9911796707
TMI Blog2004 (2) TMI 390X X X X Extracts X X X X X X X X Extracts X X X X ..... a lease of land bearing Plot No. 101, C D admeasuring about 923 sq. metres in area in favour of one Acme Rayon Doubling Mills Pvt. Ltd. The constitution and the name of Acme Rayon Doubling Mills Pvt. Ltd. were change to Lana Printer Pvt. Ltd. on 19th November, 1982, and since the change of name and structure of the Acme Rayon Doubling Mills Pvt. Ltd. was an voluntary act on the part of the company, M/s. Lana Printer Pvt. Ltd. had to pay 75% of the unearned profit to the Collector on 10th September, 1987. On 12th April, 1994, M/s. Lana Printers Pvt. Ltd. changed its name to Magna Graphics Pvt. Ltd. and accordingly intimated the same to the Collector for the purpose of carrying out required changes in their records in relation to the said company. By letter dated 25th May, 1995, while consenting for the change and without making any demand for 75% for the unearned profit subjected to the company to the certain terms and conditions to be followed by Magna Graphics (India) Pvt. Ltd. By letter dated 14th November, 1998, since the average annual turnover of the petitioner company during the financial years 1995-96, 1996-97 and 1997-98 had exceeded a sum of Rs. 10 crores, bearing in mi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... my considered view, the change in name of the petitioner was not by any voluntary act on behalf of the petitioner but was purely by virtue of operation of law under the provisions of section 43A(1A) of Companies Act. It is also not in dispute that the petitioner has not committed any breach of conditions or ground because change of name was not at his instance but merely due to operation of law." Thereafter, the appeal before the respondent No. 1 came up for final disposal and the copy of the order in the said writ petition passed on 1st November, 2001 was placed before the respondent No. 1 in the course of hearing on 8th January, 2002. By the order dated 25th February, 2002 respondent No. 1 rejected the appeal on the ground that the petitioner did not take prior permission from the Collector before the change in its name as per the conditions mentioned in the original lease which was still binding upon the petitioner company, and therefore, held that the demand of unearned profit by the Collector was perfectly justified. While challenging the said decision of the respondent No. 1, in the said appeal, the petitioner has filed the present contempt petition. 4. Being prima fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... marily necessary to ascertain what was the order of this Court which is said to be violated by the respondent No. 1. As already observed above, the order spoken of is dated 1st November, 2001 in Writ Petition No. 2592 of 2001. Undoubtedly, the matter has come before this Court on the basis of the claim put forth by the petitioner for the change in name from Magna Graphics (India) Pvt. Ltd. to Magna Graphic (India) Ltd. was on account of operation of law in terms of section 43A(1A) of the Companies Act, 1956, and that therefore, the petitioner was not liable to pay any percentage out of the unearned profit to the respondents. In fact, the grievance of the petitioner in the said petition as transcribed in the order dated 1st November, 2001 reads thus :- "The petitioner informed the respondent No. 1 about their becoming deemed public limited company as per section 43A(1A) of the Companies Act and requested the respondent No. 1 to change the name of the petitioner in the records of the respondent No. 1. Thereupon the respondent No. 1 called upon the petitioners to furnish a copy of the Memorandum of Articles of Association which was furnished to the respondent No. 1. Thereupon the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... op India Ltd. 1985(19) ELT 22 (SC), it was held thus: "However, in the present case, this principle clearly is not applicable. Here is the case wherein the petitioner has not committed any default but the change has occurred only due to operation of law and, therefore, respondent No. 2 - The Divisional Commissioner should have stayed the recovery and expedited the hearing of the appeal under the circumstances involved in this case." With the above ruling, the petition was disposed of in terms of prayer Clause ( a ) in the petition, which reads thus:- "( a )that this Hon ble Court be pleased to issue a writ of certiorari or any other appropriate writ, order or direction in the nature of writ of certiorari calling for the records relating to the present case and after examining the legality, validity and propriety thereof, this Hon ble Court be pleased to quash and set aside the impugned order dated 9th October, 2001 being Exhibit "A" hereto, passed by 2nd respondent herein and grant stay application till the hearing and final disposal of the appeal in terms of prayer Clause ( d )." 6. Plain reading of the order dated 1st November, 2001 in the said writ petition, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of voluntary acts on the part of the company. 