2010 (10) TMI 920 - HC - Companies Law

Present application under section 151 CPC read with Order 39 Rule 2 and 2A CPC made by the applicant/petitioner in a contempt petition seeking directions against the respondents from continuing the contempt on a repetitive basis Held that - There was no direction issue by CLB against the parties from corresponding with the Government authorities seeking permission /licenses/sanctions in respect of the said land. The directions given by CLB were to maintain status quo and as already observed by this Court this implied that no construction activities and no parting with the possession of said land and no transfer of title should be there. There is no bar on parties in corresponding with authorities and seeking licenses /permissions /approvals of projects from Government in anticipation of succeeding in the litigation. However, it is directed that respondents during pendency of this petition shall not undertake any development activities over the land and shall not part with possession of the land to any third party and shall not transfer title of the land in question to any third party. Obtaining permission by respondents is at their own risk and costs as for that, there was no injunction granted by CLB. However it is made clear that if construction activities are done and status quo is altered, the respondents shall be liable to restore the status of the land as it existed on the date of grant of injunction, at their costs and if it is not done by the respondents and a violation is undertaken by the respondents, the court shall be constrained to restore the position of the land in question as it existed on the date of status quo through Court Commissioner. Thus the present application stands disposed of

Summary

Issues:
Contempt petition seeking directions against respondents for violating an order of the Company Law Board regarding maintaining status quo on specific land.

Analysis:
The judgment addresses a contempt petition filed by the petitioner alleging a violation of an order passed by the Company Law Board (CLB) directing the parties to maintain status quo on a piece of land. The order specified that no development, construction, or other activities should be carried out on the land in question. The petitioner contended that the respondents had sought permission from the State Government for development activities on the land, which would violate the CLB order. However, the CLB order only mandated maintaining status quo and did not prohibit corresponding with government authorities for permissions or approvals. The court clarified that seeking permissions was allowed, but any violation of the status quo order would require the respondents to restore the land to its original state at their own costs.

The court considered precedents such as the Delhi Development Authority case and the All Bengal Excise Licensees Association case, emphasizing the duty of the court to prevent the perpetuation of wrongdoings in disobedience of a restrain order. It was highlighted that the court has the power under section 151 CPC to intervene and ensure compliance with interim injunctions. The petitioner presented evidence obtained through an RTI query indicating the respondents' intentions to develop the land beyond the agreed terms, which further supported the need for maintaining status quo.

In conclusion, the court directed the respondents not to undertake any development activities on the land, part with its possession, or transfer its title during the pendency of the petition. Any violation would require the respondents to restore the land to its original state at their own costs. The judgment underscores the importance of upholding court orders and ensuring that parties comply with directives to maintain the status quo on disputed lands.