2011 (2) TMI 1260 - HC - Companies Law

Winding up - company-in-liquidation - The Official Liquidator is directed to prepare a sale proclamation in consultation with the officials of Punjab and Sind Bank. The said sales proclamation would also be displayed on the official website of the Official Liquidator. The sale proclamation is directed to be issued for 28-4-2011. The sale proclamation shall be published 30 days before the said date. Contempt proceedings against Mr. Vinod Kumar Jain, ex-director of company in liquidation.

Issues Involved:
1. Recall of the order dated 27-5-2008 and restoration of the order dated 13-3-2008.
2. Initiation of contempt proceedings against Mr. Vinod Kumar Jain.
3. Relief from deposit of money and refund of the amount deposited by Mr. Vinod Kumar Jain.

Detailed Analysis:

Issue 1: Recall of the Order Dated 27-5-2008 and Restoration of the Order Dated 13-3-2008

The application was filed by Punjab and Sind Bank, a secured creditor, seeking recall of the order dated 27-5-2008 and restoration of the order dated 13-3-2008. The order dated 13-3-2008 had issued a sale proclamation for the Ghaziabad property and plant and machinery of the company-in-liquidation, scheduled for 29-5-2008. However, the sale was recalled based on the applications filed by Mr. Vinod Kumar Jain, ex-director of the company, who claimed that there was no ascertained debt of the Punjab and Sind Bank and that a settlement had been reached with the workmen. Based on these submissions, the court recalled the sale proclamation subject to Mr. Jain depositing Rs. 2 lakhs for publication expenses and Rs. 1.5 crores within two months. Mr. Jain failed to deposit the full amount, leading the court to recall the order dated 27-5-2008. The court appointed M/s. ITCOT Consultancy and Services Ltd. as the valuer for the properties and directed the Official Liquidator to prepare a new sale proclamation in consultation with Punjab and Sind Bank, to be issued for 28-4-2011.

Issue 2: Initiation of Contempt Proceedings Against Mr. Vinod Kumar Jain

Punjab and Sind Bank sought suo moto initiation of contempt proceedings against Mr. Vinod Kumar Jain for making false and misleading statements in his application, which led to the recall of the sale proclamation. Mr. Jain had averred that no ascertained amount was due to the bank, despite admitting in various documents and proceedings that a significant debt was owed. The court found that Mr. Jain's statements were false and misleading, constituting an interference with the administration of justice. Citing precedents, the court emphasized the importance of maintaining the purity of judicial proceedings and issued a criminal contempt notice to Mr. Jain, granting him eight weeks to file a reply affidavit. The court directed the registry to open a separate file for the contempt proceedings and listed the matter for hearing on 23-8-2011.

Issue 3: Relief from Deposit of Money and Refund of the Amount Deposited by Mr. Vinod Kumar Jain

Mr. Vinod Kumar Jain filed an application seeking relief from depositing the money as per the initial order dated 27-5-2008 and requested a refund of Rs. 25 lakhs deposited. The court noted that since the sale proclamation was recalled at Mr. Jain's instance and he failed to deposit the required Rs. 1.5 crores, he must bear the costs incurred for the initial and subsequent sale proclamations, security charges, and other expenses. The Official Liquidator was directed to certify the expenses incurred by Punjab and Sind Bank and the Official Liquidator. The court dismissed Mr. Jain's application with liberty to file a fresh application for a refund after the expenses were verified and certified.

Other Applications:

- CO. APPL. 1175/2008: The application was dismissed as infructuous.
- CO. PET. 115/1991: The court directed the Official Liquidator to file a fresh status report before the next hearing date.

The judgment comprehensively addressed the issues related to the recall of the sale proclamation, the initiation of contempt proceedings, and the financial liabilities of Mr. Vinod Kumar Jain, ensuring adherence to legal procedures and the integrity of judicial processes.

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