2023 (5) TMI 1 - HC - Indian Laws

Respondent held in contempt for breaching MoU, sentenced to imprisonment and fine. Property sale restricted.

The Court found the Respondent guilty of contempt for wilfully breaching the Memorandum of Understanding (MoU) and undertakings, leading to a sentence of ... Wilful breach of the Memorandum of Understanding (MoU) - Dishonour of Cheque - Section 138 of Negotiable Instruments Act, 1881 - HELD THAT:- In view of the acknowledgment, assurances and the undertakings given by the Respondent in these proceedings, the submission of the Respondent during the hearing dated 06.03.2023; that the MoU was signed under coercion is clearly a dishonest plea. This Court is, therefore, unable to accept the submission of the learned counsel for the Respondent, that the MoU was executed under coercion. In fact, the said submission of the Respondent clearly evidences that the apology tendered by the Respondent on 14.07.2021 after he was held guilty of contempt is not bona fide. In this affidavit of apology dated 14.07.2021, the Respondent had admitted his liability and sought further time to honor his undertaking. This Court is of the opinion that the Respondent has only been biding time after he was held guilty of contempt vide orders dated 13.07.2021 and 20.12.2021. The last payment was made on 24.02.2022 and despite giving two undertakings on 02.06.2022 and 31.08.2022, not a single paisa has been paid by the Respondent. The Apex Court has time and again reiterated that non-compliance of ‘undertakings’ given to the Court will amount to contempt of orders of the Court. In this regard, it is instructive to refer to the judgment of Supreme Court in HSBC PI Holdings (Mauritius) Limited v. Pradeep Shantipershad Jain and Others, [2022 (7) TMI 568 - SUPREME COURT], wherein it has been held that non-payment of the outstanding amount by the Respondent even after repeated opportunities and directions passed by the court will amount to punishment under contempt of Court. In this matter on 06.03.2023, on an enquiry to the Respondent with respect to the time required by him to sell his immovable property to raise the funds, the Respondent was non-committal and vague. He stated that he is still looking for a buyer and it was not possible to give a firm date. This Court did not find that the response of the Respondent was serious or made in good faith. The Respondent is owner of immovable properties and therefore, has sufficient means to make the payment undertaken by him; he, however, lacks the will to make the payment to the Petitioner. In view of the aforesaid contumacious conduct of the Respondent, this Court is unable to accept the submission that the punishment of imprisonment should not be awarded to the Respondent. Sentencing - HELD THAT:- As the Respondent has already been held guilty of contempt and considering his subsequent conduct as aforesaid, this Court sentences Respondent, Contemnor, Mr. Anand Kamal Goel, to undergo two (02) months imprisonment along with a fine of Rs. 2,000. In default of payment of the fine, he shall further undergo fifteen (15) days simple imprisonment - the Registrar General of this Court directed to take necessary steps to have the convicted contemnor taken into custody and cause him to send to Central Jail, Tihar, under appropriate warrant of commitment for undergoing the sentence awarded. The present contempt petition and all the pending applications, if any, are disposed of. Issues Involved:1. Wilful breach of Memorandum of Understanding (MoU) and consequent undertakings.2. Contempt of Court for non-payment of the settlement amount.3. Arguments and defenses raised by the Respondent.4. Sentencing for contempt of court.Summary:Issue 1: Wilful Breach of Memorandum of Understanding (MoU) and Consequent UndertakingsThe Petitioners filed a contempt petition alleging that the Respondent wilfully breached the MoU dated 07.09.2019 and the undertaking given to the Trial Court on 30.10.2019. The MoU acknowledged the receipt of a stock portfolio valued at Rs. 1,97,62,499 by the Respondent, who agreed to pay an additional Rs. 69,22,529 and interest at 12% per annum till 29.02.2020. The Respondent undertook to pay the settlement amount by 29.02.2020, failing which he would be liable for contempt of court.Issue 2: Contempt of Court for Non-Payment of Settlement AmountThe Petitioners, senior citizens and registered medical practitioners, alleged that the Respondent defrauded them by misappropriating their stock, leading to the filing of complaint cases under Section 138 of the NI Act. Despite the MoU and multiple court orders, the Respondent paid only Rs. 42 lakhs out of the total dues of Rs. 2,82,84,782.14. The Court held the Respondent guilty of contempt for wilful breach of the MoU and undertakings given.Issue 3: Arguments and Defenses Raised by the RespondentDuring the hearings, the Respondent acknowledged an outstanding amount of Rs. 1.89 Crores towards interest and claimed the principal amount had been paid. He argued that the MoU was signed under coercion and should not be enforced. The Respondent also sought to avoid imprisonment by referencing the Supreme Court judgment in Smt. Pushpaben and Another v. Narandas V. Badiani and Another.Issue 4: Sentencing for Contempt of CourtThe Court noted that the Respondent had given multiple undertakings to pay the outstanding amount but failed to comply. Despite being held guilty of contempt, the Respondent did not make any payments after 24.02.2022. The Court rejected the Respondent's plea that the MoU was signed under coercion and found his apology not bona fide. The Court sentenced the Respondent to two months imprisonment and a fine of Rs. 2,000, with an additional fifteen days of simple imprisonment in default of payment. The Court also directed that the Respondent's properties could not be sold without the Petitioner's consent and the Trial Court's permission until the outstanding amount was cleared.Conclusion:The Court found the Respondent guilty of contempt for wilful breach of the MoU and multiple undertakings, resulting in a sentence of two months imprisonment and a fine. The Respondent's properties were restrained from being encumbered or disposed of until the outstanding amount was paid.