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:

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

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

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

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

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

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

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.

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

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

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

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

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.

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,

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.

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;

(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

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

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

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

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.

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

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.

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;

(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’

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

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

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.

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

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

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

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.

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.

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

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

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

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

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

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

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

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.

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

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

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.

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.

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

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

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

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

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

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.

[M.R. SHAH]

NEW DELHI; ………………………………….J.

JULY 11, 2022 [ANIRUDDHA BOSE]

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

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