COMMITTEE OF CREDITORS OF AMTEK AUTO LIMITED THROUGH CORPORATION BANK versus DINKAR T VENKATASUBRAMANIAN & ORS. on 23 February 2021

1. The order of this Court dated 18 June 2020 must beunderstood in the context of the IA which was moved by DVI.EWhen the three judge Bench in its order dated 18 June 2020observed that the “application made by the applicant forwithdrawal of the offer is hereby rejected” it must be understoodin the context of the plea which was setup by DVI. There can beno mistaking the fact that DVI, despite having submitted aFresolution plan which had undergone discussion and revisionbefore the CoC before being approved in the meeting of the CoCof 11 February 2020, was seeking to renege its applications tofulfill the resolution plan. The plea for being allowed to re-examine the impact of the pandemic and to re-negotiate the termsof the resolution plan makes it abundantly clear that DVI was notGwilling to fulfill the terms of the obligations which it had agreed.This is evident from the fact also that though DVI was obliged tofurnish the second tranche of its performance bank guarantee ofINR 150 crores, it was not ready to do so. On the contrary,apprehending a threat of the invocation of the first tranche of theHbank guarantee of INR 150 crores, DVI pleaded special equities and sought a direction allowing it to keep the bank guaranteealive until the process of re-negotiation was completed in twomonths. This again was to overcome the consequence of theinvocation of the bank guarantee arising from DVI’s default. Theprayer seeking a direction to allow DVI to extend the bankguarantee was artfully worded since the effect would be to restrainthe invocation of the bank guarantee. The present application, thisjudgment is based on the record as it stands, which leaves nomanner of doubt that DVI was seeking to renege on itscommitments. When the order of this Court dated 18 June 2020alludes to “the application made by the applicant for withdrawalof the offer”, the reference is clearly to the substantive content ofthe IA which indicates that DVI was not ready to abide by thecommitments made by it in the resolution plan. The latter part ofthe order dated 18 June 2020, placed DVI on notice that if itindulged in such kind of practices in the future, it was “to betreated as contempt of this Court in view of the various orderspassed by this Court at his instance”. DVI submits that the ordersof this Court were not passed at its instance since applicationsfor the extension of time had earlier been granted on the requestby the CoC. However, there can be no manner of doubt that theextensions of time granted by this Court were to enable a dueconsideration of the proposals of resolution applicants of whichDVI undoubtedly was an applicant. [Para 27][1036-D-H; 1037-A-E]

2. On 10 February 2020, the CoC sought an extension of aweek for the resolution plan to be voted upon by the members ofthe CoC. On 11 February 2020, the resolution plan of DVI wasapproved and an affidavit was filed by the RP before this Courton 19 February 2020 reporting the approval of DVI’s resolutionplan by the CoC. Appropriate directions were sought. Thissequence of events leaves no manner of doubt that the extensionswhich were granted were to facilitate the process initially ofinviting resolution applicants to submit their plans and later forthe evaluation of the plans which had been submitted. After DVIwas found to be the highest evaluated resolution applicant,extensions were sought and granted for the resolution plan to befinalized and voted upon by the CoC. Who sought an extensionof time is really beside the point and is of subsidiary importance.

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AFormally it may be true that the extensions were applied for bythe CoC, with the RP having apprised this Court also of theapproval granted to DVI’s resolution plan. However, DVI wasthe beneficiary of the extensions which were granted by thisCourt. The extensions granted from time to time facilitated theconsideration of the resolution plan submitted by DVI. DVI cannotBbe heard to contend that the order of this Court dated 8 June2020 suffers from an error when the process of seekingextensions before this Court ultimately led up to the approval ofits resolution plan. DVI’s application for rectification, in otherwords, is an attempt to renege from the resolution plan which itCsubmitted and to resile from its obligations. This is a deviousattempt which must be disallowed. The rectification applicationmust accordingly be dismissed. [Para 29][1038-C-H]

ContemptPetition

3. The issue which needs to be addressed is whetherDrecourse to the contempt jurisdiction is valid and whether it shouldbe exercised in the facts of this case. Undoubtedly, the conductof DVI has not been bona fide. The extension of time in the courseof the judicial process before this Court enures to the benefit ofDVI as a resolution applicant whose proposal was consideredEunder the auspices of the directions of the Court. DVI attemptedto resile from its obligations and a reading of its application whichled to the passing of the order of this Court dated 18 June 2020will leave no doubt about the fact that DVI was not just seeking anextension of time but a re-negotiation of its resolution plan afterits approval by the CoC. Then again, despite the order of thisFCourt dated 18 June 2020 rejecting the attempt of DVI, itcontinued to persist in raising the same pleas within and outsidethe proceedings before the NCLAT. The conduct of DVI is lackingin bona fides. The issue however is whether this conduct in raisingthe untenable plea and in failing to adhere to its obligations underGthe resolution plan can per se be regarded as a contempt of theorder of this Court dated 18 June 2020. DVI was undoubtedlyplaced on notice of the order that should it proceed in such terms,it would invite the invocation of the contempt jurisdiction. Havingsaid that, it is evident that the order of this Court dated 18 June H

2020 rejected the IA moved by DVI and as a necessaryconsequence, the basis on which the reliefs in the IA were sought.Therefore correctly, it has been now stated on behalf of the DVIthat it will not set-up a plea of force majeure in view of the dismissalof its IA on 18 June 2020. However lacking in bona fides theconduct of DVI was, we must be circumspect about invoking thecontempt jurisdiction as setting up an untenable plea should notin and by itself invite the penal consequences which emanate fromthe exercise of the contempt jurisdiction. Likewise, the defaultof DVI in fulfilling the terms of the resolution plan may inviteconsequences as envisaged in law. On the balance, this Court isof the considered view that it would not be appropriate to exercisethe contempt jurisdiction.[Para 38][1042-B-H]

CIVIL APPELLATE/INHERENT JURISDICTION: I.A. No.58156 of 2019 in Civil Appeal No. 6707 of 2019.

From the Judgment and Order dated 16.08.2019 of the NationalCompany Law Appellant Tribunal, New Delhi in Company Appeal (AT)(Insolvency) No. 219 of 2019.

With

Contempt Petition Civil No. 524 of 2020 inCivil Appeal No. 6707of 2019.

