The respondents cannot be held guilty of willful disobedience as they are prevented by operation of law from paying the balance amount to the petitioner in satisfaction of the compromise decree due to the insolvency proceedings under the Insolvency and Bankruptcy Code, 2016.

JUDGMENT :

C.M. Appl. No.3887/2019 (for delay)

1. This is an application seeking condonation of delay of 9 days in filing rejoinder.

2. For the reasons stated in the application, the same is allowed and the delay of 9 days in filing the rejoinder is condoned.

C.M. stands disposed of.

C.M. Appl. No. 19227/2019 (for delay)

3. This is an application seeking condonation of delay of 34 days in filing reply.

4. For the reasons stated in the application, the same is allowed and the delay of 34 days in filing the reply is condoned.

C.M. stands disposed of.

CONT.CAS (C) No.579/2017

5. The present contempt petition has been filed by the petitioner under Sections 10 and 12 of the Contempt of Courts Act, 1961 read with Article 215 of the Constitution of India, seeking a direction to punish respondent No. 7 and its key officers/directors (respondent Nos. 1 to 6) for willful disobedience of the undertaking dated 21.04.2017 given on behalf of respondent No. 7, in respect of a settlement under Order 23 Rule 3 CPC as also for violation of order dated 10.07.2017, whereby, in view of the settlement, a compromise decree has been passed.

6. When the matter came up on 21.8.2017 the learned senior counsel for the petitioner sought liberty to implead respondent No. 6, which is the Authorised Representative of the respondent no.7-Company and filed a corrected memo of parties. Liberty was granted by this Court and in terms thereof amended memo of parties was filed wherein the Authorised Representative of the Company was impleaded as respondent No. 6.

7. The brief and relevant facts as averred by the petitioner are that on 19.10.2016, Jai Enterprises, a sole proprietorship of the petitioner filed a suit being CS No.59041/2016 before the Trial Court for recovery of a sum of Rs.15,81,420/- against respondent No. 7. On 21.04.2017, a joint application for settlement under Order 23 Rule 3 CPC was filed by the parties with the following terms:

(a) Defendant No. 1 will make payment of the principal sum of Rs.10,19,763/- (Rupees ten lakh nineteen thousand seven hundred and sixty three only) in full and final settlement of the plaintiffs claims in the present suit;

(b) This payment will be made in five monthly installments with the first installment being paid on 02.05.2017 and every subsequent installment being paid on the second of every month;

(c) No installment shall be less than Rs.1,50,000/- (Rupees one lakh fifty thousand and paise nil only);

(d) On payment of the above five monthly installment of the total principal sum of Rs.10,19,763/- (Rupees ten lakh nineteen thousand seven hundred and sixty three only) the plaintiff shall forego all other claims made in the suit;

(e) On default in payment of any installment the Defendant No. 1 undertakes to pay the plaintiff interest at the rate of 12% per annum on the defaulted sum till the date of payment;

(f) On payment of all five installments plaintiff undertakes to withdraw all proceedings instituted by them against the Defendant No. 1 and its directors including criminal complaints filed, and to communicate such withdrawal to the Defendant No. 1.

(g) Defendant has no objection to the plaintiff applying and receiving refund of court fees paid in the present suit.”

8. Pursuant to the said settlement, on 04.05.2017, the cheque given by respondent No. 7 for Rs.1,50,000/- towards the first installment, was dishonored on the ground ‘account blocked’. On being informed of the dishonor, respondent No. 6 deposited Rs.1,50,000/- by RTGS on 05.05.2017 and the cheque was to be used towards the second installment.

9. On 14.06.2017, the cheque for Rs.1,50,000/- for the second installment also bounced and a legal notice under Section 138 of Negotiable Instruments Act, 1882 (‘NI Act’), was sent to the respondents on 08.07.2017, by the petitioner.

10. On 20.06.2017, IRP (Interim Resolution Professional) was appointed by the National Company Law Tribunal (NCLT) in an application filed by respondent No. 7 under Section 10 of the Insolvency and Bankr