Case: RAMA NARANG Vs. RAMESH NARANG AND OTHERS

2. Factual matrix necessary for the adjudication of the present case is thus:-The petitioner in the contempt petition Rama Narang was married to Smt. Motia. The respondent Nos.1 and 2 i.e. Ramesh Narang and Rajesh Narang so also Rakesh Narang are sons of the petitioner and Smt. Motia. The petitioner and Smt. Motia divorced in 1963. The petitioner thereafter married Smt. Mona. Out of the said wedlock, two sons Rohit and Rahul as well as a daughter Ramona were born.3. In a previous round of litigation between these parties, the respondent No.1- Ramesh Narang had approached this Court by filing a Contempt Petition (C) Nos.265-67 of 1999 in Contempt Petition (C) No. 209 of 1998 in Civil Appeal Nos.366 of 1998, 603 of 1998 and 605 of 1998. The present petitioner Rama Narang was respondent No.1 in the said proceedings. This Court passed the following order in the said proceedings on 2nd November 2001:-In Conmt. Pet. (C) Nos.265-267/1999 in Conmt. Pet. (C) No.209/1998 in Civil Appeal No.366/1998, 603/1998 & 605/1998.After hearing Mr. Kapil Sibal, learned senior counsel for the petitioner and Mr. Gopal Subramaniam, learned senior counsel for the alleged contemnor, at length, we are satisfied that the contemnor has flouted the order of this Court dated 4th May, 1999 by not transferring 50% of the share (and contending that he could make out the 50% share only by calculating the shares of NIHPL held by M/s. Fashion Wears Private Ltd., which have been forbidden by the order dated 22.01.1998). We call upon the contemnor to show cause regarding the punishment to be imposed on him for which he shall be present in this Court on 29th November, 2001.I.A. No.6 in C.P. (C) No.209/1998 in C.A. No.366/1998.Dismissed as withdrawn.List all matters on 29th November, 2001.4. It appears, that subsequently the matter was settled between the parties and the parties had placed on record the Minutes of the Consent Order. It will be apposite to reproduce the entire order passed by this Court on 12th December 2001:-The following cases are pending between the parties who are parties in the present proceedings before us one way or the other. We are told that all the parties have settled their disputes in respect of all the litigations specified below.1. O.S. No. 3535 of 1994 before the Bombay High Court.2. O.S. No. 3578 of 1994 before the Bombay High Court.3. O.S. No. 1105 of 1998 before the Bombay High Court.4. O.S. No. 3469 of 1996 before the Bombay High Court.5. O.S. No. 1792 of 1998 before the Bombay High Court.6. O.S. No. 320 of 1991 before the Bombay High Court.7. Company Petition No. 28 of 1992 Before the Principal Bench, Company Law Board, New Delhi.8. Arbitration Suit No. 5110 of 1994 before the Bombay High Court.Today they filed a document styled it as MINUTES OF CONSENT ORDER signed by all the parties. Learned counsel appearing on both sides submitted that all the parties have signed this document. Today except Mona Narang and Ramona Narang (two ladies), all the rest of the parties are present before us when these proceedings are dictated. As for Mona Narang and Ramona Narang learned counsel submitted that Mona Narang had affixed the signatures and the power of attorney holder of Ramona Narang has signed the above document in his presence. This is recorded.Both sides agreed that all the suits can be disposed of in terms of the settlement evidenced by MINUTES OF CONSENT ORDER produced before us. For disposal of those cases and/or for passing decrees in them we have to pronounce the final formal order in terms of the settlement now produced before us.We, therefore, withdraw all the aforesaid suits to this Court under Article 139-A of the Constitution of India.Prothonotory and Senior Master of the Bombay High Court are directed to transmit the records in the above mentioned suits by special messenger to this court so as to reach the Registry here within ten days from today. The Bench Officer of the Principal Bench of the Company Law Board, New Delhi is directed to forward the records relating to Company Petition No. 28 of 1992 to the Registry of this Court so as to reach the Registry within ten days from today.All the parties have undertaken before us that they will implement the terms of the MINUTES OF CONSENT ORDER on or before 1.1.2002 and that no further time will be sought for in the matter.Clause (f) of the compromise relates to the operation of the bank accounts. That clause will come into force from today onwards.All the afore-mentioned suits and the company petition will be posted for final formal orders on 8.1.2002 at 10.30 a.m. along with these contempt proceedings.5. The matter came up again before this Court on 8th January 2002. This Court passed the order thus:-Pursuant to the order dated 12th December, 2001 the following suits and company petition have been transmitted to this court and they are on the file of this court now and registered as Transferred Cases Nos. 1 to 8 of 2002:1. O.S. No. 3535 of 1994 before theBombay High Court.2. O.S. No. 3578 of 1994 before theBombay High Court.3. O.S. No. 1105 of 1998 before theBombay High Court.4. O.S. No. 3469 of 1996 before theBombay High Court.5. O.S. No. 1792 of 1998 before theBombay High Court.6. O.S. No. 320 of 1991 before theBombay High Court.7. Company Petition No. 28 of 1992 Before the Principal Bench, Company Law Board, New Delhi.8. Arbitration Suit No. 5110 of 1994 before theBombay High Court.All the above are now being disposed of in terms of the Minutes of Consent Order incorporated in the proceedings passed by us on 12.12.2001.The decree will be drawn up in terms of the Minutes of the Consent Order.In regard to the property (64, Sunder Nagar, New Delhi) which is the subject matter for O.S. No. 3578/1994 of the High Court of Bombay Rama Narang, who is present in court, gives an undertaking that the same would be transferred with clear and marketable title to Rajesh Narang or his nominee on or before 31.03.2002. This undertaking is recorded.In the light of the above developments we deem it necessary to drop the steps against Rama Narang for contempt pursuant to the order of this court dated 2.11.2001. We order so.Similarly all other contempt petitions are dropped and IAs and Transferred Cases are disposed of.It will also be relevant to refer to the Minutes of the Consent Order, which is a family settlement between all the members of the family including the parties herein:-1. Rameshs Suit No.3535 of 1994 [for specific performance of family settlement] both pending in the Bombay High Court to be decreed and implemented forthwith.2. Rameshs Suit No. 1105 of 1998 [Fashion Wears] opening in the Bombay High Court to be decreed and implemented forthwith; 19184 shared held by FWPL in NIHL are validly transferred