Tushar Mehta, SG Mukul Rohatgi, Dr. Abhishek Manu Singhvi,Neeraj Kishan Kaul, Anupam Lal Das, Sr. Advs., Ms. Misha, AnoopRawat, Siddhant Kant, Sagar Dhawan, Ms. Charu Bansal, Ms. PrabhSimran Kaur, S. S. Shroff, D. P. Singh, Kaushik Moitra, Ms. Ishita Jain,Anurag Tandon, Ms. Sanjukta Roy, Ms. Sonam Gupta, GyanendraKumar, Ms. Shikha Tandon, Sumit Attri, Ms. Akanksha Sharma, RobinGrover, M/s. Cyril Amarchand Mangaldas Ashish Prasad, Mahfooz AhsanNazki, Dinesh Pednekar, Chanakya Keswani, Arpan Behl, Sumant Batra,Sanjay Bhatt, Ms. Niharika Sharma, Ms. Akansha Srivastava, RabinMajumder, Arvind Kumar Gupta, Ravindra Sadanand Chingale, P. S.Sudheer, Vikas Kumar, Manish Paliwal, M/s Corporate Legal PartnersMayank Pandey, E. C. Agrawala, Advs. for the appearing parties.

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AThe Judgment of the Court was delivered by DR DHANANJAYA Y CHANDRACHUD, J.

1. This judgment will govern two proceedings:

(i) A Contempt Petition[1] instituted by the Committee of CreditorsBof AMTEK Auto Limited (“corporate debtor”) inter aliaagainst Deccan Value Investors LP(“DVI”), the thirdRespondent in the Civil Appeal[2] for violation of an order passedby this Court on 18 June 2020[3].

(ii) An application for rectification[4] of the order of this Court datedC18 June 2020 instituted by DVI.

Both the proceedings are inter-related. Both have been heardtogether.

2. On 24 July 2017, an application under Section 7 of the Insolvencyand Bankruptcy Code 2016 (“IBC”) was admitted by the NationalDCompany Law Tribunal (“NCLT”). Mr Dinkar T Venkatsubramanianwas appointed as Interim Resolution Professional. He was later confirmedas the Resolution Professional (“RP”).

3. On 31 August 2017, the RP published an advertisement invitingresolution plans from prospective resolution applicants. Resolution plansEwere submitted by Liberty House Group and DVI.

4. On 6 March 2018, a revised plan submitted by Liberty HouseGroup emerged as the highest evaluated plan, while DVI withdrew itsplan.

5. The Committee of Creditors (“CoC”) by a majority of 94.20Fper cent approved the final revised plan of Liberty House Group on 2April 2018. On 25 July 2018, the NCLT approved the resolution plan ofLiberty House Group.

6. On 4 December 2018, the CoC filed an application seeking adeclaration that Liberty House Group had willfully contravened the termsGof the resolution plan as approved by the NCLT and for the RP to attempt 1 Contempt Petition (C) No.542 of 2020

2 Civil Appeal No.6707 of 2019

3 Order dated 18 June 2020 passed in I.A. No.54321 of 2020 in Civil Appeal No. 6707of 2019H4 I.A. No.58156 of 2020

a fresh process of resolution. NCLT by an order dated 13 February2019 held that Liberty House Group had failed to fulfill its obligationsunder the approved resolution plan and directed the reconstitution of theCoC for consideration of the resolution plan submitted by DVI. NCLTdid not accede to the request for carrying out a fresh process by invitingthe plans again.

7. As a result the CoC filed an appeal[5] before the NationalCompany Law Appellate Tribunal (“NCLAT”). The appeal was limitedto the extent of challenging the rejection of the prayer for inviting freshapplications from prospective applicants for submitting resolution plans.On 15 April 2019, DVI filed an interlocutory application seekingimpleadment before the NCLAT, which was allowed by an order dated22 April 2019. In the course of the proceedings before the NCLAT, DVIsupported the plea of the CoC for restarting the process of inviting freshapplications for resolution plans. By its order dated 16 August 2019,NCLAT came to the conclusion that since more than 270 days had elapsed,an order of liquidation of the corporate debtor would have to ensue andaccordingly directed the NCLT to pass appropriate orders of liquidation.The Civil Appeal before this Court arose out of the order of the NCLATdirecting liquidation of the corporate debtor and was instituted on 26August 2019 by the CoC.

8. This Court issued notice in the Civil Appeal on 6 September2019 and stayed the liquidation of the corporate debtor. The secondproviso to Section 12(3) of the IBC was amended with effect from 16August 2019 by the Amending Act 26 of 2019 so as to stipulate a timelimit of 330 days for the completion of the corporate insolvency resolutionprocess from the insolvency commencement date. On 24 September2019, this Court accordingly directed the RP to invite fresh offers withina period of 21 days, following which the CoC was directed to take a“final call in the matter” within two weeks. The decision was to beplaced before this Court on 5 November 2019. The RP made a publicannouncement for inviting fresh resolution plans on 26 September 2019,and the last date for submission of resolution plans was 22 October2019. The CoC on 23 October 2019 concluded that only one resolutionplan was received within the stipulated timeline. DVI submitted a financialproposal on 4 November 2019. In the meantime on 6 November 2019, A

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Athe CoC moved an IA[6] before this Court seeking an extension of fourweeks to consider three resolution offers received by the RP, includingthat of DVI. On 13 November 2019 when the I.A. came up before thisCourt, an order was passed that:

“The consideration to be confined to five offers received withinBthe time specified in the advertisement inviting offers. Two offersreceived thereafter not to be considered.”

9. On 21 November 2019, the CoC again moved an IA[7] formodification of the order dated 13 November 2019 on the ground thatwhile five resolution applicants had responded to the fresh invitation ofCoffers, only one had submitted the resolution plan before the last datespecified in the advertisement.

10. On 2 December 2019, the IA seeking modification of theearlier order was partly allowed by this Court by directing that freshoffers be invited within 30 days after due advertisement. The CoC wasdirected to evaluate the offers within three weeks thereafter and toDsubmit its evaluation before this Court. On 3 December 2019, the RPmade a public announcement for inviting fresh resolution plans. Freshresolution plans were submitted by four applicants, including DVI andLHG, and eventually on 6 January 2020, DVI was declared the highestevaluated resolution applicant. On 17 January 2020, DVI submitted itsEresolution plan together with a performance bank guarantee of INR 150crores (representing the first tranche).On 18 January 2020, DVI submitteda revised resolution plan. The revised proposal of DVI was discussed inthe 29[th] meeting of the CoC, following which certain revisions weresought from DVI.F

11. On 20 January 2020, when the proceedings came up beforethis Court, an extension of two weeks was granted for finalizing theresolution plan. On 7 February 2020, DVI submitted an addendum alongwith its resolution plan dated 17 January 2020. On 10 February 2020,this Court was apprised of the fact that a resolution plan was beingGvoted upon by the members of the CoC in view of which an extension ofone week was granted to finalise the resolution plan. On 11 February2020, the resolution plan of DVI was approved by 70.07 per cent of thevoting share of the CoC. On 19 February 2020, the RP filed an affidavitbefore this Court intimating it about the outcome of the voting. On 13

