UNION BANK OF INDIA Vs. MEHUL R SHAH

JUDGEMENT

(1.) THE petitioner has filed the present contempt petition seeking to punish the respondents for having disobeyed the order passed by this Court in Application No.3458 of 2002 in C.S.No.326 of 2002 dated 06.09.2002.

(2.) WHEN the contempt petition came up on 16.12.2003, neither the respondents nor their counsel was present. Hence, bailable warrant was issued. Subsequently, on an application being made, the warrant was re-called on 22.12.2003.

(3.) IN the counter affidavit filed by the respondents, it was stated that they have co-operated with the bank and sold the goods rejected by the foreign buyer at a substantial loss only because the petitioner had advanced money. As a matter of fact, most of the goods were not paid by the foreign buyers. The petitioner was fully aware of the removal of goods that were hypothecated for various purposes such as polishing, showing samples and safe keeping and they were also permitted to market and sell them. The petitioner was also aware that the stocks were not with the respondents as already set out in the written statement. Even as early as February 2001, the petitioner was aware that the stocks were not available and there were no stock statement with them from October/November 2000 as the goods were sent for cutting and polishing to Buch and other places and were also being exported at that time. The goods were not in their control as early as February/April 2001 and several officials of the petitioner Bank were also aware of the same. They have incurred huge loss in their business and have given lot of security to the Bank and they are willing to sell the properties and pay back the dues to the Bank. It was further stated that they have not removed any stock after the order was passed by this Court. The only difficulty was that they were not able to put back the stocks as this Court has directed them to do due to the circumstances beyond their control. The allegation that they had removed the stocks just few days before filing of the suit and it has been secreted somewhere was denied. The stocks were removed in the usual course of business which was permitted and it is not a case where the stocks were under pledge with the Bank and they had clandestinely removed it. The removal was done in the usual course of business and with the knowledge of the Bank. Even at the time of stock audit, which was as early as February 2001, the stocks were not available.