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2019 (9) TMI 713 - AT - Companies LawContempt of Court / Tribunal - Seeking initiation of contempt proceedings against the Respondents - application u/s 425 of the Companies Act, 2013 - alleged wilful violation of the order dated 23rd October, 2008 passed by the erstwhile Company Law Board, Additional Principal Bench, Chennai - no wilful disobedience of order. Whether an appeal under Section 421 of the Companies Act, 2013 is maintainable against an order passed by the Tribunal in exercise of powers conferred under Section 425 of the Companies Act, 2013 which empowers the Tribunal to initiate contempt proceeding for committing contempt of its own order? HELD THAT - The Tribunal has been empowered to exercise and discharge such powers and functions as have been conferred on it or under this Act or any other law ( Insolvency and Bankruptcy Code, 2016 ) for the time being in force - From Section 421 of the Companies Act, 2013, it is clear that if the Tribunal passes order under Section 420 of the Companies Act, 2013, an appeal under Section 421 of the Companies Act, 2013 is maintainable before the Appellate Tribunal. From Section 425 of the Companies Act, 2013, it will be evident that the Tribunal as also the Appellate Tribunal have been empowered with the same jurisdiction, powers and authority in respect of contempt of themselves as the High Court has and may exercise, for this purpose, the powers under the provisions of the Contempt of Courts Act, 1971 , which shall have the effect subject to modifications that in place of High Court, it should be read as Tribunal or the Appellate Tribunal; and in place of Advocate-General, it is to be read as Law Officers as may be specified by the Central Government. The Tribunal and the Appellate Tribunal are empowered to punish a person for violation of its own order under the Contempt of Courts Act, 1971 and are required to follow procedure prescribed under Section 14 of the Contempt of Courts Act, 1971 before holding a person guilty of having committed contempt of the Tribunal or the Appellate Tribunal - No appeal is maintainable under Section 421 of the Companies Act, 2013 once the Tribunal exercises its power under Contempt of Courts Act, 1971 read with Section 425 of the Companies Act, 2013. Thus, for non-exercising of powers for initiation of contempt proceeding by the Tribunal in exercise of powers conferred by the Contempt of Courts Act, 1971 read with Section 425 of the Companies Act, 2013, the appeal under Section 421 of the Companies Act, 2013 is not maintainable before this Appellate Tribunal - This apart, the petition for initiation of Contempt proceeding was also barred by limitation as prescribed under Section 20 of the Contempt of Courts Act, 1971 . Appeal dismissed.
Issues:
- Appeal under Section 421 of the Companies Act, 2013 against an order passed by the Tribunal in exercise of powers under Section 425 of the Companies Act, 2013. - Maintainability of an appeal under Section 421 of the Companies Act, 2013. - Powers of the National Company Law Tribunal and the National Company Law Appellate Tribunal in contempt proceedings. - Interpretation of the order dated 23rd October, 2008 passed by the erstwhile Company Law Board. Analysis: Issue 1: Appeal under Section 421 of the Companies Act, 2013 The judgment revolves around the question of whether an appeal under Section 421 of the Companies Act, 2013 is maintainable against an order passed by the Tribunal under Section 425 of the Companies Act, 2013. The Tribunal's power to initiate contempt proceedings for violation of its own orders is central to this issue. Issue 2: Maintainability of an appeal under Section 421 The Tribunal's authority to exercise powers under the Contempt of Courts Act, 1971, in conjunction with Section 425 of the Companies Act, 2013, is analyzed. The judgment clarifies that once the Tribunal exercises its powers under the Contempt of Courts Act, 1971, no appeal under Section 421 of the Companies Act, 2013 is maintainable before the Appellate Tribunal. Issue 3: Powers of the Tribunals in contempt proceedings The judgment delves into the powers vested in the National Company Law Tribunal and the National Company Law Appellate Tribunal regarding contempt proceedings. It highlights that these Tribunals are empowered to punish for contempt of their own orders under the Contempt of Courts Act, 1971, subject to specific modifications. Issue 4: Interpretation of the order dated 23rd October, 2008 The judgment scrutinizes the interpretation of the order dated 23rd October, 2008, passed by the erstwhile Company Law Board. It emphasizes that the order aimed at facilitating an amicable settlement between parties regarding shareholding and assets in group companies. The Tribunal concluded that the transfer in question was a step towards a potential settlement, aligning with the spirit of the 2008 order. The judgment clarifies the interplay between the Companies Act, 2013, and the Contempt of Courts Act, 1971, in the context of appeals and contempt proceedings before the National Company Law Tribunal and the National Company Law Appellate Tribunal. It underscores the limitations on appeals once contempt powers are invoked and provides a detailed analysis of the interpretation of a specific order to determine compliance. The decision ultimately dismisses the appeals, citing the non-maintainability of the appeals under Section 421 of the Companies Act, 2013 and the limitation prescribed under the Contempt of Courts Act, 1971.
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