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TMI Blog2017 (5) TMI 733X X X X Extracts X X X X X X X X Extracts X X X X ..... find that Respondent No.3 is guilty of having committed contempt of court on both the counts. At this stage it must be stated that in terms of Rule 6 (1) of Rules to Regulate Proceeding for Contempt of Supreme Court 1975, Respondent No.3 was obliged and duty bound to appear in person in response to the notice issued by this Court in Contempt Petition. Instead, he chose to file application seeking recall of the orders issuing notice. Having considered the matter, we see no reason to recall that order and dismiss I.A. Nos.1 to 4 of 2016 preferred by Respondent No.3 in Contempt Petition Civil No.421-424 of 2016. Respondent No.3 is therefore duty bound to appear in person in the present contempt proceedings. Since Respondent No.3 has not filed any reply to the Contempt Petition nor did he appear in person, though we have found him guilty of having committed contempt of court, we deem it necessary to give him one more opportunity and also hear him on the proposed punishment. We therefore adjourn matter to 10.07.2017 for hearing Respondent No.3 in person on matters in issue including one regarding the proposed punishment to be awarded to him for contempt of court. The instant contempt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioners banks filed OA No.766 of 2013 against Respondent Nos.1 to 9 before Debt Recovery Tribunal, Bengaluru (for short DRT Bengaluru), inter alia seeking recovery of ₹ 6203,35,03,879.32 (Rupees Six Thousand Two Hundred and Three Crores Thirty Five Lakhs Three thousand Eight Hundred and Seventy Nine and Paise Thirty Two only) from Respondent Nos.1 to 4. It is the case of the petitioners-banks that despite applications having been filed requiring Respondent Nos.1 to 4 to disclose details of their assets on oath, said respondents never disclosed the assets and instead, said respondents secretly tried to dispose of their assets with an intention to defeat the recovery proceedings pending before DRT Bengaluru. 2. According to the petitioners banks, on 25.02.2016 Respondent Nos.10 and 11 disclosed to London Stock Exchange and Bombay Stock Exchange respectively that Respondent No.3 had resigned as Chairman of Respondent No.11; that Respondent No.10 would pay to Respondent No.3 a sum of US$ 75 million; that out of said amount a sum of US$ 40 million would be paid immediately; and that Respondent No.3 had made a statement to the press confirming said transaction and had stated th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest including beneficial interest and those held in fiduciary capacity, in private trusts, public trusts, companies, partnerships, limited liability partnerships, and/or any other entity/ies both in India and abroad etc. in any form and there should be a substantial deposit made before this Court .. .. ..Mr. C. S. Vaidyanathan and Mr. Parag P. Tripathi, learned Senior Counsel appearing for Respondent Nos.1 to 4 have submitted that they may be given short time to file their response to the main petition. Accordingly, they are granted time upto 21.04.2016 to file their response. In the response filed by the third respondent, he shall disclose the details of all his properties - movable, immovable, tangible, intangible, shareholdings and any right, title or interest including beneficial interest and those held in fiduciary capacity, in private trusts, public trusts, companies, partnerships, limited liability partnerships, and/or any other entity/ies both in India and abroad etc. in any form whatsoever and also the rights, indicated above, in the name also of his wife and children, as on 31.03.2016. It shall also be indicated in the response as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment of assets furnished in the sealed cover, to the petitioners. 7. On 28.06.2016 Respondent No.10 filed a memo in O.A. No.766 of 2013 pending before DRT, Bengaluru along with two documents stating that an amount of US$ 40 million was paid to Respondent No.3 on 25.02.2016. Said memo was to the following effect:- MEMO The opponent 2 in the above application begs to submit the below mentioned documents: 1. Extract confirming payment of US$ (US Dollars) 40 Million to Defendant No.3 on 25.02.2016. 2. Resignation of Defendant No.3 from the Board of United Spirits Ltd. WHEREFORE the Opponent No.2 prays that this Memo and enclosures be taken on record in the interests of justice. 8. On 14.7.2016 I.A. Nos.9 to 12 of 2016 were filed by the petitioners-banks stating that the disclosure statement made by Respondent No.3 and furnished to the petitioners-banks in terms of the aforesaid Order dated 26.04.2016 was vague and lacked in material particulars; that the location of the assets mentioned in the statement was so unclear that it would be impossible for any person to identify the location of the property; and that Respondent No.3 had undisputedly received a sum of U ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assets in various forms/entities such as beneficial interest, etc. and thereby intentionally concealing the information. In fact, there is no whisper regarding the said details in the Disclosure Statement. 