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Dalbir Singh Vs. Sakaw Industries Private Ltd. - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtKolkata High Court
Decided On
Case NumberAppeal No. 231 of 1980
Judge
Reported in[1983]54CompCas359(Cal)
ActsCompanies Act, 1956 - Sections 446, 446(2) and 456; ;Contempt of Courts Act
AppellantDalbir Singh
RespondentSakaw Industries Private Ltd.
Cases ReferredDhirendra Chandra Pal v. Associated Bank of Tripura Ltd.
Excerpt:
- .....and illegal possession of the said godowns by breakingopen the pad-locks and the seals of the official liquidator, and receiver.certain consequential orders were also made therein.2. it appears that sakaw industries pvt. ltd. was ordered to be wound up by this court on 5th june, 1972. it further appears that one surinder paul mehta tookra lease of the two godowns at farm house, link road, faridabad, from dalbir singh (grewal), the appellant herein, for 11 months at a rental of rs. 700 per month. at least that is the lease which has been forwarded on behalf of the appellant to the adyocate:on record of the official liquidator. the official liquidator took possession of the said godowns on 24th july, 1974, and put his lock and seal. on 29th july, 1974, one sri sohan lal graver,.....
Judgment:

Sabyasachi Mukahrji, J.

1. This is an appeal from an order and judgment of Mr. Justiee Salil K. Roy Chowdhmy, passed on 28th April, 1980,in Company Application No. 118, arising out of Company Petition No., 88of 1971. By the said judgment and order the learned judge had madean order for payment by the appellant of a sum of Rs. 1,29,471.45, beingthe value of the goods which had been lost by the company in liquidationand the learned judge has further held that such loss and injury, hadbeen caused by the deliberate and wilful act; on the part of the appellantin taking unlawful and illegal possession of the said godowns by breakingopen the pad-locks and the seals of the official liquidator, and receiver.Certain consequential orders were also made therein.

2. It appears that Sakaw Industries Pvt. Ltd. was ordered to be wound up by this court on 5th June, 1972. It further appears that one Surinder Paul Mehta tookra lease of the two godowns at Farm House, Link Road, Faridabad, from Dalbir Singh (Grewal), the appellant herein, for 11 months at a rental of Rs. 700 per month. At least that is the lease which has been forwarded on behalf of the appellant to the adyocate:on record of the official liquidator. The official liquidator took possession of the said godowns on 24th July, 1974, and put his lock and seal. On 29th July, 1974, one Sri Sohan Lal Graver, advocate for Dalbir Singh (Grewal); wrote a letter to the official liquidator requesting him, inter alia, to pay the arrears of rents, as Dalbir Singh, according to the said advocate, came to know that his tenant's firm had gone into liquidation. It would be necessary to refer to the said letter which is at page 37 of the paper book. The said letter was addressed to, as mentioned before, the official liquidator on behalf of the present appellant and by the said letter it was stated that by a lease dated 26th April, 1973, between Sri Surinder Paul Mehta, son of Sri Amir Chand Mehta, of 20, Old Ballygunge Road, Calcutta, and Shri Dalbir Singh, the said Surinder Paul Mehta became a tenant of a portion of the said premises, which tenancy started from the 1st day of every English calendar month and lasted till the last day of every such month and aftes expiry of the lease period, the tenant, Shri Surinder Paul Mehta, became a statutory tenant at the same rent and on the same conditions. It further appears from the letter that the said Surinder Paul Mehta stopped payment of the rent of the said premises since 1st December, 1973, and as such he was liable to pay rent from 1st December, 1973, to 31st July, 1974, that is to say, for 8 months at the rate of Rs. 700 per month, which, according to the said Mr. Grover, came to Rs. 5,600 and interest thereon at the rate of 1% per month came to Rs. 150, which brought the total to Rs. 5,750 up to 31st July, 1974. The letter, thereafter, went on to say as follows :

' 6. That my client has come to know that the tenant's firm has come under the liquidation proceedings and you are the official liquidator appointed by the Hon'ble High Court, Calcutta, and you have sealed the above said premises as official liquidator.

