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2014 DIGILAW 1230 (MAD)

C. Jayakumar v. C. Anandakumar

2014-06-10

P.R.SHIVAKUMAR

body2014
Judgment : 1. The petitioner, who figured as appellant in Company Appeal No.11 of 2012 on the file of this court (Ordinary Original Civil Jurisdiction), has broughtforth this petition for punishing the respondent for the alleged wilful disobedience of the order passed by this court on 26.6.2012 in M.P.No.1 of 2012 in the abovesaid Company Appeal. 2. After notice, the respondent/alleged contemnor has entered appearance and he is also personally present. The respondent has also filed an affidavit dated 21.4.2014 stating that he had not committed any act of wilful disobedience of the order passed by this court. 3. The arguments advanced by Mr.A.K.Mylsamy, learned counsel for the petitioner in the contempt petition and by Mr.H.Karthik Seshadri, learned counsel for the respondent in the contempt petition are heard. The affidavits of the parties, copy of the order which is said to have been violated and the other documents produced in the form of typed set of papers are also perused. 4. The petitioner and the respondent are brothers and they are the Directors of the Company M/s.Renaissance RTW Asia Private Limited, Palladam District. As dispute arose between them regarding the management of the Company, C.P.No.50 of 2012 came to be filed before the Company Law Board, Chennai Bench by the respondent herein for the following reliefs:- 1). To direct the take over of the Company, by the respondent herein (petitioner in the Company Petition), including its contingent and other liabilities by offering an exit to the petitioner herein (second respondent in the Company Petition) or in the alternative to direct take over of the Company by the petitioner herein together with the contingent and other liabilities, offering an exit to the respondent herein. 2). To surcharge the petitioner herein (second respondent in the Company Petition) for a sum of Rs.2.135 crores and a sum of Rs.2.21 crores towards alleged amount unlawfully appropriated by him in the name of his wife and towards loss caused to the Company. 3). To grant such other orders for resolution of the deadlock between the petitioner and the respondent. 4). To grant such rehabilitative, ameliorative, and remedial reliefs. 5). To grant further or other reliefs as the Board might deem fit. 5. 3). To grant such other orders for resolution of the deadlock between the petitioner and the respondent. 4). To grant such rehabilitative, ameliorative, and remedial reliefs. 5). To grant further or other reliefs as the Board might deem fit. 5. Pending disposal of the Company Petition, an interim direction was also sought for directing that the operation of the bank account of the Company with State Bank of India should be carried on in the same manner in which it was being carried on by the Company till the date of filing of the Company Petition in terms of the existing resolution of the Board of Directors of the Company and to permit the Directors (petitioner herein and the respondent herein) to individually give consent on behalf of the Company to the Sanction Advice issued by the Bankers of the Company for renewal of the existing limits and also restraining the petitioner herein from in any manner interfering with the day to day affairs of the management of the Company. In the said Company Petition, the respondent herein filed an application as C.A.No.108 of 2012 praying for grant of an interim order as prayed for in the Company Petition in para VIII (1) of the Company Petition viz., dealing with the prayer of interim relief in the Company Petition. 6. The Company Law Board passed an order on 21.6.2012 disposing of the Company Application without passing any specific order in it holding that the parties to the Company Petition were operating the bank account of the company with the SBI severally from the inception of the Company till prior to the filing of the Company Petition and the same pattern of operation might continue until further orders. Further, a direction regarding the submission of weekly statement of accounts was also incorporated in the order. 7. Aggrieved by and challenging the said order, the petitioner herein preferred the above said Company Appeal viz., C.A.No.11 of 2012 on the file of this court. Further, a direction regarding the submission of weekly statement of accounts was also incorporated in the order. 7. Aggrieved by and challenging the said order, the petitioner herein preferred the above said Company Appeal viz., C.A.No.11 of 2012 on the file of this court. At the time of admission of the appeal, this court passed an interim order on 26.6.2012 in the presence of the respondent who had entered appearance by lodging a caveat prior to the filing of the appeal in M.P.No.1 of 2012 in C.A.No.11 of 2012, to the effect that the bank account of the Company should be jointly operated by the Directors of the Company who are none other than the petitioner herein and the respondent herein until further orders. This court also incorporated a direction that in case of any difficulty, the parties might approach the court for directions as and when necessity would arise. The said interim arrangement was directed to be enforced until further orders. 8. Complaining that the said order was deliberately violated by clandestinely operating the Company's bank account with Bank of India, the petitioner has come forward with the present contempt petition for punishing the respondent for contempt. The unilateral operation of the Company's bank account maintained with Bank of India is not disputed by the respondent herein. On the other hand, the respondent has come forward with the plea that the operation of the said account would not amount to violation of the order of this court referred above as the interim order of this court was intended to cover the bank account maintaind with State Bank of India alone. This court is not in a position to accpet the abovesaid contention of the learned counsel appearing for the respndent herein. 