National Company Law Appellate Tribunal
Prakash Shanker Mishra vs Ashok Kriplani on 2 May, 2025
Author: Ashok Bhushan
Bench: Ashok Bhushan
NATIONAL COMPANY LAW APPELLATE TRIBUNAL,
PRINCIPAL BENCH, NEW DELHI
Contempt Case (AT) No. 8 of 2025
In
Company Appeal (AT) (Insolvency) No. 34 of 2020
IN THE MATTER OF:
Ashok Kriplani . ...Petitioner
Versus
Konduru Prasanth Raju & Anr. ...Respondents
Present:
For Appellant : Mr. Ashok Kriplani, Petitioner in person.
For Respondents : Mr. Vijaya Vittal, Advocate for RP.
JUDGMENT
ASHOK BHUSHAN, J.
This Contempt Application has been filed for initiating contempt proceedings against Respondent Nos.1 and 2 for violation of order dated 13.01.2021 of this Tribunal in Company Appeal (AT) (Ins.) No. 34 of 2020. The Applicant in Contempt Application in paragraph-A has stated following:
"A. That, the Petitioner at present is invoking the Contempt of the Courts Act, 1971 against the Respondents against their last action in Contempt by filing an application before Hon'ble NCLT, BB at IA no. 546/2024 dated 10/07/2014 on withdrawal of the CIRP without paying CIRP costs and fees whether approved or unapproved thus erasing the protection granted by the Order dated 13/01/21 protecting the CIRP costs and fees of the Petitioner which the actions of the Respondents are in Contempt of the Order dated 13/01/2021 of this Hon'ble Court, even to the knowledge of the Respondents as the value of the assets of the present Project are assessed merely at Rs.55 Lakhs by the present Contempt Case (AT) No.8 of 2025 1 R-1 which are much less than the even the approved CIRP fees only, of the Petitioner of Rs.1.48Cr. + interest @12%pa, hence is this Contempt Petition as such an action and other such action are in Contempt of Order dated 13/01/21 of this Hon'ble Tribunal and thus frustrate the order dated 13/01/2021 of this Hon'ble Tribunal. Annexure A1 is the C.C. of the Order dated 13/01/2021 of this Hon'ble Tribunal."
2. We need to notice facts giving rise to this Contempt Application:
i. The NCLT, Bengaluru Bench vide order dated 20.08.2019 commenced Corporate Insolvency Resolution Process ("CIRP") against the Corporate Debtor ("CD") Dreamz Infra India Ltd.
on an Application filed by three Homebuyers of the Dreamz Infra India Ltd. of Sumadhur Project of the CD. The CD had more than 60 Projects.
ii. The Applicant was appointed as an IRP. The CoC in its second Meeting held on 19.11.2019 selected Mr. Konduru Prasanth Raju, Respondent No.1 as Resolution Professional ("RP") by replacing the Appellant.
iii. The NCLT Bengaluru vide order dated 17.12.2019, exercising its inherent powers under Rule 11 of the NCLT Rules, 2016, offered the post of IRP to the Applicant at fee of Rs.6.75 lakhs per month with GST. The order dated 17.12.2019 was challenged by the Members of the CoC by filing Appeal No.34 of 2020, challenging the order appointing Applicant as RP.Contempt Case (AT) No.8 of 2025 2
iv. On 04.09.2020, NCLT Bengaluru Bench passed an order, confining the CIRP in CP(IB)84/2019 to Dreamz Sumadhur Project only. The Applicant challenged order dated 04.09.2020 before the NCLAT, which Appeal came to be dismissed.
v. Appeal No.34 of 2020 filed by the CoC, challenging order dated 17.12.2019 appointing the Applicant as RP was decided on 13.01.2021 by setting aside order dated 17.12.2019 of the NCLT Bengaluru. This Tribunal, however, protected the action taken by Respondent No.1 and the CIRP cost incurred. Respondent No.1 started functioning as RP and Respondent No.2 as Authorised Representative of the Dreamz Infra India Ltd.
vi. No Resolution Plan was received by the RP. RP Filed an Application seeking liquidation. The CoC, which consist of Homebuyers, held its various Meetings and in 11 th CoC Meeting, Authorised Representative presented to the CoC the expenditure incurred by both - former RP (Shri Ashok Kriplani - the Applicant herein) as well as current RP (Mr. Konduru Prasanth Raju - Respondent No.1 herein) for the consideration and voting. The CoC in its 11 th Meeting unanimously rejected the CIRP expenses incurred by former RP and current RP. The RP left with no other option, filed an Contempt Case (AT) No.8 of 2025 3 IA No.426 of 2023 for liquidation, which is pending consideration.
vii. The CoC in its 14th and 15th Meeting with 94.08% decided not to continue with the CIRP as well as not to continue with the liquidation. The CoC decided to withdraw the CIRP with 98% vote share. In the above background, an Application IA No.546 of 2024 was filed by the RP before the Adjudicating Authority on 10.07.2024. Filing of which Application has given rise to this Contempt Application by the erstwhile RP.
3. We have heard Shri Ashok Kriplani, Applicant in person in support of the Contempt Application. The Applicant also filed written submission dated 18.04.2025.
