NON-REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

I.A. NOS.13 TO 36 OF 2017, IA NO.61787/2017 AND IA NO.77072/2017 IN

CIVIL APPEAL  NO(S).  4298-4299/2017

BARANAGORE JUTE FACTORY PLC. MAZDOOR SANGH (BMS) APPELLANT(S)

                               VERSUS

BARANAGORE JUTE FACTORY PLC. ETC.              RESPONDENT(S)

WITH CONMT.PET.(C) NOS. 824-827/2017 IN C.A. NOS. 4302-4305/2017  CONMT.PET.(C) NOS. 840-842/2017 IN C.A. NOS. 4306-4308/2017  CONMT.PET.(C) NOS. 1485-1486/2017 IN C.A. NOS.4298-4299/2017

J U D G M E N T

KURIAN, J.

Company Petition No.2 of 1987, pending before the Company Judge of Calcutta High Court has given rise to  several  litigations  before  the  Company  Judge, thereafter  in  intra  court  appeals  and  before  this Court.  One wonders why, despite several directions by this Court, the Company Petition itself has not been disposed of. 2. Having said that we have to deal with three set

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of contempt petitions before us i.e. Contempt Pet.(C) Nos.  824-827/2017  in  C.A.  Nos.  4302-4305/2017, Contempt  Pet.(C)  Nos.  840-842/2017  in  C.A.  Nos. 4306-4308/2017  and  Contempt  Pet.(C)  Nos. 1485-1486/2017  in  C.A.  Nos.  4298-4299/2017.   These contempt  petitions  arise  out  of  our  order  dated 21.03.2017 in Civil Appeal Nos. 4298-4299/2017 etc. The dispute is in a narrow compass as far as contempt is  concerned.   Paragraph  25  of  our  order  dated 21.03.2017 reads as follows:-

“25. In the background as above of the case, the Division Bench should not have interfered with the order dated 26.06.2015 passed by the learned Single Judge. However, taking note of the fact, an amount of Rs.2,23,00,000/- has been kept in fixed deposit towards lien for issuance of bank guarantee, we make it clear that the respondents shall not operate the bank accounts of the company after 03.04.2017 without  securing  an  amount  of Rs.8,32,60,331/-. We also make it clear that without leave of the High Court, the fixed deposit  of  Rs.2,23,00,000/-  with  the  Axis Bank  shall  not  be  withdrawn.  However,  it would be open to the respondents to apply for appropriate clarification or modification of the order dated 26.06.2015, after making the deposit as above and it will be open to the learned Single Judge to pass the appropriate orders on merits of the application.”

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3. It is the common ground of the petitioners that the alleged contemnors have not respected the orders passed by this Court in its true spirit and they have been trying various methods to get around the order. Shri  Vikas  Singh,  learned  senior  counsel  appearing for the alleged contemnors pointed out that there is no  willful  or  deliberate  violation  of  any  of  the orders passed by this Court. 4. On 25.7.2017, having regard to the submissions as to whether the alleged contemnors have actually made up  the  amount  referred  to  in  our  order  dated 21.03.2017. passed the following order:-

“We have sought the assistance of Mr. Ajit Kumar Sinha, learned senior counsel to verify as to whether the alleged contemnors have actually furnished the amount in terms of our orders dated 21.3.2017 and 8.5.2017.

List on 27.07.2017. Additional  documents,  if  any,  may  be

filed in the meantime.”

5. Thereafter, on 31.07.2017, this Court passed the following order:-

“The learned counsel for Respondent No. 1,  on  proper  instruction,  submits  that  in order  to  avoid  all  confusions,  a  Fixed Deposit Receipt for an amount of Rs. 10.55 Crores  (Rupees  Ten  Crores  and  Fifty  Five Lakhs) drawn in the name of the Registrar of

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this Court will be produced before this Court on the next date of hearing.   

It is made clear that in case the Fixed Deposit Receipt, as above, is not produced on that date, all the Directors of the Company shall be personally present before this Court on the next date of hearing.   

We  make  it  further  clear  that  for enabling  the  company  to  produce  the  Fixed Deposit Receipt, it will be open to them to encash  the  earlier  Fixed  Deposit  to  the extent of Rs. 2.23 Crores (Rupees Two Crores and Twenty Three Lakhs) referred to in our Judgment.    

List on 08.08.2017.  We  record  our  appreciation  for  the

services  rendered  by  Mr.  Gaurab  Banerjee, learned  senior  counsel,  in  assisting  the court”.

6. When the matters were taken up on 8.8.2017, a Fixed Deposit Receipt for a sum of Rs.10,55,60,331/- drawn in the name of Registrar Supreme Court of India was produced.  The Fixed Deposit Receipt, as above, had been taken on record on that day.   7. Mr. Krishnan Veugopal and Mr. R. Basant, learned senior  counsel,  submit  that  there  is  blatant violation  of  the  order  dated  21.03.2017  passed  by this Court on many aspects and in particular, in the matter of the alleged Fixed Deposit of Rs.2.23 Crores in Axis Bank and in operating the accounts in Axis