6 I.A. No.168814 of 2019H7 I.A. No.177847 of 2019

May 2020, the CoC filed an IA[8] seeking approval of the resolution planof DVI. On 8 June 2020, this Court passed an order relegating the matterto the NCLT to decide upon the approval application within a fortnight.The time spent before the NCLT and this Court was directed to beexcluded for calculating the long stop date. An email was addressed toDVI on the same day by the RP to submit a performance bank guaranteefor the balance of INR 150 crores by 15 June 2020. DVI filed anapplication[9] before this Court on 12 June 2020 seeking a modification ofthe order of 8 June 2020 for grant of a period of two months to it toexamine and understand the impact of the onset of COVID-19 and tore-evaluate the resolution plan. Simultaneously, the RP filed anapplication[10 ]before the NCLT on the same day seeking approval of theresolution plan submitted by DVI. While seeking a extension of time oftwo months before this Court, DVI in its IA inter alia stated that:

“4. The Approval Application by the Appellant seeking approvalof DVI’s Resolution Plan, was listed for hearing on 08.06.2020,when the Applicant submitted that due to Covid-19 pandemic DVI’sResolution Plan (as submitted and approved by the CoC) wasunviable and not feasible in the present circumstances and theRespondent No. 3/Applicant required sometime to assess theimpact of the Covid-19 pandemic on the Indian economy as wellas the Auto Industry (including but not limited to the impact on theoverall business and financial health of the Corporate Debtor). Itwas therefore requested that this Hon’ble Court may be pleasedto relegate the issue of the approval of a resolution plan to theAdjudicating Authority, so as to enable the parties to re-negotiatethe terms of the Resolution Plan and to hear all the stakeholdersbefore approving a resolution plan.

[…]

7. […]

[…]

7. […]

Based on a prima facie analysis of the said information providedby the RP and subject to a detailed examination and verification,the Applicant, at the present stage, understands that the significanceof the information is substantial.

8 I.A. No. 48906 of 2020

9 I.A. No.54321 of 2020

10 IA No.225 of 2020 in CP (IB) No.42/CHD/HRY/2017

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AThe information provided strongly indicates an adverse impactwhich is likely to be over INR 700 crores.

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9. However, COVID-19 pandemic has materially andadversely impacted commercial assumptions underlying theBbusiness plan and financial proposal for revival of theCorporate Debtor and the feasibility and viability of theResolution Plan.

10. That faced with the limited time granted under the Order, theRP has been insisting on the Respondent No. 3/ Applicant that itCexecutes the letter of intent and submit its additional bank guaranteepursuant to the resolution plan which had been approved, andwhich is now to be filed before the NCLT.

11. That the Respondent No. 3/ Applicant also suffers from thethreat of invocation of its existing bank guarantee of INR 150Dcrores that it had submitted in support of the DVI Resolution Plan,if it does not execute the letter of intent and submit the additionalbank guarantee.”

12. On 18 June 2020, the IA filed by DVI was listed before thisECourt when the following order was passed:

“The application made by the applicant for withdrawal of the offeris hereby rejected and in case he indulges in such kind ofpractice, it will be treated as contempt of this Court in viewof the various orders passed by this Court at his instance. TheFapplication is accordingly dismissed.”

(emphasis supplied)

Following the order of this Court, the RP called upon DVI tosubmit a performance bank guarantee for a balance of INR 150 croresGwhich was reiterated on 6 July 2020 setting an outer limit of 10 July2020. In the meantime, on 30 June 2020 DVI moved its rectificationapplication[11] before this Court on the ground that:

(i) No application had ever been filed by DVI seekingwithdrawal of the order; andH11 IA No.58156 of 2020

(ii) DVI had never approached this Court earlier for any reliefincluding seeking an extension of time.

13. NCLT passed an order on 9 July 2020 approving the resolutionplan submitted by DVI. Following this, on 10 July 2020, an email wasaddressed to DVI by the erstwhile RP to provide its nominations to theImplementation and Monitoring Committee (“IMC”). By this email, DVIwas also requested to attend the first meeting of the IMC scheduled on14 July 2020. On 14 July 2020, DVI by its email stated that formation ofthe IMC and the convening of meetings was premature and recorded itsintent to institute an appeal against the order of the NCLT dated 9 July2020 approving the resolution plan. On 21 July 2020, the RP addressed acommunication to DVI to implement the resolution plan and submit aperformance bank guarantee for the balance INR 150 crores. This wasreiterated in a communication dated 23 July 2020 of the CoC to DVI.DVI by its letter dated 25 July 2020 reiterated its intent to lodge anappeal against the order of NCLAT and eventually filed its appeal[12]before the NCLAT challenging the order of the NCLT dated 9 July2020. The said appeal is pending adjudication before the NCLAT.On 3September 2020, DVI addressed an email invoking clause 8.7 of theresolution plan to seek its termination forthwith. The email recordedthat:

“6. Our client states that in view of outbreak of the COVID-19 pandemic since March 2020 and continuing till date, thebusiness/assets/revenues of the Corporate Debtor havebeen adversely and materially affected beyond INR 300crores triggering clause 8.7 (iii) of the Resolution Plan. Thisconstitutes a ‘Force Majeure Event’ (as defined in the AmtekResolution Plan) which is a self operating clause providing for theforthwith termination of the Resolution Plan. The extent of theaforesaid adverse and material impact on the business/assets/revenues of the Corporate Debtor have remained uncontrovertedby you in proceedings before the NCLT Chandigarh. In anyevent, withholding of the information sought vide the emaildated 13 July 2020 only reinforces the fact that the eventof Force Majeure has occurred resulting in the forthwithtermination of the Amtek Resolution Plan.”

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A14. On 26 August 2020, the CoC filed a Contempt Petition[13 ]beforethis Court on the ground that DVI was in breach of the order of thisCourt dated 18 June 2020 by seeking to withdraw the resolution plan.On 10 September 2020, DVI filed an IA[14] in the pending appeal beforethe NCLAT seeking cancellation and return of the performance bankguarantee.B

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15. Notice was issued by this Court in the contempt petitioninstituted by the CoC on 25 September 2020.

16. On 14 December 2020, notice was issued by this Court on therectification application filed by DVI.

C17. The learned Senior Counsel who have principally urgedsubmissions on behalf of the contesting parties are:

(i) Mr Mukul Rohatgi for DVI in support of the rectificationapplication;

(ii) Mr Tushar Mehta, Solicitor General of India in support ofthe Contempt Petition filed by the CoC; D

(iii) Mr Niraj Kishan Kaul, learned Senior Counsel for the RP;and

(iv) Dr Abhishek Manu Singhvi, learned Senior Counsel on behalfEof the contemnor.

