Idbi Bank Limited vs Ms. Mamta Binani & Ors

Deccan Chronicle Holdings Limited (Acting through the Supervisory Committee 36, S.D. Road, Secunderabad, Telengana- 500 003 .. Applicant

Vs.

1. Srei Multiple Asset Investment Trust- Vision India Fund, Successful Resolution Applicant 86C, Topsia Road (South), Kolkata-700 046

2. Samgrahah Commercial Private Limited, Vishwakarma, 86C, Topsia Road (South) Kolkata- 700 046

3. Shilpa Modi, Director of Samgrahah Commercial Private Limited, Vishwakarma, 86C, Topsia Road (South) Kolkata- 700 046

4. Dipen Chatterjee Director of Samgrahah Commercial Private Limited, And also Director in Corporate Debtor, 3/14, Bijaygarh, Jadavpur University, Jadavpur, Kolkata- 700 032

5. Raghunath Ghosh, Trustee of Srei Multiple Asset Investment Trust- Vision India Fund, Vishwakarma, 86C, Topsia Road (South) Kolkata- 700 046 2

Contempt Case (AT) No. 28 of 2021

6. Trinity Alternative Investment Managers Limited, Vishwakarma, 86C, Topsia Road (South) Kolkata- 700 046

7. Chandra Shgekhar Samal, Director Trinity Alternative Investment Managers Limited, Vishwakarma, 86C, Topsia Road (South) Kolkata- 700 046

8. Sushil Kumar Pal, Director Trinity Alternative Investment Managers Limited, Vishwakarma, 86C, Topsia Road (South) Kolkata- 700 046

9. Ratan Kumar Sarawagi, Director Trinity Alternative Investment Managers Limited, Vishwakarma, 86C, Topsia Road (South) Kolkata- 700 046

10. Ashish Kumar Dhandanya Director Trinity Alternative Investment Managers Limited, Vishwakarma, 86C, Topsia Road (South) Kolkata- 700 046

11. Srivishnu Raju Nandyala Director appointed by Srei Multiple Asset Investment Trust- Vision India Fund to the Corporate Debtor Plot No. 616, Road No. 33, Jubilee Hills, Hyderabad- 500 033 Telengana

12. Upewndra Rao Kancharana Director appointed by Srei Multiple Asset Investment Trust- Vision India Fund to the Corporate Debtor H. No. 246, 3rd Floor, 5th Cross RMV Stage-2, Block 2, Bengaluru, ..Respondents/ North Bengaluri- 560 094 Contemnors. 3

Contempt Case (AT) No. 28 of 2021

Present: For Appellant: Mr. Abhijeet Sinha, Mr. Siddharth Sharma, Mr. Arjun Asthana, Mr. Saikat Sarkar, Ms. Anushka Sarkar, Advocates

For Respondents: Mr. Rishav Banerjee and Mr. Saptarshi Mandal, Advocates for R-1 & 2 Mr. Abhinav Vasisht, Sr. Advocate with Mr. Sidhartha Barua, Ms. Priya Singh, Mr. Praful Jindal, Advocates for Respondent No. 4

JUDGMENT

[2nd September, 2022]

(Per Hon'ble Mr. Justice M. Satyanarayana Murthy

A Financial Creditor i.e., IDBI Bank filed the present contempt case

under Section 425 of Companies Act, 2013 r/w Article 215 of

Constitution of India and Section 15 of Contempt of Court Act 1971

against the Supervisory Committee of Deccan Chronicle Holdings Limited

(hereinafter referred to 'DCHL') represented by Ms. Mamta Binani, the

erstwhile Resolution Professional and at present Member of Supervisory

Committee to punish the Contemnors No. 1 to 4 for criminal contempt

for lowering the authority of this Appellate Tribunal, interfering with the

course of proceedings before this Tribunal and for obstructing

administration of justice, finding them guilty for Contempt of Court. The

following are the acts of contemnors alleged constituted criminal

contempt.

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Contempt Case (AT) No. 28 of 2021

(a) Approaching adjudicating authority for stay of direction passed by the Appellate Tribunal thereby obstructed administration of

justice.

