Wilful disobedience and paid debt: contempt and insolvency revival both declined where later disputes remained unresolved.

Contempt for breach of an undertaking requires proof of wilful and conscious disobedience beyond reasonable doubt; where the evidence shows initial compliance and the later dispute concerns possession, inspection, or alleged structural issues, contempt is not made out. On the insolvency side, revival of Section 9 proceedings is not justified where the admitted debt forming their basis has already been paid, even if other claims or disputes remain between the parties. Those residual disputes are left to be resolved before the competent forum, rather than through revival of the insolvency process.

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Issues: (i) Whether the Respondent was guilty of wilful disobedience of the order recording the settlement and, on that basis, liable to be punished for contempt; (ii) Whether the proceedings under Section 9 of the Insolvency and Bankruptcy Code, 2016 deserved revival on the alleged breach of the settlement.

Issue (i): Whether the Respondent was guilty of wilful disobedience of the order recording the settlement and, on that basis, liable to be punished for contempt.

Analysis: Contempt jurisdiction can be invoked only on proof of wilful disobedience beyond reasonable doubt. The record showed that the initial payments under the settlement had been made and that the later dispute arose in the background of possession, inspection of the premises, and asserted structural issues. The material placed did not establish a deliberate or conscious breach of the undertaking; the dispute was essentially about subsequent inter se claims and the condition of the premises, which could not be examined as a roving inquiry in contempt.

Conclusion: The Respondent was not found guilty of wilful disobedience and was not liable to be punished for contempt.

Issue (ii): Whether the proceedings under Section 9 of the Insolvency and Bankruptcy Code, 2016 deserved revival on the alleged breach of the settlement.

Analysis: The Section 9 proceedings had been initiated for the admitted debt that stood paid. In those circumstances, revival of the insolvency process would serve no useful purpose. The existence of further claims and disputes between the parties was left to be determined before the appropriate forum, and that circumstance did not justify revival of the CIRP in these proceedings.

Conclusion: Revival of the Section 9 proceedings was declined.

Final Conclusion: The contempt petition and the connected application for revival of insolvency proceedings were both declined, while leaving the parties to pursue their remaining claims before the competent forum.

Ratio Decidendi: Contempt for breach of an undertaking requires proof of wilful and conscious disobedience beyond reasonable doubt, and insolvency revival will not be directed where the debt forming the basis of the Section 9 proceedings has already been paid.

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