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Bank.  As far as Fixed Deposit of Rs.2.23 Crores in Axis Bank is concerned, we find that our order was based on the order of the High Court.   8. Be  that  as  it  may,  Mr.  Vikas  Singh,  learned senior  counsel, submits  that as  a matter  of fact, there were Fixed Deposits in Syndicate Bank and Karur Vysya Bank to the tune of Rs.2.23 Crores and a bit more  in  case  the  interest  was  added  on  to  it. However, unfortunately, it was noted to be a deposit in Axis Bank but, even after the judgment, grace was not shown in bringing to the notice of this Court that there was no fixed deposit in Axis Bank, despite several  rounds  of  arguments  with  regard  to  the implementation of our order dated 21.3.2017.  As far as  operation  of  the  accounts  in  Axis  Bank  is concerned,  it  is  submitted  that  there  was  an inadvertent withdrawal of an amount of Rs.3.20 Lacs. According to Mr. Vikas Singh, learned senior counsel, it is because the Bank had not taken note of the instruction.  But the fact remains that the order of the  Court  was  not  produced  before  the  Bank, apparently because in that order it was made clear that no account should be operated without making up the required amount.   9. Mr. Dhruv Mehta, learned senior counsel appearing for the Bank, however, submits that immediately on coming to know of the transaction for an amount of

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Rs.3.46 Lacs, being in violation of the order dated 21.3.2017  passed by  this Court,  the same  had been reversed  and  status  quo  ante  with  regard  to  the operation had been restored by the Bank.  Mr. Vikas Singh, learned senior counsel, submits that the same was  on  account  of  instruction  by  the  alleged contemnors as well.  10. Be that as it may, the Manager of the Bank has tendered unconditional apology, despite a plausible explanation  offered  for  the  operation  of  the accounts.  We see no reason to refuse the apology by the Manager of the Axis Bank.  Accordingly, accepting the  explanation and  apology by  the Manager  of the Bank, further proceedings against the Manager of the Axis bank are dropped and the rule is discharged as against the Manager. 11. Though  there  are  also  allegations  against  the alleged contemnors that attempts have been made to circumvent the orders passed by this Court by even forming a new company, these allegations also have been  sought  to  be  explained  by  Mr.  Vikas  Singh, learned senior counsel, who submits that the decision to lease out the property had already been taken as early  as  on  16.03.2017.   However,  Mr.  R.  Basant, learned senior counsel, points out that though the decision had allegedly been taken on 16.3.2017 the same had been uploaded only on 19.04.2017.

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12. Be that as it may, having regard to the conduct of the alleged contemnors and in the background of the various orders passed by this Court it is clear that their conduct was not graceful before this Court and  whether  for  such  a  conduct  this  Court  should initiate proceedings for contempt is the question to be decided. 13. As  we  have  already  noted  hereinabove,  since various other cases are pending before the Company Judge in the High Court of Calcutta and having regard to the three decades long fight on the management of the  Company,  we  are  of  the  view  that  the  apology tendered  by  the  alleged  contemnors  for  the inconvenience caused to the Court should be accepted subject to imposition of appropriate costs. 14. As  far  as  the  submission  made  by  the  learned senior  counsel  for  the  petitioners  based  on  the interlocutory applications, we are of the view that those are matters for the Company Judge to deal with appropriately.  Therefore, we express no opinion on the  merits  of  those  applications.   It  is  for  the petitioners, if so advised, to move the Company Judge at the appropriate stage.  15. Dr.  Kylashnath  Pillay,  learned  senior  counsel appearing for some of the Unions submits that they may also be heard before this Court.   16. We  find  it  difficult  to  appreciate  this

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submission, since the main matter had already been disposed of and what survives are only the contempt petitions before this Court.  We do not find any need for intervention/impleadment.  In case, those unions have any grievance it is for them to approach the Company Judge, in which case the Company Judge may pass appropriate orders. 17. As we have noted above, the Company Court is in seisin  of  the  matter  for  about  three  decades  in Company Petition No.2/1987.  This Court, we find at least on three occasions (on 27.10.2014, 12.03.2015 and 4.3.2016), had issued directions to the Company Court to dispose of all the applications and also the main petition.   18. All the parties appearing before us submit that they  will  extend  full  cooperation  to  the  Company Judge to dispose of the applications and the Company Petition itself without any delay. 19. In  the  above  circumstances,  we  request  the Company Judge, High Court of Calcutta to take up the Applications  and Company  Petition on  a day  to day basis  and  dispose  of  the  same  expeditiously, preferably  within  a  period  of  four  months.   Any adjournment by any party, shall be granted only on the imposition of cost of Rs.10,00,000/- (Rupees Ten Lacs) and that too only for a short period, be it on any reason.

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20. Yet  with  all  these  safeguards,  in  case  the Company Judge is not in a position to dispose of the applications/petition  on  account  of  non-cooperation on the part of the respondents herein, it will be open to the Company Judge to make a Report to this Court,  in  which  case,  this  Court  will  think  of appropriate steps even by appointing a Receiver for the Company. 21. Subject  to  the  final  disposal  of  the  Company Petition it will be open to the Company Judge to pass appropriate orders with regard to the Fixed Deposit made in the name of the Registrar, Supreme Court of India. 22. We  also  direct  the  Company  Judge,  not  to entertain any fresh application in Company Petition No.2/1987, without leave of this Court. 23. However, liberty is granted to the applicants who have  already  filed  applications  for directions/intervention/impleadment before this Court to  approach  the  Company  Judge,  if  they  are  so advised. 24. In view of the persuasive submission made by the learned  senior counsel  in the  matter of  costs, we reluctantly refrain from passing any further orders. 25. The contempt petitions and I.As are, accordingly, disposed of.

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26. Pending  applications,  if  any,  shall  stand disposed of. 27. There shall be no orders as to costs.

.......................J.               [KURIAN JOSEPH]  

.......................J.               [R. BANUMATHI]  

NEW DELHI; AUGUST 30, 2017.

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