LexASHISH SETH versus SUMIT MITTAL AND OTHERS
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A B C D E F G H 412 SUPREME COURT REPORTS [2020] 9 S.C.R. ASHISH SETH v. SUMIT MITTAL AND OTHERS (Contempt Petition (C) No. 34/2016) IN (Writ Petition (Criminal) No.5/2015) APRIL 24, 2020 [ASHOK BHUSHAN AND M. R. SHAH, JJ.] Contempt of Court – Dispute in the instant case was between the two groups of a Joint Venture (JV) Company – Seth Group and Mittal Group – The JV Company had acquired some land including Sector 89, Faridabad and also availed licences from competent authorities with an intent to develop Sector 89 land – Subsequently, both the groups agreed that development in the said land be divided and carried out separately and thereupon the development rights in Sector 89 were sold – Dispute arose between both the groups in respect of payment of liabilities out of the JV Company which gave rise to various litigations including Writ Petition 5/2015 and 11/ 2015 – Dispute was referred to arbitration – Memorandum of Settlement (MoS) dated 04.05.2015 was executed between the Seth Group, Mittal Group and JV Company whereunder both the groups were to fulfill the reciprocal obligations – Writ Petition 5/2015 was disposed of in terms of MoS dated 04.05.2015 – In the Contempt Petitions filed by Seth Group, the grievance of Seth Group was that Mittal Group failed to comply with the obligations under the MoS and the order passed by the Court and the non-compliance was wilful and intentional – Held: In view of the relevant clauses of the MoS and the obligations to be fulfilled by the respective parties to the MoS, Seth Group fully complied with their obligations, except deposit of the total amount of Rs.25.27 crores - payment to DTCP towards initial liability of Rs.59.05 crores of JV Company – Seth Group already paid Rs.9.40 crores against the liability of Rs.25.27 crores towards EDC liability against the total liability of Rs.59.05 crores of JV Company as per Clause 1.2 – The balance amount was not deposited by the Seth Group as the Mittal Group had not fulfilled 412 [2020] 9 S.C.R. 412 412 A B C D E F G H 413 their obligations under the MoS – The material on record showed that the Mittal Group did not fulfill their obligations as per Clause 1.2, Clause 5.3 and Clause 8 – Neither the Mittal Group nor JV Company deposit the balance amount to be paid towards EDC liability of Rs.59.05 crores (deducting Rs.25.27 crores to be paid by the Seth Group) – Mittal Group in Contempt Petition No. 34 of 2016 deliberately and willfully did not fulfill their obligations under the MoS dated 04.05.2015 and as such they rendered themselves liable for action under the Contempt of Courts Act – However, further two months’ time is given to the respondents to fulfill their part of obligations under the MoS dated 04.05.2015 failing which, proceedings under the Contempt of Courts Act would be initiated. Listing Contempt Petition (C) No.34/2016 in Writ Petition (Crl.) No. 5 of 2015 after three months while dismissing Contempt Petition (C) Nos. 257 of 2016 and No. 889 of 2017, the Court HELD: 1. The relevant clauses of the MoS and the obligations to be fulfilled by the respective parties to the MoS showed that Seth Group have fully complied with their obligations, except deposit of the total amount of Rs.25.27 crores - payment to DTCP towards initial liability of Rs.59.05 crores of TFIPL. Seth Group have already paid Rs.9.40 crores against the total liability of Rs.25.27 crores towards EDC liability against the total liability of Rs.59.05 crores of JV Company. The balance amount is not deposited by the Seth Group as the Mittal Group have not fulfilled their obligations under the MoS. It is stated at the bar that the Seth Group is always ready and willing to fulfill their obligations in terms of the MoS, i.e. their liability as per Clause 1.2, subject to Mittal Group fulfill its obligations. The material on record showed that the Mittal Group have not fulfilled their obligations as per Clause 1.2, Clause 5.3 and Clause 8. Neither the Mittal Group nor TFIPL have deposited the balance amount to be paid towards EDC liability of Rs.59.05 crores (deducting Rs.25.27 crores to be paid by the Seth Group as per Clause 1.2). It is the case on behalf of the Mittal Group that in the MoS there is no specific term and the obligation that the said amount is to be paid by the Mittal Group. [Para 9.1][438-G-H; 439-A-C] 2. The liability of Rs.59.05 crores was with respect to the entire land – 48.03 acres at Sector 89, Faridabad. Therefore, the ASHISH SETH v. SUMI
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