Registration after a restraint order can breach injunctions, but contempt may not extend to unserved third parties.

A conveyance of immovable property takes legal effect only upon registration, so registration completed after a court restraint order can amount to breach by parties bound by that order. The company and its directors were therefore found guilty of violating the restraint order because they proceeded with registration after the injunction, despite prior knowledge of it. However, the Court declined to invalidate the transfer in contempt proceedings, as the transferee was not shown to be bound or served and the matter had already been left to the appropriate statutory forum. Contempt was not proved against the registering officials, the transferee company, its directors, or the alleged controlling individuals.

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Issues: (i) whether the conveyance of the Katihar property, completed by registration on 02.07.2014, was made in breach of the restraint order dated 08.05.2014 and rendered the company and its directors liable for contempt; (ii) whether the Court should invalidate the registration or undo the transfer notwithstanding the transferee's position; and (iii) whether the registering and mutation , the transferee company and its directors, and the alleged controlling individuals were proved guilty of contempt.

Issue (i): whether the conveyance of the Katihar property, completed by registration on 02.07.2014, was made in breach of the restraint order dated 08.05.2014 and rendered the company and its directors liable for contempt.

Analysis: The restraint order prohibited disposal of the company's capital assets without permission. In relation to a transfer of tangible immovable property, title passes only through a registered instrument. The document relied upon by the contemnors had not been registered before the restraint order and became legally effective only upon registration on 02.07.2014. The plea that execution in 2013 had completed the transfer was rejected. The company and its directors had knowledge of the restraint order and their conduct in proceeding with registration after the order was treated as a deliberate device to defeat it.

Conclusion: The company and its directors were guilty of violating the restraint order.

Issue (ii): whether the Court should invalidate the registration or undo the transfer notwithstanding the transferee's position.

Analysis: Although a breach of an injunction can justify restoration of the prior position, the transferee was not shown to have been served with or bound by the restraint order, and the earlier judgment had already relegated the question of the sale's propriety to the appropriate statutory forum. The record also showed that substantial consideration had been paid long before registration. In those circumstances, the Court declined to unsettle the registration or invalidate the transfer in the contempt proceedings.

Conclusion: The registration and transfer were not invalidated in the contempt proceedings.

Issue (iii): whether the registering and mutation , the transferee company and its directors, and the alleged controlling individuals were proved guilty of contempt.

Analysis: The officials who registered the document were cautioned, but the material was held insufficient to punish them. The transferee company and its directors were not shown to have been served with the restraint order, and the evidence against the alleged controlling individuals and the alleged representative was held inconclusive. Accordingly, contempt was not established against those persons.

Conclusion: No contempt was proved against the registering officials, the transferee company and its directors, or the alleged controlling individuals.

Final Conclusion: The contempt petitions succeeded only to the limited extent of establishing breach by the company and its directors, while the transfer itself was left undisturbed and the remaining alleged contemnors were not punished.

Ratio Decidendi: A transfer of immovable property takes legal effect only upon registration, and a conveyance completed by registration after a court's restraint order amounts to breach of that order by the parties bound by it, though third parties not shown to be bound or served may not be punished in contempt.

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