(Per : HONOURABLE MR.JUSTICE RAVI R.TRIPATHI) 1. The present appeal is filed by Jubilee Mills Limited Employees' Cooperative Society Limited being aggrieved by judgment and order dated 10.08.2005 passed by the learned Company Judge in Company Application No.219 of 2004.
2. Learned Senior Advocate Mr.B.B.Naik for the appellant-society invited attention of the Court to paras-1 and 2 of the judgment, which are reproduced for ready perusal:-
“1. The applicant, namely, Jubilee Mills Limited Employees Co-operative Society Limited has taken out this Judge's Summons seeking extension of time for the period of one month to lift the material sold to the applicant in response to the order passed by this Court in O.L.R. No. 11/2004 dated 01.04.2004 without charging any rent.
2. An affidavit in support of the Judge's Summons is filed by Shri A.K. Doshi, President of the applicant Society. It is stated in the said affidavit that the employees of the Ahmedabad Jubilee Mills Limited had formed the applicant Credit Society and the shareholders of the applicant Credit society were the actual employees of the Jubilee Mills Limited (In Liquidation). It is further stated that various machineries like G.P.D. Plant and other machineries were auctioned out by the Sale Committee. The applicant Society had given a bid of Rs. 1.75 Lacs and the Official Liquidator has filed his report being O.L.R. No. 11/2004. This Court has accepted the report filed by the Official Liquidator and confirmed the sale in favour of the applicant Society. As per the said order, the applicant Society has paid the full consideration. After payment of full consideration, the applicant Society had started lifting materials. However, due to marriage season and shortage of labour and some disturbance and misunderstanding, the work of lifting the materials could not be completed within the stipulated period and hence, the extension of time for one month was sought for. Since the shareholders of the applicant Society are poor persons and the Society is suffering from shortage of fund, no rent should be charged from the Society for extension of time.”
(emphasis supplied)
2.1 Learned Senior Advocate for the appellant- society submitted that it was in this application that on filing of an affidavit by one Shri Jivanlal F.Parmar, who is impleaded as opponent No.8 in this appeal, the learned Company Judge passed an order, not only rejecting the application but imposing penalty of Rs.2 lacs on the basis of the approximate value and quantum of the alleged excess goods lifted by the appellant-society. Learned Senior Advocate for the appellant-society submitted that in the affidavit filed by said Shri Jivanlal F.Parmar, he has described himself to be the ex-employee of Calico Mill and also stated that he is residing near Calico Mill Compound, whereas the goods which are alleged to have been lifted were lying in the premises of Mill compound situated at Chharanagar. Learned Senior Advocate for the appellant-society submitted that there are reports filed by the Official Liquidator and in one of the reports (dated 19.04.2005), it is specifically stated by the Official Liquidator in para-6 that:-
“6. That however, this Honourable High Court may be pleased to observe that the premises or the portion belonging to Calico Mills was neither opened nor anything was delivered or allowed to remove therefrom. The deliveries were made specifically from the portion and premises of GDP Unit of Jubilee Mills situated at Chharanagar, Ahmedabad.”
(emphasis supplied)
2.2 Learned Senior Advocate for the appellant- society submitted that there is word against word and therefore, the learned Company Judge ought not to have passed an order imposing penalty of Rs.2 lacs in the application of the present appellant praying for extension of time.
2.3 Learned Senior Advocate for the appellant- society also invited attention of the Court to para-3 of the impugned judgment and order, which reads as under:-
“3. The Textile Labour Association which is impleaded as one of the party – respondent has filed the supporting affidavit stating that Textile Labour Association has no objection if the time prayed for is granted by this Court.
2.4 Learned Senior Advocate for the appellant- society submitted that even the Textile Labour Association has not said anything about the so-called excessive lifting of goods by the appellant, as alleged belonging to Calico Mill Company.
2.5 Learned Senior Advocate for the appellant- society invited attention of the Court to the nature of the affidavit filed by said Shri Jivanlal F.Parmar and submitted that there could not be more vague averments than which are made by said Shri Jivanlal F.Parmar. The relevant part of the affidavit reads as under:-
“1. ..... As per the direction contained in para 2 of the said order, I respectfully submit that our dues are still pending with the Calico Mills, Saranagar (sic-Chharanagar), Ahmedabad. ”
As if there is a separate Calico Mill at Chharanagar.
2.6 It is further stated in the affidavit that:-
“1. ..... When I came to know about taking delivery of the goods belonging to Jubilee Mills, which were lying in the compound of Calico Mills, Saranagar, GPD Unit, along with others, I was also regularly visiting the site but from outside the compound.
(emphasis supplied) Whether such person can be believed who files an affidavit on the basis of his so-called 'regular visits' to the place. Until a person is having definite information about the goods sold and the goods taken, how there can be a complaint and that too on affidavit alleging an offence of theft against an entity – a Cooperative Society of the employees.
2.7 It is further stated in the affidavit that:-
“1. ..... It was found that initially three to four trucks goods were taken out daily for about ten to twelve days and thereafter, on 16th and 17th May, 2004, seven to eight trucks loads were taken away daily and on 18th May, 2004 approximately fifteen truck loads were taken out of the compound. All the while the trucks carried various items including cupboards, tables iron angles, copper, pital aluminum, jasat cables and wires, tanks and lot of other materials and according to our knowledge approximately 60 truck loads were taken out of the compound and we suspected that the materials lifted were of Calico Mills under the guise of lifting goods of Jubilee Mills. ”
(emphasis supplied)
3. If this type of affidavit can be made the basis for drawing an inference to the effect that the appellant has lifted goods which were not sold to the appellant, there will not be an end to such type of cases. As against that, there is a report filed by the Official Liquidator dated 19.04.2005, wherein it is specifically stated in para-3 as under:-
“3. That so far as the description of goods delivered as mentioned in Gate passes and the description of goods as mentioned in the inventory cum valuation report of Shri P.Matadar and the description of goods as mentioned on page 56 and 57 of the Statement of affairs are concerned, the Official Liquidator most respectfully submits that in the meeting of sale committee held on 4.7.2003 the offer for purchase of moveable items by the applicant society at a consideration of Rs.1,25,000/- was recommended by the Sale Committee. The Sale Committee recommended that offer with the understanding that the offer is for purchase of moveable items as listed in the inventory cum valuation report prepared by Shri Vinod P.Matadar on 13.12.2001. That later on the applicant society informed the Official Liquidator that its offer is not restricted to the items mentioned in the inventory cum valuation report of Shri Vinod P.Matadar but its offer is in respect for all the moveable items of ownership of Jubilee Mills whatever are lying in GPD unit of Jubilee Mills situated at Chharanagar, Ahmedabad, as there were few more items which were stated in the statement of affairs of Jubilee Mills but did not find a place in the inventory cum valuation report of Shri Vinod P.Matadar. That therefore, a fresh meeting of Sale Committee was called by Official Liquidator whereas it was decided that sale of all the moveable items belonging to Jubilee Mills whatever wee lying at GPD unit of Jubilee Mills situated at Chharanagar, Ahmedabad, may be recommended for sale to the applicant society at a consideration of Rs.1,75,000/-.”
3.1 From the aforesaid report filed by the Official Liquidator (dated 19.04.2005), the affidavit filed by said Shri Jivanlal F.Parmar stands answered.
4. Learned Senior Advocate for the appellant- society invited attention of the Court to a fact that earlier, the appellant-society was to purchase movable items for a consideration of Rs.1,25,000/-. Later on, this consideration was enhanced to Rs.1,75,000/-, as stated in para-3 of the report. He submitted that in that transaction, the learned Company Judge has imposed fine of Rs.2 lacs, which by any standard can be said to be out of proportion, even if the guilt is taken to have been proved. Learned Senior Advocate for the appellant- society submitted that this submission is made without prejudice to his submission that on the basis of affidavit filed by an individual, which stands controverted by the affidavit (Official Liquidator's Report) filed by the office of the Official Liquidator, the application ought to have been allowed and the extension of time which was prayed for ought to have been granted.
5. Learned Advocate Mr.Bhairavia submitted that his client-Shri Jivanlal F.Parmar has done his duty by drawing the attention of the authorities concerned and it was the duty of the authorities to see that proper investigation is made in the matter so as to see that the rights of the persons like the complainant (Shri Jivanlal F.Parmar-ex-employee of Calico Mills) are not prejudiced.
6. One cannot have any dispute with the submission of learned Advocate, but then the question remains whether the course adopted by the learned Company Judge of relying on an affidavit, which is found to be vague, a penalty imposed, stands test of legality. The matter which requires to be investigated must be investigated by the concerned authority and after the investigation, the matter must be taken to its logical end, but in this appeal, the Court is required to consider a limited question whether the order by which the learned Company Judge is pleased to impose penalty of Rs.2 lacs can be allowed to stand or is required to be quashed and set aside.
6.1 On careful consideration, the Court finds that merely on the basis of an affidavit filed by one person (Shri Jivanlal F.Parmar) and in absence of any other convincing material coming on record to establish that the appellant-society has lifted the goods more than the appellant was allowed to lift, such penalty count not have been imposed.
6.2 This Court finds substance in the submission of learned Senior Advocate for the appellant-society that the goods were lifted by following procedure of issuance of 'gate passes'. Learned Company Judge could have directed the Official Liquidator to undertake a detailed investigation of the said gate passes, wherein the goods taken out from the premises were enlisted. It is only on the basis of such inquiry that the veracity of the affidavit filed by Shri Jivanlal F.Parmar could have been verified. He submitted that, that exercise was necessary before passing an order of imposing penalty of Rs.2 lacs on the appellant-society.
7. Learned Senior Advocate for the appellant- society also invited attention of the Court to the fact that the very same person-Shri Jivanlal F.Parmar had filed police complaint, but it is not pursued by him and ultimate result of that complaint is not placed on record. Learned Senior Advocate for the appellant- society submitted that the matter is required to be considered in light of the averments made in para-2 of the judgment and order, wherein it is mentioned that, “shareholders of the applicant Society are poor persons and
the Society is suffering from shortage of fund”. It was therefore prayed that for extended period, rent may not be charged. Learned Senior Advocate for the appellant- society submitted that for a transaction, which was for Rs.1,25,000/-, later on increased to Rs1,75,000/-, penalty of Rs.2 lacs ought not to have been imposed. He submitted that the order is in the nature of a 'death- stroke' to the appellant-society. At this stage, learned Senior Advocate for the appellant-society submitted that the appellant-society has gone in liquidation and an Administrator is appointed. Learned Senior Advocate for the appellant-society submitted that if this stands, out of the assets of the society in liquidation, an amount of Rs.2 lacs will be paid to the Official Liquidator, which
will result into depriving the shareholders of the society from the amount which they may otherwise be getting.
8. Taking into consideration the totallity of the case, the Court finds that judgment and order dated 10.08.2005 deserves to be set aside, to the extent it imposed penalty /fine on the appellant-society of Rs.2 lacs. It goes without saying that the other direction/s with regard to investigation in the matter stands.
At the request of the learned Senior Advocate for the appellant-society, it is clarified that it will be open for the appellant-society to renew its request of extension of time before the learned Company Judge.
9. The appeal is accordingly allowed to the aforesaid extent.
(Ravi R.Tripathi, J.) *Shitole (N.V.Anjaria, J.)