18. Mr Mukul Rohatgi, learned Senior Counsel appearing on behalfof DVI submitted that the order of this Court dated 18 June 2020 needsto be rectified or clarified on the ground that it proceeds on two factualmisconceptions. The factual errors are stated to be that:F

(i) The IA that was moved by DVI was for withdrawal of theoffer (resolution plan); and

(ii) Various orders have been passed by this Court at theinstance of DVI.

19. The submission is that the observation of the Court that “inGcase he [DVI]indulges in such kind of practice, it will be treated ascontempt of this Court” is premised on a factual misconception. Addressingthe Court on the first of the above premises, Mr Rohatgi submitted that H

13 Contempt Petition No.524 of 2020

14 IA No.21814 of 2020

the reliefs which were sought in the application that was filed by DVI on12 June 2020 were in the following terms:

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(a) Pass an order modifying the Order dated 08.06.2020 to granta period of 2 (two) months from the date of the Order to theRespondent No. 3/ Applicant to examine and understand theimpact of the Covid-19 pandemic and the lock down to discussthe terms of the Resolution Plan with the Committee ofCreditors and thereafter direct the NCLT to consider thematter of I.A. No. 48906 of 2020 and pass appropriate orders; (b) Pass an order directing the Committee of Creditors and theresolution professional not to act upon the existing resolutionplan until conclusion of the above process, subject to theApplicant/ Respondent No. 3 extending the term of theexisting bank guarantee for a corresponding period;”

20. It was urged that there was no attempt on the part of DVI towithdraw from the resolution plan. On the contrary, what the IA postulatedwas that a period of 15 days which was fixed, commencing from 8 June2020, for the NCLT to pass orders on the approval application had resultedin practical difficulties for parties to enter into a meaningful discussionand negotiation. DVI, according to the submission, stressed that the periodwhich was reserved for the NCLT to decide the approval application,which was to expire on 23 June 2020, was inadequate and there was athreat on the invocation of the performance bank guarantee. It was inthis context that DVI highlighted the serious financial impact of COVID-19 on the business of the corporate debtor in the context of which itsought time to assess the impact of the pandemic on the business andfinancial health of the corporate debtor. On the second of the factualpremises set out in the order of this Court, DVI has stressed that it hadnever moved any application before this Court earlier for seeking anextension of time and hence the basis of the order of this Court is factuallyincorrect.

The submission which has been urged on behalf of DVI has beenopposed by Mr Tushar Mehta, learned Solicitor General and by Mr NirajKishan Kaul, learned Senior Counsel, appearing respectively for the CoCand the RP. The Solicitor General submitted that:

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A(i)a detailed process was undertaken following the order ofthis Court dated 24 September 2019 to ensure that resolutionplans could be invited so as to obviate an order of liquidationof the corporate debtor. DVI was in the fray even before theproceedings had reached this Court and even after the orderof 24 September 2019, it had indicated its intent to enter theBfray. From 4 November 2019 when DVI submitted itsfinancial proposal, extensions of time were granted by thisCourt on 13 November 2019, 2 December 2019, 20 January2020 and 10 February 2020. Though the extensions weresought by the CoC, there can be no manner of doubt that thisCwas to facilitate the finalization and approval of a resolutionplan and DVI was among the resolution applicants. Afterthe CoC approved DVI’s resolution plan on 11 February2020,an IA was filed by the CoC on 13 May 2020.This Court byan order dated 8 June 2020 relegated the proceedings to theNCLT for considering the approval application. Laying stressDon the IA filed by DVI on 12 June 2020, it was urged that anattempt was made by DVI to wriggle-out of its commitmentsunder the resolution plan which has been approved by theCoC on 11 February 2020 by highlighting the impact ofCOVID-19 on the financial health of the corporate debtor.

E(ii)Despite this Court having rejected the IA on 18 June 2020 : (a)DVI failed to take steps in pursuance of the resolutionplan which is approved by the NCLT on 9 July 2020 by

(i) failing to submit the second tranche of the performanceFbank guarantee of INR 150 crores;

(ii) failing to provide its nomination to the IMC;

(iii) refusing to attend the meetings of the IMC;

(iv) setting up through its advocates the plea that a forcemajeure event had occurred resulting in terminationGof the resolution plan.

(b) This conduct, it has been submitted, is contumacious inthat despite being placed on notice by the order of thisCourt dated 18 June 2020 that:

H(i) DVI’s IA stood dismissed; and

(ii) Any attempt to resile from the resolution plan wouldresult in the invocation of the contempt jurisdiction,DVI effectively thwarted the implementation of theresolution plan.

The Solicitor General has thus opposed the application forrectification and supported the contempt petition on the abovesubmissions.

21. Adopting a similar line of submissions, Mr Niraj Kishan Kaul,learned Senior Counsel urged that:

(i) A plea of force majeure on account of COVID-19 wasspecifically raised in the application filed by DVI before thisCourt on 12 June 2020;

(ii) By a letter dated 3 September 2020 addressed by theadvocates of DVI, a plea of force majeure was set up evenafter the order of this Court dated 18 June 2020 rejecting theIA; and

(iii) Even before the NCLAT, DVI filed an additional affidavit on12 September 2020 for pleading a case of force majeurebased on the COVID-19 pandemic.

On these grounds, it was submitted that DVI has made anintentional and willful attempt to evade compliance of its obligation underthe approved resolution plan though its IA was specifically rejected on18 June 2020 by this Court.

22. Dr Abhishek Manu Singhvi, learned Senior Counsel appearingon behalf of the contemnor submitted that:

(i) In order to invoke the contempt jurisdiction, a disobediencehas to be willful and not by implication;

(ii) The exercise of legal rights by a party to a proceeding cannotconstitute contempt;

(iii) DVI was within its legitimate rights in challenging the orderof the NCLT;

(iv) The view which may be taken on the merits of the submissionswhich have been addressed by DVI on whether the conditionsprecedent to the implementation of the resolution plan have A

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been fulfilled cannot be basis for invoking the contemptjurisdiction. An adjudicatory forum may take a decision, oneway or the other on the merits of DVI’s submissions, but aplea of contempt cannot be founded on the acceptance orrejection of the plea of DVI that the conditions precedent tothe implementation of the resolution plan have not beenfulfilled.

