Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL CONTEMPT JURISDICTION
CONTEMPT PETITION (CIVIL) No. 624 OF 2020
IN CIVIL APPEAL NO. 5158 OF 2016
HSBC PI Holdings (Mauritius) Limited …Petitioner(s)
Versus
Pradeep Shantipershad Jain & Ors. …Respondent(s)
J U D G M E N T
M.R. SHAH, J.
1. Present contempt petition has been preferred by the
petitioner herein, alleging wilful, intentional and deliberate
disobedience of the directions issued by this Court by the
alleged contemnors – respondents herein in not depositing
the shortfall amount so as to maintain a balance of USD 60
million in the Corporation Bank account maintained by
Avitel Post Studioz Limited (hereinafter referred to as the
“Avitel”), a company owned by the alleged contemnors. It is
alleged that the alleged contemnors are in wilful breach of
two orders of this Court dated 19.08.2020 and 06.05.2021.
Signature Not Verified
Digitally signed by
SWETA BALODI
Date: 2022.07.11
17:21:54 IST
Reason:
2. The facts leading to the present contempt proceedings in a
nutshell are as under:
1
2.1 A Share Subscription Agreement (SSA) was entered into on
21.04.2011 between HSBC – petitioner herein and Avitel
and others (original appellant(s) before this Court in Civil
Appeal No. 5145/2016). HSBC made an investment in the
equity capital of Avitel India for a consideration of USD 60
million in order to acquire 7.8% of its paidup capital. That
the said SSA contained an arbitration clause.
2.2 That thereafter, both the parties entered into a
Shareholders Agreement (SHA) on 06.05.2011, which
defined the relationship between the parties after SSA
dated 21.04.2011 had been entered into. The said SHA
also contained an arbitration clause. As disputes arose
between the parties, on 11.05.2012, notices of arbitration
were issued by HSBC to the Singapore International
Arbitration Centre (SIAC) to commence arbitral
proceedings. The SIAC appointed an Emergency Arbitrator.
The Emergency Arbitrator passed two interim awards dated
28.05.2012 and 29.05.2012, in the SSA and SHA,
respectively, in favour of HSBC, directing the alleged
contemnors – Avitel Dubai to refrain from disposing of or
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dealing with or diminishing the value of their assets up to
USD 50 million, and permitting HSBC to deliver a copy of
the interim awards to financial institutions in India and the
UAE with which any of them hold or may hold or be
signatory to accounts, together with a request that the
financial institutions freeze such accounts consistent with
the interim awards. On 27.07.2012, the Emergency
Arbitrator made an amendment to interim awards granting
further relief to HSBC. That thereafter on 30.07.2012,
HSBC filed Arbitration Petition No. 1062/2012 under
Section 9 of the Arbitration and Conciliation Act, 1996
(hereinafter referred to as the Act, 1996) in the Bombay
High Court, interalia, seeking directions to call upon the
alleged contemnors to deposit a security amount to the
extent of HSBC’s claim in the arbitration proceedings that
had begun under both the SSA and SHA.
2.3 On 03.08.2012, the learned Single Judge of the Bombay
High Court passed an interim order under Section 9
petition, interalia, directing the Corporation Bank to allow
the alleged contemnors to withdraw a sum of INR 1 crore
from their account on or before 09.08.2012, but not to
3
allow any further withdrawals until further orders, till
which time, the account was to remain frozen. Meanwhile,
the alleged contemnors challenged the jurisdiction of the
threemember Arbitral Tribunal set up under the auspices
of the SIAC. The Arbitral Tribunal on 07.12.2012 passed a
unanimous “final partial award on jurisdiction”, dismissing
the jurisdictional challenge.
2.4 That thereafter in Section 9 petition pending before the
Bombay High Court, the learned Single Judge passed an
order dated 22.01.2014, in which the respondents herein –
alleged contemnors were directed to deposit any shortfall in
their account with the Corporation Bank so as to maintain
a balance of USD 60 million. An appeal against the order of
the learned Single Judge was disposed of by the Division
Bench of the High Court vide judgment and order dated
31.07.2014. The order passed by the learned Single Judge
directing the alleged contemnors to deposit the shortfall in
their account with the Corporation Bank so as to maintain
a balance of USD 60 million was the subject matter of
further appeal before the Division Bench. By judgment and
order dated 31.07.2014, the Division Bench of the High
4
Court partly allowed the said appeal and modified the
order passed by the learned Single Judge and directed the
alleged contemnors to deposit an additional amount
equivalent to USD 20 million in the Corporation Bank
account, so that the total deposit in the said account is
maintained at half the said figure of USD 60 million, i.e., at
USD 30 million (instead of USD 60 million as ordered by
the learned Single Judge).
2.5 Feeling aggrieved and dissatisfied with order dated
31.07.2014 passed by the Division Bench of the High
Court, both Avitel and HSBC preferred appeals before this
Court. (being Civil Appeal No. 5145/2016 by Avitel and
Civil Appeal No. 5158/2016 by HSBC). By a common
judgment and order dated 19.08.2020, this Court set aside
the order passed by the Division Bench of the High Court,
directing the Avital to deposit USD 60 million and restored
the order dated 22.01.2014 passed by the learned Single
Judge. Thus, by the judgment and order dated 19.08.2020,
the alleged contemnors – respondents herein – Avitel and
others were required to deposit and/or maintain USD 60
million in the Corporation Bank account. It is alleged that
5
not depositing the shortfall amount and/or maintaining
USD 60 million in the Corporation Bank account, the
respondents herein have rendered themselves liable for
suitable punishment under the Contempt of Courts Act.
2.6 At this stage, it is required to be noted that in the
meanwhile the Arbitral Tribunal in Singapore had passed a
final award dated 27.09.2014, awarding USD 60 million as
damages in favour of the HSBC and against the
respondents herein. The same foreign award was
challenged by the respondents herein – alleged contemnors
in Section 34 proceedings before the Bombay High Court.
By a judgment and order dated 28.09.2015, the learned
Single Judge dismissed Section 34 application/proceedings
and an appeal under Section 37 of the Act, 1996 also came
to be dismissed on 05.05.2017. Meanwhile, HSBC had
moved the Bombay High Court to enforce the foreign final
award dated 27.09.2014 in the SSA, of which enforcement
proceedings were reported to be pending.
2.7 It appears that thereafter and pursuant to the judgment
and order dated 19.08.2020 passed by this Court, the
HSBC addressed a legal notice dated 04.09.2020 to the
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alleged contemnors and Avitel, calling upon them to inter
alia deposit the shortfall amount in the Corporation Bank
account to maintain a total of USD 60 million. The alleged
contemnors replied to the said notice by their reply dated
09.09.2020 and refused to deposit the shortfall amount on
the ground that they were contemplating remedies under
Article 137 of the Constitution of India.
