HSBC PI HOLDINGS (MAURITIUS) LIMITEDversusPRADEEP SHANTIPERSHAD JAIN & ORS

430                      [2022]REPORTS
               SUPREME COURT   15 S.C.R. 430              [2022] 15 S.C.R.


A              HSBC PI HOLDINGS (MAURITIUS) LIMITED
                                       v.
                PRADEEP SHANTIPERSHAD JAIN & ORS.
                   (Contempt Petition (Civil) No. 624 of 2020)
B                                      IN
                        (Civil Appeal No. 5158 of 2016)
                                 JULY 11, 2022
               [M. R. SHAH AND ANIRUDDHA BOSE, JJ.]
C
            Contempt of Courts Act, 1971 – Contempt of Court – When –
      Held: Sufficient opportunities have been given to the respondents
      to deposit the shortfall amount so as to maintain a sum of USD 60
      million in their Corporation Bank account – Defence on their behalf
      lacks bona fides – Respondents cannot be permitted to make the
D     same submissions which have not been accepted and/or rejected
      earlier – Repetitive submissions which have not been accepted
      earlier by court that itself is a wilful disobedience and tantamount
      to contempt showing the conduct on the part of the contemnors –
      Respondents are guilty of deliberate and wilful disobedience of
      judgment and order dated 19.08.2020 passed in Civil Appeal No.
E
      5158/2016 as well as order dated 06.05.2021 passed in the present
      petition – They have rendered themselves liable for suitable
      punishment under the provisions of the Contempt of Courts Act for
      wilful disobedience – However, before any further order of
      punishment/conviction is passed, an additional opportunity is given
F     to the respondents to comply with order dated 06.05.2021 as well
      as judgment and order dated 19.08.2020 passed by this Court to
      deposit the shortfall amount so as to maintain a balance of USD 60
      million in their Corporation Bank account within a period of four
      weeks from today – This would have a direct bearing on the
      punishment to be imposed – Matter be put up for further order on
G
      punishment.
           R.N. Dey Vs. Bhagyabati Pramanik (2000) 4 SCC 400: [2000]
      3 SCR 172 – distinguished.


H
                                      430
  HSBC PI HOLDINGS (MAURITIUS) LIMITED v. PRADEEP                431
            SHANTIPERSHAD JAIN & ORS.

     Welset Engineers & Anr. Vs. Vikas Auto Industries &         A
     Ors. (2015) 10 SCC 609; SEBI Vs. Sahara India Real
     Estate Corp. Ltd. & Ors. (2014) 5 SCC 429 – relied on.
     KK Modi Vs. KN Modi and Ors. (1998) 3 SCC 573 :
     [1998] 1 SCR 601; Firm Ashok Traders Vs Gurumukh
     Das Saluja (2004) 3 SCC 155 : [2004] 1 SCR 404;             B
     Delhi Development Authority Vs. Skipper Construction
     CO. (P) Ltd. (1996) 4 SCC 622 : [1996] 2 Suppl. SCR
     295; Rajinder Kumar Malhotra Vs. Paresh Biharilal
     Vyas; 2016 SCC Online Bom 89; Rama Narang Vs.
     Ramesh Narang and Anr. (2006) 11 SCC 114 : [2006]
     3 SCR 1068; M/s Terra Manufacturing & Sales Vs. M/          C
     s Alagendiraa Apparels 2011 SCC Online Del 4458;
     Kunhayammed Vs. State of Kerala; (2000) 6 SCC 359 :
     [2000] 1 Suppl. SCR 538; Maninderjit Singh Bitta Vs.
     Union of India; (2012) 1 SCC 273 : 2011 (11 ) SCALE
     634; Vedanta Ltd. (formerly 26 known as M/s. Sesa           D
     Sterlite Ltd) Vs. Goa Foundation and Ors. 2021 SCC
     Online SC 476; Food Corpn. of India Vs. Sukh Deo
     Prasad (2009) 5 SCC 665; Court Liquidator Employees’
     Assn. Vs. P.G. Mankad (2002) 10 SCC 477; Rama
     Narang Vs. Ramesh Narang and Ors. (2021) SCC
     Online SC 29; Ram Kishan Vs. Tarun Bajaj (2014) 16          E
     SCC 204 : [2014] 1 SCR 538; Kanwar Singh Saini Vs.
     High Court of Delhi (2012) 4 SCC 307 : [ 2011] 15
     SCR 972; Kapildeo Prasad Sah Vs. State of Bihar (1999)
     7 SCC 569 : [1999] 1 Suppl. SCR 725; Rita Markandey
     Vs. Surjit Singh Arora (1996) 6 SCC 14 : [1996] 7           F
     Suppl. SCR 56; Bank of Baroda Vs. Sadruddin Hasan
     Daya; (2004) 1 SCC 360 : [2003] 6 Suppl. SCR 764 –
     referred to.
                     Case Law Reference
[2000] 3 SCR 172             distinguished           Para 5.4    G
[1998] 1 SCR 601             referred to             Para 4.7
[2004] 1 SCR 404             referred to             Para 4.13
[1996] 2 Suppl. SCR 295      referred to             Para 4.14
                                                                 H
432            SUPREME COURT REPORTS                         [2022] 15 S.C.R.


A     [2006] 3 SCR 1068                 referred to                Para 4.15
      [2000] 1 Suppl. SCR 538           referred to                Para 4.19
      [2014] 1 SCR 538                  referred to                Para 5.14
      [2011] 15 SCR 972                 referred to                Para 5.14
B     [1999] 1 Suppl. SCR 725           referred to                Para 5.14
      [1996] 7 Suppl. SCR 56            referred to                Para 8.1
      [2003] 6 Suppl. SCR 764           referred to                Para 8.1
             CIVIL ORIGINAL CONTEMPT JURISDICTION: Contempt
C     Petition (Civil) No.624 of 2020 In Civil Appeal No.5158 of 2016.
            Petition filed for willful disobedience of Court’s Order dated
      19.08.2020 and 06.05.2021 passed by the Supreme Court of India in
      Contempt Petition (Civil) No.624 of 2020 in Civil Appeal no. 5158 of
      2016.
D           Neeraj Kishan Kaul, Nikhil M. Sakhardande, Sr. Advs., Rajendra
      Barot, Ms. Liz Mathew, Ms. Vidhi Barot, Ms. Priyanka Shetty, Ms.
      Apoorva Gupta, Dhruv Sharma, Ms. Sonali Jain, Ayush Chaddha, Dhaval
      Arora, Ms. Vasudha Jain, Advs. for the Petitioner.
            Mukul Rohatgi, Sr. Adv., Ankur Yadav, Adv. for the Respondents.
E
            The Judgment of the Court was delivered by
            M. R. SHAH, J.
             1. Present contempt petition has been preferred by the petitioner
      herein, alleging wilful, intentional and deliberate disobedience of the
F     directions issued by this Court by the alleged contemnors – respondents
      herein in not depositing the shortfall amount so as to maintain a balance
      of USD 60 million in the Corporation Bank account maintained by Avitel
      Post Studioz Limited (hereinafter referred to as the “Avitel”), a company
      owned by the alleged contemnors. It is alleged that the alleged contemnors
      are in wilful breach of two orders of this Court dated 19.08.2020 and
G
      06.05.2021.
            2. The facts leading to the present contempt proceedings in a
      nutshell are as under: -
            2.1 A Share Subscription Agreement (SSA) was entered into on
H     21.04.2011 between HSBC – petitioner herein and Avitel and others
  HSBC PI HOLDINGS (MAURITIUS) LIMITED v. PRADEEP                               433
     SHANTIPERSHAD JAIN & ORS. [M. R. SHAH, J.]

