TaxTMI 
TaxTMI 
2021 (1) TMI 939
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....ous round of litigation between these parties, the respondent No.1- Ramesh Narang had approached this Court by filing a Contempt Petition (C) Nos.265-67 of 1999 in Contempt Petition (C) No. 209 of 1998 in Civil Appeal Nos.366 of 1998, 603 of 1998 and 605 of 1998. The present petitioner Rama Narang was respondent No.1 in the said proceedings. This Court passed the following order in the said proceedings on 2nd November 2001:- "In Conmt. Pet. (C) Nos.265-267/1999 in Conmt. Pet. (C) No.209/1998 in Civil Appeal No.366/1998, 603/1998 & 605/1998. After hearing Mr. Kapil Sibal, learned senior counsel for the petitioner and Mr. Gopal Subramaniam, learned senior counsel for the alleged contemnor, at length, we are satisfied that the contemnor has flouted the order of this Court dated 4th May, 1999 by not transferring 50% of the share (and contending that he could make out the 50% share only by calculating the shares of NIHPL held by M/s. Fashion Wears Private Ltd., which have been forbidden by the order dated 22.01.1998). We call upon the contemnor to show cause regarding the punishment to be imposed on him for which he shall be present in this Court on 29th November, 2001. I.A. No.....
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....ed to forward the records relating to Company Petition No. 28 of 1992 to the Registry of this Court so as to reach the Registry within ten days from today. All the parties have undertaken before us that they will implement the terms of the "MINUTES OF CONSENT ORDER" on or before 1.1.2002 and that no further time will be sought for in the matter. Clause (f) of the compromise relates to the operation of the bank accounts. That clause will come into force from today onwards. All the afore-mentioned suits and the company petition will be posted for final formal orders on 8.1.2002 at 10.30 a.m. along with these contempt proceedings." 5. The matter came up again before this Court on 8th January 2002. This Court passed the order thus:- "Pursuant to the order dated 12th December, 2001 the following suits and company petition have been transmitted to this court and they are on the file of this court now and registered as Transferred Cases Nos. 1 to 8 of 2002: 1. O.S. No. 3535 of 1994 before the Bombay High Court. 2. O.S. No. 3578 of 1994 before the Bombay High Court. 3. O.S. No. 1105 of 1998 before the Bombay High Court. 4. O.S. No. 3469 of 1996 before the Bombay Hi....
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....so clarified that Ramesh, Rajesh and Rakesh shall have no objection to the transfer of 403 shares held by FWPL in NIHL to Rama. 3. The following directions issued by this Hon'ble Supreme Court in the above matter are re-affirmed and agreed to by the parties as follows:- (a) With effect from 4th May, 1999 Rama, Ramesh and Rajesh are the only Directors of NIHL (and its subsidiaries). Any increase in the Board of Directors shall be with the mutual consent of Rama and Ramesh/Rajesh. (b) None of the Directors (Rama, Ramesh and Rajesh) can be removed from directorship. (c) Rama and Ramesh shall continue to be in joint management and control of NIHL and Rajesh shall continue to be the Permanent Whole Time Director thereof in charge of day to day operations/management. (d) No decision shall be adopted concerning or affecting the said Company (and its subsidiaries) without the consent of Rama and Ramesh (or Rajesh) in writing. It is further clarified and agreed that save and except as provided herein no prevailing decisions including appointment of Directors/Executives or any other persons shall continue unless Rama and Ramesh (or Rajesh) consent to the same in writing. (e....
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....nu Group. d. Consent to hive off land at Marol, Sahar, Bombay owned by NIHL admeasuring about 45105.70 square meters to the Manu Group. e. Consent to hive off ownership and possession of the property at 64, Sunder Nagar, New Delhi to Rajesh." 7. All the above is to be performed by the Rama Group before 01.01.2002. 8. Matter to be listed before this Hon'ble Court on 08.01.2002." 6. Perusal of the family settlement would reveal, that insofar as Narang International Hotel Limited (hereinafter referred to as 'NIHL') and its subsidiaries are concerned, Rama Narang, Ramesh Narang and Rajesh Narang were to be the only Directors. Any decision by the Board of Directors was to be taken only by the mutual consent of Rama Narang on one hand and Ramesh and Rajesh, on the other hand. The settlement also provided, that none of the Directors i.e. Rama Narang, Ramesh Narang and Rajesh Narang could be removed from the Directorship. Rama Narang and Ramesh Narang were continued to be in joint management and control of NIHL and Rajesh Narang was continued to be whole time Director In-Charge of day-to-day operations and management of NIHL. It also provided, that no decision shall be taken ....
