Bombay HC Issues Non-Bailable Warrant Against Promoter Of IT Company Varanium Cloud For Non-Appearance In Case Over Default In Payment To Creditor

On September 12, the court ordered Sabale to be brought before it on September 18.

“…in view of the egregiously recalcitrant, grossly disobedient, contumacious and contemptuous conduct of the Respondent and continued audacious breaches not only of the directions of this Court but also of the undertakings given to this Court, despite advice of the Respondent's Advocate to the Respondent as noted above to remain present before this Court, this Court directs the issuance of non-bailable standing warrant of arrest against the Respondent to be arrested as and where found and his presence be secured in this Court on 18^th September 2024 at 10.30 a.m. without fail.”

The case against Sabale arose over non-payment of over Rs. 49.53 crores to his creditor. Even earlier in March, the Court had issued a non-bailable warrant against Sabale for defaulting in this payment and for not appearing before the Court.

On August 12, the Court issued a contempt notice against Sabale due to his failure to pay Rs 20 crores and also for leaving Mumbai in breach of the Court's order.

On 26 August, the Court observed that Rs. 2 crore had been deposited by Sabale in the account of the Office of the Prothonotary and Senior Master with the RBI. As the service of notice had not reached Sabale, the Court had directed the registry to expedite and send the remainder with respect to the service of show cause notice. It also directed Sabale to be present in the court at the next hearing.

On September 12, Sabale's counsel stated that Sabale did not receive the show cause notice. He also said that even though he had informed Sabale to be present in the court, he had not come to the court.

The applicant's counsel pleaded that an enquiry should be conducted on failure to serve the show cause notice and also issue a non-bailable warrant against Sabale to secure his presence in the Court.

Justice Abhay Ahuja noted that the service of show cause notice was sent by the Court's Registry to the Registrar of Small Causes Court at Bandra, Mumbai and District and Sessions Judge, District and Sessions Court, Pune. However, the show cause notice was not served on Sabale. The Court stated that the notice was not served despite its earlier directions.

It remarked “The aforesaid series of orders indubitably demonstrate the egregiously recalcitrant, grossly disobedient, contumacious and contemptuous conduct of the Respondent and therefore, this Court on the basis of prima facie findings as recorded in these orders had directed issuance of notice under the Contempt of Courts Act, 1971. It is, therefore, unfathomable that the authorities of the Small Causes Court at Bandra and the District and Sessions Judge at Pune have casually and without any seriousness of the matter not even cared to effectively respond to even the reminder sent by the High Court of the State under which these courts function.”

In view of this, the Court directed the Prothonotary and Senior Master of the Court to conduct an inquiry as to why the show cause issued by it was not served on Sabale.

The next date of hearing is on September 18.

Notably, on August 6, the Court had directed the police authorities to register a FIR at the instance of the applicant, Cherag Shah. As per the 'Consent Terms' between Sabale and Shah, which was recorded by the Court, Shah could withdraw the amount deposited by Sabale in the account of the Prothonotary & Senior Master of the Court.

However, the Court had noted the amount which was purported to be transferred by Sabale through NEFT, was not credited in the account. It was observed that although NEFT number was given by the drawer's bank, the transaction was not executed.

It had thus Economic Offence Wing of the police to register a FIR and conduct investigation into the matter, preferably within three months. Pursuant to this order, a FIR was registered on 11 September at the instance of Shah.

Case title: Cherag Shah vs. Harshwardhan H. Sabale (Interim Application (L) No. 16702 Of 2023 In Commercial Execution Application (L) No. 16273 Of 2023 With Show Cause Notice (L) No. 26194 Of 2024)