Telangana High Court
Ras Al Khaimah Investment Authority ... vs I Quest Enterprises Private Ltd. on 7 November, 2025
Author: K. Lakshman
Bench: K. Lakshman
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KL,J
CC NO.1378_2024
IN THE HIGH COURT FOR THE STATE OF TELANGANA
AT HYDERABAD
HON'BLE SRI JUSTICE K. LAKSHMAN
CONTEMPT CASE No.1378 OF 2024
Between:
Ras Al Khaimah Investment Authority (RAKIA) .........Petitioner
vs.
IQuest Enterprises Private Limited and others ....... Respondents
DATE OF ORDER PASSED: 07.11.2025
SUBMITTED FOR APPROVAL.
THE HON'BLE SRI JUSTICEK.LAKSHMAN
1 Whether Reporters of Local newspapers
may be allowed to see the Judgment? Yes/No
2 Whether the copies of judgment may be
marked to Law Reporters/Journals Yes/No
3 Whether His Lordship wish to see the fair
copy of the Judgment? Yes/No
_______________________
JUSTICE K. LAKSHMAN
2
KL,J
CC NO.1378_2024
IN THE HIGH COURT FOR THE STATE OF TELANGANA
AT: HYDERABAD
CORAM:
* HON'BLE SRI JUSTICE K. LAKSHMAN
+ COMTEMPT CASE No.1378 OF 2024
% Delivered on: 07-11-2025
Between:
# Ras Al Khaimah Investment Authority
(RAKHA) .. Petitioner
Vs.
$ IQuest Enterprises Private Ltd.
and others. .. Respondents
For Petitioner Sri K.Vivek Reddy, learned Senior
Counsel, rep.Sri G.Vamshi Krishna,
Learned Counsel for the petitioner,
For Respondents Sri P. Sri Raghu Ram, Learned
Senior Counsel rep. Sri K.V.
Rusheek Reddy, Learned counsel
appearing for 1strespondent,
Sri D. Prakash Reddy, Learned
Senior Counsel rep. Sri Naraparaju
Avaneesh, Learned Counsel
appearing for 2nd respondent,
Sri S.Niranjan Reddy, Learned
Senior Counsel rep. Sri A. Abhishek
Swaroop Reddy, Learned Counsel
appearing for 3rd respondent,
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CC NO.1378_2024
Sri A. Venkatesh, Learned Senior
Counsel rep. Ms. Pratusha Bopanna,
Learned Counsel appearing for 4th
respondent,
and
Sri Avinash Desai, Learned Senior
Counsel rep. Sri Kondaparthy Kiran
Kumar, Learned Counsel appearing
for respondent Nos.5 and 6.
<Gist --
> Head Note --
? Cases Referred
1. (2014) 5 ALD 230 (DB)
2. 1981 AIR 723
3. (2014) 14 SCC 446
4. (2021) 20 SCC 365
5. (2010) 3 SCC 705
6. (2006) 1 SCC 613
7. (2002) 5 SCC 352
8. (2014) 9 SCC 407
9. AIR 1970 SUPREME COURT 2015
10. AIR 1988 SUPREME COURT 1208
11. 249 U.S. 47 (1919)
12. 341 U.S. 494 (1951)
13. 391 U.S. 194 (1968)
14. 2 NSWLR 887
15. AIR 1954 SUPREME COURT 10
16. 1968 SCC OnLine SC 141
17. 2021 13 SCC 549
18. AIR 1998 SUPREME COURT 1895
19. (2001) 1 SCC 516,
20. (1996) 5 SCC 216
21. (2010) 7 SCC 502
22. AIR 1974 SC 710
23. 1971 AIR 1132
24. AIR 1959 BOM 182
25. (1991) 4SCC406
26. AIR 1954 SC 186
27. AIR 1955 SC 19
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CC NO.1378_2024
28. (2014) 3 SCC 373
29. 1992 Cri LJ 2520
30. (2021) 14 SCC 312
31. [1900] 2 QB 36 (UK)
32. [1974] AC 273
33. 331 US 367 (1947) (USA)
34. (1979) 2 EHRR 245 (ECHR)
35. (1994) 6 SCC 332,
36. (2003) 11 SCC 1
37. AIR 1968 SC 1413
38. AIR 2009 SC 2214
39. AIR 1980 SC 1528
40. (2001) 7 SCC 549
41. 2024 INSC 544
42. 2025 INSC 546
43. 1988 SCC ONLINE SC 463
44. [(1991) 2 LW 295]
45. 2024 INSC 73
46. CC No. 793 of 2016 dated 09 December 2016
47. 2025 INSC 567
48. Suit no 1912 of 2004 dated 4th August 2008
49. 2024 INSC 978,
50. (1994) 6 SCC 442
51. (2022 BHC-OS 1870-DB)
52. 1952 2 SCC 14
53. (2009) 10 SCC 48
54. 2014 16 SCC 204
55. (2007) 12 SCC 788
56. (2010) 3 SCC 330
57. (2019) 17 SCC 193
58. (2017) 1 SCC 640
59. (2008) 5 SCC 668
60. (2022) 7 SCC 31
61. (2024 SCC OnLine Del 5604),
62. 2000 (4) SCC 400
63. 2018 SCC OnLine Pat 2035,
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INDEX
Sr. No. Particulars Page Nos.
1. Factual background 6
2. Contentions of the Petitioner 7
3. Contentions of Respondent No.1 17
4. Contentions of Respondent No. 2 26
5. Contentions of Respondent No. 3 33
6. Contentions of Respondent No. 4 40
7. Origin and Jurisdiction of Contempt Proceedings 46
8. Case Laws cited and Findings 70
9. CCI Proceedings 115
117
10. Alter Ego
11. Conclusion 119
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KL,J
CC NO.1378_2024
HON'BLE SRI JUSTICE K. LAKSHMAN
CONTEMPT CASE No.1378 OF 2024
ORDER:
Heard Sri K.Vivek Reddy, learned Senior Counsel, representing Sri G.Vamshi Krishna, learned counsel for the petitioner, Sri P. Sri Raghu Ram, learned Senior Counsel representing Sri K.V. Rusheek Reddy, learned counsel appearing for respondent No. 1, Sri D. Prakash Reddy, learned Senior Counsel representing Sri Naraparaju Avaneesh, learned counsel appearing for 2nd respondent, Sri S.Niranjan Reddy, learned Senior counsel representing Sri A. Abhishek Swaroop Reddy, learned counsel appearing for 3rd respondent, Sri A. Venkatesh, learned Senior Counsel representing Ms. Pratusha Bopanna, learned counsel appearing for 4th respondent, and Sri Avinash Desai, learned Senior Counsel representing Sri Kondaparthy Kiran Kumar, learned counsel appearing for respondent Nos.5 and 6.
2. This Contempt Case is filed under Sections 10 and 12 of the Contempt of Courts Act, 1971 ( hereinafter referred to as 'the 7 KL,J CC NO.1378_2024 Act,1971'), by the petitioner against the respondents seeking to punish them for civil contempt in terms of Sections 10 to 12 of the Contempt of Courts Act, for willful breach of Undertaking, willful disobedience of Order and/or willful circumvention of the Undertaking/Order of Principal Special Court in the Cadre of District Judge, for Trial and Disposal of Commercial Disputes, City Civil Court, Hyderabad in CEP No.19 of 2023 etc.
3. CONTENTIONS OF THE PETITIONER:
i) The petitioner - Ras Al Khaimah Investment Authority (hereinafter referred to as "RAKIA"), is a statutory authority constituted under Emiri Decree No. 2 of 2005 of the Emirate of Ras Al Khaimah.
ii) The gravamen of the Petitioner's complaint is that IQuest Enterprises Private Limited (hereinafter "IQuest" or "Respondent No. 1"), through its authorized legal representative, made an unambiguous, categorical, and solemn submission before the Commercial Court that it had withdrawn from a proposed acquisition 8 KL,J CC NO.1378_2024 involving the Active Pharmaceutical Ingredients (API) business and assets of Viatris Inc. (hereinafter "Viatris" or "Respondent No. 3").
This submission, which was made in the course of judicial proceedings and was subsequently recorded in the docket order dated 01.05.2024, constituted, according to the Petitioner, solemn Undertaking to the Court, in reliance upon which the Petitioner agreed not to press for any interim restraint on the transaction. The Petitioner avers that but for the said undertaking, injunctive reliefs would have been granted, and thus, the assurance directly impacted the Court's exercise of judicial discretion.
iii) The Petitioner further submits that the Undertaking was not a mere oral submission of counsel, but was also formally crystallized through a sworn Counter Affidavit dated 27.03.2024, filed by an authorized representative of IQuest, wherein it was clearly and unequivocally stated that IQuest was no longer pursuing any transaction with Viatris (R3). Specific reference is drawn to paragraphs 43, 54, and 60 of the said affidavits, which purportedly reiterated in no uncertain terms that the acquisition plan stood 9 KL,J CC NO.1378_2024 abandoned. It is the Petitioner's contention that this solemn assertion was not only intended to, but in fact did, induce the Court to exercise judicial restraint and refrain from issuing injunctive orders.
iv) However, the Petitioner asserts that subsequent events reveal that the representation made by IQuest was false, misleading, and knowingly deceptive. Far from abandoning the transaction, the parties are alleged to have engaged in a strategic and calculated restructuring of the same, under a new nomenclature and through alternate corporate vehicles, now referred to as the "Mudhra Transaction". The Petitioner submits that while the external structure of the transaction was modified to give the appearance of dissociation from Iquest (R1), the essential and substantive elements of the original deal were retained, thereby constituting a deliberate and sophisticated attempt to circumvent the judicial process and hoodwink the Court.
v) In support of the above contention, the Petitioner outlines the similarities between the original transaction and the Mudhra Transaction, which, it is submitted, render the restructuring cosmetic and illusory. It is specifically averred that: 10
KL,J CC NO.1378_2024 v-a) The subject matter of the transaction, i.e., the transfer of the same API business and assets, remained unchanged; v-b) Mylan Laboratories Ltd., a subsidiary of Viatris (R3), continued to be the selling party;
v-c) Tianish Laboratories Pvt. Ltd., a corporate entity initially created to hold the said assets, was retained in the final transaction;
v-d) The acquirer, Matrix Pharma Pvt. Ltd., was not a bona fide third party but was allegedly a corporate conduit controlled by the same beneficial interests; v-e) Ms. Swathi Gunupati Reddy(RESPONDENT NO. 2), daughter of Mr. Nimmagadda Prasad (R4), and common director in both Matrix and Tianish, played a pivotal role in structuring and executing the impugned transaction; v-f) The ultimate beneficial ownership, both in legal and economic terms, remained with Mr. Nimmagadda Prasad(R4), who is the principal judgment debtor in CEP No. 19 of 2023.
vi) The motivation behind this restructuring was to create an artificial distinction between the originally contemplated transaction 11 KL,J CC NO.1378_2024 and its subsequent execution, with the aim of evading the consequences of the solemn Undertaking made before the Commercial Court and to frustrate the execution of the foreign decree in its favor.
vii) Between March and June 2024, the Respondents, acting in concert and with common intent, engaged in active suppression of relevant facts from the executing court while simultaneously pursuing regulatory approvals from the Competition Commission of India (CCI). Applications filed before the CCI under the Green Channel route, which allows for automatic approval subject to self- certification, were allegedly drafted to present the transaction as an arm's length, standalone acquisition by Matrix and Tianish. No mention was made of the ongoing judicial proceedings or of the solemn Undertaking given by IQuest (R1). This, the Petitioner avers, was a conscious act of concealment calculated to avoid scrutiny and defeat the administration of justice.
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viii) The Petitioner also refers to various communications addressed to Viatris (R3), including formal legal notices dated 21.11.2023 and 18.05.2024, placing it on express notice of the pending court proceedings, the Undertaking made on behalf of Iquest (R1), and the legal consequences of proceeding with the transaction. Notwithstanding such intimation, Viatris (R3) proceeded to conclude and consummate the transaction as evidenced by multiple press releases, public filings, and regulatory disclosures dated on or about 03.06.2024. It is therefore asserted that Viatris (R3) was complicit and fully aware of the implications of its conduct, and thus cannot claim innocence or lack of privity.
ix) The Petitioner places reliance on contemporaneous public records, including CCI orders dated 13.02.2024, 04.04.2024, and 28.05.2024, media reports, investor briefings, and financial statements, all of which are stated to reflect the ongoing nature of the transaction and its eventual conclusion, in gross violation of the Undertaking given to the Commercial Court. It is urged that the transaction was pursued and completed in clandestine fashion, with 13 KL,J CC NO.1378_2024 deliberate disregard to the binding nature of judicial proceedings, thereby constituting not merely technical disobedience but an egregious and fraudulent abuse of process.
x) The Petitioner submits that the conduct of the Respondents meets all the jurisprudential criteria for establishing civil contempt, as laid down by the Supreme Court, namely:
x-a) That there was a valid and enforceable Undertaking or order of the Court;
x-b) That the Respondents had full and conscious knowledge of such undertaking/order;
x-c) That the breach was willful, deliberate, and in conscious disregard of the Court's authority.
xi) The effect of the breach was not merely procedural but goes to the root of the judicial process. The Court was induced into refraining from issuing protective or injunctive orders based on representations which were immediately dishonored. The Petitioner submits that such conduct, if permitted to go unchecked, would erode 14 KL,J CC NO.1378_2024 the sanctity of judicial undertakings and would embolden parties to manipulate court proceedings through strategic deception.
xii) In light of the above, the Petitioner prays that this Court to take serious judicial notice of the calculated, orchestrated, and structured breach of trust demonstrated by the Respondents, and seeks the following reliefs:
xii-a) A declaration that the transaction concluded under the guise of the Mudhra Transaction is null and void ab initio and non-est in law;
xii-b) A direction that all actions, benefits, and profits arising from the said transaction be reversed, disgorged, or declared ineffectual;
xii-c) An award of exemplary costs and imposition of punitive penalties on all Respondents involved in the contempt;
xii-d) The initiation of appropriate punitive proceedings under Section 12 of the Contempt of Courts Act, 1971; 15
KL,J CC NO.1378_2024 xii-e) An interim restraint on all further steps in relation to the transferred assets, including alienation, disbursement, or third-party interests;
xii-f) A direction to all Respondents to disclose with specificity the nature, value, and deployment of all funds exchanged or received under the impugned transaction.
