ORDER
K.K. Balu, Vice-Chairman
1. During pendency of the company petition filed under Sections 397&398 of the Companies Act, 1956 (“the Act”) for the purported acts of oppression and mis-management in the affairs of M/s. Bajaj Promoters Private Limited (“the Company”), the petitioner filed an application (C.A.20/2001) for an order of injunction restraining the respondents 2&3 from interfering with construction and sale of undivided portion of the building situated at No. 4-A, Stringers Road, Vepery, Chennai-600 007, upon which the respondents were restrained from dealing with or negotiating for sale of the property until 18.04.2001 and, thereafter, by an order dated 20.04.2001 the respondents 2&3 were restrained from entering into any negotiation or deal with any member of the public for sale of any flat, apart from restraining them from carrying on any construction of the building. According to the petitioner, the respondents 2 & 3 sold away the property in gross violation of the order dated 20.04.2001, to the fourth respondent herein, for a throw away price thereby committing contempt of the order passed by the Bench. Hence, the present application is for an order to punish the respondents 2 to 4 for committing gross contempt of the order dated 20.04.2001 of the Bench.
2. Shri A.K. Myisamy, learned Counsel representing the applicant submitted that the restraint orders were passed in the presence of Counsel for the respondents 1 to 3 and, therefore, cannot plead ignorance of the same. The property in question, remaining without sub-division and reportedly mortgaged in favour of the fifth respondent, came to be sold in the Debts Recover Tribunal (“the DRT”) proceedings, in favour of the fourth respondent, however, without any notice to the applicant. The fourth respondent was represented before the DRT, by the same Counsel who appeared for the respondents 1 to 3. Thus, the fourth respondent had full knowledge of the proceedings before the Company Law Board. The applicant has already applied before the DRT for setting aside the sale of the property and accordingly pursuing his remedy. The sale of the property in collusion with the respondents 2 & 3 is clearly in violation of the order of the Bench. Shri Mylsamy, learned Counsel therefore, urged that the respondents 2 to 4 must be punished for having committed gross contempt of the order dated 20.04.2001.
3. According to Shri M. Shreedhar, learned Counsel for the third respondent, the grievances of the petitioner set out in the company petition are exclusively in relation to the property situated at 4-A, Stringers Road, Vepery, Chennai-600 007. The restraint order sought and obtained by the petitioner is only in respect of the undivided portion of the building situated at Door No. 4-A, Stringers Road. Whereas, the fourth respondent purchased the building situated at Door No. 4B, Stringers Road in the DRT proceedings, initiated by Bank of India enforcing its mortgage rights over the said property. The sale effected in compliance with the requirements of law, has become final and binding on the petitioner and other parties. Therefore, these respondents have not committed any contempt of the order of the Bench.
4. Shri S.R. Raghunathan, learned Counsel appearing for the fourth respondent while denying any contempt of the order made by the CLB submitted that the disputes between the petitioner and his family members are con lined to construction and sale of land over the property situated at 4-A. Stringers Road, in respect of which only the restraint order has been passed by the CLB, in terms of the prayer for the interim reliefs made in the company petition, as borne out by the agreements and memorandum of understanding entered into with third party purchasers. The property situated at old Door No. 3-A, Stringers Street, Vepery. Chennai-600 007 was purchased by the Company under a registered deed of sale dated 30.03.1992, which was mortgaged in favour of the fifth respondent, as evidenced from form Nos. 8 & 13 filed before the Registrar of Companies. The fifth respondent, on account of default in repayment of outstanding amount due to it, was constrained to bring the mortgaged property for sale through the DRT. The property was purchased by the fourth respondent for an amount of Rs. 1,10,00,000/- and upon payment of the sale consideration, the DRT confirmed the sale on 11.02.2003 and the Recovery Officer issued the sale certificate, which was duly registered on 28.02.2003. Shri Raghunathan, learned Counsel pointed out that the petitioner questioned the sale in favour of the respondent before the DRT upon which by an order dated 17.03.2004 the sale was confirmed subject to the final outcome of the CLB proceedings in the pending dispute. Thus, the subject matter of the company petition (Door No. 4-A, Stringers Road) is entirely different from the property purchased by the fourth respondent (Door 4-B, Stringers Road). The fourth respondent is a bonafide third party purchaser for valuable consideration, without notice of the internal disputes between the petitioner and the respondent group in respect of the property situated at 4-A, Stringers Road, Vepery, Chennai-600 007. There is no question of contempt committed by the fourth respondent.
