2000 Supreme(SC) 1980

2000(8) Supreme 294
SUPREME COURT OF INDIA
(From the Special Court at Mumbai)
B.N. Kirpal, Doraiswamy Raju and Brijesh Kumar, JJ.
Western Press Pvt. Ltd., Mumbai -Appellant
versus
The Custodian & Ors. -Respondents
Civil Appeal No. 2770 of 2000
Decided on 6-12-2000
Counsel for the Parties :
For the Appellant : Dr. Rajeev Dhavan, Sr. Advocate, Vimal Chandra S. Deve, Advocate.
For the Respondents : Shiraz Rustomjee, A. Subba Rao, Ms. Kumud Singh and Bhargava, V. Desai, Advocates.

IMPORTANT POINT
In a case where an item of property is referred to in an undertaking given to the Court as one which can be proceeded against in the event of the judgment-debtor failing to pay the decretal amount within the stipulated time, the immovable property does not get ipso facto affected or suffer in anyone of the manner envisaged under Section 17(1) of the Registration Act so as to require com pulsory registration. Such a case falls under Section 17(2)(vi).

Headnote:(i) Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992-Section 10-Appeal against order of Special Court-Consent order against notified person- Appellant Company third party to proceeding-Consent order for benefit of notified person-Appellant undertook not to alienate, encumber or part with possession or create third party right in respect of property in question-Undertook to handover possession in the event of parties fail to satisfy decree-Cannot resile on grounds appellant was not a notified person and that Chairman of appellant Company had no authority to give undertaking in question-Appellant could not be allowed to take shelter under technicalities to overreach Court which believed parties-Undertaking was given by appellant to secure benefit to notified person-Appellant same group of Companies belong to notified person-Declaration or undertaking given by appellant falls under Section 17(2)(vi) of Registration Act and as such non-registration would not be fatal-Custodian can proceed against property of appellant.

       Held : The parties before the Special Court having consented and invited the Court to pass the order dated 5.7.95 and obtained benefits by giving undertaking of their own and on behalf of the appellant-company, ought not to be allowed to take shelter under technicalities to overreach the Court, which believed the parties and counsel appearing on their behalf and acted in good faith by accepting the terms suggested by the parties themselves. If it is held that the consent order dated 5.7.95 and the affidavit dated 28.7.95 are binding upon not only the parties but upon the appellant, as one who has undertook to abide by certain consequences and such an undertaking was given to secure any or some benefit for any one or more of the parties from the Court, the facts such as the appellant not being itself a party in the proceedings before the Court and it was only a third party and that the property in question is of the appellant and that the appellant is neither a notified party nor one claiming through such notified party or the judgment debtor pale into in significance and are rendered wholly irrelevant in determining the actual issues arising. (Paras 8 & 9)

       The Minutes of the order dated 5.7.95 came to be passed as a consent order, decreeing for the recovery of Rs. 11,82,81,316/- with interest @ 20 and the manner in which such decree has to be satisfied as well as proportionate liabilities, inter se, of the parties thereto. The permission for payment in instalments sought for has been countenanced. Clauses 8, 12 and 13 make it abundantly clear that Respondents 2 and 3 before the Special Court declared that they will not claim any right, title or interest in the premises in question (Schedule A3 properties) and Respondents 2 and 3 before the Special Court as well as the appellant undertook to the Special Court, not to alienate, encumber or part with possession of or create third party right, title or interest in or over the Schedule A3 properties or any part thereof pending satisfaction of the decree passed therein. The consent decretal order further stipulated that in the event of the decree becoming executable the Companies including the appellant undertook to hand over possession of the properties mentioned in Schedules A1 to A3 to the purchaser, on the sale being held and sanctioned by the Special Court. In carrying out the directions contained in the above consent decretal order, Mr. Milan B. Dalal, Chairman of the appellant-company, filed the required affidavit of undertaking dated 28.7.95. In the said affidavit of undertaking, while affirming the factum of ownership of Western Press Pvt. Ltd., to the property in question. (Para 10)

       Though for fixing liability as such the mere fact that the judgment debtor companies and the appellant-company being part of the same group of companies completely controlled by Dalal family and its group concerns may not be sufficient as such, the said factual information indicating that the cluster of companies is a mere cloak for these groups will be a just and relevant piece of material in appreciating the foul play and attempts on the part of the Directors of the appellant and their opportunistic stands adopted, as it suits them, from time to time, not only before the Court below but even in this Court. Mr. Milan B. Dalal has been found to be and seems to have been openly allowed by others without demur to liberally play the multifarious roles he held in different companies of Dalal group families. Though the authority of Milan B. Dalal as Chairman of the appellant-company was seriously questioned by another Director of the appellant at a later stage, the rejoinder filed in this appeal by the very same Milan B. Dalal, in support of the stand of the appellant-company patently betrays the sinister motive of all those who are fighting under the shadow of the appellant-company harping upon some technicalities of law or otherwise unmindful of the fact realities starring at them, who cannot disown their own responsibilities too in the matter. We are constrained to observe that both the parties as well as their advisers who have been responsible for the respective roles they seem to have played in misguiding and misleading the Special Court to pass a particular order, assuring the existence of certain obvious facts, ought not to be allowed to either retrace their steps or derive, retain or enjoy the fruits of their own machinations and manipulations by now assuming different postures and asserting facts which they deliberately withheld from the Court and were found to be giving a different picture altogether when such orders came to be passed. This condemnable conduct of the parties alone, in our view, is more than sufficient to reject their claims now made in desperateness under the cover of pretended and invented illegalities. (Para 11)

