HSBC PI HOLDINGS (MAURITIUS) LIMITED versus PRADEEP SHANTIPERSHAD JAIN & ORS on 11 July 2022

1. Present contempt petition has been preferred by the petitionerherein, alleging wilful, intentional and deliberate disobedience of theFdirections issued by this Court by the alleged contemnors – respondentsherein in not depositing the shortfall amount so as to maintain a balanceof USD 60 million in the Corporation Bank account maintained by AvitelPost Studioz Limited (hereinafter referred to as the “Avitel”), a companyowned by the alleged contemnors. It is alleged that the alleged contemnorsare in wilful breach of two orders of this Court dated 19.08.2020 andG06.05.2021.

2. The facts leading to the present contempt proceedings in anutshell are as under: - 2.1 A Share Subscription Agreement (SSA) was entered into onH21.04.2011 between HSBC – petitioner herein and Avitel and others (original appellant(s) before this Court in Civil Appeal No. 5145/2016).HSBC made an investment in the equity capital of Avitel India for aconsideration of USD 60 million in order to acquire 7.8% of its paid-upcapital. That the said SSA contained an arbitration clause.

2.2 That thereafter, both the parties entered into a ShareholdersAgreement (SHA) on 06.05.2011, which defined the relationship betweenthe parties after SSA dated 21.04.2011 had been entered into. The saidSHA also contained an arbitration clause. As disputes arose betweenthe parties, on 11.05.2012, notices of arbitration were issued by HSBCto the Singapore International Arbitration Centre (SIAC) to commencearbitral proceedings. The SIAC appointed an Emergency Arbitrator. TheEmergency Arbitrator passed two interim awards dated 28.05.2012 and29.05.2012, in the SSA and SHA, respectively, in favour of HSBC,directing the alleged contemnors – Avitel Dubai to refrain from disposingof or dealing with or diminishing the value of their assets up to USD 50million, and permitting HSBC to deliver a copy of the interim awards tofinancial institutions in India and the UAE with which any of them holdor may hold or be signatory to accounts, together with a request that thefinancial institutions freeze such accounts consistent with the interimawards. On 27.07.2012, the Emergency Arbitrator made an amendmentto interim awards granting further relief to HSBC. That thereafter on30.07.2012, HSBC filed Arbitration Petition No. 1062/2012 under Section9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred toas the Act, 1996) in the Bombay High Court, inter-alia, seeking directionsto call upon the alleged contemnors to deposit a security amount to theextent of HSBC’s claim in the arbitration proceedings that had begununder both the SSA and SHA.

2.3 On 03.08.2012, the learned Single Judge of the Bombay HighCourt passed an interim order under Section 9 petition, inter-alia, directingthe Corporation Bank to allow the alleged contemnors to withdraw asum of INR 1 crore from their account on or before 09.08.2012, but notto allow any further withdrawals until further orders, till which time, theaccount was to remain frozen. Meanwhile, the alleged contemnorschallenged the jurisdiction of the three-member Arbitral Tribunal set upunder the auspices of the SIAC. The Arbitral Tribunal on 07.12.2012passed a unanimous “final partial award on jurisdiction”, dismissing thejurisdictional challenge.

2.4 That thereafter in Section 9 petition pending before the BombayHigh Court, the learned Single Judge passed an order dated 22.01.2014, A

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Ain which the respondents herein – alleged contemnors were directed todeposit any shortfall in their account with the Corporation Bank so as tomaintain a balance of USD 60 million. An appeal against the order of thelearned Single Judge was disposed of by the Division Bench of the HighCourt vide judgment and order dated 31.07.2014. The order passed bythe learned Single Judge directing the alleged contemnors to deposit theBshortfall in their account with the Corporation Bank so as to maintain abalance of USD 60 million was the subject matter of further appealbefore the Division Bench. By judgment and order dated 31.07.2014,the Division Bench of the High Court partly allowed the said appeal andmodified the order passed by the learned Single Judge and directed theCalleged contemnors to deposit an additional amount equivalent to USD20 million in the Corporation Bank account, so that the total deposit inthe said account is maintained at half the said figure of USD 60 million,i.e., at USD 30 million (instead of USD 60 million as ordered by thelearned Single Judge).D2.5 Feeling aggrieved and dissatisfied with order dated 31.07.2014passed by the Division Bench of the High Court, both Avitel and HSBCpreferred appeals before this Court. (being Civil Appeal No. 5145/2016by Avitel and Civil Appeal No. 5158/2016 by HSBC). By a commonjudgment and order dated 19.08.2020, this Court set aside the orderpassed by the Division Bench of the High Court, directing the Avital toEdeposit USD 60 million and restored the order dated 22.01.2014 passedby the learned Single Judge. Thus, by the judgment and order dated19.08.2020, the alleged contemnors – respondents herein – Avitel andothers were required to deposit and/or maintain USD 60 million in theCorporation Bank account. It is alleged that not depositing the shortfallFamount and/or maintaining USD 60 million in the Corporation Bankaccount, the respondents herein have rendered themselves liable forsuitable punishment under the Contempt of Courts Act.

2.6 At this stage, it is required to be noted that in the meanwhilethe Arbitral Tribunal in Singapore had passed a final award datedG27.09.2014, awarding USD 60 million as damages in favour of the HSBCand against the respondents herein. The same foreign award waschallenged by the respondents herein – alleged contemnors in Section34 proceedings before the Bombay High Court. By a judgment and orderdated 28.09.2015, the learned Single Judge dismissed Section 34application/proceedings and an appeal under Section 37 of the Act, 1996H

also came to be dismissed on 05.05.2017. Meanwhile, HSBC had movedthe Bombay High Court to enforce the foreign final award dated27.09.2014 in the SSA, of which enforcement proceedings were reportedto be pending.

2.7 It appears that thereafter and pursuant to the judgment andorder dated 19.08.2020 passed by this Court, the HSBC addressed alegal notice dated 04.09.2020 to the alleged contemnors and Avitel, callingupon them to inter-alia deposit the shortfall amount in the CorporationBank account to maintain a total of USD 60 million. The allegedcontemnors replied to the said notice by their reply dated 09.09.2020and refused to deposit the shortfall amount on the ground that they werecontemplating remedies under Article 137 of the Constitution of India.

2.8 That thereafter, the petitioner had filed the present petitionagainst the respondents herein on 26.09.2020, alleging wilful, intentionaland deliberate disobedience of August Judgment. This Court issued noticein the contempt petition on 06.11.2020.

2.9 On 30.04.2021, HSBC filed an Interim Application bearingNo. 59119/2021, inter-alia, seeking to restrain the alleged contemnorsfrom diverting their assets and/or creating third party rights during thependency of the contempt petition with a view to secure its interests.

