Holding

The Supreme Court dismissed DVI's rectification application and the contempt petition, holding that although DVI sought to renege on its obligations, contempt jurisdiction was not appropriate.

Summary

The Committee of Creditors (CoC) of Amtek Auto Ltd., through Corporation Bank, filed a contempt petition against Deccan Value Investors (DVI) after the Supreme Court rejected DVI's application seeking to renegotiate its approved resolution plan on the ground of COVID‑19. DVI also moved a rectification application alleging factual errors in the Court’s order that it had withdrawn its offer. The Court examined whether DVI’s request for an extension and re‑negotiation amounted to a withdrawal of the offer and whether contempt jurisdiction could be invoked. It held that while DVI was clearly attempting to renege on its commitments, the conduct did not warrant contempt proceedings. Consequently, both the rectification application and the contempt petition were dismissed, and the Court directed that DVI’s appeal before the NCLAT be heard within a month, with a prohibition on raising a force‑majeure plea in that appeal.

Issues considered

Whether DVI's interlocutory application seeking extension and re‑negotiation of the resolution plan amounts to a withdrawal of its offer, thereby attracting contempt of court.
Whether the Supreme Court can invoke contempt jurisdiction against DVI for its conduct post‑rejection of the IA.
Whether DVI may raise a force‑majeure plea in the pending NCLAT appeal after its IA was dismissed.
Whether the extensions of time granted to the CoC constitute a benefit to DVI affecting the rectification application.

Legislation cited

Contempt of Courts Act, 1971s. 2(b)
Insolvency and Bankruptcy Code, 2016s. 12(3), s. 29A, s. 30, s. 31, s. 61, s. 7

Subjects

InsolvencyResolution PlanContempt of CourtForce MajeureCOVID‑19IBCRectification ApplicationCommittee of CreditorsPerformance Bank Guarantee

Judgment

[2021] 3 S.C.R. 1015 1015

COMMITTEE OF CREDITORS OF AMTEK AUTO LIMITED A
THROUGH CORPORATION BANK
v.
DINKAR T VENKATASUBRAMANIAN & ORS.
I.A.No.58156 of 2020 B
With
Contempt Petition (C) No. 524 of 2020
(Civil Appeal No. 6707 of 2019)
FEBRUARY 23, 2021 C
[DR DHANANJAYA Y CHANDRACHUD AND
M. R. SHAH, JJ.]
Insolvency and Bankruptcy Code, 2016 – ss. 7, 12(3) and 31
– Contempt of Courts Act, 1971 – s.2(b) – On 24.09.2019, the
Supreme Court directed the Resolution Professional (RP) to invite D
fresh offers for resolution plans – Fresh Resolution plans were invited
– The third respondent-DVI submitted financial proposal on
04.11.2019 and was declared the highest resolution applicant – On
17.01.2020, DVI submitted its resolution plan together with a
performance bank guarantee of INR 150 crores – DVI filed E
application before the Court seeking grant of a period of two months
to examine and understand the impact of the onset of COVID-19
and to re-evaluate the resolution plan – On 18.06.2020, the
application was rejected by the Supreme Court – RP called upon
DVI to submit a performance bank guarantee for INR 150 crores –
On 30.06.2020, DVI moved rectification application before the F
Supreme Court on the ground that (i) No application was ever filed
by DVI seeking withdrawal of the order; (ii) DVI never approached
the Supreme Court for extension of time – On the other hand, NCLT
approved resolution plan of DVI – DVI filed appeal before the
NCLAT – DVI addressed an e-mail invoking clause 8.7 (event of G
Force Majeure) of the resolution plan to seek its termination – CoC
filed contempt petition – Both rectification application and contempt
petition are before the Supreme Court – Held: In rectification
application, the record as it stands leaves no manner of doubt that
DVI was seeking to renege on its commitments – The plea to re-
H
1015
1016 SUPREME COURT REPORTS [2021] 3 S.C.R.

A examine the impact of pandemic and to re-negotiate the terms of the
resolution plan makes it abundantly clear that DVI was not willing
to fulfill the terms of obligation – As far as extension of time is
concerned, as DVI was found highest evaluated resolution applicant
– Extensions were sought and granted also – Who sought an
extension of time is beside the point and is of subsidiary importance
B
– Formally, it may be true that the extensions were applied by CoC,
however, DVI was the beneficiary of the extensions which were
granted by the Court, as process of seeking extensions led to
approval of its resolution plan – Accordingly, the rectification
application is dismissed – In contempt petition, the conduct of DVI
C lack bonafide, however, the Court must be circumspect about invoking
the contempt jurisdiction as setting untenable plea should not in
and by itself invite penal consequences which emanate from the
exercise of the contempt jurisdiction – Therefore, it would not be
appropriate to exercise the contempt jurisdiction.
D Dismissing both the rectification application and the
contempt petition, the Court
HELD: Application for Rectification
1. The order of this Court dated 18 June 2020 must be
understood in the context of the IA which was moved by DVI.
E When the three judge Bench in its order dated 18 June 2020
observed that the “application made by the applicant for
withdrawal of the offer is hereby rejected” it must be understood
in the context of the plea which was setup by DVI. There can be
no mistaking the fact that DVI, despite having submitted a
F resolution plan which had undergone discussion and revision
before the CoC before being approved in the meeting of the CoC
of 11 February 2020, was seeking to renege its applications to
fulfill the resolution plan. The plea for being allowed to re-
examine the impact of the pandemic and to re-negotiate the terms
of the resolution plan makes it abundantly clear that DVI was not
G willing to fulfill the terms of the obligations which it had agreed.
This is evident from the fact also that though DVI was obliged to
furnish the second tranche of its performance bank guarantee of
INR 150 crores, it was not ready to do so. On the contrary,
apprehending a threat of the invocation of the first tranche of the
H bank guarantee of INR 150 crores, DVI pleaded special equities
COC OF AMTEK AUTO LTD. THROUGH CORP. BANK v. DINKAR T 1017
VENKATASUBRAMANIAN

