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TMI Blog2025 (1) TMI 435X X X X Extracts X X X X X X X X Extracts X X X X ..... icating Authority while passing the order dated 24.08.2023 for initiating CIRP with regard to Project Samhita of the CD, has violated the order dated 13.01.2021. Hence, both the Members of the Adjudicating Authority, who are Respondent Nos.1 and 2 need to be proceeded under the Contempt of Courts Act, 1971. The Applicant submits that the present RP, who is appearing in CP(IB) No. 84 of 2019 is misconducting himself and not taking steps to pay the CIRP costs to the Applicant. Various fraudulent activities are being undertaken by present RP - Shri K.P. Raju. The Applicant submits that order dated 24.08.2023, by which the CIRP has been initiated against another Project of CD, i.e. Samhita Project is in violation of order dated 13.01.2021. Hence, both the Members of the Adjudicating Authority be proceeded under the Contempt of Courts Act. The law is well settled that civil contempt under Section 2(b) of the Contempt of Courts Act must be wilful and where there is deliberate flouting of the orders of the Court, the Court may initiate action. On looking into the facts of the present case, the Adjudicating Authority has passed order dated 24.08.2023 on an Application filed by Apartment Bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder dated 20.08.2019 passed by Adjudicating Authority Bengaluru Bench in which the Applicant was appointed as Interim Resolution Professional. (ii) On 09.11.2019, Committee of Creditors ( CoC ) passed a resolution replacing the Applicant and appointing one Mr. Konduru Prasanth Raju ( K.P. Raju ), as RP. The Adjudicating Authority vide order dated 17.12.2019 did not approve the resolution of CoC and offered the Applicant to work as RP at the fixed rate of Rs.6.75 lakhs per month. (iii) Order dated 17.12.2019 was challenged by CoC before this Tribunal in Company Appeal (AT) (Ins.) No.34 of 2020, which Company Appeal was decided on 13.01.2021, setting aside the order dated 17.12.2019 passed by Adjudicating Authority appointing Applicant as RP. This Appellate Tribunal while setting aside order dated 17.12.2019 directed that fees paid/ payable in terms of impugned orders, shall be protected. In pursuance of the order of this Appellate Tribunal dated 13.01.2021, the Applicant handed over charge of the RP to K.P. Raju. (iv) The Corporate Debtor was having several Projects, various Applications came for consideration in the CP(IB)84/2019. The Adjudicating Authority vide order dated 04.09. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Applicant filed this Contempt Application for taking action under the Contempt of Courts Act, 1971 against the Respondents for violation of order of this Tribunal dated 13.01.2021 in Company Appeal (AT) (Ins.) No.34 of 2020 in passing order dated 24.08.2023. 2. Shri Ashok Kriplani, the Applicant has appeared in person in support of the Contempt Application. When the Contempt Application came for consideration on 25.11.2024, this Tribunal granted time to the Applicant to file an affidavit explaining the question of limitation for filing a Contempt Application for violation of order dated 13.01.2021. In pursuance of the order of this Tribunal dated 25.11.2024, the Applicant filed affidavit dated 09.12.2024. 3. We have heard the Applicant appearing in person. 4. The Applicant explaining the limitation under Section 20 of the Limitation Act, 1971 submits that order dated 24.08.2023 has been passed by the Adjudicating Authority and within one year from the said order, the present Contempt Application was filed on 16.06.2024, thus, the Contempt Application is not hit by Section 20 of the Limitation Act and needs to be heard on merits. It was further contended that Applicant has continuou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which was protected by order dated 13.01.2021 for all the Projects of the CD. Since, the assets of the Sumadhur Project, to which CP(IB) No.84/BB/2019 has been confined by order dated 04.9.2020, are only Rs.55 lakhs, whereas CIRP cost to which the Applicant is entitled is Rs.2.15 crores. Hence, the Applicant has rightly filed Application with respect to other Projects, i.e. Sneh Project and Samhita Project for deciding upon the CIRP cost of the Applicant, which Application was wrongly rejected by the Adjudicating Authority. It is submitted that the Adjudicating Authority while passing the order dated 24.08.2023 for initiating CIRP with regard to Project Samhita of the CD, has violated the order dated 13.01.2021. Hence, both the Members of the Adjudicating Authority, who are Respondent Nos.1 and 2 need to be proceeded under the Contempt of Courts Act, 1971. The Applicant submits that the present RP, who is appearing in CP(IB) No. 84 of 2019 is misconducting himself and not taking steps to pay the CIRP costs to the Applicant. Various fraudulent activities are being undertaken by present RP - Shri K.P. Raju. The Applicant submits that order dated 24.08.2023, by which the CIRP has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in paragraph 12(D), which directed that The steps taken by them in CIRP and fees paid/ payable in terms of Impugned Orders, shall be protected . The grievance which has been raised in the Contempt Application and by various Applications filed by the Applicant in the CIRP of the CD with respect to other two Projects namely Sneh Project and Samhita Project, is only with respect to CIRP costs to which the Applicant was entitled and the present Contempt Application has also been filed for the purpose of CIRP costs, which according to the Applicant he was entitled as per order dated 13.01.2021. 