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TMI Blog2023 (5) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... in stock portfolio valued at Rs. 1,97,62,499/-. In addition, the Respondent agreed to pay a sum of Rs. 69,22,529, which has accrued till 17.07.2019 on the said stocks. The Respondent further agreed to pay interest at the rate of 12% per annum on the above amount till 29.02.2020. 1.2. This MoU was filed before the Trial Court, wherein, the Respondent gave an undertaking to the Trial Court that the entire settlement amount shall be paid on or before 29.02.2020 and it was further stated that in case of default, the Respondent herein would become liable for contempt of Court. 2. This contempt petition has been filed by the Petitioners on 02.03.2020 stating that the Respondent has only paid a sum of Rs. 42 lakhs and has failed to pay the balance of Rs. 2,40,84,782.14 as per the undertaking recorded in order dated 30.10.2019 passed by the Trial Court. 2.1 It is stated in the petition that the Petitioners are senior citizens, who are registered medical practitioners who were defrauded by the Respondent, who represented himself to be a portfolio Manager and lured the Petitioners to transfer their stock in shares to the Respondent. The said stock was misappropriated by the Respondent lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tock. 7.2. Both the parties entered into agreement dated 26.03.2018 for the management of the said stock portfolio. The Respondent issued six (06) cheques in favour of the Petitioners, however, the same were dishonored on 02.08.2019 due to insufficiency of funds. 7.3. Thereafter, the Petitioners filed two (02) complaint cases, Complaint Case Nos. 27671/2019 and 27736/2019, under Section 138 of the NI Act. 7.4. Subsequently, with a view to arrive at a settlement, the parties entered into the MoU, whereby, the Respondent agreed to pay a total sum of Rs. 2,66,85,028 along with interest at the rate of Rs. 12% per annum till 29.02.2020 to the complainant in both the cases collectively. 7.5. The breakup of this amount was (i) Rs. 1,97,62,499, i.e., the value of the stocks and; (ii) profits to the tune of Rs. 69,22,529, which had accrued till 17.07.2019 on the said stocks. In addition, the interest at 12% was also payable. 7.6. The Respondent agreed to pay a sum of Rs. 25,00,000/- (first installment), within a week from the date of the MoU and to continue to pay the remaining sum in instalments till 29.02.2020. 7.7. It was further agreed that, if the Respondent defaults in payment o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in any manner they like without informing the First Party about the same. He has further assured the Second Party that in case he is unable to pay the money of the Second Party, he will hand over the possession and title documents of Sonepat Property also to the second party and his family members and they would be free to sell the same to anyone they like." (Emphasis supplied) 7.10. On 18.09.2019, the Respondent paid a total sum of Rs. 20 lakhs in favour of the Petitioners. 7.11. On 30.10.2019, the Respondent paid a sum of Rs. 14 lakhs by way of demand draft to the Petitioners and also undertook to pay a remaining sum without any fail. The order dated 30.10.2019 passed by the Trial Court reads as under: "I am accused in the present cases bearing number 27671/2019 & 27736/2019 filed by the complainant against me u/s 138 of NI Act. I have amicably settled all the claims of complainant against me, arising out of the cheque in question, I had agreed to pay full and final settlement amount of Rs. 2,66,85,028/- alongwith interest at the rate of 12% per annum to the complainant in both the cases collectively. I hereby undertake that I will make the whole payment of aforesaid settle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice of contempt was issued to the respondent, to which he has filed a reply, including an affidavit of unconditional apology dated 17.10.2020 wherein he says, "That I tender my unconditional apology to this Court." and in para 7 of his reply, he has given further undertaking that, "..the respondent has further undertaken to pay to the respondent (sic, petitioner) Rs.35 lakh by 04.012.2020 and R.20 lakh by the 20th every month and the balance by 31.03.2021..." 3. The learned counsel for the respondent submits that the said undertaking shall be duly complied with by the respondent. The said undertaking is accepted. 4. List for compliance on 28.04.2021." (Emphasis supplied) 8.3. However, the Respondent failed to make any payment in furtherance of the undertaking recorded on 21.01.2021. 8.4. In these circumstances, by order dated 13.07.2021, this Court has taken adverse note of the conduct of the Respondent in not even tendering a partial compliance in making the payments; and thereby held the Respondent guilty of contempt of Court. The relevant portion of the order dated 13.07.2021 reads as under: "3. The learned counsel for the petitioner submits that the respondent has def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Petitioners and mitigate the difficult circumstances. This Court specifically observed that the order on sentencing was deferred so as to bring about some rapprochement and some action from the Respondent to pay the outstanding dues to the Petitioners, as undertaken before this Court. Even on the said date (20.12.2021), this Court granted one last and final opportunity to the Respondent to make the payments to the Petitioners. The relevant portion of the order dated 20.12.2021 is reproduced herein under: "2. It is evident from the aforesaid orders that despite the court holding the respondent guilty of contempt of court, it provided the respondent with sufficient opportunity to pay the petitioners and mitigate their difficult circumstances. 3. The case has been adjourned on four occasions post holding the respondent guilty. The order on sentencing was deferred, so as to bring about some rapprochement and some movement from the respondent to pay the monies. Albeit costs of Rs.10,000/- have been paid, the monies owed to the petitioner are still due. The respondent, who is present in court, continues to state that he does not have the monies to pay the outstanding amount. 4. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date for orders on sentencing. No further opportunity shall be granted." (Emphasis supplied) 8.9. On 24.02.2022, the Respondent issued demand draft for an amount of Rs. 70 lakhs to the Petitioners. It was submitted by the learned counsel for the Respondent that a further payment of Rs. 37 lakhs will be made by the Respondent within a week from 24.02.2022. He also undertook not to encumber and/or dispose of any property in which he may have an absolute or partial share or interest. In view of the assurances made and undertaking given before this Court, the orders on sentencing were deferred. The relevant portion of the order dated 24.02.2022, reads as under: "3. The learned counsel for the petitioner submits that after due adjustments, the total amount now due is Rs.2.89 crores, inclusive of all interest as of date. After setting off today's payment of Rs.70 lacs and the promised payment of Rs.37 lacs, the total amount due will be Rs.1.82 crores. 