4. Applicant submits that this Tribunal vide order dated 13.01.2021 has protected the CIRP and fee of the Applicant as RP and filing of Application by the present RP for withdrawal of CIRP without obtaining a Bank Guarantee for fee and expenses is contemptuous of the order of this Tribunal dated 13.01.2021 and the action of the RP to file an Application for withdrawal of the CIRP without payment of fee and expenses of Applicant, violates the protection granted by order dated 13.01.2021 and the contempt proceedings be initiated against both the Respondents. It is submitted that action of the Respondents is fully covered by the civil contempt as defined in Section 2(d) of the Contempt of Courts Act, 1971. Respondent No.1 is carrying on the CIRP of the CD fraudulently to harm the interest of the Applicant. IA No.546 of 2024 filed by Respondent No.1 Contempt Case (AT) No.8 of 2025 4 is full of illegalities. Applicant has referred to paragraph 21, 22 and 25 of the Application and Form-FA and states that CoC has rejected the CIRP cost as it is unable to pay, which does not stand the test of law, where CoC whimsically conveyed to continue to take action initiated against the company's directors and/ or landlord in NCDRC and for withdrawal of the CIRP before NCLT. It is further submitted that RP and the CoC colluding fraudulently to erase the protection granted by this Tribunal by order dated 13.01.2021 on the rights of the Applicant. The Applicant in support of the submission has relied on various judgments of Hon'ble Supreme Court, which we shall refer hereinafter.
5. The question to be considered in the present Appeal is as to whether Applicant has made out any case for initiating contempt proceedings against Respondent Nos.1 and 2 for violation of the order of this Tribunal dated 13.01.2021.
6. We need to first notice the order dated 13.01.2021 passed by this Tribunal in Company Appeal (AT) (Ins.) No.34 of 2020 filed by the CoC, challenging order dated 17.12.2019. The Appellant was appointed as IRP by order dated 20.08.2019 and the CIRP initiated against the CD. In the 2nd Meeting of the CoC held on 09.11.2019, the Applicant was replaced and Respondent No.1 was appointed as RP. The Adjudicating Authority however, vide order dated 17.12.2019 directed appointment of Applicant as RP with fee of Rs.6.75 lakhs per month with GST, which order was challenged by the CoC in Company Appeal (AT) (Ins.) No.34 of 2020. This Tribunal vide order dated 13.01.2021 allowed the Appeal filed by the CoC Contempt Case (AT) No.8 of 2025 5 and set aside the order dated 17.12.2019. Consequently, the appointment of the Applicant as RP was set aside. However, while setting aside the order dated 17.12.2019, this Tribunal protected the steps taken by the present Applicant as well as CIRP fees paid/ payable in terms of the impugned order. It is useful to notice paragraph-12 of the order of this Tribunal passed on 13.01.2021, which is as follows:
"12. For the above reasons, we set aside the Impugned Order as at Annexure A-1 Page - 45 read with Order as at Page 47 to the extent it appointed Respondent No.1 as Resolution Professional and Respondent No.2 as Authorised Representative. We remit back the matter to the Adjudicating Authority with the following directions:-
(A) Mr. Hari T. Devadiga will be treated as the Authorized Representative of class of Financial Creditors (home or shop buyers) of Dreamz Infra India Ltd. under Section 21(6-A)(b) of IBC. Charge, if any, required to be handed over by Respondent No.2 shall be handed over to Mr. Hari T. Devadiga.
(B) The Adjudicating Authority shall in compliance of Section 22(4) forward the name of Mr. Konduru Prasanth Raju to the IBBI and follow the procedure as laid down in Section 22(4) and (5) of IBC.
(C) In the meanwhile, the charge of IRP will remain with the Respondent No.1 - Ashok Kriplani who will be treated as IRP till the Adjudicating Authority does compliance of Section 22(4) and (5) of IBC.
(D) Legality of the actions taken by the Respondents 1 and 2 in the period between passing of the Impugned Orders dated 17th December, 2019 till now, shall not be called into question on the basis of present Orders which we are passing. The steps taken by them pursuant to Impugned Orders shall be treated as acts done in regular course. The Contempt Case (AT) No.8 of 2025 6 steps taken by them in CIRP and fees paid/payable in terms of Impugned Orders, shall be protected.
7. The above order, thus, inspite of setting aside order dated 17.12.2019, action taken by the Applicant as the Authorized Representative was directed not be called in to question. The direction in paragraph 12(D) is to the effect that "The steps taken by them in CIRP and fees paid/ payable in terms of Impugned Orders, shall be protected". The Applicant's case in the present Contempt Petition is that the above direction/ protection granted to the Applicant by order dated 13.01.2021 is being breached by filing the Application - IA 546 of 2024 by Respondent No.1 before the Adjudicating Authority for withdrawal of the CIRP, which is in violation of the order, hence, the contempt proceedings be drawn. The Applicant has brought on record the copy of the Application - IA No.546 of 2024 filed by the RP under Section 12A of the IBC read with Regulation 30A (1)(b) of IBBI (CIRP of Corporate Persons) Regulations, 2016 ("CIRP Regulations") seeking withdrawal of the CIRP. The Application is dated 10.07.2024, where following prayers have been made:
"a. Take the Form FA dated 28.06.2024 on record, waive the requirement of bank guarantee under Regulation 30A of the CIRP Regulations and permit the withdrawal of the present proceedings; and b. Pass such other consequential order(s) as this Hon'ble Tribunal may deem fit and appropriate in the facts and circumstances of the case."
