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TMI Blog2023 (4) TMI 831X X X X Extracts X X X X X X X X Extracts X X X X ..... rges were required to be paid by the Respondent - the facts and circumstances do not indicate that there is any willful disobedience by the Respondent in discharging their obligations under the Settlement Agreement. It does appear that as per Settlement Agreement, certain payments have been made and issues arose between the parties after taking the possession of the premises by the Respondent and inspection and reports were obtained by the Respondent regarding the condition of the premises and structural stability. We are not inclined to proceed to punish the Respondent for any contempt of order of this Court dated 27.07.2022. We, thus, decline to proceed to punish the Respondent for contempt. We, however, make it clear that insofar as inter se rights of the parties regarding claims, we have not expressed any opinion and the same can be examined and decided in appropriate Forum. Revival of the CIRP against the Respondent - HELD THAT:- Section 9 proceedings were initiated by the Operational Creditor for a total amount of INR 1,16,79,622/-. It is true that settlement entered between the parties on 14.07.2022 was for an amount of INR 6,09,68,538/-, which was the amount claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s prayed that Company Appeal (AT) (Insolvency) No.836 of 2022 be decided in terms of the settlement. This Tribunal vide order dated 27.07.2022 allowed IA No.2448 of 2022 and permitted the Operational Creditor to withdraw the Section 9 Application. The order dated 05.07.2022 was withdrawn. (iii) As per the Settlement Agreement between the parties, the Corporate Debtor undertook to make payments as per the Schedule given in the settlement. The settlement contemplated that on making payment of INR 1,16,79,622/-, the Operational Creditor shall handover the keys of the premises within twenty-four hours. The settlement also contemplated that Corporate Debtor shall undertake to make the Screen operational by 20.07.2022. Monthly payments were also contemplated under the settlement. 2. The Applicant Operational Creditor filed this Contempt Application alleging non-compliance of the order dated 27.07.2022 by the Corporate Debtor. The case of the Applicant in the Contempt Application is that on 17.08.2022 the Applicant sent an email to the Contemnor for the non-payment of amount stated in the Settlement Agreement for month of August 2022. The Applicant further pleads that Contemnor ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... multiple holes dug on the roof. The email dated 17.08.2022 was immediately replied by the email dated 30.08.2022. In the email dated 30.08.2022, the Respondent communicated that inspite of two payments, keys were never physically handed over. The keys were kept in the possession of the Shop Owners Welfare Association, who took 20 days to handover the keys. The other details and efforts taken by the Respondent were communicated along with structural stability issue. There is no willful disobedience on the part of Respondent and Contempt Application deserves to be dismissed. 7. The learned Senior Counsel for the Respondent further submits that the Applicant has already initiated proceedings under Section 9 of the Arbitration and Conciliation Act, 1996 in the Court of Learned Additional District Judge (Commercial Court), Special Commercial Court at Gurugram for recovery of entire dues of INR 7,53,33,234/-. Notice was sent in the arbitration case fixing the date 17.02.2023. It is submitted that Contempt Application deserves to be rejected. 8. The learned Counsel for both the parties have relied on several judgments of Hon ble Supreme Court in support of their respective submissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the payment of INR 1,16,79,622. 3. That, for the further payment of the balance amount of INR 2.10 Crore, the Second Party herein agrees to pay the aforesaid sum of INR 2.10 Crore in TWELVE (12) EQUATED MONTHLY INSTALMENTS wherein the Second Party shall remit an amount of INR 17,50,000 (Indian rupees Seventeen Lakh Fifty Thousand) for twelve months starting from July 2022 for which the payment shall be made on 10.08.2022 along with the monthly rent/ conducting charges of INR 25,36,420 (Indian Rupees Twenty Five Lakhs Thirty Six Thousand and Four Hundred Twenty). 11. We may also notice one more Clause of the Agreement, i.e., Termination of Agreement, which is to the following effect: TERMINATION OF AGREEMENT The event of default/ breach as defined in Clause (I) of this Settlement Agreement shall lead to revival of the proceedings initiated in Company Petition (IB) No.160 of 2021 under Section 9 of the Code before the Hon ble National Company Law Tribunal, Mumbai in addition to the proceedings for contempt for breach of this Settlement Agreement. 