Case Note & Summary
The case involves an appeal against an order of contempt passed by the National Company Law Tribunal (NCLT) against Ravi Kiran Saladi Konda (Deputy Traffic Manager, Paradip Port Authority) and another official (Deputy Commissioner of Customs, Paradip Customs Division). The Corporate Debtor, Lanco Babandh Power Limited, was admitted into Corporate Insolvency Resolution Process (CIRP) on 29.08.2018 and subsequently ordered into liquidation on 27.11.2019. The Corporate Debtor had imported machinery for a thermal power plant between July 2011 and April 2016 under 45 bills of entry, but the goods were not released due to failure to furnish required documents. The Deputy Commissioner of Customs issued out-of-charge for 42 bills but not for three. After liquidation, the Deputy Commissioner filed a claim of Rs. 34,64,33,861 and the Deputy Traffic Manager filed a claim of Rs. 4,36,30,691 before the Liquidator. The Liquidator filed I.A. No. 939 of 2020 seeking release of the goods, which was allowed on 29.03.2023 with a direction to the Respondents (including the Appellants) to release the goods without insisting on installation certificate, reconciliation statement, final payment certificate, or payment of customs duty, and to issue no objection certificate for sale. Despite this order, the Appellants did not comply, leading to contempt proceedings. The NCLT found them guilty of contempt and sentenced them to simple imprisonment for one month each and a fine of Rs. 1,000 each, with default imprisonment of 15 days. On appeal, the NCLAT upheld the contempt finding, noting that the order was clear and unambiguous, and the Appellants' failure to comply constituted wilful disobedience. The Tribunal rejected the Appellants' arguments that they were not parties to the original application or that the order required compliance with customs laws, holding that the order was binding and must be obeyed. The appeal was dismissed.
Headnote
A) Contempt of Court - Wilful Disobedience - Section 2(b) of the Contempt of Courts Act, 1971 - The Appellants, a Deputy Traffic Manager of Paradip Port Authority and a Deputy Commissioner of Customs, were held guilty of contempt for failing to comply with an order directing release of imported goods of a company in liquidation. The Tribunal found that the Appellants had wilfully disobeyed the order by insisting on documents and customs duty despite the clear direction to release without such conditions. Held that the order was unambiguous and the Appellants' conduct amounted to civil contempt (Paras 1-13). B) Insolvency and Bankruptcy Code - Liquidation - Section 33 of the Insolvency and Bankruptcy Code, 2016 - The Corporate Debtor was ordered into liquidation on 27.11.2019. The Liquidator sought release of imported goods lying with Customs and Port Authority. The Tribunal directed release without insisting on installation certificate, reconciliation statement, final payment certificate, or payment of customs duty. The Appellants' failure to comply led to contempt proceedings. Held that the order was passed in the interest of liquidation and must be obeyed (Paras 2-7).
Issue of Consideration
Whether the Appellants are guilty of contempt for wilfully disobeying the order dated 29.03.2023 directing them to release the goods of the Corporate Debtor without insisting on certain documents and payment of customs duty.
Final Decision
The appeal is dismissed. The order of the NCLT holding the Appellants guilty of contempt and sentencing them to simple imprisonment for one month each and a fine of Rs. 1,000 each, with default imprisonment of 15 days, is upheld.
Law Points
- Contempt of Court
- Wilful Disobedience
- Liquidation
- Release of Goods
- Customs Duty
- Port Authority
- Corporate Insolvency Resolution Process