2.8 That thereafter, the petitioner had filed the present petition
against the respondents herein on 26.09.2020, alleging
wilful, intentional and deliberate disobedience of August
Judgment. This Court issued notice in the contempt
petition on 06.11.2020.
2.9 On 30.04.2021, HSBC filed an Interim Application bearing
No. 59119/2021, interalia, seeking to restrain the alleged
contemnors from diverting their assets and/or creating
third party rights during the pendency of the contempt
petition with a view to secure its interests.
2.10 At next hearing on 06.05.2021, the alleged contemnors
volunteered to give an undertaking not to sell or encumber
any of their and Avitel’s assets during the pendency of this
contempt petition as well as the enforcement petition
7
pending before the Bombay High Court. The same proposal
was rejected by this Court. This Court further directed the
respondents herein alleged contemnors to deposit the
shortfall amount within a period of six weeks (i.e., by June,
2021).
2.11 That thereafter instead of complying with the directions of
this Court, on 15.06.2021 the respondents filed an IA
seeking exemption from the payment of the shortfall
amount, interalia, on the ground that they are unable to
liquidate their assets and offered the same undertaking,
which was earlier rejected by this Court on 06.05.2021 (IA
No. 68388/2021). The said exemption application was
opposed by HSBC vide their reply dated 01.07.2021. This
Court dismissed the exemption application vide order
dated 02.07.2021 and directed the alleged contemnors to
file their counter affidavit to the contempt petition in two
weeks. It is the case on behalf of HSBC that instead of
complying with the judgment and order dated 19.08.2020
and subsequent order dated 06.05.2021, the alleged
contemnors have filed another application being I.A. No.
8
82521/2021 (application for directions) raising the same
grounds that were earlier rejected by this Court.
2.12 As the respondents herein – alleged contemnors have failed
to comply with the order passed by the learned Single
Judge and the judgment and order passed by this Court
dated 19.08.2020 and subsequent order dated 06.05.2021
in not depositing the shortfall of approx. USD 42 million
(approx. INR 3,09,07,88,400 as on 18.09.2020), so as to
maintain a sum of at least USD 60 million (approx.
4,41,54,12,000 as on 18.09.2020) in the Corporation Bank
account, the petitioner herein – HSBC has preferred the
present contempt petition.
3. Shri Neeraj Kishan Kaul, learned Senior Advocate has
appeared on behalf of the petitioner – HSBC and Shri
Mukul Rohatgi, learned Senior Advocate has appeared on
behalf of the respondents – alleged contemnors. A counter
is filed on behalf of the respondents – alleged contemnors.
4. Shri Neeraj Kishan Kaul, learned Senior Advocate
appearing on behalf of the petitioner – HSBC has
vehemently submitted that there is wilful, intentional and
deliberate disobedience of judgment and order dated
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19.08.2020 and subsequent order dated 06.05.2021 by the
respondents herein by not depositing the shortfall amount
to a sum of USD 60 million in the Corporation Bank
account maintained by the Avitel. It is submitted that the
wilful, intentional and deliberate disobedience of orders
passed by this Court has rendered the respondents –
alleged contemnors liable for suitable punishment under
the provisions of the Contempt of Courts Act.
4.1 It is further submitted by Shri Kaul, learned Senior
Advocate appearing on behalf of the petitioner – HSBC that
in the present case after judgment and order dated
19.08.2020 passed by this Court confirming the order
passed by the learned Single Judge, directing the Avital and
others to deposit the shortfall amount so as to maintain a
sum of USD 60 million in the Corporation Bank account
maintained by the Avitel, the respondents and the Avitel
have filed number of proceedings on the same grounds
which were rejected by this Hon’ble Court time and again. It
is submitted that the respondents and the Avitel have
continued to file number of proceedings on the same
10
grounds which were earlier not accepted by this Hon’ble
Court.
4.2 It is submitted that the respondents – alleged contemnors
have siphoned off USD 60 million invested by the petitioner
in Avitel to related parties. It is submitted that the monies
were siphoned off by the respondents – alleged contemnors
to Avitel Post Studioz FZLLC (Avitel Dubai) through Avitel
Holdings Limited (Avitel Mauritius). These amounts were
thereafter paid to Highend, Digital Fusion, etc. i.e., to
companies owned by alleged contemnors. It is submitted
that out of the total amount invested by the petitioner i.e.,
USD 59.2 million have been transferred to Avitel Dubai’s
bank accounts and into the bank accounts, the majority of
which are controlled by the Jain Family. It is submitted that
the same has been upheld by the arbitral tribunal in the
Foreign Final Award and prima facie accepted by this
Hon’ble Court in the August Judgment.
4.3 It is submitted that the respondents – alleged contemnors
did not challenge the final arbitral award in Singapore.
However, they filed a petition under Section 34 of the Act,
1996 before the Bombay High Court, which has been
11
dismissed on 28.09.2015. It is submitted that the Division
Bench of the Bombay High Court has confirmed the order
passed by the learned Single Judge dated 28.09.2015
rejecting Section 34 application. It is submitted that the
Foreign Final Award has not been challenged in Singapore,
the findings made therein are final and binding on the
alleged contemnors.
4.4 It is submitted that despite the petitioner served a legal
notice to the respondents – alleged contemnors and Avitel,
which was after and pursuant to the August Judgment
delivered by this Hon’ble Court, calling upon them to inter
alia, deposit the shortfall amount in the Corporation Bank
account to maintain a total of USD 60 million, the
respondents – alleged contemnors have refused to deposit
the shortfall amount at that time on the ground that they
were contemplating the proceedings under Article 137 of
the Constitution of India. It is submitted that therefore and
after this Hon’ble Court issued the notice in the present
contempt petition, this Hon’ble Court passed an order dated
06.05.2021 directing respondents – alleged contemnors to
deposit the shortfall amount within a period of six weeks. It
12
is submitted that instead of depositing the shortfall amount
which expired on 17.06.2021, the respondents – alleged
contemnors filed an IA seeking exemption from the payment
of the shortfall amount which came to be dismissed by this
Hon’ble Court. It is submitted that the offer made by the
respondents to file an undertaking that they will not
dispose of their assets in place of making deposit of the
shortfall amount, has not been accepted and/or the said
proposal has been rejected by this Hon’ble Court.
4.5 It is further submitted that the case on behalf of the
respondents – alleged contemnors that they are unable to
arrange and liquidate their assets is nothing but a false
attempt on the part of the respondents not to deposit the
shortfall amount. It is submitted that their inability to
liquidate their assets and/or their inability to deposit the
requisite amount is nothing but a lame excuse which as
such is belated. It is submitted that though the August
Judgment was pronounced over ten months ago, the
respondents – alleged contemnors did not notify their
inability to deposit the amount until they made their
exemption application.
