TMI Blog2016 (6) TMI 1467X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by this Court against the alleged contemnors under the provisions of the Contempt of Courts Act, 1971. Whether the respondent no.1 was required to obtain any prior consent of the BIFR under Section 22 of the SICA for taking steps in execution of the said two foreign awards in respect of the properties of the petitioner situated outside India? HELD THAT:- A conjoint reading of Section 1(2) and Section 21 of the SICA clearly indicates that the provisions of the SICA are extended only to the whole of India and not outside India. The expression any of the properties of the Industrial Company in Section 22 of the SICA will have to be read with Section 1(2) of the SICA which provides for territorial jurisdiction of the BIFR which is extended only to any part of this country and not outside India. A reference to the judgment of this Court in the case of MURABLACK INDIA LTD. VERSUS UBS AG [ 2000 (9) TMI 927 - HIGH COURT OF BOMBAY] will be useful to deal with this issue raised by the learned senior counsel for the respondents. It is held by this Court in the said judgment that prima facie, provisions of Section 22 which have only territorial application would not be attract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l breach of the said order dated 8th September 2015 passed by this Court under the provisions of the Contempt of Courts Act, 1971. 2. The following important questions of law arise in this matter:- (i) Whether this Court in the order dated 8th September 2015 had issued a direction in the nature of a command or authoritative instruction to the respondent no.1 herein not to take any steps in execution of the foreign awards and seek any relief in violation of Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (for short 'SICA') without permission of the Board for Industrial and Financial Reconstruction (BIFR) or had only made its observations against the respondent no.1 not to proceed against the petitioner herein or to take steps in execution of the foreign awards without permission of the BIFR ? (ii) Whether the respondents were bound to obtain permission of the BIFR under Section 22 of the SICA for seeking enforcement of the foreign awards and to file garnishee proceedings in respect of the properties of the petitioner judgment debtor situated outside India ? (iii) Whether there was any genuine difference of opinion between the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ebruary 2010 were enforceable as decrees of this Court and for a direction to enforce and/or execute the said two awards as decrees in favour of the respondent no.1 herein and against the petitioner herein. 6. The respondent no.1 herein commenced proceedings for enforcement and execution of the said two foreign awards against the petitioner in United State on 23rd June 2010 before District Court for Southern District of New York. It is the case of the respondent no.1 that though the petitioner was served with the said proceedings in India on 7th February 2011, the petitioner chose not to appear before the said Court. The US District Court by its order dated 29th July 2011 granted recognition and enforcement of the two foreign awards. 7. The petitioner herein thereafter filed proceedings under Chapter 15 of the Bankruptcy Code before US Bankruptcy Court for the Southern District of New York. In the said proceedings, the petitioner sought recognition of BIFR proceedings in India and immediate protection against commencement or continuation of action against it or its assets in pending litigation including proceedings filed by the respondent no.1 for recognition of the awards. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent no.1 respectively do not survive and are disposed of accordingly. 10. In the said judgment, this Court observed that in view of the pendency of the proceedings before the BIFR, the petitioner would not be entitled to take steps in execution of the award and seek any relief which would be in violation of Section 22 of the SICA without permission of the BIFR. This Court also observed that there is no bar under Section 22 of the SICA to declare that the foreign awards rendered in favour of the petitioner are enforceable as decrees of this Court. In paragraph 37 of the said judgment, it was clarified that as and when any application for execution of the said award as a decree is pressed by the respondent no.1 herein and if any coercive orders are proposed to be passed which are prohibited under Section 22 of the SICA, the executing Court can consider the effect thereof. This Court also observed that this Court was inclined to accept the submission of the petitioner herein that no coercive orders can be passed by this Court for execution of the said foreign awards as decrees of this Court at this stage. 11. Mr.Andhyarujina, learned counsel appearing for the petitioner inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondents in reply to the letter dated 7th October 2015 contending that the BIFR did not have extra territorial jurisdiction on the properties of the petitioner situated outside India. It is contended that none of the orders passed by the BIFR and also by this Court restricted the respondent no.1 from executing the foreign awards outside India. It is contended that the provision of SICA including Section 22 does not have any application to any proceedings which are instituted by the respondent no.1 outside India as the said provision of the SICA extends only to the territory of India. 14. Learned counsel placed reliance on the judgment of the Madras High Court in the case of Ananta Udyog Private Ltd. Vs. Cholamandalam Investment and Finance Co. Ltd., reported in ( 1995) 83 Comp Cases 498 (Mad.) and would submit that the purpose and object of the provision is clearly to await the outcome of the reference made to the BIFR for the revival and rehabilitation of the sick industrial company and thus the properties of the sick industrial company shall not be made the subject matter of a coercive action by taking any steps in execution. 