7. You are, therefore, requested that the above-said amount of my client may kindly be get recovered from the assets of the tenant's firm paid to my client and this may be considered on top priority. It is also requested that the premises may kindly be vacated at the earliest. '

3. On receipt of the said letter, on behalf of the official liquidator a request was made to the advocate for Dalbir Singh to send the alleged lease. Thereafter, on the 11th February, 1975, the asst. official liquidator wrote a letter to the said advocate, Mr. Sohan Lal Grover, which reads as follows:

'With reference to your letter dated 14-1-75 enclosing an attested copy of lease deed dated 26-4-73 made between Sri Dalbir Singh Grewal, son of S. Amarjeet Singh of Farm House, Link Road, Faridabad, Tehsil Ballabgarh, Dist. Gurgaon, as landlord of the one part and Sri Surinder Paul Mehta, son of late Prof. Amir Chand Mehta of 20, Old Ballygunge Road, Calcutta-19 of the other part as tenant, I have to state that it appears from the above copy of the lease deed that it was made after the company went into liquidation, by Sri S.P. Mehta in his individual capacity and as such the company in liquidation is not liable for any breach, etc.'

4. These letters are important because, according to the respondent, it is clear that the goods of the ' firm ' were kept in the premises in question and that the appellant was aware of the same 'and that the official liquidator was in possession of the said premises, as would be evident from the letter of the advocate of Mr. Dalbir Singh at page 37 of the paper-book, where there was a request to 'kindly vacate at the earliest'. Here the expression 'firm' had been used to convey the meaning of the company, which is in liquidation.

5. On behalf of the appellant, however, reliance was placed on the letter of 11th February, 1975. He emphasised a point that there was no jural relationship between the appellant and the company and as such the official liquidator was estopped from contending that an order could be made against the present appellant under Section 446 of the Act. The said lease was, of course, unregistered. Thereafter, it appears admittedly from the statement of the official liquidator, as corroborated by the statement made in the valuation report, that the goods of the company were in the godowns ; there was an inventory made, a valuation made on or about 10th May, 1977. It is the case of the appellant that Mehta, since deceased^ handed over vacant possession of the said godown on part payment of Rs. 3,500 on account of arrears. The said. Mehta died and was cremated on 1st October, 1977.

6. On the 14th June, 1979, the High Court ordered sale of the properties lying in the said godowns upon an application made by the official liquidator. On 16th July, 1979, an inventory report, being annex. A to the petition, was made. On the 24th July, 1979, the official liquidator and the representative of the valuer went to the godown for inspection and making necessary arrangements for the sale of the materials and at that time it was found that the said goods were not in the said godowns ; some portion of the said goods were found in front of the said premises. Thereafter, an FIR was duly lodged and proceedings were taken. -Thereafter judges summons in this case was taken out for the following orders :

'(a) the respondent be directed to pay the petitioner a sum ofRs. 1,29,471.45 ;

(b) the respondent is guilty of interfering with the possession of the petitioner of two godowns at 3/184 Link Road, Faridabad, and as such liable to be proceeded with in contempt proceedings;

(c) the respondent do pay the liquidator the costs of and incidental to this application ;

(d) such further or other order or orders be made and directions given as this Honourable Court may deem fit and proper.'

7. Upon the affidavits being filed by the parties, the learned judge heard the matter in the presence of, and after consideration of the contentions of, the present appellant and thereafter delivered judgment in which he has analysed the scope of Section 446 and discussed the facts, mentioned herein-before. The learned judge noted that it was indisputable that the official liquidator took possession of the said godowns together with the goods therein at the Farm House, Link Road, Faridabad, on 24th April, 1974; and put his own pad-lock. This is also corroborated by the statement in the letter of the learned advocate of the appellant. It further appears that the said locks and seals were intact up to 10th May, 1977, when the official, liquidator's representative had been at the said Farm House for making an! inventory and valuation. Thereafter, it is clear, that one S.M.G. Beaty Pvt. Ltd. was appointed valuer under orders of the court for a valuation of the assets in the said godown and other assets of the company lying elsewhere. By its valuation report, dated 21st May, 1977, which is also in the paper-book, the valuer valued the assets lying at the-said godowns at a total sum of Rs. 1,29,471.45 and a further valuation report was made in respect of other materials lying at the other place as it appears from the valuation report dated 16th July, 1979. These valuation reports have been annexed to the affidavit filed on behalf of the official liquidator. The learned judge has also noted, as would be evident from the letter, that the present appellant knew that the said godown and the goods were in the possession of the official liquidator, who had sealed the godowns.