8. The Application in sequence noticed the steps taken in the CIRP of the CD. The Application mentions the decision taken by the CoC in Contempt Case (AT) No.8 of 2025 7 different Meetings. It is to be noted that the Applicant having been replaced consequent to the order of this Appellate Tribunal dated 13.01.2021, it was Respondent No.1, who had conducted the different proceedings of the CoC. Paragraph-21 of the Application clearly mentions that in the 11th CoC Meeting, Authorised Representative presented to the CoC, the CIRP expenditure incurred by former RP (Ashok Kriplani) and present RP (Konduru Prasanth Raju) for CoC consideration and voting. In paragraphs 21 and 22, following have been stated:
"21. In the 11th CoC Meeting, the Authorized Representative presented to the CoC, the CIRP expenditures incurred by both former RP Mr. Ashok Kriplani as well as the current RP Mr. Konduru Prasanth Raju, for the CoC's consideration and voting. The outcome of the voting are outlined below:
Sl. No. Question No Abstain Yes
1. Approval of CIRP expenses 100% 0% 0%
incurred by the Applicant
Mr. Ashok Kriplani, The
erstwhile resolution
professional of Dreamz Infra
India Limited
2. Approval of certain 100% 0% 0%
expenses incurred by the
present Resolution
Professional, Mr. Konduru
Prasanth Raju, including
upfront payments requiring
reimbursement and other
pending costs
22. A review of the Minutes of the 11 th CoC meeting indicates that the CoC members unanimously rejected the approval of CIRP Contempt Case (AT) No.8 of 2025 8 expenses incurred by the former Resolution Professional, as well as the expenses incurred by the current Resolution Professional, including upfront payments and pending costs. The CoC voted against the approval of both sets of expenses, demonstrating that a CoC members have failed to exercise their commercial wisdom and take appropriate decisions regarding the CIRP expenses, despite the clear need to address these financial matters. A copy of minutes of the meeting is produced herewith as Annexure - F."
9. The above clearly indicate that CoC with 100% vote share has disapproved the payment of CIRP expenditure to the Applicant as well as to the present RP - Mr. Raju. After the aforesaid decision, the RP left with no remedy and filed an IA No.426 of 2023 praying for liquidation under Section 33(1)(a) of the IBC, which Application remained pending consideration. During the course of proceedings, the Homebuyers suggested that feasibility of the Project may be re-assessed. The RP called the CoC Meeting, where feasibility Report was directed to be obtained. In the 15th CoC Meeting, which commenced on 18.06.2024, six questions were put to vote and answer of all the six questions are captured in paragraph 29 of the Application, which is as follows:
"29. The e-voting process commenced on 18.06.24 and ended on 23.06.24. A list of 6 questions were framed for voting as sought by the COC pursuant to the 15th CoC meeting, which are summarized below, along with the results by voting platform and email are as below:
Question No.1 In light of the discussions and conclusions arrived at in the 14th and 15th CoC meetings and after studying the feasibility report, do you wish to continue with CIRP?
Answer Results No I do not wish to Abstain Yes, I
continue with CIRP wish to
continue
Contempt Case (AT) No.8 of 2025 9
with CIRP
Voting Platform 94.00% 4% 2%
E-mail 00.08% 0% 0%
Total 94.08% 4% 2% 100%
Question No.2 In light of the discussions and conclusions
arrived at in the 14th and 15th CoC
meetings and after studying the feasibility report, do you agree to proceed with the liquidation of the Corporate Debtor?
Answer Results No, I disagree to Abstain Yes, I agree
proceed with to proceed
Liquidation with
Liquidation
Voting Platform 95.00% 3% 2%
E-mail 00.08% 0% 0%
Total 95.08% 3% 2% 100%
Question No.3 In light of the discussions and conclusions
arrived at in the 14th and 15th CoC
meetings and after studying the feasibility report, do you think the liquidation process will harm the interests of the CoC members?
Answer Results Yes, it harms the Abstain No, it
interests of COC doesn't
Members harm the
interests of
COC
Members
Voting Platform 96.00% 4% 0%
E-mail 00.08% 0% 0%
Total 96.08% 4% 0% 100%
Question No.4 In light of the discussions and conclusions
arrived at in the 14th and 15th CoC
meetings and after studying the feasibility report, do you want withdrawal of the CIRP process?
Answer Results Yes, I want to Abstain No, I do
Contempt Case (AT) No.8 of 2025 10
withdraw the CIRP not want to
Process withdraw
the CIRP
Process
Voting Platform 98.00% 2% 0%
E-mail 00.08% 0% 0%
Total 98.08% 2% 0% 100%
Question No.5 In light of the discussions and conclusions
arrived at in the 14th and 15th CoC
meetings and after studying the feasibility report, do you want the RP to file withdrawal of the CPIB No.84/BB/2019 filed under Section 7 of IBC?
Answer Results Yes, I want RP to file Abstain No, I do
for withdrawal of not want
application filed RP to file
under sec 7 of IBC for
withdrawal
of
application
filed under
sec 7 of
IBC
Voting Platform 94.00% 3% 3%
E-mail 00.066% 0% 0%
Total 94.06% 3% 3% 100%
Question No.6 Do you want to continue action initiated
against the company's directors and/ or
landlord in the National Consumer
Dispute Redressal Commission or any
other forums?
Answer Results Yes, I want to Abstain No, I do
continue legal not want to
actions at other continue
forums legal
actions at
other
forums
Voting Platform 95.00% 5% 0%
Contempt Case (AT) No.8 of 2025 11
E-mail 00.08% 0% 0%
Total 95.08% 5% 0% 100%
*Note: 57 voters have not voted during the e-voting *7 Voters have sent votes by E-mail A copy of e-voting results is produced herewith as Annexure-
J."