to Ramesh on 27th June 1992 and Ramesh having already transferred 5194 (12%) shares in the joint names of Rama and Ramesh on 21st May 1990 directed by order of this Honble Supreme Court dated 4th May 1999. It is clarified and agreed that the transfer of 142 additional shares by Ramesh on 24th May 1999 to the joint names of Rama and Ramesh is void and the said 142 shares stand restored to the name of Ramesh. The purported transfer of shares by Rama on 14th May 1999 in compliance with order dated 4th May 1999 is void. It is further clarified that the transfer by Rama of 3998 shares to Ramesh pursuant to order dated 4th May 1999 is void and the said 3998 shares stand restored to the joint names of Mohini, Rama and Mona. It is also clarified that Ramesh, Rajesh and Rakesh shall have no objection to the transfer of 403 shares held by FWPL in NIHL to Rama.3. The following directions issued by this Honble Supreme Court in the above matter are re-affirmed and agreed to by the parties as follows:-(a) With effect from 4th May, 1999 Rama, Ramesh and Rajesh are the only Directors of NIHL (and its subsidiaries). Any increase in the Board of Directors shall be with the mutual consent of Rama and Ramesh/Rajesh.(b) None of the Directors (Rama, Ramesh and Rajesh) can be removed from directorship.(c) Rama and Ramesh shall continue to be in joint management and control of NIHL and Rajesh shall continue to be the Permanent Whole Time Director thereof in charge of day to day operations/management.(d) No decision shall be adopted concerning or affecting the said Company (and its subsidiaries) without the consent of Rama and Ramesh (or Rajesh) in writing. It is further clarified and agreed that save and except as provided herein no prevailing decisions including appointment of Directors/Executives or any other persons shall continue unless Rama and Ramesh (or Rajesh) consent to the same in writing.(e) All the collections coming in cash shall continue to be remitted in the bank accounts of the Company and all transactions will only be made in the form of cheques and/or as may hereafter be agreed to between Rama and Ramesh (or Rajesh).(f) All bank accounts of the Company shall continue to be operated jointly by any two out of the three Directors namely Rama, Ramesh and Rajesh and/or as may hereafter be agreed to between Rama and Ramesh (or Rajesh). If the amount of any transaction exceeds Rs. 10 (ten) lacs the same shall be undertaken through a cheque signed jointly by Rama and Ramesh/Rajesh.(g) All statutory record of the Company [and its subsidiaries] including minutes of Directors Meetings and/or Shareholders Meetings shall be valid only if signed jointly by Rama and Ramesh or Rajesh.(h). The remuneration and perquisites to which Rama, Ramesh and Rajesh shall be entitled as Directors with effect from 4th May 1999 shall be the maximum permissible under the provisions of the Companies Act, 1956 and which shall be divided/allocated between them in equal shares as provided and/or as may hereafter be agreed to between Rama and Ramesh [or Rajesh].4. Rahuls Suit No. 3469 of 1996 and Ramas Suit No. 1792 of 1998 both pending in the Bombay High Court to be withdrawn.5. Rameshs Company Petition No. 28 of 1992 pending before the Company Law Board, New Delhi to be withdrawn.6. Rakeshs Suit No. 320 of 1991 [who is part of the Rama Group] to be compromised and implemented as follows:a. Rama shall transfer 5410 shares in NIHL to the sole name of Rakesh.b. Rama Group agree and undertake to restore to Rakesh his residential accommodation on the third floor of the bungalow at 40, Pali Hill, Bandra, Bombay and consent to carry out all additions and alterations required by him therein.In consideration of the above Rakesh hereby agrees and undertakes to ratify and confirm and implement the family settlement and do all the acts, deeds and things required in that purpose including;a. Transfer 1000 equity shares held by Rakesh in Narang Overseas Private Limited to Rajesh.b. Confirm his retirement as partner in the firm of United Corporation and withdraw his claims referred to arbitration in Arbitration Suit No. 5110 of 1994.c. Consent to the transfer of entire undertaking of Bull Worker Private Limited from FWPL to the Manu Group.d. Consent to hive off land at Marol, Sahar, Bombay owned by NIHL admeasuring about 45105.70 square meters to the Manu Group.e. Consent to hive off ownership and possession of the property at 64, Sunder Nagar, New Delhi to Rajesh.7. All the above is to be performed by the Rama Group before 01.01.2002.8. Matter to be listed before this Honble Court on 08.01.2002.6. Perusal of the family settlement would reveal, that insofar as Narang International Hotel Limited (hereinafter referred to as NIHL) and its subsidiaries are concerned, Rama Narang, Ramesh Narang and Rajesh Narang were to be the only Directors. Any decision by the Board of Directors was to be taken only by the mutual consent of Rama Narang on one hand and Ramesh and Rajesh, on the other hand. The settlement also provided, that none of the Directors i.e. Rama Narang, Ramesh Narang and Rajesh Narang could be removed from the Directorship. Rama Narang and Ramesh Narang were continued to be in joint management and control of NIHL and Rajesh Narang was continued to be whole time Director In-Charge of day-to-day operations and management of NIHL. It also provided, that no decision shall be taken concerning the said NIHL and its subsidiaries, without the consent of Rama Narang on one hand and Ramesh/Rajesh on the other hand. It is further provided, that all bank accounts of the Company have to be operated jointly by any two of the three Directors as agreed between Rama Narang and Ramesh/Rajesh. It further provided, that if amount of any transaction was exceeding Rs. 10 lakhs, then the same could be undertaken only through a cheque singed jointly by Rama Narang on one hand and Ramesh or Rajesh on the other hand.7. It appears, that though the matter was settled between the parties in terms of Minutes of Consent Order as recorded in the orders dated 12th December 2001 and 8th January 2002, passed by this Court, there was no quietus to the dispute between the parties. Rama Narang alleging, that Ramesh and Rajesh had violated the terms of the Consent Order stipulated in Clause 3 (c), (d), (e) and (f) of the Minutes of the Consent Order, filed a contempt petition being Contempt Petition(C) No. 148 of 2003 in Contempt Petition (C) Nos. 265-67 of 1999 in Contempt Petition (C) No.209 of 1998 in CA No. 366 of 1998. It was the case of the petitioner Rama Narang, that the violations of the Consent Order by Ramesh and Rajesh amounted to clear disobedience of the orders dated 12th December 2001 and 8th January 2002 and thus punishable under the Contempt of Courts Act, 1971. This