(original appellant(s) before this Court in Civil Appeal No. 5145/2016).        A
HSBC made an investment in the equity capital of Avitel India for a
consideration of USD 60 million in order to acquire 7.8% of its paid-up
capital. That the said SSA contained an arbitration clause.
       2.2 That thereafter, both the parties entered into a Shareholders
Agreement (SHA) on 06.05.2011, which defined the relationship between           B
the parties after SSA dated 21.04.2011 had been entered into. The said
SHA also contained an arbitration clause. As disputes arose between
the parties, on 11.05.2012, notices of arbitration were issued by HSBC
to the Singapore International Arbitration Centre (SIAC) to commence
arbitral proceedings. The SIAC appointed an Emergency Arbitrator. The
Emergency Arbitrator passed two interim awards dated 28.05.2012 and             C
29.05.2012, in the SSA and SHA, respectively, in favour of HSBC,
directing the alleged contemnors – Avitel Dubai to refrain from disposing
of or dealing with or diminishing the value of their assets up to USD 50
million, and permitting HSBC to deliver a copy of the interim awards to
financial institutions in India and the UAE with which any of them hold         D
or may hold or be signatory to accounts, together with a request that the
financial institutions freeze such accounts consistent with the interim
awards. On 27.07.2012, the Emergency Arbitrator made an amendment
to interim awards granting further relief to HSBC. That thereafter on
30.07.2012, HSBC filed Arbitration Petition No. 1062/2012 under Section
9 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to        E
as the Act, 1996) in the Bombay High Court, inter-alia, seeking directions
to call upon the alleged contemnors to deposit a security amount to the
extent of HSBC’s claim in the arbitration proceedings that had begun
under both the SSA and SHA.
       2.3 On 03.08.2012, the learned Single Judge of the Bombay High           F
Court passed an interim order under Section 9 petition, inter-alia, directing
the Corporation Bank to allow the alleged contemnors to withdraw a
sum of INR 1 crore from their account on or before 09.08.2012, but not
to allow any further withdrawals until further orders, till which time, the
account was to remain frozen. Meanwhile, the alleged contemnors
challenged the jurisdiction of the three-member Arbitral Tribunal set up        G
under the auspices of the SIAC. The Arbitral Tribunal on 07.12.2012
passed a unanimous “final partial award on jurisdiction”, dismissing the
jurisdictional challenge.
      2.4 That thereafter in Section 9 petition pending before the Bombay
High Court, the learned Single Judge passed an order dated 22.01.2014,          H
434            SUPREME COURT REPORTS                        [2022] 15 S.C.R.


A     in which the respondents herein – alleged contemnors were directed to
      deposit any shortfall in their account with the Corporation Bank so as to
      maintain a balance of USD 60 million. An appeal against the order of the
      learned Single Judge was disposed of by the Division Bench of the High
      Court vide judgment and order dated 31.07.2014. The order passed by
      the learned Single Judge directing the alleged contemnors to deposit the
B
      shortfall in their account with the Corporation Bank so as to maintain a
      balance of USD 60 million was the subject matter of further appeal
      before the Division Bench. By judgment and order dated 31.07.2014,
      the Division Bench of the High Court partly allowed the said appeal and
      modified the order passed by the learned Single Judge and directed the
C     alleged contemnors to deposit an additional amount equivalent to USD
      20 million in the Corporation Bank account, so that the total deposit in
      the said account is maintained at half the said figure of USD 60 million,
      i.e., at USD 30 million (instead of USD 60 million as ordered by the
      learned Single Judge).
D            2.5 Feeling aggrieved and dissatisfied with order dated 31.07.2014
      passed by the Division Bench of the High Court, both Avitel and HSBC
      preferred appeals before this Court. (being Civil Appeal No. 5145/2016
      by Avitel and Civil Appeal No. 5158/2016 by HSBC). By a common
      judgment and order dated 19.08.2020, this Court set aside the order
      passed by the Division Bench of the High Court, directing the Avital to
E
      deposit USD 60 million and restored the order dated 22.01.2014 passed
      by the learned Single Judge. Thus, by the judgment and order dated
      19.08.2020, the alleged contemnors – respondents herein – Avitel and
      others were required to deposit and/or maintain USD 60 million in the
      Corporation Bank account. It is alleged that not depositing the shortfall
F     amount and/or maintaining USD 60 million in the Corporation Bank
      account, the respondents herein have rendered themselves liable for
      suitable punishment under the Contempt of Courts Act.
            2.6 At this stage, it is required to be noted that in the meanwhile
      the Arbitral Tribunal in Singapore had passed a final award dated
G     27.09.2014, awarding USD 60 million as damages in favour of the HSBC
      and against the respondents herein. The same foreign award was
      challenged by the respondents herein – alleged contemnors in Section
      34 proceedings before the Bombay High Court. By a judgment and order
      dated 28.09.2015, the learned Single Judge dismissed Section 34
      application/proceedings and an appeal under Section 37 of the Act, 1996
H
  HSBC PI HOLDINGS (MAURITIUS) LIMITED v. PRADEEP                             435
     SHANTIPERSHAD JAIN & ORS. [M. R. SHAH, J.]

also came to be dismissed on 05.05.2017. Meanwhile, HSBC had moved            A
the Bombay High Court to enforce the foreign final award dated
27.09.2014 in the SSA, of which enforcement proceedings were reported
to be pending.
       2.7 It appears that thereafter and pursuant to the judgment and
order dated 19.08.2020 passed by this Court, the HSBC addressed a             B
legal notice dated 04.09.2020 to the alleged contemnors and Avitel, calling
upon them to inter-alia deposit the shortfall amount in the Corporation
Bank account to maintain a total of USD 60 million. The alleged
contemnors replied to the said notice by their reply dated 09.09.2020
and refused to deposit the shortfall amount on the ground that they were
contemplating remedies under Article 137 of the Constitution of India.        C

       2.8 That thereafter, the petitioner had filed the present petition
against the respondents herein on 26.09.2020, alleging wilful, intentional
and deliberate disobedience of August Judgment. This Court issued notice
in the contempt petition on 06.11.2020.
                                                                              D
      2.9 On 30.04.2021, HSBC filed an Interim Application bearing
No. 59119/2021, inter-alia, seeking to restrain the alleged contemnors
from diverting their assets and/or creating third party rights during the
pendency of the contempt petition with a view to secure its interests.
       2.10 At next hearing on 06.05.2021, the alleged contemnors             E
volunteered to give an undertaking not to sell or encumber any of their
and Avitel’s assets during the pendency of this contempt petition as well
as the enforcement petition pending before the Bombay High Court.
The same proposal was rejected by this Court. This Court further directed
the respondents herein - alleged contemnors to deposit the shortfall amount
within a period of six weeks (i.e., by June, 2021).                           F
       2.11 That thereafter instead of complying with the directions of
this Court, on 15.06.2021 the respondents filed an IA seeking exemption
from the payment of the shortfall amount, inter-alia, on the ground that
they are unable to liquidate their assets and offered the same undertaking,
which was earlier rejected by this Court on 06.05.2021 (IA No. 68388/         G
2021). The said exemption application was opposed by HSBC vide their
reply dated 01.07.2021. This Court dismissed the exemption application
vide order dated 02.07.2021 and directed the alleged contemnors to file
their counter affidavit to the contempt petition in two weeks. It is the
case on behalf of HSBC that instead of complying with the judgment
                                                                              H
436             SUPREME COURT REPORTS                         [2022] 15 S.C.R.


A     and order dated 19.08.2020 and subsequent order dated 06.05.2021, the
      alleged contemnors have filed another application being I.A. No. 82521/
      2021 (application for directions) raising the same grounds that were earlier
      rejected by this Court.
             2.12 As the respondents herein – alleged contemnors have failed
B     to comply with the order passed by the learned Single Judge and the
      judgment and order passed by this Court dated 19.08.2020 and subsequent
      order dated 06.05.2021 in not depositing the shortfall of approx. USD 42
      million (approx. INR 3,09,07,88,400 as on 18.09.2020), so as to maintain
      a sum of at least USD 60 million (approx. 4,41,54,12,000 as on 18.09.2020)
      in the Corporation Bank account, the petitioner herein – HSBC has
C     preferred the present contempt petition.
            3. Shri Neeraj Kishan Kaul, learned Senior Advocate has appeared
      on behalf of the petitioner – HSBC and Shri Mukul Rohatgi, learned
      Senior Advocate has appeared on behalf of the respondents – alleged
      contemnors. A counter is filed on behalf of the respondents – alleged
D     contemnors.
              4. Shri Neeraj Kishan Kaul, learned Senior Advocate appearing
      on behalf of the petitioner – HSBC has vehemently submitted that there
      is wilful, intentional and deliberate disobedience of judgment and order
      dated 19.08.2020 and subsequent order dated 06.05.2021 by the
E     respondents herein by not depositing the shortfall amount to a sum of
      USD 60 million in the Corporation Bank account maintained by the Avitel.
      It is submitted that the wilful, intentional and deliberate disobedience of
      orders passed by this Court has rendered the respondents – alleged
      contemnors liable for suitable punishment under the provisions of the
F     Contempt of Courts Act.
              4.1 It is further submitted by Shri Kaul, learned Senior Advocate
      appearing on behalf of the petitioner – HSBC that in the present case
      after judgment and order dated 19.08.2020 passed by this Court confirming
      the order passed by the learned Single Judge, directing the Avital and
G     others to deposit the shortfall amount so as to maintain a sum of USD 60
      million in the Corporation Bank account maintained by the Avitel, the
      respondents and the Avitel have filed number of proceedings on the
      same grounds which were rejected by this Hon’ble Court time and again.
      It is submitted that the respondents and the Avitel have continued to file
      number of proceedings on the same grounds which were earlier not
H     accepted by this Hon’ble Court.
  HSBC PI HOLDINGS (MAURITIUS) LIMITED v. PRADEEP                              437
     SHANTIPERSHAD JAIN & ORS. [M. R. SHAH, J.]