2.10 At next hearing on 06.05.2021, the alleged contemnorsvolunteered to give an undertaking not to sell or encumber any of theirand Avitel’s assets during the pendency of this contempt petition as wellas the enforcement petition pending before the Bombay High Court.The same proposal was rejected by this Court. This Court further directedthe respondents herein - alleged contemnors to deposit the shortfall amountwithin a period of six weeks (i.e., by June, 2021).

2.11 That thereafter instead of complying with the directions ofthis Court, on 15.06.2021 the respondents filed an IA seeking exemptionfrom the payment of the shortfall amount, inter-alia, on the ground thatthey are unable to liquidate their assets and offered the same undertaking,which was earlier rejected by this Court on 06.05.2021 (IA No. 68388/2021). The said exemption application was opposed by HSBC vide theirreply dated 01.07.2021. This Court dismissed the exemption applicationvide order dated 02.07.2021 and directed the alleged contemnors to filetheir counter affidavit to the contempt petition in two weeks. It is thecase on behalf of HSBC that instead of complying with the judgment A

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Aand order dated 19.08.2020 and subsequent order dated 06.05.2021, thealleged contemnors have filed another application being I.A. No. 82521/2021 (application for directions) raising the same grounds that were earlierrejected by this Court.

2.12 As the respondents herein – alleged contemnors have failedBto comply with the order passed by the learned Single Judge and thejudgment and order passed by this Court dated 19.08.2020 and subsequentorder dated 06.05.2021 in not depositing the shortfall of approx. USD 42million (approx. INR 3,09,07,88,400 as on 18.09.2020), so as to maintaina sum of at least USD 60 million (approx. 4,41,54,12,000 as on 18.09.2020)in the Corporation Bank account, the petitioner herein – HSBC hasCpreferred the present contempt petition.

3. Shri Neeraj Kishan Kaul, learned Senior Advocate has appearedon behalf of the petitioner – HSBC and Shri Mukul Rohatgi, learnedSenior Advocate has appeared on behalf of the respondents – allegedcontemnors. A counter is filed on behalf of the respondents – allegedDcontemnors.

4. Shri Neeraj Kishan Kaul, learned Senior Advocate appearingon behalf of the petitioner – HSBC has vehemently submitted that thereis wilful, intentional and deliberate disobedience of judgment and orderdated 19.08.2020 and subsequent order dated 06.05.2021 by theErespondents herein by not depositing the shortfall amount to a sum ofUSD 60 million in the Corporation Bank account maintained by the Avitel.It is submitted that the wilful, intentional and deliberate disobedience oforders passed by this Court has rendered the respondents – allegedcontemnors liable for suitable punishment under the provisions of theFContempt of Courts Act.

4.1 It is further submitted by Shri Kaul, learned Senior Advocateappearing on behalf of the petitioner – HSBC that in the present caseafter judgment and order dated 19.08.2020 passed by this Court confirmingthe order passed by the learned Single Judge, directing the Avital andGothers to deposit the shortfall amount so as to maintain a sum of USD 60million in the Corporation Bank account maintained by the Avitel, therespondents and the Avitel have filed number of proceedings on thesame grounds which were rejected by this Hon’ble Court time and again.It is submitted that the respondents and the Avitel have continued to filenumber of proceedings on the same grounds which were earlier notHaccepted by this Hon’ble Court.

4.2 It is submitted that the respondents – alleged contemnors havesiphoned off USD 60 million invested by the petitioner in Avitel to relatedparties. It is submitted that the monies were siphoned off by therespondents – alleged contemnors to Avitel Post Studioz FZ-LLC (AvitelDubai) through Avitel Holdings Limited (Avitel Mauritius). These amountswere thereafter paid to Highend, Digital Fusion, etc. i.e., to companiesowned by alleged contemnors. It is submitted that out of the total amountinvested by the petitioner i.e., USD 59.2 million have been transferred toAvitel Dubai’s bank accounts and into the bank accounts, the majority ofwhich are controlled by the Jain Family. It is submitted that the same hasbeen upheld by the arbitral tribunal in the Foreign Final Award and primafacie accepted by this Hon’ble Court in the August Judgment.

4.3 It is submitted that the respondents – alleged contemnors didnot challenge the final arbitral award in Singapore. However, they fileda petition under Section 34 of the Act, 1996 before the Bombay HighCourt, which has been dismissed on 28.09.2015. It is submitted that theDivision Bench of the Bombay High Court has confirmed the orderpassed by the learned Single Judge dated 28.09.2015 rejecting Section34 application. It is submitted that the Foreign Final Award has not beenchallenged in Singapore, the findings made therein are final and bindingon the alleged contemnors.

4.4 It is submitted that despite the petitioner served a legal noticeto the respondents – alleged contemnors and Avitel, which was afterand pursuant to the August Judgment delivered by this Hon’ble Court,calling upon them to inter-alia, deposit the shortfall amount in theCorporation Bank account to maintain a total of USD 60 million, therespondents – alleged contemnors have refused to deposit the shortfallamount at that time on the ground that they were contemplating theproceedings under Article 137 of the Constitution of India. It is submittedthat therefore and after this Hon’ble Court issued the notice in the presentcontempt petition, this Hon’ble Court passed an order dated 06.05.2021directing respondents – alleged contemnors to deposit the shortfall amountwithin a period of six weeks. It is submitted that instead of depositing theshortfall amount which expired on 17.06.2021, the respondents – allegedcontemnors filed an IA seeking exemption from the payment of theshortfall amount which came to be dismissed by this Hon’ble Court. It issubmitted that the offer made by the respondents to file an undertakingthat they will not dispose of their assets in place of making deposit of the A

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Ashortfall amount, has not been accepted and/or the said proposal hasbeen rejected by this Hon’ble Court.

4.5 It is further submitted that the case on behalf of the respondents– alleged contemnors that they are unable to arrange and liquidate theirassets is nothing but a false attempt on the part of the respondents not toBdeposit the shortfall amount. It is submitted that their inability to liquidatetheir assets and/or their inability to deposit the requisite amount is nothingbut a lame excuse which as such is belated. It is submitted that thoughthe August Judgment was pronounced over ten months ago, therespondents – alleged contemnors did not notify their inability to depositthe amount until they made their exemption application.C

4.6 It is submitted that in reply to the exemption application – IANo. 68388/2011, it was specifically pointed out by the petitioner – HSBCthat if respondents – alleged contemnors – Avitel are granted the reliefsprayed for in the application (exemption from making payment of theshortfall amount) the August judgment, contempt petition, order datedD06.05.2021 and consequently, the enforcement proceedings before theBombay High Court, would be rendered infructuous. It is submitted thatthereafter, after hearing learned counsel appearing on behalf of both theparties by order dated 02.07.2021 this Hon’ble Court had dismissed theexemption application and directed the respondents to file their counteraffidavit to the contempt petition in two weeks. It is submitted thatEhowever, thereafter and in continuous of its contemptuous conduct therespondents – alleged contemnors filed yet another IA No. 82521/2021(application for directions) raising the same grounds that were rejectedby this Hon’ble Court.