(b) This Tribunal vide order dated 22.05.2019 in the Appeal directed as follows:

"In the meantime, decision, if any taken by the Adjudicating Authority for implementation of Resolution Plan shall be subject the decision of this appeal"

The Resolution Plan was approved by Adjudicating Authority on

03.06.2019 on the next day i.e., on 04.06.2019, IDBI Bank issued

notice to Successful Resolution Applicant (hereinafter referred to

'SRA') not to implement the Resolution Plan. While the matter

stood that this Tribunal passed an order dated 05.12.2019

directing as follows:

"During pendency of the Appeal, if Successful Resolution Applicant has not taken over the charge of the Corporate Debtor, the Monitoring Committee with the held of the Resolution Professional will ensure that the Company remains a going concern"

But, on 16.07.2020, Contemnor No. 1 filed I.A. No. 1351 of 2020 for

withdrawal of approved Resolution Plan same was heard and

reserved orders by the Tribunal. On the date fixed for

pronouncement of order i.e., on 6.8.2020, Contemnor No. 1 filed 5

Contempt Case (AT) No. 28 of 2021

another Application for withdrawal of I.A. No. 1351 of 2020 which

was allowed. Filing of Application one after the other without any

justified ground amounts to interference with Administration of

Justice.

(c) On 01.06.2021, the Tribunal issued the following direction:

"It is also not in dispute that Resolution Plan has been

approved by the Adjudicating Authority. The only major point

which is in dispute is about the distribution of funds amongst

financial creditors. The other issue involved is the stay of

implementation of Resolution Plan by this Tribunal order

dated 22.05.2019 whereas it is not so. The Resolution

Applicant has not been barred from making payments as

stipulated in the approved Resolution Plan.

11. In view of the above submissions and documents as

produced during the virtual hearing through sharing on the

screen, we are of the firm view that four years have lapsed and

implementation of Resolution Plan has still not happened.

Even after approval of Resolution Plan, two years have lapsed

and still the Resolution Applicant has not injected any fund in

the corporate debtor. We also confirm that this Tribunal order

dated 22.05.2019 as stated above is not a stay order for

implementation of Resolution Plan. The Resolution Applicant

is hereby directed to go ahead and implement the plan and 6

Contempt Case (AT) No. 28 of 2021

make payments and take other actions as finally approved by

the Adjudicating Authority."

2. In pursuance of direction, Contemnor No. 1 only infused a sum of

Rs. 60 Crores on 15.06.2021, filed Interlocutory Application on behalf of

Contemnor before Adjudicating Authority, seeking indirect stay of

operation of order of this Tribunal dated 01.06.2021.

3. Despite several directions of this Tribunal at various stages, though

two years period has been elapsed, the Plan was not implemented but the

Contemnors infused Rs. 60 Crores as a lip service on 15th June, 2021,

thus the Contemnors have failed to further implement the Resolution

Plan as failure to infuse balance of Rs. 348.06 Crores as agreed in the

Resolution Plan amount to contempt.

4. It is further contended that with one hand the Contemnors

assuring implementation of Resolution Plan while assuring

implementation by Supervisory Committee, on the other hand the

Contemnors have filed Interlocutory Applications before the Adjudicating

Authority, at last on 27th August, 2021, the Contemnors served a copy of

one such Applications filed before the Adjudicating Authority. The said

Application was listed before the Adjudicating Authority on 8th

September, 2021 as I.A.(IB)/480(HYD) 2021 and passed an order on the

even date. Very filing of Applications without implementation of

Resolution Plan amounting to interference with Administration of

Justice.

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Contempt Case (AT) No. 28 of 2021

5. This Tribunal on 1st June, 2021 observed as follows:

a. Resolution Plan has not been implemented for two years.

b. There was no stay on implementation of Resolution Plan.

c. Successful Resolution Applicant had not made any investment

(by infusion of funds or otherwise) in Corporate Debtor

d. The Resolution Applicant is directed to go ahead and

implement the Plan and make payments.

6. Though this Tribunal passed order dated 1st June, 2021, no further

action was taken by Contemnors to implement the Plan.

7. The Contemnors approached the Adjudicating Authority by filing

an Application I.A. (IBC)/480/(HYD)/2021 claiming stay and other

incidental reliefs as mentioned in para 2.6 of the petition. Filing of such

Interlocutory Application without any reason amounts to criminal

contempt. Hence requested to punish the Contemnors for criminal

contempt.