and sought a direction allowing it to keep the bank guarantee A
alive until the process of re-negotiation was completed in two
months. This again was to overcome the consequence of the
invocation of the bank guarantee arising from DVI’s default. The
prayer seeking a direction to allow DVI to extend the bank
guarantee was artfully worded since the effect would be to restrain
B
the invocation of the bank guarantee. The present application, this
judgment is based on the record as it stands, which leaves no
manner of doubt that DVI was seeking to renege on its
commitments. When the order of this Court dated 18 June 2020
alludes to “the application made by the applicant for withdrawal
of the offer”, the reference is clearly to the substantive content of C
the IA which indicates that DVI was not ready to abide by the
commitments made by it in the resolution plan. The latter part of
the order dated 18 June 2020, placed DVI on notice that if it
indulged in such kind of practices in the future, it was “to be
treated as contempt of this Court in view of the various orders
D
passed by this Court at his instance”. DVI submits that the orders
of this Court were not passed at its instance since applications
for the extension of time had earlier been granted on the request
by the CoC. However, there can be no manner of doubt that the
extensions of time granted by this Court were to enable a due
consideration of the proposals of resolution applicants of which E
DVI undoubtedly was an applicant. [Para 27][1036-D-H; 1037-A-
E]
2. On 10 February 2020, the CoC sought an extension of a
week for the resolution plan to be voted upon by the members of
the CoC. On 11 February 2020, the resolution plan of DVI was F
approved and an affidavit was filed by the RP before this Court
on 19 February 2020 reporting the approval of DVI’s resolution
plan by the CoC. Appropriate directions were sought. This
sequence of events leaves no manner of doubt that the extensions
which were granted were to facilitate the process initially of
inviting resolution applicants to submit their plans and later for G
the evaluation of the plans which had been submitted. After DVI
was found to be the highest evaluated resolution applicant,
extensions were sought and granted for the resolution plan to be
finalized and voted upon by the CoC. Who sought an extension
of time is really beside the point and is of subsidiary importance. H
1018 SUPREME COURT REPORTS [2021] 3 S.C.R.

A Formally it may be true that the extensions were applied for by
the CoC, with the RP having apprised this Court also of the
approval granted to DVI’s resolution plan. However, DVI was
the beneficiary of the extensions which were granted by this
Court. The extensions granted from time to time facilitated the
consideration of the resolution plan submitted by DVI. DVI cannot
B
be heard to contend that the order of this Court dated 8 June
2020 suffers from an error when the process of seeking
extensions before this Court ultimately led up to the approval of
its resolution plan. DVI’s application for rectification, in other
words, is an attempt to renege from the resolution plan which it
C submitted and to resile from its obligations. This is a devious
attempt which must be disallowed. The rectification application
must accordingly be dismissed. [Para 29][1038-C-H]
Contempt Petition
3. The issue which needs to be addressed is whether
D
recourse to the contempt jurisdiction is valid and whether it should
be exercised in the facts of this case. Undoubtedly, the conduct
of DVI has not been bona fide. The extension of time in the course
of the judicial process before this Court enures to the benefit of
DVI as a resolution applicant whose proposal was considered
E under the auspices of the directions of the Court. DVI attempted
to resile from its obligations and a reading of its application which
led to the passing of the order of this Court dated 18 June 2020
will leave no doubt about the fact that DVI was not just seeking an
extension of time but a re-negotiation of its resolution plan after
its approval by the CoC. Then again, despite the order of this
F
Court dated 18 June 2020 rejecting the attempt of DVI, it
continued to persist in raising the same pleas within and outside
the proceedings before the NCLAT. The conduct of DVI is lacking
in bona fides. The issue however is whether this conduct in raising
the untenable plea and in failing to adhere to its obligations under
G the resolution plan can per se be regarded as a contempt of the
order of this Court dated 18 June 2020. DVI was undoubtedly
placed on notice of the order that should it proceed in such terms,
it would invite the invocation of the contempt jurisdiction. Having
said that, it is evident that the order of this Court dated 18 June
H
COC OF AMTEK AUTO LTD. THROUGH CORP. BANK v. DINKAR T 1019
VENKATASUBRAMANIAN

2020 rejected the IA moved by DVI and as a necessary A
consequence, the basis on which the reliefs in the IA were sought.
Therefore correctly, it has been now stated on behalf of the DVI
that it will not set-up a plea of force majeure in view of the dismissal
of its IA on 18 June 2020. However lacking in bona fides the
conduct of DVI was, we must be circumspect about invoking the
B
contempt jurisdiction as setting up an untenable plea should not
in and by itself invite the penal consequences which emanate from
the exercise of the contempt jurisdiction. Likewise, the default
of DVI in fulfilling the terms of the resolution plan may invite
consequences as envisaged in law. On the balance, this Court is
of the considered view that it would not be appropriate to exercise C
the contempt jurisdiction.[Para 38][1042-B-H]
CIVIL APPELLATE/INHERENT JURISDICTION: I.A. No.
58156 of 2019 in Civil Appeal No. 6707 of 2019.
From the Judgment and Order dated 16.08.2019 of the National D
Company Law Appellant Tribunal, New Delhi in Company Appeal (AT)
(Insolvency) No. 219 of 2019.
With
Contempt Petition Civil No. 524 of 2020 inCivil Appeal No. 6707
E
of 2019.
Tushar Mehta, SG Mukul Rohatgi, Dr. Abhishek Manu Singhvi,
Neeraj Kishan Kaul, Anupam Lal Das, Sr. Advs., Ms. Misha, Anoop
Rawat, Siddhant Kant, Sagar Dhawan, Ms. Charu Bansal, Ms. Prabh
Simran Kaur, S. S. Shroff, D. P. Singh, Kaushik Moitra, Ms. Ishita Jain, F
Anurag Tandon, Ms. Sanjukta Roy, Ms. Sonam Gupta, Gyanendra
Kumar, Ms. Shikha Tandon, Sumit Attri, Ms. Akanksha Sharma, Robin
Grover, M/s. Cyril Amarchand Mangaldas Ashish Prasad, Mahfooz Ahsan
Nazki, Dinesh Pednekar, Chanakya Keswani, Arpan Behl, Sumant Batra,
Sanjay Bhatt, Ms. Niharika Sharma, Ms. Akansha Srivastava, Rabin
Majumder, Arvind Kumar Gupta, Ravindra Sadanand Chingale, P. S. G
Sudheer, Vikas Kumar, Manish Paliwal, M/s Corporate Legal Partners
Mayank Pandey, E. C. Agrawala, Advs. for the appearing parties.

H
1020 SUPREME COURT REPORTS [2021] 3 S.C.R.

