The main legal point established in the judgment is that willful disobedience of court orders related to an arbitral award, including unreasonably delaying compliance and seeking to avoid compliance, justifies the invocation of contempt jurisdiction under the Contempt of Courts Act.

JUDGMENT :

M.R. SHAH, J.

1. The present contempt petition has been filed by the petitioner herein – Urban Infrastructure Real Estate Fund – the Award Creditor in whose favour there is an award passed by the learned Arbitrator to punish the respondents under the Contempt of Courts Act, 1971 for wilful disobedience of the order dated 17.09.2021 passed by this Court in Special Leave Petition (C) No. 14724 of 2021 and the subsequent order dated 28.10.2021 passed in Miscellaneous Application No. 1668 of 2021 in the very same Special Leave Petition (C) No. 14724 of 2021.

2. Before considering the submissions made by learned senior counsel appearing on behalf of the respective parties, the chronological dates and events leading up to the filing of this contempt petition are required to be referred to and considered, which are as under:-

2.1 That by Arbitral Award dated 30.08.2018 passed in arbitral proceedings filed by the petitioner herein against the respondents alleged contemnors, the learned Arbitrator awarded specific performance of the Share Purchase Agreement and held that the petitioner is entitled to recover an amount of Rs. 78,33,37,500/- with interest at the rate of 18% p.a. with effect from 20.12.2014 till realization.

2.2 Challenging the award passed by the learned Arbitrator, the respondent herein preferred Commercial Arbitration Petition No. 55 of 2019 before the High Court under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “Act of 1996”). In the said arbitration petition, the respondents herein – original applicants took out a Notice of Motion No. 960 of 2019 praying for stay of the award.

2.3 The learned Single Judge of the High Court disposed of the said Notice of Motion in terms of the prayer clause “a” on the condition that the respondents herein deposit 50% of the awarded sum within twelve weeks. The learned Single Judge also observed that if such deposit is not made within the time prescribed, the interim stay granted shall stand vacated without further reference to the Court. Simultaneously, the petitioner was also directed to deposit 50% of its shareholding in the respondent No. 2 company within one week of deposit of amount. The learned Single Judge also made it clear that if the respondents – original applicants commit any default in making payments as directed, the respondent (applicant herein) is not required to deposit such shares.

2.4 It appears that even before the application under Section 34 of the Act of 1996 challenging the award was made, the Award Creditor had filed the execution petition before the High Court being Commercial Execution Application No. 2908 of 2018. After the order was passed by the learned Single Judge dated 08.08.2019, a Notice of Motion No. 960 of 2019 was filed. The learned Single Judge being the Executing Court passed the order dated 18.11.2019 in the Chamber Summons No. 357 of 2019 taken out by the Award Creditor. The learned Single Judge directed the respondent herein to file the disclosure affidavit declaring their assets vide order dated 18.11.2019. The order dated 18.11.2019 was, however, not complied with by the respondents and repeated extensions were sought.

2.5 That in the meantime, respondents herein instituted Commercial Appeal No. 521 of 2019 challenging the order dated 08.08.2019 by which, while staying the award passed by the learned Arbitrator, the High Court directed them to deposit 50% of the awarded amount. It is required to be noted that during the pendency of the Commercial Appeal No. 521 of 2019, the respondents herein i.e., the contemnors – appellants before the High Court prayed for a number of extensions to deposit the amount as directed by the learned Single Judge vide order dated 08.08.2019.

2.6 The aforesaid appeal came to be dismissed as not maintainable vide order dated 29.07.2021 and the interim application was also disposed of. Being aggrieved, the respondents herein preferred special leave petition before this Cou