Mere non-compliance without evidence of wilful disobedience does not constitute civil contempt; execution of orders provides the appropriate recourse for enforcement.

O R D E R

1. This Contempt Petition is filed under Section 425 of the Companies Act, 2013 , read with Sections 11 and 12 of the Contempt of Courts Act, 1971 , and Rule 11 of the NCLT Rules, 2016, by the Financial Creditor, State Bank of India, against the suspended directors of the Corporate Debtor Company, M/s Tenny Jose Limited (hereinafter referred to as “the Corporate Debtor”), for their alleged wilful and deliberate violation of the order dated 25.01.2023 passed by this Adjudicating Authority in IA(IBC)/204/KOB/2022.

Brief facts of the case: -

2. The petitioner filed CP(IBC)/25/KOB/2021 against the Corporate Debtor, Tenny Jose Limited, under Section 9 of the Insolvency and Bankruptcy Code, 2016 (the Code). Based on the findings of a forensic audit, the Resolution Professional filed IA(IBC)/204/KOB/2022 under Section 66 of the Code seeking reversal of fraudulent transactions involving excess remuneration of Rs. 3,08,00,000 drawn by Respondents 1 to 4. This Tribunal, vide order dated 25.01.2023, directed the Respondents to jointly and severally pay the said amount within one month, failing which it would carry interest at 12%. Aggrieved by the said order, the Respondent preferred an appeal before the Hon’ble NCLAT in Company Appeal Company Appeal (AT) (CH) (INS) No. 95 of 2023, which was dismissed on 04.08.2023. Subsequently, the Corporate Debtor was dissolved vide order dated 31.10.2023 in IA(IBC)/372/KOB/2023, directing designated managers of State Bank of India and South Indian Bank to pursue PUFE transactions. However, despite the dismissal of the appeal, the Respondents have failed to comply with the order dated 25.01.2023 and have not repaid the amounts directed by this Tribunal.

3. The Respondents in the reply affidavit contended that the present application is not maintainable, relying on interim moratoriums under Sections 96 and 101 of the Code during personal guarantor insolvency proceedings of Respondent No. 1 (CP(IB)/51/KOB/2023). They further claimed that there is no wilful disobedience of the order, citing financial distress, mortgaged assets, and inability to make the payment. According to the Respondents, the non-payment was due to genuine financial incapacity and not intentional disobedience, and hence the essential ingredient of “wilful disobedience” under Section 2(b) of the Contempt of Courts Act, 1971 , is absent.

4. In response, the petitioner filed a rejoinder clarifying that the present proceedings are not for recovery of debt but to punish wilful disobedience of the order dated 25.01.2023, which directed the Respondents to return amounts derived from fraudulent transactions under Section 66 of the Code. Such amounts cannot be treated as “debt” to attract the protection of moratoriums, and the Respondents cannot seek shelter under the provisions of the Code. Their continued failure to comply with this Tribunal’s order amounts to wilful disobedience, warranting action under the Contempt of Courts Act, 1971 .

5. The Respondents, in their reply to the rejoinder, denied the allegations and submitted that the petitioner relied selectively on turnover figures and other unrelated details to misrepresent their financial capacity. Turnover, they argued, cannot measure profitability or financial strength. The Respondents clarified that they hold limited shareholding in the companies referred to by the petitioner, have no controlling interest, and the assets of family members or subsidiaries cannot be attributed to them. They reiterated that no funds were siphoned from the Corporate Debtor and that forensic audits and subsequent investigations did not establish any fraudulent diversion of