A The Judgment of the Court was delivered by
DR DHANANJAYA Y CHANDRACHUD, J.
1. This judgment will govern two proceedings:
(i) A Contempt Petition1 instituted by the Committee of Creditors
B of AMTEK Auto Limited (“corporate debtor”) inter alia
against Deccan Value Investors LP(“DVI”), the third
Respondent in the Civil Appeal2 for violation of an order passed
by this Court on 18 June 20203.
(ii) An application for rectification4 of the order of this Court dated
C 18 June 2020 instituted by DVI.
Both the proceedings are inter-related. Both have been heard
together.
2. On 24 July 2017, an application under Section 7 of the Insolvency
and Bankruptcy Code 2016 (“IBC”) was admitted by the National
D Company Law Tribunal (“NCLT”). Mr Dinkar T Venkatsubramanian
was appointed as Interim Resolution Professional. He was later confirmed
as the Resolution Professional (“RP”).
3. On 31 August 2017, the RP published an advertisement inviting
resolution plans from prospective resolution applicants. Resolution plans
E were submitted by Liberty House Group and DVI.
4. On 6 March 2018, a revised plan submitted by Liberty House
Group emerged as the highest evaluated plan, while DVI withdrew its
plan.
5. The Committee of Creditors (“CoC”) by a majority of 94.20
F per cent approved the final revised plan of Liberty House Group on 2
April 2018. On 25 July 2018, the NCLT approved the resolution plan of
Liberty House Group.
6. On 4 December 2018, the CoC filed an application seeking a
declaration that Liberty House Group had willfully contravened the terms
G of the resolution plan as approved by the NCLT and for the RP to attempt
1
Contempt Petition (C) No.542 of 2020
2
Civil Appeal No.6707 of 2019
3
Order dated 18 June 2020 passed in I.A. No.54321 of 2020 in Civil Appeal No. 6707
of 2019
4
H I.A. No.58156 of 2020
COC OF AMTEK AUTO LTD. THROUGH CORP. BANK v. DINKAR T 1021
VENKATASUBRAMANIAN [DR DHANANJAYA Y CHANDRACHUD, J.]

a fresh process of resolution. NCLT by an order dated 13 February A
2019 held that Liberty House Group had failed to fulfill its obligations
under the approved resolution plan and directed the reconstitution of the
CoC for consideration of the resolution plan submitted by DVI. NCLT
did not accede to the request for carrying out a fresh process by inviting
the plans again.
B
7. As a result the CoC filed an appeal 5 before the National
Company Law Appellate Tribunal (“NCLAT”). The appeal was limited
to the extent of challenging the rejection of the prayer for inviting fresh
applications from prospective applicants for submitting resolution plans.
On 15 April 2019, DVI filed an interlocutory application seeking
impleadment before the NCLAT, which was allowed by an order dated C
22 April 2019. In the course of the proceedings before the NCLAT, DVI
supported the plea of the CoC for restarting the process of inviting fresh
applications for resolution plans. By its order dated 16 August 2019,
NCLAT came to the conclusion that since more than 270 days had elapsed,
an order of liquidation of the corporate debtor would have to ensue and D
accordingly directed the NCLT to pass appropriate orders of liquidation.
The Civil Appeal before this Court arose out of the order of the NCLAT
directing liquidation of the corporate debtor and was instituted on 26
August 2019 by the CoC.
8. This Court issued notice in the Civil Appeal on 6 September E
2019 and stayed the liquidation of the corporate debtor. The second
proviso to Section 12(3) of the IBC was amended with effect from 16
August 2019 by the Amending Act 26 of 2019 so as to stipulate a time
limit of 330 days for the completion of the corporate insolvency resolution
process from the insolvency commencement date. On 24 September
2019, this Court accordingly directed the RP to invite fresh offers within F
a period of 21 days, following which the CoC was directed to take a
“final call in the matter” within two weeks. The decision was to be
placed before this Court on 5 November 2019. The RP made a public
announcement for inviting fresh resolution plans on 26 September 2019,
and the last date for submission of resolution plans was 22 October G
2019. The CoC on 23 October 2019 concluded that only one resolution
plan was received within the stipulated timeline. DVI submitted a financial
proposal on 4 November 2019. In the meantime on 6 November 2019,

5
Company Appeal No.219 of 2019
H
1022 SUPREME COURT REPORTS [2021] 3 S.C.R.

A the CoC moved an IA6 before this Court seeking an extension of four
weeks to consider three resolution offers received by the RP, including
that of DVI. On 13 November 2019 when the I.A. came up before this
Court, an order was passed that:
“The consideration to be confined to five offers received within
B the time specified in the advertisement inviting offers. Two offers
received thereafter not to be considered.”
9. On 21 November 2019, the CoC again moved an IA7 for
modification of the order dated 13 November 2019 on the ground that
while five resolution applicants had responded to the fresh invitation of
C offers, only one had submitted the resolution plan before the last date
specified in the advertisement.
10. On 2 December 2019, the IA seeking modification of the
earlier order was partly allowed by this Court by directing that fresh
offers be invited within 30 days after due advertisement. The CoC was
D directed to evaluate the offers within three weeks thereafter and to
submit its evaluation before this Court. On 3 December 2019, the RP
made a public announcement for inviting fresh resolution plans. Fresh
resolution plans were submitted by four applicants, including DVI and
LHG, and eventually on 6 January 2020, DVI was declared the highest
evaluated resolution applicant. On 17 January 2020, DVI submitted its
E resolution plan together with a performance bank guarantee of INR 150
crores (representing the first tranche).On 18 January 2020, DVI submitted
a revised resolution plan. The revised proposal of DVI was discussed in
the 29th meeting of the CoC, following which certain revisions were
sought from DVI.
F 11. On 20 January 2020, when the proceedings came up before
this Court, an extension of two weeks was granted for finalizing the
resolution plan. On 7 February 2020, DVI submitted an addendum along
with its resolution plan dated 17 January 2020. On 10 February 2020,
this Court was apprised of the fact that a resolution plan was being
G voted upon by the members of the CoC in view of which an extension of
one week was granted to finalise the resolution plan. On 11 February
2020, the resolution plan of DVI was approved by 70.07 per cent of the
voting share of the CoC. On 19 February 2020, the RP filed an affidavit
before this Court intimating it about the outcome of the voting. On 13
6
I.A. No.168814 of 2019
H 7
I.A. No.177847 of 2019
COC OF AMTEK AUTO LTD. THROUGH CORP. BANK v. DINKAR T 1023
VENKATASUBRAMANIAN [DR DHANANJAYA Y CHANDRACHUD, J.]