4.7 It is submitted that on 16.07.2021, respondents – allegedFcontemnors also filed their counter affidavit, inter-alia, stating that theyare in the process of collecting offers in respect of their immovable andmovable assets including their shareholding in Avitel to arrange the shortfallamount and have filed a review petition (Diary No. 20098/2020) againstthe August Judgment which is pending before the Supreme Court. It isGsubmitted that all grounds raised by the respondents – alleged contemnorsin the counter affidavit have already been rejected by this Hon’ble Courtin this contempt petition itself. It is submitted that therefore, therespondents – alleged contemnors are seeking to reagitate the sameissue again is abuse of process of the Court, as held by this Hon’bleCourt in the case of KK Modi Vs. KN Modi and Ors.; (1998) 3HSCC 573.

4.8 It is further submitted by Shri Kaul, learned Senior Advocateappearing on behalf of the petitioner – HSBC that as such therespondents have accepted that are duty bound to comply with thedirections of this Hon’ble Court and order dated 06.05.2021. It is submittedthat as such the respondents have not raised the issue of maintainabilityof the contempt petition.

4.9 It is submitted that while the alleged contemnors in the counteraffidavit state that they have been “in the process of collecting offers”and “actively pursuing sale of their personal assets”, the allegedadvertisements put up for sale of such assets have been published aslate as on 8[th] July, 2021 (i.e. one week before the filing of counter affidavitand almost 11 months after the August Judgment and subsequent to theorder rejecting the exemption application on 02.07.2021), which is nothingbut an attempt to create an illusion of their attempts for compliance.

4.10 It is submitted that the list of assets provided by the allegedcontemnors is untrustworthy and may not be relied upon on the groundsthat: -

(i) The list of assets submitted by alleged contemnors is notverified / audited by neither any Chartered Accountant northe income tax returns of the Alleged Contemnors;

(ii) Does not contain a list of liabilities. Fails to disclose whetherthere are existing encumbrances on any of the assetsdisclosed;

(iii) The assets disclosed by the alleged contemnors only amountto Rs 16.37 Crore (approx.). If permitted to dispose assets,then in the best-case scenario only 16 Crores would bedeposited;

(iv) The basis for the valuation of fixed assets is not clear norcredible. For instance, the cost of depreciable items suchas computers, furniture, etc. has been maintained at thesame price since 2014. Such assets would obviouslydepreciate with time and lead to decrease in value;

(v) No independent valuation of Avitel or the AllegedContemnors share in Avitel has been provided. The sameis merely an eyewash; A

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A(vi)The value of petitioner’s investment of USD 60 Million inAvitel was held to be nil in the Final Foreign Award.Therefore, the net worth of Avitel and what actual amountwould be realizable from the sale of shares of Avitel remainsuncertain; B(vii)Avitel holding shares worth Rs. 274 Crore in a subsidiary,Avitel Mauritius is also completely unreliable and misleading.The underlying value of Avitel Mauritius arose only fromthe transfer of USD 60 Million that the Petitioners hadinvested in Avitel or in any event is not supported by anycredible proof. No independent valuation report of AvitelCMauritius has been provided to lend credence to the valueof the company;

(viii) In light of findings of the arbitral tribunal and the SupremeCourt in August Judgment that the petitioner’s investmentDof USD 60 Million was diverted to entities related to thealleged contemnors; the list of assets owned by the allegedcontemnors and Avitel are even less reliable.

4.11 It is further submitted by Shri Kaul, learned Senior Advocateappearing on behalf of the respondents that as such they have not raisedEthe issue of maintainability of the contempt petition either in its counteror the two applications filed earlier. It is submitted that therefore, thebelated submissions challenging the maintainability of the presentcontempt petition deserves to be dismissed on this ground alone. It issubmitted that even the Supreme Court has jurisdiction under ArticleF129 of the Constitution of India to punish any person for contempt of itsorders.

4.12 It is submitted that the submissions on behalf of the allegedcontemnors that the contempt petition cannot lie as the petitioner canexecute the August judgment passed under Section 9 of the Act, 1996Gunder the Code of Civil procedure, 1908 is misconceived, tenuous andunsustainable in law. It is submitted that as such in addition therespondents – alleged contemnors have further wilfully disobeyed orderdated 06.05.2021 passed by this Hon’ble Court.

4.13 It is submitted that this Hon’ble Court in the case ofFirmAshok Traders Vs Gurumukh Das Saluja (2004) 3 SCC 155H

has held that an application under Section 9 is not a suit and the orderpassed under Section 9 would fall within the expression “interim measureof protection” as opposed to all time or permanent protection. Thepurpose of Section 9 is to provide expedited interim relief in support ofarbitration and safeguard the subject matter of the dispute so thatirreparable loss would not cause. It is submitted that an executionapplication is to be filed for a default of Section 9 Order, then the wholepurpose of Section 9 of Arbitration Act to get expeditious interim protectionwould be defeated. It is submitted that Section 9 proceedings are interimproceedings in nature.

4.14 It is further submitted that the purpose behind contempt isto bring violation of Court Orders to the notice of the Court and thereforeContempt is a matter between the court and the person in contempt ofcourt. In contrast, the purpose behind execution proceedings is to enjoythe fruits of the decree in his favour. It is submitted that in the presentcase, the Hon’ble Court has directed the alleged contemnors to depositthe shortfall amount in the bank account owned by Avitel India as aninterim relief for subject matter of the dispute and not make any paymentto the petitioner that would warrant execution proceedings. It issubmitted that the contempt proceedings and execution proceedingsare two separate remedies that can be invoked simultaneously. Relianceis placed upon the decision of this Court in the case of DelhiDevelopment Authority Vs. Skipper Construction CO. (P) Ltd.;(1996) 4 SCC 622 as well as the decision of the Bombay High Courtin the case of Rajinder Kumar Malhotra Vs. Paresh Biharilal Vyas;2016 SCC Online Bom 89. It is submitted that in any event theviolation of order dated 06.05.2021 in this contempt petition is also initself contempt of court.

4.15 It is further submitted that it is a settled position of law thatmerely because an order or decree of a court is executable, the samewould not take away the court’s jurisdiction in contempt proceedings.Reliance is placed on the decision of this Court in the case of RamaNarang Vs. Ramesh Narang and Anr.; (2006) 11 SCC 114.