xiii) The Petitioner concludes by emphasizing that the credibility of judicial proceedings and the authority of the Court cannot be compromised. It is submitted that unless willful breaches of solemn undertakings are met with swift, firm, and exemplary action, parties will be encouraged to bypass court orders through legal sophistry, and the very foundation of rule of law will be imperiled.
xiv) With specific reference to Respondent No. 3, Viatris Inc., the Petitioner categorically denies the claim that it was unaware of the judicial proceedings or that it acted independently. It is submitted that Viatris was in continuous correspondence with the Petitioner's legal team, was served with formal notices, and was cautioned against proceeding with the transaction.16
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xv) Viatris was a direct counterparty in the earlier negotiations and remained centrally involved in the final execution, signing transaction documents, accepting consideration, and issuing public disclosures. The claim that different intermediaries such as Matrix and Tianish insulated Viatris from liability is characterized as artificial and legally untenable.
xvi) Viatris, being a sophisticated global entity, had both the opportunity and obligation to verify the pendency of judicial proceedings and to act with restraint. Its failure to approach the Court for clarification and its active participation in concluding the transaction are cited as indicative of willful evasion and calculated risk-taking.
xvii) The Petitioner accordingly prays that Viatris be held liable for contempt alongside the other Respondents, and that its plea of foreign incorporation not be permitted to operate as a shield against contempt jurisdiction, particularly when it is alleged to have played a central and enabling role in the violation of judicial orders. 17
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4. CONTENTIONS OF RESPONDENT NO. 1:
i) Respondent No. 1, IQuest Enterprises Private Limited (hereinafter "IQuest" or "Respondent No. 1"), through its authorized representative, has entered appearance and filed a comprehensive counter affidavit, raising serious preliminary objections to the maintainability, legality, and procedural propriety of the present contempt proceedings. It is the foremost submission of Respondent No. 1 that the present contempt petition is wholly misconceived, devoid of merit, and constitutes an abuse of the process of law, having been instituted with an ulterior motive to harass the Respondent and extract concessions in the pending execution proceedings.
ii) At the outset, IQuest disputes the foundational premise of the contempt petition, namely, the assertion that a binding and enforceable "undertaking" was furnished by it before the Commercial Court, Hyderabad, on 01.05.2024. It is submitted that what is characterized by the Petitioner as an "undertaking" was in fact a factual clarification, made in good faith by its counsel, in response to 18 KL,J CC NO.1378_2024 an article published in the Economic Times dated 30.04.2024, which had erroneously reported that IQuest was acquiring the API business of Viatris. It is contended that such a factual denial cannot, by any stretch of law or interpretation, be elevated to the status of a judicial Undertaking as contemplated under Section 2(b) of the Act, 1971.
iii) The procedural mandate for initiating contempt proceedings under Section 15(2) of Act 1971 has not been fulfilled. In particular, IQuest draws the attention of this Court to the fact that the order allegedly violated was passed by the Commercial Court at Hyderabad, a court subordinate to this High Court, and that no reference has been made by the said subordinate court as required under Rule 5 of the Contempt of Courts Rules, 1980 (hereinafter referred to as 'the Rules, 1980'). In the absence of such reference or a motion by the Advocate General, it is submitted that the present contempt petition is procedurally barred and this Court lacks jurisdiction to entertain the matter. Reliance is placed on the authoritative judgment in Kunam 19 KL,J CC NO.1378_2024 Raghav Reddy v. Shah Enterprises 1, which reinforces this proposition.
iv) IQuest also objects to the Petitioner's reliance on the judgment in Sk Sarkar v. Vinay Chandra Misra 2, arguing that the said decision dealt with an entirely different procedural context, and does not operate to override the statutory scheme requiring either a reference from the executing court or a motion from the Advocate General.
v) The Respondent further argues that the administrative action taken by the Hon'ble Chief Justice in overruling an office objection and assigning the contempt case to a Bench does not amount to judicial cognizance of the petition. It is submitted that such administrative endorsements cannot be construed as a validation of the maintainability of the contempt petition. 1 (2014) 5 ALD 230 (DB) 2 1981 AIR 723 20 KL,J CC NO.1378_2024
vi) IQuest then proceeds to narrate the factual background of the dispute. It is submitted that CEP No. 19 of 2023, filed by the Petitioner, pertains to the execution of a foreign judgment and decree obtained against Respondent No. 4 (Mr. Nimmagadda Prasad) in his personal capacity. IQuest was not a party to the said foreign decree and was only sought to be impleaded at a subsequent stage through Execution Applications being CEA Nos. 156, 157, and 158 of 2023, wherein the Petitioner sought injunctive relief against IQuest on the speculative allegation that it was being used as a vehicle to dissipate assets of the judgment debtor.
vii) It is specifically denied that IQuest has any alter ego relationship with Respondent No. 4. The allegation that IQuest is controlled or influenced by Mr. Nimmagadda Prasad is categorically repudiated. It is submitted that Respondent No. 4 had divested his entire shareholding in IQuest by the year 2014 and resigned from its directorship with effect from 01.12.2015. Since then, IQuest claims to have functioned as a completely independent corporate entity, with its 21 KL,J CC NO.1378_2024 own management and governance, and without any involvement financial or managerial from Respondent No. 4.
viii) IQuest explains that the only statement made before the Commercial Court was a memo enclosing an email issued to the editor of The Economic Times, clarifying that the company was not acquiring the API business of Viatris. This clarification was recorded by the Court in its docket order dated 01.05.2024, and the Court, upon being satisfied that there was no urgency, refused to advance the hearing date of the execution proceedings. It is this clarification given in the context of media misinformation that the Petitioner now seeks to characterize as a binding undertaking, which is legally untenable and factually misleading.
ix) It is further submitted that the alleged Undertaking was never relied upon by the Commercial Court to dispose of any pending substantive application. No final order was passed accepting or enforcing the undertaking. Thus, even assuming for the sake of 22 KL,J CC NO.1378_2024 argument that any representation was made, the same did not form the basis of any adjudicatory relief, and hence no case of contempt arises.
x) Respondent No. 1 also distinguishes between the originally contemplated transaction, which it describes as the IQuest Transaction, and the transaction that was eventually consummated, which it refers to as the Mudhra Transaction. It is submitted that IQuest initially considered investing in Matrix Pharma Pvt. Ltd., which was negotiating the acquisition of Tianish Laboratories Pvt.
Ltd, However, upon internal evaluation, IQuest withdrew from the transaction and decided not to proceed. This decision was contemporaneously communicated through affidavit and memo before the Commercial Court.
xi) The eventual acquisition of Tianish by Matrix was, according to IQuest, a completely new transaction supported by independent institutional investors, including Kotak Strategic Situations Fund II and Kingsman Wealth Fund PCC. It is claimed that IQuest had no participation, direct or indirect, in this final transaction, 23 KL,J CC NO.1378_2024 which was evidenced by a second approval granted by the CCI on 28.05.2024. The said approval, IQuest submits, was wrongfully suppressed by the Petitioner and would demonstrate the absence of any corporate connection between IQuest and Matrix in the consummated deal.
xii) Even if there existed any prior obligation under the earlier deal structure, such as a break fee clause, the same was of a purely contractual nature, and the cancellation of the transaction nullified any liability. IQuest reiterates that no financial resources were deployed, no assets were transferred, and no corporate involvement was undertaken in the consummated transaction.
xiii) The Respondent also argues that the ingredients for establishing civil contempt are conspicuously absent. There was no express or implied undertaking, no specific order directed against IQuest, and no willful breach. The counter affidavit and memo submitted before the Commercial Court were limited in scope and did 24 KL,J CC NO.1378_2024 not preclude other third-party transactions supported by unrelated investors.
xiv) The contempt petition has been filed not as a bona fide effort to enforce the dignity of judicial orders, but as a coercive instrument to gain leverage in the underlying execution proceedings. IQuest asserts that the Petitioner has not pressed the applications for impleadment or injunction before the Commercial Court and has instead sought to bypass the execution framework by initiating parallel contempt proceedings.
xv) The Respondent points to multiple adjournments and procedural lapses by the Petitioner in the execution proceedings to suggest that the present contempt petition is an afterthought, designed to intimidate Respondent No. 1 and its associated investors and institutions, many of whom have been issued notices and press threats, thereby impairing the Respondent's business reputation and operations.
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KL,J CC NO.1378_2024 xvi) Under Order XXI of the Code of Civil Procedure, execution can only proceed against the judgment debtor. There is no legal basis for seeking injunctive or attachment orders against third parties, and no authority in law permits a lifting of the corporate veil in execution proceedings in the absence of a decree against the third party. The contempt petition, in effect, seeks to achieve what is otherwise impermissible in execution law.
xvii) Thus, Respondent No. 1 prays for the outright dismissal of the contempt petition with exemplary costs, submitting that the petition is wholly speculative, procedurally flawed, and legally unsustainable. The Respondent also seeks appropriate admonition against misuse of judicial process, and prays that the sanctity of independent corporate entities be protected from unfounded imputations of alter ego liability in the absence of a proper adjudication.
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5. CONTENTIONS OF RESPONDENT NO. 2:
i) Respondent No. 2, has filed counter affidavit opposing the allegations leveled against her contended that it is her foundational submission that she is being unjustly implicated in the present proceedings solely on account of her familial relationship with Respondent No. 4 and without any legal, factual, or evidentiary basis.
ii) At the outset, she contends that she has not given any undertaking, whether oral or written, directly or indirectly, to the Commercial Court or any other forum in relation to the acquisition of the API business of Viatris. She further clarifies that she has never appeared before the executing court in her personal capacity and has not participated in any judicial proceedings that could render her liable for breach of an undertaking.
iii) She contends that she is not a party to the underlying foreign decree, passed by the Ras Al Khaimah Court of First Instance on 02.02.2022 and upheld in appeal. The said decree is in personam against Respondent No. 4, and has no binding effect on her, in law or 27 KL,J CC NO.1378_2024 in equity. She asserts that there is no direction, injunction, or judicial finding against her, and therefore she has not committed any violation of the alleged Undertaking.
iv) She contends that she has not been impleaded as a respondent in CEP No. 19 of 2023 or in the connected Execution Applications, i.e., CEA Nos. 156, 157, and 158 of 2023. No relief has been claimed against her in those proceedings. Consequently, she has no locus or standing in the underlying proceedings and cannot be held to have violated the order under contempt to which she was neither a party nor a subject.
v) She contends that her impleadment in the present contempt case is premised on vague, speculative, and unsubstantiated allegations. The Petitioner has sought to link her to the impugned transaction on the ground that she is the daughter of Respondent No. 4, and is a common Director in certain entities such as IQuest, Matrix Pharma Pvt. Ltd., and Tianish Laboratories Pvt. Ltd. She asserts that such reliance on familial relationships and shared directorships is 28 KL,J CC NO.1378_2024 legally unsustainable and factually irrelevant, particularly in proceedings involving penal consequences such as contempt.
vi) She contends that she is an independent professional and entrepreneur, having completed her graduation in Business Management and pursued executive education programs at Stanford University. Since 2010, she has engaged in various business ventures in the fields of skincare, early childhood development and entertainment. These ventures, she contends, are independent of Respondent No. 4's commercial interests and establish her distinct legal and professional identity.
vii) Though she holds directorships in multiple companies, including Matrix and Tianish, she does not hold any shareholding in either company and does not exercise any individual or controlling influence over their financial or managerial decisions. These companies are governed by their respective Boards of Directors, and no single Director including herself has authority to bind or speak for the company independently.29
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viii) She contends that the petitioner is attempting to pierce the corporate veil and impute liability to her on the assumption that she has orchestrated the transaction to shield the assets of Respondent No.
4. She contends that such piercing of the corporate veil is a judicial doctrine to be invoked only in exceptional cases, upon a full-fledged trial, and cannot be employed summarily in contempt proceedings, particularly in the absence of any judicial finding of misuse or fraud.
ix) On the merits of the alleged "Undertaking," she contends that in the counter affidavit, Respondent No. 1 used the term "transaction" in a narrow and specific sense i.e., to mean that IQuest would not utilize its own liquid assets to acquire the API business. It was never represented that other unrelated entities such as Matrix could not proceed with an independently financed transaction. This interpretation is consistent with the Commercial Court's docket order dated 01.05.2024, which merely recorded the clarification and found no urgency to alter the schedule of hearing. 30
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x) She contends that the actual acquisition of Tianish Laboratories Pvt. Ltd. by Matrix Pharma Pvt. Ltd. was independently financed by third-party institutional investors. She refers to the approvals granted by the CCI dated 13.02.2024 and 12.07.2024, which affirmatively records that IQuest did not acquire any shares in Tianish and did not fund the transaction. Hence, the transaction was lawfully completed without any circumvention or breach of Undertaking.
xi) She clarifies that while the Share Purchase Agreement between IQuest and Viatris may have initially contained a break fee clause, that agreement was never acted upon, and the transaction did not proceed through IQuest. As a result, IQuest incurred no financial liability, and the transaction was restructured entirely outside its corporate framework.
xii) She contends that she has nothing to orchestrate the restructuring of the deal to keep control within the family. She states that all decisions were made by the corporate Boards of Directors in 31 KL,J CC NO.1378_2024 accordance with applicable company law, and there is no evidence to support the theory of familial orchestration or beneficial ownership. The allegation that she brought her husband as a part of a structuring strategy is speculative and scandalous in nature, lacking any factual foundation.
xiii) She also contends that the Petitioner has misapplied the statutory definitions of "affiliate" and "associate company" under Sections 2(6) and 2(87) of the Companies Act, 2013. Neither IQuest nor she holds any shareholding in Matrix, and therefore Matrix cannot be deemed an affiliate of IQuest in law. The Petitioner's theory of affiliate control is thus misconceived and legally untenable.
xiv) She contends that the contempt jurisdiction of this Court must be exercised sparingly and cautiously, only in cases involving clear, unambiguous orders and willful disobedience. In support, she relies upon the judgments of the Supreme Court in T.C. Gupta v. Bimal Kumar Dutta, 3and Suman Chadha v. Central Bank of 3 (2014) 14 SCC 446 32 KL,J CC NO.1378_2024 India 4. She emphasizes that there is no Undertaking attributable to her, no order violated by her, no asset held or transferred by her, and no evidence of any benefit accruing to her personally from the transaction.
xv) She also places reliance on the judgment of the Supreme Court in Sahdeo v. State of U.P 5., wherein it is held that contempt proceedings cannot be used as a substitute for civil discovery or to conduct a roving inquiry into disputed facts, particularly when those facts are already pending adjudication before the appropriate executing court.
xvi) She reiterates that there is no actual prejudice caused to the Petitioner by her actions, as no order was passed against her, and she neither gained any benefit nor induced any judicial indulgence. The Petitioner has also not shown any loss or deprivation resulting directly from any act committed by her.