10. In answer to Question No.1, the CoC with 94.08% vote share decided not to continue with the CIRP. With regard to Question No.2, the CoC with 95.08% vote share decided not to proceed with the Liquidation and 96.08% held that liquidation process will harm the interest of the CoC Members. 98.08% CoC Members answered Question No.4 to withdraw the CIRP and in answer to Question No.5, the CoC with 94.06% authorised the RP to file a withdrawal application. Certain additional questions were also considered, which has been captured in paragraph-30 of the Application, which are as follows:
Question No.1 In light of no corpus funds and liquid assets with the Corporate Debtor of Dreamz Sumadhur Project and considering the Homebuyers/Committee of Creditors have lost all their money in the said project, I, as a member of the CoC, hereby request the waiver of Bank Guarantee in view of the filing of Form "FA"
Answer Results Yes, I am No I will Abstain
unable to provide
provide Bank Bank
Guarantee Guarantee
Voting Platform 99.00% 1% 0%
E-mail 00.078% 0% 0%
Total 99.078% 1% 0% 100%
Contempt Case (AT) No.8 of 2025 12
Question No.2 I, COC Member of Sumadhur project
hereby Authorise Resolution Professional and/ or Authorised Representative to Submit a Form FA to Hon. NCLT for withdrawal of application without Bank Guarantee.
Answer Results Yes, Without NO With Abstain
Bank Bank
Guarantee Guarantee
Voting Platform 99.00% 1% 0%
E-mail 00.078% 0% 0%
Total 99.078% 1% 0% 100%
Copies of the additional e-voting results along with accompanying documents is produced herewith as Annexure - K (colly)."
11. Question No.1 was regarding waiver of Bank Guarantee in view of the filing of Form-FA, which was approved with 99.078% vote share. RP received Form-FA from the Authorised Representative of the CoC dated 28.06.2024, with regard to Bank Guarantee, which was required to be submitted as per Regulation 30A. Following has been pleaded in paragraphs 33, 34 and 35 of the Application (IA 546 of 2024):
"33. Regulation 30(2) of the CIRP Regulations stipulates that the application under sub-regulation (1) of Regulation 30 shall be made in Form - FA of Schedule - 1 accompanied by a bank guarantee towards (a) towards estimated expenses incurred on or by the interim resolution professional for purposes of regulation 33, till the date of filing of the application under clause (a) of sub- regulation (1); or (b) towards estimated expenses incurred for purposes of clauses (aa), (ab), (c) and (d) of regulation 31, till the date of filing of the application under clause (b) of sub-regulation (1).
34. It is humbly submitted that this applicant, in line with the mandate under Regulation 30(2) of the CIRP Regulations read with Contempt Case (AT) No.8 of 2025 13 the duties of this RP under section 25 of the Code, the RP appraised the CoC members of the requirement of Bank guarantee to be provided in terms of Regulation 30A of the CIRP Regulations.
35. However, the CoC in the present case consists of individual persons, who belong to modest financial backgrounds. Having already incurred huge losses at their end at the hands of the CD, they have expressed a view that they are unable to foot any expenses in the CIRP. Therefore, the CoC has rejected all the costs incurred by the former and current RP as it is unable to meet such expenses. Further, a majority of the CoC members are scattered, thereby making the requirement of obtaining a bank guarantee all the more cumbersome. In light of the same, the CoC has humbly requested that this Hon'ble Tribunal may be pleased to waive the requirement of a bank guarantee in the present case and allow the withdrawal of the CIRP as it is."
12. The pleadings in paragraph-35 specifically mentions that the CoC has expressed their view that they are unable to foot any expenses in the CIRP. Therefore, the CoC has rejected all the costs incurred by the former and current RP. In the above background, the Application under Section 12A was filed by the present RP dated 12.07.2024, pleadings of which Application has been noticed above. The question to be answered is as to whether filing of the Application by the RP on the resolution passed by the CoC, amounts to violation of the order of this Tribunal dated 13.01.2021, as contended by the Applicant.
13. Section 12A has been inserted in the IBC by Act 26 of 2018. Section 12A provides as follows:
"12A. Withdrawal of application admitted under section 7, 9 or
10. -
The Adjudicating Authority may allow the withdrawal of application admitted under section 7 or section 9 or section 10, on Contempt Case (AT) No.8 of 2025 14 an application made by the applicant with the approval of ninety per cent. voting share of the committee of creditors, in such manner as may be specified."
14. Regulation 30A of the CIRP Regulations provides for manner and procedure for filing an Application under Section 12A. Regulation 30A, which deals with withdrawal application is as follows:
30A. (1) An application for withdrawal under section 12A may be made to the Adjudicating Authority -
(a) before the constitution of the committee, by the applicant through the interim resolution professional;
(b) after the constitution of the committee, by the applicant through the interim resolution professional or the resolution professional, as the case may be:
Provided that where the application is made under clause (b) after the issue of invitation for expression of interest under regulation 36A, the applicant shall state the reasons justifying withdrawal after issue of such invitation.
(2) The application under sub-regulation (1) shall be made in Form FA of the 3[Schedule-I] accompanied by a bank guarantee-
(a) towards estimated expenses incurred on or by the interim resolution professional for purposes of regulation 33, till the date of filing of the application under clause (a) of sub-regulation (1); or
(b) towards estimated expenses incurred for purposes of clauses (aa), (ab), (c) and (d) of regulation 31, till the date of filing of the application under clause (b) of sub- regulation (1).
(3) Where an application for withdrawal is under clause (a) of sub-regulation (1), the interim resolution professional shall submit the application to the Adjudicating Authority on behalf of the applicant, within three days of its receipt. (4) Where an application for withdrawal is under clause (b) of sub-regulation (1), the committee shall consider the application, within seven days of its receipt. (5) Where the application referred to in sub-regulation (4) is approved by the committee with ninety percent voting share, the resolution professional shall submit such application along with the approval of the committee, to the Adjudicating Contempt Case (AT) No.8 of 2025 15 Authority on behalf of the applicant, within three days of such approval.