May 2020, the CoC filed an IA8 seeking approval of the resolution plan A
of DVI. On 8 June 2020, this Court passed an order relegating the matter
to the NCLT to decide upon the approval application within a fortnight.
The time spent before the NCLT and this Court was directed to be
excluded for calculating the long stop date. An email was addressed to
DVI on the same day by the RP to submit a performance bank guarantee
B
for the balance of INR 150 crores by 15 June 2020. DVI filed an
application9 before this Court on 12 June 2020 seeking a modification of
the order of 8 June 2020 for grant of a period of two months to it to
examine and understand the impact of the onset of COVID-19 and to
re-evaluate the resolution plan. Simultaneously, the RP filed an
application10 before the NCLT on the same day seeking approval of the C
resolution plan submitted by DVI. While seeking a extension of time of
two months before this Court, DVI in its IA inter alia stated that:
“4. The Approval Application by the Appellant seeking approval
of DVI’s Resolution Plan, was listed for hearing on 08.06.2020,
when the Applicant submitted that due to Covid-19 pandemic DVI’s D
Resolution Plan (as submitted and approved by the CoC) was
unviable and not feasible in the present circumstances and the
Respondent No. 3/Applicant required sometime to assess the
impact of the Covid-19 pandemic on the Indian economy as well
as the Auto Industry (including but not limited to the impact on the
overall business and financial health of the Corporate Debtor). It E
was therefore requested that this Hon’ble Court may be pleased
to relegate the issue of the approval of a resolution plan to the
Adjudicating Authority, so as to enable the parties to re-negotiate
the terms of the Resolution Plan and to hear all the stakeholders
before approving a resolution plan. F
[…]
7. […]
Based on a prima facie analysis of the said information provided
by the RP and subject to a detailed examination and verification, G
the Applicant, at the present stage, understands that the significance
of the information is substantial.

8
I.A. No. 48906 of 2020
9
I.A. No.54321 of 2020
10
IA No.225 of 2020 in CP (IB) No.42/CHD/HRY/2017 H
1024 SUPREME COURT REPORTS [2021] 3 S.C.R.

A The information provided strongly indicates an adverse impact
which is likely to be over INR 700 crores.
[…]
9. However, COVID-19 pandemic has materially and
adversely impacted commercial assumptions underlying the
B business plan and financial proposal for revival of the
Corporate Debtor and the feasibility and viability of the
Resolution Plan.
10. That faced with the limited time granted under the Order, the
RP has been insisting on the Respondent No. 3/ Applicant that it
C executes the letter of intent and submit its additional bank guarantee
pursuant to the resolution plan which had been approved, and
which is now to be filed before the NCLT.
11. That the Respondent No. 3/ Applicant also suffers from the
threat of invocation of its existing bank guarantee of INR 150
D crores that it had submitted in support of the DVI Resolution Plan,
if it does not execute the letter of intent and submit the additional
bank guarantee.”
(emphasis supplied)
12. On 18 June 2020, the IA filed by DVI was listed before this
E
Court when the following order was passed:
“The application made by the applicant for withdrawal of the offer
is hereby rejected and in case he indulges in such kind of
practice, it will be treated as contempt of this Court in view
of the various orders passed by this Court at his instance. The
F
application is accordingly dismissed.”
(emphasis supplied)
Following the order of this Court, the RP called upon DVI to
submit a performance bank guarantee for a balance of INR 150 crores
G which was reiterated on 6 July 2020 setting an outer limit of 10 July
2020. In the meantime, on 30 June 2020 DVI moved its rectification
application11 before this Court on the ground that:
(i) No application had ever been filed by DVI seeking
withdrawal of the order; and
H 11
IA No.58156 of 2020
COC OF AMTEK AUTO LTD. THROUGH CORP. BANK v. DINKAR T 1025
VENKATASUBRAMANIAN [DR DHANANJAYA Y CHANDRACHUD, J.]

(ii) DVI had never approached this Court earlier for any relief A
including seeking an extension of time.
13. NCLT passed an order on 9 July 2020 approving the resolution
plan submitted by DVI. Following this, on 10 July 2020, an email was
addressed to DVI by the erstwhile RP to provide its nominations to the
Implementation and Monitoring Committee (“IMC”). By this email, DVI B
was also requested to attend the first meeting of the IMC scheduled on
14 July 2020. On 14 July 2020, DVI by its email stated that formation of
the IMC and the convening of meetings was premature and recorded its
intent to institute an appeal against the order of the NCLT dated 9 July
2020 approving the resolution plan. On 21 July 2020, the RP addressed a
communication to DVI to implement the resolution plan and submit a C
performance bank guarantee for the balance INR 150 crores. This was
reiterated in a communication dated 23 July 2020 of the CoC to DVI.
DVI by its letter dated 25 July 2020 reiterated its intent to lodge an
appeal against the order of NCLAT and eventually filed its appeal12
before the NCLAT challenging the order of the NCLT dated 9 July D
2020. The said appeal is pending adjudication before the NCLAT.On 3
September 2020, DVI addressed an email invoking clause 8.7 of the
resolution plan to seek its termination forthwith. The email recorded
that:
“6. Our client states that in view of outbreak of the COVID- E
19 pandemic since March 2020 and continuing till date, the
business/assets/revenues of the Corporate Debtor have
been adversely and materially affected beyond INR 300
crores triggering clause 8.7 (iii) of the Resolution Plan. This
constitutes a ‘Force Majeure Event’ (as defined in the Amtek
Resolution Plan) which is a self operating clause providing for the F
forthwith termination of the Resolution Plan. The extent of the
aforesaid adverse and material impact on the business/assets/
revenues of the Corporate Debtor have remained uncontroverted
by you in proceedings before the NCLT Chandigarh. In any
event, withholding of the information sought vide the email G
dated 13 July 2020 only reinforces the fact that the event
of Force Majeure has occurred resulting in the forthwith
termination of the Amtek Resolution Plan.”
(emphasis supplied)
12
Company Appeal (AT) (Insolvency) No. 654 of 2020 H
1026 SUPREME COURT REPORTS [2021] 3 S.C.R.

A 14. On 26 August 2020, the CoC filed a Contempt Petition13 before
this Court on the ground that DVI was in breach of the order of this
Court dated 18 June 2020 by seeking to withdraw the resolution plan.
On 10 September 2020, DVI filed an IA14 in the pending appeal before
the NCLAT seeking cancellation and return of the performance bank
guarantee.
B
15. Notice was issued by this Court in the contempt petition
instituted by the CoC on 25 September 2020.
16. On 14 December 2020, notice was issued by this Court on the
rectification application filed by DVI.
C 17. The learned Senior Counsel who have principally urged
submissions on behalf of the contesting parties are:
(i) Mr Mukul Rohatgi for DVI in support of the rectification
application;

D (ii) Mr Tushar Mehta, Solicitor General of India in support of
the Contempt Petition filed by the CoC;
(iii) Mr Niraj Kishan Kaul, learned Senior Counsel for the RP;
and
(iv) Dr Abhishek Manu Singhvi, learned Senior Counsel on behalf
E of the contemnor.
18. Mr Mukul Rohatgi, learned Senior Counsel appearing on behalf
of DVI submitted that the order of this Court dated 18 June 2020 needs
to be rectified or clarified on the ground that it proceeds on two factual
misconceptions. The factual errors are stated to be that:
F (i) The IA that was moved by DVI was for withdrawal of the
offer (resolution plan); and
(ii) Various orders have been passed by this Court at the
instance of DVI.

