REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL ORIGINAL CONTEMPT JURISDICTION
CONTEMPT PETITION (CIVIL) No.  624 OF 2020
IN CIVIL APPEAL NO. 5158 OF 2016
HSBC PI Holdings (Mauritius) Limited        …Petitioner(s)
Versus
Pradeep Shantipershad Jain & Ors.     …Respondent(s)
J U D G M E N T 
M.R. SHAH, J.
1. Present   contempt   petition   has   been   preferred   by   the
petitioner  herein,  alleging   wilful, intentional  and  deliberate
disobedience   of   the   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 06.05.2021. 
2. The facts leading to the present contempt proceedings in a
nutshell are as under: ­
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2.1 A Share Subscription Agreement (SSA) was entered into on
21.04.2011   between   HSBC   –   petitioner   herein   and   Avitel
and   others   (original   appellant(s)   before   this   Court   in   Civil
Appeal No. 5145/2016). 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 paid­up 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   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   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
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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   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   as   the   Act,   1996)   in   the   Bombay
High   Court,   inter­alia,   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   Court   passed   an   interim   order   under   Section   9
petition, inter­alia, 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
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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
three­member Arbitral Tribunal set up 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, 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 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
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Court   partly   allowed   the   said   appeal   and   modified   the
order passed by the learned Single Judge and directed the
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). 
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 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
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not   depositing   the   shortfall   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 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 also came
to   be   dismissed   on   05.05.2017.   Meanwhile,   HSBC   had
moved 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   legal   notice   dated   04.09.2020   to   the
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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. 
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. 
2.9 On 30.04.2021, HSBC filed an Interim Application bearing
No. 59119/2021, inter­alia, 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
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
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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).                         
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,   inter­alia,   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.   68388/2021).   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   and   order   dated   19.08.2020
and   subsequent   order   dated   06.05.2021,   the   alleged
contemnors   have   filed   another   application   being   I.A.   No.
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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
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   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 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
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19.08.2020 and subsequent order dated 06.05.2021 by the
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 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
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
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grounds   which   were   earlier   not   accepted   by   this   Hon’ble
Court. 
4.2 It   is   submitted   that   the   respondents   –   alleged   contemnors
have 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   FZ­LLC   (Avitel   Dubai)   through   Avitel
Holdings   Limited   (Avitel   Mauritius).   These   amounts   were
thereafter   paid   to   Highend,   Digital   Fusion,   etc.   i.e.,   to
companies   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. 
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
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dismissed   on  28.09.2015.  It   is   submitted   that   the   Division
Bench   of   the   Bombay   High   Court   has   confirmed   the   order
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   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   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
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is submitted that instead of depositing the 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
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   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. 
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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
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   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
contemnors   also   filed   their   counter   affidavit,   inter­alia,
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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   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 SCC 573. 
4.8 It   is   further   submitted   by   Shri   Kaul,   learned   Senior
Advocate 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. 
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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   8 th
  July,
2021 (i.e. one week before the filing of counter affidavit and
almost   11   months   after   the   August   Judgment   and
subsequent to the 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: ­
(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   there   are   existing   encumbrances   on   any   of
the assets disclosed;
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(iii) The   assets   disclosed   by   the   alleged   contemnors   only
amount   to   Rs   16.37   Crore   (approx.).   If   permitted   to
dispose assets, then in the best­case scenario only 16
Crores would be 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   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;
(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;
(vii) Avitel   holding   shares   worth   Rs.   274   Crore   in   a
subsidiary,   Avitel   Mauritius   is   also   completely
unreliable   and   misleading.   The   underlying   value   of
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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   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 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 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
18

has   jurisdiction   under   Article   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   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   Firm
Ashok   Traders   Vs   Gurumukh   Das   Saluja   (2004)   3   SCC
155   has   held   that   an   application   under   Section   9   is   not   a
suit and the order 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
19

that   an   execution   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  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 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.;   (1996)   4   SCC   622   as   well   as
20

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. 
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 . 
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 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. 
21

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  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 , non­compliance with the orders passed by the Hon’ble
Supreme   Court   shakes   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 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
22

and   in   the   manner   suggested   by   the   learned   Single   Judge
passed by the High Court i.e., within four weeks. 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   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   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 . 
23

4.20 It   is   submitted   that   compliance   of   an   order/judgment   was
never contingent on the non­availability of “liquid funds” of
the   alleged   contemnors.   It   is   submitted   that   an   order   for
depositing the money cannot 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   non­availability   of   liquid   funds/assets
is   yet   another   deliberate   tactic   of   the   alleged   contemnors
that   is   intended   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:
(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;
24

