HSBC PI Holdings (Mauritius) Limited Versus Pradeep Shantipershad Jain & Ors.

HSBC PI Holdings (Mauritius) Limited Versus Pradeep Shantipershad Jain & Ors.

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले



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. 
2. The facts leading to the present contempt proceedings in a
nutshell are as under: ­
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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
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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
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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
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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 interalia 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
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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.
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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
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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
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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 interalia, 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
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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. 
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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,
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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. 
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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
of such assets have been published as late as on 8th 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;
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(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
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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
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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
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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.
M/s Alagendiraa Apparels 2011 SCC Online Del 4458, once
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,   nonobedience 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  Kunhayammed  (supra)   to   elaborate   the
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
applicants herein, from 31st 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, interalia, 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   noncompliance 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

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