU. Disputes arose between them and a petition OMP No. 291/2006 under Section 9 was filed by NAFED. In the said OMP, the NAFED furnished a list of properties seeking its attachment. By order, dated 06.07.2006, the court had ordered the attachment of these properties. The court also attached Plot No. 1, Noida Special Economic Zone, Noida, UP, Industrial Plot admeasuring 2118 sq. mts. allotted to Mr. Rajesh Khanna by the Department of Commerce, Government of India. On an application under Section 11 of the Arbitration and Conciliation Act, 1996, an Arbitrator was appointed to decide the dispute between parties. Besides this, other proceedings including the criminal proceedings were also initiated against Mr. Rajesh Khanna. During pendency of all these proceedings, parties arrived at a settlement. By application IA No. 5743/2007 filed in OMP No. 291/2006, this settlement was placed before the Court and the implementation of the said settlement was sought through the Court. The Court thereafter on 16.05.2007- issued the following directions:-

"By this application parties have placed on record the settlement arrived at between the parties including added parties. The application is accompanied by affidavits of the parties and the settlement arrived at. The settlement is signed by the respondent as well as Mr. Sandeep Khanna, as regards other respondents they have given individual guarantees and undertakings for implementation of this settlement. The settlement is sought to be implemented through Court. Since, the parties have

Cont App (C).9/2009 Page 2 arrived at a compromise in respect of the entire dispute, which was referred to the Arbitrator, the settlement is considered as the final settlement of dispute between the parties and the proceedings before the Arbitrator therefore have become redundant. The settlement is to be implemented by parties in phases. The first phase is sale of property no. E-19,East of Kailash, New Delhi which was attached by this Court. The respondent has to pay Rs. 5 crores within 30 days from today after sale of the property. Respondent is given permission to sell this property, the attachment is lifted for this purpose and the payment of Rs. 5 crores be made in terms of the undertaking within the period specified. This OMP is disposed of with liberty to the parties to move appropriate application seeking implementation of the compromise."

3. NAFED's case in its petition under Section 2(b) of the Contempt of Court's Act was that despite the subsistence of the attachment order of this Court dated 06.07.2006, Mr. Rajesh Khanna, sold the property bearing Plot no. 1, Noida Special Economic Zone, Noida, UP to M/s J.S. Export and also handed over its possession on 01.05.2007 without permission from the Court and in gross violation of the order passed by Court on 16.05.2007 and the undertaking given in the Court and even the sale proceeds were not deposited with NAFED.

4. In reply to the contempt proceedings, the alleged contemnor, Mr. Rajesh Khanna did not dispute the allotment of Plot no. 1, Noida Special Economic Zone, Noida, UP by Development Commissioner vide Sub-Lease Deed in his favour

Cont App (C).9/2009 Page 3 and handing over of the possession of the land by certificate dated 25.01.2005, but alleged that the allotment was on leasehold basis upon condition to that the export activities had to commence within the stipulated period. He urged that he could not start the business activities within stipulated period. The lease was extended from time to time. Finally, the lease deed was cancelled vide letter dated 23.01.2007. It is contended that as per Clause (S) of the lease deed dated 19.01.2006, he was bound to hand over the possession of the land after removing all the erections, buildings, structures erected on the said land within two months and that is why he was constrained to dispose of the structure which was a malba.

5. It was contended that on cancellation of the lease deed, the structure thereon had become malba (rubble) and it was malba what was sold to M/s J.S. Exports by Conveyance Deed dated 23.05.2007. It was further contended that the Court could not have attached the said property being a lease hold property and that the order of attachment dated 06.07.2006 after its merger in the order of the Court dated 16.05.2007 became inoperative. Therefore, there was no impediment for respondent no.1 to dispose of the said property. It was further contended that the respondent constructed the existing super structure and it was a movable asset.

6. The learned Single Judge dealt with all the contentions of the parties and concluded that Mr. Rajesh Khanna had in defiance of the attachment order intentionally sold the property of Noida

Cont App (C).9/2009 Page 4 which was under the attachment order of the Court. The Court had also rejected the apology submitted by Mr. Rajesh Khanna in his additional affidavit holding that it was not bona fide but was motivated to escape punishment for contempt.