Court had initiated contempt proceedings against the respondents vide order dated 15th September 2003. This Court had also requested Justice V.A. Mohta, retired Chief Justice of Orissa High Court to act as a Mediator for settlement of disputes between the parties. However, despite serious efforts made by the Learned Mediator, the settlement could not be arrived at.8. A preliminary objection was taken regarding the maintainability of the abovesaid contempt petition. According to the respondents Ramesh and Rajesh, in the absence of any undertaking given to the Court, this Court could not exercise its jurisdiction on mere violation of the terms of the Consent Order. The respondents had contended, that the order dated 12th December 2001, had merged in the order dated 8th January 2002 and that they had implemented the said order. A three-Judge Bench of this Court in Rama Narang v. Ramesh Narang and Another (2006) 11 SCC 114 rejected these objections raised by the respondents with regard to maintainability of the contempt petition. It will be relevant to refer to the following observations of this Court:-33. In the present case, the consent terms arrived at between the parties were incorporated in the orders passed by the Court on 12-12-2001 [Ramesh Narang (1) v. Rama Narang, (2009) 16 SCC 631] and 8-1-2002 [Ramesh Narang (2) v. Rama Narang, (2009) 16 SCC 600] . The decree as drawn up shows that order dated 8- 1-2002 [Ramesh Narang (2) v. Rama Narang, (2009) 16 SCC 600] was to be punctually observed and carried into execution by all concerned. A violation of the terms of the consent order would amount to a violation of the Courts orders dated 12-12-2001 [Ramesh Narang (1) v. Rama Narang, (2009) 16 SCC 631] and 8-1-2002 [Ramesh Narang (2) v. Rama Narang, (2009) 16 SCC 600] and, therefore, be punishable under the first limb of Section 2(b) of the Contempt of Courts Act, 1971. The question whether the respondents should not be held guilty of contempt because of any earlier confusion in the law reflected in Babu Ram Gupta case [(1980) 3 SCC 47 : 1980 SCC (Cri) 527 ] is a question which must be left for decision while disposing of the contempt petition on merits. It may be argued as an extenuating or mitigating factor once the respondents are held guilty of contempt. The submission does not pertain to the maintainability of the petition for contempt. The preliminary objection raised by the respondents regarding the non-maintainability of the petition for contempt is, for the reasons stated, dismissed.9. After the preliminary objections raised by the respondents were rejected, the aforesaid contempt petition was heard by this Court on merits. The main allegations against the respondents with regard to violation of Clause 3 (c), are thus:-(a) that the high value contracts were executed by issuing multiple cheques under the value of Rs. 10 lakhs, though, the contract amount was much more. It was done so as to overcome the requirement, that for a transaction worth more than rupees ten lakhs, the cheques had to bear joint signatures of Rama Narang on one hand and Ramesh or Rajesh on the other hand;(b) the vital information with regard to management of the Company was withheld and as such the Company was managed to the complete exclusion of Rama;(c) settlement with trade union was unilaterally undertaken by the respondents and the petitioner was only asked to sign the enhanced salary cheques, which the petitioner refused as he was not consulted; and(d) it was also alleged, that the respondents had taken unilateral decisions with regard to appointment and promotion of senior executives and as such, had acted in clear violation of Clause 3 (d).10. The respondents had filed response to the said contempt petition. It was contended on behalf of the respondents, that the petitioner was deriving undue advantage from the alleged technical breach of the consent terms; which too was based on interpretation of the consent terms contrary to the mutual understanding of the parties. It was submitted, that the petitioner was attempting to stall the functioning of the company by trying to use the veto power. It was submitted, that it was never the intention of the parties, that the petitioner should enjoy the veto power over the company transactions having value of more than Rs. 10 lakhs and create a deadlock.11. However, the Court did not find favour with the submissions made by the respondents and while rejecting the respondents contention, this Court in its judgment and order dated 15th March 2007 reported as Rama Narang (V) v. Ramesh Narang and Another (2009) 16 SCC 126 , observed thus:-32. The object of entering into consent terms and jointly filing the undertaking was to run the family business harmoniously with the active participation of all as a family business but the respondents had taken absolute control of the Company NIHL to the total exclusion of the petitioner. All the management decisions and other decisions affecting the Company were taken by the respondent Rajesh Narang, the whole-time Director under the guise of the day-to-day operation/management in clear violation of Clause 3(c) of the consent terms which clearly states that Rama Narang and Ramesh Narang shall continue to be in joint management and control. The parties gave undertaking to the Court regarding the consent terms.33. The respondents have erroneously submitted that joint management and control of the Company means giving veto power to the petitioner. According to the terms of undertaking the petitioner and the respondents were under an obligation to run the Company harmoniously with the active participation of all as a family business but unfortunately the respondents have taken absolute control to the total exclusion of the petitioner. This is contrary to the terms of the undertaking given to this Court.12. This Court while convicting the present respondents under Section 2(b) of the Contempt of Courts Act observed thus:-52. We have carefully perused the undertaking given by the parties to the Court and orders of this Court dated 12- 12-2001 [Ramesh Narang (1) v. Rama Narang, (2009) 16 SCC 631] and 8-1-2002 [Ramesh Narang (2) v. Rama Narang, (2009) 16 SCC 600] based on the undertaking of the parties given to this Court and other relevant facts and circumstances. According to our considered view the respondents are clearly guilty of committing contempt of court by deliberate and wilful disobedience of the undertaking given by them to this Court. In this view of the matter, in order to maintain sanctity of the orders of this Court, the respondents must receive appropriate punishment for deliberately flouting the orders of this Court.53. Consequently, we convict the respondents under Section 2(b) of the Contempt of Courts Act and sentence them to