(6) The Adjudicating Authority may, by order, approve the application submitted under sub-regulation (3) or (5). (7) Where the application is approved under sub-regulation (6), the applicant shall deposit an amount, towards the actual expenses incurred for the purposes referred to in clause (a) or clause (b) of sub-regulation (2) till the date of approval by the Adjudicating Authority, as determined by the interim resolution professional or resolution professional, as the case may be, within three days of such approval, in the bank account of the corporate debtor, failing which the bank guarantee received under sub-regulation (2) shall be invoked, without prejudice to any other action permissible against the applicant under the Code."
15. Regulation 30A, sub-regulation (1) (b) requires the Application to be filed through the RP, after the constitution of the CoC with requisite vote share approving filing of Section 12A Application. The RP was statutorily obliged to file Application under Section 12A for withdrawal of the CIRP. Section 12A Application, which has been filed by the RP contained necessary submissions and averments and case details of various resolution of the CoC for filing the withdrawal Application and circumstances under which the CoC decided to file 12A Application with 98% vote share. We have already noticed above that before the CoC, fee and expenses of the Applicant (former RP) and the present RP, i.e. Respondent No.1 were also placed for the approval, and the CoC did not approve the expenses, either of the former RP or of the present RP with 100% vote share, which has been noticed in paragraph 29 of the Application, as extracted above. The RP was statutorily obliged to file Application under Section 12A, which was resolved by the CoC with requisite vote share, we fail to see how the RP can be said to have Contempt Case (AT) No.8 of 2025 16 committed contempt of the order dated 13.01.2021, by filing an Application for withdrawal.
16. The law for initiating proceedings of civil contempt are well settled. Willful violation of order passed by Court can give cause for initiating contempt proceedings against the delinquent. The Hon'ble Supreme Court in Dr. U.N. Bora, Ex. Chief Executive Officer and Ors. vs. Assam Roller Flour Mills Association and Anr. - (2022) 1 SCC 101, has reviewed the entire law of civil contempt. In paragraphs 8 and 9, following was laid down:
"8. We are dealing with a civil contempt. The Contempt of Courts Act, 1971 explains a civil contempt to mean a wilful disobedience of a decision of the Court. Therefore, what is relevant is the "wilful" disobedience. Knowledge acquires substantial importance qua a contempt order. Merely because a subordinate official acted in disregard of an order passed by the Court, a liability cannot be fastened on a higher official in the absence of knowledge. When two views are possible, the element of wilfulness vanishes as it involves a mental element. It is a deliberate, conscious and intentional act. What is required is a proof beyond reasonable doubt since the proceedings are quasi-criminal in nature. Similarly, when a distinct mechanism is provided and that too, in the same judgment alleged to have been violated, a party has to exhaust the same before approaching the court in exercise of its jurisdiction under the Contempt of Courts Act, 1971. It is well open to the said party to contend that the benefit of the order passed has not been actually given, through separate proceedings while seeking appropriate relief but certainly not by way of a contempt proceeding. While dealing with a contempt petition, the Court is not expected to conduct a roving inquiry and go beyond the very judgment which was allegedly violated. The said principle has to be applied with more vigour when disputed questions of facts are involved and they were raised earlier but consciously not dealt with by creating a specific forum to decide the original proceedings.
9. We do not wish to reiterate the aforesaid settled principle of law except by quoting the reasoned decision of this Court in Hukum Chand Deswal v. Satish Raj Deswal [Hukum Chand Deswal v. Satish Raj Deswal, (2021) 13 SCC 166 : 2020 SCC OnLine SC 438] wherein the celebrated judgment in Ram Kishan v. Tarun Bajaj [Ram Kishan v. Tarun Bajaj, (2014) 16 SCC 204 : (2015) 3 SCC (L&S) 311] , has been quoted. The following paragraphs would govern the aforesaid principle : (Hukum Chand Contempt Case (AT) No.8 of 2025 17 Deswal case [Hukum Chand Deswal v. Satish Raj Deswal, (2021) 13 SCC 166 : 2020 SCC OnLine SC 438] , SCC paras 20-21 & 25-
27) "20. At the outset, we must advert to the contours delineated by this Court for initiating civil contempt action in Ram Kishan v. Tarun Bajaj [Ram Kishan v. Tarun Bajaj, (2014) 16 SCC 204 : (2015) 3 SCC (L&S) 311] . In paras 11, 12 and 15 of the reported decision, this Court noted thus : (SCC pp.
209-11) '11. The contempt jurisdiction conferred on to the law courts power to punish an offender for his wilful disobedience/contumacious conduct or obstruction to the majesty of law, for the reason that respect and authority commanded by the courts of law are the greatest guarantee to an ordinary citizen that his rights shall be protected and the entire democratic fabric of the society will crumble down if the respect of the judiciary is undermined. Undoubtedly, the contempt jurisdiction is a powerful weapon in the hands of the courts of law but that by itself operates as a string of caution and unless, thus, otherwise satisfied beyond reasonable doubt, it would neither be fair nor reasonable for the law courts to exercise jurisdiction under the Act. The proceedings are quasi- criminal in nature, and therefore, standard of proof required in these proceedings is beyond all reasonable doubt. It would rather be hazardous to impose sentence for contempt on the authorities in exercise of the contempt jurisdiction on mere probabilities.