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....maintainability of the contempt petition. It will be relevant to refer to the following observations of this Court:- "33. In the present case, the consent terms arrived at between the parties were incorporated in the orders passed by the Court on 12-12-2001 [Ramesh Narang (1) v. Rama Narang, (2009) 16 SCC 631] and 8-1-2002 [Ramesh Narang (2) v. Rama Narang, (2009) 16 SCC 600] . The decree as drawn up shows that order dated 8- 1-2002 [Ramesh Narang (2) v. Rama Narang, (2009) 16 SCC 600] was to be 'punctually observed and carried into execution by all concerned'. A violation of the terms of the consent order would amount to a violation of the Court's orders dated 12-12-2001 [Ramesh Narang (1) v. Rama Narang, (2009) 16 SCC 631] and 8-1-2002 [Ramesh Narang (2) v. Rama Narang, (2009) 16 SCC 600] and, therefore, be punishable under the first limb of Section 2(b) of the Contempt of Courts Act, 1971. The question whether the respondents should not be held guilty of contempt because of any earlier confusion in the law reflected in Babu Ram Gupta case [(1980) 3 SCC 47 : 1980 SCC (Cri) 527] is a question which must be left for decision while disposing of the contempt petition on merits.....
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.... Narang (V) v. Ramesh Narang and Another (2009) 16 SCC 126, observed thus:- "32. The object of entering into consent terms and jointly filing the undertaking was to run the family business harmoniously with the active participation of all as a family business but the respondents had taken absolute control of the Company NIHL to the total exclusion of the petitioner. All the management decisions and other decisions affecting the Company were taken by the respondent Rajesh Narang, the whole-time Director under the guise of the day-to-day operation/management in clear violation of Clause 3(c) of the consent terms which clearly states that Rama Narang and Ramesh Narang shall continue to be in joint management and control. The parties gave undertaking to the Court regarding the consent terms. 33. The respondents have erroneously submitted that joint management and control of the Company means giving veto power to the petitioner. According to the terms of undertaking the petitioner and the respondents were under an obligation to run the Company harmoniously with the active participation of all as a family business but unfortunately the respondents have taken absolute control to the ....
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....nd it would also vitally affect the interest of large number of people including the employees of the Company, the sentence of imprisonment imposed on the respondents was kept in abeyance. This Court further directed the parties to meticulously comply with the undertaking given by them to the Court. It was further observed by the Court, that in case, similar violations of the undertaking given to this Court, was brought to the notice of this Court, the respondents shall be sent to jail forthwith to serve out the sentence imposed in the said case. 15. It appears, that the dispute between the parties not only continued but got aggravated. Contending that on account of noncooperation by Rama, the functioning of the Company had come to a standstill, Ramesh filed Company Petition No.47 of 2008 before the Company Law Board, New Delhi (hereinafter referred to as 'CLB'). It was contended in the said company petition, that due to non-cooperation by Rama in signing cheques, the employees could not be paid their salaries from November 2007 onwards. It was also contended, that bills for payment to supplier could also not be paid, due to which, the entire functioning of the various units of th....
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....hich will be binding on the Directors and the Company. I make it abundantly clear that his role will be limited only to operational matters, like, issues relating to workers/employees of all categories, issues relating to suppliers/supply contracts, urgent repairs to equipments etc. These are only illustrative. It will be within his competence to decide considering the spirit of this order that the business of the company should be carried on smoothly till the petition is disposed of, which are urgent/essential operational issues." 17. Alleging, that the order passed by CLB dated 10th April 2008, was violative of the order of this Court dated 15th March 2007 and nothing but an attempt to legalize their conduct of contempt, the petitioner approached this Court by the present contempt petition. 18. It appears, from the Record of Proceedings, that on 15th December 2008, this Court had heard the counsel for the parties and reserved the order. The contempt petition was listed before this Court on 10th February 2009 and on the said date, this Court passed the following order:- "We have perused the order dated 27.01.2009. On 15th December, 2008, this Court heard learned counsel fo....