       4.2 It is submitted that the respondents – alleged contemnors have      A
siphoned off USD 60 million invested by the petitioner in Avitel to related
parties. It is submitted that the monies were siphoned off by the
respondents – alleged contemnors to Avitel Post Studioz FZ-LLC (Avitel
Dubai) through Avitel Holdings Limited (Avitel Mauritius). These amounts
were thereafter paid to Highend, Digital Fusion, etc. i.e., to companies
                                                                               B
owned by alleged contemnors. It is submitted that out of the total amount
invested by the petitioner i.e., USD 59.2 million have been transferred to
Avitel Dubai’s bank accounts and into the bank accounts, the majority of
which are controlled by the Jain Family. It is submitted that the same has
been upheld by the arbitral tribunal in the Foreign Final Award and prima
facie accepted by this Hon’ble Court in the August Judgment.                   C
       4.3 It is submitted that the respondents – alleged contemnors did
not challenge the final arbitral award in Singapore. However, they filed
a petition under Section 34 of the Act, 1996 before the Bombay High
Court, which has been dismissed on 28.09.2015. It is submitted that the
Division Bench of the Bombay High Court has confirmed the order                D
passed by the learned Single Judge dated 28.09.2015 rejecting Section
34 application. It is submitted that the Foreign Final Award has not been
challenged in Singapore, the findings made therein are final and binding
on the alleged contemnors.
       4.4 It is submitted that despite the petitioner served a legal notice   E
to the respondents – alleged contemnors and Avitel, which was after
and pursuant to the August Judgment delivered by this Hon’ble Court,
calling upon them to inter-alia, deposit the shortfall amount in the
Corporation Bank account to maintain a total of USD 60 million, the
respondents – alleged contemnors have refused to deposit the shortfall
                                                                               F
amount at that time on the ground that they were contemplating the
proceedings under Article 137 of the Constitution of India. It is submitted
that therefore and after this Hon’ble Court issued the notice in the present
contempt petition, this Hon’ble Court passed an order dated 06.05.2021
directing respondents – alleged contemnors to deposit the shortfall amount
within a period of six weeks. It is submitted that instead of depositing the   G
shortfall amount which expired on 17.06.2021, the respondents – alleged
contemnors filed an IA seeking exemption from the payment of the
shortfall amount which came to be dismissed by this Hon’ble Court. It is
submitted that the offer made by the respondents to file an undertaking
that they will not dispose of their assets in place of making deposit of the
                                                                               H
438             SUPREME COURT REPORTS                            [2022] 15 S.C.R.


A     shortfall amount, has not been accepted and/or the said proposal has
      been rejected by this Hon’ble Court.
             4.5 It is further submitted that the case on behalf of the respondents
      – alleged contemnors that they are unable to arrange and liquidate their
      assets is nothing but a false attempt on the part of the respondents not to
B     deposit the shortfall amount. It is submitted that their inability to liquidate
      their assets and/or their inability to deposit the requisite amount is nothing
      but a lame excuse which as such is belated. It is submitted that though
      the August Judgment was pronounced over ten months ago, the
      respondents – alleged contemnors did not notify their inability to deposit
      the amount until they made their exemption application.
C
              4.6 It is submitted that in reply to the exemption application – IA
      No. 68388/2011, it was specifically pointed out by the petitioner – HSBC
      that if respondents – alleged contemnors – Avitel are granted the reliefs
      prayed for in the application (exemption from making payment of the
      shortfall amount) the August judgment, contempt petition, order dated
D     06.05.2021 and consequently, the enforcement proceedings before the
      Bombay High Court, would be rendered infructuous. It is submitted that
      thereafter, after hearing learned counsel appearing on behalf of both the
      parties by order dated 02.07.2021 this Hon’ble Court had dismissed the
      exemption application and directed the respondents to file their counter
      affidavit to the contempt petition in two weeks. It is submitted that
E
      however, thereafter and in continuous of its contemptuous conduct the
      respondents – alleged contemnors filed yet another IA No. 82521/2021
      (application for directions) raising the same grounds that were rejected
      by this Hon’ble Court.
              4.7 It is submitted that on 16.07.2021, respondents – alleged
F     contemnors also filed their counter affidavit, inter-alia, stating that they
      are in the process of collecting offers in respect of their immovable and
      movable assets including their shareholding in Avitel to arrange the shortfall
      amount and have filed a review petition (Diary No. 20098/2020) against
      the August Judgment which is pending before the Supreme Court. It is
G     submitted that all grounds raised by the respondents – alleged contemnors
      in the counter affidavit have already been rejected by this Hon’ble Court
      in this contempt petition itself. It is submitted that therefore, the
      respondents – alleged contemnors are seeking to reagitate the same
      issue again is abuse of process of the Court, as held by this Hon’ble
      Court in the case of KK Modi Vs. KN Modi and Ors.; (1998) 3
H     SCC 573.
  HSBC PI HOLDINGS (MAURITIUS) LIMITED v. PRADEEP                                  439
     SHANTIPERSHAD JAIN & ORS. [M. R. SHAH, J.]

       4.8 It is further submitted by Shri Kaul, learned Senior Advocate           A
appearing on behalf of the petitioner – HSBC that as such the
respondents have accepted that are duty bound to comply with the
directions of this Hon’ble Court and order dated 06.05.2021. It is submitted
that as such the respondents have not raised the issue of maintainability
of the contempt petition.
                                                                                   B
        4.9 It is submitted that while the alleged contemnors in the counter
affidavit state that they have been “in the process of collecting offers”
and “actively pursuing sale of their personal assets”, the alleged
advertisements put up for sale of such assets have been published as
late as on 8th July, 2021 (i.e. one week before the filing of counter affidavit
and almost 11 months after the August Judgment and subsequent to the               C
order rejecting the exemption application on 02.07.2021), which is nothing
but an attempt to create an illusion of their attempts for compliance.
        4.10 It is submitted that the list of assets provided by the alleged
contemnors is untrustworthy and may not be relied upon on the grounds
that: -                                                                            D

       (i)     The list of assets submitted by alleged contemnors is not
               verified / audited by neither any Chartered Accountant nor
               the income tax returns of the Alleged Contemnors;
       (ii)    Does not contain a list of liabilities. Fails to disclose whether   E
               there are existing encumbrances on any of the assets
               disclosed;
       (iii)   The assets disclosed by the alleged contemnors only amount
               to Rs 16.37 Crore (approx.). If permitted to dispose assets,
               then in the best-case scenario only 16 Crores would be              F
               deposited;
       (iv)    The basis for the valuation of fixed assets is not clear nor
               credible. For instance, the cost of depreciable items such
               as computers, furniture, etc. has been maintained at the
               same price since 2014. Such assets would obviously
                                                                                   G
               depreciate with time and lead to decrease in value;

       (v)     No independent valuation of Avitel or the Alleged
               Contemnors share in Avitel has been provided. The same
               is merely an eyewash;
                                                                                   H
440            SUPREME COURT REPORTS                           [2022] 15 S.C.R.


