Rajendra Mulchand Varma & Ors vs K.L.J Resources Ltd & Anr

IN THE MATTER OF: Rajendra Mulchand Verma & Anr. ...Appellants

Versus K.L.J. Resources Ltd. & Anr. ...Respondents

Present: For Appellant: Mr. C. George Thomas, Advocate For Respondent: Ms. Deepali Upadhyaya, Advocate

ORDER

(Virtual Mode) 20.07.2022: This appeal is directed against the order dated

20.01.2020 passed by the Adjudicating Authority (National Company Law

Tribunal, Mumbai Bench, Mumbai) in M.A 3564 of 2019 (Contempt Petition)

in C.P. (IB) 1084/(MB)/2019.

Counsel for the Appellant has submitted that the Respondent No. 1

had filed an application under Section 7 of the Insolvency and Bankruptcy

Code, 2016 (in short 'Code') against the Appellant. The said application filed

for an amount of Rs. 10.92 Crores was assigned CP (IB) No. 1084/MB/2019

by the office of the Adjudicating Authority. During the proceedings, the

parties had entered into a settlement on 18.09.2019 which has been

appended with this record as Annexure A-2.

On 18.09.2019 the Adjudicating Authority had passed the following

order:

"C.P. (IB)-1084(MB)/2019 Ld. Counsel for the Financial Creditor sought leave of the Court for filing consent term. Prayer is allowed. Consent term is taken on record. Further request was made by the counsel for withdrawing the petition.

-2- The Petition is dismissed as withdrawn with liberty to file a fresh petition in case of the breach of consent terms."

Thereafter, the Respondent (K.L.J Resources Ltd.) alongwith another

party filed a Contempt Petition bearing Misc. Application No. 3564 of 2019

for the alleged breach of consent term. The Contempt Petition is on record

as Annexure A-8. In the said Contempt Petition, the Adjudicating Authority

had passed the following order on 20.01.2020:

"M.A 3564/2019 in C.P. (IB) 1084/(MB)/2019 This is a fit case where the applicant should have gone straight to police and file an FIR as the same is a cognizable offence. List the matter for further consideration on 3.2.2020."

Assailing the validity of the impugned order, Counsel for the Appellant

has submitted that once the main petition was dismissed as withdrawn and

the liberty was granted to the Respondent (Applicant before the Adjudicating

Authority) to file a fresh petition in case of breach of consent terms, the

filing of Contempt Petition was totally unwarranted.

On the other hand, Counsel for the Respondent has strongly

supported the order dated 20.01.2020 of the Adjudicating Authority and

submitted that there is no error in the said order which requires any

interference.

We have heard counsel for the parties and perused the record.

The question that arises for our consideration is as to whether in

terms of the order dated 18.09.2019 (Annexure A-3), the Respondent herein

had the jurisdiction to prefer the Contempt Petition instead of filing a fresh

application in terms of the Section 7 of the Code? -3-

To our mind, the approach of the Respondent is totally fallacious as it

did not understand the order dated 18.09.2019 (Annexure A-3) of the

Adjudicating Authority in which, while passing the order of dismissal as

withdrawn, the Adjudicating Authority had given the liberty to it to file a

fresh petition in case of breach of consent terms. Instead of filing a fresh

petition under Section 7 of the Code, on the pretext that there was a breach

of consent of terms, the Contempt Petition was filed which is totally

uncalled for and unwarranted.

Thus, while we are holding that the Contempt Petition was not

maintainable at all as it has been filed while misunderstanding the order

dated 18.09.2019 (Annexure A-3) the Adjudicating Authority was to

consider as to whether the order passed by the Adjudicating Authority has

been violated or not but the Adjudicating Authority do not have the

jurisdiction to direct the party to the lis to get the FIR registered as has been

done in the present case.

Thus, in view of the facts and circumstances, the present appeal

succeeds and the impugned order is hereby set aside.

[Justice Rakesh Kumar Jain] Member (Judicial)

[Mr. Kanthi Narahari] Member (Technical)

[Dr. Alok Srivastava] Member (Technical)

Sheetal/RR