Respondent guilty of contempt for failing to disclose assets and violating court orders

Respondent No. 3 was found guilty of contempt by the Supreme Court for failing to disclose assets as directed and violating restraint orders of the High Court of Karnataka. The court ordered Respondent No. 3 to make a complete disclosure of assets, including funds transferred to trusts, and to appear for a hearing on proposed punishment for contempt. The judgment underscores the significance of adhering to court orders and the serious repercussions of obstructing justice.

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Issues Involved:
1. Non-disclosure of assets by Respondent No. 3.
2. Violation of High Court of Karnataka's restraint orders.
3. Contempt of court by Respondent No. 3.

Issue-Wise Detailed Analysis:

1. Non-disclosure of Assets by Respondent No. 3:
The petitioners, a consortium of banks, alleged that Respondent No. 3 failed to disclose his assets fully as directed by the Supreme Court in its order dated 07.04.2016. The court had required Respondent No. 3 to disclose all properties, including movable, immovable, tangible, intangible, shareholdings, and any right, title, or interest in various entities both in India and abroad. The disclosure provided by Respondent No. 3 was found to be vague and lacking in material particulars, failing to identify the location of the properties clearly. Additionally, Respondent No. 3 did not disclose the receipt of US$ 40 million, which he had received on 25.02.2016 and subsequently transferred to trusts benefiting his children. The Supreme Court found that Respondent No. 3 had not made a proper disclosure and directed him to make a complete disclosure of all his properties, including the receipt and disbursement of the US$ 40 million.

2. Violation of High Court of Karnataka's Restraint Orders:
The High Court of Karnataka had passed orders on 03.09.2013 and 13.11.2013 restraining Respondent No. 3 from transferring, alienating, disposing, or creating third-party rights in respect of his movable and immovable properties. Despite these orders, Respondent No. 3 transferred US$ 40 million to trusts benefiting his children. The Supreme Court found that these funds, which came under the control of Respondent No. 3 after the restraint orders were passed, were covered by the orders and that the transfer was in violation of the High Court's orders. The court noted that the actions of Respondent No. 3 in disbursing the amount were reflective of an intent to put the funds beyond the reach of the court's processes.

3. Contempt of Court by Respondent No. 3:
The Supreme Court found Respondent No. 3 guilty of contempt on two counts: (a) disobeying the orders of the Supreme Court by not disclosing full particulars of his assets, and (b) violating the restraint orders passed by the High Court of Karnataka. The court emphasized that the orders of restraint were clear and unambiguous, covering all properties under the control of Respondent No. 3, regardless of when they came into his possession. The court also noted that Respondent No. 3 had not filed any reply to the contempt petition nor appeared in person as required by the rules. Consequently, the court directed the Ministry of Home Affairs to ensure the presence of Respondent No. 3 before the Supreme Court on 10.07.2017 for a hearing on the proposed punishment for contempt of court.

Conclusion:
The Supreme Court found Respondent No. 3 guilty of contempt for non-disclosure of assets and violation of the High Court of Karnataka's restraint orders. The court directed Respondent No. 3 to appear in person for a hearing on the proposed punishment and instructed the Ministry of Home Affairs to ensure his presence. The judgment highlights the importance of compliance with court orders and the severe consequences of attempting to subvert the course of justice.

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