10. The Applicant has brought on the record order dated 04.09.2020 passed by Adjudicating Authority in CP(IB) 84/BB/2019, which directed the CIRP be deemed to be in respect of only Sumadhur Project. Various Applications filed by the Applicant, Members of the CoC and various Homebuyers, came to be decided by common order dated 04.09.2020. The Adjudicating Authority in paragraphs 28 and 29 of the order dated 04.09.2020 directed as follows: 28. For the aforesaid reasons and circumstance of the case and the Law on the issue, we are of considered opinion that the Applicant has exceeded his jurisdictio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted the petition with respect to Project Dreamz Sneh Project. It is useful to extract paragraphs 14 to 17 of the order, which are as follows: 14. It is pertinent to refer here the judgement dated 04.02.2020 passed by the Hon'ble NCLAT in the matter of Flat Buyers Association Winter Hills-77, Gurgaon vs. Umang Realtech Pvt. Ltd. through IRP Ors. in Company Appeal (AT) (Insolvency) No.926 of 2019 wherein it is inter alia held that a Corporate Insolvency Resolution Process (CIRP) against a real estate Company would have to be limited to only the concerned project and will not affect other projects undertaken by it. 15. Further, the Hon'ble NCLAT in a recent judgment dated 10.06.2022 in the matter of Ram Kishor Arora Suspended Director of M/s. Supertech Ltd. vs. Union Bank of India Anr. in Company Appeal (AT) (Insolvency) No.406 of 2022, inter alia opined that in CIRP Process, Project-wisc Resolution has to be started as a test to find out the success of such Resolution and allowed the IRP therein to constitute the CoC with regard to the Project Eco Village II only. 16. We have carefully considered the arguments of the respective Counsels. In view of the facts and circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebtor. Written Consent given by the IRP in Form 2 dated 08.09.2021 has been filed along with the C.P at Page Nos.1516-1520, wherein it was declared she is eligible to be appointed as IRP in the case of the Corporate Debtor and that no disciplinary proceedings are pending against her with the Board or ICSI Institute of Insolvency Professionals. However, since the Certificate of Registration is not filed, the IRP shall file the same within one week from the receipt of this order. 12. Thus, CP(IB) No.83/BB/2021 was admitted with respect to Sneh Project, in which CIRP, the Applicant filed an IA No.168 of 2022 praying for impleadment and seeking a direction to decide upon unpaid CIRP costs of the Applicant. Application IA No.168 of 2022 filed by the Applicant was rejected on 07.10.2022, the copy of which order is filed as Annexure A9. It is useful to extract paragraph 3 of the order, which is as follows : 3. When the matter is taken up for hearing, it is observed that the Applicant/Erstwhile RP was appointed as the IRP/RP in C.P. (IB)No.84/BB/2019 against the same Corporate Debtor herein for another project, and through this Application, he is seeking to get his unpaid CIRP costs from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e his remedy, if so advised, in accordance with law. No costs. Pending IAs are closed. 14. It is useful to notice that challenging the order dated 04.07.2023, the Applicant filed Civil Appeal (Diary No.33778/2023), which Appeal was dismissed by the Hon ble Supreme Court vide order dated 12.12.2023. The order passed by the Hon ble Supreme Court on 12.12.2023 is as follows: IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL No. of 2023 (Arising out of Diary No.33778 of 2023 ASHOK KRIPLANI APPELLANT(S) VERSUS RAMANATHAN BHUVANESHWARI ANR. .RESPONDENT(S) ORDER Delay condoned. We do not find any good ground and reason to interfere with the impugned judgment/order and hence, the present appeal is dismissed. Pending application(s), if any, shall stand disposed of. J. (SANJIV KHANNA) J. (S.V.N. BHATTI) NEW DELHI December 12, 2023. 15. Now we come to the order dated 24.08.2023, which is the main basis of alleging contempt by the Applicant and it is contended that the said order is in violation of order dated 13.01.2021, hence, the contempt proceedings be initiated against both the Members of the Adjudicating Authority. 16. The copy of the order dated 24.08.2023 has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respective Counsel. In view of the facts and circumstances discussed above, the present Petition being complete and having established the default in payment of the financial debt and for the default amount being above Rs.1,00,00,000/- (Rupees One Crore Only), the Petition is admitted in respect of Dreamz Samhita Project of Respondent-Dreamz Infra India Limited under Section 7 of the I B Code, 2016.Accordingly, moratorium is declared in terms of Section 14 of the Code. As a necessary consequence of the moratorium in terms of Section 14, the following prohibitions are imposed, which must be followed by all and sundry: (a) The institution of suits or continuation of pending suits or proceedings against the Corporate Debtor including execution of any judgment, decree or order in any court of law, tribunal, arbitration panel or