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IN THE HIGH COURT OF DELHI
Subramonium Prasad, J.
Hero Wind Energy Pvt. Ltd. - Appellant
Versus
Balachandra Nadar - Respondent
CONT.CAS(C) 162 of 2021
Decided On : 12-04-2022




Contempt proceedings require a clear, specific undertaking to pay, and lack of timeliness in filing for contempt can render such actions barred under Section 20 of the Contempt of Courts Act, 1971.

Headnote:(A) Arbitration and Conciliation Act, 1996 - Section 9 - Contempt of Courts Act, 1971 - Section 20 - Non-compliance of settlement agreement - The court dismissed the contempt petition, finding no willful disobedience of a court order or undertaking, and ruling the petition was barred by limitation due to being filed over one year after the alleged contempt. (Paras 5, 8, 14)

(B) Limitation - A claim of continuous cause of action for non-payment asserted by the petitioner was rejected; the Court emphasized the need for specific undertakings to engage in contempt proceedings effectively. (Paras 12, 14)

(C) Settlement agreements - The existence of multiple settlement agreements between the parties does not imply liability unless terms are clear and specific, and the failure to uphold obligations under a general service agreement does not constitute contempt. (Paras 6, 14)

Table of Content
1. contempt petition filed under non-compliance. (Para 1 , 2)
2. details of agreements and alleged defaults. (Para 3 , 4 , 5 , 6 , 7 , 8)
3. limitation period under contempt of courts act. (Para 9 , 10 , 11 , 12 , 13)
4. conclusion and dismissal of petition. (Para 14 , 15 , 16)

JUDGMENT

Subramonium Prasad, J. The instant contempt petition has been filed for non-compliance of the Order dated 03.04.2018 passed by this Court in OMP (I) No.592/2015.

2. Shorn of details, the brief facts leading to the filing of the instant contempt petition are:

a) The Petitioner and Respondent No.4 entered into a Site Development, Land Acquisition and Construction Services Agreement dated 23.08.2013 for developing a wind farm of capacity of 74 MW. Dispute arose between the parties.

b) The Petitioners filed a petition under Section 9 of the Arbitration and Conciliation Act, 1996, being OMP (I) No.592/2015. This Court referred the parties to Delhi High Court Mediation and Conciliation Centre. In the mediation proceedings, the parties entered into an amicable settlement. Settlement agreement dated 12.05.2016 was entered into between the parties. The relevant portion of the said agreement reads as under:

    "That the following settlement has been arrived at between the parties which are as under:

    b) The second party has also agreed to pay a sum of Rs.21.50 Crores to the first party towards satisfaction of its all claims, differences and disputes. After receiving the said sum of Rs.21.50 Crores, the first party will be left with no claim or grievance of whatsoever nature against the second party. The said sum of Rs.21 50 Crores shall be free from interest if paid on or before 31.08.2016 otherwise it shall be given to the first party by the second party in following manner/instalments and shall carry 12% per annum proportionately decreasing rate of interest:

    i) Rs.1 Crore on or before 30.06.2016.

    ii) Rs.1 Crore on or before 31.07.2016.

    iii) Rs.1 Crore on or before 31.08.2016.

    iv) Rs.2 Crores on or before 30.09.2016.

    v) Rs.2 Crores on or before 31.10.2016.

    vi) Rs.2.5 Crores on or before 30.11.2016.

    vii) Rs.2.5 Crores on or before 31.12.2016.

    viii) Rs.2.5 Crores on or before 31.01.2017.

    ix) Rs.2.5 Crores on or before 28.02.2017.

    x) Rs.2.5 Crores on or before 31.03.2017.

    xi) Rs.1 Crore on or before 30.04.2017.

    xii) Rs.1 Crore on or before 31.05.2017."

c) The agreement was placed on record in the case and the petition under Sections 9 and 11 of the Arbitration and Conciliation Act, 1996 was disposed of in terms of the settlement agreement dated 12.05.2016. Both the parties were bound to the said settlement agreement.

d) It is alleged that the contemnors defaulted and flouted the terms of the settlement agreement dated 12.05.2016. The Petitioners filed an application under Section 39(1)(b) CPC being I.A. No.9227/2017 for transfer of the decree dated 25.07.2016 in OMP (I) No.592/2015. Notice was issued in the said application and when the Contemnor No.1 failed to appear, this Court imposed a cost of Rs.25,000/- and also directed that coercive steps be taken against the contemnor No.1, if he fails to appear on the next date.

e) On 08.02.2018, the Petitioners and the Contemnor Nos.4 and 5 entered into a second settlement agreement dated 08.02.2018. The relevant portion of the second settlement agreement reads as under:

    "C. The Buyer and the Developer had entered into a Settlement Agreement dated 12.05.2016 (more specifically defined below in the agreement) under which the Developer had to pay an amount of Rs.21,50,00,000/- (Rupees Twenty One Crores Fifty Laksh) along with interest out of which Developer had paid Rs.1,50,00,000/- (Rupees One Crore Fifty Lakhs) to the Buyer. However, there was default in performing the obligations stipulate under the Settlement Agreement and hence the parties are entertain into this agreement. Furthermore, the Buyer agrees that the b

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