21. The disclosure is prima facie vague and lacks any material particulars. The location of the assets mentioned in the Disclosure Statement is so unclear that it is not practically possible for any person other than the Alleged Contemnor to identify the location of the properties. 22. Further, it is stated that the Alleged Contemnor had received a sum of US$ 40 million from Respondent No.10 pursuant to an Agreement dated 25.02.2016 entered into between Respondent No.3 and Respondent No.10. 23. It is pertinent to mention here that after disposal of the captioned Special Leave Petition, on 28.06.2016 the Respondent No.10 filed a Memo along with two documents in the DRT, stating that the above mentioned amount of US$ 40 million was paid to alleged Contemnor on 25.02.2016. A copy of the said Memo dated 28.06.2016 is annexed herewith 24. A reading of the above documents clearly establishes that as on 26.04.2016 when the alleged Contemnor filed the Disclosure St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lications being I.A. Nos.1 to 4 of 2016 were also filed on behalf of Respondent No.3/Alleged Contemnor for recall of Order dated 25.07.2016 passed by this Court issuing notice in contempt petition. It was submitted by Respondent No.3:- .It is further submitted that the disclosures made by Respondent No.3/Alleged Contemnor to this Hon ble Court were (a) pursuant to the Order dated 7th April, 2016 were made as on 31.03.2016 and were accurate as on 31.03.2016 , and (b) far from being made under the provisions of Order 21 Rule 41(2) of the Code of Civil Procedure, 1908, were only for the purpose of enabling the petitioners to have a fair idea for a meaningful settlement as observed in the order dated 26th April, 2016. It is respectfully submitted that the Petitioners are incorrectly alleging that the disclosures are inaccurate, and are now seeking to substantially alter the basis and purpose of the disclosures, as is evident from a mere perusal of the submissions in paragraphs 21 and 25 of the present Contempt Petition. It is denied that Respondent No.3 has not obeyed the directions of this Hon ble Court dated 7th April, 2016 or has not disclosed the details of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2016 passed by this Hon ble Court. 15. When IA Nos.9-12 of 2016 along with Contempt Petition Nos.421-424 of 2016 came up before this Court on 25.10.2016, it was prima facie found that Respondent No.3 had not made a proper disclosure. In the premises, this Court observed and directed:- Having heard learned Attorney General appearing for the applicants and Shri C.S.Vaidyanathan, learned Senior Counsel appearing for Respondent No.3, we are prima facie of the view that Respondent No.3 has not made a proper disclosure in terms of our Order dated 07.04.2016. Therefore, Respondent No.3 is directed to make a complete disclosure of all his properties and in particular, about the receipt of US$ 40 Million. It shall be disclosed as to when this amount was received; where was it deposited and how the same has been dealt with up to date. Respondent No.3 shall also furnish the particulars of the assets abroad with full details thereof, as has been given with regard to the assets in India. 16. Respondent No.3 thereafter filed further counter affidavit in aforementioned I.A. Nos.9-12 of 2016 on 23.11.2016. The affidavit enclosed letter dated 18.11.2016 issued by Edmond De Rothschild ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13 to 16 of the reply were as under: 13. Notwithstanding the above, it is respectfully submitted that pursuant to filing of O.A. No.766/2013 before the Hon ble DRT, Bengaluru, on 26.07.2013, Respondent Nos.1 to 3 gave an oral undertaking before the Hon ble DRT, that they would not alienate or dispose of their properties. Thereafter, since no interim order was passed by the Hon ble DRT, Petitioners filed a writ petition bearing W.P.No.38870/2013 W.P.No.39048-39052/2013 before the Hon ble High Court of Karnataka, seeking a writ in the nature of Mandamus directing the Hon ble DRT to hear and dispose of the interlocutory applications filed by the petitioners in the OA i.e. IA No. 2593/2013 to 2598/2013 IA No.3034/2013 expeditiously. In the aforesaid writ petition, the Hon ble High Court of Karnataka was pleased to pass a restraint Order on 03.09.2013 against respondent Nos. 1 to 3 herein in the following terms: In that view, there shall be interim order of injunction against the Respondent Nos.1 to 3 from transferring, alienating, disposing or creating third party rights in respect of movable as well as immovable properties belonging to them until further order in these p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e filed by the