2021 (12) TMI 1327 - Tri - Companies Law

Initiation of contempt proceedings against the respondents on the basis of the report of the observer - contention of the respondent is that there was no time and date fixed for the meeting which is not correct - HELD THAT - The contention of the petitioner is to go through the financial statements as per the orders passed by this Bench and then, take a decision whether to sign the financial statements or not, Since the brief purpose for which she sought an inspection of the record as permitted by this court, has not been complied with, it is opined that it is a fit case for ordering notice in this application. The court officer is directed to issue contempt notice calling upon the respondents as to why contempt proceedings should not be initiated against them as per law - list the matter for further consideration on 25th January 2022.

Summary

Issues: Contempt proceedings for non-compliance with court order, inspection of financial records, adjournment of Annual General Meeting (AGM), violation of court orders, initiation of contempt proceedings.

In the judgment delivered by the National Company Law Tribunal, New Delhi, the Contempt Petition 15/2021 was considered, where the petitioners sought to initiate contempt proceedings against the respondents for failing to comply with a court order based on a report by the observer, Mr. P. Nagesh. The report highlighted that the respondents did not adhere to the order, initially attempting to produce records for inspection but later backing out and adjourning the AGM. The court noted that the respondents' claim of no fixed time and date for the meeting was incorrect, emphasizing that the meeting could have been scheduled during business hours for inspection. The petitioners' main contention was to review financial statements per the court's orders before deciding to sign them. As the purpose for inspection was not fulfilled, the Tribunal deemed it appropriate to issue a contempt notice, despite the respondents' argument that no court order was violated, the meeting was adjourned, and an appeal was filed. Since no stay order was issued by the Appellate Tribunal, the Tribunal decided to proceed with contempt proceedings against the respondents for non-compliance with the orders. Consequently, the court directed the court officer to issue a contempt notice to the respondents, summoning them to justify why contempt proceedings should not be initiated. The matter was scheduled for further consideration on 25th January 2022.