Baranagore Jute Factory Plc. Mazdoor ... vs Baranagore Jute Factory Plc. Etc

The appellants are the petitioners/applicants before the learned Single Judge in an application filed by them for taking appropriate action against the respondents herein for violating the order dated 23.02.2011. According to the appellants, the entire money paid by the National Highway Authority of India (‘NHAI’ for short) on account of acquisition of the company’s land, should have been deposited with the High Court, in the true spirit of the order dated 23.02.2011. To the extent relevant, for the purpose of the present case, it may be noted that of the total amount due to the company, the NHAI issued a cheque for an amount of Rs.94.16 crores approximately in favour of the Registrar of the High Court after deducting an amount of Rs.10,55,60,331/- by way of tax deducted at source (‘TDS’ for short). Thereafter, the company filed its income-tax return for the assessment year 2013-2014 and claimed and received refund of the entire amount covered by the TDS, after deducting the tax. According to the respondents, the amount was utilised for various purposes in connection with the affairs of the company. It is the stand of the respondents that the direction to deposit the amount with the High Court was given to the NHAI, and in having claimed, received and utilised the refund received from the Income-Tax Department, there is no violation of the order dated 23.02.2011. Learned Single Judge was prima facie of the opinion that there was deliberate violation of the order dated 23.02.2011, and therefore, issued Rule to the respondents, returnable in six weeks, vide order dated 26.06.2015. There was also a direction that the respondents shall not operate the bank accounts of the company without securing the afore- mentioned amount of Rs.10,55,60,331/-.

Aggrieved, the respondents took up the matter in appeal before the Division Bench leading to the impugned order.

The Division Bench, in the impugned order, took the view that the learned Single Judge should not have passed an order affecting the operation of bank accounts, and therefore, to that extent, the order of the learned Single Judge was vacated. And thus aggrieved, the appellants are before this Court.

It may specifically be noted that the Division Bench has not interfered with the Rule issued to the respondents in the proceedings initiated under The Contempt of Courts Act, 1971 (hereinafter referred to as ‘the Act’) for the alleged violation of the order dated 23.02.2011. The Division Bench only vacated the order regarding operation of the bank accounts of the company without securing the amount of rupees ten crores and odd. To quote from the impugned order:

For the aforesaid reasons, issue Rule against the alleged contemnor Nos. 1 to 6. Returnable six weeks hence.

Since the company, in liquidation, through the machination of the alleged contemnors, has been enriched by the aforesaid sum and in order to preserve the aforesaid sum the alleged contemnors are restrained from operating the bank account/accounts of the company without setting aside the aforesaid sum of Rs.10,55,60,331/-. …” (Emphasis supplied) The above order was the subject matter of challenge before the Division Bench, leading to the impugned order.