SRI. SUNIL SHARMA & Ors. v. KOBIAN PTE LIMITED

[BY SRI SRIRANGA, ADV. FOR M/S. JUST LAW, ADVS.] AND : KOBIAN PTE LIMITED FORMERLY KNOWN AS M/S KOBIAN SINGAPORE PVT LTD., NO.89, TEMASEK BOULEVARD, NO. 41-02, SUNTEC TOWER 2 SINGAPORE - 038989 2 ALSO AT M/S KOBIAN PTE LIMITED, 7, TEMASEK BOULEVARD, #12-01, SUNTECH TOWER ONE SINGAPORE – 038987 REP. BY ITS LAWFULLY CONSTITUTED POWER OF ATTORNEY HOLDER CHANDRAMOHAN NATARAJAN S/O SRI C N NATARAJAN R/AT NO.1, 102, ASHOK MEWS KONDHWA MAIN ROAD PUNE – 411 048 … ACCUSED THESE CCCs ARE FILED U/S 11 & 12 OF THE CONTEMPT OF COURT ACT BY THE COMPLAINANT, WHEREIN HE PRAYS THAT THE HON'BLE HIGH COURT BE PLEASED TO INITIATE CONTEMPT PROCEEDINGS AGAINST THE ACCUSED FOR DISOBEYING THE ORDER PASSED BY THE HON'BLE HIGH COURT IN COMPA.NO. 225/2005 C/W COMPA.NO. 1/2005, DATED 28.07.2010, VIDE ANEXURE - A AND ETC., THESE CCCs COMING ON FOR ORDERS, THIS DAY, SHYLENDRA KUMAR, J., MADE THE FOLLOWING:

O R D E R These contempt petitions are listed for orders about the letter received from the Ministry of Home Affairs, Internal Security—II Division, New Delhi. The letter is in the background of this court, having directed service of court notice on accused person which is M/s. Kobian PTE Limited, [formerly known as M/s. Kobian Singapore Pvt. Ltd.,], represented by its lawfully constituted power of attorney holder Mr. Chandramohan Natarajan and with the said person not having been served at the given 3 address in Pune and complainants having indicated that the person was residing in Singapore for effecting service, services of Ministry of Home Affairs had been availed of and the letter indicates that the Ministry of Home Affairs has received intimation from the office of the High Commission of India in Singapore to the effect that notice is served on the company.

It is not known whether the very person whom the complainants indicate as one representing the company is served or otherwise on a perusal of the report and receipt produced along with the communication.

Be that as it may, we have heard Sri. Sriranga, learned counsel for the complainants about the facts of the case and the background.

M/s. Kobian PTE Ltd., [formerly known as M/s. Kobian Singapore Pvt. Ltd.,], having its office in Singapore and represented by its power of attorney 4 holder Chandramohan Natarajan, had approached the Company Law Board [for short ‘the Board’] impleading the company by name M/s. Kobian India Pvt. Ltd.,, having its registered office at Bangalore as first respondent and complainants as respondents 2 & 3.

The petition before the Board was under sections 397 and 398 of the Companies Act, 1956, on the allegation that the company petitioner constituted minority shareholding who is subjected to oppression and mismanagement by the respondents 2 & 3 therein.

The Board worked out a solution for the problem and had given an option to respondents 2 & 3 therein to retire from the company on receipt of certain amount of money.

This order of the Board passed on 8.11.2004 in company petition No.37/2004 before it was subject matter of appeal and cross appeal both by the petitioner 5 before the Board by filing an appeal under section 10F of the Companies Act, 1956 in company appeal No.225/2005 and so also the respondents in the company petition before the Board figuring as appellants before this court in a like appeal under section 10F of the Companies Act, 1956 in company appeal No.1/2005.

These two appeals were heard together and were disposed of in terms of the Judgment dated 28.7.2010.

It is complaining that the respondent – accused person who was required to give effect to the order issued by this court modifying the order of the Board in terms of the Judgment passed in the two appeals and particularly that the respondent – accused was required to adjudicate for determining the quantum of amount payable to the complainants by looking into the records of the company for the purpose of complainants’ going out of the company on receiving that amount and that was to have been worked out within a period of seven 6 months, but even long after the expiry of that period, the respondent – accused person not having taken steps amounts to disobedience or disregard of the court order/direction and therefore the present contempt petitions.

Submission of Sri. Sriranga, learned counsel for the complainants is that the respondent – accused person on the face of it has disregarded or disobeyed the court order and therefore rendered themselves liable for proceeding in contempt jurisdiction for punishment.

We have bestowed our attention to this submission.

We find that complainants and respondent – accused person as shareholders of M/s. Fobian India Pvt. Ltd., had differences amongst them and it was accused person who had approached the Board. The Board worked out some solution for their problem within the framework of the Companies Act, 1956 and in a petition 7 which was presented by the respondent – accused under sections 397 and 398 of the Companies Act, 1956, it so happened that, neither party was satisfied with the order of the Board which is obvious that both the parties preferred appeals to this court.

The appellate order passed by this court in exercise of appellate jurisdiction, as part of the statutory jurisdiction conferred on this court under the Companies Act, 1956, is basically in respect of the jurisdiction which is exercised by the Board and if there are any errors or illegalities or any other manner of irregularity in passing of the order, that can be examined by this court exercising appellate jurisdiction. Even when an order gets modified by this court exercising appellate jurisdiction, it is basically in respect of the jurisdiction exercised by the Board and as it is the order of the Board which is in some way modified or altered in the appeal. 8

While this court when convinced that orders/directions are disregarded can definitely exercise contempt jurisdiction and call upon violating persons to show cause as to why person should not be punished for committing contempt of court order, we find that that the present case is not a proper situation for exercise of contempt jurisdiction, particularly, complainants can work out their rights and remedies within the framework of the Companies Act, 1956 as even the order passed by this court is on par with the order passed by the Board in a petition under sections 397 and 398 of the Companies Act, 1956.

In our considered opinion, contempt jurisdiction should not be allowed to be misused, abused or even to browbeat parties or such coercive measures as though it is one another mode of execution by the successful party before the court. Execution of the decree or order or award is not the same as proceeding in contempt jurisdiction. 9

While in the given circumstances, we are disinclined to exercise contempt jurisdiction in a matter of this nature, we reserve liberty to the complainants to work out their rights and remedies elsewhere, in accordance with law.

Without prejudice, these contempt petitions are dismissed. Sd/- JUDGE Sd/- JUDGE AN/-