TaxTMI 
TaxTMI 
2019 (7) TMI 1304
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....peal (AT) No. 99 of 2018' alleging wilful breach of the undertaking given by the Contemnors. 2. The brief facts of the case are as follows. The Petitioners - 'HSBC Daisy Investments (Mauritius) Limited & Others' filed an application u/s 397 and 398 of the Companies Act, 1956 (now Section 241-242 of the Companies Act, 2013) in C.P. No. 07/2016 before the National Company Law Tribunal, Mumbai Bench (hereinafter referred to as the 'Tribunal'). In the said case an application being M.A. No. 92/2018 was filed alleging that the Respondent Nos. 7 -10 therein had caused prejudice to the interest of the applicant, who had invested Rs. 1,100/- Crores by trying to alienate the assets of the company in violation of Article 79 (affirmative right) constituted in favour of 'HSBC Daisy Investments (Mauritius) Limited & Others'. The Tribunal passed an order on 12th March, 2018 and stayed the resolution passed by the Board of Directors to sell the assets of the 1st Respondent ('Reliance Infratel Ltd.') to 'Reliance Jio' until further orders. 3. The aforesaid interim order dated 12th March, 2018 was challenged by 'Reliance Infratel Limited & Others' (Contemnors herein) before this Appellate T....
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....eliance Communications Limited .... Hereinafter collectively referred to as Appellants" 1. HSBC Daisy Investments (Mauritius) Limited 2. Drawbridge Towers Limited 3. Galleon Technology Offshore Limited 4. Galleon Special Opportunities Master Fund, SPC, Limited Galleon Crossover Segregated Portfolio, 5. Galleon Special Opportunities Master Fund, SPC, Limited Galleon Asia Crossover Segregated Portfolio, 6. IIC Pond View R Tower Limited, 7. IIC Lispenard R Tower Limited 8. Investment Partners B(Mauritius) Limited, 9. NSR PE Mauritius LLC/Revendell PE LLC, and 10. Quantum (M) Limited ..... hereinafter collectively referred to as "Respondents" Appellants and Respondents are hereinafter collectively referred to as "Parties" and individually as "Party". 1. The Respondents are minority shareholders (holding 4.26% shares) in Appellant No. 1 Company. Being aggrieved by various acts of the majority shareholders (Appellant Nos. 2 and 3), the Respondents had filed a Company Petition No. 7 of 2016 against inter alia the Appellants alleging oppression and mis management, which is pending before the NCLT, Mumbai Bench. 2. The parties have now agre....
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.... Offshore Limited (4) Galleon Special Opportunities Master Fund, SPC, Limited Galleon Crossover Segregated Portfolio (5) Galleon Special Opportunities Master Fund, SPC, Limited Galleon Asia Crossover (6) IIC Pond View R Tower Limited (7) IIC Lispenard R Tower Limited (8) Investment Partners B(Mauritius) Limited (9) Revendell PE LLC (10) Quantum (M) Limited (Respondent Nos. 1 to 10) Mr. Robert Pavrey (Authorised Representative) Advocates for Respondent Nos. 1 to 10 ANNEXURE A Proportion of each Respondent Respondent No. Name Percentage 1. HSBC Daisy Investments (Mauritius) Limited 27.826 2. Drawbridge Towers Limited 17.391 3. Galleon Technology Offshore Limited 8.696 4. Galleon Special Opportunities Master Fund, SPC, Ltd Galleon Crossover Segregated Portfolio 7.609 5. Galleon Special Opportunities Master Fund, SPC, Limited Galleon Asia Crossover segregated portfolio 5.217 6. IIC Pond View R Tower Limited 4.348 7. IIC Lispenard R Tower Limited, 4.348 8. Investment Partners (B) Mauritius Limited 8.696 9. Revendell PE LLC/NSR Mauritius PE LLC 7.174 10. Quantum (M) Limited 8.696 11. ....