4 (2021) 20 SCC 365 5 (2010) 3 SCC 705 33 KL,J CC NO.1378_2024 xvii) She also contends that the present contempt case, insofar as it pertains to her, is manifestly vexatious, motivated, and designed solely to apply pressure on Respondent No. 4. Therefore, she sought to dismiss the present contempt case with exemplary costs, so as to deter the misuse of contempt jurisdiction and to uphold the integrity of independent corporate functioning and personal legal identity.
6. CONTENTIONS OF RESPONDENT NO. 3:
i) Respondent No. 3 , is a multinational pharmaceutical company incorporated under the laws of the State of Delaware, United States of America, has entered appearance in the present contempt proceedings through its authorized signatory, Mr. Syamantak Sen, and has filed counter affidavit denying the allegations made against it. At the outset, it contends that the present contempt petition is misconceived, factually inaccurate, and legally unsustainable, and that it has been arrayed as a Respondent without any justifiable legal nexus to the judicial order purportedly violated. 34
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ii) It contends that it is a foreign corporate entity, with its global headquarters located at 1000 Mylan Boulevard, Canonsburg, Pennsylvania 15317, USA, and that it does not maintain any branch office, subsidiary, or permanent establishment in India. It has no business operations that would subject it to the jurisdiction of Indian courts in a contempt proceeding, particularly in the absence of any express order or Undertaking directed against it. It contends that it never participated in any manner in the judicial proceedings before the Commercial Court, Hyderabad, or gave any undertaking to the Court, either directly or through its representatives.
iii) It contends that the order dated 01.05.2024 was passed in CEA No. 44 of 2024 in CEP No. 19 of 2023, and was recorded solely on the representation of Respondent No.1. Respondent No. 3 was neither a party to that proceeding nor was it heard or served with any application in relation thereto. Thus, it cannot be said to have willfully disobeyed or breached an Undertaking that it was never privy to, much less bound by it.
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iv) It contends that its involvement in the transaction relating to the divestiture of its Active Pharmaceutical Ingredients (API) business, housed in its Indian subsidiary Mylan Laboratories Ltd., was a matter of corporate restructuring, undertaken in accordance with Indian Regulatory and Competition Law. The said transaction was duly disclosed and notified to the CCI under the Green Channel route in terms of the CCI (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011.
v) It contends that its subsidiary, Mylan Laboratories Ltd., entered into a Share Purchase Agreement dated 03.06.2024 with Matrix, whereby 100% shareholding of Tianish, which housed the API assets, was sold to Matrix. The said transaction was the culmination of independent negotiations between Mylan and Matrix, and was entirely unrelated to IQuest or any of the other Respondents in the present proceedings.
vi) While IQuest may have previously expressed interest in acquiring Tianish, that transaction never materialized. Respondent No. 3 36 KL,J CC NO.1378_2024 had no reason to doubt the bona fides of the eventual acquirer, Matrix, especially in light of the disclosures and representations made in the CCI filings and in the Definitive Agreements executed between the parties.
vii) It contends that the notices allegedly issued by the Petitioner, dated 21.11.2023 and 18.05.2024, were sent to its public email addresses or legal teams, and did not contain any specific order of injunction, undertaking, or court direction. Furthermore, those communications did not reflect the existence of a binding judicial restraint that required Respondent No. 3to refrain from concluding the transaction. As such, no legal duty or constructive notice can be attributed to it.
viii) It contends that the Petitioner's allegations proceed on the erroneous assumption that the Matrix transaction was restructured into the Mudhra Transaction. It further contends that the final transaction consummated on 03.06.2024 was fundamentally distinct from the earlier IQuest proposal both in terms of shareholding, financial 37 KL,J CC NO.1378_2024 structuring, and investor profile. The final acquirer, Matrix, was supported by institutional investors including Kotak Strategic Situations Fund II and Kingsman Wealth Fund PCC, whose identities were disclosed to the CCI and other Regulatory Bodies.
ix) It undertook thorough due diligence and ensured regulatory compliance at all stages of the transaction. In the absence of any express judicial restraint or pending litigation directly naming it as a party, it had no legal obligation to seek clarification from the Court or to abstain from concluding the divestment. The decision to proceed with the transaction was taken in accordance with standard commercial practice and global legal advice.
x) It also refutes the Petitioner's attempt to characterize it as an "affiliate" of Respondent No. 4 or as being part of a conspiracy to defeat the execution of the foreign decree. It has no corporate relationship, direct or indirect, with Respondent No. 4 or the other Respondents in this contempt case save for the commercial transaction involving the sale of Tianish. The Petitioner's attempt to 38 KL,J CC NO.1378_2024 draw inferences based on post-facto ownership patterns or familial links between unrelated companies is speculative and legally untenable.
xi) With regard to the allegation that it issued public disclosures and press releases in defiance of the undertaking, it submits that such disclosures were made in the ordinary course of its corporate and investor relations obligations, and were factually accurate reflections of a legitimate business transaction. The said disclosures cannot be interpreted as evidence of contempt or knowledge of any prior undertaking.
xii) Placing reliance on the judgments of the Supreme Court in Union of India v. Subedar Devassy PV6, and Jhareswar Prasad Paul v. Tarak Nath Ganguly 7, It would contend that contempt jurisdiction cannot be exercised against a third-party foreign entity in the absence of a clear, specific, and direct order or Undertaking binding it. It is a well-established principle that the jurisdiction of 6 (2006) 1 SCC 613 7 (2002) 5 SCC 352 39 KL,J CC NO.1378_2024 contempt cannot be invoked vicariously or indirectly in the absence of a personal and proximate act of disobedience.
xiii) It also contends that the Petitioner failed to make out a prima facie case of willful disobedience against it. There is no mens rea or conscious disregard for the Court's authority. In fact, it was never made a party to the execution proceedings, and no injunctive relief was sought or granted against it. As such, it cannot be faulted for concluding a transaction in accordance with applicable Indian law and international norms.
xiv) Therefore, Respondent No. 3sought to dismiss the contempt case in limine against it with exemplary costs, clarifying those foreign corporate entities not party to judicial undertakings cannot be drawn into contempt jurisdiction based on remote allegations or speculative affiliations. It also seeks protection against reputational harm and commercial prejudice arising from its wrongful impleadment in the instant proceedings.
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7. CONTENTIONS OF RESPONDENT NO.4:
i) He filed counter, denying the allegations made against him, contending that the contempt petition is misconceived in law, mala fide in intent, and an abuse of the judicial process. He asserts that he has not given any Undertaking to any Court in relation to the Viatris API business transaction and that there exists no legal basis to implicate him in proceedings alleging willful disobedience or contempt.
ii) He contends that he is not a party to the alleged Undertaking dated 01.05.2024 recorded by the Commercial Court in CEA No. 44 of 2024 and, therefore, cannot be said to have breached any judicial commitment.
iii) He contends that the contempt petition is merely a collateral tactic devised by the Petitioner to assert pressure in CEP No. 19 of 2023, which concerns the enforcement of a foreign decree passed by the Ras Al Khaimah Court of First Instance, UAE, on 02.02.2022.
That decree, as per the Petitioner's own pleadings, is enforceable 41 KL,J CC NO.1378_2024 against Respondent No. 4 in his individual capacity. He is contesting the said execution proceedings on grounds available under Section 13 of the Code of Civil Procedure, 1908, and the Petitioner is seeking to pre-empt a substantive adjudication by invoking contempt jurisdiction.
iv) He is neither a shareholder, Director, nor Officer of IQuest Enterprises Pvt. Ltd., the entity which is alleged to have made representations to the Commercial Court. He ceased to hold any shareholding in IQuest as far back as 2014, and resigned as a director on 01.12.2015. Therefore, any actions taken by IQuest thereafter are not attributable to him either legally or factually. The attempt by the Petitioner to conflate his identity with that of IQuest or any of the acquiring companies involved in the Matrix-Tianish transaction is, according to him, fundamentally flawed.
v) He has no personal interest in the API transaction entered into between Viatris through its subsidiary Mylan Laboratories Ltd. and Matrix Pharma Pvt. Ltd. He asserts that the entire transaction was 42 KL,J CC NO.1378_2024 conducted at an arms-length basis between unrelated third parties and with the full knowledge and regulatory oversight of the CCI, which granted its approval for the transaction on 13.02.2024 and again on 28.05.2024. The transaction was concluded on 03.06.2024 without any involvement or role attributable to him.
vi) Insofar as the Petitioner seeks to establish his involvement based on familial relationships particularly his relation with Respondent No. 2, he submits that such reliance is impermissible in law and contrary to settled jurisprudence. He contends that a familial connection alone cannot form the basis for lifting the corporate veil or attributing liability, especially in proceedings where penal consequences are sought to be imposed. In support of his case, he placed reliance on the judgment of the Supreme Court in Balwant Rai Saluja v. Air India Ltd. 8, and would contend that piercing of the corporate veil must be exercised only upon a clear showing of fraud, agency, or sham structures, none of which exist in the present case. 8 (2014) 9 SCC 407 43 KL,J CC NO.1378_2024
vii) Taking serious objection to the Petitioner's insinuation that the transaction involving the acquisition of Tianish Laboratories was a "sham" or "camouflaged continuation" of an earlier structure involving IQuest, he contends that this theory is wholly unsubstantiated and rests entirely on selective interpretation of business correspondence and post-facto allegations. The actual acquirer, Matrix, is a separate legal entity financed by institutional investors, and no part of the consideration passed through Respondent No. 4, directly or indirectly.
viii) He denies that he orchestrated or coordinated the transaction with the intent to shield his assets or to frustrate the execution of the foreign decree. He contends that the execution petition remains pending adjudication, and any concern regarding dissipation of assets can and should be addressed within the procedural framework of Order XXI CPC, rather than through collateral contempt proceedings.
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ix) The contempt case, insofar as it concerns to him, does not meet the essential elements required to invoke civil contempt jurisdiction under Section 2(b) and Section 12 of the Act. He contends that there is:-
• No order of the Court binding on him;
• No Undertaking given by him to any Court;
• No direction which he was legally bound to comply with;
• No willful and deliberate disobedience of any binding judicial act.
x) He contends that in the absence of these foundational elements, the present contempt proceedings against him cannot be sustained.
xi) He contends that the Petitioner has failed to seek or obtain leave of the Court under Section 15(2) of the Act 1971, for initiating contempt proceedings against a person not party to the proceedings in which the alleged Undertaking was made. Further, no prior notice was issued to him by the executing court or by the Court before which the 45 KL,J CC NO.1378_2024 Undertaking was allegedly recorded. Therefore, he contends that the present petition is procedurally defective and legally untenable.
xii) The entire basis for the Petitioner's claim is the docket order dated 01.05.2024 of the Commercial Court. Respondent No. 4 states that even a plain reading of the said docket reveals that it merely records the submissions of I Quest's counsel and does not record or accept any Undertaking binding on him. No injunctive relief was granted on that basis, and no directive was issued to any person restraining any transaction. Hence, even assuming that the transaction took place subsequently, it cannot amount to contempt of Court.
xiii) The Petitioner has not demonstrated any prejudice resulting from the alleged breach. The Petitioner did not press for injunctive relief before the Commercial Court, nor did it take steps to implead Matrix or Tianish in the execution proceedings. Instead, the Petitioner seeks to retroactively criminalize a transaction that was concluded between third parties with no demonstrated link to him. 46
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xiv) He contends that the petitioner is trying to cause serious reputational and professional harm to him by leveling baseless allegations against him. He contends that the contempt case has already received media attention and is being misused to tarnish his name in business circles. He therefore sought to take judicial notice of the weaponization of contempt jurisdiction and protect the dignity of individuals against such speculative proceedings.
xv) With the aforesaid contentions, he sought to dismiss the present contempt case.
8. ORIGIN AND JURISDICTION OF CONTEMPT PROCEEDINGS:
Before dwelling into the merits of the case, it is relevant to discuss about the contempt jurisdiction and its origin through multiple Case Laws of the Supreme Court as well as International Courts and also other aspects.
1. DEFINITION OF CONTEMPT:
i) Contempt of court, in its most essential form, denotes any act or omission that undermines the authority, dignity, or the orderly functioning of a court of law, or which obstructs the administration of 47 KL,J CC NO.1378_2024 justice. The Black's Law Dictionary defines it as "a willful disobedience to or disregard of a court order, or any act that is calculated to embarrass, hinder, or obstruct a court in the administration of justice."
ii) In India, the Contempt of Courts Act, 1971 categorizes contempt under two broad heads:
ii-a) Civil Contempt: Defined under Section 2(b) of the 1971 Act as "willful disobedience to any judgment, decree, direction, order, writ or other process of a court or willful breach of an Undertaking given to a court."
ii-b) Criminal Contempt: Defined under Section 2(c) as "the publication (whether by words, spoken or written, or by signs, or by visible representation, or otherwise) of any matter or the doing of any other act whatsoever which
(i) scandalizes or tends to scandalize, or lowers or tends to lower the authority of any court; or
(ii) prejudices, or interferes or tends to interfere with the due course of any judicial proceeding; or
(iii) Interferes or tends to interfere with, or obstructs or tends to obstruct, the administration of justice in any other manner."48
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iii) Further jurisprudential refinement is offered by Halsbury's Laws of England, which holds that contempt includes "any act done or writing published which is calculated to bring a court or a judge into contempt or to lower his authority or to interfere with the due course of justice or the lawful process of the court." However, it also recognizes that fair and temperate criticism made in good faith does not constitute contempt.
iv) Thus, the key element across jurisdictions is the intent to willfully disrupt, disrespect, or obstruct justice, subject to limits carved by constitutional freedoms.
