2022 (3) TMI 810 - Tri - Insolvency and Bankruptcy

Initiation of Contempt of Court proceedings against the Alleged Contemnors - willful disobedience/breach of orders - direction to Contemnors to cease and desist from carrying any construction activity on the subject land - HELD THAT - In order to establish that there is contempt by the respondents of the order of this tribunal. Following ingredients have to be fulfilled namely;--Firstly, whether there is any restraint order against any of the parties; Secondly, whether Respondents are aware of the order; Thirdly, whether the respondents are able to comply with the order; Lastly, whether there is disobedience of the order by the respondent. Admittedly, there is no allegation with regard to any change in shareholding of the Applicant having been effected by the Respondents/alleged Contemnors. Therefore, no case is made out with respect to disobedience in relation to this part of the order. Now, coming to the second part of the order, it is seen the Respondent No. 1 is a company engaged in the real estate business. In defence of the allegation, it has been submitted that there no ownership rights have been created by the Respondents/alleged Contemnors in favour any third party and only a development agency has been engaged to continue with the housing project of the Respondent No. 1 Company - In the instant case the Applicant has not been able to establish with cogent evidence that ownership of the said project of Respondent No. 1 has been transferred in favour any third party. No case about contempt of this Tribunal's orders dated 15.9.2017 and 15.1.2019 has been made - the present contempt petition is dismissed as being devoid of merits.

Summary

Issues Involved:
1. Alleged willful disobedience of tribunal orders dated 15.09.2017 and 15.01.2019.
2. Maintainability of the contempt application.
3. Allegations of forum shopping and abuse of process of law.
4. Interpretation and compliance with the status quo order regarding shareholding and property development.

Detailed Analysis:

1. Alleged Willful Disobedience of Tribunal Orders:
The applicant sought to initiate contempt proceedings against the respondents for alleged willful disobedience of the tribunal’s orders dated 15.09.2017 and 15.01.2019. The tribunal's order on 15.09.2017 directed maintaining the status quo in relation to shareholding and the project "THE GLEN" being part of "AURIEL TOWNE." The order on 15.01.2019 reiterated maintaining the status quo regarding the property at Plot No. 31, Knowledge Park, Greater Noida, West. The applicant claimed that the respondents violated these orders by engaging in construction activities and creating third-party rights.

2. Maintainability of the Contempt Application:
The respondents challenged the maintainability of the contempt application, arguing that there was no willful disobedience of the orders. They contended that the applicant's actions, such as publishing a notice on 15.02.2021, were done with mala fide intentions, creating panic among the allottees. They also accused the applicant of forum shopping by filing multiple applications and petitions, which they argued was an abuse of the legal process.

3. Allegations of Forum Shopping and Abuse of Process of Law:
The respondents argued that the applicant was engaging in forum shopping by filing numerous applications in the captioned petition and a separate company petition before the principal bench. They claimed this was an abuse of the process of law and that the applicant had not participated in the day-to-day functioning of the respondent company, which was halting the project. The respondents asserted that M/s. World Infracons Private Limited (Contemnor No. 1) had come forward to invest and develop the project when financial institutions were unwilling to provide assistance due to pending litigations.

4. Interpretation and Compliance with the Status Quo Order:
The tribunal examined whether the respondents had violated the status quo orders. It noted that there were no allegations of changes in shareholding, thus no disobedience regarding this aspect. Regarding the property, the tribunal found that the respondents had not created ownership rights in favor of any third party but had engaged a development agency to continue the housing project. The tribunal concluded that carrying out construction activities under a valid agreement did not violate the orders as long as the legal ownership remained with the respondent company.

Conclusion:
The tribunal dismissed the contempt petition, stating that no case of contempt had been made regarding the orders dated 15.09.2017 and 15.01.2019. The tribunal emphasized that the applicant failed to provide cogent evidence of ownership transfer to any third party. Consequently, the contempt petition was dismissed as devoid of merits, with no orders as to costs.