NCLAT refuses to initiate contempt proceeding against Anil Ambani in a dispute with minority shareholder

The National Company Law Appellate Tribunal (NCLAT) has dismissed contempt pleas against Reliance Communication (RCom) Chairman, Anil Ambani and other officials in connection with the dispute between RCom group Company – Reliance Infratel and its minority shareholder, HSBC Daisy Investments (Mauritius)..The order was pronounced by a two-member Bench of Chairman Justice SJ Mukhopadhyay and Justice Bansi Lal Bhat in the contempt plea preferred by HSBC Daisy..“No case is made out..”, Justice Mukhopadhyay said while refusing to initiate contempt proceedings against Ambani and others..HSBC Daisy had moved the National Company Law Tribunal (NCLT) against Reliance Infratel alleging oppression of minority shareholders and mismanagement for not taking their consent for the sale of its tower and fiber assets to Reliance Jio. While entertaining the plea, the NCLT stayed the sale of assets and Reliance Infratel was constrained to move NCLAT in appeal..However, during the course of proceedings before the NCLAT, the parties entered into a settlement which was taken on record by the NCLAT and appeal was withdrawn..As per the final Consent Terms between the parties, a settlement sum of Rs. 230 crore was agreed upon, which was payable to HSBC Daisy within 180 days of June 29, 2018..It was HSBC Daisy’s case that it neither received the settlement amount nor the bank guarantee within the stipulated time pursuant to an order passed by the NCLAT, in spite of an undertaking to that effect by the company..HSBC, through Senior Advocate Vikram Nankani, thus argued that Reliance Communication was in contempt of court as it had undertaken to pay the settlement amount but failed to do so..Appearing for one of the RCom officials, Senior Advocate Salman Khurshid had argued that there was no undertaking by Reliance Communications to the NCLAT to pay the settlement amount, hence, there could be no question of initiation of contempt proceedings..Instead, recourse to execution proceedings should be taken by HSBC Daisy, he had stated..Agreeing with the submission, the NCLAT stated that if the consent terms agreed upon by the parties were not carried upon, it could be a ground for execution of a compromise decree or the ‘Consent Terms’ but it could not be a ground for initiation of a contempt proceeding..” We have noticed that this Appellate Tribunal had not gone into merit and allowed the appeal to be withdrawn on 29th May, 2018 in view of the’ consent terms’ reached between the parties. In the disposed of appeal, Interlocutory Application was filed to show that the parties have reached the final consent terms, but there was no undertaking given by any party before this Appellate Tribunal nor any direction was issued..On bare perusal of pleadings made in the present petitions, we find that Petitioners filed the Contempt Petitions for execution of their ‘consent terms’, which will be apparent from the fact that companies namely ‘Reliance Communications Infrastructure Limited’; ‘Reliance Infratel Limited’ and Reliance Communications Limited, have also been impleaded as contemnors, though it is not maintainable against the companies.“.Based on the above, NCLAT concluded that no case was made out for initiation of contempt proceedings against any of the alleged contemnors..HSBC Daisy was represented by Senior Advocate Vikram Nankani with Advocates Mukta Dutta, Ashish Prasad, Sahilesh Poria, Sanyam Saxena and Rohan Roy..Respondents were represented by Senior Advocate Salman Khurshid with Advocate Chaitanya Safaya, Shally Bhasin, Madhavi Agrawal, Amna Darkshashan and Prateek Gupta..Read the Judgement: