ORDER S.P. Mehrotra, J.
1. The aforesaid application has been filed by the Official Liquidator under Sections 82 and 83 of the Code of Criminal Procedure, 1973 read with Section 454(5A) of the Companies Act, 1956, interalia, praying for taking cognizance of the offence committed by Vinay Bagla (opposite party) under Section 454(5) and (5A) of the Companies Act, 1956, and for attachment of property of Vinay Bagla (opposite party), and for issuance of proclamation regarding attachment and sale of the property "C-775, New Friends Colony, P.S. New Friends Colony, New Delhi".
2. An Affidavit, sworn by Shri S.K. Saxena, Official Liquidator on 5-11-2003, has been filed in support of the aforesaid application.
3. It is, interalia, stated in the said affidavit that the company, namely, M/s. Viniyoga Clothex Limited (in liquidation) was ordered to be wound up by the order dated 24-4-1998 on the recommendation of the Board for Industrial and Financial Reconstruction (BIFR); and that complaint was filed by the Official Liquidator for non-filing of the Statement of Affairs by the opposite party as provided under Section 454 of the Companies Act, 1956; and that upon the said complaint, this Court took cognizance of the offence and issued summons to the opposite party for compliance and filing of the Statement of Affairs of the company; and that the said summons were returned as unserved; and that thereafter, this Court issued bailable warrant compelling appearance of the opposite party; and that as the opposite party did not turn up, non-bailable warrant was issued by this Court which was later returned as unserved with an endorsement "absconding" by the Chief Metropolitan Magistrate, New Delhi; and that in the circumstances, the aforesaid application has been filed seeking the directions mentioned above.
4. I have heard Shri Arnab Banerji, learned counsel for the Official Liquidator in support of the aforesaid application.
5. It is submitted by Shri Banerji that in view of the provisions of Section 454(5A) read with Section 446(2) of the Companies Act, 1956, the proceedings under Sections 82 and 83 of the Code of Criminal Procedure, 1973 may be taken by this Court. Reliance in this regard has been placed on the following decisions :
1. In re Khosla Fans (India) P. Ltd., (in liquidation), (1983) 53 Comp Cas 858 : (1981 Tax LR 244) (Punj and Har).
2. B.L. Sharma v. Om Prakash Malhotra, (1979) 49 Comp Cas 402 : (1979 Tax LR (NOC) 8) (Delhi).
6. It is further submitted by Shri Banerjee that in view of the facts and circumstances as stated in the affidavit accompanying the aforesaid application, it is in the interest of justice that the prayers made in the aforesaid application be granted.
7. I have considered the submissions made by Shri Banerji, learned counsel for the Official Liquidator, and perused the record.
8. The first question which arises is as to whether this Court can take proceedings under Sections 82 and 83 of the Code of Criminal Procedure, 1973 in order to compel the appearance of Vinay Bagla (opposite party).
9. In this connection, it is pertinent to refer to the relevant provisions of the Companies Act, 1956 and the Code of Criminal Procedure, 1973.
10. Section 446 of the Companies Act, 1956 provides as follows :
"446. (1) When a winding up order has been made or the Official Liquidator has been appointed as provisional liquidator, no suit: or other legal proceeding shall be commenced, or if pending at the date of the winding up order, shall be proceeded with, against the company, except by leave of the Court and subject to such terms as the Court may impose.
[(2) The Court which is winding up the company shall, notwithstanding anything contained in any other law for the time being in force, have jurisdiction to entertain, or dispose of--
(a) any suit or proceeding by or against the company;
(b) any claim made by or against the company (including claims by or against any of its branches in India);
(c) any application made under Section 391 by or in respect of the company;
(d) any question of priorities or any other question whatsoever, whether of law or fact, which may relate to or arise in course of the winding up of the company;
whether such suit or proceeding has been instituted, or is instituted, or such claim or question has arisen or arises or such application has been made or is made before or after the order for the winding up of the company, or before or after the commencement of the Companies (Amendment) Act, 1960.] (3) Any suit or proceeding by or against the company which is pending in any Court other than that in which the winding up of the company is proceeding may, notwithstanding anything contained in any other law for the time being in force, be transferred to and disposed of by that Court.
[(4) Nothing in Sub-section (1) or Sub-section (3) shall apply to any proceeding pending in appeal before the Supreme Court or a High Court.]"
11. Section 454 of the Companies Act, 1956 lays down as under :
"454. (1) Where the Court has made a winding up order or appointed the Official Liquidator as provisional liquidator, unless the Court in its discretion otherwise orders, there shall be made out and submitted to the Official Liquidator a statement as to the affairs of the company in the prescribed form, verified by an affidavit, and containing the following particulars, namely :
(a) the assets of the company, stating separately the cash balance in hand and at the bank, if any, and the negotiable securities, if any, held by the company;
(b) its debts and liabilities;
(c) the names, residences and occupations of its creditors, stating separately the amount of secured and unsecured debts; and in the case of secured debts, particulars of the securities given, whether by the company or an officer thereof, their value and the dates on which they were given;
(d) the debts due to the company and the names, residences and occupations of the persons from whom they are due and the amount likely to be realized on account thereof;
(e) such further or other information as may be prescribed, or as the Official Liquidator may require.
(2) The statement shall be submitted and verified by one or more of the persons who are at the relevant date the directors and by the person who is at that date the manager, secretary or other chief officer of the company, or by such of the persons hereinafter in this sub-section mentioned, as the Official Liquidator, subject to the direction of the Court, may require to submit and verify the statement, that, is to say, persons-
(a) who are or have been officers of the company;
(b) who have taken pan in the formation of the company at any time within one year before the relevant date;
(c) who are in the employment of the company, or have been in the employment of the company within the said year, and are, in the opinion of the Official Liquidator, capable of giving the information required;
(d) who are or have been within the said year officers of, or in the employment of, a company which is, or within the said year was, an officer of the company to which the statement relates.
(3) The statement shall be submitted within twenty-one days from the relevant date, or within such extended time not exceeding three months from that date as the Official Liquidator or the Court may, for special reasons, appoint.
(4) Any person making, or concurring in making the statement and affidavit required by this section shall be allowed, and shall be paid by the Official Liquidator or provisional liquidator, as the case may be, out of the assets of the company, such costs and expenses incurred in and about the preparation and making of the statement and affidavit, as the Official Liquidator may consider reasonable, subject to an appeal to the Court.
(5) If any person, without reasonable excuse, makes default in complying with any of the requirements of this section, he shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend to [one thousand] rupees for every day during which the default continues, or with both.
(5A) The Court by which the winding up order is made or the provisional liquidator is appointed, may take cognizance of an offence under Sub-section (5) upon receiving a complaint of facts constituting such an offence and trying the offence itself in accordance with the procedure: laid down in the Code of Criminal Procedure, 1898 (5 of 1898), for the trial of summons cases by magistrates.] (6) Any person stating himself in writing to be a creditor or contributory of the company shall be entitled, by himself or by his agent, at all reasonable times, on payment of the prescribed fee, to inspect the statement submitted in pursuance of this section, and to a copy thereof or extract therefrom.
(7) Any person untruthfully so stating himself to be creditor or contributory shall be guilty of an offence under Section 182 of the Indian Penal Code (45 of 1860); and shall, on the application of the Official Liquidator, be punishable accordingly.
(8) In this section, the expression "the relevant date" means, in a case where a provisional liquidator is appointed, the date of his appointment, and in a case where no such appointment is made, the date of the winding up order."
12. In view of the provisions of Section 446(2) of the Companies Act, 1956, the Court, which is winding up the company, shall have jurisdiction to entertain or dispose of, inter alia, any "proceeding" by or against the company. Section 454(5A) of the Companies Act, 1956 lays down that the Court by which the winding up order is made, may take cognizance of an offence under Sub-section (5) of Section 454 of the Companies Act, 1956 upon receiving a complaint of facts constituting such an offence, and try the offence itself in accordance with the procedure laid down in the Code of Criminal: Procedure, 1898 for the trial of summons cases by Magistrates.
13. Reading the provisions of Section 446(2), Section 454(5) and Section 454(5A) of the Companies Act, 1956 together, it is evident that the Court by which the winding up order is made, has jurisdiction to take cognizance of and try the offence under Section 454(5) of the Companies Act, 1956. Such trial will be held in accordance with the procedure laid down in the Code of Criminal Procedure, 1898 (now, Code of Criminal Procedure, 1973) for the trial of summons cases by Magistrates.
14. In view of the above position, the inevitable conclusion is that this Court while taking, cognizance of and trying the offence under Section 454(5) of the Companies Act, 1956 in accordance with the procedure laid down in the Code of Criminal Procedure, 1898 (now, Code of Criminal Procedure, 1973), will have all the relevant powers provided under the Code of Criminal Procedure, 1898 (now, Code of Criminal Procedure, 1973) including those in regard to processes to compel appearance of a person before the Court.
15. Chapter VI of the Code of Criminal Procedure, 1973, consisting of Sections 61 to 90, deals with the processes to compel appearance.
16. Section 90 of the Code of Criminal Procedure, 1973 lays down as follows :
"90. Provisions of this Chapter generally applicable to summonses and warrants of arrest. The provisions contained in this Chapter relating to a summons and warrant, and their issue, service and execution, shall, so far as may be, apply to every summons and every warrant of arrest issued under this Code."
17. Hence, the provisions contained in Chapter VI of the Code of Criminal Procedure, 1973 relating to summons and warrants, and their issue, service and execution, shall, so far as may be, apply to every summons and every warrant of arrest issued under the Code of Criminal Procedure, 1973.
18. Part A of Chapter VI of the Code of Criminal Procedure, 1973, consisting of Sections 61 to 69, deals with the summons, while Part B of Chapter VI of the Code of Criminal Procedure, 1973, consisting of Sections 70 to 81, deals with warrant of arrest.
19. Section 76 of the Code of Criminal Procedure, 1973, inter alia, provides that the Police Officer or other person executing a warrant of arrest shall without unnecessary delay bring the person arrested before the Court before which he is required by law to produce such person. Proviso to Section 76 of the Code of Criminal Procedure, 1973 provides that the delay in producing the person arrested before the Court shall not, in any case, exceed 24 hours exclusive of the time necessary for the journey from the place of arrest to the Court.
20. Section 76 of the Code of Criminal Procedure, 1973 is, however, subject to the provisions of Section 71 of the Code of Criminal Procedure, 1973 as to security. Section 71(1) of the Code of Criminal Procedure, 1973, inter alia, provides that any Court issuing a warrant for the arrest of any person may in its discretion direct by endorsement on the warrant that, if such person executes a bond with sufficient sureties for his attendance before the Court at a specified time and thereafter until otherwise directed by the Court, the officer to whom the warrant is directed shall take such security and shall release such person from custody.
21. Sub-section (2) of Section 71 of the Code of Criminal Procedure, 1973 provides for the details which shall be stated in the endorsement mentioned in Sub-section (1) of Section 71 of the said Code.
22. Part C of Chapter VI of the Code of Criminal Procedure, 1973 consisting of Sections 82 to 86 deals with proclamation and attachment in case warrant cannot be executed against a person. Sections 82 and 83 of the Code of Criminal Procedure, 1973, which are relevant in the present context, are reproduced below:
"82. Proclamation for person absconding.-- (1) If any Court has reason to believe (whether after taking evidence or not) that any person against whom a warrant has been, issued by it has absconded or is concealing himself so that such warrant cannot be executed, such Court may publish a written proclamation requiring him to appear at a specified place and at a specified time not less than thirty days from the date of publishing such proclamation.
(2) The proclamation shall be published as follows:
(i) (a) it shall be publicly read in some conspicuous place of the town or village in which such person ordinarily resides;
(b) it shall be affixed to some conspicuous part of the house or homestead in which such person ordinarily resides or to some conspicuous place of such town or village;
(c) a copy thereof shall be affixed to some conspicuous part of the Court house:
(ii) the Court may also, if it thinks fit, direct a copy of the proclamation to be published in a daily newspaper circulating in the place in which such person ordinarily resides.
(3) A statement in writing by the Court issuing the proclamation to the effect that the proclamation was duly published on a specified day, in the manner specified in Clause (i) of Sub-section (2), shall be conclusive evidence that the requirements of this section have been complied With, and that the proclamation was published on such day."
"83. Attachment of property of person absconding.-- (1) The Court issuing a proclamation under Section 82 may, for reasons to be recorded in writing, at any time after the issue of the proclamation, order the attachment of any property, movable or immovable or both, belonging to the proclaimed person:
Provided that where at the time of the issue of the proclamation the Court is satisfied, by affidavit or otherwise, that the person in relation to whom the proclamation is to be issued,--
(a) is about to dispose of the whole or any part of his property, or
(b) is about to remove the whole or any part of his property from the local jurisdiction of the Court, it may order the attachment simultaneously with the issue of the proclamation.
(2) Such order shall authorize the attachment of any property belonging to such person within the district in which it is made; and it shall authorize the attachment of any property belonging to such person without such district when endorsed by the District Magistrate within whose district such property is situate.
(3) If the property ordered to be attached is a debt or other movable property, the attachment under this section shall be made--
(a) by seizure; or
(b) by the appointment of a receiver; or
(c) by an order in writing prohibiting the delivery of such property to the proclaimed person or to any one on his behalf; or
(d) by all or any two of such methods, as the Court thinks fit.
(4) If the property ordered to be attached is immovable, the attachment under this section shall, in the case of land paying revenue to the State Government, be made through the Collector of the district in which the land is situate, and in all other cases--
(a) by taking possession; or
(b) by the appointment of a receiver; or
(c) by an order in writing prohibiting the payment of rent, or delivery of property to the proclaimed person or to any one on his behalf; or
(d) by all or any, two of such methods as the Court thinks fit.
(5) If the property ordered to be attached consists of live-stock or is of a perishable nature, the Court may, if it thinks it expedient, order immediate sale thereof; and in such case the proceeds of the sale shall abide the order of the Court.
(6) The powers, duties and liabilities of a receiver appointed under this section shall be the same as those of a receiver appointed under the Code of Civil Procedure, 1908 (5 of 1908).
23. Part D of Chapter VI of the Code of Criminal Procedure, 1973, consisting of Sections 87 to 90, deals with "other rules regarding processes."
24. Chapter XX of the Code of Criminal Procedure, 1973, consisting of Sections 251 to 259, deals with the trial of summons cases by Magistrates.
25. Thus, it is evident that the Court, by which the winding up order is made, has jurisdiction to take cognizance of, and, try the offence under Section 454(53) of the Companies Act, 1956. Such trial will be held by such Court in accordance with the procedure laid down in Chapter XX of the Code of Criminal Procedure, 1973, consisting of Sections 251 to 259, for the trial of summons cases by Magistrates. Further, such Court while taking cognizance of and trying the offence under Section 454(5) of the Companies Act, 1956, will have all the relevant powers provided under the Code of Criminal Procedure, 1973 including the powers given in Chapter VI of the Code of Criminal Procedure, 1973, consisting of Sections 61 to 90, regarding processes to compel appearance of a person before the Court.
26. Hence, the Court by which the winding-up order is made, has jurisdiction to exercise powers given under Sections 82 and 83 of the Code of Criminal Procedure, 1973 in case the circumstances of the case so require.
27. This view gets support from the decisions in In re: Khosla Fans (India) P. Ltd. (in liquidation), (1983) 53 Comp Cas 858 : (1981 Tax LR 244) (Punj and Har) (supra) and B.L. Sharma v. Om Prakash Malhotra, (1979) 49 Comp Cas 402 : (1979 Tax LR (NOC) 8) (Delhi) (supra) relied upon by the learned counsel for the Official Liquidator.
28. In re: Khosla Fans (India) P. Ltd. (in liquidation), (1983) 53 Comp Cas 858 : (1981 Tax LR 2447, Para 5) (supra), it was laid down by the Punjab and Haryana High Court as follows (at pages 863 and 864 of the said Company Cases) (at Page 2450 of Tax LR):
".........The scheme of the Act would suggest that the provisions of Sub-section (2) of Section 446 of the Act have been enacted to clothe he High Court with wide Jurisdiction to entertain and dispose of any suit or proceeding by or against, the company when a winding-up order has been passed. It is, therefore not, correct to contend that this provision would not clothe this Court with the jurisdiction to try criminal proceedings if it so chooses.
It may be observed that it is the discretion of this Court to transfer or allow the institution of the said proceedings, but to say that the Court has no jurisdiction would be going against the provisions of Section 446 of the Act, which is a special provision vesting jurisdiction in the High Court in connection with any suit or proceeding by or against the company."
29. It was further observed as follows (at pages 864 and 865 of the said Company Cases) [at Page 2451 of Tax LR):
"The provisions of Sub-sections (1) to (4) of Section 454 of the Act are procedural, non-compliance of which is an offence under Sub-section (5). Sub-section (5A) of the Act was enacted by the Legislature to give special jurisdiction for the reasons enumerated above. Provisions of Section 446(2) of the Act are general in character and deal with the vesting of jurisdiction to entertain or dispose of any suit or proceeding by or against the company. The provisions of Section 454(5A) of the Act are special in nature, in addition to the jurisdiction vested in the High Court under the provisions of Sub-section (2) of Section 446 of the Act, which are general in nature."
30. It was further observed as follows (at pages 865 and 868 of the said Company Cases) (at, pages 2451 and 2452 of Tax LR):
"As already observed, there are offences against the Act in which the official liquidator has to launch the prosecution proceedings. In appropriate cases, the High Court may exercise jurisdiction, in entertaining or transferring the said proceedings to do complete justice between the parties, especially when, the company has been ordered to be wound up. In such cases, the winding-up Court may be the only appropriate Court which could determine the disputes more appropriately. It of course, goes without saying that if the jurisdiction had not: been vested in the High Court tinder Sub-section (2) of Section 446 of the Act, in that case, in view of the provisions of Section 2(11) read with Section 10 of the Act, it had to be held that all the offences under the Act had to be tried by the Magistrate and not by any other Court, but a special provision has been enacted in the background of the scheme of the Act to clothe the High Court with jurisdiction to entertain and dispose, of any suit or proceeding by or against the company.
Reference may also be made to the provisions of Rule 9 of the Companies (Court) Rules, 1959, wherein it has been provided that nothing in the Rules shall be deemed to limit or otherwise effect the inherent powers of the Court to give such directions or pass such orders as may be necessary for the ends of justice or to prevent abuse of the process of the Court. This rule also saves the inherent power of the Court to pass appropriate, orders which may be necessary for the ends of justice or to prevent the abuse of the process of the Court.
We are, therefore, inclined to hold that the High Court can exercise jurisdiction in suits and proceedings, including criminal proceedings in appropriate cases, by or against the company. The question of law referred to this Bench is answered accordingly and the case may now be listed before a learned single Judge for appropriate orders."
31. In B.L. Sharma v. Om Prakash Malhotra, (1979) 49 Comp Cas 402 : (1979 Tax LR (NOC) 8) (supra), the Delhi High Court, held as follows (at pages 404 and 405):
"The scheme of the Companies Act is that when a, winding-up order has been passed a statement of affairs has to be given to the official liquidator and failure to make such a statement by the persons mentioned in Section 454 is a penal offence created by Section 454(5) which, is punishable and has to be tried by the Court which passed the winding up order. This, in short, is the effect of Section 454 when applied to a winding-up by the Court.
32. It is, therefore, evident that this Court has jurisdiction to exercise powers under Sections 82 and 83 of the Code of Criminal Procedure, 1973 to compel the appearance of Vinay Bagla (opposite party) in case the circumstances of the case so require.
33. The question which next arises, is as to whether on the facts and in the circumstances of the case, this Court should exercise powers under Sections 82 and 83 of the Code of Criminal Procedure, 1973 to compel the appearance of Vinay Bagla (opposite party). In order to answer this question, let us examine the facts and circumstances of the present case.
34. This Court by the order dated 21-4-1998 directed for winding up of the company in question, namely, M./s. Viniyoga Clothex Limited (in liquidation).
35. By the order dated 31-8-2001 passed on Company Application No. 8 of 2000, this Court took, cognizance of the offence committed by the Directors on account of non-filing of the Statement of Affairs as provided under Section 454(3) of the Companies Act, 1956, and directed for issuance of bailable warrants against the directors including the, said Vinay Bagla (opposite party).
36. As despite the issuance of bailable warrant in respect of the said Vinay Bagla (opposite party), he did not appear, this Court, by the order dated 24-4-2003 directed for issuance of non-bailable warrant against the said Vinay Bagla (opposite party) for appearance before this Court on 19-5-2003.
37. By the order dated 19-5-2003, it was directed that reminder be sent to the Chief Metropolitan Magistrate, New Delhi enquiring regarding the steps taken for execution of non-bailable warrant issued against the said Vinay Bagla (opposite party).
38. On 4-7-2003, this Court passed an order, inter alia, issuing following directions in respect of the said Vinay Bagla (opposite party) :
"Pursuant to the directions given in the order dated 19-5-2003 in regard to Vinay Bagla, a report dated 15-5-2003 has been received from the office of Chief Metropolitan Magistrate, Delhi, inter alia, stating that the non-bailable warrant could not be executed, as the said Vinay Bagla was not residing at the given address at present and the non-bailable warrant was returned as unexecuted.
Having perused the said report dated 15-5-2003, there is reason to believe that the said Vinay Bagla has absconded or is concealing himself so that warrant cannot be executed. In the circumstances, Official Liquidator is directed to take necessary steps in accordance with the provisions of Sections 82 to 85 of the Code of Criminal Procedure, 1973 in respect of the said Vinay Bagla.
In the circumstances, the case is directed to be listed on 26th August, 2003."
39. It is thus, evident that this Court has already recorded its satisfaction that there is reason to believe that the said Vinay Bagla (opposite party) has absconded or is concealing himself so that warrant cannot be executed, and in the circumstances this Court has directed the Official Liquidator to take necessary steps in accordance with the provisions of Sections 82 to 85 of the Code of Criminal Procedure, 1973 in respect of the said Vinay Bagla (opposite party).
40. Thereafter, the Official Liquidator has filed the aforesaid Civil Misc. Company Application No. 201662 of 2003 under consideration.
41. Having considered the facts and circumstances of the case, as narrated above, I am of the opinion that this is a fit case for directing for publication of proclamation in accordance with the provisions of Section 82 of the Code of Criminal Procedure, 1973.
42. Accordingly, it is directed that written proclamation be published under Section 82 of the Code of Criminal. Procedure, 1973 requiring the said Vinay Bagla (opposite party) to appear before this Court on 26-4-2004 at 10.00 a.m.
43. Besides the publication of the proclamation in accordance with the procedure laid down in Section 82(2)(i) of the Code of Criminal Procedure, 1973, the proclamation will be published in the newspaper "The Hindu" having circulation in New Delhi. The publication of proclamation as aforesaid will be done on or before 24-3-2004. The case will be listed on 26-4-2004.