4. The learned counsel for the respondent seeks time to obtain instructions in this regard. 5. The respondent undertakes not to encumber and/or dispose off any property in which he may have an absolute or partial share or interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent sought further time to make pending payments. In this manner the Respondent, yet again, undertook (3rd undertaking was given to this Court) to make payments of the outstanding amount to the Petitioners before 12.10.2022. 8.15. However, no payment was made in furtherance of 3rd undertaking as well. 8.16. Thereafter, on 17.11.2022, this Court gave one final opportunity to the Respondent to purge the contempt and to pay the requisite amount to the Petitioner within a period of three (3) weeks and noted that the orders on sentencing will be passed, taking into account the steps taken by the Respondent to purge the contempt. The order dated 17.11.2022 reads as under: "The respondent has not complied with the undertaking given vide order dated 31.08.2022 to the effect that the requisite amount will be paid to the petitioner on or before 12.10.2022. Last opportunity is granted to the respondent to purge his contempt and to pay the requisite amount to the petitioner within a period of three weeks from today. The orders on sentencing will be passed on the next date of hearing, taking into account the steps taken by the respondent to purge his contempt. List on 14.12.2022. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 09.2019 and the order dated 30.10.2019. 3 CM APPL. 20910/2021 dated 14.07.2021 was filed by the Respondent after the Respondent was held guilty of contempt vide order dated 13.07.2021 Application tendering unconditional apology and extension of time by three (03) months for making payments to the Petitioner under the MoU. 4 Affidavit of undertaking dated 30.05.2022 filed by the Respondent in compliance with the order dated 26.05.2022. Affidavit of undertaking whereby the Respondent undertook to pay a sum of Rs. 1,89,00,000 as per the schedule agreed between the parties. Also tendered an unconditional apology to this Court. 10.4. In each of these pleadings referred to above, the Respondent has never disputed the validity of the MoU and has in fact duly acknowledged his liability to pay the outstanding amounts to the Petitioners. In addition to acknowledging the outstanding amount payable to the Petitioners, the Respondent has also repeatedly assured and undertook to this Court that the said amount which is due, will be paid to the Petitioners. 10.5. In view of the acknowledgment, assurances and the undertakings given by the Respondent in these proceedings, the submission of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers, 2022 SCC OnLine SC 827, wherein it has been held that non-payment of the outstanding amount by the Respondent even after repeated opportunities and directions passed by the court will amount to punishment under contempt of Court. The relevant portion of the said judgment reads as under: "67. Sufficient opportunities have been given to the respondents to deposit the shortfall amount so as to maintain a sum of USD 60 million in their Corporation Bank account. The first order passed by the learned Single Judge in their application under Section 9 of the Act, 1996 is passed in the year 2014 and even the same has been restored by this Court vide judgment and order dated 19.08.2020 and thereafter, further directions have been issued specifically directing the respondents to deposit the shortfall vide order dated 06.05.2021 and thereafter their application for exemption from depositing the shortfall amount has been dismissed by this Court. Despite the above, the respondents have failed to deposit the shortfall amount and therefore, they have rendered themselves liable for suitable punishment under the provisions of the Contempt of Courts Act for wilful disobedience of not only the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... temnors is such as would justify invocation of contempt jurisdiction of this Court. Not only have the contemnors unreasonably delayed and defaulted in compliance of the orders of this Court without explaining the cause for such default, or seeking extension of time for compliance; but they have also sought to avoid compliance of the order, even after taking benefit of the extended time period granted for compliance of the same. The contemnors cannot, at this juncture, claim that the requirement of deposit was not mandatory, but directory and therefore non-compliance thereof would not constitute contempt. 27. In view of the above and for the reasons stated above, we are of the firm view that the respondents have wilfully disobeyed the order passed by the High Court dated 8-8-2019 [Nirmal Lifestyle Ltd. v. Urban Infrastructure Real Estate Fund, 2019 SCC OnLine Bom 13106] in Notice of Motion No. 960 of 2019 in Commercial Arbitration Petition No. 55 of 2019 and have wilfully disobeyed the order dated 28-10-2021 [Dharmesh S. Jain v. Urban Infrastructure Real Estate Fund, 2021 SCC OnLine SC 3109] passed by this Court in Miscellaneous Application No. 1668 of 2021 in Special Leave Petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irect the Registrar General of this Court to take necessary steps to have the convicted contemnor taken into custody and cause him to send to Central Jail, Tihar, under appropriate warrant of commitment for undergoing the sentence awarded as above.
15. A copy of this judgment shall also be furnished to the convicted contemnor free of cost. He shall be informed by the Superintendent, Central Jail that he has the right to prefer an appeal against the conviction and order on sentence passed by this Court.
16. The undertaking given by the Respondent vide order dated 24.02.2022, that he shall restrain from encumbering or disposing off any property in which he may have an absolute or partial share or interest including the property No. B-7/111A, Extension Safdarjung Enclave, New Delhi, is made absolute and shall continue to operate until the Respondent clears the admitted amount of Rs. 1.89 Cr., such properties cannot be sold by the Respondent without seeking written consent of the Petitioner herein and the prior permission of the Trial Court.
17. With these observations, the present contempt petition and all the pending applications, if any, are disposed of. X X X X Extracts X X X X X X X X Extracts X X X X
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