8. It also appears that the State Bank of India had filed a suit for the enforcement of its security, which was alleged to be the goods of the company, which were lying hypothecated with the State Bank of India and the said suit was filed with the leave of court in 1976. In the said suit between the State Bank of India and Sakaw Industries, the official liquidator was appointed, as the Receiver and it was clear from the records that the said respondent by its said advocate's letter had admitted that the official liquidator was in possession of the said godown and put his seal. Subsequent to the order for sale, there were two valuation reports, which we have mentioned hereinbefore. It appears that the godowns were owned by the appellant and he was living in the same building within the same compound where the godowns were situated. It was alleged that the goods in the godowns were removed by the ex-managing director of the company and the godowns were lying vacant and taken possession of by the appellant. Some of the goods were lying in the open godown of the appellant, being the landlord of the said godowns at the rear of the premises and several bags containing different types of chemicals were kept in open field. A police diary was lodged by the representative of the official liquidator. It appears that the official liquidator who was also the official liquidator and receiver in the suit, State Bank of India v. Sakaw Industries, took possession of the godowns on 24th April, 1974, and the seals put by the receiver in the said two godows, were found to be intact up to 10th May, 1977, when the said goods were inventdrised and valued by the valuer, as mentioned hereinbefore. In these circumstances, the appellant was sought to be made liable for the value of the said goods in the said godowns belonging to the company. The learned judge has held that the appellant was guilty and ordered him to pay Rs. 1,29,471.45.

9. Section 446, Sub-section (2) of which came by subsequent amendment, gives power to the winding-up court, notwithstanding any other law for the time being in force, to have jurisdiction to entertain or dispose of any suit or proceedings against the company, any claim made by or against the company as also any question whatsoever, where law requires and which arises in the course of the winding-up. The amplitude of the scope of Section 446(2) of the said provision has been construed by a judgment of Division Bench of this court in the case of Indramani v. Shriram Jute Mills (P.) Ltd. (judgment delivered on 6th December, 1976), wherein it was held that the court was competent to adjudicate on all questions provided the procedure enjoined by law was followed. In this case the claim of the liquidator was that the present appellant was guilty of removing, destroying and damaging the goods of the company in liquidation. The appellant was given notice and was heard. There was ample evidence for the learned judge to come to the conclusion that he did.

10. It was contended, however, that the valuation reports, upon which the learned judge relied, were not legal documents because the said documents were not supported by the affidavit of the valuer. In our opinion, this cannot be accepted. These valuation reports were made pursuant to the orders of the court by a valuer appointed and approved by the court. The valuation reports have been annexed to the affidavit filed on behalf of the official liquidator. The appellant had the opportunity to controvert any statement or allegation made in the said valuation reports but the appellant did not do so. Therefore, it cannot be said that the trial court had acted without legal materials.