13
4.6 It is submitted that in reply to the exemption application –
IA No. 68388/2011, it was specifically pointed out by the
petitioner – HSBC that if respondents – alleged contemnors
– Avitel are granted the reliefs prayed for in the application
(exemption from making payment of the shortfall amount)
the August judgment, contempt petition, order dated
06.05.2021 and consequently, the enforcement proceedings
before the Bombay High Court, would be rendered
infructuous. It is submitted that thereafter, after hearing
learned counsel appearing on behalf of both the parties by
order dated 02.07.2021 this Hon’ble Court had dismissed
the exemption application and directed the respondents to
file their counter affidavit to the contempt petition in two
weeks. It is submitted that however, thereafter and in
continuous of its contemptuous conduct the respondents –
alleged contemnors filed yet another IA No. 82521/2021
(application for directions) raising the same grounds that
were rejected by this Hon’ble Court.
4.7 It is submitted that on 16.07.2021, respondents – alleged
contemnors also filed their counter affidavit, interalia,
14
stating that they are in the process of collecting offers in
respect of their immovable and movable assets including
their shareholding in Avitel to arrange the shortfall amount
and have filed a review petition (Diary No. 20098/2020)
against the August Judgment which is pending before the
Supreme Court. It is submitted that all grounds raised by
the respondents – alleged contemnors in the counter
affidavit have already been rejected by this Hon’ble Court in
this contempt petition itself. It is submitted that therefore,
the respondents – alleged contemnors are seeking to
reagitate the same issue again is abuse of process of the
Court, as held by this Hon’ble Court in the case of KK Modi
Vs. KN Modi and Ors.; (1998) 3 SCC 573.
4.8 It is further submitted by Shri Kaul, learned Senior
Advocate appearing on behalf of the petitioner – HSBC that
as such the respondents have accepted that are duty bound
to comply with the directions of this Hon’ble Court and
order dated 06.05.2021. It is submitted that as such the
respondents have not raised the issue of maintainability of
the contempt petition.
15
4.9 It is submitted that while the alleged contemnors in the
counter affidavit state that they have been “in the process of
collecting offers” and “actively pursuing sale of their
personal assets”, the alleged advertisements put up for sale
th
of such assets have been published as late as on 8 July,
2021 (i.e. one week before the filing of counter affidavit and
almost 11 months after the August Judgment and
subsequent to the order rejecting the exemption application
on 02.07.2021), which is nothing but an attempt to create
an illusion of their attempts for compliance.
4.10 It is submitted that the list of assets provided by the alleged
contemnors is untrustworthy and may not be relied upon
on the grounds that:
(i) The list of assets submitted by alleged contemnors is
not verified / audited by neither any Chartered
Accountant nor the income tax returns of the Alleged
Contemnors;
(ii)
Does not contain a list of liabilities. Fails to disclose
whether there are existing encumbrances on any of
the assets disclosed;
16
(iii) The assets disclosed by the alleged contemnors only
amount to Rs 16.37 Crore (approx.). If permitted to
dispose assets, then in the bestcase scenario only 16
Crores would be deposited;
(iv)
The basis for the valuation of fixed assets is not clear
nor credible. For instance, the cost of depreciable
items such as computers, furniture, etc. has been
maintained at the same price since 2014. Such assets
would obviously depreciate with time and lead to
decrease in value;
(v)
No independent valuation of Avitel or the Alleged
Contemnors share in Avitel has been provided. The
same is merely an eyewash;
(vi) The value of petitioner’s investment of USD 60 Million
in Avitel was held to be nil in the Final Foreign Award.
Therefore, the net worth of Avitel and what actual
amount would be realizable from the sale of shares of
Avitel remains uncertain;
(vii)
Avitel holding shares worth Rs. 274 Crore in a
subsidiary, Avitel Mauritius is also completely
unreliable and misleading. The underlying value of
17
Avitel Mauritius arose only from the transfer of USD
60 Million that the Petitioners had invested in Avitel
or in any event is not supported by any credible proof.
No independent valuation report of Avitel Mauritius
has been provided to lend credence to the value of the
company;
(viii) In light of findings of the arbitral tribunal and the
Supreme Court in August Judgment that the
petitioner’s investment of USD 60 Million was diverted
to entities related to the alleged contemnors; the list of
assets owned by the alleged contemnors and Avitel are
even less reliable.
4.11 It is further submitted by Shri Kaul, learned Senior
Advocate appearing on behalf of the respondents that as
such they have not raised the issue of maintainability of the
contempt petition either in its counter or the two
applications filed earlier. It is submitted that therefore, the
belated submissions challenging the maintainability of the
present contempt petition deserves to be dismissed on this
ground alone. It is submitted that even the Supreme Court
18
has jurisdiction under Article 129 of the Constitution of
India to punish any person for contempt of its orders.
4.12 It is submitted that the submissions on behalf of the alleged
contemnors that the contempt petition cannot lie as the
petitioner can execute the August judgment passed under
Section 9 of the Act, 1996 under the Code of Civil
procedure, 1908 is misconceived, tenuous and
unsustainable in law. It is submitted that as such in
addition the respondents – alleged contemnors have further
wilfully disobeyed order dated 06.05.2021 passed by this
Hon’ble Court.
4.13 It is submitted that this Hon’ble Court in the case of Firm
Ashok Traders Vs Gurumukh Das Saluja (2004) 3 SCC
155 has held that an application under Section 9 is not a
suit and the order passed under Section 9 would fall within
the expression “interim measure of protection” as opposed
to all time or permanent protection. The purpose of Section
9 is to provide expedited interim relief in support of
arbitration and safeguard the subject matter of the dispute
so that irreparable loss would not cause. It is submitted
19
that an execution application is to be filed for a default of
Section 9 Order, then the whole purpose of Section 9 of
Arbitration Act to get expeditious interim protection would
be defeated. It is submitted that Section 9 proceedings are
interim proceedings in nature.
4.14 It is further submitted that the purpose behind contempt is
to bring violation of Court Orders to the notice of the Court
and therefore Contempt is a matter between the court and
the person in contempt of court. In contrast, the purpose
behind execution proceedings is to enjoy the fruits of the
decree in his favour. It is submitted that in the present
case, the Hon’ble Court has directed the alleged contemnors
to deposit the shortfall amount in the bank account owned
by Avitel India as an interim relief for subject matter of the
dispute and not make any payment to the petitioner that
would warrant execution proceedings. It is submitted that
the contempt proceedings and execution proceedings are
two separate remedies that can be invoked simultaneously.
Reliance is placed upon the decision of this Court in the
case of Delhi Development Authority Vs. Skipper
Construction CO. (P) Ltd.; (1996) 4 SCC 622 as well as
20
the decision of the Bombay High Court in the case of
Rajinder Kumar Malhotra Vs. Paresh Biharilal Vyas;
2016 SCC Online Bom 89 . It is submitted that in any
event the violation of order dated 06.05.2021 in this
contempt petition is also in itself contempt of court.
