2022 (7) TMI 1431 - AT - Insolvency and Bankruptcy

Tribunal rules against Contempt Petition, emphasizes compliance with Adjudicating Authority's terms

Rajendra Mulchand Verma & Anr. Versus K.L.J. Resources Ltd. & Anr.

The Tribunal held that filing a Contempt Petition instead of a fresh application under the Insolvency and Bankruptcy Code was unwarranted as it ... Jurisdiction - power of respondent to prefer the Contempt Petition instead of filing a fresh application in terms of the Section 7 of the Code - HELD THAT:- 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order dated 18.09.2019 (Annexure A-3) of the Adjudicating Authority in which, while passing the order of dismissal as withdrawn, the Adjudicating Authority had given the liberty to it to file a fresh petition in case of breach of consent terms.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. 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. Appeal allowed. Issues Involved:Jurisdiction to file Contempt Petition instead of fresh application under Section 7 of the Insolvency and Bankruptcy Code, 2016.Detailed Analysis:1. Jurisdiction to file Contempt Petition:The appeal was against an order passed by the Adjudicating Authority in a Contempt Petition related to a settlement agreement under the Insolvency and Bankruptcy Code, 2016. The Appellant argued that the filing of the Contempt Petition was unwarranted as the main petition had been dismissed with liberty to file a fresh petition in case of breach of consent terms. On the other hand, the Respondent supported the Adjudicating Authority's order. The Tribunal considered whether the Respondent had the jurisdiction to file a Contempt Petition instead of a fresh application under Section 7 of the Code as per the order dated 18.09.2019. The Tribunal found the Respondent's approach to be fallacious, as the Adjudicating Authority had granted liberty to file a fresh petition in case of breach of consent terms, not a Contempt Petition. The Tribunal held that the filing of the Contempt Petition was uncalled for and unwarranted, as it misunderstood the Adjudicating Authority's order.2. Violation of Adjudicating Authority's Order:The Tribunal emphasized that the Adjudicating Authority was to consider whether its order had been violated, but it did not have the jurisdiction to direct the party to file an FIR, as done in this case. The Tribunal noted that while the Adjudicating Authority should have assessed if its order was breached, directing the party to register an FIR was beyond its jurisdiction. Consequently, the Tribunal set aside the impugned order, ruling in favor of the Appellant.In conclusion, the Tribunal found that the Contempt Petition was not maintainable as it was filed based on a misunderstanding of the Adjudicating Authority's order. The Tribunal clarified the jurisdictional aspect of filing a Contempt Petition versus a fresh application under the Insolvency and Bankruptcy Code, emphasizing the importance of adhering to the terms set by the Adjudicating Authority.