(v) In this context, the reply filed by the contemnor to thecontempt petition specifically sets out the case of DVI thatthe condition precedents to the implementation of the resolutionplan have not been fulfilled. The following paragraphs of thereply have been emphasized:

“5. It is submitted that Resolution Plan dated 17.01.2020(r/w the addendum dated 07.02.2020) as submitted by DVIand approved by the COC contains several obligations/conditions precedents for its effective implementation andto ensure the going concern status of the Corporate Debtor.It is an admitted position that the Resolution Professional /COC inter alia failed to ensure compliance of certainconditions precedents under the Resolution Plan includingfailure of obtaining the prior written consent of the mortgageof the Ace Complex Land whilst executing a long term leasedeed on behalf of the Corporate Debtor. By an email dated29.01.2020, such default was brought to the due notice ofthe Resolution Professional by the representative of DVI.The aforesaid requirement of obtaining the prior writtenconsent was further reiterated by DVI in the addendumdated 07.02.2020. A copy of the email dated 29.01.2020 isattached as Annexure R-1. (Pages 37-40)

6. It is a matter of record that the aforesaid issues werebrought before the National Company Law Tribunal,Chandigarh (“NCLT”) at the time of hearing of the IAfiled by the Resolution Professional for the approval of theResolution Plan. However, the NCLT proceeded to approvethe Resolution Plan on 09.07.2020 by inter alia unilaterallymodifying the provisions of the Resolution Plan to thedetriment of DVI. Respectfully, it is submitted that in theabsence of fulfilment of the aforementioned provisions of the Resolution Plan (amongst others), the veryimplementation/feasibility/ viability of the Resolution Planand revival of the Corporate Debtor fails into jeopardy. DVIhas accordingly exercised its rights as available under layby filing its appeal before the National Company LawAppellate Tribunal (“NCLAT”). Without prejudice to theaforesaid and as elaborated hereunder, the ResolutionProfessional was also intimated of the termination of theResolution Plan on 03.09.2020 pursuant to the self-operativetermination clause of the Resolution Plan as approved bythe CoC.

9. DVI’s Resolution Plan dated 17.01.2020 (read with itsaddendum dated 07.02.2020) inter alia contains contingentconditions in the form of clause 2.5.2, which is set out asunder:

“Unless waived (where permissible under Applicable Law)by the Resolution Applicants, Acquisition of the CorporateDebtor by the Resolution Applicants in terms of sub-section5.1 (Acquisition as a Going Concern) of this Resolution Planand any other action set out in sub-sections 5.1 and 5.2(Acquisition as a Going Concern), of the Resolution Planare contingent on the following conditions having beenfulfilled in a form and manner satisfactory to the ResolutionApplicants (“Effective Date Conditions Precedents”)

(a) Occurrence of NCLT Approved Date;

(b) Receipt of a copy of the order of the NCLT approving thisResolution Plan; and

(c) term lease (subsisting for 20 years or more) for the ACEComplex Land with Acceptable Terms.”

“Acceptable Terms” has been defined in the ResolutionPlan as under:

“Shall mean terms relating to the lease of ACEComplex Land and shall be suitable protective termsacceptable to the Resolution Applicants including (i)confirmation of the validity and subsistence of the leasearrangement by way of prior written consent of Vistra ITCL

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ALimited acting as the security trustee on behalf of KKRIndia Financial Services Limited and L&T Finance Limitedin a form and substance acceptable to the ResolutionApplicants; (ii) no right of termination according to the lessoras long as lease rentals are paid; and (iii) right of first refusaloccurring to the Resolution Applicants, in case of sale ofBACE Complex Land.”

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10. It is thus seen that it is one of the essential requirementsof the Resolution Plan for the Corporate Debtor to executea long-term lease (for 20 years or more) in respect of theAce Complex Land with “Acceptable Terms” i.e. with theCprior written consent of Vistra ITCL (India) Limited(“Vistra”)viz; the mortgagee of the Ace Complex Land.

11. Significantly, the aforesaid requirement of the “Executionof a long term lease (subsisting for 20 years or more) forthe ACE Complex Land with Acceptable Terms” wasDreiterated in the addendum to the Resolution Plan dated07.02.2020.”

23. During the course of the hearing, Dr Singhvi made the followingoral statement namely that “the application filed by DVI before theSupreme Court was to consider finding solutions for the delay occasionedEby COVID-19. Neither was force majeure pleaded nor has it beenpleaded now and only an extension of time has been sought on the groundof Covid-19”. In other words, the submission of Dr Singhvi is that

(i) DVI has not set up a plea of force majeure as a basis forwithdrawing from the resolution plan; and F

(ii) Whether the conditions precedent under the resolution planhave been fulfilled isa matter which is sought to be urged inthe appeal before the NCLAT.

The application for rectificationG24. The application for rectification is premised on the assertionthat there are two factual misconceptions contained in the order of thisCourt dated 18 June 2020. Firstly, the order proceeds on the basis thatDVI in its IA of 12 June 2020 intended to withdraw from the resolutionplan, which was not the case; and secondly, the order indicates thatextensions of time for the submission of resolution plans were obtainedH

on behalf of DVI, which is contrary to the record. The submission, inother words, is that DVI did not intend to resile from the resolution planand only sought to highlight the financial impact of the COVID-19pandemic on the economy, the auto industry and the viability of thecorporate debtor. This submission has been reiterated by Dr AbhishekManu Singhvi, learned Senior Counsel when he urged that the applicationmoved before this Court on 12 June 2020:

(i) was to consider finding solutions for the delay due toCOVID-19;

(ii) force majeure was not pleaded; and

(iii) the only plea was for the extension of time.

25. The record before this Court would however belie the critiqueof the order dated 18 June 2020 and of the submissions made by learnedSenior Counsel. The IA filed by DVI was styled as “an application forrectification”, as its title indicates, but paragraph 1 states that it is “anapplication for clarification /modification of the order dated 8 June 2020”.On 8 June 2020, this Court had relegated the matter of approval of theresolution plan to the NCLT with a timeline of 15 days. In the IA filed byDVI purportedly for ‘clarification and modification’, it was submittedthat “due to Covid-19 pandemic DVI’s resolution plan (as submitted andapproved by the CoC) was unviable and not feasible in the presentcircumstances”. DVI submitted that when the proceedings came up on8 June 2020 it had urged that its resolution plan was required to berelegated to the adjudicating authority to assess the impact of thepandemic on the economy, the auto industry and the financial health ofthe corporate debtor and to enable the parties to renegotiate the termsof the resolution plan. In other words, DVI sought to submit that thepurpose of relegating the issue of approval of the resolution plan was toenable a re-negotiation to take place before the resolution plans whichhave been approved by the CoC could be the subject matter of an approvalof the adjudicating authority. Now, this submission of DVI cannot beaccepted for two reasons: firstly, it is asettled principle of law that therecord of the Court speaks for itself and the terms of a judicial orderreflect what has been decided. The order of this Court dated 8 June2020 indicates that since the fresh resolution plan had been passed bythe CoC with the majority of 70 per cent, “the matter of IA” namely, IA48906 of 2020 filed by the CoC was being relegated to the NCLT for A