4.15 It is further submitted that it is a settled position of law
that merely because an order or decree of a court is
executable, the same would not take away the court’s
jurisdiction in contempt proceedings. Reliance is placed on
the decision of this Court in the case of Rama Narang Vs.
.
Ramesh Narang and Anr.; (2006) 11 SCC 114
4.16 It is submitted that in order to constitute, the order of the
court must be of such a nature which is capable of
execution by the person charged in normal circumstances.
4.17 It is submitted that as observed and held by the Delhi High
Court in the case of M/s Terra Manufacturing & Sales Vs.
, once
M/s Alagendiraa Apparels 2011 SCC Online Del 4458
an order passed under Section 9 of the Arbitration Act is
wilfully violated, the person is liable for contempt.
21
4.18 It is submitted that the power of Court to punish for
contempt is wide and the recognized. A party in breach of
any order of court whether interlocutory or final is subject
to being proceeded against in contempt. It is submitted that
as observed and held by this Hon’ble Court in the case of
Welset Engineers & Anr. Vs. Vikas Auto Industries &
Ors.; (2015) 10 SCC 609 and in the case of SEBI Vs.
Sahara India Real Estate Corp. Ltd. & Ors.; (2014) 5 SCC
429 , noncompliance with the orders passed by the Hon’ble
Supreme Court shakes the foundation of judicial system
and undermines rule of law.
4.19
Now so far as the submissions on behalf of the respondents
– alleged contemnors that as the August Judgment did not
provide a timeline for depositing the shortfall amount and
therefore, the alleged contemnors – respondents cannot be
held to be in contempt of the orders of this Hon’ble Court, it
is submitted that the same is incorrect in facts and in law.
It is submitted that the August Judgment required the
alleged contemnors and Avitel to deposit the shortfall
amount in Corporation Bank account as an interim relief
22
and in the manner suggested by the learned Single Judge
passed by the High Court i.e., within four weeks. Reliance is
placed upon the decision of this Court in the case of
Kunhayammed Vs. State of Kerala; (2000) 6 SCC 359 . It
is submitted that therefore, when this Hon’ble Court
confirmed the order passed by the learned Single Judge, the
respondents – alleged contemnors were required to deposit
the shortfall amount in their owned Corporation Bank
account at least within a period of four weeks from
19.08.2020. It is submitted that as such the respondents
have been given many opportunities and ample time to
comply with the August Judgment. They continue to be in
contempt of order dated 06.05.2021 for deposit in these
contempt proceedings, where an additional six weeks were
provided to them for deposit. It is submitted that inordinate
delay in complying with the orders of the Court, non
obedience by a passive and dormant conduct has been held
to be a contempt of court by this Hon’ble Court in the case
of
Maninderjit Singh Bitta Vs. Union of India; (2012) 1
SCC 273 .
23
4.20 It is submitted that compliance of an order/judgment was
never contingent on the nonavailability of “liquid funds” of
the alleged contemnors. It is submitted that an order for
depositing the money cannot be made contingent upon the
funds available to the alleged contemnors. They cannot
contend that they will comply with the August Judgment
only when their assets are allowed to be sold.
4.21 It is submitted that nonavailability of liquid funds/assets
is yet another deliberate tactic of the alleged contemnors
that is intended to deceive not only the petitioner but also
this Hon’ble Court. Given the findings by this Hon’ble Court
and the SIAC that the alleged contemnors are guilty of
siphoning off funds to their families, the assets of their
families are not disclosed. The list of assets indicates that
even if the alleged contemnors are allowed to sell their
assets; the same would not fetch any substantial amount to
match USD 60 Million, as under:
(i) The total value of the assets of the alleged contemnors
is approximately Rs. 16 crores;
(ii) Alleged contemnors have submitted that Avitel has
assets worth approx. Rs. 365 crores;
24
(iii) Out of Rs. 365 crores, Rs. 84 crores approximately are
the monies lying in the Corporation Bank account Rs.
247 crores, is the value of investment of Avitel in the
form of shares in Avitel Mauritius.
(iv)
The submissions of alleged contemnors that Avitel
holds shares worth Rs. 274 Crore in a subsidiary
called Avitel Mauritius is also completely unreliable
and misleading. The underlying value of Avitel
Mauritius arose only from the transfer of USD 60
Million that the petitioners had invested in Avitel or in
any event is not supported by any credible proof. The
valuation of Avitel Mauritius is unreliable and no
independent valuation report of Avitel Mauritius has
been provided to lend credence to the value of the
company.
(v) The Foreign Final Award held that the value of
investment made by petitioner in Avitel was nil.
It is submitted that in light of the same it is uncertain
what is the actual value of Avitel and what actual amount
would be realizable from the sale of shares of Avitel. No
independent valuation of Avitel or the alleged contemnors’
25
share in Avitel has been provided. The same is merely an
eyewash.
4.22 It is further submitted that mere pendency of a review
petition cannot be a ground for noncompliance of
judgment/ order of this Hon’ble Court. It is submitted that
the respondents alleged contemnors and Avitel have a
history of noncompliance of the orders of judicial
authorities including the orders of the Arbitral Tribunal. It
is submitted that the review petition has been filed only to
delay the compliance of the August Judgment/order. It is
submitted that although the review petition was filed in
month of September 2020, which has been into in defects
at the Registry due to want of procedural compliances.
Such oneyear delay in curing the defects is a deliberate
attempt to await (i) the retirement of the Judge who
rendered the August Judgment, and (ii) rely on the mere
filing of the review petition to argue against depositing of
the amounts. It is submitted that as this Hon’ble Court has
held that such tactics in delaying the filing of the review
petition must be disapproved. Reliance is placed on the
decision of this Court in the case of Vedanta Ltd. (formerly
26
known as M/s. Sesa Sterlite Ltd) Vs. Goa Foundation
and Ors.; 2021 SCC Online SC 476 .
4.23 It is submitted that the judgments of this Hon’ble Court
relied upon on behalf of the respondents – alleged
contemnors shall not be applicable to the facts of the case
on hand as the present case is of compliance of the order
passed in Section 9 application of the Act, 1996 and the
subsequent specific directions issued by this Hon’ble Court
in the contempt proceedings in order dated 06.05.2021.
