2009 (10) TMI 972 - HC - Companies Law

Summary

Issues Involved:
1. Breach of Undertakings
2. Revival of Petition and Contempt Proceedings
3. Modification of Orders and Undertakings
4. Quantum of Punishment

Summary:

1. Breach of Undertakings:
On 09.01.2009, a notice to show cause why contempt proceedings be not initiated against Sh. S.P. Gupta, Principal Officer and Vice President of STB Enterprises Ltd., was issued for breach of undertakings given to this court. The respondent company had initially undertaken to pay an amount of US $125,570 as per a schedule mentioned in an affidavit dated 29/30.8.2006. This undertaking was accepted by the court on 6.9.2006. However, the respondent defaulted on this commitment.

2. Revival of Petition and Contempt Proceedings:
Due to the default, the petitioner sought revival of the petition through C.A. 522/2007. During the pendency of this application, the respondent was granted time to propose immediate payment of the outstanding dues. On 11.12.2007, the respondent undertook to pay 25% of the total outstanding amount by 25.12.2007, failing which they would be liable for contempt. This undertaking was also breached. Consequently, on 9.1.2008, the court revived the petition for winding up and issued a show cause notice of contempt to Sh. S.P. Gupta.

3. Modification of Orders and Undertakings:
The respondent contended that the order of 11.12.2007 superseded the earlier commitment of 6.9.2006. However, the court noted that even the undertaking of 11.12.2007 was breached. The company was directed to be wound up by a judgment delivered on 16.6.2008. The court observed that the respondent had failed to adhere to the payment schedule and had only paid a fraction of the outstanding amount. The appellate court, on 2.7.2008, granted the respondent a final opportunity to pay the outstanding amount, noting the pending contempt proceedings.

4. Quantum of Punishment:
The court emphasized that the power to punish for contempt is used sparingly and only in clear-cut cases. Despite multiple opportunities, the respondent failed to comply with the undertakings. The court held that granting further opportunities to pay did not absolve the respondent from the consequences of previous violations. The respondent was found guilty of contempt and was ordered to pay a fine of Rs. 22,000, to be deposited in the common pool fund of the official liquidator within two weeks. The matter was disposed of with this order.