12. There is no dispute between the parties that as per Settlement Agreement between the parties dated 14.07.202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions. To reopen any Cinema after a prolonged closure, it takes massive amount of capital for the same and recommence the business operations. Due to the closure of the premises for a period of 2 years, the company had to incur huge costs for cleaning and sanitizing, reparation of the projectors, mobilization of the staff members, negotiation with the vendors, and such major functions alike which are cardinal prerequisites to recommence the business operations. All these functions and processes are a time consuming affair and took at least 30 days. Due to the aforementioned compelling circumstances of getting ingress after 20 days from the proposed day of admission, the entire process to get on track was derailed. Further to this, it was a pre requisite of Cam Agency to sign settlement agreement covering all the charges from Closure till the commencement of operations. There was lot of back and forth on this agreement on account incorrect charges being levied that consumed a lot of time resulting in delaying the finalization of settlement agreement and commencement of operations. We also state that on numerous occasions the CEO, Finance Head of Business Operations and oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Appeal against the order passed by the Delhi High Court, convicting the Contemnors with simple imprisonment for three months along with fine of Rs.2000/-. The learned Counsel for the Applicant has submitted that in the above case also there was breach of undertaking given by the Contemnor for which the conviction was ordered. In the above case, the Hon ble Supreme Court laid down following in paragraph 25, 26, and 27: 25. It is true that an undertaking given by a party should be seen in the context in which it was made and (i) the benefits that accrued to the undertaking party; and (ii) the detriment/injury suffered by the counter party. It is also true that normally the question whether a party is guilty of contempt is to be seen in the specific context of the disobedience and the wilful nature of the same and not on the basis of the conduct subsequent thereto. While it is open to the court to see whether the subsequent conduct of the alleged contemnor would tantamount to an aggravation of the contempt already committed, the very determination of an act of contempt cannot simply be based upon the subsequent conduct. 26. But the subsequent conduct of the party may throw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irections which are explicit in a judgment or order or are plainly self-evident ought to be taken into account for the purpose of consideration as to whether there has been any disobedience or wilful violation of the same. Decided issues cannot be reopened; nor can the plea of equities be considered. The Courts must also ensure that while considering a contempt plea the power available to the Court in other corrective jurisdictions like review or appeal is not trenched upon. No order or direction supplemental to what has been already expressed should be issued by the Court while exercising jurisdiction in the domain of the contempt law; such an exercise is more appropriate in other jurisdictions vested in the Court, as noticed above. The above principles would appear to be the cumulative outcome of the precedents cited at the Bar, namely, Jhareswar Prasad Paul v. Tarak Nath Ganguly [(2002) 5 SCC 352 : 2002 SCC (L S) 703] , V.M. Manohar Prasad v. N. Ratnam Raju [(2004) 13 SCC 610 : 2006 SCC (L S) 907] , Bihar Finance Service House Construction Coop. Society Ltd. v. Gautam Goswami [(2008) 5 SCC 339] and Union of India v. Subedar Devassy PV [(2006) 1 SCC 613] . 17. Another judgme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the plea as has been communicated by the Respondent to the Applicant by email dated 30.08.2022, as extracted above and other facts as pleaded in the reply filed to this Contempt Application. The facts and pleadings by the parties indicate that there were some issues between the parties regarding the premises for which conducting charges were required to be paid by the Respondent. The Screen could not run beyond two months and due to several issues including structural stability the Cinema premises could not run. In the contempt proceedings we are not required to determine the rights of the respective parties qua the initial agreement between the parties and the claim made by each other. Only question which needs to be considered is as to whether the act of the Respondent can be treated to be act of willful disobedience of the undertaking given before the Court in order dated 27.07.2022. When we look into the overall facts and circumstances, we are satisfied that the facts and circumstances do not indicate that there is any willful disobedience by the Respondent in discharging their obligations under the Settlement Agreement. It does appear that as per Settlement Agreement, cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rties on 14.07.2022 was for an amount of INR 6,09,68,538/-, which was the amount claimed to be in default from 1st November, 2019 to 23rd March, 2020. The total debt in Section 9 Application having been paid, we are of the view that no useful purpose will be served in directing revival of Section 9 Application and proceeding of CIRP in respect of Corporate Debtor. The payments, having been made for which Section 9 Application was filed, it is clear that Respondent has capacity to make the payment and no CIRP needs to be undertaken at this stage. We further notice that with regard to claim by the Operational Creditor, proceedings under Section 9 of the Arbitration and Conciliation Act, 1996 have been initiated as noted above, where notices have also been issued to M/s Cinema Ventures Private Limited, where claim of both the parties shall be examined and determined. This has also weighed with us in not reviving Section 9 proceedings initiated by the Operational Creditor. 25. In view of the foregoing discussion, we dismiss the Contempt Case (AT) No.19 of 2022 as well as IA No.4842 of 2022. We make it clear that in these proceedings, we have not expressed any opinion with regard to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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