4.24 Making the above submissions, it is vehemently submitted
by Shri Kaul, learned Senior Advocate appearing on behalf
of the petitioner – HSBC that the respondents – alleged
contemnors have shown highest form of wilful disobedience
and contemptuous action and therefore, they may be
punished under the Contempt of Courts Act and they may
be sentenced to civil imprisonment at least unless and until
they have purged the contempt by full compliance of the
August Judgment. It is submitted that the petitioner has
suffered irreparable loss due to the fraudulent conduct of
Avitel and alleged contemnors and in light of the same; the
petitioner’s petition for enforcement of Foreign Award before
27
the Bombay High Court may be expedited by this Hon’ble
Court; it is submitted that the respondents have sought to
employ dilatory tactics at every stage and therefore, any
further delay will continue to cause prejudice to the
petitioner. It is submitted that such delay would also
discourage foreign investors like the petitioner who has
been waiting to enjoy fruits of the Foreign Final Award
passed in its favour since 2014 and seeks to safeguard the
subject matter of its dispute as directed in the August
Judgment under Section 9 of the Act, 1996.
5. Present contempt proceedings are vehemently opposed by
Shri Mukul Rohatgi, learned Senior Advocate appearing on
behalf of the contesting respondents – alleged contemnors.
5.1 It is submitted that the present proceedings have been
initiated by the petitioner – HSBC alleging noncompliance
of order dated 22.01.2014 passed by the learned Single
Judge in Arbitration Petition No. 1062/2012 by which the
respondents are directed to deposit USD 60 million. It is
submitted that the order passed by the learned Single
Judge has been confirmed by this Hon’ble Court by
judgment and order dated 19.08.2020 in Civil Appeal No.
28
5158/2016. It is submitted that as such a review
application being R.P. Diary No. 20098/2020 has been
filed by Avitel India requesting to recall/review the
aforesaid judgment and order dated 19.08.2020. It is
submitted that the said review application is pending for
consideration by this Hon’ble Court.
5.2 It is submitted that in just about 37 days of the August
Judgment, the present contempt petition has been filed by
the HSBC before this Hon’ble Court on 26.09.2020 on
expiry of three weeks’ time granted by HSBC. It is
submitted on 30.04.2021, HSBC filed I.A. No. 59119/2021
for interim reliefs before this Hon’ble Court to direct the
respondents herein to restrain them from selling,
alienating, encumbering, creating third party rights,
transferring or diverting their movable and immovable
assets during the pendency of the present contempt
petition. It is submitted that the same application is
pending adjudication before this Hon’ble Court.
5.3 It is submitted that the respondents have also filed one I.A.
No. 82521/2021 seeking the permission of this Hon’ble
Court to sell and/or encumber their assets and also the
29
assets of the company, to arrange the requisite shortfall
amount to deposit the same in the bank account of the
company maintained with the Corporation Bank. It is
submitted that therefore the petitioner herein is taking
contradictory stands in as much as on one hand the
petitioner is seeking appointment of receiver on the assets
of the respondents before the Bombay High Court and
filing an application to restrict the respondents from
disposing of its assets, but on the other hand the petitioner
is using contempt jurisdiction to seek enforcement of the
judgment of the learned Single Judge of the Bombay High
Court for deposit of the shortfall amount in the
Corporation Bank account. It is submitted that at present
the respondent has not taken any measures to dispose of
any assets and the respondent is currently only assessing
the value of the assets owned in the name of the company
and its directors and will only sell/encumber their assets
with due permission of this Hon’ble Court, to comply with
the direction to deposit the shortfall amount in the
Corporation Bank account. It is submitted that therefore
30
while considering the present contempt proceedings the
aforesaid aspects may be taken into consideration.
5.4 Shri Rohatgi, learned Senior Advocate appearing on behalf
of the respondents – alleged contemnors has further
submitted that the present contempt petition is not
maintainable before this Hon’ble Court on the grounds,
interalia, (i) by way of the present proceedings in
contempt, the petitioner is seeking to execute the order of
the learned Single Judge dated 22.01.2014 in Arbitration
Petition No. 1062/2012, which is executable before
appropriate court/forum; (ii) the contempt proceedings
cannot substitute the execution/enforcement proceedings
(already being availed by the petitioner) and as such the
present contempt proceedings are misconceived in law and
facts. In support of above submissions, Shri Rohatgi,
learned Senior Advocate has relied upon the decisions of
this Court in the cases of Food Corpn. of India Vs. Sukh
Deo Prasad; (2009) 5 SCC 665 (para 31) and R.N. Dey
Vs. Bhagyabati Pramanik; (2000) 4 SCC 400 (para 7) as
31
well as in the case of Court Liquidator Employees’ Assn.
Vs. P.G. Mankad; (2002) 10 SCC 477.
5.5 It is submitted that in the present case also, this Hon’ble
Court by the August Judgment has allowed the appeal of
the petitioner herein and upheld the order of the learned
Single Judge therefore, as such, the appropriate remedy for
the petitioner herein is to approach the High Court of
Bombay for execution if warranted and not this Hon’ble
Court.
5.6 It is submitted that so far as the decision of this Court in
the case of (supra) to elaborate the
Kunhayammed
principle of merger particularly with respect to the
maintainability of the present contempt petition, relied
upon by the petitioner is concerned, the said decision shall
not be applicable to the facts of the case on hand. It is
submitted that the principle of merger as discussed and
contemplated in the said decision was on a different footing
and the same is evident from the conclusions set out in
paragraph 44 of the said judgment.
32
5.7 It is further submitted by Shri Rohatgi, learned Senior
Advocate appearing on behalf of the respondents that
respondents herein never had and do not have any
intention whatsoever to disobey the order passed by this
Hon’ble Court. It is submitted that despite absolute
willingness and best efforts, the respondents are helpless
in complying with the directions of this Hon’ble Court for
such reasons which are absolutely beyond their control
and for want of adequate funds at this stage. It is
submitted that there is no intent whatsoever to bring the
authority and administration of law into disrespect or
disregard or to interfere with or to undermine the authority
of this Hon’ble Court or to cause any prejudice to the
petitioner.
5.8 It is submitted that the respondents do not have immediate
liquid funds to deposit the shortfall. Utmost and
expeditious sincere efforts are being taken by the
respondents herein to collect offers in respect of their
immovable and movable assets including their
shareholdings in the company to arrange for the requisite
funds.
33
5.9 It is submitted that the respondents herein have also
disclosed all the assets in the name of the company and
the alleged contemnors herein before this Hon’ble Court
and have also submitted to court auction of the said
assets, if directed by this Hon’ble Court. It is submitted
that an application being I.A. No. 82521/2021 praying for
directions to sell and/or encumber their assets and also
the assets of the company, to arrange the requisite
shortfall amount to deposit the same in the bank account
of the company maintained with the Corporation Bank is
also pending before this Hon’ble Court.
5.10 It is submitted that the respondents have genuine inability
and do not have the wherewithal to deposit the shortfall
amount in the Corporation Bank despite their best
intentions, unless they are permitted to sell/encumber
their assets to generate further funds for depositing the
shortfall amount in the Corporation Bank account.
5.11 It is further submitted that contempt proceedings can only
be attracted when the lapse on the part of the parties is
deliberate and with the intention to defy the authority of
34
the Court and there has to be wilful disobedience on the
part of the party.