(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   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 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.
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’
25

share   in   Avitel   has   been   provided.   The   same   is   merely   an
eyewash.
4.22 It   is   further   submitted   that   mere   pendency   of   a   review
petition   cannot   be   a   ground   for   non­compliance   of
judgment/ order of this Hon’ble Court. It is submitted that
the   respondents   ­   alleged   contemnors   and   Avitel   have   a
history   of   non­compliance   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   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   one­year   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
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
26

known   as   M/s.   Sesa   Sterlite   Ltd)   Vs.   Goa   Foundation
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 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   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
petitioner’s petition for enforcement of Foreign Award before
27

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   Foreign   Final   Award
passed in its favour since 2014 and seeks to 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. 
5.1 It   is   submitted   that   the   present   proceedings   have   been
initiated by the petitioner – HSBC alleging non­compliance
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
Judge   has   been   confirmed   by   this   Hon’ble   Court   by
judgment   and   order   dated   19.08.2020   in   Civil   Appeal   No.
28

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   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   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. 
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
29

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
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   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  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
30

while   considering   the   present   contempt   proceedings   the
aforesaid aspects may be taken into consideration.     
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,
inter­alia,   (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,   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   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
31

well as in the case of   Court Liquidator Employees’ Assn.
Vs. P.G. Mankad; (2002) 10 SCC 477.     
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. 
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 was on a different footing
and   the   same   is   evident   from   the   conclusions   set   out   in
paragraph 44 of the said judgment. 
32

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   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 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   their
immovable   and   movable   assets   including   their
shareholdings   in   the   company   to   arrange   for   the   requisite
funds. 
33

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   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. 
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. 
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
34

the   Court   and   there   has   to   be   wilful   disobedience   on   the
part of the party. 
5.12 It is submitted that as held by this Hon’ble Court in catena
of   decisions   mere   non­compliance   cannot   be   a   ground   to
punish   a   person/judgment­debtor   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   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.
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
35

appearing   on   behalf   of   the   respondents   has   also   relied
upon   the   following   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   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.  
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
36

that in the present case the learned 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   the   Division
Bench   of   the   High   Court  and   the   alleged  contemnors  were
directed 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). 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   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
37

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   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   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,
inter­alia,   deposit   the   shortfall   amount   in   the   Corporation
Bank   account   to   maintain   a   balance   of   USD   60   million.
Despite   the   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
38

disobedience   of   judgment   and   order   passed   by   this   Court
dated   19.08.2020.   This   Court   had   issued   a   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: ­     
   
“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
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   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
39

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   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   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   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
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
40

this   Hon'ble   Court   or   to   cause   any   prejudice   to   the
petitioner.
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   PI   Holdings   (Mauritius)   Limited   was
allotted   by   the   Company,   total   614,327   Compulsorily
Convertible   Preference   Shares   on   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.   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   A­2.   (Page   No.   13   to   19).   Thus,   a   total
amount of 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
Eighty­Four Crores Ten Lacs Sixty 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
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 31 st
 March 2014 till date.
41

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
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   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.
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   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   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. A­7 & A­8,
Vimal Udyog Bhavan, Taikalwadi Road, Mumbai since
08­07­1999   and   19­07­2001   respectively,   and
registered   owner   of   residential   premises   at   Pleasant
Palace,   Narayan   Dabholkar   Road,   Malabar   Hill,
Mumbai ­ 400 006 since 07­01­2011, 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   Jain,   and   Mrs
Priyanka   Hrishi   Jain   wife   of   Applicant   No.   3   Hrishi
Jain   are   registered   owners   of   office   premises   at   Unit
42

No.   A­9   &   A­6   respectively,   in   Vimal   Udyog   Bhavan,
Taikalwadi  Road,  Mumbai since  03­09­2012  & 30­08­
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.   A­11   in   Vimal   Udyog
Bhavan,   Taikalwadi   Road,   Mumbai   since   30­08­2012.
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.
13. That, the Applicants inability to comply with the
Order dated 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. 
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 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,
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,   till   date,   the
43

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
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   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,   non­compliance   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. 
   
44

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 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 non­compliance 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   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
entertained.
45

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 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
(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   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 with the due course
46

of   justice.   The   decisions   relied   upon   by   the
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
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
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
Court   that   non­compliance   with   the   orders   passed   by   this
Court shakes the very foundation of our judicial system and
47

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 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 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 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
48

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   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 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   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
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dated   06.05.2021   and   thereafter   their   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. 5158/2016 but also for wilful disobedience and
non­compliance   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   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
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passed by this Court in Civil Appeal 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   passed   in   the   present   petition   as
well   as   judgment   and   order   dated   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. 
Put up the matter before this Bench on 12.08.2022 for
further order on punishment.
             
………………………………….J.
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[M.R. SHAH]
NEW DELHI; ………………………………….J.
JULY 11, 2022         [ANIRUDDHA BOSE]
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