A           (vi)    The value of petitioner’s investment of USD 60 Million in
                    Avitel was held to be nil in the Final Foreign Award.
                    Therefore, the net worth of Avitel and what actual amount
                    would be realizable from the sale of shares of Avitel remains
                    uncertain;
B           (vii)   Avitel holding shares worth Rs. 274 Crore in a subsidiary,
                    Avitel Mauritius is also completely unreliable and misleading.
                    The underlying value of Avitel Mauritius arose only from
                    the transfer of USD 60 Million that the Petitioners had
                    invested in Avitel or in any event is not supported by any
                    credible proof. No independent valuation report of Avitel
C                   Mauritius has been provided to lend credence to the value
                    of the company;

            (viii) In light of findings of the arbitral tribunal and the Supreme
                   Court in August Judgment that the petitioner’s investment
D                  of USD 60 Million was diverted to entities related to the
                   alleged contemnors; the list of assets owned by the alleged
                   contemnors and Avitel are even less reliable.
             4.11 It is further submitted by Shri Kaul, learned Senior Advocate
      appearing on behalf of the respondents that as such they have not raised
E     the issue of maintainability of the contempt petition either in its counter
      or the two applications filed earlier. It is submitted that therefore, the
      belated submissions challenging the maintainability of the present
      contempt petition deserves to be dismissed on this ground alone. It is
      submitted that even the Supreme Court has jurisdiction under Article
F     129 of the Constitution of India to punish any person for contempt of its
      orders.
            4.12 It is submitted that the submissions on behalf of the alleged
      contemnors that the contempt petition cannot lie as the petitioner can
      execute the August judgment passed under Section 9 of the Act, 1996
G     under the Code of Civil procedure, 1908 is misconceived, tenuous and
      unsustainable in law. It is submitted that as such in addition the
      respondents – alleged contemnors have further wilfully disobeyed order
      dated 06.05.2021 passed by this Hon’ble Court.
           4.13 It is submitted that this Hon’ble Court in the case of
      FirmAshok Traders Vs Gurumukh Das Saluja (2004) 3 SCC 155
H
  HSBC PI HOLDINGS (MAURITIUS) LIMITED v. PRADEEP                               441
     SHANTIPERSHAD JAIN & ORS. [M. R. SHAH, J.]

has held that an application under Section 9 is not a suit and the order        A
passed under Section 9 would fall within the expression “interim measure
of protection” as opposed to all time or permanent protection. The
purpose of Section 9 is to provide expedited interim relief in support of
arbitration and safeguard the subject matter of the dispute so that
irreparable loss would not cause. It is submitted that an execution
                                                                                B
application is to be filed for a default of Section 9 Order, then the whole
purpose of Section 9 of Arbitration Act to get expeditious interim protection
would be defeated. It is submitted that Section 9 proceedings are interim
proceedings in nature.
        4.14 It is further submitted that the purpose behind contempt is
to bring violation of Court Orders to the notice of the Court and therefore     C
Contempt is a matter between the court and the person in contempt of
court. In contrast, the purpose behind execution proceedings is to enjoy
the fruits of the decree in his favour. It is submitted that in the present
case, the Hon’ble Court has directed the alleged contemnors to deposit
the shortfall amount in the bank account owned by Avitel India as an            D
interim relief for subject matter of the dispute and not make any payment
to the petitioner that would warrant execution proceedings. It is
submitted that the contempt proceedings and execution proceedings
are two separate remedies that can be invoked simultaneously. Reliance
is placed upon the decision of this Court in the case of Delhi
Development Authority Vs. Skipper Construction CO. (P) Ltd.;                    E
(1996) 4 SCC 622 as well as the decision of the Bombay High Court
in the case of Rajinder Kumar Malhotra Vs. Paresh Biharilal Vyas;
2016 SCC Online Bom 89. It is submitted that in any event the
violation of order dated 06.05.2021 in this contempt petition is also in
itself contempt of court.                                                       F
      4.15 It is further submitted that it is a settled position of law that
merely because an order or decree of a court is executable, the same
would not take away the court’s jurisdiction in contempt proceedings.
Reliance is placed on the decision of this Court in the case of Rama
Narang Vs. Ramesh Narang and Anr.; (2006) 11 SCC 114.                           G
      4.16 It is submitted that in order to constitute, the order of the
court must be of such a nature which is capable of execution by the
person charged in normal circumstances.
      4.17 It is submitted that as observed and held by the Delhi High
Court in the case of M/s Terra Manufacturing & Sales Vs. M/s                    H
442            SUPREME COURT REPORTS                         [2022] 15 S.C.R.


A     Alagendiraa Apparels 2011 SCC Online Del 4458, once an order
      passed under Section 9 of the Arbitration Act is wilfully violated, the
      person is liable for contempt.
             4.18 It is submitted that the power of Court to punish for contempt
      is wide and the recognized. A party in breach of any order of court
B     whether interlocutory or final is subject to being proceeded against in
      contempt. It is submitted that as observed and held by this Hon’ble Court
      in the case of Welset Engineers & Anr. Vs. Vikas Auto Industries
      & Ors.; (2015) 10 SCC 609 and in the case of SEBI Vs. Sahara
      India Real Estate Corp. Ltd. & Ors.; (2014) 5 SCC 429, non-
      compliance with the orders passed by the Hon’ble Supreme Court shakes
C     the foundation of judicial system and undermines rule of law.
             4.19 Now so far as the submissions on behalf of the respondents
      – alleged contemnors that as the August Judgment did not provide a
      timeline for depositing the shortfall amount and therefore, the alleged
      contemnors – respondents cannot be held to be in contempt of the orders
D     of this Hon’ble Court, it is submitted that the same is incorrect in facts
      and in law. It is submitted that the August Judgment required the alleged
      contemnors and Avitel to deposit the shortfall amount in Corporation
      Bank account as an interim relief and in the manner suggested by the
      learned Single Judge passed by the High Court i.e., within four weeks.
E     Reliance is placed upon the decision of this Court in the case of
      Kunhayammed Vs. State of Kerala; (2000) 6 SCC 359. It is
      submitted that therefore, when this Hon’ble Court confirmed the order
      passed by the learned Single Judge, the respondents – alleged contemnors
      were required to deposit the shortfall amount in their owned Corporation
      Bank account at least within a period of four weeks from 19.08.2020. It
F     is submitted that as such the respondents have been given many
      opportunities and ample time to comply with the August Judgment. They
      continue to be in contempt of order dated 06.05.2021 for deposit in these
      contempt proceedings, where an additional six weeks were provided to
      them for deposit. It is submitted that inordinate delay in complying with
G     the orders of the Court, non-obedience by a passive and dormant conduct
      has been held to be a contempt of court by this Hon’ble Court in the
      case of Maninderjit Singh Bitta Vs. Union of India; (2012) 1 SCC
      273.
            4.20 It is submitted that compliance of an order/judgment was
H     never contingent on the non-availability of “liquid funds” of the alleged
  HSBC PI HOLDINGS (MAURITIUS) LIMITED v. PRADEEP                              443
     SHANTIPERSHAD JAIN & ORS. [M. R. SHAH, J.]

contemnors. It is submitted that an order for depositing the money cannot      A
be made contingent upon the funds available to the alleged contemnors.
They cannot contend that they will comply with the August Judgment
only when their assets are allowed to be sold.
       4.21 It is submitted that non-availability of liquid funds/assets is
yet another deliberate tactic of the alleged contemnors that is intended       B
to deceive not only the petitioner but also this Hon’ble Court. Given the
findings by this Hon’ble Court and the SIAC that the alleged contemnors
are guilty of siphoning off funds to their families, the assets of their
families are not disclosed. The list of assets indicates that even if the
alleged contemnors are allowed to sell their assets; the same would not
fetch any substantial amount to match USD 60 Million, as under:                C

      (i)     The total value of the assets of the alleged contemnors is
              approximately Rs. 16 crores;
      (ii)    Alleged contemnors have submitted that Avitel has assets
              worth approx. Rs. 365 crores;                                    D
      (iii)   Out of Rs. 365 crores, Rs. 84 crores approximately are the
              monies lying in the Corporation Bank account Rs. 247
              crores, is the value of investment of Avitel in the form of
              shares in Avitel Mauritius.
      (iv)    The submissions of alleged contemnors that Avitel holds          E
              shares worth Rs. 274 Crore in a subsidiary called Avitel
              Mauritius is also completely unreliable and misleading. The
              underlying value of Avitel Mauritius arose only from the
              transfer of USD 60 Million that the petitioners had invested
              in Avitel or in any event is not supported by any credible       F
              proof. The valuation of Avitel Mauritius is unreliable and no
              independent valuation report of Avitel Mauritius has been
              provided to lend credence to the value of the company.
      (v)     The Foreign Final Award held that the value of investment
              made by petitioner in Avitel was nil.
                                                                               G
       It is submitted that in light of the same it is uncertain what is the
actual value of Avitel and what actual amount would be realizable from
the sale of shares of Avitel. No independent valuation of Avitel or the
alleged contemnors’ share in Avitel has been provided. The same is
merely an eyewash.
                                                                               H
444             SUPREME COURT REPORTS                           [2022] 15 S.C.R.


