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2018 (11) TMI 935 - HC - Companies LawProperty belonging to the Company (In Liquidation) had been demolished and stolen - illegal demolition and theft of the Company has arisen in the course of the winding up of the Company - Held that - As already noticed in the body of this order above, the investigation had been ordered because the Company Court found that not only property belonging to the Company (In Liquidation) had been demolished, it had also been stolen. The demolition has undoubtedly resulted in diminishing the value of the assets of the Company (In Liquidation), which will adversely effect the interest of the secured creditors as also the workmen. It would also be relevant to refer to Section 456(2) of the Companies Act, which provides that all the property and assets of the Company (In Liquidation) shall be deemed in the custody of the Court from the date of the order of its winding up. Section 456(2)(d), of the Companies Act, 1956, provides that the Company Court, notwithstanding anything contained in any other law for the time being in force, has jurisdiction to entertain, or dispose of, any question of priorities or any other question, whatsoever, whether of law or fact, which may relate to or rise in the course of the winding up of the Company. The question of illegal demolition and theft of the Company has arisen in the course of the winding up of the Company. The objections of learned Advocate General are therefore, rejected out right, not only on the ground that they lack merit but also because, prima facie, they appear to have been raised, malafide, and only with a view to protect the perpetrators of the illegal demolition and theft This Court also finds substance in the contention of Shri Gopal Verma that the police has failed to interrogate the persons, whose photographs were provided by the Official Liquidator. Various photographs have been provided by him to the Court also. This Court also considers it necessary to note that the counsel appearing for the State have been consistently praying for further time. Even the Principal Secretary(Home) after being asked by the Court, as to whether, he was aware of the seriousness of the matter stated that he had been apprised of the situation. He thereafter made a prayer for two months further time for carrying out a proper investigation, which prayer for turned down because it was not found to be, bonafide. As on date, more than three months have elapsed since lodging of the F.I.R. and the Court can perceive absolutely no progress in the investigation, as recorded above. There is also force in the submission of Shri Gopal Verma that in view of the allegations made that the rubble was removed in vehicles belonginig to the Nagar Nigam attempts should have been made by the Investigating Agency to obtain the vide footage from the CCTV s installed in the vicinity of the site of the demolition. This was clearly not done till 22.10.2018. The police cannot claim to be unaware that video footage from DVR s is to be procured promptly, failing which, it gets overwritten within a fortnight or at the most, after a month. The failure on the part of the investigating agency to act promptly was therefore only with a view to allow the evidence to be destroyed. This by itself show that complicity of the police in the matter. The SSP, Allahabad, on 22.10.2018, stated precisely this very fact before the Court. Under the circumstances the objections raised by the Advocate General U.P are repelled and this Court is issuing the following directions I. Let notices under section 340 Cr.P.C be issued to Shri Ashwini Singh, Municipal Commissioner, Nagar Nigam Allahabad to show cause why action be not taken against him for having tried to mislead this Court by his letter in writing. II.Notice under section 340 Cr.P.C, be also issued to the erstwhile SHO, Muttiganj, Allahabad, Rishi Kant Rai, for having made a false statement in Court that he had produced the order passed by this Court on 06.09.2018 before the concerned Magistrate when in fact it was not produced by him nor any prayer was made before the Magistrate for obtaining police remand. III.A current and up to date report regarding the current status of the investigation be filed within three days to enable the Court to decide whether there is any progress in the investigation and / or whether, in the facts, and circumstances of this case, the investigation needs to be handed over to an outside agency beyond the control of the local administration or for handing over the inquiry to a retired Judge of the High Court of the accused.
Issues Involved:
1. Unauthorized demolition of the property of M/s Mitra Prakash Ltd. (in liquidation). 2. Political pressure and involvement of the Municipal Commissioner in the demolition. 3. Lack of progress in police investigation and alleged complicity of local administration. 4. Jurisdiction of the Company Court to monitor the investigation. 5. Alleged misleading statements by officials and potential contempt of court. Issue-wise Detailed Analysis: 1. Unauthorized Demolition of the Property: The Court noted that M/s Mitra Prakash Ltd. was under liquidation, and its assets were in the possession of the Court. The Official Liquidator reported that the Municipal Commissioner was pressurizing him to demolish the building housing the company's machinery. Despite assurances from the Municipal Commissioner that demolition orders would be withdrawn, demolition was carried out. The Court directed the police to register a case regarding the illegal demolition and ensure it was stopped immediately. 2. Political Pressure and Municipal Commissioner’s Involvement: The Court found that the Municipal Commissioner was under political pressure to effect the demolition. Letters from the Municipal Commissioner and other officials indicated that the demolition was being pressed by the office of the Chief Minister and the District Magistrate. The Court observed that the entire proceedings were initiated based on a complaint regarding unauthorized occupation and incorrect house tax assessment by the Akhara, which misled the authorities about the status of the property. 3. Lack of Progress in Police Investigation and Alleged Complicity: The Court expressed dissatisfaction with the police investigation, noting that no substantial progress had been made. The police failed to interrogate key individuals and collect crucial evidence, such as CCTV footage. The Court observed that the police’s actions, or lack thereof, suggested an attempt to shield the real culprits. The Court directed the police to file a fresh report and considered the possibility of handing over the investigation to an outside agency. 4. Jurisdiction of the Company Court to Monitor the Investigation: The Advocate General challenged the jurisdiction of the Company Court to monitor the investigation, citing the Supreme Court's decision in D. Venkatasubramaniam & Ors. vs. M.K. Mohan Krishnamachari & Anr. The Court rejected this argument, stating that it had inherent powers under Rule 9 of the Company Court Rules, 1959, to issue directions necessary for justice. The Court emphasized that the demolition and theft of the company's property, which was in the custody of the Court, warranted its intervention. 5. Alleged Misleading Statements by Officials and Potential Contempt of Court: The Court found that the Municipal Commissioner and the SHO Mutthiganj had made false statements and misled the Court. The Municipal Commissioner falsely claimed that the Nagar Nigam was not involved in the demolition, despite evidence to the contrary. The SHO falsely stated that he had produced the Court’s order before the Magistrate. The Court issued notices under Section 340 Cr.P.C. to both officials to show cause why action should not be taken against them for misleading the Court. Conclusion: The Court observed that the illegal demolition and theft of the company's assets were carried out with the tacit support of the local administration and political pressure. The investigation by the police was found to be inadequate and possibly complicit. The Court asserted its jurisdiction to monitor the investigation to protect the interests of the company in liquidation, its creditors, and workmen. Notices were issued to the Municipal Commissioner and the SHO for misleading the Court, and further directions were given to ensure a thorough investigation.
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