a simple imprisonment for a period of two months. We further impose a fine of Rs 2000 to be deposited by each of them within one week failing which they shall further undergo imprisonment for one month.13. It will also be relevant to refer to para (54) of the said judgment and order passed by this Court in Rama Narang (V) (2009) 16 SCC 126 (supra) dated 15th March 2007:-54. We are also not oblivious of the fact that immediately sending the respondents to jail would create total chaos in the Company which would also vitally affect the interests of large number of people including the employees of the Company. Therefore, while keeping in view the peculiar facts and circumstances of this case, the sentence of imprisonment imposed on the respondents is kept in abeyance. We further direct the parties to meticulously comply with the undertakings given by them to this Court. In case similar violation of the undertakings given to this Court is brought to the notice of the Court, in that event, the respondents shall be sent to jail forthwith to serve out the sentence imposed in this case.14. It could thus be seen, that though this Court held the respondents guilty of contempt, taking into consideration the fact that immediately sending the respondents to jail would create total chaos in the Company and it would also vitally affect the interest of large number of people including the employees of the Company, the sentence of imprisonment imposed on the respondents was kept in abeyance. This Court further directed the parties to meticulously comply with the undertaking given by them to the Court. It was further observed by the Court, that in case, similar violations of the undertaking given to this Court, was brought to the notice of this Court, the respondents shall be sent to jail forthwith to serve out the sentence imposed in the said case.15. It appears, that the dispute between the parties not only continued but got aggravated. Contending that on account of non- cooperation by Rama, the functioning of the Company had come to a standstill, Ramesh filed Company Petition No.47 of 2008 before the Company Law Board, New Delhi (hereinafter referred to as CLB). It was contended in the said company petition, that due to non-cooperation by Rama in signing cheques, the employees could not be paid their salaries from November 2007 onwards. It was also contended, that bills for payment to supplier could also not be paid, due to which, the entire functioning of the various units of the Company had been seriously affected. On 14th March 2008, the CLB directed the board meeting of NIHL to be held on 24th March 2008 at 11.00 AM in the registered office of the Company. Each of the three Directors were also directed to circulate a list of items, that they desired to discuss in the meeting, to the Directors by 18th March 2008. The CLB also appointed Shri C.R. Das, Former Member of CLB as Observer, to observe the proceedings of the said meeting. In the said proceedings, Ramesh also filed CA No.194 of 2008 on 20th March 2008, pointing out therein, that due to non- payment of salaries/wages for the months of December 2007 and January 2008, about two hundred workers at Delhi Flight Catering Unit of the Company had stopped the work and started protest and agitation.16. When the matter was listed before CLB on 7th April 2008, the CLB found, that though the Board met on two consecutive dates totally for fifteen hours, not a single decision had been taken, in view of each one holding of his own views/opinion. From the Report of the Observer, the CLB found, that all the three Directors had adopted a rigid stand resulting in complete deadlock. The CLB found, that in the proceedings under Section 397/398 of the Companies Act, 1956, it was the interest of the Company, which was paramount. The CLB noticed, that due to differences among the Directors, many operational issues like payment of salaries/wages, payment to supplier etc. were pending, leading to agitation by employees and irregularities in supply. The CLB found it appropriate, that till the petition was disposed of, as an interim measure, in the interests of the Company and more than 3000 employees/workers, there should be a mechanism by which the day-to-day operations of the Company were carried on without any hitch. The CLB thus passed the following order on 10th April 2008:-8. Accordingly, as I indicated during the hearing, I appoint Shri Justice Arvind V. Savant, Former Chief Justice of Kerala High Court, who has given his consent, as the Facilitator (Mobile No. ……..). As the Facilitator, he would try to bring about a consensus among the directors on matters which are urgent and essential to ensure that the business of the Company is carried on smoothly and in case a consensus is not possible, taking into consideration the views of the three Directors, he will take a final decision which will be binding on the Directors and the Company. I make it abundantly clear that his role will be limited only to operational matters, like, issues relating to workers/employees of all categories, issues relating to suppliers/supply contracts, urgent repairs to equipments etc. These are only illustrative. It will be within his competence to decide considering the spirit of this order that the business of the company should be carried on smoothly till the petition is disposed of, which are urgent/essential operational issues.17. Alleging, that the order passed by CLB dated 10th April 2008, was violative of the order of this Court dated 15th March 2007 and nothing but an attempt to legalize their conduct of contempt, the petitioner approached this Court by the present contempt petition.18. It appears, from the Record of Proceedings, that on 15th December 2008, this Court had heard the counsel for the parties and reserved the order. The contempt petition was listed before this Court on 10th February 2009 and on the said date, this Court passed the following order:-We have perused the order dated 27.01.2009.On 15th December, 2008, this Court heard learned counsel for the parties at length and reserved the order.Before this Court could pronounce the order, IA No.1 of 2008 was filed by respondent No.1 in which a prayer was made to recall the order dated 15th December, 2008. In the said IA what has been incorporated in para No.2 is reproduced hereunder:

Court's reasoning:
