2017 (9) TMI 2045 - SC - SEBI

Delayed payment of dues to the SEB - Liberty granted on number of occasions to the respondent-contemnor to pay the amount by depositing the same in SEBI-Sahara account - Except hyperbolic arguments and rhetoric statements the amount in entirety has not been paid - whether further time to the respondent-contemnor for payment of the outstanding dues be provided or proceed with the auction of the Aamby Valley property? HELD THAT - Grant of further time to the respondent-contemnor and entertaining post-dated cheques which are dated 11th November 2017 would tantamount to travesty of justice and extending unwarranted sympathy to a person who is indubitably an abuser of the process of law. He who thinks or for that matter harbours the notion that he can play with law is under wrong impression. We are constrained to state that the respondent-contemnor in his own way has treated this Court as a laboratory and has made a maladroit effort to play possibly thinking that he can survive on the ventilator as long as he can. He would have been well advised that a person who goes on a ventilator may not survive for long and in any case a time would come when he has to be comatosed. Here comatose takes place as regards the ambitious effort made by the respondent-contemnor. Therefore we direct without any hesitation that the auction shall be held as per the direction given by this Court and the Official Liquidator is permitted to carry out the auction as per procedure and during the auction the Registrar General of the High Court of Bombay who is designated as Supreme Court appointee shall remain personally present to over see the physical auction at the auction venue at Mumbai.

Summary

1. ISSUES PRESENTED and CONSIDERED

The Supreme Court of India considered the following core legal issues in this judgment:

• Whether the respondent-contemnor has complied with the orders of the Court regarding the payment of dues to the SEBI-Sahara Refund Account.
• Whether the Court should grant further time to the respondent-contemnor for payment of the outstanding dues or proceed with the auction of the Aamby Valley property.
• Whether the Court should entertain the respondent-contemnor's proposal to pay the outstanding amount through post-dated cheques.
• Whether the auction process for the Aamby Valley property should be allowed to proceed as per the Official Liquidator's proposed schedule.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Compliance with Court Orders

• Relevant Legal Framework and Precedents: The legal framework involves the enforcement of Court orders and contempt proceedings due to non-compliance. The precedents emphasize the importance of adhering to Court directives and the consequences of contempt.
• Court's Interpretation and Reasoning: The Court noted the respondent-contemnor's history of non-compliance and the substantial amounts still owed. The Court expressed skepticism about the contemnor's intentions, given the repeated failures to meet payment deadlines.
• Key Evidence and Findings: The Court observed that despite some payments, a significant balance remained unpaid. The contemnor's assurances and partial payments were insufficient to satisfy the Court's orders.
• Application of Law to Facts: The Court applied the principles of contempt law, emphasizing the contemnor's obligation to comply with its orders and the consequences of failing to do so.
• Treatment of Competing Arguments: The contemnor's argument that substantial payments had been made was countered by the Court's emphasis on the outstanding balance and the need for full compliance.
• Conclusions: The Court concluded that the contemnor had not complied with its orders and that further indulgence was unwarranted.

Issue 2: Granting Further Time for Payment

• Relevant Legal Framework and Precedents: The Court considered the principles of reasonableness and the need to balance indulgence with enforcement of its orders.
• Court's Interpretation and Reasoning: The Court expressed its disinclination to grant further time, citing the contemnor's history of non-compliance and the need to uphold the integrity of its orders.
• Key Evidence and Findings: The contemnor's request for additional time was viewed in light of previous failures to meet deadlines and the ongoing non-payment issue.
• Application of Law to Facts: The Court applied the principle that justice should not be delayed, emphasizing the need for prompt compliance with its orders.
• Treatment of Competing Arguments: The contemnor's plea for more time was weighed against the Court's interest in ensuring compliance and preventing further delays.
• Conclusions: The Court decided against granting further time, directing the auction process to proceed.

Issue 3: Acceptance of Post-Dated Cheques

• Relevant Legal Framework and Precedents: The Court considered the reliability and enforceability of post-dated cheques in the context of compliance with its orders.
• Court's Interpretation and Reasoning: The Court viewed the acceptance of post-dated cheques as a potential delay tactic and expressed concern over the contemnor's sincerity.
• Key Evidence and Findings: The contemnor proposed to pay the outstanding amount through post-dated cheques, which the Court found unsatisfactory.
• Application of Law to Facts: The Court applied the principle of ensuring immediate compliance and avoiding further procrastination.
• Treatment of Competing Arguments: The contemnor's proposal was rejected in favor of ensuring immediate and full compliance with the Court's orders.
• Conclusions: The Court refused to accept post-dated cheques, directing the auction to proceed.

Issue 4: Proceeding with the Auction

• Relevant Legal Framework and Precedents: The Court considered the procedures for auctioning properties to recover dues and the role of the Official Liquidator in the process.
• Court's Interpretation and Reasoning: The Court emphasized the need to proceed with the auction to ensure recovery of the outstanding dues and prevent further delays.
• Key Evidence and Findings: The Official Liquidator's proposed auction schedule was reviewed, and the Court found it necessary to move forward with the process.
• Application of Law to Facts: The Court applied principles of expediency and efficiency in directing the auction to proceed as scheduled.
• Treatment of Competing Arguments: The contemnor's objections to the auction were dismissed, with the Court prioritizing compliance and recovery of dues.
• Conclusions: The Court directed the auction to proceed as per the Official Liquidator's schedule, with oversight by a designated Supreme Court appointee.

3. SIGNIFICANT HOLDINGS

• Preserve verbatim quotes of crucial legal reasoning: "He, who thinks or for that matter harbours the notion that he can play with law, is under wrong impression."
• Core principles established: The Court reinforced the principle that compliance with its orders is mandatory and that non-compliance will not be tolerated. It emphasized the importance of timely enforcement of orders to uphold the rule of law.
• Final determinations on each issue: The Court concluded that the contemnor had failed to comply with its orders, refused to grant further time or accept post-dated cheques, and directed the auction of the Aamby Valley property to proceed as scheduled.