8. The Respondent Nos. 1 and 4 are served with notice and filed their

counters denying the material allegations made in the petition while

explaining the reasons that prompted them to file Applications and failure

to implement the approved Resolution Plan. Those contentions of

Contemnor Nos. 1 and 2 will be adverted to at appropriate time while

deciding this Application.

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Contempt Case (AT) No. 28 of 2021

9. Notice though ordered by this Tribunal to other Contemnor, the

Applicant did not take steps to serve notice as mandated under Section

18 of Contempt of Courts Act 1971. Hence the contempt case against the

other Contemnors is closed, while deciding the Contempt allegedly

committed by Contemnor Nos. 1 and 4.

10. Before proceeding to decide the criminal contempt allegedly

committed by Contemnor Nos. 1 and 4, it is appropriate to advert to

relevant provisions of Contempt of Courts Act, 1971 dealing with

limitation to take cognizance and mode of taking cognizance of criminal

contempt.

11. Section 20 of the Contempt of Courts Act deals with limitation for

action of contempt which is extracted hereunder for better appreciation:

"20. Limitation for actions for contempt.- No Court shall

initiate any proceedings for contempt, either on its own motion

or otherwise, after the expiry of a period of one year from the

date on which the contempt is alleged to have been

committed."

12. A bare look at Section 20 of the Contempt of Courts Act, limitation

to take cognizance is one year from the date of commission of alleged

contempt. Section 20 prescribes only a condition precedent to exercise

power of Court under Contempt Jurisdiction. Whether or not Section 3

of the Limitation Act is attracted, it is the Court's duty to see that this 9

Contempt Case (AT) No. 28 of 2021

condition precedent to exercise of Contempt Jurisdiction is satisfied. The

Court cannot overlook it, nor can it defeat the statute, vide "Dineshbai

Vs. Kripalu Co-operative Housing"1 At the same time, Section 20

applies to all Contempts, whether Court took action sue moto or at the

instance of a party, which had obtained Advocate Generals permission,

no notice can be issued after expiry of one year, as held in "Hari Nandan

Vs. S N Pandeta"2

13. In view of the clear embargo contained in Section 20 of Contempt

of Courts Act, 1971 to exercise contempt jurisdiction to take cognizance,

it is the duty of the Tribunal to decide, the issue of limitation to take

cognizance of criminal contempt in the present petition.

14. Admittedly, the Contempt case is filed on 14th September, 2021,

the alleged acts of Contemnors constituting criminal contempt must be

within a year proceeding to the date of filing i.e., 14th September, 2021.

For the contemptuous acts of Contemnors beyond one year preceding to

date of filing, the Tribunal is not competent to issue notice for criminal

contempt. The alleged acts of contemnors prior to 14th September, 2020

are not cognizable.

15. On examination of alleged acts of contempt pleaded in the petition,

the acts of the Contemnors up to withdrawal of I.A. No. 135 of 2020 on

6th August, 2020 are beyond one year period prescribed under Section 20 1 AIR 1980 Gujarat page 194 (D.B) 2 AIR 1975 AII page 48 10

Contempt Case (AT) No. 28 of 2021

of the Contempt of Courts Act, 1971. Therefore, the alleged acts of

contempt upto withdrawal of I.A. No. 1351 of 2020 on 6th August, 2020

cannot be taken into consideration to determine the contempt of Court of

Contemnors. The only direction of the Tribunal dated 01.06.2021 is not

implemented and filed an Interlocutory Application before the

Adjudicating Authority. The order of the Tribunal dated 01.06.2021 is

already extracted at contention 'C' in the earlier paragraph. It is clear

from the order that there is no stay and clarified the earlier order dated

22.05.2019 for implementation and Resolution Applicant is directed to

go ahead to implement the Resolution Plan and make payments and

other actions as finally approved by the Adjudicating Authority. The

direction simplicitor obligates the SRA to implement the approved

Resolution Plan but no time for implementing is fixed in the order.

However, the SRA is bound to follow time line fixed under IBC even in the

absence of specific period fixed by this Tribunal. So far the direction is

not implemented in total, however infused 60 Crores to implement

Resolution Plan on 15th June, 2021. Thus, the SRA started

implementation of approved Resolution Plan but not in total. Without

waiting for total implementation, the Applicant filed the contempt case

on 14th September, 2021 i.e., within four months.

