Rajasthan State Road Development And ... vs Vasundhra Gupta

IN THE MATTER OF: VASUNDHRA GUPTA (Suspended Director of Aesthetic Stone Arts India Pvt. Ltd.), R/o: Plot No.9, 22 Godam Circle, Behind Nehru Sahkar Bhawan, Jaipur-302001 (Rajasthan) ...Applicant

Versus 1. MR. SANDEEP MATHUR Managing Director, Rajasthan State Road Development & Construction Corporation Ltd, Setu Bhavan, Opposite Jhalana, Doongari, Jaipur-Agra Byepass, Jaipur-302004 (Rajasthan). ... Respondent No. 1 2. RAJASTHAN STATE ROAD DEVELOPMENT & CONSTRUCTION CORPORATION LTD, (Formerly RSBCC Ltd.), Registered Office: Setu Bhavan, Opposite Jhalana, Doongari, Jaipur-Agra Byepass, Jaipur-302004 (Rajasthan). ...Respondent No. 2 Present: For Appellant: Mr. Jasmeet Singh with Mr. Divjot Singh Bhatia, Mr. Pushpendra Singh Bhadoriya, Mr. Rusheet Salya and Ms. Aastha Chaturvedi, Advocate For Respondent: Dr. Rajeev Sharma Advocate for Contemnors. Mr. Ankit Raj and Mr. Piyush Beriwal, Advocates for Respondent No. 3- PNB

Contempt Case (AT) No. 16 of 2021 In Company Appeal (AT) (Insolvency) No. 131 of 2021 Page 2 of 6

JUDGMENT

Jarat Kumar Jain: J.

The Applicant Vasundhra Gupta, Suspended Director of Aesthetic

Stone Arts India Pvt. Ltd. (Corporate Debtor) has filed the Contempt

Application under Section 425 of the Companies Act, 2013 r/w Rule 11 of

National Company Law Appellate Tribunal, Rules, 2016 and Section 12 of

Contempt of Court Act, 1971 for initiation of Contempt proceedings against

Mr. Sandeep Mathur, Managing Director of Rajasthan Road Development

and Construction Corporation Ltd. and also against the Corporation.

2. As per the Applicant, the Work Order No. 1 & 2 were awarded to the

Corporate Debtor for construction of building on 28.03.2017 and

13.03.2019. The Corporate Debtor could not complete the work after

granting many extensions. Ultimately, on 11.06.2020 and 04.08.2020

respectively the Work Order No. 1 and 2 were terminated as per the terms

and conditions of the agreement. At the instance of one Operational Creditor

on 04.03.2020, CIRP initiated against the Corporate Debtor and Mrs.

Anuradha Gupta was appointed as Interim Resolution Professional. The

Applicant Vasundhra Gupta Suspended Director of the Corporate Debtor

Company filed an Application before the Adjudicating Authority for stay on

the operation of the termination order dated 11.06.2020 and stay on fresh

work order dated 02.07.2020. IRP Mrs. Anuradha Gupta has also filed an

Application under Section 60(5) of IBC before the Adjudicating Authority and

prayed the same relief. Ld. Adjudicating Authority vide order dated

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07.01.2021 allowed the Applications and held that during the moratorium

period termination of work orders are illegal and the invocation of bank

guarantee by the Corporation is also illegal. Being aggrieved with this order

the Corporation has filed CA (AT) (Ins) No. 131 of 2021 before this Appellate

Tribunal. This Appellate Tribunal vide order dated 25.02.2021 admitted the

Appeal for hearing and also directed that the status quo as exist today shall

be maintained till next date of hearing.

3. The Applicant Vasundhra Gupta has filed this Contempt Application

alleging that after passing of the status quo order dated 25.02.2021 the

Respondent No. 1 is carrying out the pending work at the project site

through its officers and are trying to execute every work mentioned in G-

Schedule of the agreement dated 28.03.2017. Thus, the Respondent No. 1

Mr. Sandeep Mathur has committed willful disobedience of the order passed

by this Appellate Tribunal on 25.02.2021. It is also stated that on

24.06.2021 the Applicant vide email dated 24.06.2021 informed the RP

about the ongoing work on the project site. The Respondents illegal acts and

omissions have caused irreparable damaged to the Applicant and the

Corporate Debtor. Therefore, allowed the Application and issue notice to the

Respondents and punished for the said act of contempt under Section 12 of

the Contempt of Court Act, 1971.