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....9, again this Court passed a detailed order. The perusal thereof shows, that the Court directed the Registrar of Companies and Chief Commissioner of Income Tax to be impleaded in the proceedings. The Court also observed, that it would also like to know from the Chief Commissioner of Income Tax, as to what action has been taken against the Company with regard to dues under the Income Tax Act. The Court also wanted to know as to why assessment has not been done for all the years, particularly, when the Return/Accounts have not been filed by the Company. The matter was directed to be listed by this Court thereafter on 21st July 2009. On 21st July 2009, the Court considered the Status Report submitted before it, by the Chief Commissioner of Income Tax. Apology was tendered to the Court by the Registrar of Companies for not taking action under the Companies Act. The Court recorded, that both these officers have assured to take action in accordance with law. The Court also noticed, that apart from non-compliance of the statutory provisions, the Books of Accounts had not been audited by the Auditors of Company. The Court therefore, in order to set the house in order and particularly, keep....
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....independent Director. It was further clarified that, Shri Ranina was not to be subjected to prosecution which the Court had directed in its earlier order dated 21stJuly 2009 with regard to the action to be taken by the Registrar of Companies against the Directors for violation of the provisions of Companies Act; (iii) The BSR & Company was to update and audit the Accounts of the Company. If the BSR & Company found any impediment, they were to report to Shri Ranina, who in turn, was to try to resolve the problem himself in the first instance and if not, to submit a report to this Court; (iv) The BSR & Company would also submit the reports on the status of the accounts from time to time to Shri Ranina. In case, Shri Ranina found any impediment or difficulty in carrying out the orders passed by the Court, he would submit Status Report to this Court through Shri Parag Tripathi. 23. The matter thereafter came up before this Court on 14th December 2009. This Court noted, that the Accounts of the Company stood duly audited upto 31st March 2006, whereas accounts of the subsidiary Companies stood audited upto 31st March 2009. The Court further noted, that as on that date, there was ....
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....al Chief Metropolitan Magistrate, 37th Court, Mumbai, to expedite the hearing and finally dispose of the cases pending before him. The Court by the said order dispensed with the services of Shri H.P. Ranina and Shri Syed Habibur Rehman. 26. In the parallel proceedings before the CLB, Rama Narang had filed Company Application No.57 of 2011 in Company Petition No. 47 of 2008, praying for the discharge of the Facilitator Retired Justice Arvind V. Savant, on the ground of collusion with the petitioner and the respondent before the CLB. The Court found no substance in the allegation made by Shri Rama Narang and therefore, dismissed the said CA by imposing exemplary cost of Rs. 1,00,000/. It will be relevant to refer to paragraph (7) of the order dated 22nd February 2011, as under:- "7. I therefore dismiss CA 57/2011 while awarding an exemplary cost of Rs. one lakh against R-2. The cost so awarded shall be deposited by R-2 in the High Court Legal Aid Committee, New Delhi within a week from today. The Facilitator shall now proceed to fix a date for holding meeting of the Board of Directors for ensuring statutory compliances and also for acting in furtherance of directions contained in ....
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....cilitator was not able to function and operate smoothly and therefore, vide order dated 29th November 2011, the CLB, as a temporary measure, appointed Shri H.S. Acharya as a Special Officer-cum-Advisor, in addition to the Facilitator already appointed. The CLB further directed, that since the present Facilitator has stayed his hands from exercising additional powers given vide order dated 28th April 2011, the said powers could be exercised by Shri Acharya until further orders. 29. Thereafter, by an order dated 30th April 2015, the CLB passed the following order:- "16. Therefore, for the reasons stated above, I hereby appoint Mr. H.P. Ranina as Facilitator cum Advisor by removing Mr. H.S. Acharya as Administrator cum Advisor. Mr. Ranina has to act as Facilitator cum Advisor with the powers that were conferred upon on Mr. Acharya by CLB when he was made as Facilitator cum Advisor. It is made clear that Mr. Ranina will not go beyond the powers conferred upon when Mr. Acharya was appointed by CLB through orders dated 29.11.2011, R1 Company shall not close down flight catering units without prior permission from Company Law Board." It could thus be seen, that by the said order, CLB....