16. The Contemnors nos. 1 & 4 being erstwhile Resolution

Professionals and Members of Supervising Committee did not take steps

to implement the Resolution Plan. The Contemnors are only Supervising

Committee Members, not the SRA who is under obligation to implement 11

Contempt Case (AT) No. 28 of 2021

the Resolution Plan infusing funds, when the Contempt Case against SRA

is not prosecuted, the Contemnor Nos. 1 and 4, who are Members of

Supervising Committee, cannot be found guilty for criminal contempt for

the reason that the SRA has to infuse funds to implement Resolution Plan

and unless the SRA infused funds, the Committee can do nothing to

implement the Resolution Plan. Therefore, the alleged acts of Contemnors

1 and 4 cannot be said to be willful or intentional, to saddle with any

liability for criminal contempt. Criminal Contempt is defined under

Section 2(C) of Contempt of Courts Act, 1917 is as follows:

"2. ... (C) "criminal contempt" means the publication (whether by words, spoken or written, or by signs, or by visible representations, or otherwise) of any matter or the doing of any other act whatsoever which-

(i) Scandalizes or tends to scandalize, or lowers or tends to lower the authority of, any Court; or

(ii) Prejudices, or interferes or tends to interfere with, the due course of any judicial proceeding; or

(iii) Interferes or tends to interfere with, or obstructs or tends to obstruct, the administration of justice in any other manner;

(iv) "High Court" means the High Court for a State or a Union territory, and includes the Court of the Judicial Commissioner in any Union territory."

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Contempt Case (AT) No. 28 of 2021

17. Criminal contempt is divided into tow categories, one is publication

of any matter which scandalizes or tends to scandalizes the authority of

any Court etc. The second category is the doing of any act whatsoever,

which scandalizes or tends to scandalize the authority of any Court. If an

act is not a criminal contempt merely because there was no publication,

such act would automatically fall within purview of the other category,

because the latter consists of "the doing any other act whatsoever". The

latter category is thus, a residuary category, wide enough that no act of

criminal contempt can possibly escape. The common denomination for

both is that it scandalizes or tends to scandalize any Court, as held in

"S.K. Sundaram Inre"3 .

18. From the principle laid down by Hon'ble Apex Court, to constitute

criminal contempt, the act of Contemnor must scandalize or tend to

scandalize the Court, lowers or tends to lower the authority of Court.

Secondly, prejudices or interference or tends to interfere with due course

of any judicial proceedings, thirdly, obstruct or tends to obstruct the

administration of justice in any other manner. Hence the alleged acts of

Contemnor do not fall in any of the categories, as the acts of the Members

of Supervisory Committee do not amount to interference or obstruction

to any judicial proceedings or administration of justice. The Contemnors

are only Members of Supervisory Body to act upon in directions subject

to infusion of funds by SRA. Hence, we find that all acts of the

3 AIR 2001 SC Page 2374 13

Contempt Case (AT) No. 28 of 2021

Contemnors are within one year prior to 14.09.2021 would not fall within

criminal contempt.

19. A special procedure is provided to take cognizance of criminal

contempt, other than criminal contempt in the face of Supreme Court or

High Court. In case of criminal contempt, other than contempt referred

under Section 14 of the Act, Supreme Court or High Court may take

action on its own motion or on a motion made by Advocate General or

any other person, with the consent in writing of Advocate General. In

relation to Union Territory of Delhi, such Law Officer, as the Central Govt.

may by notification in the Official Gazette, specifying in this behalf or any

other person with the consent of such Law Officer in writing.

20. In the present contempt case, the procedure contemplated under

Section 15 of Contempt of Courts Act, 1971 has not been complied,

consequently, the Contempt Case is liable to be closed as cognizance was

taken in violation of mandatary procedure prescribed in Section 15 and

major part of alleged acts of contempt are barred by Limitation prescribed

by Section 20 of the Act.

21. In view of the foregoing discussion, we find no ground to punish

the Contemnor Nos 1 and 4. However, it is open to the Creditors to take

action, if any, in accordance with provisions of IBC and regulations

thereunder, subject to permissibility.

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Contempt Case (AT) No. 28 of 2021

In the result, Contempt Case is closed.

[Justice Ashok Bhushan] Chairperson

[Justice M. Satyanarayana Murthy] Member (Judicial)

[Barun Mitra] Member (Technical)

NEW DELHI

Akc