2. HISTORICAL BACKGROUND OF CONTEMPT LAW:
i) The concept of contempt of court in India has evolved through a blend of indigenous traditions, colonial influences, and post-independence constitutional developments. Its trajectory reflects a gradual transition from monarchical absolutism to democratic accountability, albeit with persistent tensions between judicial authority and constitutional liberties.49
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ii) Historically, reverence for judicial institutions is embedded in ancient Indian thought. Kautilya's Arthashastra explicitly prescribed severe penalties for disrespecting the King's justice, viewing the administration of justice as a sacrosanct function of state. This early notion of judicial sanctity laid the foundational ethos for later legal systems.
iii) The modern Indian law on contempt derives primarily from the British legal system, formally introduced through the Charter of 1726, which established Mayor's Courts in the Presidency Towns of Bombay, Madras, and Calcutta. These courts, being courts of record, were vested with inherent powers to punish for contempt. The establishment of the Supreme Court of Judicature at Fort William in 1774, followed by similar courts in Bombay (1824) and Madras (1801), marked a significant consolidation of judicial authority. These courts were subsequently replaced by the High Court's under the Indian High Courts Act, 1861, all of which retained contempt powers as courts of record.
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iv) The first statutory codification of contempt law in India came with the Contempt of Courts Act, 1926, which empowered High Courts to punish for contempt of themselves and their subordinate courts. However, the Act was limited in scope it failed to address contempt by subordinate courts adequately and did not clarify the extraterritorial jurisdiction of High Courts, leading to inconsistent judicial interpretations.
v) To address these issues, the Act, was enacted, expanding the High Courts' jurisdiction, but it still lacked procedural safeguards and definitional clarity, especially regarding the balance between contempt powers and the freedom of the speech.
vi) Recognizing these deficiencies, the Government of India appointed the H.N. Sanyal Committee in 1961, to examine law and problems relating to contempt of Court in India, which submitted its report in 1963. The Committee's recommendations formed the basis of enacting /promulgating the Contempt of Courts Act, 1971, the current governing statute. This Act introduced a crucial distinction 51 KL,J CC NO.1378_2024 between civil contempt (willful disobedience of court orders) and criminal contempt (acts that scandalize or lower the authority of the court, interfere with judicial proceedings, or obstruct the administration of justice). Importantly, the 1971 Act attempts to strike a balance between the judiciary's authority and freedom of speech under Article 19(1)(a) of the Constitution.
vii) Over time, Indian courts have grappled with the need to preserve judicial dignity without encroaching on democratic values. Landmark cases illustrate this tension: in E.M.S. Namboodiripad v. T. Narayanan Nambiar 9, the Supreme Court took a strict view against political criticism of the judiciary, whereas in P.N. Duda v. P. Shiv Shankar 10, the Court adopted a more liberal stance, upholding robust criticism within democratic discourse.
viii) Thus, the historical development of contempt law in India showcases a complex interplay between inherited colonial doctrines, 9 AIR 1970 SUPREME COURT 2015 10 AIR 1988 SUPREME COURT 1208 52 KL,J CC NO.1378_2024 ancient reverence for judicial authority, and the evolving demands of a constitutional democracy.
3. INTERNATIONAL PERSPECTIVES:
i) The jurisdiction of courts to punish for contempt is a feature found in several legal systems across the world. While its core function preserving the authority, independence, and proper functioning of the judiciary remains universal, its scope, application, and theoretical justifications vary significantly across jurisdictions. A comparative study reveals a gradual shift from rigid, monarchical notions of contempt to more liberal, rights-based approaches in democratic countries.
ii) United Kingdom:
ii-a )The law of contempt in the UK evolved from the medieval doctrine of the "King's Justice," where courts represented the sovereign and any disrespect to judges was treated as an affront to royal authority. Over time, this concept was institutionalized into a common law power aimed at protecting the administration of justice rather than judicial dignity per se. The Act, 1971, codified much of 53 KL,J CC NO.1378_2024 the law and introduced essential reforms such as the requirement that media publications can only be penalized if they create a "substantial risk of serious prejudice" to a trial.
ii-b) The British courts distinguish between civil contempt (non-compliance with court orders) and criminal contempt (acts that interfere with the administration of justice). Judicial commentary, including that of Lord Denning and Lord Salmon, emphasized that contempt law should not be used to shield judges from criticism but to preserve justice. In practice, the offence of "scandalizing the court" has become obsolete in the UK, as liberal democratic norms encourage judicial accountability and open criticism.
iii) United States of America iii-a) In the United States, contempt jurisdiction derives from both common law tradition and constitutional principles. The American legal system clearly distinguishes between direct contempt (occurring in the court's presence) and indirect contempt (outside the courtroom). Furthermore, a constitutional safeguard is embedded through the First Amendment, which protects free speech. Thus, any 54 KL,J CC NO.1378_2024 restriction on expression must meet the "clear and present danger" test as enunciated in Schenck v. United States 11or the "clear and probable danger" test as seen in Dennis v. United States 12.
iii-b) The U.S. courts have strongly upheld procedural safeguards in contempt proceedings, especially in criminal contempt, including the right to trial by jury when punishment exceeds six months as held in Bloom v. Illinois 13.Courts have reiterated that contempt jurisdiction must not become a tool for suppressing legitimate dissent or public scrutiny of the judiciary. The modern American approach largely emphasizes due process, transparency, and proportionality in exercising contempt powers.
iv) Australia:
iv-a) Australia's approach is similar to that of the UK, rooted in common law but evolving toward liberal interpretations. Australian courts exercise contempt jurisdiction cautiously. Notably, in cases 11 249 U.S. 47 (1919) 12 341 U.S. 494 (1951) 13 391 U.S. 194 (1968) 55 KL,J CC NO.1378_2024 such as Attorney General for NSW v. Mundey 14, the judiciary has upheld that public interest and fair criticism of the court are not necessarily contemptuous unless they present a real and substantial risk to the administration of justice.
iv-b) The Australian High Court, especially in recent decades, has emphasized the importance of freedom of political communication as an implied constitutional right, which places constraints on the arbitrary exercise of contempt powers. Contempt for "scandalizing the court" is considered practically obsolete and only serious interference with judicial proceedings or clear disobedience to orders invites punishment.
iv-c) The international perspective reveals a global trend toward narrowing and rationalizing the contempt jurisdiction of courts, aligning it with democratic values, media freedom, and public accountability. Jurisdictions like the UK, USA, and Australia have consciously moved away from punitive and opaque contempt 14 2 NSWLR 887 56 KL,J CC NO.1378_2024 practices, while still preserving the core purpose of maintaining the sanctity of justice delivery.
4. JURISPRUDENCE ON CONTEMPT:-
i) The jurisprudence surrounding contempt of court in India has developed progressively, balancing the imperatives of judicial independence and the fundamental right to free speech and expression. It spans civil and criminal contempt, with emphasis on the intent, effect, and nature of disobedience or obstruction.
ii) Foundational Principles: -
ii-a) The seminal judgment in Brahma Prakash Sharma v. State of Uttar Pradesh15, laid down that contempt is not dependent on the actual obstruction caused but the tendency of an act to interfere with the due course of justice. The Court clarified that criticism of a judge does not amount to contempt unless it undermines public confidence in the judiciary.
15
AIR 1954 SUPREME COURT 10 57 KL,J CC NO.1378_2024 ii-b) In Re: P.C. Sen 16, the Supreme Court held that it is not necessary for actual interference to be proved; a "real and substantial tendency" is sufficient. This precedent set a lower threshold for attracting criminal contempt.
ii-c) More recently, in Re: Vijay Kurle & Ors 17., the Court held that truth is a valid defense only if it is bona fide and in public interest, thereby interpreting Section 13(b) of the 1971 Act narrowly to prevent abuse of free speech as a shield for vilification.
iii) Scope and Restraint iii-a) In Supreme Court Bar Association v. Union of India18, the Court held that contempt jurisdiction cannot be exercised in a manner that supplants other remedies or overrides statutory limitations. The punishment for contempt is not guided by rehabilitation or compensation, but by the need to preserve the dignity of the court. 16
1968 SCC OnLine SC 141 17 2021 13 SCC 549 18 AIR 1998 SUPREME COURT 1895 58 KL,J CC NO.1378_2024 iii-b) Further, in T. Sudhakar Prasad v. Govt. of A.P. 19, the Supreme Court underscored the inherent nature of contempt power under Articles 129 and 215, beyond the Contempt of Courts Act.
iii-c) In Dr. D.C. Saxena v. Hon'ble Chief Justice of India 20, the Supreme Court observed that personal vilification of judges is not permissible under the garb of fair criticism.
iv) Public Interest, Apology, and Discretion iv-a) In Hari Singh Nagra v. Kapil Sibal 21, the Supreme Court held that while an apology can purge contempt, it must be unconditional and genuine, and not a tactic to escape punishment.
iv-b) The jurisprudence consistently stresses that contempt power is a weapon not to be used for judicial ego, but only for maintaining justice and institutional credibility.
iv-c) As observed in Baradakanta Mishra v. Registrar of Orissa HC 22, the Supreme Court held as "The cornerstone of contempt law is the 19 (2001) 1 SCC 516, 20 (1996) 5 SCC 216 21 (2010) 7 SCC 502 59 KL,J CC NO.1378_2024 accommodation of two constitutional values: the right of free speech and the right to independent justice."
5. CONSTITUTIONAL VALIDITY OF CONTEMPT:
i) The power to punish for contempt of court is deeply embedded in the constitutional and legal framework of India. It is not a statutory innovation but a constitutional necessity to uphold the dignity, authority, and integrity of the judiciary. The Constitution of India, under Article 129, confers upon the Supreme Court the status of a "Court of Record" with inherent powers to punish for its own contempt. Likewise, Article 215 of the Constitution of India, vests similar powers in every High Court. These provisions clearly establish that the power to punish for contempt is not merely statutory but constitutionally derived and essential for the effective administration of justice.
ii) The Contempt of Courts Act, 1971 was enacted to codify and limit the powers of courts in punishing for contempt, while ensuring procedural safeguards. The Act distinguishes between civil 22 AIR 1974 SC 710 60 KL,J CC NO.1378_2024 contempt which involves willful disobedience to court orders and criminal contempt which encompasses acts that scandalize the court or interfere with the administration of justice. Despite the breadth of the definition, especially in criminal contempt, the Act includes vital safeguards, such as Sections 4 and 5, which protect fair and accurate reporting of court proceedings and fair criticism of judgments, respectively. These provisions reflect a conscious legislative attempt to reconcile the court's authority with the democratic values enshrined in the Constitution.
iii) From a constitutional standpoint, the Contempt of Courts Act has been tested primarily against Articles 14, 19, and 21 of the Constitution. It has been consistently upheld by the judiciary. Under Article 14, the law of contempt has been found to satisfy the test of reasonable classification.
iv) The more contentious challenge has been under Article 19(1)(a), which guarantees the freedom of speech and expression.
Critics argue that the offence of scandalizing the court under criminal 61 KL,J CC NO.1378_2024 contempt is vague and suppresses legitimate criticism of the judiciary. However, Article 19(2) specifically permits the State to impose "reasonable restrictions" on free speech in the interest of, inter alia, contempt of court.
v) In C.K. Daphtary v. O.P. Gupta 23, the Supreme Court held that the existing law of contempt imposes reasonable restrictions and is constitutionally valid.
vi) Similarly, in E.M.S. Namboodiripad (supra), the Court emphasized that the right to free speech cannot extend to lowering the authority of the judiciary or impairing the administration of justice.
vii) With respect to Article 21 of the Constitution of India, which guarantees the right to life and personal liberty, concerns have been raised regarding the summary nature of contempt proceedings. However, Indian courts have clarified that the procedure for contempt, as prescribed in the Act, satisfies the "procedure established by law"
requirement under Article 21 of the Constitution of India. 23
1971 AIR 1132 62 KL,J CC NO.1378_2024
viii) In State of Bombay v. Mr. P 24., it was held that the contempt law has statutory backing and incorporates adequate procedural safeguards, including notice, right to defend, and appeal.
The Contempt of Courts Act, 1971further supports this view through Section 14 (procedure for contempt in the face of court) and Section 19 (right of appeal), ensuring that the rights of alleged contemnors are not violated.
ix) Moreover, the Act expressly limits judicial discretion by prescribing a maximum punishment of six months' simple imprisonment or a fine of ₹2000, or both. It also permits discharge upon tendering an apology to the satisfaction of the court, as per Section 12. These features demonstrate that the law is neither arbitrary nor excessive, and is proportionate to the objective it seeks to achieve namely, preserving the dignity and authority of the judiciary.
x) In conclusion, the Act, 1971 does not offend the fundamental rights guaranteed under the Constitution. It stands on firm 24 AIR 1959 BOM 182 63 KL,J CC NO.1378_2024 constitutional footing under Articles 129 and 215 and is protected under Article 19(2) of the Constitution of India as a reasonable restriction on free speech. The law has been harmonized with constitutional values through procedural safeguards, limitations on punishment, and judicial pronouncements. Therefore, the contempt law, while not immune from criticism or reform, is constitutionally valid and continues to play a crucial role in safeguarding the rule of law and the majesty of the Indian judiciary.
6. RELEVANT NATIONAL AND INTERNATIONAL JUDGMENTS:
i) Indian courts have consistently emphasized the principle of justice, not judicial infallibility, as the foundation of contempt law.