A             4.22 It is further submitted that mere pendency of a review petition
      cannot be a ground for non-compliance of judgment/ order of this Hon’ble
      Court. It is submitted that the respondents - alleged contemnors and
      Avitel have a history of non-compliance of the orders of judicial authorities
      including the orders of the Arbitral Tribunal. It is submitted that the review
      petition has been filed only to delay the compliance of the August
B
      Judgment/order. It is submitted that although the review petition was
      filed in month of September 2020, which has been into in defects at the
      Registry due to want of procedural compliances. Such one-year delay in
      curing the defects is a deliberate attempt to await (i) the retirement of
      the Judge who rendered the August Judgment, and (ii) rely on the mere
C     filing of the review petition to argue against depositing of the amounts. It
      is submitted that as this Hon’ble Court has held that such tactics in
      delaying the filing of the review petition must be disapproved. Reliance
      is placed on the decision of this Court in the case of Vedanta Ltd.
      (formerly known as M/s. Sesa Sterlite Ltd) Vs. Goa Foundation
D     and Ors.; 2021 SCC Online SC 476.
            4.23 It is submitted that the judgments of this Hon’ble Court relied
      upon on behalf of the respondents – alleged contemnors shall not be
      applicable to the facts of the case on hand as the present case is of
      compliance of the order passed in Section 9 application of the Act, 1996
      and the subsequent specific directions issued by this Hon’ble Court in
E
      the contempt proceedings in order dated 06.05.2021.
             4.24 Making the above submissions, it is vehemently submitted by
      Shri Kaul, learned Senior Advocate appearing on behalf of the petitioner
      – HSBC that the respondents – alleged contemnors have shown highest
      form of wilful disobedience and contemptuous action and therefore, they
F
      may be punished under the Contempt of Courts Act and they may be
      sentenced to civil imprisonment at least unless and until they have purged
      the contempt by full compliance of the August Judgment. It is submitted
      that the petitioner has suffered irreparable loss due to the fraudulent
      conduct of Avitel and alleged contemnors and in light of the same; the
G     petitioner’s petition for enforcement of Foreign Award before the Bombay
      High Court may be expedited by this Hon’ble Court; it is submitted that
      the respondents have sought to employ dilatory tactics at every stage
      and therefore, any further delay will continue to cause prejudice to the
      petitioner. It is submitted that such delay would also discourage foreign
      investors like the petitioner who has been waiting to enjoy fruits of the
H
  HSBC PI HOLDINGS (MAURITIUS) LIMITED v. PRADEEP                                 445
     SHANTIPERSHAD JAIN & ORS. [M. R. SHAH, J.]

Foreign Final Award passed in its favour since 2014 and seeks to                  A
safeguard the subject matter of its dispute as directed in the August
Judgment under Section 9 of the Act, 1996.
      5. Present contempt proceedings are vehemently opposed by Shri
Mukul Rohatgi, learned Senior Advocate appearing on behalf of the
contesting respondents – alleged contemnors.                                      B
       5.1 It is submitted that the present proceedings have been initiated
by the petitioner – HSBC alleging non-compliance of order dated
22.01.2014 passed by the learned Single Judge in Arbitration Petition
No. 1062/2012 by which the respondents are directed to deposit USD
60 million. It is submitted that the order passed by the learned Single           C
Judge has been confirmed by this Hon’ble Court by judgment and order
dated 19.08.2020 in Civil Appeal No. 5158/2016. It is submitted that as
such a review application being R.P. Diary No. 20098/2020 has been
filed by Avitel India requesting to recall/review the aforesaid judgment
and order dated 19.08.2020. It is submitted that the said review application
                                                                                  D
is pending for consideration by this Hon’ble Court.
       5.2 It is submitted that in just about 37 days of the August Judgment,
the present contempt petition has been filed by the HSBC before this
Hon’ble Court on 26.09.2020 on expiry of three weeks’ time granted by
HSBC. It is submitted on 30.04.2021, HSBC filed I.A. No. 59119/2021
for interim reliefs before this Hon’ble Court to direct the respondents           E
herein to restrain them from selling, alienating, encumbering, creating
third party rights, transferring or diverting their movable and immovable
assets during the pendency of the present contempt petition. It is submitted
that the same application is pending adjudication before this Hon’ble
Court.                                                                            F
        5.3 It is submitted that the respondents have also filed one I.A.
No. 82521/2021 seeking the permission of this Hon’ble Court to sell
and/or encumber their assets and also the assets of the company, to
arrange the requisite shortfall amount to deposit the same in the bank
account of the company maintained with the Corporation Bank. It is                G
submitted that therefore the petitioner herein is taking contradictory stands
in as much as on one hand the petitioner is seeking appointment of receiver
on the assets of the respondents before the Bombay High Court and
filing an application to restrict the respondents from disposing of its assets,
but on the other hand the petitioner is using contempt jurisdiction to seek
                                                                                  H
446             SUPREME COURT REPORTS                          [2022] 15 S.C.R.


A     enforcement of the judgment of the learned Single Judge of the Bombay
      High Court for deposit of the shortfall amount in the Corporation Bank
      account. It is submitted that at present the respondent has not taken any
      measures to dispose of any assets and the respondent is currently only
      assessing the value of the assets owned in the name of the company and
      its directors and will only sell/encumber their assets with due permission
B
      of this Hon’ble Court, to comply with the direction to deposit the shortfall
      amount in the Corporation Bank account. It is submitted that therefore
      while considering the present contempt proceedings the aforesaid aspects
      may be taken into consideration.

C            5.4 Shri Rohatgi, learned Senior Advocate appearing on behalf of
      the respondents – alleged contemnors has further submitted that the
      present contempt petition is not maintainable before this Hon’ble Court
      on the grounds, inter-alia, (i) by way of the present proceedings in
      contempt, the petitioner is seeking to execute the order of the learned
      Single Judge dated 22.01.2014 in Arbitration Petition No. 1062/2012,
D     which is executable before appropriate court/forum; (ii) the contempt
      proceedings cannot substitute the execution/enforcement proceedings
      (already being availed by the petitioner) and as such the present contempt
      proceedings are misconceived in law and facts. In support of above
      submissions, Shri Rohatgi, learned Senior Advocate has relied upon the
E     decisions of this Court in the cases of Food Corpn. of India Vs. Sukh
      Deo Prasad; (2009) 5 SCC 665 (para 31) and R.N. Dey Vs.
      Bhagyabati Pramanik; (2000) 4 SCC 400 (para 7) as well as in the
      case of Court Liquidator Employees’ Assn. Vs. P.G. Mankad;
      (2002) 10 SCC 477.

F            5.5 It is submitted that in the present case also, this Hon’ble Court
      by the August Judgment has allowed the appeal of the petitioner herein
      and upheld the order of the learned Single Judge therefore, as such, the
      appropriate remedy for the petitioner herein is to approach the High
      Court of Bombay for execution if warranted and not this Hon’ble Court.