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...., that the Bandra property was only nonbusiness asset of the Company. It is further stated in the Minutes of the Meeting, that if funds were not available, it would result in closure of the Company's Flight Catering Business, which would result in over 3000 persons losing their livelihood as well as create serious financial and legal challenges. It was suggested in the said Meeting, that on the sale of the Bandra property, an amount of Rs. 351 crore could be received from Maverick Realty & Developers LLP. In the said Meeting, the petitioner was also asked by the respondent No.1 as well as the Facilitator, as to whether the petitioner had any other suggestions to offer so as to tide over the financial crisis. However, the petitioner refused to offer any suggestion, as such under the directions of the Facilitator, the following resolutions came to be passed:- "RESOLVED THAT pursuant to applicable provisions of the Companies Act, 2013 as amended from time to time (including any statutory modification or re-enactment thereof) and any other applicable rules, regulations, laws, circulars, the Company do sell its right, title and interest in the property/non business asset comprising of....
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.... in the judgment reported in Rama Narang (2006) 11 SCC 114 (supra) had clearly held, that the contempt petition at the behest of present petitioner against the present respondents was very much tenable. He further submitted, that not only this, but the judgment of this Court reported in Rama Narang (V) (2009) 16 SCC 126 (supra) would clearly show, that this Court in unequivocal terms has held, that the present respondents had acted in breach of the undertaking given to this Court. It is submitted, that though the respondents were required to run the affairs of NIHL jointly with the present petitioner, it was clearly found, that they had acted in breach of the orders of the Court and were running the business totally to the exclusion of the petitioner. The learned Senior Counsel submitted, that the acts which are alleged to be contemptuous in nature, in the present proceedings, are identical with the acts which are found to be contemptuous in the judgment of this Court dated 15th March 2007. He submitted, that in spite of having been held guilty, similar acts have been continued by the respondents even after 15th March 2007. He submitted, that in view of the findings of this Court i....
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....ment was with regard to the management of the Company. The learned Senior Counsel submitted, that the conduct of the present petitioner was throughout of non-cooperation in the functioning of the Company. The petitioner, at every stage, was attempting to put a hindrance so that the functioning of the Company comes to a standstill. He submitted, that after the orders were passed by this Court on 12th December 2001 and 8th January 2002, though the petitioner was required to co-operate, the petitioner refused to do so and in order to run the affairs of the Company, the respondents were required to do certain things in the interest of the Company. He submitted, that had the respondents not done what they had done, the entire business of the Company would have come to a standstill thereby, depriving the livelihood of 3000 persons and further resulting into closure of the Company, apart from incurring various financial and statutory liabilities. 37. Shri Sibal submitted, that though there was a settlement with regard to the affairs of the Company, the affairs were required to be regulated by the statutory provisions and in spite of the settlement, statutory powers cannot be abridged. He....
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....perty. 39. Shri Sibal further submitted, that since after 2008, the respondents have been acting as per the orders passed by the CLB, which were passed by a competent statutory authority in exercise of the statutory provisions, by no stretch of imagination, they could be held guilty for having committed contempt of this Court. The learned Senior Counsel submitted, that even interim orders passed by the jurisdictional authorities are binding on the parties as long as they hold the field. The learned Senior Counsel relies on the judgment of this Court in the case of Tayabbhai M. Bagasarwalla and Another v. Hind Rubber Industries (P) Ltd. And Others (1997) 3 SCC 443, in support of the said proposition. 40. Shri Sibal submitted, that insofar as application of the respondents is concerned, in order to save the Company from imminent danger of closure, thereby affecting the livelihood of 3000 workers and also from statutory and financial repercussions, it was necessary that this Court exercises powers under Article 142 and directs the contempt petitioner to comply with the decision of the Facilitator. He relied on the judgments of this Court in Vijay Laxmi and Others v. Prabhu Devi and ....