The jurisprudence around contempt reflects this equilibrium between judicial dignity, functional efficacy, and public accountability.
ii) National Judgments ii-a)Delhi Judicial Service Association v. State of Gujarat25, the Supreme Court condemned the arrest and handcuffing of a judicial 25 (1991) 4SCC406 64 KL,J CC NO.1378_2024 magistrate and reaffirmed that contempt powers can be used to uphold the independence and dignity of the judiciary. It extended protection to judicial officers against executive high-handedness.
ii-b) In E.M.S. Namboodripad (supra),of the Supreme Court, the petitioner, a sitting Chief Minister, was held guilty of contempt for stating that courts protect capitalist interests. The Court ruled that even political speech must not scandalize courts.
ii-c) In Sukhdev Singh Sodhi v. Hon'ble C.J. S. Teja Singh26, the Apex Court reiterated that the power to punish for contempt is inherent in courts of record and is not dependent on statutory authorization.
ii-d) M.Y. Shareef v. Judges of the Nagpur High Court27, the Apex Court held that the Advocates filing petitions containing scandalous allegations against High Court judges were held guilty of 26 AIR 1954 SC 186 27 AIR 1955 SC 19 65 KL,J CC NO.1378_2024 contempt. The Court emphasized that lawyers, as officers of the court, are held to a higher standard of conduct.
ii-e) In Sudhir Vasudeva v. M. George Ravishekaran 28, the Apex Court clarified that contempt powers cannot be used for execution or enforcement of ambiguous orders. Where the original direction lacks clarity, contempt jurisdiction cannot be invoked.
ii-f) In Roshan Lal Ahuja v. State of Rajasthan29, the Apex Court laid down the principle that mere fair criticism of a judgment does not amount to contempt, unless it crosses into malicious vilification or scandalizing intent.
ii-g) In Dr. U.N. Bora, Excise Commissioner v. Assam Roller Flour Mills Association 30, theApex Court rejected the principle of vicarious liability in contempt proceedings. Unless direct knowledge and willful disobedience are established, a party cannot be held liable for another's actions.
28 (2014) 3 SCC 373 29 1992 Cri LJ 2520 30 (2021) 14 SCC 312 66 KL,J CC NO.1378_2024
iii) International Judgments:-
iii-a) R. v. Gray31, the Division Court of England & Wales, this case laid down the principle that scandalizing the court by suggesting bias or incompetence is criminal contempt, punishable to protect the court's authority.
iii-b) Attorney General v. Times Newspapers Ltd.32, the House of Lords upheld the rule against publication that posed a "real risk of prejudice" to pending proceedings. It highlighted the shift from "inherent power" to a "necessity-based" approach.
iii-c) Craig v. Harney 33, the U.S. Supreme Court struck down a contempt conviction, holding that free speech in a democracy must tolerate public criticism of the judiciary, unless there is a clear and present danger to the administration of justice. 31 [1900] 2 QB 36 (UK) 32 [1974] AC 273 33 331 US 367 (1947) (USA) 67 KL,J CC NO.1378_2024 iii-d) Sunday Times v. United Kingdom34The European Court of Human Rights ruled that contempt laws must not violate Article 10 (freedom of expression) unless they pursue a legitimate aim and are necessary in a democratic society.
7. SCOPE OF CIVIL CONTEMPT:
i) Civil contempt, governed by Section 2(b) of the Contempt of Courts Act, 1971, refers to willful disobedience of court orders or undertakings. Its primary object is compliance, not punishment. The act must be deliberate, conscious, and defiant to constitute contempt.
ii) Key Judicial Clarifications:
ii-a) Niaz Mohammad v. State of Haryana 35, the Apex Court held that willful disobedience is essential; mere inaction or administrative delays without intent do not attract contempt.
ii-b) Ashok Paper Kamgar Union v. Dharam Godha 36, the Apex Court distinguished between inability and unwillingness. Civil contempt is made out only where there is a clear finding of willful disregard.
34 (1979) 2 EHRR 245 (ECHR) 35 (1994) 6 SCC 332, 36 (2003) 11 SCC 1 68 KL,J CC NO.1378_2024 ii-c) Balwantrai Bhandari v. Hiralal Contractor 37The supreme court held that breach of an Undertaking amounts to civil contempt when the Undertaking has been relied upon by the court in disposing the matter.
ii-d) C. Elumalai v. A.G.L. Irudayaraj38 Supreme court observed that innocent breach or misunderstanding may not warrant contempt.
ii-e) Babu Ram Gupta v. Sudhir Bhasin 39, the Apex Court held that compromise agreements, unless recorded as undertakings, do not automatically constitute enforceable contempt grounds.
8. JURISDICTION OF THE HIGH COURT IN CONTEMPT PROCEEDINGS:
i) Constitutional and Statutory Foundations i-a) Article 215 of the Constitution of India, declares every High Court a court of record with the power to punish for contempt of itself.
i-b) Section 10 of the Contempt of Courts Act, 1971 extends this jurisdiction to cover contempt of subordinate courts, except where such contempt can be dealt with under the CrPC. 37 AIR 1968 SC 1413 38 AIR 2009 SC 2214 39 AIR 1980 SC 1528 69 KL,J CC NO.1378_2024 i-c) In Sukhdev Singh Sodhi (supra), it was held by the Apex Court that these powers are inherent, independent of statute, and cannot be abrogated even by legislation.
ii) Contempt of Subordinate Courts- In T. Sudhakar Prasad (supra) the Supreme Court held that High Courts can take cognizance of contempt against any subordinate court within its territorial jurisdiction, even if no reference is made by such court.
iii) Procedural and Temporal Limits iii-a) Under Section 20 of the Act, 1971, no contempt proceeding can be initiated after one year from the alleged act of contempt. iii-b) However, in Pallav Sheth v. Custodian40, it was held that the limitation applies only to initiation of proceedings, and not to their conclusion.
iii-c) Recent judgments such as S. Tirupathi Rao v. M. Lingamaiah41 have reaffirmed that strict adherence to limitation under Section 20 is mandatory, and the doctrine of continuing wrong cannot override statutory timelines.
40
(2001) 7 SCC 549 41 2024 INSC 544 70 KL,J CC NO.1378_2024 iii-d) In Rajan Chadha v. Sanjay Arora 42, the Delhi High Court held that once a coordinate bench has taken a view on contempt, a fresh bench cannot re-open the matter unless there is a jurisdictional error. CASE LAWS CITED AND FINDINGS:
9. This Court has meticulously examined the scope, purpose, and constitutional underpinnings of contempt jurisdiction in India. Upon a comprehensive evaluation of statutory texts, historical context, judicial pronouncements, and comparative legal developments, certain clear observations emerge, which are foundational to both the legitimacy and restraint of this extraordinary jurisdiction.
10. Having examined the submissions and material placed on record, this Court now proceeds to crystallize its findings on the core issues arising in the present contempt proceedings. For clarity and completeness, the conclusions are arranged under distinct heads addressing the scope and nature of contempt jurisdiction, the nature of the alleged undertaking, the maintainability and prematurity of the 42 2025 INSC 546 71 KL,J CC NO.1378_2024 petition, and the factual disputes involved. The issue-wise findings are set out hereunder.
SCOPE AND NATURE OF CONTEMPT JURISDICTION:
11. It is evident that the power to punish for contempt, whether civil or criminal is an essential facet of the Court's authority to ensure compliance with its orders and to preserve the sanctity and dignity of the judicial process. This power flows not merely from the Contempt of Courts Act, 1971, but from the Constitution of India itself Articles 129 and 215 being declaratory of the Court's status as a Court of Record, thereby acknowledging its inherent powers.
12. However, such power, though plenary in form, is not unbridled. The judicial consensus, both within and beyond Indian borders, affirms that the power to punish for contempt must be invoked with circumspection, not caprice; with resolve, not resentment. As emphasized in multiple binding authorities, the objective is not to vindicate the individual prestige of a judge, but to uphold the majesty of the judicial institution as the sentinel of constitutional governance.
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13. The Court further notes that freedom of speech and expression, a fundamental right guaranteed under Article 19(1) (a) of the Constitution of India, is not subordinate to judicial sensitivities. While scandalizing the court or obstruction of justice may justify curtailment under Article 19(2) of the Constitution of India, legitimate criticism tempered with decency, objectivity, and public interest must not be gagged in the name of contempt. Judicial accountability, like all constitutional functionaries, flows from informed public discourse, and must not be conflated with defamatory expression.
14. With respect to procedural safeguards, the Court underscores the quasi-criminal nature of contempt proceedings. The principles of natural justice, including the right to notice, opportunity of defense, and burden of proof resting upon the initiator, must be scrupulously observed. Contempt, though summary in procedure, is never summary in justice.
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15. The Hon'ble Supreme Court in Amit Kumar Das v. Shrimati Hutheesingh Tagore Charitable Trust 43, has expounded the doctrinal limits within which contempt jurisdiction may be exercised under Article 215 of the Constitution read with the Act, 1971. The Court, while interpreting the scope of Section 2(b) of the Act, 1971 held that the power to punish for contempt is corrective, not appellate, and that a High Court, while adjudicating an alleged violation, cannot traverse beyond the four corners of the order whose breach is complained of. It observed that although a Court retains inherent authority to issue restitutive or remedial directions to ensure that a contemnor does not continue to enjoy the fruits of his disobedience, such directions cannot assume the character of a review, modification, or vacation of the original order itself. The jurisdiction in contempt must, therefore, be confined to enforcing compliance, not to rewriting or revisiting the substantive merits of the order.
16. Section 2(b) of the Act of 1971 is relevant and the same is extracted below:-
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2. Definitions. --In this Act, unless the context otherwise requires
(b) "civil contempt" means wilful disobedience to any judgment, decree, direction, order, writ or other process of a court or wilful breach of an undertaking given to a court;
17. The Supreme Court in Amit Kumar Das (supra) also circumscribed the use of contempt jurisdiction to ensure that it does not become a parallel appellate forum. The two decisions, when read conjointly, delineate the boundary between judicial enforcement and judicial overreach affirming that restoration of status quo or preservation of assets is legitimate, but substantive alteration of an existing order under the guise of contempt is impermissible.
18. The Division Bench of the High Court of Andhra Pradesh in 3I Infraprojects (Mauritius) Ltd. v. Navayuga Engineering Company Ltd44., was confronted with the allegations of alienation of substantial assets in defiance of interim orders passed under Section 9 of the Arbitration and Conciliation Act, 1996. It was found that the respondents had alienated their valuable holdings in Dhola and 44 CC No. 793 of 2016 dated 09 December 2016 75 KL,J CC NO.1378_2024 Dibang projects despite an Undertaking not to alienate assets "except in the usual course of business." The Court held that such conduct was not bona fide and that if there had been genuine necessity to deal with those assets, prior permission of the Court ought to have been obtained. Consequently, the Bench deleted the liberty granted by the earlier order and directed the respondents not to deal with any assets, directly or indirectly, pending adjudication of the main application
19. This decision exemplifies the preventive and protective dimension of judicial authority, while the Court in 3I Infraprojects (supra) exercised its inherent jurisdiction within the same proceedings to preserve the subject matter and enforce discipline upon parties.
20. In Jhareswar Prasad Paul (supra), the Supreme Court observed that no one is immune from the reach of contempt if the act undermines the authority of law. The Court clarified that the jurisdiction under Articles 129 and 215 of the constitution of India is not circumscribed by status or office; even judicial officers or quasi- judicial bodies are liable where they exhibit deliberate disregard of 76 KL,J CC NO.1378_2024 binding orders. The guiding test is whether the conduct in question impairs the administration of justice or erodes public faith in the judiciary, and not merely whether it disobeys a procedural direction.
21. Relevant paragraph is extracted below:-
11. A reference has then been made to Air India Statutory Corpn. v. United Labour Union [(1997) 9 SCC 377 : 1997 SCC (L&S) 1344] , a decision of a three-Judge Bench. It has been held that the industry carried on by Air India under authority of the Central Government would involve public law element even though its activity may be commercial in nature. It was held that Air India was being run by the Airports Authority of India of the Central Government and there was an element of deep and pervasive governmental control. Initially it was a statutory authority under the International Airports Authority of India Act, 1971. Later it was amalgamated with the National Airports Authority and thereafter it is constituted as a company under the Companies Act. In that context, it has been held, if the company is run wholly or partially by the share capital floated from public exchequer, it gives indication of its control by the appropriate Government. On consideration of a number of decisions on the point, the Court found the following principles which may be considered, for coming to a conclusion whether any public element is involved or not. Para 26 of the decision reads as under: (SCC pp. 409-10) "26. (1) The constitution of the corporation or instrumentality or agency or corporation aggregate or corporation sole is not of sole material relevance to decide whether it is by or under the control of the appropriate Government under the Act.
(2) If it is a statutory corporation, it is an instrumentality or agency of the State. If it is a company owned wholly or partially by a share capital, floated from public exchequer, it 77 KL,J CC NO.1378_2024 gives indicia that it is controlled by or under the authority of the appropriate Government.
(3) In commercial activities carried on by a corporation established by or under the control of the appropriate Government having protection under Articles 14 and 19(2), it is an instrumentality or agency of the State.
(4) The State is a service corporation. It acts through its instrumentalities, agencies or persons -- natural or juridical.
(5) The governing power, wherever located, must be subject to the fundamental constitutional limitations and abide by the principles laid in the directive principles.
(6) The framework of service regulations made in the appropriate rules or regulations should be consistent with and subject to the same public law, principles and limitations.
(7) Though the instrumentality, agency or person conducts commercial activities according to business principles and are separately accountable under their appropriate bye-laws or memorandum of association, they become the arm of the Government.
(8) The existence of deep and pervasive State control depends upon the facts and circumstances in a given situation and in the altered situation it is not the sole criterion to decide whether the agency or instrumentality or persons is by or under the control of the appropriate Government.
(9) Functions of an instrumentality, agency or person are of public importance following public interest element.
(10) The instrumentality, agency or person must have an element of authority or ability to effect the relations with its employees or public by virtue of power vested in it by law, memorandum of association or bye-laws or articles of association.
(11) The instrumentality, agency or person renders an element of public service and is accountable to health and strength of the workers, men and women, adequate means of livelihood, the security for payment of living wages, reasonable conditions of work, decent standard of life and opportunity to enjoy full leisure and social and cultural activities to the workmen.
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KL,J CC NO.1378_2024 (12) Every action of the public authority, agency or instrumentality or the person acting in public interest or any act that gives rise to public element should be guided by public interest in exercise of public power or action hedged with public element and is open to challenge. It must meet the test of reasonableness, fairness and justness.