5. According to the fifth respondent, the property bearing old Door No. 3-A (new Door No. 4-B), Stringers Road belonging to the Company was mortgaged in its favour. When the respondents 1 to 3 failed to clear the outstanding dues, recovery proceedings were initiated through the DRT. bringing the property for sale and the fifth respondent purchased the property for a consideration of Rs. 1,10,00,000/- The sale effected and completed through the DRT, in accordance with due process of law cannot be challenged. This respondent is neither aware of the disputes between the petitioner and his family members nor is a party to the CLB proceedings. The mortgaged property being entirely different from the subject matter of the company petition, the applicant can seek no relief before the CLB.
6. After considering the submissions of learned Counsel, the short issue before me is whether the respondents 2 to 4 committed contempt of the order dated 20.04.2001, by sale of the property covered under the certificate of sale of immovable property dated 26.02.2003 issued by the DRT in favour of the fourth respondent. A careful scrutiny of the various documents on record reveals that the DRT has certified, in its certificate dated 26.02.2003, issued under the provisions of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993 (“Act 51 of 1993”), that the fourth respondent herein has paid a sum of Rs. 1,10,00,000/- and has been declared the purchaser at a sale held on 11.02.2003 of the immovable property, charged in favour of Bank of India, with an extent of 8778 sq. ft. together with superstructure, building, amenities and fixtures being plot No. ‘B’ together with the pathway of an extent of 1950 sq. ft. provided exclusively for access to plot ‘B’, forming part of old Door No. 3-A and new Door No. 4-B, Stringers Road, Vepery. Chennai-600 007, in execution of orders of the Presiding Officer dated 11.02.2003 in O.A. No. 271/2002 for recovery of debts due from the petitioner and the respondents 1, & 2. The Recovery Officer in his certificate, dated 21.03.2003 certified that the property situated at corporation old Door No. 4A and new Door No. 4B, Stringers Road. Vepery, Chennai-600 007, covered under the sale deed bearing registration No. 860/92 was sold by the DRT to the fourth respondent on 11.02.2003, in execution of the orders of the Presiding Officer in O.A. No. 271/2002. It is, therefore, beyond doubt that the respondents 2 & 3 sold the property bearing old Door No. 3A and new Door No. 4B, Stringers Road, Vepery, Chennai-600 007, covered by the sale deed dated 30.03.1992 with registration No. 860/92. in favour of the fourth respondent.
The dispute in question shall now be considered against the background of the facts and circumstances of the present proceedings before me. According to the petitioner, the Company had purchased the immovable properties situated at Door No. 3A (old No.), Stringers Road under three different sale deeds as under:
(i) land with an extent of 8778 sq. ft. being plot No. “B” together with pathway of an extent of 1950 sq. ft., forming part of Corporation Door No. 3A, Stringers Road under sale deed dated 30.03.1992;
(ii) land with an extent of 7408 sq. ft., being plot No. “A-1” together with the partially demolished and dilapidated structure thereon, forming part of Corporation Door No. 3A, Stringers Road under sale deed dated 31.03.1993:
(iii) land with an extent of 8567 sq. ft., being plot No. “A-2” together with the partially demolished and dilapidated superstructure thereon, forming part of Corporation Door No. 3A, Stringers Road under sale deed dated 18.03.1994.