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....C 126 (supra), have been continued even after the judgment was delivered by this Court, the respondents are required to be held guilty of having committed contempt of this Court and punished in accordance with law. He relied on the judgment of this Court in Re: Vinay Chandra Mishra (The Alleged Contemnor) (1995) 2 SCC 584. 44. Shri Rohatgi further submitted, that the family settlements even in company matters are required to be dealt with differently. He relied on the judgment of this Court in the cases of Sangramsinh P. Gaekwad and Others v. Shantadevi P. Gaekwad (Dead) Through LRs and Others (2005) 11 SCC 314 and Kale and Others v. Deputy Director of Consolidation and Others (1976) 3 SCC 119. 45. As indicated in the opening paragraphs itself, though initially only an interlocutory application filed by the respondent No.1 herein for direction to the petitioner to comply with the Facilitator's decision was listed, we intimated the parties that we would hear the contempt petition as well as the interlocutory application together. As such, we have heard the learned Senior counsel for the parties at length on both the Contempt Petition as well as the interlocutory application (IA No....
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....e mala fide intention. It is their case, that the son of the petitioner from his second wife namely Rohit Narang is working as the Managing Director of Sky Gourmet Catering Pvt. Ltd., which Company is a direct competitor with the Flight Catering business of NIHL. It is their case, that since the petitioner refused to offer any cooperation for proper functioning of the Company, the respondent No.1 was compelled to approach the CLB by Company Petition No. 47 of 2008. The said petition was filed on 10th March 2008. The petitioner in the said petition had averred, that after the order was passed by this Court on 15th March 2007, all genuine efforts were made by the respondents herein, to ensure that the present petitioner should not have any further grievance regarding exclusion from the management and control of the Company. It was averred, that however the attitude of non-cooperation and putting hindrances in the functioning of the Company by the petitioner continued even thereafter. It was averred, that petitioner Rama was unreasonably withholding his consent even in routine decisions crucial to the operations of the Company. It was averred, that the situation had led to complete ma....
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....ution, this Court should appoint an independent Director, who will look into the financial management of the Company and submit his report to this Court from time to time, on the state of the Company's accounts and due compliance of the statutory provisions of the Companies Act and Income Tax Act. He was also requested to suggest steps for good corporate governance including financial management in future. The Court therefore appointed Shri Homi Ranina, who is a Tax Expert, as an independent Director of the Company. However, by the said order, this Court noted, that Shri Arvind Savant, Former Chief Justice of the Kerala High Court had been appointed as Facilitator by the CLB. The Court therefore clarified, that the said order will not come in the way of the functioning of the Facilitator. The Court clarified, that it had requested Shri Ranina to take charge as an independent Director only in the context of compliance of the provisions of the Companies Act as well as Income Tax Act and that function will not overlap with the functioning of the Facilitator, who was free to proceed in accordance with law. There are two takeaways from the order of this Court. First, the Court recognise....
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....statutory provisions. It further clarified, that if Rama failed to do so, Shri Ranina was authorised to do so. Vide subsequent order dated 16th April 2010, the Court clarified, that Rama will comply with the directions given by the Court vide order dated 14th December 2009. It also clarified, that the said order dated 14th December 2009, was to be implemented by Rama without prejudice to his rights and contentions in the pending litigation. 55. It further appears from the record, that Company Application No. 223 of 2011 was filed by respondent No.2-Rajesh before the CLB in Company Petition No. 47 of 2008. Vide order dated 28th April 2011, the CLB rejected the objection raised by the counsel for Rama as to the locus of the applicant Rajesh (respondent No.2 herein). The CLB after considering the complete, repeated, persistent and deliberate non-cooperation by Rama in the smooth functioning of the Company, in order to regulate the conduct of the Company's affairs, deemed it fit to grant the relief as prayed for in Company Application No. 223 of 2011 and directed, that in addition to the directions already made in Company Petition No. 47 of 2008, in the event of dispute/disagreement i....