G 19. The submission is that the observation of the Court that “in
case he [DVI]indulges in such kind of practice, it will be treated as
contempt of this Court” is premised on a factual misconception. Addressing
the Court on the first of the above premises, Mr Rohatgi submitted that
13
Contempt Petition No.524 of 2020
14
H IA No.21814 of 2020
COC OF AMTEK AUTO LTD. THROUGH CORP. BANK v. DINKAR T 1027
VENKATASUBRAMANIAN [DR DHANANJAYA Y CHANDRACHUD, J.]

the reliefs which were sought in the application that was filed by DVI on A
12 June 2020 were in the following terms:
“
(a) Pass an order modifying the Order dated 08.06.2020 to grant
a period of 2 (two) months from the date of the Order to the
Respondent No. 3/ Applicant to examine and understand the B
impact of the Covid-19 pandemic and the lock down to discuss
the terms of the Resolution Plan with the Committee of
Creditors and thereafter direct the NCLT to consider the
matter of I.A. No. 48906 of 2020 and pass appropriate orders;
(b) Pass an order directing the Committee of Creditors and the C
resolution professional not to act upon the existing resolution
plan until conclusion of the above process, subject to the
Applicant/ Respondent No. 3 extending the term of the
existing bank guarantee for a corresponding period;”
20. It was urged that there was no attempt on the part of DVI to D
withdraw from the resolution plan. On the contrary, what the IA postulated
was that a period of 15 days which was fixed, commencing from 8 June
2020, for the NCLT to pass orders on the approval application had resulted
in practical difficulties for parties to enter into a meaningful discussion
and negotiation. DVI, according to the submission, stressed that the period E
which was reserved for the NCLT to decide the approval application,
which was to expire on 23 June 2020, was inadequate and there was a
threat on the invocation of the performance bank guarantee. It was in
this context that DVI highlighted the serious financial impact of COVID-
19 on the business of the corporate debtor in the context of which it
sought time to assess the impact of the pandemic on the business and F
financial health of the corporate debtor. On the second of the factual
premises set out in the order of this Court, DVI has stressed that it had
never moved any application before this Court earlier for seeking an
extension of time and hence the basis of the order of this Court is factually
incorrect. G
The submission which has been urged on behalf of DVI has been
opposed by Mr Tushar Mehta, learned Solicitor General and by Mr Niraj
Kishan Kaul, learned Senior Counsel, appearing respectively for the CoC
and the RP. The Solicitor General submitted that:
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1028 SUPREME COURT REPORTS [2021] 3 S.C.R.

A (i) a detailed process was undertaken following the order of
this Court dated 24 September 2019 to ensure that resolution
plans could be invited so as to obviate an order of liquidation
of the corporate debtor. DVI was in the fray even before the
proceedings had reached this Court and even after the order
of 24 September 2019, it had indicated its intent to enter the
B
fray. From 4 November 2019 when DVI submitted its
financial proposal, extensions of time were granted by this
Court on 13 November 2019, 2 December 2019, 20 January
2020 and 10 February 2020. Though the extensions were
sought by the CoC, there can be no manner of doubt that this
C was to facilitate the finalization and approval of a resolution
plan and DVI was among the resolution applicants. After
the CoC approved DVI’s resolution plan on 11 February2020,
an IA was filed by the CoC on 13 May 2020.This Court by
an order dated 8 June 2020 relegated the proceedings to the
NCLT for considering the approval application. Laying stress
D
on the IA filed by DVI on 12 June 2020, it was urged that an
attempt was made by DVI to wriggle-out of its commitments
under the resolution plan which has been approved by the
CoC on 11 February 2020 by highlighting the impact of
COVID-19 on the financial health of the corporate debtor.
E (ii) Despite this Court having rejected the IA on 18 June 2020 :
(a) DVI failed to take steps in pursuance of the resolution
plan which is approved by the NCLT on 9 July 2020 by
(i) failing to submit the second tranche of the performance
F bank guarantee of INR 150 crores;
(ii) failing to provide its nomination to the IMC;
(iii) refusing to attend the meetings of the IMC;
(iv) setting up through its advocates the plea that a force
majeure event had occurred resulting in termination
G
of the resolution plan.
(b) This conduct, it has been submitted, is contumacious in
that despite being placed on notice by the order of this
Court dated 18 June 2020 that:
H (i) DVI’s IA stood dismissed; and
COC OF AMTEK AUTO LTD. THROUGH CORP. BANK v. DINKAR T 1029
VENKATASUBRAMANIAN [DR DHANANJAYA Y CHANDRACHUD, J.]

(ii) Any attempt to resile from the resolution plan would A
result in the invocation of the contempt jurisdiction,
DVI effectively thwarted the implementation of the
resolution plan.
The Solicitor General has thus opposed the application for
rectification and supported the contempt petition on the above B
submissions.
21. Adopting a similar line of submissions, Mr Niraj Kishan Kaul,
learned Senior Counsel urged that:
(i) A plea of force majeure on account of COVID-19 was
specifically raised in the application filed by DVI before this C
Court on 12 June 2020;
(ii) By a letter dated 3 September 2020 addressed by the
advocates of DVI, a plea of force majeure was set up even
after the order of this Court dated 18 June 2020 rejecting the
IA; and D
(iii) Even before the NCLAT, DVI filed an additional affidavit on
12 September 2020 for pleading a case of force majeure
based on the COVID-19 pandemic.
On these grounds, it was submitted that DVI has made an
E
intentional and willful attempt to evade compliance of its obligation under
the approved resolution plan though its IA was specifically rejected on
18 June 2020 by this Court.
22. Dr Abhishek Manu Singhvi, learned Senior Counsel appearing
on behalf of the contemnor submitted that:
F
(i) In order to invoke the contempt jurisdiction, a disobedience
has to be willful and not by implication;
(ii) The exercise of legal rights by a party to a proceeding cannot
constitute contempt;
(iii) DVI was within its legitimate rights in challenging the order G
of the NCLT;
(iv) The view which may be taken on the merits of the submissions
which have been addressed by DVI on whether the conditions
precedent to the implementation of the resolution plan have
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1030 SUPREME COURT REPORTS [2021] 3 S.C.R.