4.16 It is submitted that in order to constitute, the order of thecourt must be of such a nature which is capable of execution by theperson charged in normal circumstances.

4.17 It is submitted that as observed and held by the Delhi HighCourt in the case of M/s Terra Manufacturing & Sales Vs. M/s AB

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AAlagendiraa Apparels 2011 SCC Online Del 4458, once an orderpassed under Section 9 of the Arbitration Act is wilfully violated, theperson is liable for contempt.

4.18 It is submitted that the power of Court to punish for contemptis wide and the recognized. A party in breach of any order of courtBwhether interlocutory or final is subject to being proceeded against incontempt. It is submitted that as observed and held by this Hon’ble Courtin the case of Welset Engineers & Anr. Vs. Vikas Auto Industries& Ors.; (2015) 10 SCC 609 and in the case of SEBI Vs. SaharaIndia Real Estate Corp. Ltd. & Ors.; (2014) 5 SCC 429, non-compliance with the orders passed by the Hon’ble Supreme Court shakesCthe foundation of judicial system and undermines rule of law.

4.19 Now so far as the submissions on behalf of the respondents– alleged contemnors that as the August Judgment did not provide atimeline for depositing the shortfall amount and therefore, the allegedcontemnors – respondents cannot be held to be in contempt of the ordersDof this Hon’ble Court, it is submitted that the same is incorrect in factsand in law. It is submitted that the August Judgment required the allegedcontemnors and Avitel to deposit the shortfall amount in CorporationBank account as an interim relief and in the manner suggested by thelearned Single Judge passed by the High Court i.e., within four weeks.EReliance is placed upon the decision of this Court in the case ofKunhayammed Vs. State of Kerala; (2000) 6 SCC 359. It issubmitted that therefore, when this Hon’ble Court confirmed the orderpassed by the learned Single Judge, the respondents – alleged contemnorswere required to deposit the shortfall amount in their owned CorporationBank account at least within a period of four weeks from 19.08.2020. ItFis submitted that as such the respondents have been given manyopportunities and ample time to comply with the August Judgment. Theycontinue to be in contempt of order dated 06.05.2021 for deposit in thesecontempt proceedings, where an additional six weeks were provided tothem for deposit. It is submitted that inordinate delay in complying withGthe orders of the Court, non-obedience by a passive and dormant conducthas been held to be a contempt of court by this Hon’ble Court in thecase of Maninderjit Singh Bitta Vs. Union of India; (2012) 1 SCC273.

4.20 It is submitted that compliance of an order/judgment wasHnever contingent on the non-availability of “liquid funds” of the alleged contemnors. It is submitted that an order for depositing the money cannotbe made contingent upon the funds available to the alleged contemnors.They cannot contend that they will comply with the August Judgmentonly when their assets are allowed to be sold.

4.21 It is submitted that non-availability of liquid funds/assets isyet another deliberate tactic of the alleged contemnors that is intendedto deceive not only the petitioner but also this Hon’ble Court. Given thefindings by this Hon’ble Court and the SIAC that the alleged contemnorsare guilty of siphoning off funds to their families, the assets of theirfamilies are not disclosed. The list of assets indicates that even if thealleged contemnors are allowed to sell their assets; the same would notfetch any substantial amount to match USD 60 Million, as under:

(i) The total value of the assets of the alleged contemnors isapproximately Rs. 16 crores;

(ii) Alleged contemnors have submitted that Avitel has assetsworth approx. Rs. 365 crores;

(iii) Out of Rs. 365 crores, Rs. 84 crores approximately are themonies lying in the Corporation Bank account Rs. 247crores, is the value of investment of Avitel in the form ofshares in Avitel Mauritius.

(iv) The submissions of alleged contemnors that Avitel holdsshares worth Rs. 274 Crore in a subsidiary called AvitelMauritius is also completely unreliable and misleading. Theunderlying value of Avitel Mauritius arose only from thetransfer of USD 60 Million that the petitioners had investedin Avitel or in any event is not supported by any credibleproof. The valuation of Avitel Mauritius is unreliable and noindependent valuation report of Avitel Mauritius has beenprovided to lend credence to the value of the company.

(v) The Foreign Final Award held that the value of investmentmade by petitioner in Avitel was nil.

It is submitted that in light of the same it is uncertain what is theactual value of Avitel and what actual amount would be realizable fromthe sale of shares of Avitel. No independent valuation of Avitel or thealleged contemnors’ share in Avitel has been provided. The same ismerely an eyewash.

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A4.22 It is further submitted that mere pendency of a review petitioncannot be a ground for non-compliance of judgment/ order of this Hon’bleCourt. It is submitted that the respondents - alleged contemnors andAvitel have a history of non-compliance of the orders of judicial authoritiesincluding the orders of the Arbitral Tribunal. It is submitted that the reviewpetition has been filed only to delay the compliance of the AugustBJudgment/order. It is submitted that although the review petition wasfiled in month of September 2020, which has been into in defects at theRegistry due to want of procedural compliances. Such one-year delay incuring the defects is a deliberate attempt to await (i) the retirement ofthe Judge who rendered the August Judgment, and (ii) rely on the mereCfiling of the review petition to argue against depositing of the amounts. Itis submitted that as this Hon’ble Court has held that such tactics indelaying the filing of the review petition must be disapproved. Relianceis placed on the decision of this Court in the case of Vedanta Ltd.(formerly known as M/s. Sesa Sterlite Ltd) Vs. Goa Foundationand Ors.; 2021 SCC Online SC 476.D

4.23 It is submitted that the judgments of this Hon’ble Court reliedupon on behalf of the respondents – alleged contemnors shall not beapplicable to the facts of the case on hand as the present case is ofcompliance of the order passed in Section 9 application of the Act, 1996and the subsequent specific directions issued by this Hon’ble Court inEthe contempt proceedings in order dated 06.05.2021.

4.24 Making the above submissions, it is vehemently submitted byShri Kaul, learned Senior Advocate appearing on behalf of the petitioner– HSBC that the respondents – alleged contemnors have shown highestform of wilful disobedience and contemptuous action and therefore, theyFmay be punished under the Contempt of Courts Act and they may besentenced to civil imprisonment at least unless and until they have purgedthe contempt by full compliance of the August Judgment. It is submittedthat the petitioner has suffered irreparable loss due to the fraudulentconduct of Avitel and alleged contemnors and in light of the same; theGpetitioner’s petition for enforcement of Foreign Award before the BombayHigh Court may be expedited by this Hon’ble Court; it is submitted thatthe respondents have sought to employ dilatory tactics at every stageand therefore, any further delay will continue to cause prejudice to thepetitioner. It is submitted that such delay would also discourage foreigninvestors like the petitioner who has been waiting to enjoy fruits of theH

Foreign Final Award passed in its favour since 2014 and seeks tosafeguard the subject matter of its dispute as directed in the AugustJudgment under Section 9 of the Act, 1996.