5.12 It is submitted that as held by this Hon’ble Court in catena
of decisions mere noncompliance cannot be a ground to
punish a person/judgmentdebtor under the provisions of
the Contempt of Courts Act.
5.13 It is submitted that in the present case, as such, the order
of the learned Single Judge has not yet become a decree
and enforcement of the arbitral award is still pending
before the High Court. It is submitted that even if it is
assumed that the order of the learned Single Judge has
become a decree, Section 51 read with Order XXI Rule 40
of CPC lays down the guidelines for the execution of the
same.
5.14 It is submitted that in the case of Rama Narang Vs.
Ramesh Narang and Ors.; (2021) SCC Online SC 29, this
Hon’ble Court has observed and held that for bringing an
action for civil contempt, the petitioner has to satisfy the
court that there has been a wilful disobedience of any
judgment, decree, direction, order, writ or other process of
the Court. Shri Rohatgi, learned Senior Advocate
35
appearing on behalf of the respondents has also relied
upon the following decisions of this Court in the cases
Ram Kishan Vs. Tarun Bajaj; (2014) 16 SCC 204;
Kanwar Singh Saini Vs. High Court of Delhi; (2012) 4
SCC 307 and Kapildeo Prasad Sah Vs. State of Bihar;
(1999) 7 SCC 569 , in support of his above submissions and
in support of his request and prayer not to entertain the
present contempt petition and relegate the petitioner to
avail any other remedy which may be available to the
petitioner to execute order dated 22.01.2014 passed by the
learned Single Judge, which has been affirmed and
confirmed by this Hon’ble Court vide judgment and order
dated 19.08.2020 in Civil Appeal No. 5158/2016.
6. Heard. In the present contempt proceedings, the petitioner
has alleged that the respondents herein – alleged
contemnors have committed the contempt of court for
wilful disobedience of two orders passed by this Court
dated 19.08.2020 passed in Civil Appeal No. 5158/2016
and subsequent order dated 06.05.2021 passed in the
present proceedings. At this stage, it is required to be noted
36
that in the present case the learned Single Judge passed an
order as far as back on 22.01.2014 in a petition under
Section 9 of the Act, 1996, directing the respondents herein
– alleged contemnors to deposit the shortfall amount in
their account with the Corporation Bank so as to maintain
a balance of USD 60 million. The order passed by the
learned Single Judge came to be modified by the Division
Bench of the High Court and the alleged contemnors were
directed to deposit an additional amount equivalent to USD
20 million in the Corporation Bank account, so that the
total deposit in the said account is maintained at half the
said figure of USD 60 million, i.e., at USD 30 million
(instead of USD 60 million as ordered by the learned Single
Judge). By detailed judgment and order dated 19.08.2020,
this Court in Civil Appeal No. 5158/2016 has restored the
order passed by the learned Single Judge dated
22.01.2014. Thus, the respondents herein – alleged
contemnors are directed to deposit the shortfall in their
account with the Corporation Bank so as to maintain a
balance of USD 60 million. The said order has not been
complied with till date and the respondents have failed to
37
maintain a balance of USD 60 million in their bank account
with the Corporation Bank. At this stage, it is required to
be noted that in the meanwhile the Arbitral Tribunal in
Singapore had also passed a Final Award dated 27.09.2014
awarding USD 60 million as damages in favour of the
HSBC – petitioner herein and against the respondents. The
applications under Section 34 and 37 of the Act, 1996
against the Award passed by the Arbitral Tribunal in
Singapore had been dismissed and the execution
proceedings moved by the HSBC in the Bombay High Court
to enforce Foreign Final Award dated 27.09.2014 are
reported to be pending. By a notice dated 04.09.2020, the
petitioner had served a legal notice upon the alleged
contemnors – respondents and Avitel calling upon them to,
interalia, deposit the shortfall amount in the Corporation
Bank account to maintain a balance of USD 60 million.
Despite the above, the respondents have failed to deposit
and/or to maintain a balance of USD 60 million in their
Corporation Bank account. That thereafter, the present
contempt proceedings have been initiated/filed on
25.09.2020 alleging wilful, intentional and deliberate
38
disobedience of judgment and order passed by this Court
dated 19.08.2020. This Court had issued a notice in the
present contempt proceedings on 06.11.2020. That
thereafter by a further order dated 06.05.2021 this Court
had directed the respondents to deposit the shortfall
amount within a period of six weeks in the Corporation
Bank account as per prayer (b) of the present application.
The prayer (b) which has been granted by this Court vide
order dated 06.05.2021 is as under:
“b) direct the Alleged Contemnors to forthwith deposit
the shortfall of appx. USD 42 million (appx. INR
3,09,07,88,400 as on 18.09.2020), so as to maintain a
sum balance of at least USD 60 million (appx. INR
4,41,54,12,000 as on 18.09.2020) in the Corporation
Bank account to ensure obedience of the judgment
dated 19.08.2020 in Civil Appeal No. 5158 of 2016
passed by this Hon'ble Court;”
6.1 Thus, not only there is a final judgment and order dated
19.08.2020 passed by this Court in Civil Appeal No.
5158/2016 restoring the order passed by the learned
Single Judge passed in an application under Section 9 of
the Act, 1996 directing the respondents herein to maintain
a balance of USD 60 million in their Corporation Bank
account, there is further directions in terms of the prayer
para (b) (reproduced hereinabove) vide order dated
39
06.05.2021. The subsequent direction dated 06.05.2021
has also not been complied with by the respondents. It is
to be noted that after the direction/order dated
06.05.2021, instead of complying with the directions
contained in order dated 06.05.2021, the respondents filed
an I.A. seeking exemption from payment of shortfall
amount being I.A. No. 68388/2021. While seeking
exemption, it was the case on behalf of the respondents in
I.A. No. 68388/2021 that despite their absolute willingness
and best efforts, they are helpless in complying with the
directions issued by this Court for such reasons which are
absolutely beyond their control and for want of adequate
funds at this stage. In paragraph 5 to 16, it was stated as
under:
“5. At the outset, the Applicants most humbly state
and submit that they have the utmost respect of this
Hon'ble Court and are duty bound to comply with
every order passed by this Hon'ble Court. The
applicants herein never had and do not have any
intention whatsoever to disobey the order passed by
this Hon'ble Court. Despite their absolute willingness
and best efforts, the applicants are helpless in
complying with the directions of this Hon'ble Court for
such reasons which are absolutely beyond their
control and for want of adequate funds at this stage.
There is no intent whatsoever to bring the authority
and administration of law into disrespect or disregard
or to interfere with or to undermine the authority of
40
this Hon'ble Court or to cause any prejudice to the
petitioner.
6. The Applicants tender an unqualified and
unconditional apology to this Hon'ble Court for being
unable to implement and comply with the directions
passed by this Hon'ble Court vide its order dated
06.05.2021 in the instant contempt petition.
