TMI Blog2009 (10) TMI 972X X X X Extracts X X X X X X X X Extracts X X X X ..... as disposed of, with liberty to revive the petition in case of any default. Petitioner's counsel also stated that, in such a situation, the petitioner would be entitled to claim interest. 4. The respondent defaulted. Consequently, C.A. 522/2007 was moved by the petitioner seeking revival of the petition. During the pendency of this application, on 30.10.2007, the respondent was granted time to give a proposal for immediate payment of the outstanding dues. On 11.12.2007, respondent's counsel stated that 25% of the total outstanding amount would be paid on or before 25.12.2007 and left it to the court to fix the schedule for repayment of the balance amount due as well as rate of interest, on the next date. On 11.12.2007, the submission of the petitioners' counsel, that in case the respondent failed to abide by the aforesaid statement to pay 25% of the outstanding amount on or before 25.12.2007, the respondent would render itself liable for contempt, was also recorded. 5. It is contended by the counsel for the respondent that a reading of the order of 11.12.2007 shows that the statement made by the respondent to the effect that 25% of the total outstanding principal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 25% of the outstanding liability. In these circumstances, this Court revived the company petition and listed the same for hearing on 4.2.2008. The Court also issued notice to Shri S.P.Gupta, the principal officer of the respondent company who had filed the affidavit giving an undertaking for payment of the outstanding dues of the petitioner as aforesaid, to show cause as to why contempt proceedings be not initiated against him under the Contempt of Courts Act for breach of his undertaking to the Court. Thereafter, the company petition was heard on 4.2.2008 and judgment reserved. Second, in paragraph 18, the judgment concluded as follows:- For the aforesaid reasons, the winding up petition is admitted and the official liquidator attached to this Court is appointed as a provisional liquidator in respect of the respondent company. The official liquidator is directed to forthwith take over all the assets and books of accounts of the respondent-company. The respondent company is also restrained from transferring, alienating, encumbering or dealing with any of its moveable and immoveable assets, bank accounts and other securities, except for the purpose of, and to the extent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of contempt, which had been issued to Mr. S.P.Gupta was initially posted for 25th March, 2008, but since the judgment had been reserved in the company petition on 4th February, 2008 and had not been pronounced before 25th March, 2008, contempt proceedings were also not listed before the court on 25th March, 2008. Now, since the orders had been pronounced on 16th June, 2008, the contempt proceedings were directed to be listed before the court on 18 th August, 2008. Significantly, this Court did not discharge the contempt notice at this stage. 12. As already noted, counsel for the respondent contends that the aforesaid order passed by this Court on 16.6.2008 in the exercise of its company jurisdiction on the winding up petition granting a further opportunity to the respondent to pay the outstanding amount, amounted to a variation of the order of 11.12.2007, and therefore even the undertaking given by the respondent on 11.12.2007 stood superseded and waived by the Court. 13. In addition, my attention has also been drawn to some observations of the Division Bench in the appeal filed by the respondent against the order of 16.6.2008. There, during arguments the respondent had co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the respondent submits that the undertaking which the appellate court permitted his client to give in its judgment passed on 2.7.2008 has, in fact, been complied with. 16. He further submits that it has long been held by the courts that in case two views are possible with regard to the interpretation of orders, which are stated to have been violated, benefit of the same is usually granted to the alleged contemnor and that the power to punish for contempt is used by the courts sparingly and only in the most clear- cut and obvious cases. With regard to the former aspect, learned counsel has taken the position that, it could legitimately be inferred that various orders which came to be passed from 2.9.2006 onwards, in fact, modified previous orders. In this way, the order passed on 6.9.2006 stood modified on 30.10.07 and then again on 11.12.07, and also thereafter, by the conditional final order passed on 16.6.2008, whereby another opportunity was granted to the respondent to clear the outstandings. The conditions set down on 16.6.2008 were again modified in appeal on 2.7.2008. Therefore, the benefit of such a view being a plausible one, should be given to the respondent and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f hearing of that appeal. In these circumstances, the submission that by granting another opportunity on terms, the appellate court had, in effect, discharged the notice of contempt, also deserves to be rejected. It bears repetition that although the appellate court also noted the fact of the contempt notice, it did not discharge the same. 19. Another aspect that needs consideration is the question whether the later orders are to be taken as having modified the previous orders with regard to all the respondent's obligations; or whether they merely amounted to grant of another opportunity to pay. To my mind, the former proposition is not axiomatic. If any undertaking is given to the court by a party undertaking to do something, or to pay an amount, and the party fails to perform, the court is empowered not only to punish for contempt by fine or imprisonment, but also to direct the party to either perform as originally undertaken, i.e., to purge the contempt, or to invoke some further legal consequences of the non-performance, such as a winding up order. In a given case, depending on the facts, the court could always find the respondent not guilty of contempt, while at the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etc. would stand vacated; and not that the violation of the previous undertakings to pay will stand condoned. Surely, by choosing to issue notice of contempt to the respondent, the court, in effect, had taken a conscious decision not to condone the respondent's violation of his undertaking. Had it been a case where further opportunity was granted to pay and no notice of contempt was issued, and nothing whatsoever was stated contemporaneously about the respondent's violation of his undertaking given to the court, then, perhaps, it could be inferred that the court had decided to absolve the respondent entirely of the consequences of violation of the undertaking. But this is not the case here. 21. In my view, for all the aforesaid reasons, all the orders including the order of 16.6.2008 and the order in appeal of 2.7.2008, can only mean one thing, which is that the respondent is not absolved or discharged from his undertakings. 22. At this stage, learned counsel for the respondent, on instructions from the respondent, who is present in court, states that his client throws himself at the mercy of this court and prays that a lenient view be taken. His statement has been re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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