Wilful disobedience and settlement failure led to civil contempt, recall of the compromise order, and revival of insolvency proceedings.

Wilful disobedience of a Tribunal's order and undertaking constituted civil contempt where the respondents failed to pay the first instalment, issued a dishonoured cheque, and did not regularise compliance despite repeated s. Their explanations of internal approval, inability to pay, and arbitration did not negate deliberate non-compliance. However, the settlement agreement itself was not treated as wilfully breached in the contempt sense because it contained an arbitration mechanism for breach disputes. As the settlement foundation for disposal had failed, the earlier order dated 11.03.2019 was recalled and the corporate insolvency resolution process was revived.

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Issues: (i) Whether the respondents wilfully disobeyed the Tribunal's order dated 11.03.2019 and were liable for contempt, and whether there was wilful breach of the settlement agreement dated 08.03.2019; (ii) Whether the order dated 11.03.2019 was liable to be recalled and the corporate insolvency resolution process revived.

Issue (i): Whether the respondents wilfully disobeyed the Tribunal's order dated 11.03.2019 and were liable for contempt, and whether there was wilful breach of the settlement agreement dated 08.03.2019.

Analysis: Civil contempt requires wilful disobedience of a judicial order or wilful breach of an undertaking. The respondents had executed the settlement agreement, furnished undertakings, and were expressly directed to comply with the payment schedule. The first instalment was not paid, the cheque issued in substitution was dishonoured, and repeated opportunities to regularise compliance were not honoured. Their later explanations based on internal board approval, alleged inability to pay, and invocation of arbitration did not displace the finding that they knowingly and deliberately failed to obey the Tribunal's order. However, the settlement agreement itself contained an arbitration mechanism for disputes arising out of breach, and in that limited context the material did not justify a finding of wilful breach of the settlement agreement as such.

Conclusion: The respondents were guilty of wilful disobedience of the Tribunal's order dated 11.03.2019 and liable for contempt, but they were not held guilty of wilful breach of the settlement agreement.

Issue (ii): Whether the order dated 11.03.2019 was liable to be recalled and the corporate insolvency resolution process revived.

Analysis: The order dated 11.03.2019 had disposed of the insolvency appeal on the basis of the settlement and had preserved liberty to revive insolvency proceedings and seek recall if the settlement was not honoured. Since the respondents failed to comply with the settlement-linked directions, the basis on which the earlier disposal rested ceased to operate. The Tribunal therefore treated the compromise arrangement as ineffective and held that the earlier order could be recalled, with consequential revival of the insolvency process.

Conclusion: The order dated 11.03.2019 was recalled and the corporate insolvency resolution process was revived.

Final Conclusion: The contempt proceeding succeeded only to the extent of the respondents' deliberate disobedience of the Tribunal's directions, and the insolvency appeal was restored to its pre-settlement position by recalling the earlier order and reviving the insolvency process.

Ratio Decidendi: Wilful disobedience of a Tribunal's order and undertaking constitutes civil contempt, but a compromise-based disposal may be recalled and the underlying insolvency process revived where the settlement foundation is not honoured and the earlier order itself reserves that consequence.

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