7. The first and foremost contention urged in the appeal is that the property was a leasehold property and hence could not have been attached. This contention was not ever urged the time when the court made the order of the attachment of the said property dated 06.07.2006. Thereafter, also at no stage was this taken, and was taken for the first time as a defence in contempt proceedings. On the other hand, the documents show that the lease was in respect of plot of land, i.e. Plot no. 1, Noida Special Economic Zone, Noida, U.P. Any superstructure was to be removed by the appellant on expiry of lease or on its termination. He was also permitted to sell the superstructure to any other person with the permission of the authorities as per the terms of lease deed dated 19.01.2006.

8. The appellant in his affidavit clearly stated that he had purchased the superstructure existing on the land from M/s Amaha Fashions before the execution of this sublease as he anticipated the allotment of land to him. It was an existing structure on the land which he purchased from the erstwhile owner of the structure. It was only the land underneath the superstructure, which was leased out, to him by the authority. From the various terms of this sublease dated 19.01.2006, it is also clear that the structure above the plot was independent of the plot and the options were given to

Cont App (C).9/2009 Page 5 the owner of that building, either to remove the structure at the time of handing over possession of the land on expiry of the terms of the lease or the sub-lessee could sell the building structure etc to the sublessor if the latter were willing and agreeable to take over the said building, structure etc and in that case the sublessor shall pay to the sub-lessee such compensation as is mutually agreed to, with the consent of Development Commissioner (Clause T) .

9. In fact the appellant applied to the Development Commissioner for permission to sell the super structure. Letter NO. 03/19/2004-EM/1964 dated 11.04.2007 gave the said permission to him. It was pursuant to this that he sold the superstructure on the said land to M/s J.S. Exports vide Conveyance Deed dated 23.05.2007. Clause 2.1 of the said deed clarified that what was sold was the building whose photographs were also attached with the said Conveyance Deed for a total consideration of ` 1,50,00,000/-. Clearly it was not malba or rubble which was sold by this Conveyance Deed. The said plot was allotted to him by a deed dated 19.01.2006 but the appellant purchased the superstructure from M/s Amaha Fashion. The photograph shows that it was the building attached to the ground which was sold and not the malba.

10. In terms of Section 3 Clause 26 of General Clauses Act, anything attached to the earth is immovable property. The building that was sold by this Conveyance Deed was certainly attached to the earth and thus cannot be termed a movable property or malba. Furthermore, the amount of consideration concededly paid does

Cont App (C).9/2009 Page 6 not pertain to malba; it is in respect of construction. The appellant nowhere disclosed why during the subsistence of the courts' orders, the sale was effected, without intimation to the court or the respondent petitioner. The appellants' contention is, therefore, rejected.

11. The next contention raised by ld. Counsel is that on passing of the order dated 16.05.2007 in IA No. 5743/2007 in OMP No. 291/2006, the earlier order dated 06.07.2006 had merged into it and since there was no specific order for the continuation of the said attachment order, there in fact was no operative order of attachment on the date the deed was executed.

12. We have considered the contentions of the ld. Counsel and perused the relevant orders. The order dated 06.07.2006 does not vacate the order of attachment dated 06.07.2006. Rather by this order, the Court had lifted/vacated the attachment only in respect of property no. E-19, East of Kailash, New Delhi. This shows that the Court was aware and conscious of the attachment order passed in respect of the immovable properties of Mr. Rajesh Khanna and had consciously lifted the attachment order only in respect of one property i.e. E-19, East of Kailash, New Delhi. Thus, the argument of Mr. Rajesh Khanna that there was no attachment order in existence in respect of the properties attached by order dated 06.07.2006 has no merit. It is also clear that at the time when the settlement was filed before the Court it was accompanied by the affidavits and the undertakings of respondents including that of the appellant whereby they undertook, to comply with the

Cont App (C).9/2009 Page 7 terms of the settlement. It was in order to facilitate the payments in terms of the settlement that the court had lifted the attachment in respect of certain properties of the respondents.

13. The impugned order therefore is based on facts and cannot be faulted with for ignoring any material circumstance. As far as apology is concerned, the court is in agreement with the findings of the single judge that it was offered as a strategy and to tide over what would have been a difficult time. At the same time, the court is of opinion that requiring the appellant to serve 6 months is severe; instead, the sentence is hereby reduced to half. The appellant is therefore, sentenced to undergo 3 months imprisonment. Barring this modification, there is no reason to interfere with the impugned order. Mr. Rajesh Khanna is directed to present himself before the Registrar, on 22nd August 2016, to serve his sentence. The appeal is dismissed, but subject to modification of sentence.

DEEPA SHARMA (JUDGE)

S. RAVINDRA BHAT (JUDGE) AUGUST 01, 2016 sapna

Cont App (C).9/2009 Page 8