15. It is submitted by the learned coun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 18. It is submitted by the learned senior counsel that the petitioner was fully aware that the respondent no.1 had already initiated the proceedings in US Court against the petitioner on 23rd June 2010 and before the Malaysian Court on 28th December 2012 i.e. much before this Court delivered the said judgment dated 8th September 2015. He submits that the proceedings filed by the respondent no.1 in the Court at Antwerp were already served upon the petitioner on July 2015 i.e. before delivery of the said judgment dated 8th September 2015. The Court at Antwerp had already passed an order on 10th August 2015 against the petitioner and its sister concern M/s.Ashapura Midgulf NV. He submits that neither the BIFR nor this Court has barred the respondent no.1 from taking any steps in execution in respect of the assets of the petitioner in other countries. It is submitted that since the petitioner and its subsidiary initially failed to contest the said proceedings filed by the respondent no.1 in the Court of First Instance at Antwerp, the said Court passed an order to surrender EUR 652.218.52. He submits that only after the said order passed by the Court at Antwerp, the petitioner has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the respondents had not committed any willful disobedience of the order passed by this Court, no action under Section 2(b) of the Contempt of Courts act, 1971 or under any other provisions of law can be initiated against the respondents. Learned senior counsel placed reliance on the judgment of the Supreme Court in the case of Indian Airports Employees' Union Vs. Ranjan Chatterjee and Anr., reported in (1999) 2 SCC 537 and in particular paragraph 11 thereof. 22. Learned senior counsel for the respondents submits that a proceeding under the extra ordinary jurisdiction of this Court in terms of the provisions of Contempt of Courts Act, 1971 is a quasi criminal and thus standard of proof required for initiating any action in a contempt proceeding is that of a criminal proceeding and breach shall have to be established beyond reasonable doubt. He submits that where there are two equally consistent possibilities open to the Court, this Court cannot hold that the offence is proved beyond reasonable doubt. In support of this submission, he placed reliance on the judgment of the Supreme Court in the case of Mrityunjoy Das Anr. Vs.Sayed Hasibur Rahaman Ors., reporte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rted the proceedings before the Malaysian Court on 28th December 2012. The respondent no.1 also initiated the proceedings in the Court of First Instance at Antwerp in April 2015 which proceedings were served upon the petitioner in the month of July 2015. It is also an admitted position that the Court at Antwerp passed an order on 10th August 2015 against the petitioner in the said proceedings. The petitioner and its sister concern however initially failed to contest the said proceedings. The Court at Antwerp accordingly directed to surrender EUR 652,218.52. 27. The order is passed by this Court in the Arbitration Petition Nos.1359 of 2010 and 1360 of 2010 and other connected matters admittedly on 8th September 2015. A perusal of the said order and judgment dated 8th September 2015 clearly indicates that though this Court made an observation that in view of the pendency of the proceedings before the BIFR, the respondent no.1 herein would not be entitled to take steps in execution of the award and seek any relief which would be in violation of Section 22 of the SICA without permission of the BIFR, this Court did not grant any injunction restraining the respondent no.1 herein to ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndustrial company in India was made. 31. A perusal of the observations made by this Court in paragraphs 36, 37 and 42 of the said judgment dated 8th September 2015 clearly indicates that the said observations are not by way of any directions or cannot be construed as an injunction against the respondent no.1 from taking any steps in execution of the foreign awards without obtaining prior consent of the BIFR under Section 22 of the SICA. Be that as it may, since the BIFR does not have territorial jurisdiction to take any steps in respect of the properties of the company in BIFR situated outside India, the respondent no.1 was not required to obtain any such consent of the BIFR. In my view, the petitioner herein cannot file contempt proceedings for initiation of an action against the respondents for not obtaining prior permission of the BIFR before filing an application for execution in respect of the properties of the petitioner situated outside India or for pursuing such application. 32. A perusal of the record clearly indicates that the respondent no.1 had already initiated proceedings in the year 2010 itself in US Court and in Malaysian Court in the year 2012. The respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mere observations or suggestions made by the Court in the order in question. It is held that there must be an express direction necessary for disposal of the case which should be in the nature of a command or authoritative instruction which contemplates the performance of certain duty or act by a person upon whom it has been issued. In my view, the observations made by this Court in paragraphs 36, 37 and 42 of the said judgment dated 8th September 2015 were ex facie not in the nature of a command, direction or instruction and were in the nature of an enforceable order and thus any alleged non-compliance of the observation made by this Court simplicitor would not attract the provisions of the Contempt of Courts Act, 1971. In my view, the judgments of the Supreme Court in the case of Arun Kumar Aggarwal Vs. State of Madhya Pradesh (supra) and of the Karnataka High Court in the case of R.S. Narayan and Ors. Vs. Air India Corporation, New Delhi and Anr. (supra) squarely apply to the facts of this case. I am respectfully bound by these judgments. I am agreement with the views expressed by this Court and the Karnataka High Court. 35. Be that as it may, I am not inclined to ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndard of proof required is that of a criminal proceeding and the breach shall have to be established beyond reasonable doubt. It is held that under Section 2(b) of the Contempt of Courts Act, 1971, the burden of proof is on the person who asserts which burden is applicable to the allegations of contempt of Court. It is held that power under the provisions of the Contempt of Courts Act, 1971 should be exercised cautiously and sparingly and in the larger interest, after examining the true effect of the alleged contemptuous conduct. 38. In my view, steps taken by the respondent no.1 prior to the date of delivery of the judgment of this Court i.e. on 8th September 2015 in execution of the foreign awards against the petitioner in respect of the properties situated outside India cannot be considered as contemptuous conduct on the part of the respondents for which an action under the provisions of the Contempt of Courts Act, 1971 can be initiated against them. In my view, the petitioner though having alleged contempt against the respondents, has failed to discharge the burden of proof which cast upon them. The principles laid down by the Supreme Court in the case of Mrityunjoy Das ..... X X X X Extracts X X X X X X X X Extracts X X X X
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