1 conp-l-17-11 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION jmi CONTEMPT PETITION NO.LODG.17/2011 IN ARBITRATION PETTION NO.48 OF 2011. Reliance Capital Limited. ..Petitioner. vs. Chandan Ram Sumaya & Anr. ..Respondents. .... Mr. K. Mehta, i/b. KMC Legal Venture, for Petitioner. Mr. A. Shete, a/w. Mr. A. Vibhute, i/b. Khaitan & Jayakar, for Respondent Nos. 1 & 2. .... CORAM : S. J. KATHAWALLA, J. DATE : 12TH OCTOBER 2011. P.C. : In the above Petition, the Petitioner has alleged that the Respondent No.1 has deliberately and willfully flouted, committed and continued to be in breach, violation and contempt of the Consent Order passed by this Court dated 1st March 2011 and therefore the Respondent No.1 be committed to Civil Prison for six months or for such term as this Court may deem fit and proper. 2. The above Contempt Petition is taken up for admission. 3. The Petitioner had filed Arbitration Petition No.48 of 2011 against the Respondents seeking various reliefs under Section 9 2 conp-l-17-11 of the Arbitration & Conciliation Act, 1996. The parties to the said Arbitration Petition entered into Consent Terms dated 1st March, 2011. Clause 3 of the Consent Terms reads thus :- “3. The Respondent No.1 undertakes to make payment of total sum of Rs.17,42,500/- to the petitioners on or before 19th March, 2011 by a demand draft only being the sum for regularizing the three loan accounts bearing Nos. (1) RLHLMUM000043051, (2) RLHLMUM00004853, & (3) RLHLMUM000149007.” 4. The parties have provided in Clause 6 of the Consent Terms that if the Respondents fail to comply with Clause 3 of the Consent Terms, the Consent Terms shall be revoked and the Petitioner will be free to adopt appropriate legal proceedings. An Order in terms of the Consent Terms was passed by this Court on 1st March 2011 itself. The Court specifically recorded that if the Consent Terms are not abided by the Respondent No. 1, the Petitioners will be at liberty to seek such interim measures as are permissible in law. 5. The Respondent No.1 has admittedly failed to comply with Clause 3 of the Consent Terms because of which the Petitioner has filed the present Contempt Petition praying for reliefs as aforestated. 6. The Learned Advocate appearing for the Respondents have pointed out that the word undertaking used in Clause 3 of the Consent Terms cannot be construed as an undertaking given 3 conp-l-17-11 to the Court and therefore the Court has not recorded in its Order that the undertaking has been accepted. Again the Parties were well aware that the Respondent No.1 may not be able to make the payment to the Petitioner as recorded in Clause 3 of the Consent Terms, because of which it was provided in Clause 6 of the Consent Terms that in the event of default on the part of the Respondent No.1 in making payment to the Petitioner, as set out in Clause 3 of the Consent Terms, the entire Consent Terms shall stand revoked and the Petitioner shall be free to adopt appropriate legal proceedings. It was also provided in the Order passed by the Court that if the Consent Terms are not abided by the Respondent No.1, the Petitioner will be at liberty to seek such interim measures as are permissible in law. The Respondent No.1 has in his Affidavit dated 29th April, 2011 also set out that since the State Bank of India failed to consider the proposal of restructuring, the Company has suffered a temporary set-back and has therefore approached a private asset restructuring company by name INVENT Assets Securitisation & Reconstruction Pvt. Ltd. (IARC), which is a RBI recognized restructuring Company established for the purpose of restructuring of Companies and the said IARC are exploring the financial viability of the Respondents, based on the potential and the assets of the Respondents. It is submitted that the Respondents are also in talks with M/s.Veet Legal Services Pvt. Ltd. to work out suitable options for a compromise with banks and/or financial institutions. It is therefore submitted that the Respondents have not willfully breached or disobeyed the Order of this Court as alleged by the 4 conp-l-17-11 Petitioner and the Contempt Petition deserves to be dismissed at the threshold. 7. I have considered the submissions advanced by the Petitioner as well as Respondent No.1. Apart from the fact that the Order dated 1st March, 2011 does not record acceptance of any undertaking by Respondent No1 and in fact records that in the event of default on the part of Respondent No.1, in making the payment, the entire Consent Terms shall stand revoked and the Petitioner shall be free to adopt appropriate legal proceedings and seek interim measures that are permissible in law. As set out in the Affidavit in Reply by the Respondent No. 1, the State Bank of India was likely to consider the proposal of restructuring of the facilities enjoyed by the Company. However, the Bank failed to consider the proposal because of which the Respondent No.1 has approached IARC who are exploring the financial viability of the Respondents based on the potential and the assets of the Respondents. Thus, it cannot be said that Respondent No.1 has willfully or deliberately disobeyed or breached Clause 3 of the Consent Terms and therefore is liable to be punished under the Contempt of Courts Act, 1971. The Contempt Petition is therefore dismissed. [ S. J. KATHAWALLA, J. ]