Ongoing lawful asset-realization efforts by the Official Liquidator negate wilful disobedience.

The complainants were former employees or workmen of Mysore Kirloskar Ltd.

They alleged disobedience of court orders concerning payment of their dues: the order dated 13 March 2023 in W.P. No. 23151/2019 and, in CCC No. 728/2024, the order dated 12 July 2023 in C.A. No. 102/2021.

The Official Liquidator stated that 96% of the workmen’s dues had been paid and that the remaining gratuity would be paid from proceeds of assets awaiting realisation.

The Liquidator’s affidavit described steps taken to identify, secure, survey and value those assets, while noting pending proceedings affecting their disposal.

Whether the Official Liquidator’s failure to pay the remaining workmen’s dues amounted to wilful disobedience of the relevant court orders.

Whether the contempt petitions should proceed, or be closed in light of the steps taken to realise the company’s assets.

The petitions invoked Article 215 of the Constitution of India and Sections 11 and 12 of the Contempt of Courts Act, 1971, which provide for the High Court’s contempt jurisdiction and punishment for contempt.

The Court’s decision turned on whether the alleged non-compliance constituted wilful disobedience; the judgment cites no precedent or further statutory test.

It also recognised that the Official Liquidator was required to pursue realisation of the company’s assets in accordance with law to meet workmen’s and other creditors’ dues.

The Court considered the Liquidator’s affidavit and the status of the relevant properties and proceedings.

It noted that disposal of certain assets depended on pending Company Court applications, resolution of competing claims, survey and demarcation, and steps to obtain possession and valuation.

In light of those steps and obstacles, the Court found that the Liquidator was making efforts under law to realise the assets and that the delay did not establish wilful disobedience.

It directed the Liquidator to take expeditious steps to realise the company’s assets so that the workmen could be paid their dues in accordance with law.

Both contempt petitions were closed and the contempt notice was discharged.