(13) If the exercise of the power is arbitrary, unjust and unfair, the public authority, instrumentality, agency or the person acting in public interest, though in the field of private law, is not free to prescribe any unconstitutional conditions or limitations in their actions."
One of the important factors to be considered is, if it is a statutory corporation, an instrumentality or agency of the State or a company owned wholly or partially by a share capital floated from public exchequer, it gives indicia that it is controlled by and under the authority of the appropriate Government. We find that it is this factor which brings in the public element. Para 61 of the judgment reads: (SCC pp. 436-37) "61. The legal right of an individual may be founded upon a contract or a statute or an instrument having the force of law. For a public law remedy enforceable under Article 226 of the Constitution, the action of the authority needs to fall in the realm of public law -- be it a legislative act of the State, an executive act of the State or an instrumentality or a person or authority imbued with public law element. The question requires to be determined in each case. However, it may not be possible to generalise the nature of the action which would come either under public law remedy or private law field nor is it desirable to give exhaustive list of such actions. ... The distinction between public law and private law remedy has now become thin and practically obliterated."
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22. The Full Bench of the Madras High Court in Vidya Charan Shukla v. Tamil Nadu Olympic Association45, exhaustively analyzed the scope of contempt under Articles 215 and 129 of the Constitution of India and held that the High Court's contempt power, being incident to a Court of Record, extends not only to parties but also to strangers or third parties who, with notice or knowledge of an order, aid, abet, or otherwise obstruct its enforcement. The Court clarified that while an injunction primarily binds the parties to the lis, any person knowingly assisting in its breach commits contempt. This pronouncement firmly establishes that obedience to judicial orders is not limited to formal parties but attaches to all who knowingly frustrate their implementation.
23. In In re P.C. Sen (supra), the Supreme Court laid down the classical test for contempt by publication. At paragraph 8, it held that any act or writing calculated to interfere with or tend to interfere with the due course of justice amounts to contempt, irrespective of intention. The focus, the Court declared, is on the tendency of the act 45 [(1991) 2 LW 295] 80 KL,J CC NO.1378_2024 to obstruct administration of justice, not on the contemnor's motive. Reinforcing this principle, the Court concluded that the dignity and authority of courts must remain inviolate, and no person, however high, may take upon himself to vindicate his conduct while the same issue is sub judice. Such behavior, though explained as administrative defense, corrodes the impartiality of justice and is punishable as contempt.
24. This Court is conscious of the limits that circumscribe the exercise of its contempt jurisdiction. As elucidated by Delhi High court in Morgan Ventures Limited v. NEPC India Limited & Ors 46, while the High Court's powers under Article 215 of the Constitution are wide and plenary in enforcing its orders, they are not appellate in nature. The contempt forum is not a venue for re- adjudicating factual controversies or for interpreting the original order as though sitting in appeal. The Court's inquiry must remain confined to determining whether the order or Undertaking was clear, 46 (2024 SCC OnLine Del 5604), 81 KL,J CC NO.1378_2024 unequivocal, and binding, and whether its breach was willful and contumacious.
25.The Supreme Court in R.N. Dey v. Bhagyabati Pramanik47 underscored that the contempt jurisdiction is a weapon to preserve the dignity of the court and the majesty of law, not a substitute for ordinary execution or enforcement mechanisms. It was emphatically held that contempt should not be invoked in abundance or as a coercive tool to compel compliance where the law provides an efficacious alternative remedy for enforcement of decrees or orders. The exercise of this extraordinary power is discretionary and must be confined to cases of willful and deliberate disobedience that strike at the authority of the court. An aggrieved litigant cannot claim contempt as of right, for the proceeding is one between the court and the alleged contemnor, and not a mode of private redress. Where no conscious or obstinate defiance of a judicial order is established, initiation of contempt proceedings amounts to misuse of jurisdiction. This principle delineates the limited scope of contempt jurisdiction, which 47 2000 (4) SCC 400 82 KL,J CC NO.1378_2024 cannot be expanded to achieve outcomes that properly fall within the domain of execution or appellate review.
26. Relevant paragraph of said judgment is extracted below: -
7. We may reiterate that weapon of contempt is not to be used in abundance or misused. Normally, it cannot be used for execution of the decree or implementation of an order for which alternative remedy in law is provided for. Discretion given to the Court is to be exercised for maintenance of Courts dignity and majesty of law. Further, an aggrieved party has no right to insist that Court should exercise such jurisdiction as contempt is between a contemnor and the Court. It is true that in the present case, the High Court has kept the matter pending and has ordered that it should be heard along with the First Appeal. But, at the same time, it is to be noticed that under the coercion of contempt proceeding, appellants cannot be directed to pay the compensation amount which they are disputing by asserting that claimants were not the owners of the property in question and that decree was obtained by suppressing the material fact and by fraud. Even presuming that claimants are entitled to recover the amount of compensation as awarded by the trial court as no stay order is granted by the High Court, at the most they are entitled to recover the same by executing the said award wherein the State can or may contend that the award is nullity. In such a situation, as there was no willful or deliberate disobedience of the order, the initiation of contempt proceedings was wholly unjustified. 83
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27. It is also apt to note that IQuest has entered into the 'Mudhra transaction' as part of the Term Fee Obligation and according to R1 the said agreement was not acted upon. The record clearly reveals that there are several disputes on the factual aspect which are serious in nature and go to the root of the controversy. These include, inter alia, (i) the very existence, validity and operative effect of the so- called Mudhra agreement; (ii) the manner in which the Term Fee Obligation was proposed to be structured and whether such obligation was ever crystallized; (iii) the extent of involvement, if any, of the various Respondents in the said transaction; (iv) the question whether the alleged steps taken by corporate entities were independent commercial decisions or part of the same integrated transaction; and
(v) the disputed issue as to whether any part of the transaction was voluntarily abandoned or superseded by subsequent negotiations. The said serious disputed factual aspects cannot be considered in the present contempt case, the said principle was also laid down by Patna High Court in Anand Mohan Saran v. State of Bihar 48, wherein it 48 2018 SCC OnLine Pat 2035 84 KL,J CC NO.1378_2024 was observed that the contempt jurisdiction is limited to enforcing clear and undisputed judicial directions and cannot be invoked for examining or adjudicating disputed factual issues or contractual controversies which fall within the province of the trial or executing court.
28. Thus, the petitioner is seeking adjudication of several factual disputes which are serious in nature in the present case which is impermissible in law.
29. This Court therefore holds, in alignment with Amit Kumar Das, Celir LLP, Vidya Charan Shukla and T.C. Gupta (supra), that the contempt jurisdiction is remedial and preservative, designed to ensure obedience, restore the rule of law, and maintain institutional authority. It extends to all who knowingly facilitate disobedience but must remain faithful to the jurisdictional discipline that precludes the Court from functioning as an appellate authority on facts.
30. This Court has, upon careful evaluation of the pleadings, counter affidavits, and extensive oral submissions advanced by the 85 KL,J CC NO.1378_2024 learned counsel for the parties, as well as upon a comprehensive analysis of the applicable legal principles enunciated in authoritative precedents, reached the considered conclusion that the present contempt petition, does not merit invocation of this Court's contempt jurisdiction in the peculiar facts and circumstances of the case.
31. It is no doubt true that Section 2(b) of the Act, 1971, empowers this Court to take cognizance of any willful disobedience of an order or Undertaking given to a court. However, it is equally well- settled that such jurisdiction is to be exercised with great circumspection and restraint.
32. In view of the above, though the High Court's jurisdiction under Article 215 of the Constitution of India, is broad enough to enforce compliance, it is not so wide as to permit reassessment of factual or interpretative issues underlying the original proceedings. 86
KL,J CC NO.1378_2024 MAINTAINABILITY AND PREMATURITY OF THE CONTEMPT PETITION:
33. The jurisprudence on civil contempt in particular has stressed that willful disobedience is the sine qua non for attracting liability. It is not every instance of non-compliance that constitutes contempt, but only such defiance which is deliberate, conscious, and in the teeth of a judicial mandate. Courts must be alive to administrative constraints, bona fide disputes, or interpretational ambiguities, before invoking coercive powers under the Act.
34. To punish contemnor in terms of Section 10 and 12 of the Act, 1971, there should be willful and deliberate disobedience of an order/Undertaking. Mere allegation of violation of an Undertaking or an order is not sufficient. The party which alleges disobedience has to prove that the same is willful and deliberate. The said principle was also laid down by three Judge Bench of Apex Court in Niaz Mahammad (supra)and the judgment dated 06th September, 2023 in Balwantbhai Somabhai Bhandari (supra).
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35. In M/s Chithra Woods Manor Welfare Association v. Shaji Augustine49, the hon'ble supreme court clarified that deliberate and persistent non-compliance with directions of the Supreme Court, despite repeated opportunities, constitutes willful disobedience within the meaning of Section 2(b) of the Act, 1971. The Court held that where an order requires periodic monetary compliance in that case, payment of arrears of license fees in six installments pursuant to an earlier interim order continued default, even after enjoyment of the property and knowledge of the order, evinces a conscious and contumacious disregard of judicial authority.
36. In Dilip Kumar Ghosh v. Tata Consultancy Services 50, the Bombay High Court delineated that a pleading must disclose a clear cause of action and direct nexus between the acts complained of and the party impleaded. It was observed that stray correspondence or moral expectation cannot translate into a legal duty enforceable through coercive process. The plaint must exhibit substantive 49 2025 INSC 567 50 Suit no 1912 of 2004 dated 4th August 2008 88 KL,J CC NO.1378_2024 engagement of the defendant with the impugned act; mere invocation of "good offices" or sympathy cannot ground liability. The Court also held that personal liability must be clearly established, and where the conduct complained of is corporate or institutional in nature, it cannot automatically be imputed to an individual unless evidence shows deliberate participation. This principle resonates within contempt jurisprudence that sanction lies only where there is a clear, direct, and intentional violation of a judicial mandate.
37. In T.C. Gupta (supra), the Supreme Court drew a clear line between judicial error and deliberate disobedience. The Court explained that inadvertent or bona-fide acts of omission, even if technically inconsistent with an order, do not attract contempt; it is only persistent, knowing defiance that invites the Court's coercive jurisdiction. The decision anchors the requirement of mens rea in civil contempt.
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38. In Celir LLP v. Sumati Prasad Bafna & Ors 51., the Supreme Court undertook an exhaustive analysis of post-judgment acts undermining final orders under Articles 129 and 142(2) of the Constitution. At paragraph 199, the Court held that the initiation of parallel proceedings before multiple fora, seeking to nullify or dilute the effect of a final judgment of the Supreme Court, amounts to abuse of process and constitutes contempt in both letter and spirit. The Court observed that deliberate resort to collateral challenges after a matter has attained finality is an affront to the authority of law, attracting the Henderson principle against re-litigation.
39. In Suman Chadha (supra), the Court reiterated that every litigant owes a duty of utmost candour and fairness to the Court. It was observed that a party cannot "speak in two voices" before judicial fora profiting from one statement and disowning it in another. The Court held that such conduct constitutes an abuse of process, striking at the purity of judicial proceedings, and warrants corrective action under the Court's inherent and contempt powers. The judgment 51 2024 INSC 978, 90 KL,J CC NO.1378_2024 emphasizes that good faith is the lifeblood of litigation; suppression or distortion of material facts is itself a species of contempt.
40. In Sanjay Mishrimal Punamiya v. Sheikhah Fadiah Saad Al Abdulla Al Sabah 52, the Division Bench underscored the necessity of authentic pleadings and proper verification, it was held that verification under Order VI Rule 15 CPC is not an idle ritual; it assures the Court that the pleadings are sworn to by a person having personal knowledge of the facts. Defective or false verification undermines the foundation of the judicial process and may render proceedings voidable. The Court observed that truth in pleadings is as essential to justice as obedience to orders, since both uphold the sanctity of judicial determination
41. In State of Bombay v. Purshottam Jog Naik53, Supreme Court, observed at paragraphs 18 and 19 that the signature and verification of pleadings are substantive requirements of law, not mere formalities. The Court held that verification must be made by a person 52 (2022 BHC-OS 1870-DB) 53 1952 2 SCC 14 91 KL,J CC NO.1378_2024 acquainted with the facts; otherwise, the plaint is defective and cannot be treated as a valid institution of a suit. The ratio reinforces that an affidavit or verification by an unacquainted or unauthorized person has no evidentiary worth, thereby corroding the integrity of judicial record.
42. The Supreme Court in KK Ahuja v. V.K. Vora & Anr. 54, clarified that a company, being a juristic entity, acts only through natural persons, and liability can be fastened on its directors or officers only when it is specifically shown that they were in charge of and responsible for the conduct of its business at the relevant time. Mere designation or familial association does not establish culpability. Applied to the present case, the ratio reinforces that Respondents Nos. 2 to 4 cannot be held vicariously liable for any alleged acts of IQuest Enterprises in the absence of clear and specific evidence showing that they were actively managing, controlling, or directing its affairs in relation to the impugned transaction. Without such material, extension 54 (2009) 10 SCC 48 92 KL,J CC NO.1378_2024 of liability or invocation of contempt jurisdiction against them would be unwarranted.
43. It was reiterated in Ram Kishan v. Tarun Bajaj 55 that willful disobedience presupposes knowledge of the order and deliberate defiance. Mere failure or negligence cannot amount to contempt. The element of mens rea is integral; the contemnor must have consciously violated the order or acted in a manner plainly inconsistent with obedience
44. The Court in K. Srikant Singh v. North East Securities Ltd 56., explained that criminal liability cannot be automatically attributed to every director or officer. A person who was not in charge of the company at the material time cannot be prosecuted merely because of his past association. Liability under Section 141 NI Act arises only when the accused had direct control over the conduct of business and participated in the transaction leading to the offence. 55
2014 16 SCC 204 56 (2007) 12 SCC 788 93 KL,J CC NO.1378_2024
45. The Supreme Court in National Small Industries Corporation Ltd. v. Harmeet Singh Paintal & Anr 57., formulated authoritative principles for invoking vicarious criminal liability:
(1) the complainant must specifically aver that the accused was in charge of and responsible for the conduct of business at the relevant time; (2) such averment is not a mere ritual but a substantive condition precedent; (3) a director or officer cannot be made liable solely by virtue of position unless it is shown that he was the guiding mind of the company's affairs; and (4) the burden on the complainant is higher when the person arrayed is not a signatory to the cheque or direct participant. These guidelines underscore that the law does not countenance automatic or presumptive prosecution of corporate officials.