G            5.6 It is submitted that so far as the decision of this Court in the
      case of Kunhayammed (supra) to elaborate the principle of merger
      particularly with respect to the maintainability of the present contempt
      petition, relied upon by the petitioner is concerned, the said decision shall
      not be applicable to the facts of the case on hand. It is submitted that the
      principle of merger as discussed and contemplated in the said decision
H
  HSBC PI HOLDINGS (MAURITIUS) LIMITED v. PRADEEP                               447
     SHANTIPERSHAD JAIN & ORS. [M. R. SHAH, J.]

was on a different footing and the same is evident from the conclusions         A
set out in paragraph 44 of the said judgment.
       5.7 It is further submitted by Shri Rohatgi, learned Senior Advocate
appearing on behalf of the respondents that respondents herein never
had and do not have any intention whatsoever to disobey the order passed
by this Hon’ble Court. It is submitted that despite absolute willingness        B
and best efforts, the respondents are helpless in complying with the
directions of this Hon’ble Court for such reasons which are absolutely
beyond their control and for want of adequate funds at this stage. It is
submitted that there is no intent whatsoever to bring the authority and
administration of law into disrespect or disregard or to interfere with or      C
to undermine the authority of this Hon’ble Court or to cause any prejudice
to the petitioner.
       5.8 It is submitted that the respondents do not have immediate
liquid funds to deposit the shortfall. Utmost and expeditious sincere efforts
are being taken by the respondents herein to collect offers in respect of       D
their immovable and movable assets including their shareholdings in the
company to arrange for the requisite funds.
       5.9 It is submitted that the respondents herein have also disclosed
all the assets in the name of the company and the alleged contemnors
herein before this Hon’ble Court and have also submitted to court auction       E
of the said assets, if directed by this Hon’ble Court. It is submitted that
an application being I.A. No. 82521/2021 praying for directions to sell
and/or encumber their assets and also the assets of the company, to
arrange the requisite shortfall amount to deposit the same in the bank
account of the company maintained with the Corporation Bank is also
pending before this Hon’ble Court.                                              F

        5.10 It is submitted that the respondents have genuine inability
and do not have the wherewithal to deposit the shortfall amount in the
Corporation Bank despite their best intentions, unless they are permitted
to sell/encumber their assets to generate further funds for depositing the
shortfall amount in the Corporation Bank account.                               G

       5.11 It is further submitted that contempt proceedings can only be
attracted when the lapse on the part of the parties is deliberate and with
the intention to defy the authority of the Court and there has to be wilful
disobedience on the part of the party.
                                                                                H
448             SUPREME COURT REPORTS                           [2022] 15 S.C.R.


A           5.12 It is submitted that as held by this Hon’ble Court in catena of
      decisions mere non-compliance cannot be a ground to punish a person/
      judgment-debtor under the provisions of the Contempt of Courts Act.
             5.13 It is submitted that in the present case, as such, the order of
      the learned Single Judge has not yet become a decree and enforcement
B     of the arbitral award is still pending before the High Court. It is submitted
      that even if it is assumed that the order of the learned Single Judge has
      become a decree, Section 51 read with Order XXI Rule 40 of CPC lays
      down the guidelines for the execution of the same.
             5.14 It is submitted that in the case of Rama Narang Vs.
C     Ramesh Narang and Ors.; (2021) SCC Online SC 29, this Hon’ble
      Court has observed and held that for bringing an action for civil
      contempt, the petitioner has to satisfy the court that there has been a
      wilful disobedience of any judgment, decree, direction, order, writ or
      other process of the Court. Shri Rohatgi, learned Senior Advocate
      appearing on behalf of the respondents has also relied upon the following
D     decisions of this Court in the cases Ram Kishan Vs. Tarun Bajaj;
      (2014) 16 SCC 204; Kanwar Singh Saini Vs. High Court of Delhi;
      (2012) 4 SCC 307 and Kapildeo Prasad Sah Vs. State of Bihar;
      (1999) 7 SCC 569, in support of his above submissions and in support
      of his request and prayer not to entertain the present contempt petition
E     and relegate the petitioner to avail any other remedy which may be
      available to the petitioner to execute order dated 22.01.2014 passed
      by the learned Single Judge, which has been affirmed and confirmed
      by this Hon’ble Court vide judgment and order dated 19.08.2020 in
      Civil Appeal No. 5158/2016.

F            6. Heard. In the present contempt proceedings, the petitioner has
      alleged that the respondents herein – alleged contemnors have committed
      the contempt of court for wilful disobedience of two orders passed by
      this Court dated 19.08.2020 passed in Civil Appeal No. 5158/2016 and
      subsequent order dated 06.05.2021 passed in the present proceedings.
      At this stage, it is required to be noted that in the present case the learned
G     Single Judge passed an order as far as back on 22.01.2014 in a petition
      under Section 9 of the Act, 1996, directing the respondents herein –
      alleged contemnors to deposit the shortfall amount in their account with
      the Corporation Bank so as to maintain a balance of USD 60 million.
      The order passed by the learned Single Judge came to be modified by
H     the Division Bench of the High Court and the alleged contemnors were
  HSBC PI HOLDINGS (MAURITIUS) LIMITED v. PRADEEP                             449
     SHANTIPERSHAD JAIN & ORS. [M. R. SHAH, J.]

directed to deposit an additional amount equivalent to USD 20 million in      A
the Corporation Bank account, so that the total deposit in the said account
is maintained at half the said figure of USD 60 million, i.e., at USD 30
million (instead of USD 60 million as ordered by the learned Single Judge).
By detailed judgment and order dated 19.08.2020, this Court in Civil
Appeal No. 5158/2016 has restored the order passed by the learned
                                                                              B
Single Judge dated 22.01.2014. Thus, the respondents herein – alleged
contemnors are directed to deposit the shortfall in their account with the
Corporation Bank so as to maintain a balance of USD 60 million. The
said order has not been complied with till date and the respondents have
failed to maintain a balance of USD 60 million in their bank account with
the Corporation Bank. At this stage, it is required to be noted that in the   C
meanwhile the Arbitral Tribunal in Singapore had also passed a Final
Award dated 27.09.2014 awarding USD 60 million as damages in favour
of the HSBC – petitioner herein and against the respondents. The
applications under Section 34 and 37 of the Act, 1996 against the Award
passed by the Arbitral Tribunal in Singapore had been dismissed and the
                                                                              D
execution proceedings moved by the HSBC in the Bombay High Court
to enforce Foreign Final Award dated 27.09.2014 are reported to be
pending. By a notice dated 04.09.2020, the petitioner had served a legal
notice upon the alleged contemnors – respondents and Avitel calling
upon them to, inter-alia, deposit the shortfall amount in the Corporation
Bank account to maintain a balance of USD 60 million. Despite the             E
above, the respondents have failed to deposit and/or to maintain a balance
of USD 60 million in their Corporation Bank account. That thereafter,
the present contempt proceedings have been initiated/filed on 25.09.2020
alleging wilful, intentional and deliberate disobedience of judgment and
order passed by this Court dated 19.08.2020. This Court had issued a
                                                                              F
notice in the present contempt proceedings on 06.11.2020. That thereafter
by a further order dated 06.05.2021 this Court had directed the
respondents to deposit the shortfall amount within a period of six weeks
in the Corporation Bank account as per prayer (b) of the present
application. The prayer (b) which has been granted by this Court vide
order dated 06.05.2021 is as under: -                                         G
      “b) direct the Alleged Contemnors to forthwith deposit the shortfall
      of appx. USD 42 million (appx. INR 3,09,07,88,400 as on
      18.09.2020), so as to maintain a sum balance of at least USD 60
      million (appx. INR 4,41,54,12,000 as on 18.09.2020) in the
      Corporation Bank account to ensure obedience of the judgment            H
450            SUPREME COURT REPORTS                          [2022] 15 S.C.R.


