Bombay HC Issues Contempt Notice Over Alleged Breach Of PMT Machines’ Court-Recorded ₹250-Crore Property-Sale Undertaking

The parties settled their dispute arising from proposed property transactions through Consent Terms dated 26 December 2024.

Under those terms, Respondent No. 1 was required to complete the sale by 30 September 2025 and deliver physical possession within one year of execution.

By order dated 23 April 2025, the Court disposed of the underlying Section 9 petition and recorded that the undertakings in the Consent Terms would be treated as undertakings given to the Court.

The Petitioner alleged non-compliance and sought civil contempt action.

The Respondents disputed the authority and legality of the Consent Terms, denied wilful breach, and argued that the dispute belonged in execution proceedings.

The matter was before the Court at the preliminary stage of deciding whether to issue notice under Rule 1035 of the Bombay High Court (Original Side) Rules, 1980.

Rule 1035 of the Bombay High Court (Original Side) Rules, 1980 requires a preliminary assessment of whether a prima facie case exists before contempt notice is issued; the Court need not determine guilt at that stage.

Under Sections 2(b) and 12 of the Contempt of Courts Act, 1971, civil contempt includes the wilful breach of an undertaking given to a court, and the breach must be deliberate rather than merely a failure to perform.

Bajranglal Gangadhar Khemka v. Kapurchand Ltd., 1950 SCC OnLine Bom 12, recognises that an undertaking incorporated into consent terms and recorded by the Court may operate as an undertaking to the Court, but wilful default remains essential.

Kanwar Singh Saini v. High Court of Delhi, (2012) 4 SCC 307, and R.N. Dey v. Bhagyabati Pramanik, (2000) 4 SCC 400, establish that contempt is not a substitute for execution, although a distinct allegation of wilful breach of a court undertaking may be considered separately.

Dinesh Kumar Gupta v. United India Insurance Co. Ltd., (2010) 12 SCC 770, and U.N. Bora v. Assam Roller Flour Mills Assn., (2022) 1 SCC 101, require conscious and wilful disobedience, not speculation or inference.

Under Pallav Sheth v. Custodian, (2001) 7 SCC 549, Section 20 is applied by reference to when contempt proceedings were initiated.

The Court read the Consent Terms together with the order recording them.

The fixed deadline for completing the sale, the separate deadline for handing over possession, and the express treatment of the terms’ undertakings as undertakings to the Court provided a prima facie basis to examine the alleged breach.

The challenges concerning corporate authority, Section 180 of the Companies Act, and the alleged Duress MOU required evidence and did not establish that the subsisting order had been set aside or stayed.

Although execution remained the proper route to obtain conveyance and possession, it did not by itself foreclose examination of an alleged wilful breach of a court undertaking.

Since the stated deadlines had passed and the material did not explain the non-performance, the Respondents should be called upon to explain; wilfulness and liability were left for later determination.

The possession-related deadline also meant that limitation did not justify rejecting the entire petition at the preliminary stage, subject to any specific objection based on the filing date and breach alleged.

The notice was made returnable on 4 November 2026; Respondent Nos. 2–6 were directed to remain present at each hearing unless specifically exempted.

The Court did not determine whether contempt had in fact been committed.