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Judgment
ORDER
Oral Judgment : Justice Sharad Kumar Sharma, Member Judicial:
The facts that engage our consideration are that;
On 06.11.2023 Smt. G. Kalpana, the Resolution Professional had filed a Contempt Application (IBC) / 5 / HYD / 2024 in CP (IB) No.10/7/HDB/2022, alleging non-compliance of the Order dated 19.07.2023 as preferred against the Suspended Board of Directors, which includes the Appellant, being the Suspended Managing Director of the Corporate Debtor (CD).
The Contempt Application is shown to have been drawn, while exercising its powers under Section 425 of the Companies Act, 2013, to be read with Section 12 of the Contempt of the Courts Act,1971.
The said Contempt Petition was taken up before the Ld. NCLT on 07.04.2025 and the same has been dismissed, as having been rendered infructuous on the following grounds:
``The resolution plan has already been approved. Therefore, this application has become infructuous. Accordingly, this application is dismissed.’’
Being aggrieved against this Order, the present Appeal has been preferred by the Appellants. Now, the question, which emerges consideration is and which has to be necessarily placed before this Tribunal to consider, as to how this Appeal would be maintainable as against the Order of Closure of a Contempt in the light of the Appellate provisions contained under Section 19 of the Contempt of Courts Act.
Records show that the proceedings of the contempt, was drawn by the Resolution Professional/Respondent herein, as against the Suspended Board of Directors of the Corporate Debtor, which include the Appellants herein in this instant Company Appeal, that has been preferred under Section 61 of I & B Code, 2016, as against the Order of closing the Contempt Petition. Closure of the Contempt Petition, by an Order of 07.04.2025 is rather an order which in favour of the Appellants and prima facie because of this reason only, the Appeal would not lie, and hence deserves dismissal.
Besides this, the powers of contempt are contained under Section 425 of the Companies Act, 2013, which is extracted hereunder:
``Section 425: Power to punish for contempt.
425.The Tribunal and the Appellate Tribunal shall have the same jurisdiction, powers and authority in respect of contempt of themselves as the High Court has and may exercise, for this purpose, the powers under the provisions of the Contempt of Courts Act, 1971, which shall have the effect subject to modifications that—
(a)the reference therein to a High Court shall be construed as including a reference to the Tribunal and the Appellate Tribunal; and
(b)the reference to Advocate-General in section 15 of the said Act shall be construed as a reference to such Law Officers as the Central Government may, specify in this behalf.’’
The above provision provides for that the contempt proceedings could be drawn in accordance with the powers contained under the provisions of the Contempt of Courts Act, 1971. As against the orders of contempt under the Contempt of Courts Act, 1971, appeal is contemplated under Section 19 of the Contempt of Courts Act.
The Appellate provision under Section 19, provides for ``any order or decision of the High Court in the exercise of its jurisdiction to punish for contempt’’, meaning thereby, the Appellate provision under Section 19 of the Contempt of Courts Act, is only available when the alleged Contemnor is punished by an Order. Dismissal of a Contempt Petition which in fact, in the instant case, happens to be an Order in favour of the Appellant since, not being an Order of Punishment, no Appeal would lie at the behest of the Appellant and that is what has been laid down by the Hon’ble Apex Court in a Judgment reported in 1988 Vol III SCC 26 D.N. Taneja V. Bhajan Lal, particularly the observations which has been made by the Hon’ble Apex Court in its Para 12 which is extracted hereunder:
``12. Right of appeal is a creature of the statute and the question whether there is a right of appeal or not will have to be considered on an interpretation of the provision of the statute and not on the ground of propriety or any other consideration. In this connection, it may be noticed that there was no right of appeal under the Contempt of Courts Act, 1952. It is for the first time that under Section 19(1) of the Act, a right of appeal has been provided for. A contempt is a matter between the court and the alleged contemnor. Any person who moves the machinery of the court for contempt only brings to the notice of the court certain facts constituting contempt of court. After furnishing such information he may still assist the court, but it must always be borne in mind that in a contempt proceeding there are only two parties, namely, the court and the contemnor It may be one of the reasons which weighed with the legislature in not conferring any right of appeal on the petitioner for contempt. The aggrieved party under Section 19(1) can only be the contemnor who has been punished for contempt of court.’’
Thus, the closure of the contempt is rather in the interest of the Appellants and in that eventuality, the Appellants, cannot be permitted to invoke the Appellate Jurisdiction to challenge the Order which has been rendered in their favour by dismissal of the Contempt proceedings, in which the Appellants were the opposite party.
Irrespective of all the material facts, drawing of a contempt by taking cognizance of it and initiation of the same, is the exclusive prerogative of the Tribunal or the Court before whom such proceedings are drawn. It falls within an exclusive domain of the Tribunal or the Court who either can entertain an Application or to reject it.
The Applicant to the Contempt Petition or, for that matter, the opposite party to the Contempt, they simply act as the informer to the Tribunal about the non-compliance of its Order. After the intimation of the institution of the Contempt Petition, the opposite party to the Contempt case has got no right to file an Appeal under Section 19 of the Contempt of Courts Act until and unless there is an order of punishment against him.
Owing to the simpliciter intention of law which needs no elaborative reference, when a Contempt Petition has been dismissed in favour of the Appellant, there will be no Appeal provided against closure of contempt proceedings, that too at the behest of the party in whose favour the Contempt Petition has been decided. The instant Company Appeal would not lie under Section 61 of the I & B Code, 2016.
Hence, this Company Appeal (AT) (CH) (INS) No. 295 / 2025 is dismissed with a cost of Rs.50,000/- (Rupees Fifty Thousand Only) to be deposited in the ``Prime Minister’s Relief Fund’’, within a period of 10 days from today and the receipt of the same should be filed before this Appellate Tribunal within the said period accordingly or 10 days thereafter.