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....isposal on a Tuesday in the month of November 2016. This Court further clarified, that without prejudice to the rights of the respective parties, the present arrangement for running the affairs of the Company will continue until further orders. It appears, that thereafter the matter was listed before this Court on 29th November 2016, when this Court directed the matter to be adjourned sine die. Thereafter, the matter has come up before this Bench to which reference has already been made in the earlier paragraphs. 59. For considering the rival submissions, it will be relevant to refer to Sections 397, 398 and 403 of the Companies Act, 1956:- "397. APPLICATION TO TRIBUNAL FOR RELIEF IN CASES OF OPPRESSION (1) Any members of a company who complain that the affairs of the company are being conducted in a manner prejudicial to public interest or in a manner oppressive to any member or members (including any one or more of themselves) may apply to the Tribunal for an order under this section, provided such members have a right so to apply in virtue of section 399. (2) If, on any application under sub-section (1), the Tribunal is of opinion- (a) that the company's affairs ....
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....97 would reveal, that a member of a Company is entitled to apply to the CLB complaining that the affairs of the Company were being conducted in a manner prejudicial to the public interest or in a manner oppressive to any member or members including anyone or more of themselves, for an order under the said section. The only rider is that such a Member should have a right to do so by virtue of Section 399. Under sub-section (2) of Section 397, if the CLB was of the opinion, that the Company's affairs are being conducted in a manner prejudicial to the public interest or in a manner oppressive to any member or members and that to wind up the Company would unfairly prejudice such member or members, but that otherwise the facts would justify the making of a winding up order on the ground, that it was just and equitable that the Company should be wound up; it was entitled to make such order as it thinks fit, with a view to bringing to an end such matter complained of. It could thus be seen, that any member of a Company is entitled to make an application to the CLB complaining that the affairs of the Company are being conducted in a manner prejudicial to public interest or in a manner pre....
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....ions passed by the Facilitator. However, perusal of the record would reveal, that no orders were passed on the said IAs. On the contrary, perusal of the record would reveal, that this Court vide order dated 21st July 2009, though had appointed Shri Homi Ranina, a Tax Expert, as an independent Director, for ensuring due compliance of the statutory provisions, it noted, that Shri Arvind Savant, Former Chief Justice of the Kerala High Court, had been appointed as a Facilitator by the CLB. The Court clarified, that the said order will not come in the way of the functioning of the Facilitator. Vide another order dated 29th July 2009, this Court while issuing various directions, before concluding the order again noted, that the CLB had appointed Shri Arvind Savant, Former Chief Justice of the Kerala High Court as a Facilitator and clarified, that the order passed by it appointing Shri Ranina as an independent Director and directing M/s BSR & Company, Chartered Accountants, to take necessary measures and to update and audit the accounts, was confined to compliance of the statutory provisions of the Companies Act as well as the Income Tax Act. The Court clearly observed, that the work assi....
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....ction in a court of law, will not amount to interfering with the course of justice, even though that may require some action on the part of the other party in connection with his own judicial proceedings. The principle is, that a party is free to take action to enforce his legal right. This Court has approved the view taken by Allahabad High Court in Hrishikesh Sanyal v. A.P. Bagchi ILR 1940 All 710 and Radhey Lal v. Niranjan Nath AIR 1941 All 95, that a person does not commit contempt of court if during the pendency of certain proceedings, he takes recourse to other judicial proceedings open to him, even though the latter proceedings put the other party at a loss. 69. In the present case, undisputedly, the respondents were entitled to invoke the jurisdiction of the CLB under Sections 397, 398 and 403 of the Companies Act. The CLB has passed the order on 10th April 2008 appointing a Facilitator and further passed order dated 28th April 2011, enhancing the powers of the Facilitator. Perusal of the orders passed by this Court dated 21st July 2009 and 29th July 2009, would reveal, that though this Court had appointed independent Director, it is clarified, that the independent Directo....