(Vide V.G. Nigam v. Kedar Nath Gupta [V.G. Nigam v. Kedar Nath Gupta, (1992) 4 SCC 697 : 1993 SCC (L&S) 202] , Chhotu Ram v. Urvashi Gulati [Chhotu Ram v. Urvashi Gulati, (2001) 7 SCC 530 : 2001 SCC (L&S) 1196] , Anil Ratan Sarkar v. Hirak Ghosh [Anil Ratan Sarkar v. Hirak Ghosh, (2002) 4 SCC 21] , Bank of Baroda v. Sadruddin Hasan Daya [Bank of Baroda v. Sadruddin Hasan Daya, (2004) 1 SCC 360] , Sahdeo v. State of U.P. [Sahdeo v. State of U.P., (2010) 3 SCC 705 : (2010) 2 SCC (Cri) 451] and National Fertilizers Ltd. v. Tuncay Alankus [National Fertilizers Ltd. v. Tuncay Alankus, (2013) 9 SCC 600 : (2013) 4 SCC (Civ) 481 : (2014) 1 SCC (Cri) 172] .)
12. Thus, in order to punish a contemnor, it has to be established that disobedience of the order is "wilful". The word "wilful" introduces a mental element and hence, requires looking into the mind of a person/contemnor by gauging his actions, which is an indication of one's state of mind. "Wilful" means knowingly intentional, conscious, calculated and deliberate with full knowledge of consequences flowing therefrom. It excludes casual, accidental, Contempt Case (AT) No.8 of 2025 18 bona fide or unintentional acts or genuine inability. Wilful acts does not encompass involuntarily or negligent actions. The act has to be done with a "bad purpose or without justifiable excuse or stubbornly, obstinately or perversely". Wilful act is to be distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. It does not include any act done negligently or involuntarily. The deliberate conduct of a person means that he knows what he is doing and intends to do the same.
Therefore, there has to be a calculated action with evil motive on his part. Even if there is a disobedience of an order, but such disobedience is the result of some compelling circumstances under which it was not possible for the contemnor to comply with the order, the contemnor cannot be punished. "Committal or sequestration will not be ordered unless contempt involves a degree of default or misconduct." (Vide S. Sundaram Pillai v. V.R. Pattabiraman [S. Sundaram Pillai v. V.R. Pattabiraman, (1985) 1 SCC 591] , Rakapalli Raja Ram Gopala Rao v. Naragani Govinda Sehararao [Rakapalli Raja Ram Gopala Rao v. Naragani Govinda Sehararao, (1989) 4 SCC 255] , Niaz Mohd. v. State of Haryana [Niaz Mohd. v. State of Haryana, (1994) 6 SCC 332] , Chordia Automobiles v. S. Moosa [Chordia Automobiles v. S. Moosa, (2000) 3 SCC 282] , Ashok Paper Kamgar Union v. Dharam Godha [Ashok Paper Kamgar Union v. Dharam Godha, (2003) 11 SCC 1] , State of Orissa v. Mohd. Illiyas [State of Orissa v. Mohd. Illiyas, (2006) 1 SCC 275 : 2006 SCC (L&S) 122] and Uniworth Textiles Ltd. v. CCE [Uniworth Textiles Ltd. v. CCE, (2013) 9 SCC 753] .
* * *
15. It is well-settled principle of law that if two interpretations are possible, and if the action is not contumacious, a contempt proceeding would not be maintainable. The effect and purport of the order is to be taken into consideration and the same must be read in its entirety. Therefore, the element of willingness is an indispensable requirement to bring home the charge within the meaning of the Act.
[See Sushila Raje Holkar v. Anil Kak [Sushila Raje Holkar v. Anil Kak, (2008) 14 SCC 392 : (2009) 2 SCC (L&S) 497] and Three Cheers Entertainment (P) Ltd. v. CESC Ltd. [Three Cheers Entertainment (P) Ltd. v. CESC Ltd., (2008) 16 SCC 592] ]
21. Similarly, in R.N. Dey v. Bhagyabati Pramanik [R.N. Dey v. Bhagyabati Pramanik, (2000) 4 SCC 400] , this Court expounded in para 7 as follows : (SCC p. 404) Contempt Case (AT) No.8 of 2025 19 '7. We may reiterate that the 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 the court's dignity and majesty of law. Further, an aggrieved party has no right to insist that the court should exercise such jurisdiction as contempt is between a contemner 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, the 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 the 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 a nullity. In such a situation, as there was no wilful or deliberate disobedience of the order, the initiation of contempt proceedings was wholly unjustified.' * * *
25. Pertinently, the special leave petitions were filed by the respondent against the order dated 28-1-2019 [Sagu Dreamland (P) Ltd. v. Jingal Bell Amusement Park (P) Ltd., 2019 SCC OnLine Del 6720] , which as aforesaid, did not deal with the question regarding the monthly rent payable by the respondent but explicitly left the parties to pursue the same before the executing court. The plaintiff-petitioner having acquiesced of that observation of the High Court, cannot be allowed to contend to the contrary. This Court in Jhareswar Prasad Paul v. Tarak Nath Ganguly [Jhareswar Prasad Paul v. Tarak Nath Ganguly, (2002) 5 SCC 352 :
2002 SCC (L&S) 703] , in para 11, opined thus : (SCC p.
360) '11. ... The court exercising contempt jurisdiction is not entitled to enter into questions which have not been dealt with and decided in the judgment or order, violation of which is alleged by the applicant. The court has to consider the direction issued in the judgment or order and not to consider the question as to what the judgment or order should have contained.
At the cost of repetition, be it stated here that the court exercising contempt jurisdiction is primarily concerned with the question of contumacious conduct Contempt Case (AT) No.8 of 2025 20 of the party, which is alleged to have committed deliberate default in complying with the directions in the judgment or order. If the judgment or order does not contain any specific direction regarding a matter or if there is any ambiguity in the directions issued therein then it will be better to direct the parties to approach the court which disposed of the matter for clarification of the order instead of the court exercising contempt jurisdiction taking upon itself the power to decide the original proceeding in a manner not dealt with by the court passing the judgment or order. If this limitation is borne in mind then criticisms which are sometimes levelled against the courts exercising contempt of court jurisdiction "that it has exceeded its powers in granting substantive relief and issuing a direction regarding the same without proper adjudication of the dispute" in its entirety can be avoided. This will also avoid multiplicity of proceedings because the party which is prejudicially affected by the judgment or order passed in the contempt proceeding and granting relief and issuing fresh directions is likely to challenge that order and that may give rise to another round of litigation arising from a proceeding which is intended to maintain the majesty and image of courts.' * * *
26. Thus understood, we find force in the explanation offered by the respondent that as per its bona fide understanding, there was no outstanding dues payable to the petitioner. Moreover, as observed [Sagu Dreamland (P) Ltd. v. Jingal Bell Amusement Park (P) Ltd., 2019 SCC OnLine Del 6720] by the High Court, these aspects could be answered by the executing court if the parties pursue their claim(s) before it in that regard. Suffice it to observe that it is not a case of intentional violation or wilful disobedience of the order passed by this Court to initiate contempt action against the respondent. Instead, we hold that it would be open to the parties to pursue their claim(s) in execution proceedings or any other proceedings, as may be permissible in law in respect of the issue(s) under consideration. In such proceedings, all aspects can be considered by the forum/court concerned on merits in accordance with law. We say no more.
27. Reverting to the allegation about damage caused to the suit property by the respondent at the time of vacating the same, in our opinion, the respondent has made out a formidable case that it did not cause any damage, much less permanent damage to the structure in the suit property. Whereas, the petitioner was relying on photographs concerning the debris on the site left behind at the time of vacating the suit property. The debris cannot cause damage and it is certainly not a case of defacement of the suit Contempt Case (AT) No.8 of 2025 21 property. That position is reinforced from the fact that the water park in the suit premises was started and became fully functional within 2-3 months. Viewed thus, it is rightly urged that it can be safely assumed that no damage was caused by the respondent to the structure in question. Minor repairs required to be carried out by the petitioner for making the water park functional cannot be painted as intentional disobedience of the order of this Court. In any case, that being a complex question of fact, need not be adjudicated in the contempt proceedings. We leave it open to the petitioner to pursue even that claim in execution proceedings or such other proceedings as may be permissible in law. We may not be understood to have expressed any final opinion in respect of condition of the suit premises, whilst handing over possession to the petitioner. We hold that even this issue under consideration does not warrant initiation of contempt action against the respondent."
(emphasis supplied)"
17. The contempt proceedings can be initiated only when there is wilful disobedience by a delinquent or a contumacious conduct or obstruction to the majesty of law. The present Application for initiating contempt is founded on filing of the Application by the RP under Section 12A for withdrawal of CIRP.
18. The Applicant in support of his submissions has relied on various judgments of the Hon'ble Supreme Court, which need to be noticed. The Applicant has relied on judgment of the Hon'ble Supreme Court dated 13.12.2024 in Contempt Petition (C) Nos.158-159 in Civil Appeal Nos.5542-5543 of 2023 in CELIR LLP vs. Mr. Sumati Prasad Bafna & Ors. The Applicant relied on paragraphs 199, 200 and 201 of the judgment, which lays down following "199. The contempt jurisdiction of this court cannot be construed by any formulaic or rigid approach. Merely because there is no prohibitory order or no specific direction issued the same would not mean that the parties cannot be held guilty of contempt. The Contempt Case (AT) No.8 of 2025 22 Contempt jurisdiction of the court extends beyond the mere direct disobedience of explicit orders or prohibitory directions issued by the court. Even in the absence of such specific mandates, the deliberate conduct of parties aimed at frustrating court proceedings or circumventing its eventual decision may amount to contempt. This is because such actions strike at the heart of the judicial process, undermining its authority and obstructing its ability to deliver justice effectively. The authority of courts must be respected not only in the letter of their orders but also in the broader spirit of the proceedings before them.
200. Any contumacious conduct of the parties to bypass or nullify the decision of the court or render it ineffective, or to frustrate the proceedings of the court, or to enure any undue advantage therefrom would amount to contempt. Attempts to sidestep the court's jurisdiction or manipulate the course of litigation through dishonest or obstructive conduct or malign or distort the decision of the courts would inevitably tantamount to contempt sans any prohibitory order or direction to such effect.
201. Thus, the mere conduct of parties aimed at frustrating the court proceedings or circumventing its decisions, even without an explicit prohibitory order, constitutes contempt. Such actions interfere with the administration of justice, undermine the respect and authority of the judiciary, and threaten the rule of law."