It has to be borne in mind that the Company purchased three pieces of properties bearing the same Door No. 3A, Stringers .Road, being Plot No. B with an extent of 8,778 sq. ft, together with pathway to the extent of 1,950 sq. ft., Plot No. A1 with an extent of 7,408 sq. ft. and Plot No. A2 with an extent of 8,567 sq. ft, under the sale deeds dated 30.03.1992, 31.03.1993 and 18.03.1994 respectively. The Company developed the properties forming part of Plot No. Al and Plot No. A2, under new Door No. 4/4A by construction of flats and began to sell them to the public. The property with an extent of 8,778 sq. ft, together with pathway forming part of Plot No. B, under new Door No. 4B, situated at the rear side, was mortgaged to Bank of India and subsequently sold to the fourth respondent in the DRT proceedings. The Company neither developed the Plot B by construction of flats nor sold any part of Plot B to the public. Similarly, Plot Nos. A1 and A2 are neither mortgaged in favour of Bank of India nor the subject matter of the DRT proceedings…These facts are borne out from the pleadings on record and the certificates issued by the DRT. It is on record that the Company being the absolute owner of the lands measuring 15,975 sq. ft. (7,408 sq. ft. + 8,567 sq. ft.) covered under the sale deeds dated 31.03.1993 & 18.03.1994, after obtaining sanction from the Madras Metropolitan Development Authority and constructing flats on this property started selling flats to various interested third parties, in terms of eighteen agreements entered into between the Company, M/s Bajaj Enterprises (“the Builder”) and members of Lal Chand in the form of Memorandum of Understanding and Builders Agreement; thirty three agreements executed between the Company or the Builder and the purchasers, whose names and other details are listed out in the report dated 09.07.2001 of the Chartered Accountant-Commissioner appointed by the Bench and a number of sale deeds executed by the Company in favour of the purchasers. The grievances of the petitioner are that when the building is almost complete and possession has been handed over to several persons, who have purchased the undivided interest in land measuring 15,975 sq. ft, the respondents 2 & 3 are attempting to alienate the same building in favour of other persons and, therefore, sought for an interim order restraining the respondents 2 & 3 from interfering with the construction and sale of the undivided portion of the building situated at Door No. 4A, Stringers Road and delivering, the possession to the purchasers of flats. Thus, the petitioner confined his interim relief only to the property situated at Door No. 4A, Stringers Road. In the meanwhile, on the application made in CA 20/2001 for an order injunction restraining the respondents 2 & 3 from interfering with construction and sale of undivided portion of the building situated at Door No. 4A, Stringers Road, this bench by an order dated 11.04.2001, restrained the respondents 2 & 3 from dealing with or negotiating for sale of the property, viz., Door No. 4A, Stringers Road, until 18.04.2000, which was followed by an order dated 20.04.2001, by which the respondents 2 & 3 were restrained from entering into any negotiation or deal with any member of the public for sale of any Hat, apart from barring them from carrying on any construction of the building. Further the Company was directed to put up immediately a notice board at the premises cautioning the prospective purchasers that the property is under dispute. Thus, the restraint orders passed by the Bench are in respect of the properties covered under the sale deeds dated 31.03.1993 and 18.03.1994 with an extent of 15,975 sq. ft. being plot Nos. A-1 and A-2 forming part of Corporation Door No. 4A (New No.), Stringers Road, where flats have been constructed and sold to the public. But, the property mortgaged in favour of Bank of India; sold by the respondents 2 & 3 and purchased by the fourth respondent through the DRT is covered under the sale deed dated 30.03.1992 with an extent of 8,778 together with pathway of an extent of 1,950 sq. ft., being plot B and forming part of Corporation New Door No. 4B, Stringers Road and is absolutely different from the properties, which are subject to the restraint orders made by the Bench. Thus, the respondents 2 to 4 have not committed contempt of the order dated 20.04.2001 by the sale of the property situated at New Door No. 4B, Stringers Road, Vepery, Chennai-600 007. Against this background, it is immaterial whether the fourth respondent was aware or unaware of the CLB proceedings at the time of purchasing the property bearing Door No. 4B. The petitioner, if aggrieved on account of any irregularity as alleged in the sale process, he is free to agitate the same before the DRT.
7. In view of my foregoing conclusions, the contempt proceedings are closed, absolving the respondents 2 to 4 of the contempt proceedings. With these directions, the application (CA 62/2003) stands disposed of.