1992 (11) TMI 245 - HC - Companies Law

Issues Involved:
1. Execution of decree and attachment of property.
2. Contempt proceedings against individuals.
3. Application for arrest and detention under Order 21, Rule 11A, and Section 51 of the Civil Procedure Code.
4. Compliance with procedural requirements for arrest and detention.
5. Determination of ownership and concealment of property.
6. Personal liability of the managing director.

Detailed Analysis:

1. Execution of Decree and Attachment of Property:
On March 2, 1984, a decree for recovery of Rs. 1,29,562.40 with interest and costs was passed in favor of the decree-holders against the judgment-debtor. Execution was sought through attachment and sale of movable property. However, the attachment could not be effected as per the report dated May 7, 1985.

2. Contempt Proceedings Against Individuals:
Contempt proceedings were initiated against Rabindra S. Grewal and Dhan Raj due to hindrance in the execution of the warrant of attachment. Both individuals submitted affidavits tendering unqualified apologies, and no further action was taken against them.

3. Application for Arrest and Detention Under Order 21, Rule 11A, and Section 51 of the Civil Procedure Code:
The decree-holders filed an application for arrest and detention of the managing director of Pan India Plastic Pvt. Ltd. The application claimed that the judgment-debtor did not permit the execution of the warrant of attachment and resisted the process server and the nominee of the decree-holder.

4. Compliance with Procedural Requirements for Arrest and Detention:
Order 21, Rule 11A, and Section 51 of the Civil Procedure Code require that an application for arrest must state the grounds and be accompanied by an affidavit. The court must provide the judgment-debtor an opportunity to show cause and record reasons in writing before ordering detention. The court referenced several judicial precedents emphasizing the need for strict compliance with these procedural requirements.

5. Determination of Ownership and Concealment of Property:
The court examined whether the judgment-debtor concealed property to obstruct or delay the execution of the decree. The affidavits and the bailiff's report did not prove that Rabindra Grewal locked the outer gate or caused hindrance in the attachment. The court found that the decree-holder failed to prove concealment of property by Rabindra Grewal.

6. Personal Liability of the Managing Director:
The decree was against the company through its managing director, not in his individual capacity. The court cited precedents establishing that the managing director is not personally liable for the company's dues unless explicitly stated. The court concluded that Rabindra Grewal, as managing director, could not be detained personally, and no evidence was provided that he had means to pay the decretal amount.

Conclusion:
The application for arrest and detention of Rabindra Grewal was dismissed due to the failure to prove the grounds required under Section 51 of the Civil Procedure Code. The court emphasized the need for strict compliance with procedural requirements and found no evidence of concealment or personal liability of the managing director. There was no order as to costs.

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