11. It was then contended that if the appellant was guilty, as it was alleged, then he should have been proceeded against for contempt of court ; the alleged act complained of amounted to a criminal contempt and the company court would have no jurisdiction to entertain this. In aid of this submission, reliance was placed on the observations of the Special Bench decision of this court in the case of Legal Remembrancer v. Matilal Ghose reported in ILR [1913] Cal 173, at pages 175, 221 and 259. It is true that proceedings for criminal contempt could be proceeded with only where there was a clear violation of the order of the court and it was in the nature of criminal proceedings. Here, the court has not proceeded under the Contempt of Courts Act. It was contended that the court should have done so because the conduct complained of, according to the appellant, amounted to a contempt of court and there was also a prayer to that effect. It is true that certain acts complained of, that is to say, interference with an officer of the court, either the official liquidator or the receiver appointed by the court, would, in certain circumstances, amount to aeon-tempt of court and the court is at liberty to proceed in an appropriate proceeding under the Contempt of Courts Act, if it is so advised. But that does not detract from the court's power or jurisdiction to proceed with any other proceedings, if that is warranted by law. The non obstante clause, being Sub-section (2) of Section 446 of the Act, does not mean that the contempt proceedings which are covered by any other special Act should be proceeded with under the special Act only and not under the procedure envisaged by Sub-section (2) of Section 446. The Contempt of Courts Act does not provide that in the case of an alleged act, which amounted to a contempt of court, it could be proceeded against only under the Contempt of Courts Act and could never be proceeded with in any proceedings which was open to the court if such a situation arises. After all, the interference in this case amounted to an interference with the custody of the goods under Section 456 of the Companies Act. The goods were in the custody of the court and the court had a duty to protect the custody of the goods on behalf of the creditors. It was contended that by the letter of the official liquidator, wherein it was denied that there, was any jural relationship between the appellant and the company, the liquidator was estopped from contending that the appellant could be proceeded against under Section 446 of the Act. Reliance in this connection was placed on the observations of the Supreme Court in the case of Jit Ram Shiv Kumar v. Slate of Haryana, : [1980]3SCR689 , in the case of Union of India v. Anglo Afghan Agencies, AIR 1968 SC 718, as also the observations in the case of Motilal Padampat Sugar Mills Co. Ltd. v. State of U.P. : [1979]118ITR326(SC) . In our opinion, no question of estoppel arises. Here, the official liquidator (sic) was not denying that the goods were not lying in the said godown. Admittedly, even according to the letter of the appellant, the goods of the company were lying in that custody and the goods were found to be in the custody or would have been wrongly taken away by the present appellant, irrespective of any jural relationship. Therefore, the jural relationship between the appellant and the company in question is wholly irrelevant and no-question of estoppel, as such, arises. In support of the plea of estoppel, reliance was placed on arts. 338, 424 and 423 of Halsbury's Laws of England, 3rd Edition, vol. 15, at page 169. In our opinion, as we have mentioned before, the question of estoppel does not arise in this case. The amplitude of the power under Section 446, as we have mentioned before, has been discussed in the decision referred to hereinbefore. In the case of Dhirendra Chandra Pal v. Associated Bank of Tripura Ltd. : 1955CriLJ555 , the Supreme Court had an occasion to consider the provisions of Section 45B of the Banking Companies Act, 1949, which is more or less in identical terms as the provisions of Section 446, Sub-section (2), of the present Act. There, the Supreme Court observed that the expression had to be widely construed and comprehended all sorts of claims which related to or arose in the course of winding up. According to the Supreme Court, obviously the normal proceedings that the section contemplated must be taken to be a summary proceeding by way of an application. But that procedure must be in consonance with justice and, in this case, the appellant was given the notice, he was given the opportunity to file the affidavit and his contentions were heard and determined. Therefore, the procedure contemplated under Section 446 was duly followed.

12. Furthermore, as appears from the affidavit of Sri Asoke Ranjan Majumdar, Asst. Liquidator, affirmed on 10th April 1980, that even after taking over possession on the 28th July, 1979, after the FIR had been lodged, as would appear from the recovery memo, the appellant had again forcibly taken possession of the said godown and had let out the same to Cybertak Engineering and it was found on an enquiry that the possession of the said godown was given by the appellant to the said firm on rental basis. The said fact came to the knowledge of the said deponent in February, 1980, when an assistant of the liquidator went to Delhi for the purpose of conducting the sale of the other assets of the company, which were lying in the said premises at Faridabad. In this connection, a letter was also written on the 4th March, 1980, issued by the Superintendent of Police, Faridabad, addressed to the liquidator. Upon these facts, in our opinion, the learned judge was justified in exercising the undisputed jurisdiction he had in the facts and circumstances of the case under Section 446 of the Act.

13. It was contended that the valuation report was not categorical as to the value of the goods. It was contended that the valuation report was based on certain guess. Undoubtedly, it was so. But this was the only material available to the court and no other material having been given, the court was forced to act upon the only relevant material that was available. If the court so acted, in our opinion, it could not be said that the court acted on conjectures and/or on hypothesis. In that view of the matter, we are unable to accept the contentions urged in support of this appeal. The appeal, therefore, fails and is accordingly dismissed with costs.

14. The costs of the appeal including the application is assessed at 50 GMs. to be retained by the official liquidator out of the assets, in the first instance.

C.K. Banerji, J.

15. I agree.


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