other authority; (b) Transferring, encumbering, alienating or disposing of by the Corporate Debtor any of its assets or any legal right or beneficial interest therein; (c) Any action to foreclose, recover or enforce any security interest created by the Corporate Debtor in respect of its property including any action under the Securitization and Reconstructio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upreme Court in (2014) 14 SCC 446 T.C. Gupta vs. Bimal Kumar Dutta and Ors. where the Hon ble Supreme Court in paragraph 10 laid down following: 10. .A contempt action being in the nature of quasi-criminal proceeding the degree of satisfaction that must be reached by the court to hold a person guilty of commission of contempt would be akin to what is required to prove a criminal charge, namely, proof beyond reasonable doubt. The order of the court in respect of which violation is alleged must, therefore, be clear, unambiguous and unequivocal and defiance thereof must be apparent on the very face of the action with which a contemnor is charged... 21. Another judgment, which needs to be noticed is (2014) 7 SCC 416 Bihar State Government Secondary School Teachers Association vs. Ashok Kumar Sinha and Ors., where the Hon ble Supreme Court had occasion to consider nature and scope of contempt proceedings. The Hon ble Supreme Court held that approach of Court has to be cautionary approach and it was further held that if there is wilful and contumacious disobedience of order, the Court should take cognizance. In the above case, the Hon ble Supreme Court has quoted with approval the earlie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gard to CIRP of the CD with respect to another Project, i.e. Sneh Project, Section 7 Application was admitted on 15.02.2023, on an Application filed by M/s. Dreamz Sneh Projects Allottees Welfare Association, in which CP(IB)No.83/BB/2021, the Applicant has filed IA No.168 of 2022 praying for impleadment in the said Project and to decide upon the unpaid CIRP costs, on the basis of order dated 13.01.2021, which Application was rejected on 07.10.2022, holding that Applicant has no locus standi to file an Application in CP(IB)No.83 of 2021, which order was unsuccessfully challenged before this Tribunal and up to the Hon ble Supreme Court. The Hon ble Supreme Court dismissed the Civil Appeal on 12.12.2023. 25. The CIRP, which has commenced vide order dated 24.08.2023 is with respect to another Project of the CD, i.e. Samhita Project. The view taken by the Adjudicating Authority that Applicant has no locus standi to file any Application in CIRP in the Sneh Project has been upheld by this Tribunal and the Hon ble Supreme Court is fully applicable while considering with respect to Project Samhita also. When CIRP has been admitted with respect to another Project Samhita of the CD, a separat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been relied by the Appellant. The present is not a case where NCLT has contravened or violated any of the order of the Hon ble Supreme Court, rather the order of NCLT is in accord with the order of Hon ble Supreme Court dated 12.12.2023 noted as above. There can be no two opinions that any violation of the order of the Hon ble Supreme Court is an act in defiance. In the present case, there being no violation of the order of Hon ble Supreme Court, the observations made by Hon ble Supreme Court in paragraphs 182 and 183, do not help the Appellant in the present case. 30. Another judgment relied by the Applicant is Contempt Petition (C) No.158-159 of 2024 in Civil Appeal Nos.5542-5543 of 2023 in Celir LLP vs. Mr. Sumati Prasad Bafna Ors. The reliance has been placed in paragraph 198 to 201, which are as follows: 198. When judicial orders are openly flouted or court proceedings are disrespected, it sends a signal that the rule of law is ineffective, leading to a loss of trust in the system. Judicial decisions must remain unimpaired, free from external pressures, manipulation, or circumvention. Acts that attempt to mislead the court, obstruct its functioning or frustrate its decisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as relied by the Applicant. In the present case, the facts and sequence of events and various orders passed have already been noticed above and it is clear that Adjudicating Authority while passing the order dated 24.08.2023 has not disobeyed any directions, nor circumvented any proceedings. The Hon ble Supreme Court in the above judgment made observation with regard to contumacious conduct of the parties, which observation has no application in the present case, where the contempt is founded on the order passed by the Adjudicating Authority passed in exercise of its statutory jurisdiction under the IBC. The above judgment of the Hon ble Supreme Court does not in any manner help the Appellant in the present case. 32. We, thus, do not find that any contempt has been committed by Adjudicating Authority in admitting Section 7 Application by order dated 24.08.2023 with respect to Project Samhita of the CD. In view of the foregoing discussions and conclusions, we do not find any ground to initiate any contempt proceedings against the Adjudicating Authority. The Contempt Application is devoid of any merit and is accordingly dismissed. A copy of this order be forwarded to Adjudicating Aut ..... X X X X Extracts X X X X X X X X Extracts X X X X
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