4. Notices were issued to the Respondents. The Respondent No. 1 filed

the Reply of the Contempt Case which is supported by his affidavit. In the

reply, he has raised some preliminary objections that the status quo order

was passed in respect of the Work Order No. 1 and 2 whereas the alleged

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work going on at the project site is in fact related to the Work Order No. 78-

80-83 dated 06.03.2018 and it has nothing to do with the Work Order No. 1

and 2, which are subject matter of CA (AT) (Ins) No. 131 of 2021. It is also

stated that he (Mr. Sandeep Mathur) has wrongly been arrayed as

Respondent No. 1. The Project Director of Unit No. 4 of RSRDS Jodhpur is

the officer in charge of the project and for the pending Appeal. Thus, the

Contempt Application is liable to be dismissed on the ground of misjoinder

of parties. It is stated that the Respondent No. 1 has not disobeyed the order

dated 25.02.2021 passed by this Appellate Tribunal. The Contempt Case is

entirely misconceived and not maintainable. After passing of the aforesaid

order no civil work was executed by the Respondents on the project site and

have not committed any willful disobedience of the order dated 25.02.2021.

Therefore, the Contempt Application is liable to be dismissed.

5. In rejoinder, the Applicant stated that after termination of work

orders, on 02.07.2020 the work orders were awarded to Mr. Amit Jain. Mr.

Amit Jain raised second running bills on 10.11.2020 and third running bill

on 15.02.2021. The Respondent No. 1 has made payment to Mr. Amit Jain

on 22.01.2021 and on 26.02.2021 i.e. after order dated 25.02.2021 passed

by this Appellate Tribunal. Thus, illegal civil work was executed by the

Respondents and they have committed willful disobedience of the order

passed by this Appellate Tribunal. In support, they have filed copy of the

running bills raised by Mr. Amit Jain.

6. After hearing Ld. Counsels for the parties, we have gone through the

record.

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7. Issue for consideration before us is whether the Respondents have

committed any willful disobedience of the status quo order dated

25.02.2021 passed by this Appellate Tribunal.

8. It is admitted fact that the Work Order No. 1 was terminated on

11.06.2020 and 02.07.2020 the Work Order No. 1 was awarded to Mr. Amit

Jain. The Applicant and IRP filed an Applications I.A. No. 167/JPR/2020

and I.A. No. 214/JPR/2020 in CP (IB) No. 131/JPR/2019 before the

Adjudicating Authority and the Adjudicating Authority vide order dated

07.01.2021 allowed the Applications and held that the termination of work

orders are inconsistent with Section 20 of IBC and are invalid and

prohibited under Section 238 of IBC. It means from 02.07.2020 to

06.01.2021, there was no prohibitory order against the new contractor Mr.

Amit Jain. The Applicant in his rejoinder filed in this case, reproduced the

extract of rejoinder dated 22.03.2021 filed by the Respondent No. 2 in the

pending Appeal, which is reproduced herein below:-

"10. That the Appellant (Corporation) after termination of the Work Order No. 1, awarded the remaining work to Mr. Amit Kumar Jain (Respondent No. 4 herein) on 02.07.2020. It is submitted that the new contractor has almost completed the work upto 14.01.2021 and the minor finishing work only is remaining. The Appellant (Corporation) is placing on record some of the recent photograph of the subject building in support of this contention true copies of the recent photograph of the subject building are annexed hereto and marked as Annexure RJ-1 (Colly)"

9. With the aforesaid pleading, it is apparent that the new contractor has

almost completed the work upto 14.01.2021. The Applicant has filed the

copy of running bills which are raised by new contractor, second running

bill dated 10.11.2020 and third running bill dated 15.02.2021. The

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Applicant has not placed on record any document in support of the

allegations that after passing of the order dated 25.02.2021 any civil work

was executed at the project site. The Applicant has sent email to RP and

also to the Project Director on 24.06.2021. The Project Director replied the

same vide letter dated 06.07.2021 and clarified that RSRDS (Corporation) is

maintaining the status quo as on 25.02.2021 for Work Orders No. 1 and 2.

The RP has not filed any affidavit in support of the allegations made against

the Respondents.

10. We are of the view that the Applicant has failed to make out a case of

willful disobedience by the Respondents. Therefore, we find no ground to

proceed in this Contempt Case and the Respondents are discharged from

the Contempt Case. Thus, the Contempt Case is closed.

[Justice Jarat Kumar Jain] Member (Judicial)

[Dr. Ashok Kumar Mishra] Member(Technical)

New Delhi 06th December, 2021.

SC

Contempt Case (AT) No. 16 of 2021 In Company Appeal (AT) (Insolvency) No. 131 of 2021