TaxTMI 
TaxTMI 
2024 (12) TMI 1651
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....ied and delivered certain goods in the nature of "Super Capacitors, Industries, LCD, Chip Capacitors, Coin battery etc.", valued at a total of USD 346,359.91/-, to the respondent's company i.e., M/s Delhi Control Devices Private Limited. However, due to failure on the part of the respondent to pay the amount for the goods purchased, the petitioner was constrained to file a suit for recovery bearing CS (OS) No. 2130/2015 against M/s Delhi Control Devices through its director, namely Mr. Ashish Gupta, i.e., respondent herein. 3. During the pendency of the suit, the parties entered into a settlement duly recorded in the MoU dated 09.03.2016. It is brought out from the record, however, that the dispute between the parties could not be put to a quietus since the terms of the said MoU dated 09.03.2016 were never honoured by the respondent herein. Subsequently, this Court, in the suit proceedings, vide order dated 02.01.2017, recorded as under: "Mr. Ashish Gupta, one of the Directors of defendant's company is present. It is submitted that other Directors are his mother and father and he has the permission from them to make a submission before this Court. It is submitt....
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....arty to the First Party on 25.10.2017. The Interest amount of $91,406/- USD @7% for the period November 2014 to Nov. 2017 shall be paid by the Second Party to the First Party on 25.11.2017. Second party shall pay the total amount of $437,765.91 USD including the interest amount. 2. Second Party as a guarantee to pay the said Amount will issue 06 (six) Post Dated Cheques in favour of the First Party. The first Three Cheques shall be for an amount of $ 50,000 USD Cheques Date will be 30.06.2017, 30.07.2017, and 30.08.2017. Fourth Cheque of $ 1,00,000/ USD shall be dated 30.09.2017. Fifth Cheque of $ 96,359.91/- USD shall be dated 30.10.2017. Sixth cheque of $ 91,406/- USD USD shall be dated 30.11.2017 Post Dated Cheques will be issued in Indian currency i.e. Rupees with an undertaking given by the Second Party that T.T. Payment in US Dollars will replace the Post Dated Cheques for each Cheque 05 Days before the Cheque Date. Once the Second Party makes the T.T. Payment to the First Party, First Party shall return the said Post Dated Cheque of the said Instalment to the Second Party. In case of any default in making the payment of any Installment, the First Party shall be at l....
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....quests from the petitioner. Moreover, in accordance with clause (2) of the said MoU, even the post-dated cheque issued by the respondent, when presented by the petitioner for encashment on 31.07.2017 was dishonoured for insufficiency of funds. It is in the aforesaid backdrop that the petitioner herein filed the present contempt petition against the respondent for wilful and deliberate breach and disobedience of the MoU dated 27.04.2017 and order of this Court dated 02.05.2017 respectively. PROCEEDINGS BEFORE THIS COURT 7. Upon the institution of the present petition, this Court vide order dated 16.05.2018, recorded a new undertaking given by the respondent through his counsel, to the effect that the amounts of USD 34,635.91/-, USD 91,000/- and USD 2,13,514.95/- which sum up to the total liability of the respondent towards the petitioner, shall be cleared by the respondent herein on or before 31.10.2018. 8. However, yet again the respondent reneged from his undertaking, consequent to which, this Court vide order dated 01.02.2019, issued a Show Cause Notice to the respondent to explain as to why contempt proceedings be not initiated against him. 9. Interestingly, on 18.03....
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....posal for making the payment of the balance amount to the Petitioner. 3. Learned counsel for Respondent No. 1 has handed over the Demand Draft of 10 Lakhs to the learned counsel for the Petitioner. 4. This Court has heard the parties. It has been clarified to Respondent No. 1 that if the said proposal is not acceptable to the Petitioner, then the present proceedings for contempt shall be proceeded with. 5. This Court also takes note that the order dated 27.07.2022 had specifically spelt out the timeline of 30.09.2022 and 31.12.2022 to make the payment. However, the Respondent has not sought any extension of time from the Court to make the payment as directed in order dated 27.07.2022 or explained the reasons for his inability to comply with the said order. 6. This Court finds that the Respondent has absolutely no regard for the present court process. The offer of payment of Rs. 10 Lakhs, when the matter is listed for reporting compliance, is clearly a token display and lacks bona fide. 7. As a matter of last opportunity, the matter is adjourned at the request of Respondent No. 1. He is directed to remain personally pr....
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....ngs Dt 18.03.2019 & 08.04.2019 shall stand revived and the First Party shall be liable to pay the* money according to the MOU dated 27.04.2017 and Judgment Dt 02.05.2017." 14. Further, the petitioner has relied upon the decisions passed in Suman Chadha v. Central Bank of India [2021 SCC OnLine 564], Rama Narang v. Ramesh Narang [(2006) 11 SCC 114] in support of its contention that the director of a contemnor-company can be held guilty of contempt on behalf of the acts of the company that had been carried out with and through his knowledge and consent. Further reliance has been placed on Bank of Baroda v. Sadruddin Hasan Daya [(2004) 1 SCC 360] and Bajranglal Gangadhar Khemka v. Kapurchand Limited [AIR 1950 Bom 336] while contending that the noncompliance of a consent order can also amount to contempt of court. Aggrieved by the continuous and brazen flouting of the orders of this Court at the hands of the respondent, the petitioner herein prays that the respondent herein be punished for wilfully reneging from the undertakings given time and again by him to this Court. ANALYSIS AND DECISION: 15. I have bestowed my anxious consideration to the submissions advanced by the lear....
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....e guilty of the contempt and the punishment may be enforced, with the leave of the court, by the detention in civil prison of such director, manager, secretary or other officer." 21. A careful perusal of the aforesaid provisions, when applied to the present case, would leave no iota of doubt that the respondent/contemnor has committed repeated contumacious defaults, while acknowledging his personal liability and guarantee in respect of the debts owed to the company. In this regard, a reference may also be invited to the decision of the Supreme Court in the case of Suman Chadha v. Central Bank of India [2021 SCC OnLine 564] wherein a director of a contemnor-company was held guilty for contempt for disobeying various undertakings given to the respondent bank in the capacity of the director of the said contemnor-company. The relevant extracts read as under: "26. It is also true that normally the question whether a party is guilty of contempt is to be seen in the specific context of the disobedience and the wilful nature of the same and not on the basis of the conduct subsequent thereto. While it is open to the court to see whether the subsequent conduct of the alleged cont....