Contempt jurisdiction cannot be invoked for mere non-payment; it requires clear evidence of wilful disobedience.

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)/206/KOB/2022.

Brief facts of the case: -

2. It is submitted that this Adjudicating Authority vide order dated 21.12.2021 in CP(IBC)/25/KOB/2021 admitted the Corporate Debtor, Tenny Jose Limited, into CIRP and subsequently ordered liquidation on 16.12.2022. During the CIRP, the Resolution Professional identified certain preferential transactions and filed IA(IBC)/206/KOB/2022 under Sections 43 and 44 of the Insolvency and Bankruptcy Code, 2016 (the Code). This Adjudicating Authority vide order dated 25.01.2023 allowed the application and directed the Respondents to repay the amounts received under the preferential transactions within one month. Aggrieved by the said order, the Respondent preferred an appeal before the Hon’ble NCLAT in Company Appeal Company Appeal (AT) (CH) (INS) No. 96 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 as directed by this Tribunal.

3. The Respondents submitted that the present contempt application is not maintainable. It is stated that the 1^st Respondent, being the promoter and personal guarantor of the Corporate Debtor, has initiated personal guarantor insolvency resolution process by filing CP(IBC)/51/KOB/2023 under Section 94 of the Code which was admitted by this Adjudicating Authority on 08.02.2024, and consequently moratorium under Sections 96 and 101 of the Code has come into effect in respect of all debts. It is further contended that the Respondents are under severe financial distress and have no means to comply with the order dated 25.01.2023 passed in IA(IBC)/206/KOB/2022, and therefore, the alleged non-compliance is neither wilful nor deliberate but due to financial incapacity.

4. The Petitioner, in its rejoinder, submitted that the contentions of the Respondents Nos. 1 to 3 regarding the applicability of the moratorium under Sections 96 and 101 of the Code are misconceived and not applicable to the present proceedings. It is contended that the present petition is not for recovery of any debt but for initiating contempt proceedings for wilful disobedience of the order dated 25.01.2023 passed by this Adjudicating Authority in IA(IBC)/206/KOB/2022, directing the Respondents to return amounts received through preferential transactions. The Petitioner further submitted that the said amount represents money unlawfully received by the Respondents Nos. 1 to 3 and cannot be treated as “debt” so as to attract the protection of moratorium under the Code. Accordingly, it is submitted that the Respondents Nos. 1 to 3 cannot seek shelter under the moratorium provisions and are liable for contempt for non-compliance with the order of this Adjudicating Authority.

Findings:

5. This Adjudicating Authority has heard the learned Counsel appearing for the parties and has perused the documents placed on record, the written submissions filed, and the judgments relied upon by both sides.

6. The Petitioner has filed the p