A           dated 19.08.2020 in Civil Appeal No. 5158 of 2016 passed by this
            Hon’ble Court;”
             6.1 Thus, not only there is a final judgment and order dated
      19.08.2020 passed by this Court in Civil Appeal No. 5158/2016 restoring
      the order passed by the learned Single Judge passed in an application
B     under Section 9 of the Act, 1996 directing the respondents herein to
      maintain a balance of USD 60 million in their Corporation Bank account,
      there is further directions in terms of the prayer para (b) (reproduced
      hereinabove) vide order dated 06.05.2021. The subsequent direction dated
      06.05.2021 has also not been complied with by the respondents. It is to
      be noted that after the direction/order dated 06.05.2021, instead of
C     complying with the directions contained in order dated 06.05.2021, the
      respondents filed an I.A. seeking exemption from payment of shortfall
      amount being I.A. No. 68388/2021. While seeking exemption, it was the
      case on behalf of the respondents in I.A. No. 68388/2021 that despite
      their absolute willingness and best efforts, they are helpless in complying
D     with the directions issued by this Court for such reasons which are
      absolutely beyond their control and for want of adequate funds at this
      stage. In paragraph 5 to 16, it was stated as under: -
            “5. At the outset, the Applicants most humbly state and submit
            that they have the utmost respect of this Hon’ble Court and are
E           duty bound to comply with every order passed by this Hon’ble
            Court. The applicants herein never had and do not have any
            intention whatsoever to disobey the order passed by this Hon’ble
            Court. Despite their absolute willingness and best efforts, the
            applicants are helpless in complying with the directions of this
            Hon’ble Court for such reasons which are absolutely beyond their
F           control and for want of adequate funds at this stage. There is no
            intent whatsoever to bring the authority and administration of law
            into disrespect or disregard or to interfere with or to undermine
            the authority of this Hon’ble Court or to cause any prejudice to
            the petitioner.
G           6. The Applicants tender an unqualified and unconditional apology
            to this Hon’ble Court for being unable to implement and comply
            with the directions passed by this Hon’ble Court vide its order
            dated 06.05.2021 in the instant contempt petition.
            7. The applicants submit that on 06.05.2011, the petitioner HSBC
H           PI Holdings (Mauritius) Limited was allotted by the Company,
HSBC PI HOLDINGS (MAURITIUS) LIMITED v. PRADEEP                          451
   SHANTIPERSHAD JAIN & ORS. [M. R. SHAH, J.]

  total 614,327 Compulsorily Convertible Preference Shares on            A
  payment of nominal amount of Rs. 10 per share (total nominal
  amount paid= Rs. 61,43,270/-) and Premium amount of Rs. 4355.75
  per share (total premium amount paid= Rs. 267,58,52, 260/-) and
  1 Equity Share of nominal amount of Rs. I 0 per share (total
  nominal amount paid = Rs. I 0/-) and Premium amount of Rs.
                                                                         B
  4460/- per share (total premium amount paid = Rs. 4460/-), as
  evident from the Return of allotment filed in Form 2 under Section
  75(1) of the Companies Act, 1956. A copy of the said Form 2 filed
  by the Company showing the details of the shares issued and the
  amounts paid towards the same, is hereto annexed and marked
  as Annexure A-2. (Page No. 13 to 19). Thus, a total amount of          C
  Rs. 268,20,00,000/- (Rupees Two Hundred Sixty Eight Crores
  Twenty Lakhs - equivalent to USD 60 Million) was invested in
  shares of the Company by the petitioner HSBC.
  8. The applicants herein submit that presently an aggregate amount
  of Rs. 84,10,65,140/- (Rupees Eighty-Four Crores Ten Lacs Sixty        D
  Five Thousand One Hundred Forty) is lying in the Corporation
  Bank. It is humbly submitted that the present application has been
  filed before this Hon’ble Court so as to seek for an exemption
  from depositing the shortfall amount in the bank account because
  neither the Applicants nor the company, despite their best efforts
  could jointly or severally arrange the necessary balance funds to      E
  comply with the order dated 06.05.2021 passed by this Hon’ble
  Court.
  9. The Applicants are annexing herewith a complete list of assets
  of the Company and each of the applicants herein, from 31st March
  2014 till date.                                                        F

  10. In the present scenario, the applicants despite best efforts and
  intent, are unable to liquidate the aforesaid assets belonging to
  them and the Company, to arrange the entire shortfall amount
  directed by this Hon’ble Court, for depositing in the Corporation
  Bank account. It is not a case where the applicants have the           G
  money but are not willing to comply with the directions showing
  any affront to the orders of this Hon’ble Court. The applicants
  have genuine inability and do not have the wherewithal to deposit
  the shortfall amount in the Corporation Bank despite their best
  intentions and efforts. The Applicants most humbly state and submit    H
452      SUPREME COURT REPORTS                          [2022] 15 S.C.R.


A     that they have the utmost respect of this Hon’ble Court. The
      Applicants herein tender an unqualified apology to this Hon’ble
      Court for their genuine inability to comply with the directions of
      this Hon’ble Court vide order dated 06.05.2021 in the instant
      Contempt Petition for lack of adequate liquid funds.
B     11. The applicants however are willing to undertake to this Hon’ble
      Court that they would not create any encumbrance and would
      preserve all the above assets belonging to them or the Company
      for the future benefit of the petitioner subject to the final outcome
      of the enforcement of award proceedings/Section 48 proceedings
C     pending before the Hon’ble Bombay High Court, wherein the
      pleadings are also complete. The applicants would also give such
      further undertaking to this Hon’ble Court as may deem just and
      expedient.
      12. The applicants say that so far as the office premises of the
D     Company at Mumbai, and the residential premises where the
      applicants reside in Mumbai or Panchgani are concerned, it is
      submitted that Mrs. Sudha Pradeep Jain wife of Applicant no.1 is
      registered owner of office premises Unit No. A-7 & A-8, Vimal
      Udyog Bhavan, Taikalwadi Road, Mumbai since 08-07-1999 and
      19-07-2001 respectively, and registered owner of residential
E     premises at Pleasant Palace, Narayan Dabholkar Road, Malabar
      Hill, Mumbai - 400 006 since 07-01-2011, and seven units of
      residential properties situated at Silver valley CHS, Panchgani
      (six units since 31.03.2011 and one more unit since 09.07.2012).
      Mrs. Shivani Siddhartha Jain wife of Applicant No. 2 Siddhartha
F     Jain, and Mrs Priyanka Hrishi Jain wife of Applicant No. 3 Hrishi
      Jain are registered owners of office premises at Unit No. A-9 &
      A-6 respectively, in Vimal Udyog Bhavan, Taikalwadi Road,
      Mumbai since 03-09-2012 & 30-08-2012. Mr. Rishab Jain son of
      Applicant No.1 and brother of Applicant No.2 & 3 is registered
      owner of office premises at Unit No. A-11 in Vimal Udyog Bhavan,
G
      Taikalwadi Road, Mumbai since 30-08-2012. The office premises
      at Juhu, Mumbai was a rented premises and was vacated in year
      February 2015. None of the premises mentioned in this paragraph
      are owned by the applicants. These facts are also being disclosed
      for providing complete information to this Hon’ble Court.
H
  HSBC PI HOLDINGS (MAURITIUS) LIMITED v. PRADEEP                              453
     SHANTIPERSHAD JAIN & ORS. [M. R. SHAH, J.]

      13. That, the Applicants inability to comply with the Order dated        A
      06.05.2021 is genuine, unintentional and not lacking in bona fide.
      14. In the above circumstances the applicants humbly beg to be
      pardoned for the same and seek for an exemption from complying
      with the directions contained in the Order dated 06.05.2021 of
      this Hon’ble Court.                                                      B
      15. That, the Applicants hold this Hon’ble Court in greatest respect
      and esteem.
      16. The applicants in the above circumstances pray to this Hon’ble
      Court to graciously be pleased to accept their humble unqualified
      and unconditional apology, and exonerate them from the purview           C
      of the contempt proceedings, discharge of show cause notice of
      contempt proceedings. The applicants are also praying for an
      exemption from complying with the order dated 06.05.2021 of
      this Hon’ble Court to deposit the shortfall amount in the Corporation
      Bank, and suitably modifying the said Order dated 06.05.2021,            D
      while accepting such undertaking of the applicants which may
      deem just, expedient and to the satisfaction of this Hon’ble Court.”
       The aforesaid application for exemption from depositing the
shortfall amount pursuant to order dated 06.05.2021 has been specifically
rejected by this Court vide order dated 02.07.2021. Despite the above,         E
till date, the respondents have failed to deposit the shortfall amount
pursuant to order dated 06.05.2021. Therefore, while considering the
present contempt proceedings, the aforesaid factual scenario and the
conduct on the part of the respondents are required to be considered.
        7. The present contempt proceedings are opposed by the                 F
respondents – alleged contemnors on the grounds, inter-alia, that (i) the
order passed by the learned Single Judge dated 22.01.2014, which has
been confirmed by this Court vide order dated 19.08.2020 in Civil Appeal
No. 5158/2016, is an order executable and therefore, the present contempt
proceedings may not be entertained; (ii) that there is no wilful
disobedience on the part of the respondents – alleged contemnors in not        G
depositing the shortfall amount in their Corporation Bank account to
maintain a balance of USD 60 million as they have no sufficient funds
and therefore, non-compliance is beyond their control and therefore,
their inability to comply with the order despite their best efforts does not
warrant any punishment under the Contempt of Courts Act.
                                                                               H
454             SUPREME COURT REPORTS                          [2022] 15 S.C.R.