45. As indicated in the opening paragraphs itself, though initially only an interlocutory application filed by the respondent No.1 herein for direction to the petitioner to comply with the Facilitators decision was listed, we intimated the parties that we would hear the contempt petition as well as the interlocutory application together. As such, we have heard the learned Senior counsel for the parties at length on both the Contempt Petition as well as the interlocutory application (IA No. 87565 of 2019) filed by the respondent No.1.46. We are of the considered view, that it is appropriate to first decide the contempt petition itself, inasmuch as the outcome of the contempt petition will have a bearing on the interlocutory application filed by the respondent No.1.48. It is thus clear that for bringing an action under the ambit of civil contempt, there has to be a wilful disobedience to any judgment, decree, direction, order, writ or other process of a court or wilful breach of an undertaking given to the court. No doubt, that Shri Rohatgi is justified in relying on the judgment of this Court in the case of Rama Narang (V) (supra) decided on 15th March 2007. In the said judgment, this Court held, that according to the terms of undertaking, the petitioner and the respondents were under an obligation to run the company harmoniously with the active participation of all as a family business but unfortunately, the respondents had taken over absolute control to the total exclusion of the petitioner. This Court held, that this was contrary to the terms of the undertaking given to this Court.60. Perusal of Section 397 would reveal, that a member of a Company is entitled to apply to the CLB complaining that the affairs of the Company were being conducted in a manner prejudicial to the public interest or in a manner oppressive to any member or members including anyone or more of themselves, for an order under the said section. The only rider is that such a Member should have a right to do so by virtue of Section 399. Under sub-section (2) of Section 397, if the CLB was of the opinion, that the Companys affairs are being conducted in a manner prejudicial to the public interest or in a manner oppressive to any member or members and that to wind up the Company would unfairly prejudice such member or members, but that otherwise the facts would justify the making of a winding up order on the ground, that it was just and equitable that the Company should be wound up; it was entitled to make such order as it thinks fit, with a view to bringing to an end such matter complained of.It could thus be seen, that any member of a Company is entitled to make an application to the CLB complaining that the affairs of the Company are being conducted in a manner prejudicial to public interest or in a manner prejudicial to the interest of the Company and the CLB is empowered to make such order as it thinks fit, with a view to bring to an end the matter complained of.61. A similar provision contained in Section 398, enables the members of a Company to complain, that the affairs of the Company are being conducted in a manner prejudicial to public interest or in a manner prejudicial to interest of the Company. It also enables a member to complain with regard to material change which has taken place in the management and control of the Company and by reason of such change, it is likely that the affairs of the Company will be conducted in a manner prejudicial to the public interest or to the interest of the Company. Again, the only rider is, that such a member must have a right to apply by virtue of Section 399. Perusal of sub-section (2) of Section 398 would further reveal, that if such an application was made under sub-section (1) of Section 398 and if the CLB was of the opinion, that the affairs of the Company are being conducted as aforesaid, the Tribunal may, with a view to bringing to an end or preventing the matter complained of or apprehended, is entitled to make such orders as it thinks fit.62. Perusal of Section 403 would reveal, that the CLB is also entitled to make any interim order pending making by it of a final order under Section 397 or 398, on an application of any party to the proceedings, which order it thinks fit for regulating the conduct of the Companys affairs. Such an order has to be made on such terms and conditions as appears to CLB to be just and equitable.63. The respondents had legitimately invoked the jurisdiction of CLB invoking the aforesaid powers under Sections 397, 398 and 403 of the Companies Act, to which they were entitled to in law and were not restrained to do so by any competent Court/forum.66. It could thus be seen, that the respondents had legitimately approached the CLB invoking its jurisdiction under Sections 397, 398 and 403 of the Companies Act. The learned CLB had also passed interim orders in exercise of its powers under Section 403 of the Companies Act. The petitioner had approached this Court immediately after the order dated 10th April 2008, was passed by the CLB by way of present contempt petition. Along with the contempt petition, IA No. 1 of 2008 was also filed for stay of the order passed by CLB. Subsequently, another IA No. 2 of 2008 was also filed seeking stay of the proceedings before CLB and the communications/directions passed by the Facilitator. However, no orders have been passed by this Court on the said IAs.68. It will be relevant to refer to the observations of this Court in the case of Pratap Singh and Another v. Gurbaksh Singh 1962 SCR Supp. (2) 838. This Court after referring to various judgments of the High Courts, observed thus:-The principle behind all these cases is that such action of the person which he takes in pursuance of his right to take legal action in a Court of law or in just making a demand on the other to make amends for his acts will not amount to interfering with the course of justice, even though that may require some action on the part of the other party in connection with his own judicial proceeding, as a party is free to take action to enforce his legal rights.It could thus be seen, that this Court has held, that such action of a person which he takes in pursuance of his right to take legal action in a court of law, will not amount to interfering with the course of justice, even though that may require some action on the part of the other party in connection with his own judicial proceedings. The principle is, that a party is free to take action to enforce his legal right. This Court has approved the view taken by Allahabad High Court in Hrishikesh Sanyal v. A.P. Bagchi ILR 1940 All 710 and Radhey Lal v. Niranjan Nath AIR 1941 All 95 , that a person does not commit contempt of court if during the pendency of certain proceedings, he takes recourse to other judicial proceedings open to him, even though the latter proceedings put the other party at a loss.69. In the present case, undisputedly, the respondents were entitled to invoke the jurisdiction of the CLB under Sections 397, 398 and 403 of the Companies Act. The CLB has passed the order on 10th April 2008 appointing a Facilitator and further passed order dated 28th April 2011, enhancing the powers of the