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Apassing “appropriate orders”. There is absolutely no indication in theorder of the Court dated 8 June 2020 that the purpose of relegating theIA to the NCLT was to facilitate a fresh evaluation being made by DVIin regard to the impact of the pandemic on the economy, the auto industryand the health of the corporate debtor. DVI, in other words, has attemptedto read into the order dated 8 June 2020 a basis which does not findBexpression in the terms of the order. Such an exercise is plainlyimpermissible. Secondly, Section 31 of the IBC provides the requirementsto be observed, before the adjudicating authority approves the resolutionplan. Sub-Sections (1) and (2) of Section 31 are in the following terms:

“(1) If the Adjudicating Authority is satisfied that the resolutionCplan as approved by the committee of creditors under sub-section(4) of section 30 meets the requirements as referred to in sub-section (2) of section 30, it shall by order approve the resolutionplan which shall be binding on the corporate debtor and itsemployees, members, creditors, [including the Central Government,Dany State Government or any local authority to whom a debt inrespect of the payment of dues arising under any law for the timebeing in force, such as authorities to whom statutory dues areowed,] guarantors and other stakeholders involved in the resolutionplan:

E[Provided that the Adjudicating Authority shall, before passing anorder for approval of resolution plan under this sub-section, satisfythat the resolution plan has provisions for its effectiveimplementation.]

(2) Where the Adjudicating Authority is satisfied that the resolutionFplan does not confirm to the requirements referred to in sub-section(1), it may, by an order reject the resolution plan.”

26. The role of the adjudicating authority under sub-section (1) ofSection 31 comes into being upon the approval of the resolution plan bythe CoC under sub-section (4) of Section 30. The function which isGassigned by the statute to the adjudicating authority is to determine whetherthe resolution plan which has been approved by the CoC meets therequirements of sub-section (2) of Section 30. Upon being satisfied thatthe resolution plan meets those requirements, the adjudicating authority“shall by order approve the resolution plan”. Before passing an order ofapproval the adjudicating authority has to satisfy itself that the resolutionH

plan has provisions for its effective implementation. In the backdrop ofthe above provisions, the order of this Court dated 8 June 2020 requiredthe adjudicating authority to perform the functions which are entrustedto it under Section 31 of the IBC. To suggest that the purpose of theorder dated 8 June 2020 was to enable DVI to re-negotiate the resolutionplan after assessing the impact of the pandemic is thus fundamentallyflawed. It is flawed because this assertion is contrary to the plain termsof the record. It is flawed also because the submission is contrary to thenature of the function which is expected to be exercised by the adjudicatingauthority by the plain terms engrafted into the provisions of Section 31.When DVI moved its application on 12 June 2020, it asserted that thetimeline of 15 days has “resulted in practical difficulties for parties toenter into any meaningful discussions and negotiations”. To assert thatthere was any scope for negotiations and discussions after the approvalof the resolution plan by the CoC would be plainly contrary to the termsof the IBC. DVI, in paragraph 7 of its application stated that it wasseeking a clarification/modification for, inter alia, the following reasons:

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(i) Its management team was based out of the US and found itdifficult to travel to India during the course of the pandemic;

(ii) The pandemic had had a drastic impact on the business,revenue, assets and financial and operational health of thecorporate debtor; E

(iii) The meeting of the CoC dated 4 May 2020 recorded theperformance updates of the corporate debtors bearing on itsfinancial health;

(iv) The RP had on 3 June 2020 shared additional informationwith DVI, which was substantial in its significance; F

(v) DVI’s resolution plan was based on the financials of thecorporate debtor prior to the COVID-19 pandemic;

(vi) The pandemic had materially and adversely impactedcommercial assumptions underlying the business plan andGfinancial proposal for revival of the corporate debtor;

(vii) The RP was requiring DVI to submit an additional bankguarantee pursuant to the resolution plan failing which DVIfaced the threat of the invocation of the performance bankguarantee of INR 150 crores which it had submitted; H

A(viii) DVI even pleaded “special equities”. The reference to specialequities contains a distinct flavor of a ground being set up toinjunct the invocation of the performance bank guarantee.DVI sought a period of two months to (i) assess the impactof the pandemic on the business and financial health of thecorporate debtor; (ii) the consequential impact of theseBcircumstances on the feasibility and viability of the resolutionplan; and (iii) to allow parties to negotiate the terms of theresolution plan. It was in this backdrop, that the reliefs whichwere sought in the IA were to permit DVI a period of twomonths “to examine and understand the impact of Covid-19Cpandemic and the lockdown to discuss the terms of theresolution plan with the CoC”; and

(ix) DVI in its IA also sought a restraining order against the CoCand the RP from acting upon the existing resolution plan untilthe conclusion of the above process subject to it extendingDthe existing bank guarantee.

27. The order of this Court dated 18 June 2020 must be understoodin the context of the IA which was moved by DVI. When the threejudge Bench in its order dated 18 June 2020 observed that the “applicationmade by the applicant for withdrawal of the offer is hereby rejected” itEmust be understood in the context of the plea which was setup by DVI.There can be no mistaking the fact that DVI, despite having submitted aresolution plan which had undergone discussion and revision before theCoC before being approved in the meeting of the CoC of 11 February2020, was seeking to renege its applications to fulfill the resolution plan.The plea for being allowed to re-examine the impact of the pandemicFand to re-negotiate the terms of the resolution plan makes it abundantlyclear that DVI was not willing to fulfill the terms of the obligations whichit had agreed. This is evident from the fact also that though DVI wasobliged to furnish the second tranche of its performance bank guaranteeof INR 150 crores, it was not ready to do so. On the contrary,Gapprehending a threat of the invocation of the first tranche of the bankguarantee of INR 150 crores, DVI pleaded special equities and sought adirection allowing it to keep the bank guarantee alive until the process ofre-negotiation was completed in two months. This again was to overcomethe consequence of the invocation of the bank guarantee arising fromDVI’s default. The prayer seeking a direction to allow DVI to extendH