46. The Court restated in Shiv Kumar Jatia v. State (NCT of Delhi)58, that the doctrine of attribution applies to determine when the intent or act of a company's officer may be deemed that of the 57 (2010) 3 SCC 330 58 (2019) 17 SCC 193 94 KL,J CC NO.1378_2024 company itself. The controlling mind principal predicates liability upon active participation and knowledge. It was held that the criminal law must distinguish between personal culpability of officers and corporate liability of the company. Merely being a director or managing personnel does not make one vicariously liable unless the statutory conditions are fulfilled. The Court cautioned that corporate officers cannot be subjected to prosecution in the absence of direct involvement, lest the criminal process become an instrument of harassment.
47. The Supreme Court in HDFC Securities Ltd. v. State of Maharashtra59, examined the ambit of Section 141 NI Act and held that the complaint must contain explicit statements demonstrating how each accused was responsible for day-to-day conduct of business. Merely being part of the Board or occupying a senior position is insufficient.
48. The Court observed that vicarious liability being an exception to criminal jurisprudence must receive strict construction. 59
(2017) 1 SCC 640 95 KL,J CC NO.1378_2024 The legislative intent is to punish only those who had knowledge and control over the transaction; others cannot be implicated on presumptions or corporate hierarchy alone.
49. In Maksud Saiyed v. State of Gujarat60, the Supreme Court held that before a Magistrate takes cognizance of an offence alleged against directors or officers of a company, there must be specific averments in the complaint indicating how and in what manner each accused was personally responsible for the conduct of business or the commission of the act complained of. The Court clarified that the doctrine of vicarious liability in criminal law does not arise by implication but only by express legislative provision. Hence, merely because a person holds a managerial position or is described as a director, he cannot automatically be presumed liable. The complaint must disclose sufficient factual particulars connecting the accused with the offence so as to justify issuance of process. The ruling underscores that judicial cognizance cannot rest on bald, 60 (2008) 5 SCC 668 96 KL,J CC NO.1378_2024 omnibus allegations, but must be grounded in precise attribution of acts or omissions.
50.Ravindranath Bajpe v. Mangalore SEZ Ltd 61., Reiterating Maksud Saiyed (supra), the Supreme Court observed that when criminal prosecution is sought to be launched against corporate officers, the complaint must contain clear, specific and unambiguous allegations of their role in the transaction in question. It was held that sweeping statements that "all directors were involved" are insufficient. Courts must scrutinize the complaint at the threshold to determine whether the basic ingredients of vicarious liability are made out. In the absence of such foundational averments, continuation of proceedings amounts to abuse of process. The Court emphasized that judicial process should not be used as a weapon of harassment against corporate functionaries who are not shown to have any personal culpability.
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51) Respondents also contended that the absence of reference from Advocate General rendered this petition non-maintainable under Section 15(2) of the Act and Rule 5 of the Andhra Pradesh High Court Rules, this Court must clarify the distinction between civil and criminal contempt. As held in Sahdeo(supra)., prior sanction of the Advocate General or a reference by the subordinate court is required only for criminal contempt and not for civil contempt, which is premised on the aggrieved party's direct grievance of willful disobedience. Therefore, notwithstanding the procedural objection, this Court finds the present petition, being one in the nature of civil contempt, to be legally maintainable.
Maintainability of contempt against 3rd party:-
52. It is also apt to note that the petitioner herein has filed I.A.Nos.11 and 12 of 2025 in the present contempt case to implead respondent Nos.5 and 6. Vide order dated 02.05.2025, this Court allowed both the said applications. Assailing the said order, respondent Nos.5 and 6 preferred an appeal vide LPA No.3 of 2025. 98
KL,J CC NO.1378_2024 Vide order dated 20.06.2025, Division Bench granted interim suspension of the said order and however, clarified that this Court can proceed the Contempt Case against respondent Nos.1 to 4. The said appeal is pending and the said interim order is subsisting.
53. In light of the legal position laid down by the Full Bench of the Madras High Court in Vidya Charan Shukla (supra), it is now well settled that third parties or strangers to a proceeding may also be held liable for contempt, provided certain conditions are met. The Courts have clarified that although an order or injunction is ordinarily enforceable only against the parties to the proceeding, a third party who has notice or knowledge of such an order and either aids, abets, or otherwise obstructs its enforcement can be proceeded against for contempt. This principal stems from the foundational requirement to uphold the dignity and efficacy of judicial orders, which would otherwise be rendered illusory.
54. Paragraph No.52 is relevant and the same is extracted below: -
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52. One important aspect of the case since there has been some arguments before us about it is, can it be said that for a breach of the injunction by a party or a stranger for aiding or abetting the breach alone, the Court's inherent power can be exercised and not in a case of a third party, who had the knowledge of the order, but decided to violate it, who may be guilty of obstructing the administration of justice, still, will not be subject to any restitution order? This we feel needs no detailed discussion. No person can obstruct the path of justice. No one can escape by committing a gross and violent obstruction to the implementation of the order/direction of the Court. The only question relevant in such a situation will be, whether the right which such a person has pleaded has been acquired by the violation of the order or had existed in him independently unaffected by the injunction. There can be no other law than one stated above that no person should be allowed to reap the benefits of a wrong done by him and thus whether he is guilty of civil contempt or criminal contempt, the wrongdoer can always be subjected to the inherent jurisdiction of the Court, which is not different for civil or criminal contempt.
Whether it is a civil contempt or a criminal contempt, it is a contempt of Court and the disobedience of the order in any case is an obstruction in the administration of justice. It has, been urged, however, that any order of restitution or restoration of the status quo ante by the order of the court should be as a consequence of the commission of the breach having been established. Reference has been made to certain procedure adopted by Courts in England that where judgments or orders of the Court are disobeyed, they are enforced by writ of sequestration or an order of committal. This however should not detain us beyond stating that even if it is assumed that the Court shall make an order of restitution or restoration of the status quo ante as a consequence of the finding of guilt of disobedience, if there can be such a power, there can always be ancillary to it the power to make an interim order to the said effect subject to the final determination of the case. 100
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55. Importantly, liability of a third party may arise in two distinct circumstances: if the third party has aided or abetted the violation (civil contempt), or if he has knowingly interfered with or obstructed the administration of justice (criminal contempt), held that even where such parties were not formally part of the litigation, the court retains the power to restore the status quo ante and undo the consequences of the contempt.
56. It is a settled principle that even non-parties may be held liable for contempt where it is affirmatively shown that they had actual and conscious knowledge of a subsisting court order or undertaking and nevertheless acted in willful defiance thereof. However, in the present case, the evidentiary threshold for such liability remains unmet. The petitioner has failed to place on record any cogent material demonstrating that Respondents No. 2 to 4 possessed direct knowledge of any binding judicial undertaking, or that they consciously participated in, facilitated, or procured its breach. In the absence of clear proof establishing privity, intention, or 101 KL,J CC NO.1378_2024 active participation, the extension of contempt jurisdiction to these respondents would be legally unsustainable.
57. In light of these principles, the Petitioner's reliance on interlocking directorships and family connections falls short of the threshold necessary to establish contemptuous privity or complicity on part of the Respondents 2 to 4.
58. In Balwant Bai Sombhai Bhandari (supra), the Court considered the evidentiary value of third-party statements in contempt and related proceedings. It was held that while statements of third parties may assist in corroboration, they cannot exonerate a contemnor whose own conduct manifests participation in the act complained of. The Court noted that a contemnor cannot shelter behind agency or intermediary communication, and that a third-party assertion unless amounting to an independent legal act does not displace the primary responsibility of compliance resting upon the party bound by the order. The ruling emphasizes that contempt is a personal act of 102 KL,J CC NO.1378_2024 defiance, and the Court must pierce the veil of proxy conduct to ascertain real intent and control behind the disobedience
59. It is apt to note that respondents have contended that the present contempt case is not maintainable as discussed supra, petitioner has filed the aforesaid CEA Nos.156, 157 and 158 of 2023. The said applications are pending. Pleadings are completed in the said applications. Thus, Respondent No.1 was not even impleaded as party to CEP No.19 of 2023. It is for the Commercial Court to consider the said three applications and decide on merits. Petitioner, instead of pursuing the said applications, filed the present contempt case alleging willful and deliberate disobedience of the aforesaid Undertaking.
60. Thus, this Court is of the considered view that the present contempt proceedings are premature in nature. The alleged acts of disobedience arise out of interlocutory matters pending adjudication before the Commercial Court in CEP No. 19 of 2023, wherein CEA Nos. 156, 157 and 158 of 2023, seeking injunction, impleadment, and inclusion of assets, are yet to be decided on merits. Until the executing court determines those applications and records specific findings 103 KL,J CC NO.1378_2024 regarding the existence or breach of any enforceable order or undertaking, the foundation for invoking contempt jurisdiction remains unsubstantiated. Contempt cannot be employed to pre-empt or influence the adjudication of pending issues or to secure reliefs that are the subject of the execution proceedings themselves. In the absence of a concluded order or clear finding of willful disobedience, the initiation of contempt proceedings at this stage is clearly premature and legally untenable.
UNDERTAKING:
61. In the case on hand, the allegation is that the respondents have violated the Undertaking. This Court reiterates that to constitute "civil contempt," there must be a willful and deliberate breach/disobedience of an order or Undertaking as defined under Section 2(b) of the Act, 1971. The said principle was laid down in Babu Ram Gupta (supra)and reinforced in Savithramma v. Cecil 104 KL,J CC NO.1378_2024 Narohna 62. It was held that an enforceable Undertaking must be express, unequivocal, and accepted by the Court.
62. Relevant paragraph from Babu Ram Gupta (supra) is extracted below: -
7. Coming to the first point, the contention of Mr. Asthana was that there was no Undertaking given by the appellant to the Court at all. Our attention has not been drawn by Counsel for the respondent to any application or affidavit filed by the appellant which contains an Undertaking given by the appellant to hand over possession to the receiver appointed by the High Court by virtue of the impugned order. It is manifest that any person appearing before the Court can give an Undertaking in two ways: (1) that he files an application or an affidavit clearly setting out the Undertaking given by him to Court, or (2) by a clear and express oral Undertaking given by the contemner and incorporated by the Court in its order. If any of these conditions are satisfied then a willful breach of the Undertaking would doubtless amount to an offence under the Act. Although the High Court observed that the consent order extracted above had been passed on the basis of various undertakings given by the contemner, we are unable to find any material on record which contains such undertakings. It seems to us that the High Court has construed the consent order itself and the directions contained therein as an implied Undertaking given by the appellant. Here the High Court has undoubtedly committed an error of law. There is a clear-cut distinction between a compromise arrived at between the parties or a consent order passed by the court at the instance of the parties and a clear and categorical Undertaking given by any of the parties. In the former, if there is violation of the compromise or the 62 1988 SCC ONLINE SC 463 105 KL,J CC NO.1378_2024 order no question of contempt of court arises, but the party has a right to enforce the order or the compromise by either executing the order or getting an injunction from the court.
63.The observations by the Apex Court in T. Sudhakar Prasad (supra) are particularly instructive: paragraph No. 22 of the judgment underscores that contempt jurisdiction is to be invoked sparingly and with caution, especially when invoked against expressions made during hearings, absent a formal order or directive being violated. Applying this to the present facts, the Court finds the alleged Undertaking too nebulous and informal to qualify as binding.
64. Paragraph No.22 is relevant and the same extracted below: -
22. Contempt jurisdiction is exercised for the purpose of upholding the majesty of law and dignity of the judicial system as also of the courts and Tribunals entrusted with the task of administering delivery of justice. Power of contempt has often been invoked, as a step in that direction, for enforcing compliance with orders of courts and punishing for lapses in the matter of compliance. The majesty of judicial institution is to be ensured so that it may not be lowered and the functional utility of the constitutional edifice is preserved from being rendered ineffective.
The proceedings for contempt of court cannot be used merely for executing the decree of the court. However, with a view to preserving the flow of the stream of justice in its unsullied form and in unstinted purity willful defiance with the mandate of the court is treated to be contemptuous. Availability of jurisdiction to punish for contempt provides efficacy to functioning of the judicial forum and enables the enforcement of the orders on account of its 106 KL,J CC NO.1378_2024 deterrent effect on avoidance. Viewed from this angle the validity of Section 17 of the Act is protected not only by sub-clause (b) of clause (2) of Article 323-A but also by sub-clause (g) thereof.
65. The docket order dated 01.05.2024 cannot be construed as a binding Undertaking within the meaning of Section 2(b) of the Contempt of Courts Act, 1971, as it merely records a clarificatory oral submission made by counsel, without any formal adjudication, injunctive relief, or operative direction issued by the Court. For a statement to amount to a binding undertaking, it must be clear, categorical, and intended to be acted upon by the Court, which is absent in the present case. The Commercial Court neither passed any order relying on the statement nor imposed any restraint based on it.
66. Furthermore, the said statement lacks the solemnity, voluntariness, and judicial acceptance necessary to constitute an enforceable undertaking. As such, in the absence of judicial imprimatur and clarity of obligation, the contempt jurisdiction cannot be invoked for its alleged breach.
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67. The aforesaid rival contentions would reveal that according to the petitioner, respondents have violated the Undertaking given to the Commercial Court and it amounts to civil contempt. Therefore, to examine as to whether it is an Undertaking or not in terms of Section 2(b) of the Act, paragraph Nos.43, 54 and 60 of the counter filed by Respondent No.1 in C.E.A.No.156 of 2023 in CEP No.19 of 2023, memo dated 01.05.2024 and e-mail dated 01.05.2024 are extracted below:-
"43. The contents of para 16 are false, baseless and hence denied. Respondent No. 1 categorically state that the purported business activities and transactions of Respondent No. 1, as alleged by the Applicant based on unverified news reports, have absolutely no relevance or bearing on the present case. The Applicant's unsolicited assertions regarding an alleged acquisition by Respondent No. I of certain assets from Viatris Inc. are entirely baseless, unsubstantiated, and extraneous to the subject matter of this proceeding. It is submitted that though the answering Respondent was initially interested in the said transaction with Viatris but has later decided not to go ahead with the transaction with Viatris. It is settled law that newspaper articles are inadmissible in evidence before any Courts of law and the Applicant without conducting any proper due diligence over the documents of the Company which are publicly available, chose to prefer the present Application to harass the answering Respondent. All of the contents in the said newspaper Articles from para 16 (a) to (d) are false and are based on assumptions and presumptions which are incorrect.
