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Vinay Prakash Singh v. Sameer Gehlaut & Ors.

Contempt Petition (Civil) · 2019 INSC 1251Decided 15 Nov 2019
Contempt Petition (Civil) No. 2120 of 2018
Chief Justice Ranjan Gogoi · Justice Deepak Gupta · Justice Sanjiv Khanna

Background

Daiichi Sankyo had won an arbitral award of roughly Rs. 3,500 crores against promoters linked to Fortis Healthcare and related group companies (including Oscar Investments, RHC Holding, Malvinder and Shivinder Singh). To protect the award's enforceability, the Supreme Court had earlier passed orders (11.08.2017 onward) restraining dealings in shares/assets that could defeat the award. The contempt petition alleged that Sameer Gehlaut and other directors of Indiabulls Housing Finance Limited and Indiabulls Ventures Limited, along with the Singh brothers and their companies, knowingly violated these restraint orders by pledging and dealing with shares despite the Court's directions.

Decision Breakdown

The Supreme Court held that Sameer Gehlaut, Gagan Banga, Ashwini Kumar Hooda, Sachin Chaudhary, Divyesh Bharat Kumar Shah and Pinank Jayant Shah (directors of the Indiabulls entities), as well as Malvinder Mohan Singh and Shivinder Mohan Singh, had knowingly and wilfully disobeyed the Court's earlier restraint orders and held them guilty of contempt of court. The Court gave the contemnors a chance to purge the contempt by depositing specified sums (value of 12,25,000 shares for the Indiabulls directors, and Rs. 1,170.95 crores each for the Singh brothers) within eight weeks, after which a lenient view on sentencing could be considered; sentencing itself was reserved for a later hearing. The Court also found that further transactions appeared to violate a subsequent order dated 14.12.2018 and directed the Registry to register a fresh suo motu contempt petition against RHC, Oscar Investments, the Singh brothers and Fortis Healthcare Limited, returnable on 03.02.2020.

Lesson Learnt

Deliberately defying a Supreme Court restraint order, even through corporate transactions routed via group companies, amounts to contempt of court regardless of corporate structuring, and courts may allow contemnors a final opportunity to "purge" contempt through compliance before sentencing, rather than imposing punishment immediately.

Official source (sci.gov.in)View Judgment (PDF)

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