SOMANADHAN V S Vs. RAVI SAINI

JUDGEMENT

(1.) The petitioners herein seek orders initiating Contempt of Court proceedings against the respondents on the ground of breach of an undertaking made by the respondents before this Court during a winding up proceeding. The said winding up proceeding relates to a company, which has launched so many construction projects. During the proceedings, an Administrator was appointed by this Court, and when suggestions and proposals for amicable settlement came from different quarters during the proceedings, an attempt in that line was also ordered to be made. During such efforts for amicable settlement of the whole dispute out of court, without and before going to the actual process of winding up, the respondent-Company came forward with a proposal that the Company would provide sufficient funds, and thus the Company intervened in the process with such an offer. An affidavit of undertaking made by the respondent-Company was accepted by the court, and the Administrator was accordingly, directed by the court to proceed with the efforts for settlement, after accepting the amount offered by the respondent-Company. Though the respondent- Company hoped at the initial stage that it could invest the money offered, the Company could not provide the funds in time, and in such a situation, the time for investment was extended by the court. When the respondent- Company sought further extension, the court extended the time till 21.10.2015, as a last chance. The first order accepting the affidavit was passed by the court on 16.09.2015, directing the Administrator to go ahead with the settlement proposals. Despite the last chance given by the court to make investment as offered, the Company could not raise funds, and provide the funds as offered. Alleging breach of the undertaking with malafide intention, the petitioners filed this application to initiate Contempt proceedings against the respondentCompany.

(2.) The respondents entered appearance, and filed statement of objection contending that there was no willful default or breach on their side, and that due to some technical reasons, the Company could not make investment and provide the funds, as offered and expected.

(3.) The application was taken up for necessary enquiry to see whether there is a prima facie case to proceed against the respondents for Contempt of Court. During the enquiry, both sides were heard, and all the required materials including the court orders, and also the undertaking made by the respondents were perused. Oral evidence was not felt necessary at this stage for a prima facie finding.