5. Present contempt proceedings are vehemently opposed by ShriMukul Rohatgi, learned Senior Advocate appearing on behalf of thecontesting respondents – alleged contemnors.

5.1 It is submitted that the present proceedings have been initiatedby the petitioner – HSBC alleging non-compliance of order dated22.01.2014 passed by the learned Single Judge in Arbitration PetitionNo. 1062/2012 by which the respondents are directed to deposit USD60 million. It is submitted that the order passed by the learned SingleJudge has been confirmed by this Hon’ble Court by judgment and orderdated 19.08.2020 in Civil Appeal No. 5158/2016. It is submitted that assuch a review application being R.P. Diary No. 20098/2020 has beenfiled by Avitel India requesting to recall/review the aforesaid judgmentand order dated 19.08.2020. It is submitted that the said review applicationis pending for consideration by this Hon’ble Court.

5.2 It is submitted that in just about 37 days of the August Judgment,the present contempt petition has been filed by the HSBC before thisHon’ble Court on 26.09.2020 on expiry of three weeks’ time granted byHSBC. It is submitted on 30.04.2021, HSBC filed I.A. No. 59119/2021for interim reliefs before this Hon’ble Court to direct the respondentsherein to restrain them from selling, alienating, encumbering, creatingthird party rights, transferring or diverting their movable and immovableassets during the pendency of the present contempt petition. It is submittedthat the same application is pending adjudication before this Hon’bleCourt.

5.3 It is submitted that the respondents have also filed one I.A.No. 82521/2021 seeking the permission of this Hon’ble Court to selland/or encumber their assets and also the assets of the company, toarrange the requisite shortfall amount to deposit the same in the bankaccount of the company maintained with the Corporation Bank. It issubmitted that therefore the petitioner herein is taking contradictory standsin as much as on one hand the petitioner is seeking appointment of receiveron the assets of the respondents before the Bombay High Court andfiling an application to restrict the respondents from disposing of its assets,but on the other hand the petitioner is using contempt jurisdiction to seek AB

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Aenforcement of the judgment of the learned Single Judge of the BombayHigh Court for deposit of the shortfall amount in the Corporation Bankaccount. It is submitted that at present the respondent has not taken anymeasures to dispose of any assets and the respondent is currently onlyassessing the value of the assets owned in the name of the company andits directors and will only sell/encumber their assets with due permissionBof this Hon’ble Court, to comply with the direction to deposit the shortfallamount in the Corporation Bank account. It is submitted that thereforewhile considering the present contempt proceedings the aforesaid aspectsmay be taken into consideration.

5.4 Shri Rohatgi, learned Senior Advocate appearing on behalf ofCthe respondents – alleged contemnors has further submitted that thepresent contempt petition is not maintainable before this Hon’ble Courton the grounds, inter-alia, (i) by way of the present proceedings incontempt, the petitioner is seeking to execute the order of the learnedSingle Judge dated 22.01.2014 in Arbitration Petition No. 1062/2012,Dwhich is executable before appropriate court/forum; (ii) the contemptproceedings cannot substitute the execution/enforcement proceedings(already being availed by the petitioner) and as such the present contemptproceedings are misconceived in law and facts. In support of abovesubmissions, Shri Rohatgi, learned Senior Advocate has relied upon theEdecisions of this Court in the cases of Food Corpn. of India Vs. SukhDeo Prasad; (2009) 5 SCC 665 (para 31) and R.N. Dey Vs.Bhagyabati Pramanik; (2000) 4 SCC 400 (para 7) as well as in thecase of Court Liquidator Employees’ Assn. Vs. P.G. Mankad;(2002) 10 SCC 477.

5.5 It is submitted that in the present case also, this Hon’ble Courtby the August Judgment has allowed the appeal of the petitioner hereinand upheld the order of the learned Single Judge therefore, as such, theappropriate remedy for the petitioner herein is to approach the HighCourt of Bombay for execution if warranted and not this Hon’ble Court.

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G5.6 It is submitted that so far as the decision of this Court in thecase of Kunhayammed (supra) to elaborate the principle of mergerparticularly with respect to the maintainability of the present contemptpetition, relied upon by the petitioner is concerned, the said decision shallnot be applicable to the facts of the case on hand. It is submitted that theprinciple of merger as discussed and contemplated in the said decisionH

was on a different footing and the same is evident from the conclusionsset out in paragraph 44 of the said judgment.

5.7 It is further submitted by Shri Rohatgi, learned Senior Advocateappearing on behalf of the respondents that respondents herein neverhad and do not have any intention whatsoever to disobey the order passedby this Hon’ble Court. It is submitted that despite absolute willingnessand best efforts, the respondents are helpless in complying with thedirections of this Hon’ble Court for such reasons which are absolutelybeyond their control and for want of adequate funds at this stage. It issubmitted that there is no intent whatsoever to bring the authority andadministration of law into disrespect or disregard or to interfere with orto undermine the authority of this Hon’ble Court or to cause any prejudiceto the petitioner.

5.8 It is submitted that the respondents do not have immediateliquid funds to deposit the shortfall. Utmost and expeditious sincere effortsare being taken by the respondents herein to collect offers in respect oftheir immovable and movable assets including their shareholdings in thecompany to arrange for the requisite funds.

5.9 It is submitted that the respondents herein have also disclosedall the assets in the name of the company and the alleged contemnorsherein before this Hon’ble Court and have also submitted to court auctionof the said assets, if directed by this Hon’ble Court. It is submitted thatan application being I.A. No. 82521/2021 praying for directions to selland/or encumber their assets and also the assets of the company, toarrange the requisite shortfall amount to deposit the same in the bankaccount of the company maintained with the Corporation Bank is alsopending before this Hon’ble Court.

5.10 It is submitted that the respondents have genuine inabilityand do not have the wherewithal to deposit the shortfall amount in theCorporation Bank despite their best intentions, unless they are permittedto sell/encumber their assets to generate further funds for depositing theshortfall amount in the Corporation Bank account.

5.11 It is further submitted that contempt proceedings can only beattracted when the lapse on the part of the parties is deliberate and withthe intention to defy the authority of the Court and there has to be wilfuldisobedience on the part of the party.

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A5.12 It is submitted that as held by this Hon’ble Court in catena ofdecisions mere non-compliance cannot be a ground to punish a person/judgment-debtor under the provisions of the Contempt of Courts Act.

