Touton Far East Pte Ltd v Shri Lal Mahal Ltd and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Leggatt |
| Judgment Date | 03 February 2017 |
| Neutral Citation | [2017] EWHC 621 (Comm) |
| Docket Number | Case No: 2017/507 |
| Court | Queen's Bench Division (Commercial Court) |
| Date | 03 February 2017 |
[2017] EWHC 621 (comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
The Royal Courts of Justice
Strand
London WC2A 2LL
Mr Justice Leggatt
Case No: 2017/507
Mr Karia QC appeared on behalf of the Claimant
The defendants were not represented and did not attend
(As Approved)
This is the resumed hearing of an application by which the claimant seeks an order giving permission to issue writs of sequestration against the defendants and to commit to prison for contempt of court the second to seventh defendants by reason of their breaches of a worldwide freezing injunction.
At the hearing of the application last Friday, the first defendant company, Shri Lal Mahal Limited, was represented by solicitors and counsel. At that hearing I made findings that the company is in breach of its disclosure obligations under the worldwide freezing injunction in two respects which amount to contempts of court. The first is that the company has wilfully disobeyed an order to make and file an affidavit giving information about its assets. The second is that the company has wilfully failed to disclose, and has indeed deliberately withheld, details of its assets that it was ordered to provide.
On that occasion I adjourned the case for sentence in part so as to give the first defendant an opportunity to reconsider its position and to decide whether, even at this late stage, it will take steps to purge its contempt and comply with the court's order. In the event, the solicitors and counsel who represented the first defendant at the hearing last Friday have since withdrawn from the case and are no longer acting. The company has done nothing to purge its contempt and has said nothing to indicate that it has any intention of complying with the court's order. As a result of the withdrawal of its legal representatives, both the company and the individual defendants are not represented and have not appeared today.
I have been taken carefully by Mr Karia QC through the evidence. He has, in addition to the evidence which was before the court last week, produced a further witness statement from a Mr Sid Kapur, a representative of GCS Risk, a firm of investigators retained by the claimant. In that statement, Mr Kapur describes how on 2 February 2016 he personally attended offices of a company called Mala Impex Proprietary Limited in New South Wales, Australia. From that visit he learned from a director of Mala Impex information about imports which that company has been making into Australia of Basmati rice purchased from the first defendant in India. I am satisfied on the basis of that evidence and the evidence contained in an earlier report provided by GCS Risk that there have been shipments made since the worldwide freezing injunction was issued of rice to Australia on at least three occasions, which each had a value of more than $20,000. In particular, such shipments were made on 17 March 2016, 29 March 2016 and 10 August 2016. The significance of the figure of $20,000 is that the worldwide freezing injunction contains a provision which orders the first defendant to disclose to the claimant any disposal of any asset which exceeds the value of $20,000. I am satisfied on the evidence and find it proved to the criminal standard of proof that there have in respect of those three shipments been additional breaches of the worldwide freezing injunction by reason of the failure of the company to comply with its obligation to disclose the transactions.
In relation to each of the individual defendants, in order to establish a contempt of court the claimant needs to prove, first, a breach of the court's order; second, that at the time of the relevant breach the defendant was aware of the court's order; and third, that the defendant is responsible for the breach — which is established by showing that the defendant was at the relevant time either a director as a matter of law or a de facto director of the company which was the subject of the order. Fourth, it is necessary to show that the committal proceedings have been served on the relevant defendant so that it has had due notice of this application and has had the opportunity to appear or to be represented before the court today. I have already dealt with the matters which constitute breaches of the court's order and have explained those breaches which I have found to be established. I will address now in relation to each of the individual defendants the further matters which the claimant needs to prove.
I start with the second defendant, Mr Prem Garg. There is ample evidence to show that he is, if not the controlling mind, then the person with primary control over the first defendant company. He was formerly a director of the company. He resigned from that office on 11 May 2015, but there is clear evidence to show that he still acts de facto, not only as a director, but as the managing director of the company. In particular, he is held out on the company's own website as the owner of the Shri Lal Mahal Group and as its managing director. He has also been referred to as such in various reports in Indian newspapers which I have been shown, and he continued to be shown as a director notwithstanding his purported resignation in a report obtained in July of last year based on corporate documents which were available on the official website of the Ministry of Corporate Affairs in India.