7. The applicants submit that on 06.05.2011, the
petitioner HSBC PI Holdings (Mauritius) Limited was
allotted by the Company, total 614,327 Compulsorily
Convertible Preference Shares on payment of nominal
amount of Rs. 10 per share (total nominal amount
paid= Rs. 61,43,270/) and Premium amount of Rs.
4355.75 per share (total premium amount paid= Rs.
267,58,52, 260/) and 1 Equity Share of nominal
amount of Rs. I 0 per share (total nominal amount
paid = Rs. I 0/) and Premium amount of Rs. 4460/
per share (total premium amount paid = Rs. 4460/),
as evident from the Return of allotment filed in Form 2
under Section 75(1) of the Companies Act, 1956. A
copy of the said Form 2 filed by the Company showing
the details of the shares issued and the amounts paid
towards the same, is hereto annexed and marked as
Annexure A2. (Page No. 13 to 19). Thus, a total
amount of Rs. 268,20,00,000/ (Rupees Two Hundred
Sixty Eight Crores Twenty Lakhs equivalent to USD
60 Million) was invested in shares of the Company by
the petitioner HSBC.
8. The applicants herein submit that presently an
aggregate amount of Rs. 84,10,65,140/ (Rupees
EightyFour Crores Ten Lacs Sixty Five Thousand One
Hundred Forty) is lying in the Corporation Bank. It is
humbly submitted that the present application has
been filed before this Hon'ble Court so as to seek for
an exemption from depositing the shortfall amount in
the bank account because neither the Applicants nor
the company, despite their best efforts could jointly or
severally arrange the necessary balance funds to
comply with the order dated 06.05.2021 passed by
this Hon'ble Court.
9. The Applicants are annexing herewith a
complete list of assets of the Company and each of the
st
applicants herein, from 31 March 2014 till date.
41
10. In the present scenario, the applicants despite
best efforts and intent, are unable to liquidate the
aforesaid assets belonging to them and the Company,
to arrange the entire shortfall amount directed by this
Hon'ble Court, for depositing in the Corporation Bank
account. It is not a case where the applicants have the
money but are not willing to comply with the
directions showing any affront to the orders of this
Hon'ble Court. The applicants have genuine inability
and do not have the wherewithal to deposit the
shortfall amount in the Corporation Bank despite their
best intentions and efforts. The Applicants most
humbly state and submit that they have the utmost
respect of this Hon'ble Court. The Applicants herein
tender an unqualified apology to this Hon'ble Court for
their genuine inability to comply with the directions of
this Hon'ble Court vide order dated 06.05.2021 in the
instant Contempt Petition for lack of adequate liquid
funds.
11. The applicants however are willing to undertake
to this Hon'ble Court that they would not create any
encumbrance and would preserve all the above assets
belonging to them or the Company for the future
benefit of the petitioner subject to the final outcome of
the enforcement of award proceedings/Section 48
proceedings pending before the Hon'ble Bombay High
Court, wherein the pleadings are also complete. The
applicants would also give such further undertaking to
this Hon'ble Court as may deem just and expedient.
12. The applicants say that so far as the office
premises of the Company at Mumbai, and the
residential premises where the applicants reside in
Mumbai or Panchgani are concerned, it is submitted
that Mrs. Sudha Pradeep Jain wife of Applicant no.1 is
registered owner of office premises Unit No. A7 & A8,
Vimal Udyog Bhavan, Taikalwadi Road, Mumbai since
08071999 and 19072001 respectively, and
registered owner of residential premises at Pleasant
Palace, Narayan Dabholkar Road, Malabar Hill,
Mumbai 400 006 since 07012011, and seven units
of residential properties situated at Silver valley CHS,
Panchgani (six units since 31.03.2011 and one more
unit since 09.07.2012). Mrs. Shivani Siddhartha Jain
wife of Applicant No. 2 Siddhartha Jain, and Mrs
Priyanka Hrishi Jain wife of Applicant No. 3 Hrishi
Jain are registered owners of office premises at Unit
42
No. A9 & A6 respectively, in Vimal Udyog Bhavan,
Taikalwadi Road, Mumbai since 03092012 & 3008
2012. Mr. Rishab Jain son of Applicant No.1 and
brother of Applicant No.2 & 3 is registered owner of
office premises at Unit No. A11 in Vimal Udyog
Bhavan, Taikalwadi Road, Mumbai since 30082012.
The office premises at Juhu, Mumbai was a rented
premises and was vacated in year February 2015.
None of the premises mentioned in this paragraph are
owned by the applicants. These facts are also being
disclosed for providing complete information to this
Hon'ble Court.
13. That, the Applicants inability to comply with the
Order dated 06.05.2021 is genuine, unintentional and
not lacking in bona fide.
14. In the above circumstances the applicants
humbly beg to be pardoned for the same and seek for
an exemption from complying with the directions
contained in the Order dated 06.05.2021 of this
Hon'ble Court.
15. That, the Applicants hold this Hon'ble Court in
greatest respect and esteem.
16. The applicants in the above circumstances pray
to this Hon'ble Court to graciously be pleased to accept
their humble unqualified and unconditional apology,
and exonerate them from the purview of the contempt
proceedings, discharge of show cause notice of
contempt proceedings. The applicants are also praying
for an exemption from complying with the order dated
06.05.2021 of this Hon'ble Court to deposit the
shortfall amount in the Corporation Bank, and
suitably modifying the said Order dated 06.05.2021,
while accepting such undertaking of the applicants
which may deem just, expedient and to the
satisfaction of this Hon'ble Court.”
The aforesaid application for exemption from depositing
the shortfall amount pursuant to order dated 06.05.2021
has been specifically rejected by this Court vide order
dated 02.07.2021. Despite the above, till date, the
43
respondents have failed to deposit the shortfall amount
pursuant to order dated 06.05.2021. Therefore, while
considering the present contempt proceedings, the
aforesaid factual scenario and the conduct on the part of
the respondents are required to be considered.
7. The present contempt proceedings are opposed by the
respondents – alleged contemnors on the grounds, inter
alia, that (i) the order passed by the learned Single Judge
dated 22.01.2014, which has been confirmed by this Court
vide order dated 19.08.2020 in Civil Appeal No.
5158/2016, is an order executable and therefore, the
present contempt proceedings may not be entertained; (ii)
that there is no wilful disobedience on the part of the
respondents – alleged contemnors in not depositing the
shortfall amount in their Corporation Bank account to
maintain a balance of USD 60 million as they have no
sufficient funds and therefore, noncompliance is beyond
their control and therefore, their inability to comply with
the order despite their best efforts does not warrant any
punishment under the Contempt of Courts Act.