the bank guarantee was artfully worded since the effect would be torestrain the invocation of the bank guarantee. One of us (Justice MRShah) was a member of the Bench which declined to grant relief on theIA filed by DVI on 12June 2020. But, for the purpose of the presentapplication, this judgment is based on the record as it stands, which leavesno manner of doubt that DVI was seeking to renege on its commitments.When the order of this Court dated 18 June 2020 alludes to “the applicationmade by the applicant for withdrawal of the offer”, the reference isclearly to the substantive content of the IA which indicates that DVIwas not ready to abide by the commitments made by it in the resolutionplan. The latter part of the order dated 18 June 2020, placed DVI onnotice that if it indulged in such kind of practices in the future, it was “tobe treated as contempt of this Court in view of the various orders passedby this Court at his instance”. DVI submits that the orders of this Courtwere not passed at its instance since applications for the extension oftime had earlier been granted on the request by the CoC. The list ofdates filed by DVI indicate that DVI filed its Vakalatnama in the appealon 5 June 2020 a point which was stressed by Mr Mukul Rohatgi, learnedSenior Counsel. However, there can be no manner of doubt that theextensions of time granted by this Court were to enable a due considerationof the proposals of resolution applicants of which DVI undoubtedly wasan applicant. This is evident from the manner in which the proceedingsunfolded. On 24 September 2019, this Court directed the RP to invitefresh offers within a period of 21 days. As a result of offers being receivedafter the deadline under the invitation which was issued pursuant to theabove directions, an IA was moved on 6November 2019 seeking anextension of four weeks. On 13 November 2019, this Court directedthat the consideration would be confined to five offers “received withinthe time specified in the advertisement”. On 21 November 2019, theCoC sought a modification of the order of 13 November 2019 to correctlyrecord that while five resolution applicants had responded to the freshinvitation by the RP only one resolution plan had been submitted beforethe last date of submission. The CoC sought liberty to consider theadditional three resolution offers, one of which was the offer by DVI. Itwas in this context that on 2 December 2019, this Court partly allowedthe application for modification by directing that fresh offers to be invitedwithin thirty days. It was in pursuance of the order of this Court dated 2December 2019 that a public announcement was made by the RP on 3December 2019. DVI submitted undertakings under Section 29A of the AB

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AIBC and other documents on 6 December 2019. Fresh resolution planswere submitted by four entities including DVI on 31 December 2019.

28. On 6 January 2020, the CoC declared DVI as the highestevaluated resolution applicant. DVI submitted a revised resolution plandated 17 January 2020, following which the voting which was scheduledBby the CoC on that day was cancelled. The revised proposal of the DVIwas discussed in the 29[th] meeting of the CoC. On the same day – 20January 2020 – when the proceedings were listed before this Court ittook note of the fact that the CoC was in the process of approving aresolution plan following which an extension of two weeks was granted.CDVI submitted an addendum to the resolution plan on 7 February 2020.

29. On 10 February 2020, the CoC sought an extension of a weekfor the resolution plan to be voted upon by the members of the CoC. On11 February 2020, the resolution plan of DVI was approved and anaffidavit was filed by the RP before this Court on 19 February 2020Dreporting the approval of DVI’s resolution plan by the CoC. Appropriatedirections were sought. This sequence of events leaves no manner ofdoubt that the extensions which were granted were to facilitate theprocess initially of inviting resolution applicants to submit their plans andlater for the evaluation of the plans which had been submitted. AfterEDVI was found to be the highest evaluated resolution applicant, extensionswere sought and granted for the resolution plan to be finalized and votedupon by the CoC. Who sought an extension of time is really beside thepoint and is of subsidiary importance. Formally it may be true that theextensions were applied for by the CoC, with the RP having apprisedthis Court also of the approval granted to DVI’s resolution plan. However,FDVI was the beneficiary of the extensions which were granted by thisCourt. The extensions granted from time to time facilitated theconsideration of the resolution plan submitted by DVI. DVI cannot beheard to contend that the order of this Court dated 8 June 2020 suffersfrom an error when the process of seeking extensions before this CourtGultimately led up to the approval of its resolution plan. DVI’s applicationfor rectification, in other words, is an attempt to renege from the resolutionplan which it submitted and to resile from its obligations. This is a deviousattempt which must be disallowed. The rectification application mustaccordingly be dismissed.

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Contempt Petition No. 542 of 2020

30. The premise of the contempt proceedings which has beeninitiated by the CoC is that despite the order of this Court dated 18 June2020, DVI has by its conduct

(i) Obstructed the implementation of the resolution plan; and B

(ii) Set up a plea in the teeth of the rejection of its IA by thisCourt on 18 June 2020.

31. Dr Abhishek Manu Singhvi, learned Senior Counsel is correctin the formulation of legal principle but it is in the application of thoseprinciples where the fine-print of this case lies. There can be no mannerof doubt that C

(i) the contempt jurisdiction is to be exercised withcircumspection;

(ii) the acceptance or rejection of a plea on merits is distinctfrom whether a party is in breach of the order of court;D

(iii) the disobedience of an order must be willful before itconstitutes contempt;

(iv) a willful breach must appear clear by the conduct of a partynot by implication; and E

(v) the exercise of legal rights and remedies would not constitutecontempt.

32. We must at the outset note that on 8 June 2020, this Courtrelegated the matter to the NCLT to decide upon the approval applicationwithin a fortnight. NCLT passed an order approving the resolution plansubmitted by DVI on 9 July 2020. DVI having taken recourse to itsappellate remedy before the NCLAT under the provisions of Section 61of the IBC does not constitute contempt. The plea of contempt howeverproceeds on the conduct of DVI. Bearing on this issue, the followingcircumstances have to be noted:

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(i) the pleas which were set up by DVI in paragraphs 9,12,13,15and 17 of its IA filed on 12 June 2020, clearly sought to setupa foundation for force majeure. In paragraph 9, DVI pleadedthat “Covid-19 pandemic has materially and adverselyimpacted commercial assumptions underlying the business H

Aplan and financial proposal for revival of the corporate debtorand the feasibility and viability of the resolution plan”. Inparagraph 12, DVI urged that the execution of a letter ofintent and submission of an additional bank guarantee “wouldmean that the approved resolution plan is being implementedwithout taking into consideration the changed circumstances,Band would be directly in conflict with the intent of discussingthe plan after understanding the impact of the changedfinancial position of the Company and the market as a whole”;

(ii) Para 13 of the IA stated that DVI “has been placed in animpossible situation where, on one hand the impact of theCchanged circumstances needs to be taken into considerationfor examining the impact of the same on the resolutionplan…”;

(iii) In para 15, DVI submitted that it was “imperative that theCoC and the resolution professional do not move forwardDwithout first giving it [DVI] the opportunity to examine theimpact of the changed circumstances on the plan and itsfeasibility and to thereupon discuss the same with the CoC”;and

(iv) Finally, in para 17, DVI pleaded that it “may be allowed toEassess the impact of the COVID-19 pandemic on the overallbusiness and financial health of the Corporate Debtor, andthe consequential impact of these circumstances on feasibilityand viability of DVI’s resolution plan and a period of 2 (two)months […] may be granted to the parties to negotiate theFterms of DVI’s resolution plan […]”.