5.13 It is submitted that in the present case, as such, the order ofthe learned Single Judge has not yet become a decree and enforcementBof the arbitral award is still pending before the High Court. It is submittedthat even if it is assumed that the order of the learned Single Judge hasbecome a decree, Section 51 read with Order XXI Rule 40 of CPC laysdown the guidelines for the execution of the same.

5.14 It is submitted that in the case of Rama Narang Vs.CRamesh Narang and Ors.; (2021) SCC Online SC 29, this Hon’bleCourt has observed and held that for bringing an action for civilcontempt, the petitioner has to satisfy the court that there has been awilful disobedience of any judgment, decree, direction, order, writ orother process of the Court. Shri Rohatgi, learned Senior Advocateappearing on behalf of the respondents has also relied upon the followingDdecisions of this Court in the cases Ram Kishan Vs. Tarun Bajaj;(2014) 16 SCC 204; Kanwar Singh Saini Vs. High Court of Delhi;(2012) 4 SCC 307 and Kapildeo Prasad Sah Vs. State of Bihar;(1999) 7 SCC 569, in support of his above submissions and in supportof his request and prayer not to entertain the present contempt petitionEand relegate the petitioner to avail any other remedy which may beavailable to the petitioner to execute order dated 22.01.2014 passedby the learned Single Judge, which has been affirmed and confirmedby this Hon’ble Court vide judgment and order dated 19.08.2020 inCivil Appeal No. 5158/2016.

F6. Heard. In the present contempt proceedings, the petitioner hasalleged that the respondents herein – alleged contemnors have committedthe contempt of court for wilful disobedience of two orders passed bythis Court dated 19.08.2020 passed in Civil Appeal No. 5158/2016 andsubsequent order dated 06.05.2021 passed in the present proceedings.At this stage, it is required to be noted that in the present case the learnedGSingle Judge passed an order as far as back on 22.01.2014 in a petitionunder Section 9 of the Act, 1996, directing the respondents herein –alleged contemnors to deposit the shortfall amount in their account withthe Corporation Bank so as to maintain a balance of USD 60 million.The order passed by the learned Single Judge came to be modified byHthe Division Bench of the High Court and the alleged contemnors were

directed to deposit an additional amount equivalent to USD 20 million inthe Corporation Bank account, so that the total deposit in the said accountis maintained at half the said figure of USD 60 million, i.e., at USD 30million (instead of USD 60 million as ordered by the learned Single Judge).By detailed judgment and order dated 19.08.2020, this Court in CivilAppeal No. 5158/2016 has restored the order passed by the learnedSingle Judge dated 22.01.2014. Thus, the respondents herein – allegedcontemnors are directed to deposit the shortfall in their account with theCorporation Bank so as to maintain a balance of USD 60 million. Thesaid order has not been complied with till date and the respondents havefailed to maintain a balance of USD 60 million in their bank account withthe Corporation Bank. At this stage, it is required to be noted that in themeanwhile the Arbitral Tribunal in Singapore had also passed a FinalAward dated 27.09.2014 awarding USD 60 million as damages in favourof the HSBC – petitioner herein and against the respondents. Theapplications under Section 34 and 37 of the Act, 1996 against the Awardpassed by the Arbitral Tribunal in Singapore had been dismissed and theexecution proceedings moved by the HSBC in the Bombay High Courtto enforce Foreign Final Award dated 27.09.2014 are reported to bepending. By a notice dated 04.09.2020, the petitioner had served a legalnotice upon the alleged contemnors – respondents and Avitel callingupon them to, inter-alia, deposit the shortfall amount in the CorporationBank account to maintain a balance of USD 60 million. Despite theabove, the respondents have failed to deposit and/or to maintain a balanceof USD 60 million in their Corporation Bank account. That thereafter,the present contempt proceedings have been initiated/filed on 25.09.2020alleging wilful, intentional and deliberate disobedience of judgment andorder passed by this Court dated 19.08.2020. This Court had issued anotice in the present contempt proceedings on 06.11.2020. That thereafterby a further order dated 06.05.2021 this Court had directed therespondents to deposit the shortfall amount within a period of six weeksin the Corporation Bank account as per prayer (b) of the presentapplication. The prayer (b) which has been granted by this Court videorder dated 06.05.2021 is as under: - “b) direct the Alleged Contemnors to forthwith deposit the shortfallof appx. USD 42 million (appx. INR 3,09,07,88,400 as on18.09.2020), so as to maintain a sum balance of at least USD 60million (appx. INR 4,41,54,12,000 as on 18.09.2020) in theCorporation Bank account to ensure obedience of the judgment AB

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Adated 19.08.2020 in Civil Appeal No. 5158 of 2016 passed by thisHon’ble Court;”

6.1 Thus, not only there is a final judgment and order dated19.08.2020 passed by this Court in Civil Appeal No. 5158/2016 restoringthe order passed by the learned Single Judge passed in an applicationBunder Section 9 of the Act, 1996 directing the respondents herein tomaintain a balance of USD 60 million in their Corporation Bank account,there is further directions in terms of the prayer para (b) (reproducedhereinabove) vide order dated 06.05.2021. The subsequent direction dated06.05.2021 has also not been complied with by the respondents. It is tobe noted that after the direction/order dated 06.05.2021, instead ofCcomplying with the directions contained in order dated 06.05.2021, therespondents filed an I.A. seeking exemption from payment of shortfallamount being I.A. No. 68388/2021. While seeking exemption, it was thecase on behalf of the respondents in I.A. No. 68388/2021 that despitetheir absolute willingness and best efforts, they are helpless in complyingDwith the directions issued by this Court for such reasons which areabsolutely beyond their control and for want of adequate funds at thisstage. In paragraph 5 to 16, it was stated as under: -

“5. At the outset, the Applicants most humbly state and submitthat they have the utmost respect of this Hon’ble Court and areEduty bound to comply with every order passed by this Hon’bleCourt. The applicants herein never had and do not have anyintention whatsoever to disobey the order passed by this Hon’bleCourt. Despite their absolute willingness and best efforts, theapplicants are helpless in complying with the directions of thisHon’ble Court for such reasons which are absolutely beyond theirFcontrol and for want of adequate funds at this stage. There is nointent whatsoever to bring the authority and administration of lawinto disrespect or disregard or to interfere with or to underminethe authority of this Hon’ble Court or to cause any prejudice tothe petitioner.

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6. The Applicants tender an unqualified and unconditional apologyto this Hon’ble Court for being unable to implement and complywith the directions passed by this Hon’ble Court vide its orderdated 06.05.2021 in the instant contempt petition.

