2021 Supreme(SC) 100

SUPREME COURT OF INDIA
DHANANJAYA Y. CHANDRACHUD, M.R. SHAH, JJ.
COMMITTEE OF CREDITORS OF AMTEK AUTO LIMITED THROUGH CORPORATION BANK – APPELLANT
VERSUS
DINKAR T. VENKATASUBRAMANIAN & ORS. - RESPONDENTS
CIVIL APPELLATE/INHERENT JURISDICTION I.A. No. 58156 of 2020 In Civil Appeal No. 6707 of 2019
COMMITTEE OF CREDITORS OF AMTEK AUTO LIMITED THROUGH CORPORATION BANK – APPELLANT
VERSUS
VINIT BODAS, AUTHORISED SIGNATORY, DECCAN VALUE INVESTOR LP – RESPONDENT
Contempt Petition (C) No. 524 of 2020 In Civil Appeal No. 6707 of 2019
Decided on : 23-02-2021

IMPORTANT POINTS
(1) Contempt of Court – Disobedience of an order must be willful before it constitutes contempt. A willful breach must appear clear by conduct of a party not by implication. Exercise of legal rights and remedies would not constitute contempt.
(2) Record of Court speaks for itself and terms of a judicial order reflect what has been decided.

Headnote:

(A) Contempt of Courts Act, 1971 – Section 12 – Contempt of Court – Contempt jurisdiction is to be exercised with circumspection – Acceptance or rejection of a plea on merits is distinct from whether a party is in breach of order of court – Disobedience of an order must be willful before it constitutes contempt – A willful breach must appear clear by conduct of a party not by implication – Exercise of legal rights and remedies would not constitute contempt. (Para 31)

(B) Contempt of Courts Act, 1971 – Section 12 – Insolvency and Bankruptcy Code 2016 – Section 31 – Contempt of Court – Alleged violation of order of court – Record of Court speaks for itself and terms of a judicial order reflect what has been decided – There is absolutely no indication in order of Court dated 8 June 2020 that purpose of relegating IA to NCLT was to facilitate a fresh evaluation being made by DVI in regard to impact of pandemic on economy, auto industry and health of corporate debtor – DVI has attempted to read into Order dated 8 June 2020 a basis which does not find expression in terms of the order – Such an exercise is plainly impermissible – To suggest that purpose of order dated 8 June 2020 was to enable DVI to re-negotiate resolution plan after assessing impact of pandemic is fundamentally flawed because this assertion is contrary to plain terms of record – Such submission is contrary to nature of the function which is expected to be exercised by adjudicating authority by plain terms engrafted into provisions of Section 31 – Order of this Court dated 18 June 2020 must be understood in context of IA which was moved by DVI – When three judge Bench in its order dated 18 June 2020 observed that “application made by the applicant for withdrawal of offer is hereby rejected” it must be understood in context of plea which was set-up by DVI – Extensions granted from time to time facilitated consideration of resolution plan submitted by DVI – DVI cannot be heard to contend that order of this Court dated 8 June 2020 suffers from an error when process of seeking extensions before this Court ultimately led up to approval of its resolution plan – DVI’s application for rectification is an attempt to renege from resolution plan which it submitted and to resile from its obligations – This is a devious attempt which must be disallowed – Rectification application must accordingly be dismissed – DVI having taken recourse to its appellate remedy before NCLAT under provisions of Section 61 of IBC does not constitute contempt – It is not expedient in interest of justice to pursue contempt proceedings. (Paras 25, 26, 27, 29, 32 and 39)

Facts of the case:

Matter in hand concerns Contempt Petition instituted by the Committee of Creditors of AMTEK Auto Limited (Corporate debtor) inter alia against Deccan Value Investors LP (DVI), third Respondent in the Civil Appeal for violation of an order passed by this Court on 18 June 2020. An application for rectification of the order of this Court dated 18 June 2020 instituted by DVI. Issue which needs to be addressed is whether recourse to the contempt jurisdiction is valid and whether it should be exercised in the facts of this case.

Findings of Court:

DVI cannot be heard to contend that the order of this Court dated 8 June 2020 suffers from an error when the process of seeking extensions before this Court ultimately led up to the approval of its resolution plan. DVI’s application for rectification, in other words, is an attempt to renege from the resolution plan which it submitted and to resile from its obligations. This is a devious attempt which must be disallowed.

Result : Rectification Application dismissed.