Contempt proceedings for violation of arbitration orders must follow appropriate remedies under the Arbitration and Conciliation Act; direct petitions to the High Court are not maintainable.

JUDGMENT :

SAURABH BANERJEE, J.

1. By virtue of the present petition under Section 10 of the Contempt of Courts Act, 1971, [Hereinafter referred to as ‘CC Act,] the petitioners seek initiation of contempt proceedings against the respondent nos.1 to 5 for violation of orders dated 27.10.2014, 12.12.2014 and 18.07.2015 passed by learned Sole Arbitrator, Hereinafter referred to as ‘learned Arbitrator in proceedings entitled ‘M/s BDR Builders & Developers Pvt. Ltd. vs. M/s Rennaissance Buildcon Company Pvt. Ltd.’.

FACTUAL MATRIX:

2. In a nutshell, petitioner no.1 is a company incorporated under the provisions of the Companies Act, 1956 wherein petitioner nos.2 and 3 are Directors, respondent nos.1 to 3 are its former Directors, who resigned on 14.01.2021, respondent no.4 is the purported Authorised Representative of the petitioner no.1, who allegedly participated in the Board Meeting on 20.09.2020, respondent no.5 is the erstwhile Chartered Accountant of the petitioner no.1, respondent no.6/ original claimant before the learned Arbitrator is a loan facility provider also incorporated under the provisions of the Companies Act, 1956 with whom the petitioner no.1 mortgaged its lands for securing a loan by way of Memorandum(s) of Understanding dated 06.02.2009 and 07.02.2009, Hereinafter referred to as ‘MOUs and Mortgage Deed(s) dated 05.02.2009 and 10.02.2009, Hereinafter referred to as ‘Mortgage Deeds respectively, respondent no.7, of which petitioner nos.1 to 3 are also Director, was one of the guarantors of the said loan, and respondent nos.8 to 16 are the vendees in whose favour the said Sale Deeds have been executed.

3. As per facts, pursuant to execution of the aforesaid Deeds, as also after issuance of a Letter of Continuing Guarantee and Memorandum of Deposit of Original Title Deeds both dated 06.02.2009 and a cheque for Rs.7,18,25,000/- by the respondent no.7 herein, the respondent no.6 herein invoked arbitral proceedings against the petitioners as well as respondent nos.1 to 3 and 7 herein before the learned Arbitrator. The learned Arbitrator, during the pendency thereof passed an order dated 18.07.2015 under Section 17 of the Arbitration and Conciliation Act, 1996, Hereinafter referred to as ‘A&C Act restraining the petitioners as well as respondent nos.1 to 3 and 7 herein, their servants, agents, assigns, legal heirs, etc. from creating any third-party rights, selling, transferring, alienating, parting with possession, etc. of the lands as provided in the Schedules thereto qua the Mortgage Deeds.

4. It is the case of the petitioners herein that despite the aforesaid order dated 18.07.2015, the respondent nos.1 to 3 created third party rights by executing Sale Deeds dated 23.11.2020 and 27.11.2020, Hereinafter referred to as ‘Sale Deeds for land falling within the Schedule of the said order amounting to one acre, as also entered into an Agreement to Sell dated 28.09.2020 for land, also falling within the Schedule of the said order, amounting to four acres, that too on the strength of a forged Board Resolution dated 20.09.2020 purported to have been passed in the Meeting of the Board of Directors of the petitioner no.1 on 20.09.2020 (as it never took place) with respondent no.4 as the purported Authorised Representative of petitioner no.1.

5. At the very outset, the respondent nos.1 to 3 have taken a preliminary objection to the maintainability of the present contempt petition.

6. Accordingly, the present petition was taken up for hearing and the learned (senior) counsels for the parties have advanced their respective submissions on the aspect of maintainability of the present