Case Note & Summary
The petitioner filed a contempt petition alleging willful disobedience of a direction in an order dated 21.10.2013, passed in Company Application (L) No.70 of 2013, which directed payment of 12% on Rs.67.5 crores under an agreement within three weeks. The respondents admitted non-compliance but contended they were not bound to comply as the interim order had merged into the final order dated 12/20 August 2014 and thus ceased to operate. The dispute arose from a family fight over control of Supermax group entities. The petitioner, father, alleged oppression and mismanagement by his son, respondent no.3, who controlled the companies. The Company Law Board appointed an observer, and appeals were filed in the High Court. In the interim order, the High Court directed Supermax Personal Care Private Limited to pay the amount to Vidyut Metalics Pvt. Ltd., a company controlled by the petitioner. The respondents argued that the direction was against the company and not them personally, the contempt petition was not maintainable after the final order, and it was an attempt to enforce a money decree. The court heard arguments but the provided judgment text is incomplete; the final decision and reasoning are not available.
Issue of Consideration
Whether the respondents are guilty of civil contempt for not paying 12% on Rs.67.5 crores as directed by the interim order dated 21.10.2013, given that the order was not continued in the final order and the direction was possibly against a non-party company.
Case Details
2016 LawText (BOM) (02) 64
Contempt Petition No.2 of 2015 in Company Application (L) No.70 of 201 in Company Appeal No.15 of 2013 in CLB/Company Petition No.13 of 2012
Mr. Mustafa Doctor (Sr. Advocate) with Mr. Rohan Cama, Mr. Rohan Dakshini & Ms. Shweta Jaydev i/by M/s.Federal & Rashmikant for petitioner; Mr. Pradeep Sancheti (Sr. Advocate) with Mr. Gautam Ankhad, Mr. Amol Barve, Mr. Yogesh Chawak, Mr. Abhishek Adke, Mr. Vaibhav Charalwar & Mr. Palkit Sharma i/by M/s.Legasis Partners for respondent nos.1-3; Mr. Ankit Lohia with Mr. Ranjit Shetty i/by Argus Partners for respondent no.4
Mr. Rajinder Kumar Malhotra
1. Mr. Paresh Biharilal Vyas, 2. Mr. Subhash D. Chaudhari, 3. Mr. Rakesh Malhotra, 4. Mr. Abhishek Kumar
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Nature of Litigation
Contempt petition alleging willful disobedience of a direction to pay 12% on Rs.67.5 crores under an agreement, as per interim order dated 21.10.2013.
Remedy Sought
Petitioner sought to hold respondents guilty of civil contempt for non-compliance with the payment direction.
Filing Reason
The direction in the order dated 21.10.2013 was not complied with within the stipulated three weeks.
Previous Decisions
Company Law Board appointed an observer-cum-facilitator; High Court appeals filed; interim order dated 21.10.2013 directing payment; final order dated 12/20 August 2014 in the appeals.
Issues
Whether the interim order merged into the final order and thus ceased to be enforceable.
Whether the direction to pay was against the company SPCPL and not respondents personally.
Whether the contempt petition was maintainable in absence of SPCPL as a party.
Whether contempt proceedings can be used for enforcement of a money decree.
Submissions/Arguments
Petitioner: The direction was clear and willfully disobeyed; respondents in control of SPCPL were liable.
Respondents: The interim order was not continued in the final order and had ceased to operate; the direction was against SPCPL, not respondents; the contempt petition was not maintainable; it was an attempt to enforce a money decree; respondent nos.1 and 2 ceased to be directors of VMPL; respondent no.4 had no obligation to comply.
Judgment Excerpts
..........Furthermore the amount of 12% on Rs.67.5 crores under the agreement needs to be paid. The same shall be paid within three weeks from today..........
Admittedly this direction has not been complied with.
It is civil contempt of Court to refuse or neglect to do an act required by a judgment or order of the Court within the time specified in the judgment or order, or to disobey a judgment or order requiring a person to abstain from doing a specified act... (Halsbury's Laws of England)
Procedural History
Company Petition No.13 of 2012 filed before Company Law Board alleging oppression and mismanagement; CLB appointed an observer-cum-facilitator; Company Appeal No.15 of 2013 and connected appeals filed in High Court challenging the CLB order; Company Application (L) No.70 of 2013 taken out; interim order dated 21.10.2013 passed directing payment; final order dated 12/20 August 2014 in the appeals; Contempt Petition No.2 of 2015 filed alleging non-compliance of the interim payment direction.
Acts & Sections
- Contempt of Courts Act, 1971: 2(b), 12(4), 12(5)
