Madras High Court
Marg Limited vs Mrs.Padmaja Chunduru on 23 September, 2021
Author: T.Raja
Bench: T.Raja
Contempt Petition No.92 of 2020
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 23.09.2021
CORAM
THE HONOURABLE MR.JUSTICE T.RAJA
Contempt Petition No.92 of 2020
Marg Limited
(formerly Marg Constructions Limited)
'Marg Axis'
4/318, Rajiv Gandhi Salai, Kottivakkam
Chennai 600 041
rep.by its Authorised Representative
Mr.K.S.Gajendra Babu .. Petitioner
-vs-
1. Mrs.Padmaja Chunduru
Managing Director
Indian Bank
PB No.5555
254-260, Avvai Shanmugam Salai
Royapettah
Chennai 600 014
2. Karaikal Port Private Limited
having its registered office at
Kheezavanjire Village
T.R.Pattinam, Karaikal
Puducherry 609 606
(R2 impleaded as per the order
of Court dated 9.12.2019 made in
1/8
http://www.judis.nic.in
Contempt Petition No.92 of 2020
Sub Appln.No.596 of 2019 in
Sub Appln.No.566 of 2019 in
Cont.P.D.No.145204 of 2019
3. Edelweiss Asset Reconstruction
Company Limited
Edelweiss House, Off CST Road
Kalina
Mumbai 400 098
(R3 impleaded as per the order
dated 18.12.2019 in Sub Appln.No.
624 of 2019 in Cont.P.D.No.145204
of 2019) .. Respondents
Petition under Section 11 of the Contempt of Courts Act, 1971 praying
to punish the respondents for wilful disobedience of the order of this Court
dated 08.06.2018 made in W.P.No.8592 of 2015.
For Petitioner :: Mr.Vijay Narayan
Senior Counsel for
M/s McGan Law Firm
For Respondents :: Mr.T.Mohan for
Mr.Rajendran Raghavan for R1
Mr.S.Ravi for
M/s Indumathi Ravi for R3
ORDER
This contempt petition has been filed complaining the non-compliance of the order dated 8.6.2018 passed in Writ Petition No.8592 of 2015. 2/8 http://www.judis.nic.in Contempt Petition No.92 of 2020
2. Mr.Vijay Narayan, learned Senior Counsel appearing for the petitioner pleaded that when Writ Petition No.8592 of 2015 was filed praying for issuance of a writ of mandamus directing the respondents 2 & 3 therein to maintain the status of the shares held by the petitioner in the fourth respondent Company as on 20.03.2015 and forbearing them in any manner proceeding with the invocation and transfer of shares in favour of third parties without following due process of law, this Court, by order dated 25.3.2015, initially passed an interim order restraining the respondent-Indian Bank from further transferring the shares or encumbering the shares in favour of third parties, until further orders. Again, by order dated 12.1.2016, this Court directed the petitioner to pay a sum of Rs.75 crores to the respondent-Bank on or before 15.3.2016. Subsequently, by orders dated 16.3.2016 and 29.3.2016, time was extended to comply with the order dated 12.1.2016. Similarly, on various dates when the interim order was in force restraining the Indian Bank from transferring the shares of the petitioner in Karaikal Port Limited, the respondent-Bank assigned the same to Edelweiss Asset Reconstruction Company Limited. During the pendency of the writ petition, a memo of compromise dated 19.4.2018 was entered into between the parties 3/8 http://www.judis.nic.in Contempt Petition No.92 of 2020 and the same was also recorded in the order dated 8.6.2018 passed in Writ Petition No.8592 of 2015 and the writ petition was disposed of. Now, in terms of the memo of compromise, the shares are to be restored to the petitioner on the instructions of Edelweiss Asset Reconstruction Company Limited, which has not been done so, that has given rise to the cause of action for coming to this Court to initiate the contempt proceedings. Mr.Vijay Narayan also submitted that the stand taken by the respondent Bank that they are not party to the memo of compromise recorded by this Court, cannot be taken into account, for the sole reason that when they were arrayed as the second respondent in the writ petition while recording the memo of compromise, had they raised any objection at that stage, the memo of compromise would not have been recorded and the Court would have avoided the disposal of the writ petition in terms of the memo of compromise. Learned Senior Counsel further contended that when the Edelweiss Asset Reconstruction Company Limited issued notice of e-auction adopting the Swiss challenge process for assignment of debt, the petitioner has filed Writ Petition No.19939 of 2021 challenging the correctness of the notice of e- auction. The Hon'ble First Bench of this Court, by order dated 20.9.2021, on 4/8 http://www.judis.nic.in Contempt Petition No.92 of 2020 the ground that the petitioner has got an alternative remedy to workout its grievance before the jurisdictional Debts Recovery Tribunal, dismissed the writ petition. Now, in any event, he pleaded, when the memo of compromise dated 19.4.2018 has been recorded, wherein it has been specifically mentioned that the parties to the writ petition (W.P.No.8592 of 2015) have initialled a restructuring agreement in pursuance of which the debt of the respondent Bank is being restructured and consequentially the shares invoked by the M/s Geojit BNP Paribas Financial Services Limited shall be restored to the petitioner on the instructions of Edelweiss Asset Reconstruction Company Limited, the order recording the compromise has to be complied with. As the respondent Bank has not complied with the same, contempt proceedings have to be initiated against them, he pleaded.
3. Mr.T.Mohan, learned counsel appearing for the respondent Bank submitted that when the notice of e-auction adopting the Swiss challenge process for assignment of debt, was put to challenge by the petitioner in Writ Petition No.19939 of 2021, the Hon'ble First Bench, finding fault with the petitioner in not availing the statutory remedy available before the Debts 5/8 http://www.judis.nic.in Contempt Petition No.92 of 2020 Recovery Tribunal, dismissed the said writ petition on the ground of availability of alternative remedy. Therefore, it is for the petitioner to workout the remedy in the manner known to law by approaching the jurisdictional Debts Recovery Tribunal. Mr.T.Mohan, learned counsel appearing for the respondent Bank, soliciting the notice of this Court to peruse the memo of compromise, indicated two infirmities therein viz., (a) that the Indian Bank was not made as a party and (b) that the signature of any representative from Indian Bank has not been appended thereto. Therefore, the memo of compromise relied upon by the petitioner cannot bind the Indian Bank, because it is a compromise entered into between the petitioner and Edelweiss Asset Reconstruction Company Limited.
4. This Court is also able to see that the memo of compromise has been entered into between the petitioner and Edelweiss Asset Reconstruction Company Limited, but not with the Indian Bank. Therefore, the contention made by Mr.Vijay Narayan that when the Indian Bank was arrayed as the second respondent in Writ Petition No.8592 of 2015, the presence of the second respondent at the time of recording the compromise amounts to their 6/8 http://www.judis.nic.in Contempt Petition No.92 of 2020 consent, is farfetched. Hence, this Court is not able to find any merits in the contempt petition. Accordingly, the contempt petition is dismissed. However, it is open to the petitioner to workout the remedy before the appropriate forum, as already observed by the Hon'ble First Bench in the order dated 20.9.2021 passed in Writ Petition No.19939 of 2021. Consequently, Sub Application Nos.114 of 2020 and 360 of 2021 are also dismissed.
23.09.2021 ss 7/8 http://www.judis.nic.in Contempt Petition No.92 of 2020 T.RAJA, J.
ss Cont.P.No.92 of 2020 23.09.2021 8/8 http://www.judis.nic.in