44
8. Now so far as the first contention resisting the present
contempt proceedings, namely, the order passed by the
learned Single Judge by the High Court by which the
respondents were directed to maintain a balance of USD 60
million in their Corporation Bank account is executable is
concerned, at the outset, it is required to be noted that in
the present proceedings it is not the case of non
compliance of the order passed by the learned Single Judge
confirmed by this Court alone. There is a further specific
direction issued by this Court vide order dated 06.05.2021.
Therefore, there is a noncompliance of direction issued by
this Court dated 06.05.2021 by which the respondents
were directed to deposit the shortfall amount so as to
maintain a balance of USD 60 million. That thereafter, a
further application for exemption from depositing the
shortfall amount pursuant to order dated 06.05.2021 has
also been dismissed by this Court. Therefore, thereafter it
shall not be open for the respondents to submit that as
order dated 22.01.2014 passed by the learned Single Judge
is executable, the present contempt proceedings may not be
entertained.
45
8.1 At this stage, a few decisions of this Court on contempt
proceedings under the Contempt of Courts Act are required
to be referred to. In the case of Rama Narang (supra) after
referring to and taking into consideration the earlier
decisions of this Court in the cases of R.N. Dey (supra),
Rita Markandey Vs. Surjit Singh Arora; (1996) 6 SCC 14
and
Bank of Baroda Vs. Sadruddin Hasan Daya; (2004) 1
SCC 360 , it is specifically observed and held by this Court
that the petitioner can execute the decree can have no
bearing on the contempt committed by the respondents. In
the said decision, this Court also considered in detail (in
para 31) the decision of this Court in the case of R.N. Dey
(supra), which has been relied upon by the learned Senior
Advocate appearing on behalf of the respondents in the
present case. The para 24 of the decision is as under:
“24. All decrees and orders are executable under the
Code of Civil Procedure. Consent decrees or orders are
of course also executable. But merely because an
order or decree is executable, would not take away the
court's jurisdiction to deal with a matter under the Act
provided the court is satisfied that the violation of the
order or decree is such, that if proved, it would
warrant punishment under Section 13 of the Act on
the ground that the contempt substantially interferes
or tends substantially to interfere with the due course
46
of justice. The decisions relied upon by the
respondents themselves hold so as we shall
subsequently see.”
8.2 Apart from the fact that the facts in the case of R.N. Dey
(supra) is distinguishable in as much as in the present
case, there is further specific directions issued by this
Court vide order dated 06.05.2021 even in the said
decision also it is observed and held by this Court that
discretion given to the court is to be exercised for
maintenance of the court’s dignity and majesty of law. It is
further observed that the contempt is between a contemnor
and the court and that an aggrieved party has no right to
insist that the court should not exercise such jurisdiction.
8.3 In the case of Welset Engineers and Anr. (supra), it is
observed and held by this Court that a party in breach of
any order of court whether interlocutory or final is subject
to being proceeded against in contempt. Orders are meant
to be obeyed and a person, acting in breach of the order
does so at that person’s peril.
8.4 In the case of SEBI (supra), it is observed and held by this
Court that noncompliance with the orders passed by this
Court shakes the very foundation of our judicial system and
47
undermines the rule of law, which we are bound to honour
and protect. This is essential to maintain faith and
confidence of the people of this country in the judiciary. It is
further observed that there is a need of iron hand to enforce
rule of law, punish contemnors and maintain faith and
confidence of the people in judiciary.
9. Applying the law laid down by this Court in the aforesaid
decisions to the facts of the case on hand and the
subsequent specific directions issued by this Court in its
order dated 06.05.2021, the objection on behalf of the
respondents that as the order passed by the learned Single
Judge of the High Court is executable and therefore, the
present contempt proceedings may not be entertained is
overruled.
10. Now so far as the submissions on behalf of the respondents
that there is no wilful disobedience as they have no
sufficient funds to deposit the shortfall amount and despite
their best efforts, they are unable to get the requisite funds
to comply with the order passed by this Court is concerned,
at the outset it is required to be noted that all these
submissions were made earlier in I.A. No. 68388/2021
48
seeking exemption from deposit of shortfall pursuant to
order dated 06.05.2021 and the same have not been
accepted by this Court and vide order dated 02.07.2021
their application for exemption has been dismissed.
Thereafter, it shall not be open for the respondents to
repeat and make the same submissions again and again.
The respondents cannot be permitted to make the same
submissions which have not been accepted and/or rejected
by this Court earlier. Repetitive submissions which have
not been accepted earlier by court that itself is a wilful
disobedience and tantamount to contempt and it shows the
conduct on the part of the contemnors.
11. Sufficient opportunities have been given to the respondents
to deposit the shortfall amount so as to maintain a sum of
USD 60 million in their Corporation Bank account. The
first order passed by the learned Single Judge in their
application under Section 9 of the Act, 1996 is passed in
the year 2014 and even the same has been restored by this
Court vide judgment and order dated 19.08.2020 and
thereafter, further directions have been issued specifically
directing the respondents to deposit the shortfall vide order
49
dated 06.05.2021 and thereafter their application for
exemption from depositing the shortfall amount has been
dismissed by this Court. Despite the above, the
respondents have failed to deposit the shortfall amount and
therefore, they have rendered themselves liable for suitable
punishment under the provisions of the Contempt of
Courts Act for wilful disobedience of not only the judgment
and order passed by this Court dated 19.08.2020 in Civil
Appeal No. 5158/2016 but also for wilful disobedience and
noncompliance of order passed by this Court dated
06.05.2021 in the present application. The defence on
behalf of the respondents lack bona fides. To maintain the
rule of law and majesty of justice and so as to see that the
faith and confidence of the people in judiciary is
maintained, this is a fit case to entertain the present
contempt proceedings and to punish the respondents
under the provisions of the Contempt of Courts Act.
12. In view of the above and for the reasons stated above, we
hold the respondents guilty for deliberate and wilful
disobedience of judgment and order dated 19.08.2020
50
passed by this Court in Civil Appeal No. 5158/2016 as well
as order dated 06.05.2021 passed by this Court in the
present petition. The respondents have rendered
themselves liable for suitable punishment under the
provisions of the Contempt of Courts Act for such
deliberate and wilful disobedience. However, before we pass
any further order of punishment/conviction, we still give an
additional opportunity to the respondents to comply with
order dated 06.05.2021 passed in the present petition as
well as judgment and order dated 19.08.2020 passed by
this Court in Civil Appeal No. 5158/2016 to deposit the
shortfall amount so as to maintain a balance of USD 60
million in their Corporation Bank account within a period
of four weeks from today.
The aforesaid would have a direct bearing on the
punishment to be imposed.
Put up the matter before this Bench on 12.08.2022 for
further order on punishment.
………………………………….J.
51
[M.R. SHAH]
NEW DELHI; ………………………………….J.
JULY 11, 2022 [ANIRUDDHA BOSE]
52