In addition, there is evidence given by Mr Espir, who is charged with responsibility for seeking to recover the monies owing to the claimant, of a conversation with Mr Prem Garg which took place on 10 March 2016. On that date, which was the day before the return date for the worldwide freezing order in London, a conference call took place between them. Mr Garg made various threats during that conversation, including a threat to lodge a criminal complaint against the claimant in India, — a threat which was, as I will mention later, subsequently carried out. It was clear from the tenor of the conversation that Mr Prem Garg was the person chiefly responsible for the affairs of the first defendant.
There is also evidence that Mr Prem Garg was aware of the order of the court from a very early stage. In particular, the order was emailed to his email address and couriered to the company's office in New Delhi at which he works on 26 and 29 February 2016 respectively. The order was also served on the English solicitors who were on the record as acting for the first defendant at that time. Mr Prem Garg was plainly aware of the order at the time of his telephone conversation with Mr Espir on 10 March 2016. To add to that, he was personally served with a copy of the order in India on 10 July 2016.
There is also evidence which demonstrates that he has had notice and is aware of the committal application. An attempt was made to serve it personally on him on 21 November 2016. He refused to accept the document and requested that it be given to his "London lawyers", which can only have been a reference to the solicitors who were, until this week, acting for the first defendant. On 2 December 2016, a lawyer acting for Mr Prem Garg in India corresponded with the claimant's solicitors indicating that Mr Prem Garg was aware of the proceedings and all the documents relied on for this application were emailed to that lawyer in India on 8 December 2016. Although Mr Prem Garg has not been personally served with the committal application, the only reason why that has not happened is because he refused to accept the documents. In those circumstances, and when he is plainly perfectly well aware of the application, it is just to dispense with the requirement of personal service, and I do so.
It is plain from the fact that, as I have indicated, Mr Prem Garg is the person chiefly responsible for managing the company that he is also responsible and indeed bears principal responsibility for the wilful breaches of the order which I have already identified. I accordingly find that he is in contempt of court in the same three respects as the company, namely: (1) wilfully disobeying the order of the court to make and file an affidavit giving information about the company's assets; (2) deliberately withholding details of the company's assets that it was ordered to provide; and (3) failing to disclose the fact that the company had made at least three shipments of goods with a value in excess of $20,000.
I shall come to the question of sentence at the end of this judgment after I have dealt with each of the other individual defendants.
I turn next to the third defendant, Anita Garg. She is the wife of Mr Prem Garg, the second defendant. She has been de jure managing director of the company since 1 July 2014. As such, she plainly also has a responsibility for managing its affairs, including ensuring the company's compliance with the freezing order. She was notified of the order and served with it by the same means and at the same time as her husband. In particular, copies of the order were emailed to her email address on 26 February 2016 and couriered to the company's office on 29 February 2016 for her attention. In addition, she was personally served with a copy of the freezing order on 10 July 2016. I am satisfied that she has also had due notice and is aware of these committal proceedings. The...
To continue reading
Request your trial
-
Integral Petroleum S.A v Petrogat FZE
...taking into account the language of the rule (if it is a statute) and its content and policy.” [Emphasis added] 59 In Touton Far East PTE v Mahal [2017] EWHC 621 (Comm) Leggatt J at [5] stated that responsibility for contempt by a company extended to de facto directors: “In relation to eac......
-
Olympic Council of Asia v Novans Jets LLP
...it has been held that these words embrace a de facto as well as a de jure director: Touton Far East Pte Ltd v Shri Lal Mahal Ltd [2017] EWHC 621 (Comm), [5], Integral Petroleum S v Petrogat FZE [2018] EWHC 2686 (Comm), [66]–[68] (the latter case rejecting the argument that the Body Corpor......
-
Akhmedova v Akhmedov and Ors (injunctive relief)
...(Comm), [2019] 1 WLR 574. JSC Bank of Moscow v JFC Group Holding (Re Kekhman)[2012] EWHC 2915 (Comm). Touton Far East v Shri Mahal Ltd[2017] EWHC 621 (Comm) (3 February 2017, Wilmot v Maughan[2017] EWCA Civ 1668, [2018] 1 FCR 465, [2018] 1 WLR 2356, [2018] 1 FLR 1306. Application The wife m......