9. Though the prayer made before the Company Law Board might have been specific in respect of a particular bank account, when the appeal was preferred before the High Court, the High Court passed an interim order, which is generic in nature, prohibiting independent operation of bank account of the Company and directing joint operation of the bank account of the Company which would require the signature of both the Directors in the cheques of the Company. Hence, the interpretation sought to be projected by the learned counsel for the respondent/alleged contemnor is bound to be discountenanced as untenable. 10. Hence, the interpretation sought to be projected by the learned counsel for the respondent/alleged contemnor is bound to be discountenanced as untenable. 10. The further attempt made by the learned counsel for the respondent is that the respondent understood the order to be confined to the bank account of the Company maintained with the State Bank of India alone and hence even if the act of the respondent in operating the bank account of the Company maintained with Bank of India might amount to violation of the order of this court, the said violation would not be a wilful violation. This court is not in a position to accept the abovesaid contention of the learned counsel for the respondent. This court did not mention any particular account with regard to which the interim order came to be passed. The Bank account of the Company was directed to be operated jointly by the Directors. The attempt made by the learned counsel for the respondent to show that the use of the definite article 'the' will refer to the particular bank account alone, is bound to fail, because at the time of passing of the order, it was not brought to the notice of this court that accounts were maintained with more than one bank in the name of the Company. When a singular term is used in the order, in the absence of any clear indication that it refers to a particular aspect in singular, it will mean the plural also. Hence, the contention of the learned counsel for the respondent that the respondent has not committed any violation of the order is bound to be discountenanced. The very fact that the respondent suppressed his act of opening and operation of the account of the Company with Bank of India and continued the operation of the same unilaterally without co-opting the other Director viz., the petitioner, will definitely amount to deliberate violation of the order of this court. 11. However, the following facts will lead to the inevitable determination that the respondent in this petition cannot be punished for the abovesaid contempt. After the passing of the order, citing the operation of another account maintained with IDBI, the petitioner filed a previous contempt petition viz., Contempt Petition No.1205 of 2012 and pending disposal of the said petition, a compromise was effected between the parties in the Company Appeal itself. After the passing of the order, citing the operation of another account maintained with IDBI, the petitioner filed a previous contempt petition viz., Contempt Petition No.1205 of 2012 and pending disposal of the said petition, a compromise was effected between the parties in the Company Appeal itself. Accordingly, the Company Appeal was disposed of with a direction to the Company Law Board to expedite the disposal of the Company Petition. In view of the said compromise, the contempt petition was also closed. Thereafter, there cannot be any justification for the petitioner to come forward with a second contempt petition contending that another act of the respondent was not within the knowledge of the petitioner at the time of filing of the earlier contempt petition and that the closure of the earlier contempt petition would not in any way hinder the maintainability of the subsequent contempt petition. Apart from the fact that the petitioner wants to proceed against the respondent for contempt after the appeal itself has been disposed of on the basis of the settlement between the parties, the petitioner has chosen to approach this court with the present contempt petition after a lapse of one year from the date of commission of the alleged contempt. Section 20 of the Contempt of Courts Act provides that no court shall initiate any proceeding for contempt either on its own motion or otherwise after the expiry of a period of one year from the date on which the contempt is alleged to have been committed. The said provision does not say that contempt proceedings can be initiated within one year from the date of commission of contempt or within one year from the date of knowledge of such commission. The omission to refer to the date of knowledge is deliberate and the legislature intended to provide a strict provision as the "Act" is penal in nature. The contention of the learned counsel for the petitioner that since the petitioner got knowledge of the act of contempt only prior to the filing of the petition, the petition could be entertained has got to be discountenanced for the said reason. Though this court is convinced that the act of the respondent will amount to contempt, in view of section 20 of the Contempt of Courts Act, this contempt petiiton is bound to fail. 12. Accordingly, the contempt petition is dismissed. Though this court is convinced that the act of the respondent will amount to contempt, in view of section 20 of the Contempt of Courts Act, this contempt petiiton is bound to fail. 12. Accordingly, the contempt petition is dismissed. The respondent/alleged contemnor is discharged.