Facilitator. Perusal of the orders passed by this Court dated 21st July 2009 and 29th July 2009, would reveal, that though this Court had appointed independent Director, it is clarified, that the independent Directors functioning would not come in the way of the functioning of the Facilitator. On the contrary, by order dated 29th July 2009, this Court observed, that the appointment of Shri Ranina as independent Director would facilitate the functioning of the Facilitator, appointed by the CLB.71. As such, merely taking recourse to the statutory remedy available to the respondents, in our view, would not amount to contempt. With regard to the reliance placed by the learned Senior counsel for the petitioner on the judgment of this Court in Rama Naranag (V) (2009) 16 SCC 126 (supra), we are of the view, that it would not be of assistance to the case of the petitioner, inasmuch as, at that stage, there were no orders passed by the CLB. It appears, that after the order was passed by this Court holding the respondents guilty and thereafter finding, that the present petitioner is not co-operating with the respondents in running the affairs of the Company, but on the contrary making every attempt to stall the functioning of the Company; the respondents thought it prudent to approach the CLB by invoking its powers under Sections 397, 398 and 403 of the Companies Act. The respondents had to take recourse to that remedy in compelling circumstances to safeguard the interest of the Company and its stakeholders. It was not in strict sense remedy for seeking personal relief, much less to defeat the terms of settlement recorded in a dispute between private parties who incidentally are Directors of the same Company.72. Perusal of the company petition filed by the respondents before the CLB and the order dated 10th April 2008, passed by CLB would reveal, that a specific reference has been made to the order passed by this Court holding the respondents guilty for committing contempt (vide Rama Narang (V) (2009) 16 SCC 126 ). We are therefore of the view, that the said judgment would be of no assistance to the case of the present petitioner.73. Apart from 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. It will be relevant to refer to paragraph (9) of the judgment of this Court in Niaz Mohammad and Others v. State of Haryana and Others (1994) 6 SCC 332 :-9. Section 2(b) of the Contempt of Courts Act, 1971 (hereinafter referred to as the Act) defines civil contempt to mean wilful disobedience to any judgment, decree, direction, order, writ or other process of a court …. Where the contempt consists in failure to comply with or carry out an order of a court made in favour of a party, it is a civil contempt. The person or persons in whose favour such order or direction has been made can move the court for initiating proceeding for contempt against the alleged contemner, with a view to enforce the right flowing from the order or direction in question. But such a proceeding is not like an execution proceeding under Code of Civil Procedure. The party in whose favour an order has been passed, is entitled to the benefit of such order. The court while considering the issue as to whether the alleged contemner should be punished for not having complied with and carried out the direction of the court, has to take into consideration all facts and circumstances of a particular case. That is why the framers of the Act while defining civil contempt, have said that it must be wilful disobedience to any judgment, decree, direction, order, writ or other process of a court. Before a contemner is punished for non-compliance of the direction of a court, the court must not only be satisfied about the disobedience of any judgment, decree, direction or writ but should also be satisfied that such disobedience was wilful and intentional. The civil court while executing a decree against the judgment-debtor is not concerned and bothered whether the disobedience to any judgment, or decree, was wilful. Once a decree has been passed it is the duty of the court to execute the decree whatever may be consequence thereof. But while examining the grievance of the person who has invoked the jurisdiction of the court to initiate the proceeding for contempt for disobedience of its order, before any such contemner is held guilty and punished, the court has to record a finding that such disobedience was wilful and intentional. If from the circumstances of a particular case, brought to the notice of the court, the court is satisfied that although there has been a disobedience but such disobedience is the result of some compelling circumstances under which it was not possible for the contemner to comply with the order, the court may not punish the alleged contemner.It can thus be seen, that this Court has held, that the contempt proceeding is not like an execution proceeding under the Code of Civil Procedure. It has been held, that though the parties in whose favour, an order has been passed, is entitled to the benefits of such order, but the Court while considering the issue as to whether the alleged contemnor should be punished for not having complied with and carried out the directions of the Court, has to take into consideration all facts and circumstances of a particular case. It has been held, that is why the framers of the Act while defining civil contempt, have said that it must be wilful disobedience of any judgment, decree, direction, order, writ or other process of the Court. It has been held, that before punishing the contemnor for non-compliance of the decision of the Court, the Court must not only be satisfied about the disobedience of any judgment, decree, direction, writ or other process but should also be satisfied that such disobedience was wilful and intentional. Though, the civil court while executing a decree against the judgment-debtor is not concerned and bothered as to whether the disobedience to any judgment or decree was wilful and once the decree had been passed, it was the duty of the court to execute the decree, whatever may be the consequences thereof. In a contempt proceeding before a contemnor is held guilty and punished, the Court has to record a finding, that such disobedience was wilful and intentional. It has been held, that if from the circumstances of a particular case, though the Court is satisfied that there has been a disobedience but such disobedience is the result of some compelling circumstances, under which it is not possible for the contemnor to comply with the same, the Court may not punish the alleged contemnor.74. It will also be apposite to refer to the following observations of this Court in Kanwar Singh Saini v. High Court of Delhi (2012) 4 SCC 307 , taking a similar view:-30. In an appropriate case where