19. The Hon'ble Supreme Court laid down that contempt jurisdiction of the Court extends beyond the mere direct disobedience of explicit orders or prohibitory directions issued by the Court. Even in the absence of such specific mandates, the deliberate conduct of parties aimed at frustrating court proceedings or circumventing its eventual decision may amount to contempt. The Court further held that any contumacious conduct of the parties to bypass or nullify the decision of the Court or render it ineffective, or to frustrate the proceedings of the Court may Contempt Case (AT) No.8 of 2025 23 amount to contempt. The present is a case where RP has filed the Application under Section 12A dated 10.07.2024 on the basis of reasons and circumstances and the decision of the CoC, as noticed above. We have noted above that RP is statutorily obliged to file the Application when withdrawal of CIRP is approved with 98% vote share of the CoC. The filing of the Application by the RP was statutory obligation of the RP. We have further noticed that CoC, who has to pay the fee and expenses has disapproved the payment of CIRP and fee and expenses to both the former RP (Applicant) and the present RP (Respondent No.1) as noticed above. The CoC having not approved CIRP fee and expenses, no action can be initiated on Respondent Nos.1 and 2. It is not the present RP, who has to pay fee and expenses to the Applicant, who was erstwhile RP, replaced by the present RP. The CoC in the CIRP of the CD, consist of only Homebuyers. It is specifically pleaded in the Application filed by the RP that Homebuyers have expressed their inability to bear expenses of CIRP. Paragraph-35 of the Application is again reproduced:
"35. However, the CoC in the present case consists of individual persons, who belong to modest financial backgrounds. Having already incurred huge losses at their end at the hands of the CD, they have expressed a view that they are unable to foot any expenses in the CIRP. Therefore, the CoC has rejected all the costs incurred by the former and current RP as it is unable to meet such expenses. Further, a majority of the CoC members are scattered, thereby making the requirement of obtaining a bank guarantee all the more cumbersome. In light of the same, the CoC has humbly requested that this Hon'ble Tribunal may be pleased to waive the requirement of a bank guarantee in the present case and allow the withdrawal of the CIRP as it is."Contempt Case (AT) No.8 of 2025 24
20. The order of this Tribunal dated 13.01.2021 as noticed above, only protected the fee and expenses of the Applicant, who was erstwhile RP, who was replaced by Respondent No.1. When the CoC, who is to make the payment of the CIRP fee and expenses is unable to bear the fee and expenses and they have decided to withdraw the CIRP by the Minutes of the Meeting held on 18.06.2024, we are of the view that filing of the Application by RP for withdrawal, cannot amount to contempt of order of this Tribunal dated 13.01.2021.
21. We may notice the next judgment relied by the Application, i.e. State Bank of India & Ors. vs. The Consortium of Mr. Murari Lal Jalan and Mr. Florian Fritisch & Anr. in Civil Appeal Nos.5023- 5024 of 2024 decided on 07.11.2024. The Applicant has referred to paragraph-183, where certain observations were made by the Hon'ble Supreme Court. The observation made in paragraph-183, on which reliance has been placed by the Applicant, were made in context of the case before the Hon'ble Supreme Court, which has no applicability in the facts of the present case.
22. The Applicant has also relied on judgment of the Hon'ble Supreme Court in Civil Appeal No.4065 of 2020 in Alok Kaushik vs. M/s Bhuvaneshwari Ramanathan and Ors., where the Hon'ble Supreme Court has allowed the Appeal and directed for consideration of the Application filed by the Appellant, who was appointed as Valuer in the CIRP of the CD. In the above case, the CIRP was set aside. The Appellant has filed the Application before the NCLT challenging non-payment of the Contempt Case (AT) No.8 of 2025 25 fee, which Application was dismissed observing that NCLT had been rendered functus officio. The Appeal against the order was also dismissed and the matter was taken before the Hon'ble Supreme Court. The Hon'ble Supreme Court in the above judgment held that NCLT had jurisdiction to consider the Application under Section 60(5)(c). In paragraph 19 of the judgment, following was held:
"19 Though the CIRP was set aside later, the claim of the appellant as registered valuer related to the period when he was discharging his functions as a registered valuer appointed as an incident of the CIRP. The NCLT would have been justified in exercising its jurisdiction under Section 60(5)(c) of the IBC and, in exercise of our jurisdiction under Article 142 of the Constitution, we accordingly order and direct that in a situation such as the present case, the Adjudicating Authority is sufficiently empowered under Section 60(5)(c) of the IBC to make a determination of the amount which is payable to an expert valuer as an intrinsic part of the CIRP costs. Regulation 34 of the IRP Regulations defines 'insolvency resolution process cost' to include the fees of other professionals appointed by the RP. Whether any work has been done as claimed and if so, the nature of the work done by the valuer is something which need not detain this Court, since it is purely a factual matter to be assessed by the Adjudicating Authority."
23. There can be no quarrel to the proposition laid down by the Hon'ble Supreme Court in the above case. The NCLT has ample jurisdiction to decide the Application for payment of fee of Valuer. The above judgment in no manner helps the Appellant in the present case.
24. Another judgment relied on by the Applicant is the judgment of the Hon'ble Supreme Court dated January 11, 2019 in Civil Appeal No.618 of 2019 in Ram Chet Verma & Anr. vs. The State of Uttar Pradesh & Contempt Case (AT) No.8 of 2025 26 Ors., where the Hon'ble Supreme Court held that the Appellant shall be entitled to salary for the period they have rendered their services. The salary, if not paid, shall be paid to the Appellants within four weeks from that day. It was held that non-payment of salary would tantamount to takeing begar from them, which is prohibited under Article 23 of the Constitution of India. The above judgment was in the facts of the said case and was with regard to the payment of salary, which has no application in the present case as noticed above.
25. We, thus, are satisfied that no case has been made out for initiating any contempt proceedings against Respondent Nos.1 and 2 for alleged violation of order dated 13.01.2021 passed by this Tribunal. We do not find any merit in the Contempt Application. The Contempt Application is rejected.
[Justice Ashok Bhushan] Chairperson [Barun Mitra] Member (Technical) [Arun Baroka] Member (Technical) NEW DELHI 2nd May, 2025 Ashwani Contempt Case (AT) No.8 of 2025 27