IMPORTANT POINT
Knowledge of the order to the contemnor must be established for maintaining a contempt proceeding.

JUDGMENT

Altamas Kabir, J. —

1. Before the Special Leave Petition which had been specially fixed for hearing on 9th November, 2010, could be taken up for consideration, Mr. T.R. Andhyarujina, learned Senior Advocate, appearing for the Petitioner, M/s Bharat Steel Tubes Ltd., submitted that Contempt Petition (Civil) No.271 of 2010 had been filed in regard to wilful and deliberate violation of the order passed by this Court on 8th October, 2010, by the alleged contemnors in entertaining bids for the auction proposed to be held in respect of the Petitioner’s property despite the said order.

2. Mr. Andhyarujina submitted that in relation to an order passed by the Debts Recovery Tribunal, Delhi, on an application filed by the Petitioner under Section 17 of the Recovery of Debts Due to Banks and Financial Institutions Act, 1993, hereinafter referred to as “the Debts Recovery Act, 1993”, a direction was given by the Tribunal on 15th September, 2010, to the Petitioner to deposit a sum of Rs.35 crores with the Industrial Finance Corporation of India Ltd. (IFCI Ltd.) without prejudice to its rights and contentions. The Respondent was also directed not to implement the possession notice as well as the public notice published on 13th September, 2010, till the next date of hearing. Against the said order, IFCI Ltd. filed Misc. Appeal No.352 of 2010 before the Debts Recovery Appellate Tribunal, which stayed the proceedings before the Debts Recovery Tribunal by its order dated 22nd September, 2010. Aggrieved by such direction, the Respondent had moved Writ Petition (Civil) No.6652 of 2010, in which an interim order was passed by the Division Bench of the Delhi High Court on 29th September, 2010, directing that during the pendency of the writ petition, the writ petitioner would be free to proceed in pursuance of the Public Notice dated 13th September, 2010, but the bid was not to be finalized. Since a winding-up order had been passed in respect of the petitioner company on the recommendation of the Board for Industrial and Financial Reconstruction (BIFR) and the Official Liquidator had been appointed, it was also directed that the Official Liquidator would be associated with the process of auction and the amount received by the Petitioner from prospective purchasers, as earnest money under the bids, would be kept in a No Lien Account.

3. Mr. Andhyarujina pointed out that such an ex- parte order was passed on the supposition that there were dues to the extent of Rs.1,100.00 crores payable by the Respondent and that proceedings had also been taken under Section 17 of the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, 2002) even though the BIFR had recommended the winding up of the Petitioner Company and finalization of those proceedings was still pending before the Company Court where the Official Liquidator had been put in charge of the functioning of the Petitioner Company. The Petitioner Company, being aggrieved by the said interim order of the Division Bench of the High Court, moved the instant Special Leave Petition and on 8th October, 2010, while issuing notice and giving directions for filing of affidavits, this Court stayed the operation of the order of the High Court which has been impugned in the Special Leave Petition. The result was that the order of the Debts Recovery Appellate Tribunal revived and according to the Petitioner, despite such order of stay passed by this Court, the alleged contemnors continued with the auction process in violation of the order of stay passed by this Court.

4. Mr. Andhyarujina submitted that while the order of stay was passed on 8th October, 2010, and the date of auction was fixed on 15th October, 2010, the Respondent Company continued to sell bid documents at least till 13th October, 2010, and the Bid Box was kept available in the office premises of the Respondent Company till 15th October, 2010, when the auction was to be conducted.