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Issues: Whether issuance of a notice under section 46(5A) of the Indian Income Tax Act, 1922 against the official liquidator without leave of the winding-up court amounted to contempt of court, and whether the contemner's unconditional apology warranted discharge without a finding of guilt.
Analysis: On a winding-up order being made, the company's property is deemed to be in the custody of the court, and section 446(1) of the Companies Act, 1956 bars commencement or continuation of any suit or other legal proceeding against the company except with leave of the court. A notice under section 46(5A) requiring payment from a person holding money due to the company was treated as a legal proceeding for recovery of arrears and therefore could not be initiated without such leave. The action of issuing the notice to the official liquidator was therefore an interference with the court's custody of the property and constituted contempt. The unconditional apology was accepted as evidence of contrition, but it did not erase the contempt or prevent a finding of guilt.
Conclusion: The issuance of the notice without leave amounted to technical contempt, and the contemner was held guilty, though no punishment was imposed because of the unconditional apology.
Final Conclusion: The proceeding ended with a finding of contempt and a disposal without penal consequence.
Ratio Decidendi: In winding-up proceedings, any revenue recovery step against the company's property or its official liquidator that constitutes a legal proceeding must first obtain leave of the court, and an unconditional apology may mitigate punishment but does not negate the contempt itself.
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