A            8. Now so far as the first contention resisting the present contempt
      proceedings, namely, the order passed by the learned Single Judge by
      the High Court by which the respondents were directed to maintain a
      balance of USD 60 million in their Corporation Bank account is executable
      is concerned, at the outset, it is required to be noted that in the present
      proceedings it is not the case of non-compliance of the order passed by
B
      the learned Single Judge confirmed by this Court alone. There is a further
      specific direction issued by this Court vide order dated 06.05.2021.
      Therefore, there is a non-compliance of direction issued by this Court
      dated 06.05.2021 by which the respondents were directed to deposit the
      shortfall amount so as to maintain a balance of USD 60 million. That
C     thereafter, a further application for exemption from depositing the shortfall
      amount pursuant to order dated 06.05.2021 has also been dismissed by
      this Court. Therefore, thereafter it shall not be open for the respondents
      to submit that as order dated 22.01.2014 passed by the learned Single
      Judge is executable, the present contempt proceedings may not be
D     entertained.
             8.1 At this stage, a few decisions of this Court on contempt
      proceedings under the Contempt of Courts Act are required to be referred
      to. In the case of Rama Narang (supra) after referring to and taking
      into consideration the earlier decisions of this Court in the cases of R.N.
      Dey (supra), Rita Markandey Vs. Surjit Singh Arora; (1996) 6 SCC
E
      14 and Bank of Baroda Vs. Sadruddin Hasan Daya; (2004) 1 SCC
      360, it is specifically observed and held by this Court that the petitioner
      can execute the decree can have no bearing on the contempt committed
      by the respondents. In the said decision, this Court also considered in
      detail (in para 31) the decision of this Court in the case of R.N. Dey
F     (supra), which has been relied upon by the learned Senior Advocate
      appearing on behalf of the respondents in the present case. The para 24
      of the decision is as under: -
            “24. All decrees and orders are executable under the Code of
            Civil Procedure. Consent decrees or orders are of course also
G           executable. But merely because an order or decree is executable,
            would not take away the court’s jurisdiction to deal with a matter
            under the Act provided the court is satisfied that the violation of
            the order or decree is such, that if proved, it would warrant
            punishment under Section 13 of the Act on the ground that the
            contempt substantially interferes or tends substantially to interfere
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  HSBC PI HOLDINGS (MAURITIUS) LIMITED v. PRADEEP                               455
     SHANTIPERSHAD JAIN & ORS. [M. R. SHAH, J.]

      with the due course of justice. The decisions relied upon by the          A
      respondents themselves hold so as we shall subsequently see.”
       8.2 Apart from the fact that the facts in the case of R.N. Dey
(supra) is distinguishable in as much as in the present case, there is
further specific directions issued by this Court vide order dated 06.05.2021
even in the said decision also it is observed and held by this Court that       B
discretion given to the court is to be exercised for maintenance of the
court’s dignity and majesty of law. It is further observed that the contempt
is between a contemnor and the court and that an aggrieved party has
no right to insist that the court should not exercise such jurisdiction.
      8.3 In the case of Welset Engineers and Anr. (supra), it is               C
observed and held by this Court that a party in breach of any order of
court whether interlocutory or final is subject to being proceeded against
in contempt. Orders are meant to be obeyed and a person, acting in
breach of the order does so at that person’s peril.
        8.4 In the case of SEBI (supra), it is observed and held by this        D
Court that non-compliance with the orders passed by this Court shakes
the very foundation of our judicial system and undermines the rule of
law, which we are bound to honour and protect. This is essential to
maintain faith and confidence of the people of this country in the judiciary.
It is further observed that there is a need of iron hand to enforce rule of
law, punish contemnors and maintain faith and confidence of the people          E
in judiciary.
       9. Applying the law laid down by this Court in the aforesaid
decisions to the facts of the case on hand and the subsequent specific
directions issued by this Court in its order dated 06.05.2021, the objection
on behalf of the respondents that as the order passed by the learned            F
Single Judge of the High Court is executable and therefore, the present
contempt proceedings may not be entertained is overruled.
       10. Now so far as the submissions on behalf of the respondents
that there is no wilful disobedience as they have no sufficient funds to
deposit the shortfall amount and despite their best efforts, they are unable    G
to get the requisite funds to comply with the order passed by this Court
is concerned, at the outset it is required to be noted that all these
submissions were made earlier in I.A. No. 68388/2021 seeking exemption
from deposit of shortfall pursuant to order dated 06.05.2021 and the
same have not been accepted by this Court and vide order dated
                                                                                H
456             SUPREME COURT REPORTS                          [2022] 15 S.C.R.


A     02.07.2021 their application for exemption has been dismissed. Thereafter,
      it shall not be open for the respondents to repeat and make the same
      submissions again and again. The respondents cannot be permitted to
      make the same submissions which have not been accepted and/or rejected
      by this Court earlier. Repetitive submissions which have not been
      accepted earlier by court that itself is a wilful disobedience and
B
      tantamount to contempt and it shows the conduct on the part of the
      contemnors.
             11. Sufficient opportunities have been given to the respondents to
      deposit the shortfall amount so as to maintain a sum of USD 60 million in
      their Corporation Bank account. The first order passed by the learned
C
      Single Judge in their application under Section 9 of the Act, 1996 is
      passed in the year 2014 and even the same has been restored by this
      Court vide judgment and order dated 19.08.2020 and thereafter, further
      directions have been issued specifically directing the respondents to
      deposit the shortfall vide order dated 06.05.2021 and thereafter their
D     application for exemption from depositing the shortfall amount has been
      dismissed by this Court. Despite the above, the respondents have failed
      to deposit the shortfall amount and therefore, they have rendered
      themselves liable for suitable punishment under the provisions of the
      Contempt of Courts Act for wilful disobedience of not only the judgment
      and order passed by this Court dated 19.08.2020 in Civil Appeal No.
E
      5158/2016 but also for wilful disobedience and non-compliance of order
      passed by this Court dated 06.05.2021 in the present application. The
      defence on behalf of the respondents lack bona fides. To maintain the
      rule of law and majesty of justice and so as to see that the faith and
      confidence of the people in judiciary is maintained, this is a fit case to
F     entertain the present contempt proceedings and to punish the respondents
      under the provisions of the Contempt of Courts Act.
             12. In view of the above and for the reasons stated above, we
      hold the respondents guilty for deliberate and wilful disobedience of
      judgment and order dated 19.08.2020 passed by this Court in Civil Appeal
G     No. 5158/2016 as well as order dated 06.05.2021 passed by this Court in
      the present petition. The respondents have rendered themselves liable
      for suitable punishment under the provisions of the Contempt of Courts
      Act for such deliberate and wilful disobedience. However, before we
      pass any further order of punishment/conviction, we still give an additional
      opportunity to the respondents to comply with order dated 06.05.2021
H
  HSBC PI HOLDINGS (MAURITIUS) LIMITED v. PRADEEP                             457
     SHANTIPERSHAD JAIN & ORS. [M. R. SHAH, J.]

passed in the present petition as well as judgment and order dated            A
19.08.2020 passed by this Court in Civil Appeal No. 5158/2016 to deposit
the shortfall amount so as to maintain a balance of USD 60 million in
their Corporation Bank account within a period of four weeks from today.
      The aforesaid would have a direct bearing on the punishment to
be imposed.                                                                   B
       Put up the matter before this Bench on 12.08.2022 for further
order on punishment.

Divya Pandey                                             Directions issued.
(Assisted by : Roopanshi Virang, LCRA)                                        C




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