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TMI Blog2021 (8) TMI 867X X X X Extracts X X X X X X X X Extracts X X X X ..... 71. It is for the Tribunal to find out whether its order has been disobeyed in a wilful manner and the mental element is to be adjudged by the Tribunal indicating the state of mind of the contemnor - It may not be out of place for this Tribunal to make a pertinent mention that Section 425 of the Companies Act, 2013 provides for power to punish for contempt and the same enjoins that the Tribunal and the Appellant Tribunal shall have the same jurisdiction, powers and authority in respect of contempt of themselves as the High Court has and may exercise for his purpose the powers under the provisions of the Contempt of Court Act, 1971. When the Tribunal has the requisite power under the Section 425 of the Companies Act, 2013 to punish a person/contemnor, then, the Tribunal is to exercise its power and to adjudicate the Contempt Petition on its file, of course, on merits - Application allowed. - Company Appeal (AT) (CH) (INS) No. 94 of 2021 - - - Dated:- 18-8-2021 - [Justice M. Venugopal] Member (Judicial) and [Kanthi Narahari] Member (Technical) For Appellant : Mr. Abhishek Anand, Advocate JUDGMENT (VIRTUAL MODE) INTRODUCTION: The Appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the knowledge of the Hon ble NCLT from time to time, thereby resulting in the breach of mandate, which affected the reputation and trust of Petitioner in dealing with the outsourcing agencies appointed in the course of Corporate Insolvency Resolution Process. 5. In view of the aforesaid facts and circumstances, the Petitioner herein is compelled to file the present petition before this Hon ble Adjudicating Authority vide orders dated 25th July, 2018, 10th December 2018, 8th July, 2019 and 1st October, 2019 and that appropriate action be initiated against the Contemnor for wilful disobedience of the direction of this Hon ble Adjudicating Authority and prayed for (1) Allowing the petition, (2) For initiating contempt proceedings against the alleged contemnors for their disobedience of judgements/orders dated 25th July, 2018, 10th December 2018, 8th July, 2019 and 1st October, 2019 respectively (3) For passing an order in directing the contemnor to comply with the orders dated 01.10.2019 of the Tribunal and to pay the fees and expenses, as ordered by an order dated 25.07.2018 amounting to ₹ 11,92, 828/- by way of demand draft/NEFT (4) In allowing the full amount of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant/Petitioner filed IA 279 of 2018 seeking directions against the Respondents to remit the amount in question. 11. In realty, it transpires that the Adjudicating Authority, as per order dated 10.12.2018 had disposed of IA 279/2018 based on the assurance of the Respondent to release the amounts as soon as the Bank Accounts are defreezed and consequently the Adjudicating Authority had directed the Bank to restore the Accounts of the Corporate Debtor . 12. To be noted, the Respondent failed to comply with his assurance even after defreezing the account of the Corporate Debtor and hence the Appellant/Petitioner projected IA 71/2019 seeking compliance of the order dated 10.12.2018 passed by the Adjudicating Authority and release the amount to the Resolution Professional and pay the fee and the expenses as ordered by the Adjudicating Authority (vide order dated 25.07.2018). 13. Indeed, the Adjudicating Authority on 08.07.2019 passed an order in IA 71/2019 granting 30 days time based on the request of the Respondent to pay the expenses incurred in respect of CIRP of the Corporate Debtor . 14. It is brought to the notice of this Tribunal by the Learned Counsel for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seeks in aid of the decision of the Hon ble Supreme Court in the matter of Jhareswar Prasad Paul Ors V Tarak Nath Ganguly ors reported in AIR 2002 Supreme Court at page 2215 wherein it is observed as under: .. The purpose of contempt jurisdiction is to uphold the majesty and dignity of the Courts of law. Since the respect and authority commanded by the Courts of law are the greatest guarantee to an ordinary citizen and the democratic fabric or society will suffer if respect for the judiciary is undermined, the Contempt of Courts Act, 1971 has been introduced under the Statute for the purpose of securing the feeling of confidence of the people in general for true and proper administration to justice in the country. The power to punish for contempt of Courts is a special power vested under the Constitution in the Courts of record and also under the statute. The power is special and needs to be exercised with care and caution. It should be used sparingly by the Courts on being satisfied regarding the true effect of contemptuous conduct. It is to be kept in mind that the Court exercising the jurisdiction to punish for contempt does not function as an original or appellate c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f our jurisdiction under Article 142 of the Constitution, we accordingly order and direct that in situation such as the present case, the Adjudicating Authority is sufficiently empowered Under Section 60(5)(c) of the IBC to make determination of the amount which is payable to an expert valuer as an intrinsic part of the CIRP costs. Regulation 34 of the IRP Regulations defines insolvency resolution process cost to include the fees of other professional appointed by the RP. Whether any work has been done as claimed and if so, the nature of the work done by the valuer is something which need not detain this Court, since it is purely a factual matter to be assessed by the Adjudicating Authority. 