       On a careful consideration of the events which occurred before the Special Court which made the said Court to believe the existence of certain facts on the representations made before it, the orders passed and the affidavits found and noticed to have been filed from time to time before the Special Court, the Special Court could not be either faulted for its conclusions or that the specific findings arrived at that the consent order dated 5.7.95 taken together with the affidavit of undertaking dated 28.7.95 covered within its fold the property of the appellant-company in question for being proceeded against in execution of the decree passed for recovering the amount due as declared in the consent order dated 5.7.95, could not be said to be vitiated in any manner warranting our interference. Consequently, it would be permissible for the Custodian to proceed against the property comprised in Units 3 and 4 belonging to the appellant-company also by means of an appropriate execution application as and when he choose to do so. The plea of lack of authority in Milan B. Dalal to bind the appellant needs mention only to be rejected even for the simple reason that the Directors of the appellant-company, who allowed Milan B. Dalal a free hand as Chairman of the appellant-company to deal with the matter, cannot be permitted to blow hot and cold as it suits them. Equally untenable is the pretended mistake of fact which, in our view, is nothing but a self-serving attempt found to be made as a pure afterthought to wriggle out of the lawful commitments made and retrace the position in which the Directors of the company have allowed themselves to be landed in. (Para 12)

       (ii) Registration Act, 1908-Section 17-Compulsory registration of document-Third party undertaking to Court in a consent decree to abide by a particular course of action if judgment debtor fails to satisfy decree-Whether require registration? -No-Declaration or undertaking conceding such liberty of action cannot be construed to fall under clause (b) of Section 17(1) but falls under exempted category of any decree or order of Court under Section 17(2)(vi).

       So far as the challenge based on the want of registration under Section 17(1)(b) of the Registration Act is concerned, we are of the view that the same is neither genuine nor has any merit whatsoever or capable of being countenanced at our hands. The reasons assigned by the Court below to reject the said plea cannot be considered to be either unjust or untenable. Even otherwise, a careful analysis and consideration of the consent order dated 5.7.95 as also the affidavit of undertaking dated 28.7.95 made in this case disclose no intention, per se, to purport or operate to create, declare, assign, limit or extinguish in present or in future any right, title or interest, whether vested or contingent in the immovable property of the value of Rs.100 and upwards. On the other hand, the terms as well as the tenure of the above proceedings make clear the dominant intention and purpose of them to be merely an undertaking given by a third party to the proceedings to the Court to abide by a particular course of action if the judgment-debtor fails to satisfy the decree. Even in cases of such default by the judgment-debtor in this case, the undertaking as well as the consent decree only enables the Custodian to initiate execution proceedings against the properties in question of the appellant-company and it is only in the event of such sale, the question of coming into existence any document which would require compulsory registration under Section 17 of the Act would arise and not at this stage. In substance and effect what has been undertaken to the Court is to preserve the properties intact for being proceeded against in a given eventuality and deliver peaceful possession of the property in the event of such action becoming necessary. Declaration or undertaking conceding such liberty of action cannot be construed to fall under clause (b) of Section 17(1) of the Registration Act. It is important to note that both the consent decree as well as the undertaking do not, by itself, envisage the execution of any deed or document also to create, declare, assign, limit or extinguish, whether in present or in future any right, title or interest whether vested or contingent of the value of Rs.100 or upwards in immovable property. The consent order as also the undertaking given in this case would squarely fall within the exempted category of any decree or order of the Court envisaged under Section 17(2)(vi) and take it outside the excepted category of cases for the simple reason that it does not deal with, as such, any immovable property envisaged in the manner of clause (b) of Section 17(1) of the Registration Act. In the first instance, the decree/order in question does not comprise any immovable property as such. In any event, in a matter like the one before us where the consent order which came to be passed on agreement as well as the undertaking given in pursuance thereof, was an undertaking to the Court, the words "subject-matter of the suit" need not be confined to the subject-matter of the plaint or subject-matter of the dispute alone, but would include all that which is made to become part of the proceedings in order to finally and effectively settle all the disputes between the parties. Shorn of all these unnecessary controversies now raised, we are also of the view that in a case where an item of property is referred to in an undertaking given to the Court as one which can be proceeded against in the event of the judgment-debtor failing to pay the decretal amount within the stipulated time, the immovable property does not get ipso facto affected or suffer in anyone of the manner envisaged under Section 17(1) of the Registration Act so as to require compulsory registration. (Para 13)