TaxTMI 
TaxTMI 
2019 (7) TMI 1304
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....ted 29th June, 2018 passed in 'Company Appeal (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....
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....hese 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 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 Ap....
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....of May 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 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 ....
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....e Appellants-Directors and Shareholders of 'Reliance Infratel Ltd.'; 'Reliance Telecom Ltd.' and 'Reliance Communications Ltd.' against the common orders dated 15th May, 2018 and 18th May, 2018, passed by the Adjudicating Authority (National Company Law Tribunal), Mumbai Bench, Mumbai, whereby and whereunder, the application(s) under Section 9 of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as "I&B Code") preferred by the Respondent- 'Ericsson India Pvt. Ltd.'- ('Operational Creditor') have been admitted, order of 'Moratorium' has been passed and 'Insolvency Resolution 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 Lende....
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.... Resolution Process' is allowed to continue, all the 'Financial Creditors' as also the 'Operational Creditors' may suffer more loss and the Appellants have made out a prima facie case, as agreed and suggested by learned Senior Counsel for the Appellants and learned Senior Counsel for the 'Joint Lenders Forum' and the learned Senior Counsel for the 'Operational Creditor'- 'Ericsson India Pvt. Ltd.', we pass the following orders: i. Until further orders, the impugned orders dated 15th May, 2018 and 18th May, 2018, passed by the Adjudicating Authority, Mumbai Bench in C.P. (IB) 1385, 1386 & 1387 (MB)/2017, shall remain stayed. The 'Resolution Professional' 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 m....
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....Companies Act, 2013, an appeal was preferred by 'Reliance Infratel Limited & Ors.' and another appeal preferred by the 'State Bank of India', both impleading 'HSBC Daisy Investments (Mauritius) Ltd. & Ors.' as party Respondents. Both the appeals were heard on merit and subsequently parties reached a 'provisional agreement', which was taken note on 29th May, 2018 and on the request of the parties, the appeals were disposed of in terms of the 'provisional agreement'. However, it was pleaded that the 'consent terms' between the Appellants and the Respondents will await the outcome of the insolvency and proposed 'consent terms' and thereafter, they will reach the final agreement. 2. An Interlocutory 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 Ne....
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....ithin a period of 180 days from the Insolvency exit date. b. In order to secure the payment of INR 230 crore, Reliance Communications Limited agrees and undertakes to provide an unconditional and irrevocable Bank Guarantee in favour of the Respondents issued by a scheduled commercial bank with an 'AAA' rating issued by CRISIL or ICRA. The Bank Guarantee shall be issued and handed over to the Respondents within 15 banking days from the date of signing of the present Consent Terms. 4. In view of the present Consent Terms, and in consideration of the Appellants undertaking to pay the amounts as agreed hereunder, the Petition No. 7 of 2016 pending before the NCLT, Mumbai Bench shall be disposed of as withdrawn upon the Insolvency exit date. All orders including the Order dated 12 March 2018 passed by the NCLT, Mumbai Bench shall stand vacated 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 1....
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....e treat it as an agreement reached between the parties on 15th June, 2018. 6. I.A. No. 865 of 2018 filed in Company Appeal (AT) No. 99 of 2018 stands disposed of." 8. The Appellant alleged the disobedience of the aforesaid order dated 29th June, 2018 recorded by this Appellate Tribunal in I.A. No. 865/2018 passed in a Company Appeal which was allowed to be withdrawn. 9. Learned counsel appearing on behalf of the Petitioners submitted that the 'Contemnors' - 'Respondents' deliberately flouted the undertaking given before this Tribunal on 29th May, 2018, which amounts to violation of the order passed by this Appellate Tribunal. It was submitted that in compliance of the 'consent terms', the Petitioners withdrew all the proceedings which was filed against the 'Majority Group' and were pending before the NCLT and the Hon'ble Supreme Court. Later on, during discussions with the representatives of the 'Reliance Group' and 'Contemnor No. 26', the Petitioners were informed that Contemnor No. 26 was working with the Banks and will furnish a Bank Guarantee as per this Appellate Tribunal's order. Petitioners were further informed that since the sale of the assets was in progres....
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.... Tribunal merely took on record the 'Consent Terms', which were recorded between the parties and no direction was passed by this Appellate Tribunal in terms of said consent recorded. It was submitted that undertaking was given to this Appellate Tribunal, as apparent from order dated 29th June, 2018 wherein at paragraph 5 it is recorded that "while we take into record the final consent terms dated 15th June, 2018 and treat the same as final, though the specific date of decree of final agreement has not been shown above but on the basis of affidavit, we treat it as an agreement reached between the parties." 13. From the record, we find that 'Company Appeal (AT) No. 99 of 2018' was not decided by this Appellate Tribunal on merit and was allowed to be withdrawn on 29th May, 2018 as the parties reached the 'Terms of Settlement'. Subsequently on 29th June, 2019, though Interlocutory Application was not filed for any decision, the appeal having withdrawn, it was taken on record and the 'Consent Terms', which parties treated as final decree and in absence of any date shown therein, this Appellate Tribunal merely stated that "we treat it as an agreement reached between the parties on 15t....
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....ecree. Can it be said in these circumstances that merely because the defendant has failed to pay the decretal amount he is guilty of contempt of court? The answer must necessarily be in the negative. Take another instance where a compromise is arrived at between the parties and a particular property having been allotted to A, he has to be put in possession thereof by B. B does not give possession of this property to A. Can it be said that because the compromise decree has not been implemented by B, he commits the offence of contempt of court? Here also the answer must be in the negative and the remedy of B would be not to pray for drawing up proceedings for contempt of court against B but to approach the executing court for directing a warrant of delivery of possession under the provisions of the Code of Civil Procedure. Indeed, if we were to hold that non-compliance of a compromise decree or consent order amounts to contempt of court, the provisions of the Code of Civil Procedure relating to execution of decrees may not be resorted to at all. In fact, the reason why a breach of clear undertaking given to the court amounts to contempt of court is that the contemner by making a fals....