exceptional circumstances exist, the court may also resort to the provisions applicable in case of civil contempt, in case of violation/breach of undertaking/judgment/order or decree. However, before passing any final order on such application, the court must satisfy itself that there is violation of such judgment, decree, direction or order and such disobedience is wilful and intentional. Though in a case of execution of a decree, the executing court may not be bothered whether the disobedience of the decree is wilful or not and the court is bound to execute a decree whatever may be the consequence thereof. In a contempt proceeding, the alleged contemnor may satisfy the court that disobedience has been under some compelling circumstances, and in that situation, no punishment can be awarded to him. [See Niaz Mohammad v. State of Haryana [(1994) 6 SCC 332] , Bank of Baroda v. Sadruddin Hasan Daya [(2004) 1 SCC 360 : AIR 2004 SC 942] and Rama Narang v. Ramesh Narang [(2006) 11 SCC 114 : AIR 2006 SC 1883 ].] Thus, for violation of a judgment or decree provisions of the criminal contempt are not attracted.75. It will also be appropriate to refer to the further observations made by this Court in para (38) of the said judgment:-38. The contempt proceedings being quasi-criminal in nature, the standard of proof required is in the same manner as in other criminal cases. The alleged contemnor is entitled to the protection of all safeguards/rights which are provided in the criminal jurisprudence, including the benefit of doubt. There must be a clear-cut case of obstruction of administration of justice by a party intentionally to bring the matter within the ambit of the said provision. The case should not rest only on surmises and conjectures. In Debabrata Bandhopadhyaya v. State of W.B. [AIR 1969 SC 189 : 1969 Cri LJ 401] , this Court observed as under: (AIR p. 193, para 9)9. A question whether there is contempt of court or not is a serious one. The court is both the accuser as well as the judge of the accusation. It behoves the court to act with as great circumspection as possible making all allowances for errors of judgment and difficulties arising from inveterate practices in courts and tribunals. It is only when a clear case of contumacious conduct not explainable otherwise, arises that the contemnor must be punished. … Punishment under the law of contempt is called for when the lapse is deliberate and in disregard of ones duty and in defiance of authority. To take action in an unclear case is to make the law of contempt do duty for other measures and is not to be encouraged.(emphasis added)This Court has observed, that the contempt proceedings are quasi-criminal in nature and the standard of proof required is in the same manner as in the other criminal cases. The alleged contemnor is entitled to the protection of all safeguards/rights which are provided in the criminal jurisprudence, including the benefit of doubt. There must be a clear-cut case of obstruction of administration of justice by a party intentionally, to bring the matter within the ambit of the said provision. The Court has also referred to the observations made by this Court in the case of Debabrata Bandopadbyay and Others v. State of West Bengal and Another AIR 1969 SC 189 , wherein it was observed, that punishment under the law of contempt is called for when the lapse is deliberate and in disregard of ones duty and in defiance of authority.76. In the present case, we are of the considered view, that the petitioner has failed to make out a case of wilful, deliberate and intentional disobedience of any of the directions given by this Court or acting in breach of an undertaking given to this Court. On the contrary, we find that the respondents had taken recourse to the legal remedy available to them under the statutory provisions. No doubt, Mr. Rohatgi has argued, that the proceedings before the CLB are itself without jurisdiction.77. In this regard, it will be appropriate to refer to following observations of this Court in the case of Tayabbhai M. Bagasarwalla (supra). After scanning the entire law, the Court observed thus:-28. The correct principle, therefore, is the one recognised and reiterated in Section 9-A — to wit, where an objection to jurisdiction of a civil court is raised to entertain a suit and to pass any interim orders therein, the Court should decide the question of jurisdiction in the first instance but that does not mean that pending the decision on the question of jurisdiction, the Court has no jurisdiction to pass interim orders as may be called for in the facts and circumstances of the case. A mere objection to jurisdiction does not instantly disable the court from passing any interim orders. It can yet pass appropriate orders. At the same time, it should also decide the question of jurisdiction at the earliest possible time. The interim orders so passed are orders within jurisdiction when passed and effective till the court decides that it has no jurisdiction to entertain the suit. These interim orders undoubtedly come to an end with the decision that this Court had no jurisdiction. It is open to the court to modify these orders while holding that it has no jurisdiction to try the suit. Indeed, in certain situations, it would be its duty to modify such orders or make appropriate directions. For example, take a case, where a party has been dispossessed from the suit property by appointing a receiver or otherwise; in such a case, the Court should, while holding that it has no jurisdiction to entertain the suit, put back the party in the position he was on the date of suit. But this power or obligation has nothing to do with the proposition that while in force, these orders have to be obeyed and their violation can be punished even after the question of jurisdiction is decided against the plaintiff provided the violation is committed before the decision of the Court on the question of jurisdiction.78. This Court has held, that the correct principle therefore is that, where an objection is taken to the jurisdiction to entertain a suit and to pass any interim orders therein, the Court should decide the question of jurisdiction in the first instance. However, that does not mean that pending the decision on the question of jurisdiction, the Court has no jurisdiction to pass interim orders as may be called for in the facts and circumstances of the case. It has been held, that a mere objection to jurisdiction does not instantly disable the court from passing any interim orders. It has been held, that it can yet pass appropriate orders. Though, this Court has observed, that the question of jurisdiction should be decided at the earliest possible time, the interim orders so passed are orders within jurisdiction, when passed and