Withdrawal of Money Not Deemed Wilful Disobedience as Respondents Lacked Knowledge of the Restraint Order at the Time | NCLT

  • News|Blog|Company Law|
  • 2 Min Read
  • By Taxmann
  • |
  • Last Updated on 26 January, 2025

NCLT civil contempt

Case Details: Asha Kiran Bawa v. Ramesh C. Bawa - [2025] 170 taxmann.com 611 (NCLT-Mum.)

Judiciary and Counsel Details

  • Justice Virendra Singh G. Bisht, (Retd.), Judicial Member & Prabhat Kumar, Technical Member

Facts of the Case

In the instant case, Respondent No. 1 was MD and CEO of IL&FS. The Company petition was filed under section 241 and 242 of the Companies Act, 2013 against IL&FS due to continuous failure of IL&FS to service its debt.

The Serious Fraud Investigation Office (SFIO) ordered an investigation into the affairs of IL&FS and its subsidiaries. On basis of the SFIO’s interim report, the petitioner sought interim reliefs against various respondents inter alia seeking disclosures of movable and immovable properties/assets and further restraining them from mortgaging or creating charge or lien or in any way alienating, movable or immovable properties owned by them, including jointly held properties.

The Tribunal granted such relief and restrained respondents from mortgaging or creating charge or lien or creating third party interest or in any way alienating, movable or immovable properties owned by them, including jointly held properties.

Thereafter, the petitioner filed an instant petition alleging that the respondents were guilty of contempt of the court as they withdrew money from their bank account and operated bank lockers after the restraint order was passed.

It was noted that the act of withdrawal of money from accounts when the restraint order had been passed might constitute a fraudulent act to keep assets away from the scope of the said order but in absence of an order in existence of knowledge of respondents on that day, it could not be said that respondents had wilfully disobeyed the said order.

NCLT Held

The NCLT observed that for bringing an act within the scope of the Contempt, there has to be an order in place and such order has to be brought to the knowledge of affected person prior to time such affected party acts in defiance of such an order.

The NCLT held that the withdrawal of money from the Bank Account prior to the release of the said order could not be said to have resulted into wilful disobedience of the said order. However, respondent No.1 was guilty of civil contempt for defying the restraint order.

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.

Leave a Reply

Your email address will not be published. Required fields are marked *

Everything on Tax and Corporate Laws of India

To subscribe to our weekly newsletter please log in/register on Taxmann.com

Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied