Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2025 Supreme(Bom) 1802

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
SUMAN SHYAM, M. M. SATHAYE, JJ.
Yogesh Prakash Kela and Ors. – Appellants
Versus
High Court On Its Own Motion, through Prothonotary & Senior Master and Anr. – Respondents
Appeal (L) No. 9967 of 2025 In Company Petition No. 149 of 2012 With Interim Application (L) No. 9970 of 2025
Decided On : 23-12-2025

Advocates Appeared:
For The Appellants :Mr Girish Godbole, Senior Advocate with Kunal Chheda, Kunal Mehta, Mohit Khanna & Mahesh Dube, i/b Kunal Chheda.
For the Respondents: Mr Anirudh Hairani with Palaksh Kanchan.
Present in Court : Mr Satyajit Roul, Official Liquidator, Mr Chetan Shelke, Deputy Official Liquidator, Mr Yogesh Kela, Mr. Umesh Kela, Ms Abhilasha Kela, Ms Lata Kela, Mr Prakash Kela.

Civil contempt proceedings require specific notice of allegations to ensure fair opportunity for defense; penalties must reflect intent and context, particularly when apologies are tendered.

Headnote:(A) Contempt of Courts Act, 1971 - Civil contempt - Judgment and Order dated 18th March 2025 - Appellants found guilty of willful disobedience of court orders regarding Lease Agreements, directed to pay fine and deposit amount - Execution of lease agreements violated prior court orders - Appellants claimed misunderstanding of orders, tendered apologies. (Paras 1, 10, 35)

(B) Judicial Proceedings - Contempt proceedings - Court must provide specific notice for alleged disobedience to ensure fair defense - Principles of law regarding civil vs. criminal contempt discussed. (Paras 11-12, 22)

(C) Conduct of Parties - Evaluation of circumstances leading to contempt - Intent behind actions considered - Factors influencing imposition of penalties in civil contempt. (Paras 26-30)

Facts of the case:
Appellants executed Lease Agreements in violation of prior court orders during company's liquidation process, leading to contempt proceedings initiated against them. Appellants argued actions were due to misunderstanding and sought leniency.

Findings of Court:
The court found intentional violation of orders but allowed the apology and reduced punishment to a fine only, as imprisoning the directors was deemed unnecessary.

Issues: The main issues included the validity of contempt proceedings initiated without specific notice for multiple alleged disobediences and the appropriateness of penalties imposed.

Ratio Decidendi: The court established that civil contempt must involve clear notice of specific violations before punishment can be imposed; the overall conduct of the Appellants reflected bad faith but was mitigated by their apology and the cancellation of leases.

Result: Appeal allowed in part; penalties modified.

Table of Content
1. civil contempt proceedings initiated. (Para 1 , 2)
2. order chronology regarding the company. (Para 3 , 4)
3. appellants argued bona fide misunderstanding. (Para 5 , 6)
4. arguments regarding no effective notice. (Para 7 , 8)
5. court's responsibility to issue proper notice. (Para 9 , 10)
6. court's previous orders discussed. (Para 11 , 12)
7. nature of civil contempt identified. (Para 13 , 14)
8. criminal contempt must be by proper bench. (Para 15 , 16)
9. procedures for contempt must be followed. (Para 17 , 18)
10. procedural missteps noted in contempt hearing. (Para 19 , 20)
11. contempt procedure lacked specific notice. (Para 21 , 22)
12. implications of previously noted findings. (Para 23 , 24)
13. ambiguity on necessity for imprisonment. (Para 25 , 26)
14. apology's importance in contempt proceeding. (Para 27 , 28)
15. further evidence needed for judgment. (Para 29 , 30)
16. expectations from contempt proceedings emphasized. (Para 31 , 32)
17. court emphasizes fair judgment standards. (Para 33 , 34)
18. court's conclusion on remanding matter. (Para 35 , 36)
19. final orders on contempt consequences. (Para 37 , 38)
20. judgment ends with clear disposition. (Para 39)

JUDGMENT :

Suman Shyam, J.

1. This Appeal is directed against the Judgment and Order dated 18^th March 2025 passed by the Learned Single Judge in Suo Moto Show Cause Notice No. 4 of 2019 in Official Liquidator’s Report No. 158 of 2019 in Company Application No. 708 of 2018 in Company Petition No. 149 of 2012, whereby the Appellants Nos. 1 to 5 have been found to be guilty of having committed civil contempt due to willful disobedience of the orders of this Court and have been directed to pay fine of Rs. 2,000/- each. Appellant No. 1 (Yogesh Prakash Kela) and Appellant No. 2 (Umesh Prakash Kela) have also been directed to be detained in civil prison for a period of three months. In addition to the above, the Appellants Nos. 1 to 5 have also been directed to deposit a sum of Rs. 5 crores with the Official Liquidator within a period of six weeks’ to purge the contempt. The facts giving rise to the filing of this Appeal, shorn of unnecessary details, may be noted hereunder:-

(a) Due to the failure of the company M/s. Glory Films Limited (company under liquidation) to pay its debts, a number of Petitions were filed with a prayer for winding up the company. Those are Company Petition No. 131 of 2012, Company Petition No. 149 of 2012, Company Petition No. 263 of 2012, Company Petition No. 328 of 2012, Company Petition No. 58 of 2013, Company Petition No. 141 of 2013 and Company Petition No. 153 of 2013. The learned Single Judge (Coram: N.M. Jamdar, J) had passed order dated 12^th November 2013 in Company Petition No. 131 of 2012, Company Petition No. 149 of 2012, Company Petition No. 328 of 2012 directing the winding up of the company and also for appointment of Official Liquidator. In sofar as the other Company Petitions are concerned, liberty was given to the Petitioners to lodge their claims before the Official Liquidator. In the order dated 12^th November 2013 it was further directed that until such time, the Official Liquidator takes charge of all the assets of the Respondent- Company, the company shall not transfer or encumber and/or dispose of its assets, movable or immovable, through its directors, service or other officer.

(b) Being aggrieved by the order dated 12^th November 2013, the company had preferred Appeal No. 61 of 2018 (in Company Petition No. 149 of 2012), Appeal No. 62 of 2014 (in Company Petition No. 131 of 2012), and Appeal No. 63 of 2014 (in Company Petition No. 328 of 2012). On 11^th August 2014, A Division Bench (Coram: SJ Vazifdar and AK Menon, JJ), by taking note of the fact that a reference in respect of the Appellant company had been registered before the Board of Industrial and Financial Reconstruction (“BIFR”) under Section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985 (“SICA”), had stayed further proceeding before the Offi

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2025 Supreme(Bom) 1802

Civil contempt proceedings require specific notice of allegations to ensure fair opportunity for defense; penalties must reflect intent and context, particularly when apologies are tendered.

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