20. The NCLT in its order dated 29.06.2020, while dismissing the application of the Appellant for the payment of fees, observed that the Insolvency and Bankruptcy Board of India (IBBI) is the competent authority to deal with allegations against the RP relating to their failure to discharge statutory duties (Paragraph 7). Section 217 of IBC empower a person aggrieved by the functioning of an RP to file a complaint to the IBBI. If the IBBI believes on the receipt of the complaint that any RP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sdiction under the Act. The proceedings are quasi-criminal in nature, and therefore, standard of proof required in these proceedings is beyond all reasonable doubt. It would rather be hazardous to impose sentence for contempt on the authorities in exercise of contempt jurisdiction on mere probabilities. (vide V. G. Nigam and ors V Kedar Nath gupta and Anr. MANU/SC/0419/1992: AIR 1992 SC 2153; Chhotu Ram V Urvashil Gulati and Anr . MANU/SC/0492/2001: AIR 2001 SCV 3468: Anil Ratan Sarkar rs V Hirak Ghosh and Ors. MANU/SC/0175/2002; AIR 2002 SC 1405; Bank of Baroda V Sadruddin Hasan Daya and Anr. MANU/SC/1031/2003: AIR 2004 SC 942; Sahdeo alias Sahdeo Singh V Stage of UP and orsMASNU/SC/0132/2010: (2010) 3 SCC 705: and National Fertilizers Ltd V Tuncay Alankus and Anr; MANU/SC/0295/2013: AIR 2013 SC 1299). 10. Thus, in order to punish a conemnor, it has to be established that disobedience of the order is wilful. The word wilful introduces a mental element and hence, requires looking int the mind of person/contemnor by gauging his actions, which is an indication of one s state of mind. Wilful means knowingly intentional, conscious, calculated and deliberate with full knowledge o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice. They were voluntarily given. There are no bona fides in seeking time. Looking to the statements made to this Tribunal by the Appellant and Deepak Daga through learned Counsel for the Appellant and the Affidavits and undertakings given, which have not been honoured, we are of the view that, prima facie, case is made out for proceeding against both the Directors in contempt. We are of the opinion that the Appellant and Deepak Daga since beginning were aware of nature of the acts they were committing in the illegal withdrawals. They disobeyed Orders of Adjudicating Authority and this Tribunal willfully and there is wilful non-compliance of undertakings given. I A No. 1075 of 2020 to seek time to comply undertaking is not honest and appears to have been filed to create grounds of defence to further abuse process to kill time. The IA is rejected. The acts of the two Directors have obstructed the proceedings of CIRP, the proceedings before the Adjudicating Authority and this Tribunal. The acts prima facie disclose serious contempt, violating mandate of law of IBC applied by orders of Adjudicating Authority and this Tribunal and breach of undertaking given of oats, actionable as NCLT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... graph 3 to the effect that .. Therefore it is not known whether the contemnor financially solvent or not, in order to initiate contempt proceedings and viewed in the perspective had not inclined to initiate contempt proceedings but disposed of the Contempt Petition No. 01 /2020 in CP (IB) No. 90/BB/2017 by granting liberty to Appellant/petitioner to persuade the contemnors to pay the outstanding amount which in the considered opinion of this Appellate Tribunal is not a correct one in the eye of law because of the fact that the object/purpose of the contempt jurisdiction is to uphold the majesty and dignity of the Tribunal (s)/Court of Law. 29. It is for the Tribunal to find out whether its order has been disobeyed in a wilful manner and the mental element is to be adjudged by the Tribunal indicating the state of mind of the contemnor . 30. It may not be out of place for this Tribunal to make a pertinent mention that Section 425 of the Companies Act, 2013 provides for power to punish for contempt and the same enjoins that the Tribunal and the Appellant Tribunal shall have the same jurisdiction, powers and authority in respect of contempt of themselves as the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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