7. The applicants submit that on 06.05.2011, the petitioner HSBCHPI Holdings (Mauritius) Limited was allotted by the Company, total 614,327 Compulsorily Convertible Preference Shares onpayment of nominal amount of Rs. 10 per share (total nominalamount paid= Rs. 61,43,270/-) and Premium amount of Rs. 4355.75per share (total premium amount paid= Rs. 267,58,52, 260/-) and1 Equity Share of nominal amount of Rs. I 0 per share (totalnominal amount paid = Rs. I 0/-) and Premium amount of Rs.4460/- per share (total premium amount paid = Rs. 4460/-), asevident from the Return of allotment filed in Form 2 under Section75(1) of the Companies Act, 1956. A copy of the said Form 2 filedby the Company showing the details of the shares issued and theamounts paid towards the same, is hereto annexed and markedas Annexure A-2. (Page No. 13 to 19). Thus, a total amount ofRs. 268,20,00,000/- (Rupees Two Hundred Sixty Eight CroresTwenty Lakhs - equivalent to USD 60 Million) was invested inshares of the Company by the petitioner HSBC.

8. The applicants herein submit that presently an aggregate amountof Rs. 84,10,65,140/- (Rupees Eighty-Four Crores Ten Lacs SixtyFive Thousand One Hundred Forty) is lying in the CorporationBank. It is humbly submitted that the present application has beenfiled before this Hon’ble Court so as to seek for an exemptionfrom depositing the shortfall amount in the bank account becauseneither the Applicants nor the company, despite their best effortscould jointly or severally arrange the necessary balance funds tocomply with the order dated 06.05.2021 passed by this Hon’bleCourt.

9. The Applicants are annexing herewith a complete list of assetsof the Company and each of the applicants herein, from 31[st] March2014 till date.

10. In the present scenario, the applicants despite best efforts andintent, are unable to liquidate the aforesaid assets belonging tothem and the Company, to arrange the entire shortfall amountdirected by this Hon’ble Court, for depositing in the CorporationBank account. It is not a case where the applicants have themoney but are not willing to comply with the directions showingany affront to the orders of this Hon’ble Court. The applicantshave genuine inability and do not have the wherewithal to depositthe shortfall amount in the Corporation Bank despite their bestintentions and efforts. The Applicants most humbly state and submit A

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that they have the utmost respect of this Hon’ble Court. TheApplicants herein tender an unqualified apology to this Hon’bleCourt for their genuine inability to comply with the directions ofthis Hon’ble Court vide order dated 06.05.2021 in the instantContempt Petition for lack of adequate liquid funds.

11. The applicants however are willing to undertake to this Hon’bleCourt that they would not create any encumbrance and wouldpreserve all the above assets belonging to them or the Companyfor the future benefit of the petitioner subject to the final outcomeof the enforcement of award proceedings/Section 48 proceedingspending before the Hon’ble Bombay High Court, wherein thepleadings are also complete. The applicants would also give suchfurther undertaking to this Hon’ble Court as may deem just andexpedient.

12. The applicants say that so far as the office premises of theCompany at Mumbai, and the residential premises where theapplicants reside in Mumbai or Panchgani are concerned, it issubmitted that Mrs. Sudha Pradeep Jain wife of Applicant no.1 isregistered owner of office premises Unit No. A-7 & A-8, VimalUdyog Bhavan, Taikalwadi Road, Mumbai since 08-07-1999 and19-07-2001 respectively, and registered owner of residentialpremises at Pleasant Palace, Narayan Dabholkar Road, MalabarHill, Mumbai - 400 006 since 07-01-2011, and seven units ofresidential properties situated at Silver valley CHS, Panchgani(six units since 31.03.2011 and one more unit since 09.07.2012).Mrs. Shivani Siddhartha Jain wife of Applicant No. 2 SiddharthaJain, and Mrs Priyanka Hrishi Jain wife of Applicant No. 3 HrishiJain are registered owners of office premises at Unit No. A-9 &A-6 respectively, in Vimal Udyog Bhavan, Taikalwadi Road,Mumbai since 03-09-2012 & 30-08-2012. Mr. Rishab Jain son ofApplicant No.1 and brother of Applicant No.2 & 3 is registeredowner of office premises at Unit No. A-11 in Vimal Udyog Bhavan,Taikalwadi Road, Mumbai since 30-08-2012. The office premisesat Juhu, Mumbai was a rented premises and was vacated in yearFebruary 2015. None of the premises mentioned in this paragraphare owned by the applicants. These facts are also being disclosedfor providing complete information to this Hon’ble Court.

13. That, the Applicants inability to comply with the Order dated06.05.2021 is genuine, unintentional and not lacking in bona fide.

14. In the above circumstances the applicants humbly beg to bepardoned for the same and seek for an exemption from complyingwith the directions contained in the Order dated 06.05.2021 ofthis Hon’ble Court.

15. That, the Applicants hold this Hon’ble Court in greatest respectand esteem.

16. The applicants in the above circumstances pray to this Hon’bleCourt to graciously be pleased to accept their humble unqualifiedand unconditional apology, and exonerate them from the purviewof the contempt proceedings, discharge of show cause notice ofcontempt proceedings. The applicants are also praying for anexemption from complying with the order dated 06.05.2021 ofthis Hon’ble Court to deposit the shortfall amount in the CorporationBank, and suitably modifying the said Order dated 06.05.2021,while accepting such undertaking of the applicants which maydeem just, expedient and to the satisfaction of this Hon’ble Court.”

The aforesaid application for exemption from depositing theshortfall amount pursuant to order dated 06.05.2021 has been specificallyrejected by this Court vide order dated 02.07.2021. Despite the above,till date, the respondents have failed to deposit the shortfall amountpursuant to order dated 06.05.2021. Therefore, while considering thepresent contempt proceedings, the aforesaid factual scenario and theconduct on the part of the respondents are required to be considered.

7. The present contempt proceedings are opposed by therespondents – alleged contemnors on the grounds, inter-alia, that (i) theorder passed by the learned Single Judge dated 22.01.2014, which hasbeen confirmed by this Court vide order dated 19.08.2020 in Civil AppealNo. 5158/2016, is an order executable and therefore, the present contemptproceedings may not be entertained; (ii) that there is no wilfuldisobedience on the part of the respondents – alleged contemnors in notdepositing the shortfall amount in their Corporation Bank account tomaintain a balance of USD 60 million as they have no sufficient fundsand therefore, non-compliance is beyond their control and therefore,their inability to comply with the order despite their best efforts does notwarrant any punishment under the Contempt of Courts Act.