These averments clearly indicate a foundation for the defence offorce majeure.

33. On 3 September 2020, after the order of this Court dated 18June 2020 rejecting the above IA, an email was addressed on behalf ofGthe DVI by Mr Dinesh Pednekar, of Economic Laws Practice (“ELP”),the advocates representing DVI to the RP. The email inter alia statedthat:

“6. Our client states that in view of outbreak of the Covid-19pandemic since March 2020 and continuing till date, the business/Hassets/revenues of the Corporate Debtor have been adversely and materially affected beyond INR 300 crores triggering clause8.7(iii) of the Resolution Plan. This constitutes a ‘Force MajeureEvent’ (as defined in the Amtek Resolution Plan) which is a self-operating clause providing for the forthwith termination business/assets/ revenues of the Corporate Debtor have remaineduncontroverted by you in proceedings before the NCLTChandigarh. In any event, withholding of the information soughtvide the email dated 13 July 2020 only reinforces the fact that theevent of Force Majeure has occurred resulting in the forthwithtermination of the Amtek Resolution Plan.”

On 12 September 2020, in an additional affidavit filed before theNCLAT, DVI again sought to plead the COVID-19 pandemic as a reasonfor allowing it to re-negotiate the resolution plan. The abovecircumstances leave no manner of doubt that despite the rejection of itsIA by this Court on 18 June 2020, DVI continued to persist in raising thesame grounds as a justification to be relieved of the obligations imposedon it by the terms of its resolution plan.

34. Dr Abhishek Manu Singhvi, learned Senior Counsel had, inthe course of his submissions which have been recorded earlier, submittedthat neither was force majeure pleaded then (in the IA filed before thisCourt) nor thereafter.

35. Faced with the communication dated 3 September 2020ofELP made on behalf of DVI, Dr Abhishek Singhvi submitted that thesubmission was not before the NCLAT. However, even this is factuallyincorrect.

36. Mr Niraj Kishan Kaul, learned Senior Counsel has drawn theattention of the Court to the fact that on 12 September 2020, additionalaffidavit was filed before the NCLAT where the plea of force majeurewas raised by DVI. Besides this, DVI has, despite the approval of theresolution plan, failed to

(i) submit a performance bank guarantee for the balance of INR150 crores;

(ii) make a nomination to the IMC; and

(iii) failed to attend the meetings of the IMC.

37. The provisions of the IBC are premised on a time boundprocess for the resolution of corporate insolvencies. Effectively, the A

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Aconduct of DVI after the CoC approved the resolution plan on11 February 2020 has thwarted the entire process, thus, bringing thingsto a stand-still. Alive to the realities of the situation, Dr Abhishek ManuSinghvi, learned Senior Counsel has stated before the Court that in theproceedings which are pending before the NCLAT, DVI shall not pleadforce majeure based on the outbreak of the Covid-19 pandemic.B

38. The issue which needs to be addressed is whether recourseto the contempt jurisdiction is valid and whether it should be exercised inthe facts of this case. Undoubtedly, as we have noted earlier, the conductof DVI has not been bona fide. The extension of time in the course ofthe judicial process before this Court enures to the benefit of DVI as aCresolution applicant whose proposal was considered under the auspicesof the directions of the Court. DVI attempted to resile from its obligationsand a reading of its application which led to the passing of the order ofthis Court dated 18 June 2020 will leave no doubt about the fact thatDVI was not just seeking an extension of time but a re-negotiation of itsDresolution plan after its approval by the CoC. Then again, despite theorder of this Court dated 18 June 2020 rejecting the attempt of DVI, itcontinued to persist in raising the same pleas within and outside theproceedings before the NCLAT. The conduct of DVI is lacking in bonafides. The issue however is whether this conduct in raising the untenableplea and in failing to adhere to its obligations under the resolution planEcan per se be regarded as a contempt of the order of this Court dated 18June 2020. DVI was undoubtedly placed on notice of the order thatshould it proceed in such terms, it would invite the invocation of thecontempt jurisdiction. Having said that, it is evident that the order of thisCourt dated 18 June 2020 rejected the IA moved by DVI and as a Fnecessary consequence, the basis on which the reliefs in the IA weresought. Therefore correctly, it has been now stated on behalf of theDVI that it will not set-up a plea of force majeure in view of the dismissalof its IA on 18 June 2020. However lacking in bona fides the conductof DVI was, we must be circumspect about invoking the contemptjurisdiction as setting up an untenable plea should not in and by itselfGinvite the penal consequences which emanate from the exercise of thecontempt jurisdiction. Likewise, the default of DVI in fulfilling the termsof the resolution plan may invite consequences as envisaged in law. Onthe balance, we are of the considered view that it would not beappropriate to exercise the contempt jurisdiction of this Court.H

During the course of the hearing, Dr Abhishek Manu Singhvi,learned Senior Counsel has relied on the affidavit filed in response to thecontempt petition while seeking to urge that DVI will be within in itsrights to urge whether the conditions precedent to the enforcement ofthe resolution plan have been fulfilled. Since DVI is in appeal before theNCLAT, we express no opinion on the merits of the submission. TheNCLAT will take a view on the tenability and merits of the submissionof DVI that the conditions precedent under the resolution plan have notbeen fulfilled after hearing the parties. This is not an issue which arisesbefore the Court in the present proceedings either upon the applicationfor rectification moved by DVI or the contempt petition moved by theCoC.

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39. For the above reasons, our conclusions and directions are that :

(i) There is no merit in the application for rectification movedby DVI. IA No. 58156 of 2020 in Civil Appeal No 6707 ofD2020 shall stand dismissed;

(ii) It is not expedient in the interest of justice to pursue thecontempt proceedings. The Contempt Petition (C) No. 524of 2020 in Civil Appeal No. 6707 of 2019 shall accordinglystand dismissed, subject to (iii) below; E

(iii) In terms of the submission which has been made by DVIbefore this Court and even otherwise, as a consequence ofthe dismissal of its IA on 18 June 2020, it shall not set-up aplea for force majeure in the proceedings which are pendingbefore the NCLAT in appeal against the order of the NCLTapproving the resolution plan; andF

(iv) The appeal filed by DVI against the approval of the resolutionplan by the NCLT shall peremptorily be heard and disposedof by the NCLAT not later than within a period of one monthfrom the date of the present judgment.

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40. There shall be an order in the above terms.

Ankit Gyan

Rectification Application and Contempt Petition dismissed.

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