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....tion Professional' has been appointed. Apart from the ground that an arbitration proceeding is pending and the Hon'ble Supreme Court has passed an order, some other grounds have also been taken to assail the impugned orders. 2. The 'Financial Creditors'- 'Joint Lenders Forum', some other Banks and 'Ericsson India Pvt. Ltd.'- ('Operational Creditor') have appeared. It is informed that interests of a number of Banks are involved who are awaiting the decision of this Appellate Tribunal as they intend to recover the amount. 3. Mr. Tushar Mehta, learned Senior Counsel for the 'Joint Lenders Forum'- ('Financial Creditors') submitted that they have reached an agreement with the 'Corporate Debtors' for sale of assets of the 'Corporate Debtors', pursuant to which, the 'Financial Creditors' can recover a sum of Rs. 18,100 crores approximately. He further submits that on re-structuring and sell of assets, the 'Financial Creditors' can recover Rs. 37,000 Crores approximately. 4. According to them, in view of the impugned order, the Bank is not in a position to recover the amount and there is recurring loss of more than crores per day. 5. Mr. Rajeeve Mehra, learned Senior Counsel ap....
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....rofessional' will allow the managements of the 'Corporate Debtors' to function. He may attend the office of the 'Corporate Debtors' till further order is passed by this Appellate Tribunal. Thereby, the 'Corporate Insolvency Resolution Process' initiated against the 'Corporate Debtors' namely- 'Reliance Infratel Ltd.'; 'Reliance Telecom Ltd.' and 'Reliance Communications Ltd.' shall remain stayed, until further orders. ii. The 'Financial Creditors'/'Joint Lenders Forum' with whom the assets of the 'Corporate Debtors' have been mortgaged as also the 'Corporate Debtors' are given liberty to sell the assets of the 'Corporate Debtors' and to deposit the total amount in the account of the lead Bank of Joint Lenders Forum which shall be subject to the decision of these appeals. If the appeals are rejected, in such case, the 'Financial Creditors'/'Joint Lenders Forum' and other Banks with whom the amount is deposited, will have to return the total amount in the respective accounts of the 'Corporate Debtors'. iii. The Chairman, Managing Directors, Directors and other members of the 'Corporate Debtors' namely- 'Reliance Infratel Ltd.'; 'Reliance Telecom Ltd.' and 'Reliance Communicatio....
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....nterlocutory Application No. 865 of 2018 has been filed by the Appellants- 'Reliance Infratel Limited & Ors.' enclosing the final 'consent terms' dated 15th June, 2018 with prayer to take the same on record and pass decree accordingly. 3. The final 'consent terms' of decree dated 15th June, 2018 is stated to be similar to the provisional one, except certain changes in language and the specific date given therein, which reads as follows: "National Company Law Appellate Tribunal New Delhi Company Appeal (AT) No. 99 of 2018 between Reliance Infratel Limited & Ors. and HSBC Daisy Investments (Mauritius) Ltd. & Ors. CONSENT TERMS These consent terms are executed by the parties set out herein below and include their successors and assigns: 1. Reliance Infratel Limited, 2. Reliance Communications Infrastructure Limited, and 3. Reliance Communications Limited. ...hereinafter collectively referred to as "Appellants" 1. HSBC Daisy Investments (Mauritius) Limited, 2. Drawbridge Towers Limited 3. Galleon Technology Offshore Limited. 4. Galleon Special Opportunities Master Fund, SPC, Limited Galleon Crossover Segregated Portfolio, 5. Galleon Special Oppo....
