Conditional recall of sale proclamation withdrawn after false statements and missed deposit; contempt notice issued and refund deferred.

A conditional recall of a sale proclamation was withdrawn after the applicant's assertions that no ascertained liability was due were found contrary to the company's own prior admissions, and the stipulated deposit was not made in time. The text also states that false and misleading statements made in court can prima facie justify criminal contempt proceedings where they affect the course of justice, and that refund of a deposited amount may be deferred until sale-related expenses are verified and certified by the Official Liquidator. The sale process was restored, contempt notice was issued suo motu, and immediate refund relief was declined.

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Issues: (i) Whether the order recalling the sale proclamation was liable to be recalled for false and misleading statements and non-compliance with the conditions imposed. (ii) Whether the facts disclosed a case for initiation of criminal contempt proceedings. (iii) Whether refund of the amount deposited by the applicant could be ordered at that stage.

Issue (i): Whether the order recalling the sale proclamation was liable to be recalled for false and misleading statements and non-compliance with the conditions imposed.

Analysis: The recall of the earlier sale proclamation had been granted on the basis of the ex-management's assertion that no ascertained liability was due to the secured creditor and on the further condition that specified deposits would be made within the stipulated time. The record showed that the asserted absence of liability was contrary to the company's own admissions in prior proceedings and returns, and the required deposit of Rs. 1.5 crores was not made within time.

Conclusion: The recall order was itself recalled and the earlier sale proclamation stood restored in substance.

Issue (ii): Whether the facts disclosed a case for initiation of criminal contempt proceedings.

Analysis: The statements made in the application and in court were found prima facie to be false, misleading and calculated to convey that no ascertained debt was due, thereby affecting the course of judicial proceedings and the administration of justice. Such conduct was treated as capable of scandalising the court and interfering with the due course of justice.

Conclusion: Criminal contempt notice was issued suo motu.

Issue (iii): Whether refund of the amount deposited by the applicant could be ordered at that stage.

Analysis: The applicant had sought refund of the deposited sum after failing to comply with the original deposit conditions. The court held that the expenses incurred for the initial and subsequent sale proceedings, including security charges, first had to be verified and certified by the Official Liquidator before any refund question could be considered.

Conclusion: Refund was declined at that stage and the application was dismissed with liberty to seek refund afresh after certification of expenses.

Final Conclusion: The court restored the sale process, initiated contempt proceedings on a prima facie finding of false and misleading statements, and refused immediate refund relief while disposing of the connected applications accordingly.

Ratio Decidendi: A conditional judicial indulgence obtained on a false factual foundation can be withdrawn on non-compliance with its terms, and making false or misleading statements that distort judicial proceedings may justify contempt action.

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