Contempt of court requires clear and contumacious conduct, and the jurisdiction of contempt is to be exercised sparingly in clear cases.

( 1 ) PETITIONER-M/s. L. G. Hotline CPT Ltd. , has filed the present petition under Section 2 and Section 12 of the Contempt of Courts Act, 1971 read with Article 215 of the Constitution of India, seeking initiation of contempt proceedings against respondent Nos. 1 to 4. Respondent No. 1 being M/s. VIACOM Electronics Ltd. , Respondent No. 2, Baron International Ltd. and Mr. Kabir Mulchandani and Ms. Shakun Mulchandani, respondent Nos. 3 and 4, who are stated to be both having controlling interest in M/s. VIACOM Electronics Ltd.

( 2 ) THE facts giving rise to the filing of the contempt petition may briefly be noted:-

(I)PETITIONER M/s. LG Hotline CPT Ltd. , had instituted suit bearing No. 2620/2001 under Order XXXVII of the Code of Civil Procedure, 1908 for recovery of a sum of Rs. 6,73,08,364/- from the defendants M/s. VIACOM Electronics Ltd. , and Baron International Ltd. The defendants in the suit, respondent Nos. 1 and 2 herein, had sought leave to defend. Defendant No. 1 vide IA. No. 8196/2002 had sought leave to contest. Defendant No. 2 vide IA. No. 5385/2002 had sought leave to defend. Pleadings were completed. On 14. 1. 2003, adjournment was sought on behalf of counsel for defendant No. 2, which was granted, subject to costs. On 7. 5. 2003, none appeared on behalf of defendant No. 1 and counsel for defendant No. 2 appeared and argued the application for leave to defend. Arguments were heard and judgment reserved.

(II)THEREAFTER IA. No. 6014/2003 was moved by defendant No. 2, which came up before the Court on 23. 5. 2003. Notice of the same was issued, returnable on 30. 7. 2003. On the said date, plaintiff sought time to file reply to the application and the application was listed for arguments on 30. 7. 2003, when further time of one week was granted to the plaintiff.

(III)THE case was directed to be listed on 22. 8. 2003. On 22. 8. 2003 counsel for defendant No. 1, Mr. R. S. Endlaw, informed the Court that a reference under Section 15 (1) of SICA had been registered as Case No. 309/2003. Relying on Pathreja Brothers Forgings and Stamping and Another Vs. ICICI Limited and others reported at (2000) 6 Supreme Court Cases 545, it was submitted that proceedings against the guarantor-defendant No. 2, respondentno. 2 herein, could also not proceed. Defendant No. 2/respondent No. 2 had stood guarantee for defendant No. 1.

(IV)IT is in this background of facts that the present application has been moved by the petitioner, who submits that the respondents herein have subverted and abused the legal proceedings and are liable to be punished for contempt.

( 3 ) LEARNED counsel for the petitioner, Mr. Sudhir Makkar, urges that defendant No. 2 i. e. respondent No. 2 herein, was fully aware of the orders passed, reserving judgment on 7. 5. 2003. IA. No. 6014/2003, to place documents on record, was moved with the ulterior purpose to somehow delay the passing of the judgment on the application for leave to defend. Mr. Makkar submits that by the said application, defendant No. 2, purported to bring on record certain facts, which he claimed could not be brought on record on account of lack of communication between defendant No. 2 and the counsel.

( 4 ) THE application to bring on record the filing of a winding up petition by the plaintiff against defendant No. 2, pertaining to the subject matter of the suit being Company Petition No. 712/2002, which was pending adjudication in the High Court of Mumbai, an Official Liquidator was also appointed and appeal No. 391/2003 was preferred against the orders passed for winding up and appointing an ex parte Official Liquidator. In the appeal, the High Court of Mumbai stayed the winding up order, but directed defendant No. 2 to deposit amount of Rs. 1. 50 crores by 8. 5. 2003 and to furnish a bank guarantee of Rs. 2. 50 crores. Defendant No. 2 claimed that it had deposited a sum of Rs. 1. 50 crores. Mr. Makkar submits that all these facts were within the knowledge of defendant No. 2, even before the

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