7. No doubt that the rule was made absolute under the said order, however, the said order nowhere comments or requires the respondent No. 1 to do any particular act as such or to refrain him from doing any act as such, as sought to be submitted on behalf of the said respondent. Nevertheless, the order in clear terms declares the change in the name from Magna Graphic (India) Pvt. Ltd. to Magna Graphic (India) Ltd. and that the same had not been on account of any voluntary act on behalf of the petitioner company but was purely by virtue of operation of law in terms of the provisions contained in section 43A(1A) of the Companies Act, 1956. Undoubtedly, it is a declaratory order in that regard. It is undisputed fact that such declaration was never challenged by the respondents, and it had attained finality for all purposes. In other words, even though there was no specific direction either to the respondent No. 1 or for that matter to any other officer dealing with any judicial or quasi- judicial matters on behalf of the respondent No. 1 to do a specific act or to refrain from doing any specific act, there was clear declaration by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s fulfilling one of the criteria, the said company automatically become a public limited company. From Ex. F, it is clear that company applied to Registrar of Companies on 14th Nov. 1998 to delete the word "Private" but company did not take any care to get it first changed from Collector, MSD as it done in earlier occasion, and after deleting the word "Private" informs the Collector, MSD that the word "Private" is deleted. The appellant company should have taken previous permission from Collector, MSD first before any change as per the conditions mentioned in original lease, which are still binding on the appellant company. Appellant Company has changed from Private Limited Company to Public Limited Company and Constitution of a Public Limited company and private limited company cannot remain same, hence Collector, MSD has rightly asked appellant company to pay unearned income." 10. Though there is no specific reference to any clause from the lease deed, which is said to be binding upon the parties, the same is sought to be referred to in the affidavit in reply filed by the respondent No. 1 and the Clause X of the said Lease Deed dated 7th June, 1972 between the Collector and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 25th February, 2002 by the respondent No. 1 is in relation to the deletion of the word Private and that, therefore, it has been concluded that there has been change in the constitution of the company, and hence, the Collector, MSD was justified in asking the petitioner to pay percentage of the unearned profit. In other words, on one hand, the respondent No. 1 clearly took note of the order of this Court holding that the deletion of the word Private from the name of the petitioner was on account of operation of law, and on the other hand, instead of the said order of this Court, the respondent No. 1 held that the petitioner was required to take consent of the Collector prior to such change. Whether on merits, the said finding is sound one or not, it is for the appellate authorities to deal with the same in the appeal filed by the petitioner against the said order. However, the fact remains that in spite of the order of this Court, the deletion of the word Private was on account of operation of law, the respondent No. 1 proceeded to hold that the petitioner ought to have taken permission of the Collector prior to the change in the name. The ruling in that regard has been giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of this Court. No judicial or quasi judicial authority can be heard to contend that it lacked mala fide while not complying with the order of this Court or that there was no deliberate attempt on the part of such authority in not complying with the order of this Court. When an act of non-compliance of the order of the this Court by any judicial or quasi judicial authority is brought to the notice of such authority and explanation in that regard is sought for, it is primarily for such lower authority to justify and explain as to how and in what basis, it could be said to have acted bona fide in not complying with the order of the this Court, and in the absence thereof, for all purposes, such non-compliance will have to be treated as wilful disobedience of the order of this Court. 14. As already observed above, the explanation given by the respondent No. 1 on the point of service of the show-cause notice is that ( i ) there was no specific direction to do any particular act or to refrain from doing any particular act or not to act under the order dated 1st November, 2001; and ( ii ) the Clause X of the Lease Deed dated 7th June, 1972 empowered the Collector to demand the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 25th February, 2002 is, therefore, as rightly submitted by the learned Advocate for the petitioner company, in contravention of the order dated 1st November, 2001 passed by this Court in Writ Petition No. 2592 of 2001, and it apparently discloses a wilful disobedience of the order of this Court by the respondent No. 1. 16. The respondent No. 1, therefore, is guilty of Contempt of Court in relation to the said order dated 1st November, 2001. 17. After pronouncement of the above order, the respondent No. 1 was personally heard on the point of punishment in the matter, and was asked him whether he wanted to submit his say on the point of punishment as he was found guilty of contempt of Court for the reasons stated above. He submitted that he may be pardoned in the matter. He has further stated that he is M.Sc. LL.B and his family consists of his wife, two daughters and son and he has completed 50 years of age. He had been the Additional Commissioner for 2 and years and now posted as Collector since 11th June, 2003 at Jalgaon. The respondent No. 1 also craved leave to place on record unconditional written apology. For that purpose, the matter is kept in the 2nd session. 18 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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