Vasundhra Gupta vs Mr. Sandeep Mathur

Jarat Kumar Jain: J.

The Applicant Vasundhra Gupta, Suspended Director of Aesthetic Stone Arts India Pvt. Ltd. (Corporate Debtor) has filed the Contempt Application under Section 425 of the Companies Act, 2013 r/w Rule 11 of National Company Law Appellate Tribunal, Rules, 2016 and Section 12 of Contempt of Court Act, 1971 for initiation of Contempt proceedings against Mr. Sandeep Mathur, Managing Director of Rajasthan Road Development and Construction Corporation Ltd. and also against the Corporation.

As per the Applicant, the Work Order No. 1 & 2 were awarded to the Corporate Debtor for construction of building on 28.03.2017 and 13.03.2019. The Corporate Debtor could not complete the work after granting many extensions. Ultimately, on 11.06.2020 and 04.08.2020 respectively the Work Order No. 1 and 2 were terminated as per the terms and conditions of the agreement. At the instance of one Operational Creditor on 04.03.2020, CIRP initiated against the Corporate Debtor and Mrs. Anuradha Gupta was appointed as Interim Resolution Professional. The Applicant Vasundhra Gupta Suspended Director of the Corporate Debtor Company filed an Application before the Adjudicating Authority for stay on the operation of the termination order dated 11.06.2020 and stay on fresh work order dated 02.07.2020. IRP Mrs. Anuradha Gupta has also filed an Application under Section 60(5) of IBC before the Adjudicating Authority and prayed the same relief. Ld. Adjudicating Authority vide order dated 07.01.2021 allowed the Applications and held that during the moratorium period termination of work orders are illegal and the invocation of bank guarantee by the Corporation is also illegal. Being aggrieved with this order the Corporation has filed CA (AT) (Ins) No. 131 of 2021 before this Appellate Tribunal. This Appellate Tribunal vide order dated 25.02.2021 admitted the Appeal for hearing and also directed that the status quo as exist today shall be maintained till next date of hearing.

The Applicant Vasundhra Gupta has filed this Contempt Application alleging that after passing of the status quo order dated 25.02.2021 the Respondent No. 1 is carrying out the pending work at the project site through its officers and are trying to execute every work mentioned in G-Schedule of the agreement dated 28.03.2017. Thus, the Respondent No. 1 Mr. Sandeep Mathur has committed willful disobedience of the order passed by this Appellate Tribunal on 25.02.2021. It is also stated that on 24.06.2021 the Applicant vide email dated 24.06.2021 informed the RP about the ongoing work on the project site. The Respondents illegal acts and omissions have caused irreparable damaged to the Applicant and the Corporate Debtor. Therefore, allowed the Application and issue notice to the Respondents and punished for the said act of contempt under Section 12 of the Contempt of Court Act, 1971.

Notices were issued to the Respondents. The Respondent No. 1 filed the Reply of the Contempt Case which is supported by his affidavit. In the reply, he has raised some preliminary objections that the status quo order was passed in respect of the Work Order No. 1 and 2 whereas the alleged work going on at the project site is in fact related to the Work Order No. 78-80-83 dated 06.03.2018 and it has nothing to do with the Work Order No. 1 and 2, which are subject matter of CA (AT) (Ins) No. 131 of 2021. It is also stated that he (Mr. Sandeep Mathur) has wrongly been arrayed as Respondent No. 1. The Project Director of Unit No. 4 of RSRDS Jodhpur is the officer in charge of the project and for the pending Appeal. Thus, the Contempt Application is liable to be dismissed on the ground of misjoinder of parties. It is stated that the Respondent No. 1 has not disobeyed the order dated 25.02.2021 passed by this Appellate Tribunal. The Contempt Case is entirely misconceived and not maintainable. After passing of the aforesaid order no civil work was executed by the Respondents on the project site and have not committed any willful disobedience of the order dated 25.02.2021. Therefore, the Contempt Application is liable to be dismissed.

In rejoinder, the Applicant stated that after termination of work orders, on 02.07.2020 the work orders were awarded to Mr. Amit Jain. Mr. Amit Jain raised second running bills on 10.11.2020 and third running bill on 15.02.2021. The Respondent No. 1 has made payment to Mr. Amit Jain on 22.01.2021 and on 26.02.2021 i.e. after order dated 25.02.2021 passed by this Appellate Tribunal. Thus, illegal civil work was executed by the Respondents and they have committed willful disobedience of the order passed by this Appellate Tribunal. In support, they have filed copy of the running bills raised by Mr. Amit Jain.

After hearing Ld. Counsels for the parties, we have gone through the record.

Issue for consideration before us is whether the Respondents have committed any willful disobedience of the status quo order dated 25.02.2021 passed by this Appellate Tribunal.

It is admitted fact that the Work Order No. 1 was terminated on 11.06.2020 and 02.07.2020 the Work Order No. 1 was awarded to Mr. Amit Jain. The Applicant and IRP filed an Applications I.A. No. 167/JPR/2020 and  I.A.  No.  214/JPR/2020  in  CP (IB)  No. 131/JPR/2019  before  the Adjudicating  Authority  and  the  Adjudicating  Authority  vide  order  dated 07.01.2021 allowed the Applications and held that the termination of work orders are inconsistent with Section 20 of IBC and are invalid and prohibited under Section 238 of IBC. It means from 02.07.2020 to 06.01.2021, there was no prohibitory order against the new contractor Mr. Amit Jain. The Applicant in his rejoinder filed in this case, reproduced the extract of rejoinder dated 22.03.2021 filed by the Respondent No. 2 in the pending Appeal, which is reproduced herein below:-

"10. That the Appellant (Corporation) after termination of the Work Order No. 1, awarded the remaining work to Mr. Amit Kumar Jain (Respondent No. 4 herein) on 02.07.2020. It is submitted that the new contractor has almost completed the work upto 14.01.2021 and the minor finishing work only is remaining. The Appellant (Corporation) is placing on record some of the recent photograph of the subject building in support of this contention true copies of the recent photograph of the subject building are annexed hereto and marked as Annexure RJ-1 (Colly)"

With the aforesaid pleading, it is apparent that the new contractor has almost completed the work upto 14.01.2021. The Applicant has filed the copy of running bills which are raised by new contractor, second running bill dated 10.11.2020 and third running bill dated 15.02.2021. The Applicant has not placed on record any document in support of the allegations that after passing of the order dated 25.02.2021 any civil work was executed at the project site. The Applicant has sent email to RP and also to the Project Director on 24.06.2021. The Project Director replied the same vide letter dated 06.07.2021 and clarified that RSRDS (Corporation) is maintaining the status quo as on 25.02.2021 for Work Orders No. 1 and 2. The RP has not filed any affidavit in support of the allegations made against the Respondents.

We are of the view that the Applicant has failed to make out a case of willful disobedience by the Respondents. Therefore, we find no ground to proceed in this Contempt Case and the Respondents are discharged from the Contempt Case. Thus, the Contempt Case is closed.