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....gment would be of no assistance to the case of the present petitioner. 73. Apart from that, for bringing an action for civil contempt, the petitioner has to satisfy the court that there has been a wilful disobedience of any judgment, decree, direction, order, writ or other process of the Court. It will be relevant to refer to paragraph (9) of the judgment of this Court in Niaz Mohammad and Others v. State of Haryana and Others (1994) 6 SCC 332:- "9. Section 2(b) of the Contempt of Courts Act, 1971 (hereinafter referred to as 'the Act') defines "civil contempt" to mean "wilful disobedience to any judgment, decree, direction, order, writ or other process of a court ...". Where the contempt consists in failure to comply with or carry out an order of a court made in favour of a party, it is a civil contempt. The person or persons in whose favour such order or direction has been made can move the court for initiating proceeding for contempt against the alleged contemner, with a view to enforce the right flowing from the order or direction in question. But such a proceeding is not like an execution proceeding under Code of Civil Procedure. The party in whose favour an order has been p....
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....s of the Court. It has been held, that before punishing the contemnor for non-compliance of the decision of the Court, the Court must not only be satisfied about the disobedience of any judgment, decree, direction, writ or other process but should also be satisfied that such disobedience was wilful and intentional. Though, the civil court while executing a decree against the judgment-debtor is not concerned and bothered as to whether the disobedience to any judgment or decree was wilful and once the decree had been passed, it was the duty of the court to execute the decree, whatever may be the consequences thereof. In a contempt proceeding before a contemnor is held guilty and punished, the Court has to record a finding, that such disobedience was wilful and intentional. It has been held, that if from the circumstances of a particular case, though the Court is satisfied that there has been a disobedience but such disobedience is the result of some compelling circumstances, under which it is not possible for the contemnor to comply with the same, the Court may not punish the alleged contemnor. 74. It will also be apposite to refer to the following observations of this Court in Kanw....
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.... conduct not explainable otherwise, arises that the contemnor must be punished. ... Punishment under the law of contempt is called for when the lapse is deliberate and in disregard of one's duty and in defiance of authority. To take action in an unclear case is to make the law of contempt do duty for other measures and is not to be encouraged."(emphasis added)" This Court has observed, that the contempt proceedings are quasi-criminal in nature and the standard of proof required is in the same manner as in the other criminal cases. The alleged contemnor is entitled to the protection of all safeguards/rights which are provided in the criminal jurisprudence, including the benefit of doubt. There must be a clear-cut case of obstruction of administration of justice by a party intentionally, to bring the matter within the ambit of the said provision. The Court has also referred to the observations made by this Court in the case of Debabrata Bandopadbyay and Others v. State of West Bengal and Another AIR 1969 SC 189, wherein it was observed, that punishment under the law of contempt is called for when the lapse is deliberate and in disregard of one's duty and in defiance of authorit....
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....s decided against the plaintiff provided the violation is committed before the decision of the Court on the question of jurisdiction." 78. This Court has held, that the correct principle therefore is that, where an objection is taken to the jurisdiction to entertain a suit and to pass any interim orders therein, the Court should decide the question of jurisdiction in the first instance. However, that does not mean that pending the decision on the question of jurisdiction, the Court has no jurisdiction to pass interim orders as may be called for in the facts and circumstances of the case. It has been held, that a mere objection to jurisdiction does not instantly disable the court from passing any interim orders. It has been held, that it can yet pass appropriate orders. Though, this Court has observed, that the question of jurisdiction should be decided at the earliest possible time, the interim orders so passed are orders within jurisdiction, when passed and effective till the court decides that it has no jurisdiction, to entertain the suit. It has been held, that those interim orders would undoubtedly come to an end with the decision that the Court had no jurisdiction. This Cour....
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....to be considered along with the merits of the case. It further observed, that in the present case, it was admitted fact, that the petitioner qualified under Section 399 of the said Act and that the CLB has jurisdiction to deal with the petition under Sections 397 and 398 of the Act. It further observed, that in the proceedings under Sections 397/398, it is the interest of the Company which is paramount. It observed, that it was quite evident from the various annexures enclosed with the petition, that due to differences among the Directors, many operational issues concerning the management of the Company like payment of salary/wages, payment to suppliers etc. were pending, resulting in agitation by the employees and irregularity in supplies. The CLB therefore considered it appropriate, that till the petition is disposed of, as an interim measure, in the interest of the Company as well as more than 3000 employees/workers, there should be a mechanism by which day to day operations are carried out without any hitch. 81. It is not in dispute, that the aforesaid order has not been challenged by the petitioner before any forum. The observations referred hereinabove are indisputably advers....