petitioners-banks to further counter affidavit filed by Respondent No.3 which inter alia referred to the orders dated 03.09.2013 and 13.11.2013 passed by the High Court of Karnataka, this Court passed the following Order: In the affidavit filed on 10.12.2016, the petitioners have brought to the notice of this Court that the transfer of US$ 40 Million in favour of the children of Respondent No.3 is in flagrant violation of the orders passed by the High Court of Karnataka. Therefore, it is prayed that appropriate orders may be issued to secure the deposit of the said amount of US$ 40 Million before this Court or the DRT forthwith, pending disposal of the further recovery proceedings. The learned senior counsel appearing for Respondent No.3 seeks three weeks' time to file reply to the submission. 19. Despite the aforesaid Order dated 11.01.2017 which took note of the violation of the orders passed by the High Court of Karnataka and though time was sought to file reply, nothing was filed in reply or rebuttal by Respondent No.3. 20. When the aforesaid IA Nos.9-12 of 2016 along with Contempt Petition Nos.421-424 of 2016 with application IA Nos.1-4 of 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... called upon to make complete disclosure of his assets. Whether the assets to be so disclosed were covered by the personal guarantee given by Respondent No.3 or not was immaterial. He was called upon to make a complete disclosure and was bound to comply with the directions. The assertion made by the petitioners-banks that the details of the bank account held in Edmond De Rothschild Bank were never disclosed by Respondent No.3 is correct. In fact, no details of any bank account with overseas banks were given by Respondent No.3. The violation by Respondent No.3 could not be termed as a mere infraction. The violation by Respondent No.3 regarding non-disclosure becomes more pronounced because it is this very account held in Edmand De Rothschild Bank that was utilized to transmit funds to the tune of US$ 40 Million. 22. We now turn to the alleged violation of orders dated 03.09.2013 and 13.11.2013 passed by the High Court of Karnataka. It is not disputed that such orders were passed restraining the concerned respondents including Respondent No.3 and that the orders were passed in proceedings arising from O.A. No.766 of 2013 before DRT Bengaluru. The present proceedings before this co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e fact that as disclosed by respondent Nos.10 and 11 to London Stock Exchange and Bombay Stock Exchange respectively Respondent No.10 would pay to Respondent No.3 a sum of US$75 million and accordingly petitioners-banks had moved four interlocutory applications for orders against respondent Nos.10 and 11 for disbursing said amount of US$ 75 million. The amount of US$ 40 Million so received by Respondent No.3 was therefore subject matter of the present controversy. The least that was expected of Respondent No.3 was to disclose relevant facts pertaining to receipt and disbursement of US$ 40 million. The violation on that count is thus not only against the directions issued by this court but also against express mandate of orders dated 03.09.2013 and 13.11.2013 passed in the proceedings in question. 25. Having thus found that the actions on the part of Respondent No.3 in disbursing the amount of US$ 40 million was against the text and tenor of the orders passed by the High Court of Karnataka, the question then arises whether this Court can take cognizance of such violation or should it leave it to be decided by the High Court of Karnataka itself in a properly instituted legal proce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the Orders passed by this Court in not disclosing full particulars of the assets as was directed by this Court. b) He is guilty of violating the express Orders of Restraint passed by the High Court of Karnataka in the same Cause from which the present proceedings have arisen. Though the contempt on the second count is theoretically of the orders passed by the High Court of Karnataka since those orders pertain to the very same Cause and the actions on part of Respondent No.3 in not disclosing the account in question through which the transfers were affected also fall with respect to contempt on first count, we proceed to exercise our contempt jurisdiction even with regard to the second count. As stated above, Respondent No.3 was adequately put to notice and no prejudice has been caused as a result of such assumption of jurisdiction by this court. 29. Having considered the entirety of the matter, we find that Respondent No.3 is guilty of having committed contempt of court on both the counts. At this stage it must be stated that in terms of Rule 6 (1) of Rules to Regulate Proceeding for Contempt of Supreme Court 1975, Respondent No.3 was obliged and duty bound to appear in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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