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....d upon the Insolvency exit date. 5. Contempt Application No. 148 of 2018 in Company Petition No. 7 of 2016 shall also stand disposed of upon the Insolvency exit date. The Respondents agree and undertake to withdraw the SpecialLeave Petition (Civil) No. 9462 of 2018 pending before the Hon'ble Supreme Court of India within 15 days of signing of the present Consent Terms. 6. All parties withdraw all allegations against each other. 7. No order as to costs. Dated this _____ day of June 2018. For Reliance Infratel Limited (Appellant No. 1) For Reliance Communications Infrastructure Limited (Appellant No. 2) For Reliance Communications Limited (Appellant No. 3) For Agarwal Law Associates (Advocate for the Appellants) For (1) HSBC Daisy Investments (Mauritius) Limited (2) Drawbridge Towers Limited (3) Galleon Technology Offshore, Ltd. (4) Galleon Special Opportunities Master Fund SPC Ltd. Galleon Crossover Segregated Portfolio, (5) Galleon Special Opportunities, Master Fund SPC Ltd. Galleon Asia Crossover, (6) IIC Pond View R Tower Limited (7) IIC Lispenard R Tower Limited (8) Investment Partners B (Mauritius) Limited (9) Riven....
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....this Appellate Tribunal's order. Petitioners were further informed that since the sale of the assets was in progress, the amount would be paid earlier than the scheduled i.e. between 10-12 September, 2018. It is alleged that in spite of such undertaking no amount has been paid, nor Bank Guarantee has been provided for defaults of order of this Appellate Tribunal dated 29th June, 2018. 10. Learned counsel appearing on behalf of the Petitioners relied upon the decision of the Bombay High Court in "Bajaranglal Gangadhar Khemka & Ors. v. Kapurchand Ltd." - "ILR 1951 Bom 125". In the said case, the defendants had given undertaking pursuant to which consent decree was passed. The court held that undertaking given in a consent decree and breach of such undertaking amounts to contempt of court. 11. Learned counsel for the Appellant also relied on the decision of the Hon'ble Supreme Court in "Bank of Baroda vs. Sadruddin Hasan Daya & Ors." - (2004) 1 SCC 360" wherein the Hon'ble Supreme Court observed that breach of undertaking given in the consent decree is civil contempt. In the said case, the Contempt Petition was filed, inter alia, on the ground that the suit instituted by 'Oman I....
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....in, this Appellate Tribunal merely stated that "we treat it as an agreement reached between the parties on 15th June, 2018." 14. From bare perusal of the orders passed on 29th May, 2018 and 29th June, 2018, it is clear that no undertaking was given by any of the parties before this Appellate Tribunal. In fact the appeal was allowed to be withdrawn in view of the 'Consent Terms' reached between the parties. 15. Similar issue fell for consideration before the Hon'ble Supreme Court in 'Babu Ram Gupta vs. Sudhir Bhasin and another" - "(1980) 3 SCC 47", wherein the Hon'ble Supreme Court observed that in absence of a written undertaking given by the contemnor to the court or incorporation of the same by the court in its order, mere non-compliance of a consent order or compromise decree, would not amount to civil contempt. The Hon'ble Supreme Court while laying down the test in order to determination whether contempt of court has been committed or not, observed and held : "10. These are the tests laid down by this Court in order to determine whether a contempt of court has been committed in the case of violation of a prohibitive order. In the instant case, however, as indicated abo....
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....ear undertaking given to the court amounts to contempt of court is that the contemner by making a false representation to the court obtains a benefit for himself and if he fails to honour the undertaking, he plays a serious fraud on the court itself and thereby obstructs the course of justice and brings into disrepute the judicial institution. The same cannot, however, be said of a consent order or a compromise decree where the fraud, if any, is practised by the person concerned not on the court but on one of the parties. Thus, the offence committed by the person concerned is qua the party not qua the court, and, therefore, the very foundation for proceeding for contempt of court is completely absent in such cases. In these circumstances, we are satisfied that unless there is an express undertaking given in writing before the Court by the contemner or incorporated by the court in its order, there can be no question of wilful disobedience of such an undertaking. In the instant case, we have already held that there is neither any written undertaking filed by the appellant nor was any such undertaking impliedly or expressly incorporated in the order impugned. Thus there being no under....