54. The averments of para 43 to 45 are incorrect and are denied. It is submitted that though the answering Respondent was initially interested in the said transaction with Viatris but has later decided not to go ahead with 108 KL,J CC NO.1378_2024 the transaction with Viatris. In any event, if the Respondent No. 1 cannot in any manner be restrained from dealing with assets as the Respondent No. 1 for the various reasons set out hereinabove. The alleged debt owed by the Respondent No. 2 to the Applicant cannot in any manner hamper the rights and obligations of the Respondent No. I over its assets. The Respondent No. 1 is not in any manner liable to satisfy the alleged judgment in favour of the Applicant as against the Respondent No. 2 alone.
60. The averments of para 53 and 54 are denied. It is denied that the Applicant has met the threshold for grant of reliefs as prayed for in any manner. It is being reiterated that though the answering Respondent was initially interested in the said transaction with Viatris but has later decided not to go ahead with the transaction with Viatris. In such a case, granting of interlocutory relief does not arise. It is reiterated that the present Application is pre-mature as unless and until this Hon'ble Court decides if the Respondent No. 1 is a proper and necessary party to the Execution Proceedings of the Applicant against the Respondent No. 2, no interim reliefs or any other reliefs can be granted as against the Respondent No. I in any manner."
"It is submitted that Respondent No, I had sent an e-mail dated 01.05.2024 to Times Group regarding the news article titled 'Edelweiss fund to back Matrix Lab founder's buyout of Viatris API biz by Shilpy Sinha and Viswanatha Pilla (Article), published in The Economic Times on 30.04.2024 on their online web portal.
Respondent No. 1 in the said e-mail requested the Times Group to issue a corrigendum rectifying the misinformation mentioned in the said article"
"Said e-mail is also attached below with subject -News Article published by you on 30 April, 2024 sent to [email protected], [email protected], [email protected] and shishir. Prasad @timesgroup.comdated Wed, May 1, 2024 at 12:35 PM. "Dear Sirs/Madam, 109 KL,J CC NO.1378_2024 This has reference to the article titled "Edelweiss fund to back Matrix Lab founder's buyout of Viatris API biz" by Shilpy Sinha and Viswanatha Pilla (Article), published on your website on 30 Apr 2024 (link below) and in the newspaper bearing Vol. 64 No. 102 dated 30 April 2024.
We wish to clarify that the contents of this article are incorrect and state as below:
(1) IQuest Enterprises is not owned by Mr. Nimmaggada Prasad, (11) IQuest Enterprises is not acquiring any business of American pharma firm Viatris, Accordingly, all references to IQuest should be deleted from the said Article.
We express our serious concern and protest for such misinformation being unsuited at your end. Hence please do the needful asap and issue a corrigendum at the earliest."
68. On consideration of the same, Commercial Court has passed docket order dated 01.05.2024 in CEA No.44 of 2024 in CEA No.156 of 2023 in CEP No.19 of 2023 and the same is as follows:-
"The present application is filed under rule 109 (2) of civil rules of practice with a prayer to advance the date of hearing from 03.05.2024 to today and further contended that News Paper article was published in Economic Times on 30.04.2024 and the judgment debtor is trying to acquire the assets. Notice of this application is served upon the respondent. The learned counsel for the respondent No.1 submitted that the paper statement is not correct and the respondent No.1 addressed an e-mail to Economic Times and the same is filed along with the memo and further submitted that Respondent No.1 already filed counter in CEA No. 156/2023 and stated at paragraph Nos. 43, 54 & 60 that the Respondent No.1 was initially 110 KL,J CC NO.1378_2024 interested in acquiring the assets of "Viatris" and subsequently they have decided not to go ahead.
Having considering the submissions of both the counsels, there is no urgency in advancing the matter. Hence the I.A. is closed."
69. In the light of the said principle, coming to the facts of the present case, petitioner herein had filed execution petition vide CEP No.19 of 2023 against Respondent No.4 for execution of judgment dated 02.02.2022 passed by the Al Khaimah Court of First Instance, Civil Plenary Circuit, in Civil Case No. 60 of 2020.
70. In the said Execution Petition, petitioner has filed CEA No.156 of 2023 seeking an order of temporary injunction restraining the respondents, their agents and assigns from alienating, transferring, encumbering, or creating third-party rights in respect of the assets of Respondent No. 1, pending execution of the RAK Foreign Judgment.
71. In CEA No.157 of 2023, petitioner prays that Respondent No. 1 - IQuest Enterprises Private Limited, be impleaded as a party- respondent to CEP No. 19 of 2023, treating it as the corporate alter 111 KL,J CC NO.1378_2024 ego and instrumentality of Judgment Debtor No. 4 for the purpose of execution of the RAK Foreign Judgment
72. In CEA No.158 of 2023 sought a direction to add the assets of Respondent No. 1 to the schedule of attachable properties in CEP No. 19 of 2023, to facilitate realization of the decretal amount under the RAK Foreign Judgment.
73. Further the petitioner filed CEA No.44 of 2024 in CEP No.19 of 2023 seeking advancement of hearing of CEA No.156 of 2023 in CEP No.19 of 2023. The said application was posted to 01.05.2024, on which date, R.1- IQuest has filed memo stating that R.1 had sent an e-mail dated 01.05.2024 to Times Groups regarding the news article titled "Edelweiss fund to back matrix lab founders buy out of Viatris API Biz" by Shilphi Sinha and Vishwanatha Pilla (Article), Published in the Economic Times, on 30.04.2024 on their online web portal.
74. Respondent No.1 in the said e-mail requested the Times Group to issue corrigendum rectifying the misinformation mentioned 112 KL,J CC NO.1378_2024 in the said Article. A copy of the said e-mail dated 01.05.2024 issued by R.1 was attached to the said memo and the same is extracted above.
75. Perusal of the said e-mail would also reveal that IQuest clarified the contents of the said Articles as incorrect and it has stated as follows: -
a) IQuest Enterprises is not owned by Mr. Nimmagadda Prasad.
b) IQuest Enterprises is not acquiring any business of American Pharma Firm Viatris. Thus, all the references to IQuest should be deleted from the said Article.
76. IQuest also expressed its serious concern and protest for such misinformation being unsuited to at the end of Times Group. IQuest has also requested the times Group to issue a corrigendum at the earliest.
77. Considering the said memo and e-mail attached to it, vide docket order dated 01.05.2024 in CEA No.44 of 2024 in CEA No.156 of 2023 in CEP No.19 of 2023, learned Commercial Court, recorded 113 KL,J CC NO.1378_2024 that learned counsel for respondent No.1 submitted that paper statement is not correct and respondent No.1 addressed an e-mail to Economic Times and the same is filed along with memo and further submitted that respondent No.1 already filed counter in CEA No.156 of 2023 and stated at paragraph No.43, 54 and 60 that respondent was initially interested in acquiring the assets of Viatris and subsequently they have decided not to go ahead.
78. According to the petitioner, respondents gave an unequivocal undertaking to the Commercial Court vide the aforesaid counter in CEA No.156 of 2023, memo dated 01.05.2024 and e-mail dated 01.05.2024 and they have disobeyed the said Undertaking willfully and deliberately.
79. As discussed supra, in the counter filed by Respondent No.1 in CEA No.156 of 2023, it has stated that initially it was interested in acquiring the assets of Viatris and subsequently they have decided not to go ahead. This court is of considered opinion that it is not an undertaking and it only a clarification is also apt to note that pleadings 114 KL,J CC NO.1378_2024 in CEA No.156 of 2023 are complete. Therefore, petitioner has to pursue the said CEA No.156 of 2023 and seek disposal of the same. Instead of doing so, petitioner filed the present contempt; therefore, this Court is of the considered opinion that this contempt case is premature.
80. The submission recorded on 01.05.2024 by the Commercial Court, upon close scrutiny, fails to meet the threshold of a clear, unambiguous, and binding Undertaking within the meaning of law, An Undertaking must be solemn, express, and intended to be acted upon by the Court. The absence of any injunctive relief or coercive direction by the Commercial Court militates against the invocation of contempt jurisdiction on this basis.
81. Therefore, the aforesaid statement made by respondent No.1 is not an Undertaking. The aforesaid ingredients are lacking.
82. As discussed supra, the contents of the aforesaid paragraphs in the counter filed by Respondent No.1 in CEA No.156 of 2023, memo dated 01.05.2024, e-mail dated 01.05.2024 do not amount to an Undertaking. It is only clarificatory in nature. 115
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83. It is also apt to note that contempt proceedings are penal in nature. Therefore, petitioner has to make out a case those respondents /contemnors willfully and deliberately disobeyed the Undertaking in clear and unambiguous terms. In the present case, it is not an Undertaking, it was only a statement made by Respondent No.1 and the memo and e-mail filed by it before Commercial Court is only a clarificatory in nature. It cannot be termed as an Undertaking.
84. In line with Babu Ram Gupta (supra) and T. Sudhakar Prasad (supra), this Court is also of the considered opinion that a statement made by counsel can be treated as an undertaking to the Court, it must be clear, unambiguous, express, and accepted by the Court as a mere statement or assurance made during submissions, without conscious intention to be bound and without the Court recording and acting upon it as an undertaking, cannot be elevated to the status of an enforceable undertaking under the Contempt of Courts Act.
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85 Referring to the proceedings issued by the Competent Commission of India, Sri K.Vivek Reddy, learned Senior Counsel would contend that respdnoent No.1 gave an Undertaking to the Commercial court and respondent Nos.2 to 4 are aware of the said Undertaking. Even then, they have disobeyed the said Undertaking intentionally and deliberately.
86. In the light of the said submission, it is also relevant to note that the Competition Commission of India (CCI), upon being notified under Section 6(2) of the Competition Act, 2002, granted approval for the IQuest Transaction on 13.02.2024, and thereafter, for the restructured "Mudhra Transaction" on 28.05.2024 under the Green Channel route as per Regulation 5A of the Combination Regulations, 2011. Both approvals recorded the proposed acquisition by Matrix Pharma Private Limited of 100% equity in Tianish Laboratories Private Limited and the associated investments by the Kotak Investors and Kingsman Wealth Fund. The CCI found the transactions to constitute a permissible combination under Section 5(a)(i)(A) of the 117 KL,J CC NO.1378_2024 Act and accordingly permitted the parties to proceed. The said approvals, however, only reflect regulatory clearance from a competition law standpoint and do not, by themselves, determine the civil or contractual disputes that are the subject matter of the present proceedings.
87. However, the said aspects which this Court cannot consider in the present contempt case. It is impermissible. ALTER EGO:-
88. This Court also finds no substance in the petitioner's attempt to invoke the 'alter-ego' doctrine to extend liability to Respondent Nos.2 to 6. The doctrine of alter-ego, by its very nature, requires a detailed enquiry into the corporate structure, the degree of control exercised, the financial interdependence, and the existence of any abuse of corporate personality. Such an enquiry presupposes examination of complex factual matrices, scrutiny of corporate records, and evaluation of evidence through a full-fledged trial or at least through adjudication in the underlying proceedings. Contempt 118 KL,J CC NO.1378_2024 jurisdiction, which is summary and limited in scope, is not a forum for piercing the corporate veil or for determining whether distinct legal entities functioned as mere extensions of one another. In the absence of a clear, binding order or undertaking directed against Respondent Nos.2 to 6, and in view of the fact that no evidence of willful or conscious disobedience is attributed to them, any attempt to fasten liability based on the alter-ego theory stands on legally untenable ground.
89. It is pertinent to note that the expression "affiliate" finds no definition under the Companies Act, 2013 or its predecessor enactments. The statute defines related concepts such as "associate company" under Section 2(6), "subsidiary company" under Section 2(87), and "related party" under Section 2(76), but the term "affiliate" does not occur in any operative provision or schedule of the Act. Its usage is therefore purely commercial. Consequently, the mere use of the expression "affiliate" in corporate documentation cannot, in the absence of statutory recognition or concrete evidence of control, be imported into judicial proceedings to establish legal or 119 KL,J CC NO.1378_2024 managerial nexus. The relationship, if any, must be demonstrated through material particulars evidencing control or participation as contemplated under the statutory definitions of "subsidiary,"
"associate company," or "related party," and not on the basis of loose commercial terminology.
CONCLUSION:-
90. In light of the above analysis and bearing in mind the solemn caution that contempt must never be used to settle scores or re-litigate complex commercial disputes under the guise of disobedience, this Court finds that the Petitioner has failed to establish that the docket order dated 01.05.2024 in CEA No.44 of 2024 in CEA No.156 of 2023 in CEP No.19 of 2023 is an undertaking as under
section 2(b) of the Act of 1971 and the same is willfully and deliberately disobeyed by the respondent Nos.1 to 4.
91. Thus, this Court is of the considered opinion that no case is made out by the petitioner against the respondent Nos.1 to 4. 120
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92. In view of the detailed discussion and findings recorded hereinabove and for the reasons stated, this Contempt Case is dismissed. However, liberty is granted to the petitioner and respondents to raise all the grounds/contentions raised in this contempt case before the Commercial Court in all the pending Commercial Execution Applications pending in CEP No.19 of 2023 and CEP No.19 of 2023.
93. It is for the learned commercial court to consider and decide the same strictly in accordance with law and on the merits of the record available.
94. Consequently, miscellaneous petitions, if any, pending in this Contempt Case, shall stand closed. In the circumstances of the case, there shall be no order as to costs.
________________________ JUSTICE K.LAKSHMAN Date: 07.11.2025 Note: L.R. copy to be marked.
b/o. vvr