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A8. Now so far as the first contention resisting the present contemptproceedings, namely, the order passed by the learned Single Judge bythe High Court by which the respondents were directed to maintain abalance of USD 60 million in their Corporation Bank account is executableis concerned, at the outset, it is required to be noted that in the presentproceedings it is not the case of non-compliance of the order passed byBthe learned Single Judge confirmed by this Court alone. There is a furtherspecific direction issued by this Court vide order dated 06.05.2021.Therefore, there is a non-compliance of direction issued by this Courtdated 06.05.2021 by which the respondents were directed to deposit theshortfall amount so as to maintain a balance of USD 60 million. ThatCthereafter, a further application for exemption from depositing the shortfallamount pursuant to order dated 06.05.2021 has also been dismissed bythis Court. Therefore, thereafter it shall not be open for the respondentsto submit that as order dated 22.01.2014 passed by the learned SingleJudge is executable, the present contempt proceedings may not beentertained.D

8.1 At this stage, a few decisions of this Court on contemptproceedings under the Contempt of Courts Act are required to be referredto. In the case of Rama Narang (supra) after referring to and takinginto consideration the earlier decisions of this Court in the cases of R.N.Dey (supra), Rita Markandey Vs. Surjit Singh Arora; (1996) 6 SCCE14 and Bank of Baroda Vs. Sadruddin Hasan Daya; (2004) 1 SCC360, it is specifically observed and held by this Court that the petitionercan execute the decree can have no bearing on the contempt committedby the respondents. In the said decision, this Court also considered indetail (in para 31) the decision of this Court in the case of R.N. DeyF(supra), which has been relied upon by the learned Senior Advocateappearing on behalf of the respondents in the present case. The para 24of the decision is as under: - “24. All decrees and orders are executable under the Code ofCivil Procedure. Consent decrees or orders are of course alsoGexecutable. But merely because an order or decree is executable,would not take away the court’s jurisdiction to deal with a matterunder the Act provided the court is satisfied that the violation ofthe order or decree is such, that if proved, it would warrantpunishment under Section 13 of the Act on the ground that thecontempt substantially interferes or tends substantially to interfere H

with the due course of justice. The decisions relied upon by therespondents themselves hold so as we shall subsequently see.”

8.2 Apart from the fact that the facts in the case of R.N. Dey(supra) is distinguishable in as much as in the present case, there isfurther specific directions issued by this Court vide order dated 06.05.2021even in the said decision also it is observed and held by this Court thatdiscretion given to the court is to be exercised for maintenance of thecourt’s dignity and majesty of law. It is further observed that the contemptis between a contemnor and the court and that an aggrieved party hasno right to insist that the court should not exercise such jurisdiction.

8.3 In the case of Welset Engineers and Anr. (supra), it isobserved and held by this Court that a party in breach of any order ofcourt whether interlocutory or final is subject to being proceeded againstin contempt. Orders are meant to be obeyed and a person, acting inbreach of the order does so at that person’s peril.

8.4 In the case of SEBI (supra), it is observed and held by thisCourt that non-compliance with the orders passed by this Court shakesthe very foundation of our judicial system and undermines the rule oflaw, which we are bound to honour and protect. This is essential tomaintain faith and confidence of the people of this country in the judiciary.It is further observed that there is a need of iron hand to enforce rule oflaw, punish contemnors and maintain faith and confidence of the peoplein judiciary.

9. Applying the law laid down by this Court in the aforesaiddecisions to the facts of the case on hand and the subsequent specificdirections issued by this Court in its order dated 06.05.2021, the objectionon behalf of the respondents that as the order passed by the learnedSingle Judge of the High Court is executable and therefore, the presentcontempt proceedings may not be entertained is overruled.

10. Now so far as the submissions on behalf of the respondentsthat there is no wilful disobedience as they have no sufficient funds todeposit the shortfall amount and despite their best efforts, they are unableto get the requisite funds to comply with the order passed by this Courtis concerned, at the outset it is required to be noted that all thesesubmissions were made earlier in I.A. No. 68388/2021 seeking exemptionfrom deposit of shortfall pursuant to order dated 06.05.2021 and thesame have not been accepted by this Court and vide order dated A

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A02.07.2021 their application for exemption has been dismissed. Thereafter,it shall not be open for the respondents to repeat and make the samesubmissions again and again. The respondents cannot be permitted tomake the same submissions which have not been accepted and/or rejectedby this Court earlier. Repetitive submissions which have not beenaccepted earlier by court that itself is a wilful disobedience andBtantamount to contempt and it shows the conduct on the part of thecontemnors.

11. Sufficient opportunities have been given to the respondents todeposit the shortfall amount so as to maintain a sum of USD 60 million intheir Corporation Bank account. The first order passed by the learnedCSingle Judge in their application under Section 9 of the Act, 1996 ispassed in the year 2014 and even the same has been restored by thisCourt vide judgment and order dated 19.08.2020 and thereafter, furtherdirections have been issued specifically directing the respondents todeposit the shortfall vide order dated 06.05.2021 and thereafter theirDapplication for exemption from depositing the shortfall amount has beendismissed by this Court. Despite the above, the respondents have failedto deposit the shortfall amount and therefore, they have renderedthemselves liable for suitable punishment under the provisions of theContempt of Courts Act for wilful disobedience of not only the judgmentand order passed by this Court dated 19.08.2020 in Civil Appeal No.E5158/2016 but also for wilful disobedience and non-compliance of orderpassed by this Court dated 06.05.2021 in the present application. Thedefence on behalf of the respondents lack bona fides. To maintain therule of law and majesty of justice and so as to see that the faith andconfidence of the people in judiciary is maintained, this is a fit case toFentertain the present contempt proceedings and to punish the respondentsunder the provisions of the Contempt of Courts Act.

12. In view of the above and for the reasons stated above, wehold the respondents guilty for deliberate and wilful disobedience ofjudgment and order dated 19.08.2020 passed by this Court in Civil AppealGNo. 5158/2016 as well as order dated 06.05.2021 passed by this Court inthe present petition. The respondents have rendered themselves liablefor suitable punishment under the provisions of the Contempt of CourtsAct for such deliberate and wilful disobedience. However, before wepass any further order of punishment/conviction, we still give an additionalopportunity to the respondents to comply with order dated 06.05.2021H

HSBC PI HOLDINGS (MAURITIUS) LIMITED v. PRADEEPSHANTIPERSHAD JAIN & ORS. [M. R. SHAH, J.]

passed in the present petition as well as judgment and order dated19.08.2020 passed by this Court in Civil Appeal No. 5158/2016 to depositthe shortfall amount so as to maintain a balance of USD 60 million intheir Corporation Bank account within a period of four weeks from today.

The aforesaid would have a direct bearing on the punishment tobe imposed.

Put up the matter before this Bench on 12.08.2022 for furtherorder on punishment.

Divya Pandey(Assisted by : Roopanshi Virang, LCRA)

Directions issued.

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