effective till the court decides that it has no jurisdiction, to entertain the suit. It has been held, that those interim orders would undoubtedly come to an end with the decision that the Court had no jurisdiction. This Court has held, that if the Court holds that it has no jurisdiction, it is open to it to modify the orders. However, it has been held, that while in force, the interim orders passed by such Court have to be obeyed and their violation can be punished even after the question of jurisdiction is decided against the plaintiff, provided violation is committed before the decision of the Court on the question of jurisdiction.79. Apart from that, it is to be noted that in the present case, the petitioner has raised an objection with regard to tenability of the proceedings before the CLB. It will be relevant to refer to the observations made by CLB in its order dated 10th April 2008:-Shri Gopal Jain once again raised the issue that without deciding on the maintainability of the petition, no interim order should be passed. In a proceeding under Sections 397/398 of the Act, it is now well settled that only if the maintainability is challenged either in terms of Section 399 or the jurisdiction of this Board, challenges on other grounds have to be considered along with the merits of the case. In the present case, it is an admitted fact that the petitioner qualifies under Section 399 of the Act and this Board has the jurisdiction to deal with the petition under Sections 397/398 of the Act. Further, in a proceeding under Sections 397/398, it is the interest of the company which is paramount. It is quite evident from the various annexure enclosed with the petition that due to differences among the directors, many operational issues, like, payment of salary/wages, payment to suppliers etc. are pending resulting in agitation by the employees and irregularities in supplies etc. Therefore, I consider it appropriate that till the petition is disposed of, as an interim measure, in the interests of the company, over 3000 employees/workers, there should be a mechanism by which the day to day operations are carried on without any hitch. [emphasis supplied]80. It could thus be seen, that though the counsel for the present petitioner had raised an issue that without deciding on the maintainability of the petition, the interim order could not be passed, the CLB observed, that under Sections 397 and 398 of the Companies Act, it is well settled, that only if the maintainability is challenged either in terms of Section 399 or jurisdiction of the CLB, challenges on other grounds have to be considered along with the merits of the case. It further observed, that in the present case, it was admitted fact, that the petitioner qualified under Section 399 of the said Act and that the CLB has jurisdiction to deal with the petition under Sections 397 and 398 of the Act. It further observed, that in the proceedings under Sections 397/398, it is the interest of the Company which is paramount. It observed, that it was quite evident from the various annexures enclosed with the petition, that due to differences among the Directors, many operational issues concerning the management of the Company like payment of salary/wages, payment to suppliers etc. were pending, resulting in agitation by the employees and irregularity in supplies. The CLB therefore considered it appropriate, that till the petition is disposed of, as an interim measure, in the interest of the Company as well as more than 3000 employees/workers, there should be a mechanism by which day to day operations are carried out without any hitch.81. It is not in dispute, that the aforesaid order has not been challenged by the petitioner before any forum. The observations referred hereinabove are indisputably adverse to the case of the petitioner. Any order passed by the CLB was appellable before the higher forums. Undisputedly, the petitioner has not challenged the said order. Having not challenged the same, in our view, it is not open for the petitioner to argue, that since the petitioner has taken objection as to maintainability of the proceedings before CLB, the said orders are without jurisdiction and the initiation of the proceedings and the orders passed thereon, would amount to respondents committing contempt of this Court. In our view, the argument needs to be rejected, in view of the judgment of this Court in the case of Tayabbhai M. Bagasarwalla (supra). This Court in unequivocal terms has held, that even if the objection is raised to the jurisdiction of a forum, it has jurisdiction to pass interim orders till it finally decides the issue of jurisdiction and such orders are binding on the parties till the issue of jurisdiction is decided. As could be seen from the order of the CLB dated 10th April 2008, though the CLB by referring to Sections 397, 398 and 399 of the Companies Act, prima facie, has observed, that only if maintainability is challenged either in terms of Section 399 of the Companies Act or on the ground of jurisdiction of the Board, the same will have to be considered first and challenges on other grounds, had to be considered along with the merits of the case. The CLB has further observed, that it was an admitted fact, that the petitioner qualifies under Section 399 of the Act and the Court has the jurisdiction to deal with the petition under Section 397 or/and 398 of the Act. Having chosen not to challenge the aforesaid observations of the CLB, in our view, the argument advanced deserves no merit and needs to be rejected. However, it should not be construed, that we have held that the proceedings under the CLB were maintainable in law. Since the proceedings are pending final adjudication, the parties would be at liberty to raise all issues available to them including the issue of jurisdiction.84. Having held, that the present contempt petition deserves no merit and is liable to be dismissed, we find that such an application need not be entertained. Indeed, the respondents may be well- advised to take recourse to the remedies available to them in law. We do not wish to express any opinion one way or the other in that regard. Though, Shri Kapil Sibal has strenuously argued, that this Court should invoke powers under Article 142 of the Constitution and issue directions to the contempt petitioner, we find, that this is not a case wherein directions as sought, should be issued under Article 142 of the Constitution. On Insolvency and Bankruptcy Code 2016, coming in force, the proceedings which are pending before the CLB, now stand transferred to the National Company Law Tribunal (NCLT). It would be appropriate for the parties to invoke the jurisdiction of NCLT for seeking such orders as deemed fit in the facts and circumstances in accordance with law.