NCLAT dismisses Gireesh Sanghi plea to start contempt proceedings against Ravi Sanghi, others

The NCLAT has dismissed industrialist Gireesh Sanghi's petition against the order of NCLT-Hyderabad bench, which declined to initiate contempt proceedings against Ravi Sanghi and others.

Passing an order on April 22, 2019 the National Company Law Appellate Tribunal (NCLT) had dismissed a contempt petition moved by Gireesh Kumar Sanghi alleging violation of the order passed by erstwhile Company Law Board (CLB) on October 23, 2008.

The NCLT has said there was no wilful disobedience of the CLB order and there was no sufficient ground to come to conclusion that the respondents had committed contempt of the said order.

This was challenged by Gireesh Sanghi before the NCLAT.

Sanghi brothers, promoters of Hyderabad-based Sanghi Group of industries, have a prolonged feud over assets.

Chennai bench of the CLB had ordered parties in South-based Sanghi Group of Companies to maintain status quo and banned any transfer of shares during the interregnum period for paving an amicable solution for the disputes the brothers.

A three-member bench headed by Chairperson Justice S J Mukhopadhaya also upheld the order of the NCLT, saying transfer of share was made "as a step towards reaching possible settlement between the parties which is also the spirit behind the order dated October 23, 2008".

"NCLT also observed that the order was passed to facilitate the parties to enter into settlement. In view of the fact that the order dated October 23, 2008 can be looked from two different angles, NCLT came to a conclusion that if the order is capable of interpreting in two ways, then it cannot be alleged that there is a patent disobedience of the order of the erstwhile CLB.

"Therefore, on merit also in absence of any wilful disobedience of the order October 23, 2008, the Tribunal came to a conclusion that no Contempt of Court is committed by any of the Respondents," it said.

The NCLAT observed that appeals filed were also barred under limitation law and also were not maintainable under section 421 of the Comanies Act.

"This apart, the petition for initiation of Contempt proceeding was also barred by limitation as prescribed under Section 20 of the Contempt of Courts Act, 1971," it said.

Section 421 provides for an appeal before the NCLAT over the order passed by the NCLT within 45 days.

"Apart from the fact that the appeals under Section 421 of the Companies Act, 2013 is not maintainable, the petition being barred by limitation under Section 20 of the Contempt of Courts Act, 1971, all the appeals are dismissed," the NCLAT said.