A been fulfilled cannot be basis for invoking the contempt
jurisdiction. An adjudicatory forum may take a decision, one
way or the other on the merits of DVI’s submissions, but a
plea of contempt cannot be founded on the acceptance or
rejection of the plea of DVI that the conditions precedent to
the implementation of the resolution plan have not been
B
fulfilled.
(v) In this context, the reply filed by the contemnor to the
contempt petition specifically sets out the case of DVI that
the condition precedents to the implementation of the resolution
plan have not been fulfilled. The following paragraphs of the
C reply have been emphasized:
“5. It is submitted that Resolution Plan dated 17.01.2020
(r/w the addendum dated 07.02.2020) as submitted by DVI
and approved by the COC contains several obligations/
conditions precedents for its effective implementation and
D to ensure the going concern status of the Corporate Debtor.
It is an admitted position that the Resolution Professional /
COC inter alia failed to ensure compliance of certain
conditions precedents under the Resolution Plan including
failure of obtaining the prior written consent of the mortgage
E of the Ace Complex Land whilst executing a long term lease
deed on behalf of the Corporate Debtor. By an email dated
29.01.2020, such default was brought to the due notice of
the Resolution Professional by the representative of DVI.
The aforesaid requirement of obtaining the prior written
consent was further reiterated by DVI in the addendum
F dated 07.02.2020. A copy of the email dated 29.01.2020 is
attached as Annexure R-1. (Pages 37-40)
6. It is a matter of record that the aforesaid issues were
brought before the National Company Law Tribunal,
Chandigarh (“NCLT”) at the time of hearing of the IA
G filed by the Resolution Professional for the approval of the
Resolution Plan. However, the NCLT proceeded to approve
the Resolution Plan on 09.07.2020 by inter alia unilaterally
modifying the provisions of the Resolution Plan to the
detriment of DVI. Respectfully, it is submitted that in the
H absence of fulfilment of the aforementioned provisions of
COC OF AMTEK AUTO LTD. THROUGH CORP. BANK v. DINKAR T 1031
VENKATASUBRAMANIAN [DR DHANANJAYA Y CHANDRACHUD, J.]

the Resolution Plan (amongst others), the very A
implementation/feasibility/ viability of the Resolution Plan
and revival of the Corporate Debtor fails into jeopardy. DVI
has accordingly exercised its rights as available under lay
by filing its appeal before the National Company Law
Appellate Tribunal (“NCLAT”). Without prejudice to the
B
aforesaid and as elaborated hereunder, the Resolution
Professional was also intimated of the termination of the
Resolution Plan on 03.09.2020 pursuant to the self-operative
termination clause of the Resolution Plan as approved by
the CoC.
9. DVI’s Resolution Plan dated 17.01.2020 (read with its C
addendum dated 07.02.2020) inter alia contains contingent
conditions in the form of clause 2.5.2, which is set out as
under:
“Unless waived (where permissible under Applicable Law)
by the Resolution Applicants, Acquisition of the Corporate D
Debtor by the Resolution Applicants in terms of sub-section
5.1 (Acquisition as a Going Concern) of this Resolution Plan
and any other action set out in sub-sections 5.1 and 5.2
(Acquisition as a Going Concern), of the Resolution Plan
are contingent on the following conditions having been E
fulfilled in a form and manner satisfactory to the Resolution
Applicants (“Effective Date Conditions Precedents”)
(a) Occurrence of NCLT Approved Date;
(b) Receipt of a copy of the order of the NCLT approving this
Resolution Plan; and F
(c) term lease (subsisting for 20 years or more) for the ACE
Complex Land with Acceptable Terms.”
“Acceptable Terms” has been defined in the Resolution
Plan as under:
G
“Shall mean terms relating to the lease of ACE
Complex Land and shall be suitable protective terms
acceptable to the Resolution Applicants including (i)
confirmation of the validity and subsistence of the lease
arrangement by way of prior written consent of Vistra ITCL
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1032 SUPREME COURT REPORTS [2021] 3 S.C.R.

A Limited acting as the security trustee on behalf of KKR
India Financial Services Limited and L&T Finance Limited
in a form and substance acceptable to the Resolution
Applicants; (ii) no right of termination according to the lessor
as long as lease rentals are paid; and (iii) right of first refusal
occurring to the Resolution Applicants, in case of sale of
B
ACE Complex Land.”
10. It is thus seen that it is one of the essential requirements
of the Resolution Plan for the Corporate Debtor to execute
a long-term lease (for 20 years or more) in respect of the
Ace Complex Land with “Acceptable Terms” i.e. with the
C prior written consent of Vistra ITCL (India) Limited
(“Vistra”)viz; the mortgagee of the Ace Complex Land.
11. Significantly, the aforesaid requirement of the “Execution
of a long term lease (subsisting for 20 years or more) for
the ACE Complex Land with Acceptable Terms” was
D reiterated in the addendum to the Resolution Plan dated
07.02.2020.”
23. During the course of the hearing, Dr Singhvi made the following
oral statement namely that “the application filed by DVI before the
Supreme Court was to consider finding solutions for the delay occasioned
E by COVID-19. Neither was force majeure pleaded nor has it been
pleaded now and only an extension of time has been sought on the ground
of Covid-19”. In other words, the submission of Dr Singhvi is that
(i) DVI has not set up a plea of force majeure as a basis for
withdrawing from the resolution plan; and
F
(ii) Whether the conditions precedent under the resolution plan
have been fulfilled isa matter which is sought to be urged in
the appeal before the NCLAT.
The application for rectification
G 24. The application for rectification is premised on the assertion
that there are two factual misconceptions contained in the order of this
Court dated 18 June 2020. Firstly, the order proceeds on the basis that
DVI in its IA of 12 June 2020 intended to withdraw from the resolution
plan, which was not the case; and secondly, the order indicates that
extensions of time for the submission of resolution plans were obtained
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COC OF AMTEK AUTO LTD. THROUGH CORP. BANK v. DINKAR T 1033
VENKATASUBRAMANIAN [DR DHANANJAYA Y CHANDRACHUD, J.]

on behalf of DVI, which is contrary to the record. The submission, in A
other words, is that DVI did not intend to resile from the resolution plan
and only sought to highlight the financial impact of the COVID-19
pandemic on the economy, the auto industry and the viability of the
corporate debtor. This submission has been reiterated by Dr Abhishek
Manu Singhvi, learned Senior Counsel when he urged that the application
B
moved before this Court on 12 June 2020:
(i) was to consider finding solutions for the delay due to
COVID-19;
(ii) force majeure was not pleaded; and
(iii) the only plea was for the extension of time. C

25. The record before this Court would however belie the critique
of the order dated 18 June 2020 and of the submissions made by learned
Senior Counsel. The IA filed by DVI was styled as “an application for
rectification”, as its title indicates, but paragraph 1 states that it is “an
application for clarification /modification of the order dated 8 June 2020”. D
On 8 June 2020, this Court had relegated the matter of approval of the
resolution plan to the NCLT with a timeline of 15 days. In the IA filed by
DVI purportedly for ‘clarification and modification’, it was submitted
that “due to Covid-19 pandemic DVI’s resolution plan (as submitted and
approved by the CoC) was unviable and not feasible in the present E
circumstances”. DVI submitted that when the proceedings came up on
8 June 2020 it had urged that its resolution plan was required to be
relegated to the adjudicating authority to assess the impact of the
pandemic on the economy, the auto industry and the financial health of
the corporate debtor and to enable the parties to renegotiate the terms
of the resolution plan. In other words, DVI sought to submit that the F
purpose of relegating the issue of approval of the resolution plan was to
enable a re-negotiation to take place before the resolution plans which
have been approved by the CoC could be the subject matter of an approval
of the adjudicating authority. Now, this submission of DVI cannot be
accepted for two reasons: firstly, it is asettled principle of law that the G
record of the Court speaks for itself and the terms of a judicial order
reflect what has been decided. The order of this Court dated 8 June
2020 indicates that since the fresh resolution plan had been passed by
the CoC with the majority of 70 per cent, “the matter of IA” namely, IA
48906 of 2020 filed by the CoC was being relegated to the NCLT for
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1034 SUPREME COURT REPORTS [2021] 3 S.C.R.

A passing “appropriate orders”. There is absolutely no indication in the
order of the Court dated 8 June 2020 that the purpose of relegating the
IA to the NCLT was to facilitate a fresh evaluation being made by DVI
in regard to the impact of the pandemic on the economy, the auto industry
and the health of the corporate debtor. DVI, in other words, has attempted
to read into the order dated 8 June 2020 a basis which does not find
B
expression in the terms of the order. Such an exercise is plainly
impermissible. Secondly, Section 31 of the IBC provides the requirements
to be observed, before the adjudicating authority approves the resolution
plan. Sub-Sections (1) and (2) of Section 31 are in the following terms:
“(1) If the Adjudicating Authority is satisfied that the resolution
C plan as approved by the committee of creditors under sub-section
(4) of section 30 meets the requirements as referred to in sub-
section (2) of section 30, it shall by order approve the resolution
plan which shall be binding on the corporate debtor and its
employees, members, creditors, [including the Central Government,
D any State Government or any local authority to whom a debt in
respect of the payment of dues arising under any law for the time
being in force, such as authorities to whom statutory dues are
owed,] guarantors and other stakeholders involved in the resolution
plan:
E [Provided that the Adjudicating Authority shall, before passing an
order for approval of resolution plan under this sub-section, satisfy
that the resolution plan has provisions for its effective
implementation.]
(2) Where the Adjudicating Authority is satisfied that the resolution
F plan does not confirm to the requirements referred to in sub-section
(1), it may, by an order reject the resolution plan.”
26. The role of the adjudicating authority under sub-section (1) of
Section 31 comes into being upon the approval of the resolution plan by
the CoC under sub-section (4) of Section 30. The function which is
G assigned by the statute to the adjudicating authority is to determine whether
the resolution plan which has been approved by the CoC meets the
requirements of sub-section (2) of Section 30. Upon being satisfied that
the resolution plan meets those requirements, the adjudicating authority
“shall by order approve the resolution plan”. Before passing an order of
approval the adjudicating authority has to satisfy itself that the resolution
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COC OF AMTEK AUTO LTD. THROUGH CORP. BANK v. DINKAR T 1035
VENKATASUBRAMANIAN [DR DHANANJAYA Y CHANDRACHUD, J.]

plan has provisions for its effective implementation. In the backdrop of A
the above provisions, the order of this Court dated 8 June 2020 required
the adjudicating authority to perform the functions which are entrusted
to it under Section 31 of the IBC. To suggest that the purpose of the
order dated 8 June 2020 was to enable DVI to re-negotiate the resolution
plan after assessing the impact of the pandemic is thus fundamentally
B
flawed. It is flawed because this assertion is contrary to the plain terms
of the record. It is flawed also because the submission is contrary to the
nature of the function which is expected to be exercised by the adjudicating
authority by the plain terms engrafted into the provisions of Section 31.
When DVI moved its application on 12 June 2020, it asserted that the
timeline of 15 days has “resulted in practical difficulties for parties to C
enter into any meaningful discussions and negotiations”. To assert that
there was any scope for negotiations and discussions after the approval
of the resolution plan by the CoC would be plainly contrary to the terms
of the IBC. DVI, in paragraph 7 of its application stated that it was
seeking a clarification/modification for, inter alia, the following reasons:
D
(i) Its management team was based out of the US and found it
difficult to travel to India during the course of the pandemic;
(ii) The pandemic had had a drastic impact on the business,
revenue, assets and financial and operational health of the
corporate debtor; E
(iii) The meeting of the CoC dated 4 May 2020 recorded the
performance updates of the corporate debtors bearing on its
financial health;
(iv) The RP had on 3 June 2020 shared additional information
with DVI, which was substantial in its significance; F
(v) DVI’s resolution plan was based on the financials of the
corporate debtor prior to the COVID-19 pandemic;
(vi) The pandemic had materially and adversely impacted
commercial assumptions underlying the business plan and
G
financial proposal for revival of the corporate debtor;
(vii) The RP was requiring DVI to submit an additional bank
guarantee pursuant to the resolution plan failing which DVI
faced the threat of the invocation of the performance bank
guarantee of INR 150 crores which it had submitted;
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1036 SUPREME COURT REPORTS [2021] 3 S.C.R.

A (viii) DVI even pleaded “special equities”. The reference to special
equities contains a distinct flavor of a ground being set up to
injunct the invocation of the performance bank guarantee.
DVI sought a period of two months to (i) assess the impact
of the pandemic on the business and financial health of the
corporate debtor; (ii) the consequential impact of these
B
circumstances on the feasibility and viability of the resolution
plan; and (iii) to allow parties to negotiate the terms of the
resolution plan. It was in this backdrop, that the reliefs which
were sought in the IA were to permit DVI a period of two
months “to examine and understand the impact of Covid-19
C pandemic and the lockdown to discuss the terms of the
resolution plan with the CoC”; and
(ix) DVI in its IA also sought a restraining order against the CoC
and the RP from acting upon the existing resolution plan until
the conclusion of the above process subject to it extending
D the existing bank guarantee.
27. The order of this Court dated 18 June 2020 must be understood
in the context of the IA which was moved by DVI. When the three
judge Bench in its order dated 18 June 2020 observed that the “application
made by the applicant for withdrawal of the offer is hereby rejected” it
E must be understood in the context of the plea which was setup by DVI.
There can be no mistaking the fact that DVI, despite having submitted a
resolution plan which had undergone discussion and revision before the
CoC before being approved in the meeting of the CoC of 11 February
2020, was seeking to renege its applications to fulfill the resolution plan.
The plea for being allowed to re-examine the impact of the pandemic
F
and to re-negotiate the terms of the resolution plan makes it abundantly
clear that DVI was not willing to fulfill the terms of the obligations which
it had agreed. This is evident from the fact also that though DVI was
obliged to furnish the second tranche of its performance bank guarantee
of INR 150 crores, it was not ready to do so. On the contrary,
G apprehending a threat of the invocation of the first tranche of the bank
guarantee of INR 150 crores, DVI pleaded special equities and sought a
direction allowing it to keep the bank guarantee alive until the process of
re-negotiation was completed in two months. This again was to overcome
the consequence of the invocation of the bank guarantee arising from
DVI’s default. The prayer seeking a direction to allow DVI to extend
H
COC OF AMTEK AUTO LTD. THROUGH CORP. BANK v. DINKAR T 1037
VENKATASUBRAMANIAN [DR DHANANJAYA Y CHANDRACHUD, J.]

the bank guarantee was artfully worded since the effect would be to A
restrain the invocation of the bank guarantee. One of us (Justice MR
Shah) was a member of the Bench which declined to grant relief on the
IA filed by DVI on 12June 2020. But, for the purpose of the present
application, this judgment is based on the record as it stands, which leaves
no manner of doubt that DVI was seeking to renege on its commitments.
B
When the order of this Court dated 18 June 2020 alludes to “the application
made by the applicant for withdrawal of the offer”, the reference is
clearly to the substantive content of the IA which indicates that DVI
was not ready to abide by the commitments made by it in the resolution
plan. The latter part of the order dated 18 June 2020, placed DVI on
notice that if it indulged in such kind of practices in the future, it was “to C
be treated as contempt of this Court in view of the various orders passed
by this Court at his instance”. DVI submits that the orders of this Court
were not passed at its instance since applications for the extension of
time had earlier been granted on the request by the CoC. The list of
dates filed by DVI indicate that DVI filed its Vakalatnama in the appeal
D
on 5 June 2020 a point which was stressed by Mr Mukul Rohatgi, learned
Senior Counsel. However, there can be no manner of doubt that the
extensions of time granted by this Court were to enable a due consideration
of the proposals of resolution applicants of which DVI undoubtedly was
an applicant. This is evident from the manner in which the proceedings
unfolded. On 24 September 2019, this Court directed the RP to invite E
fresh offers within a period of 21 days. As a result of offers being received
after the deadline under the invitation which was issued pursuant to the
above directions, an IA was moved on 6November 2019 seeking an
extension of four weeks. On 13 November 2019, this Court directed
that the consideration would be confined to five offers “received within
F
the time specified in the advertisement”. On 21 November 2019, the
CoC sought a modification of the order of 13 November 2019 to correctly
record that while five resolution applicants had responded to the fresh
invitation by the RP only one resolution plan had been submitted before
the last date of submission. The CoC sought liberty to consider the
additional three resolution offers, one of which was the offer by DVI. It G
was in this context that on 2 December 2019, this Court partly allowed
the application for modification by directing that fresh offers to be invited
within thirty days. It was in pursuance of the order of this Court dated 2
December 2019 that a public announcement was made by the RP on 3
December 2019. DVI submitted undertakings under Section 29A of the
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1038 SUPREME COURT REPORTS [2021] 3 S.C.R.

A IBC and other documents on 6 December 2019. Fresh resolution plans
were submitted by four entities including DVI on 31 December 2019.

28. On 6 January 2020, the CoC declared DVI as the highest
evaluated resolution applicant. DVI submitted a revised resolution plan
dated 17 January 2020, following which the voting which was scheduled
B by the CoC on that day was cancelled. The revised proposal of the DVI
was discussed in the 29th meeting of the CoC. On the same day – 20
January 2020 – when the proceedings were listed before this Court it
took note of the fact that the CoC was in the process of approving are
solution plan following which an extension of two weeks was granted.
C DVI submitted an addendum to the resolution plan on 7 February 2020.

29. On 10 February 2020, the CoC sought an extension of a week
for the resolution plan to be voted upon by the members of the CoC. On
11 February 2020, the resolution plan of DVI was approved and an
affidavit was filed by the RP before this Court on 19 February 2020
D reporting the approval of DVI’s resolution plan by the CoC. Appropriate
directions were sought. This sequence of events leaves no manner of
doubt that the extensions which were granted were to facilitate the
process initially of inviting resolution applicants to submit their plans and
later for the evaluation of the plans which had been submitted. After
E DVI was found to be the highest evaluated resolution applicant, extensions
were sought and granted for the resolution plan to be finalized and voted
upon by the CoC. Who sought an extension of time is really beside the
point and is of subsidiary importance. Formally it may be true that the
extensions were applied for by the CoC, with the RP having apprised
this Court also of the approval granted to DVI’s resolution plan. However,
F DVI was the beneficiary of the extensions which were granted by this
Court. The extensions granted from time to time facilitated the
consideration of the resolution plan submitted by DVI. DVI cannot be
heard to contend that the order of this Court dated 8 June 2020 suffers
from an error when the process of seeking extensions before this Court
G ultimately led up to the approval of its resolution plan. DVI’s application
for rectification, in other words, is an attempt to renege from the resolution
plan which it submitted and to resile from its obligations. This is a devious
attempt which must be disallowed. The rectification application must
accordingly be dismissed.

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COC OF AMTEK AUTO LTD. THROUGH CORP. BANK v. DINKAR T 1039
VENKATASUBRAMANIAN [DR DHANANJAYA Y CHANDRACHUD, J.]

Contempt Petition No. 542 of 2020 A
30. The premise of the contempt proceedings which has been
initiated by the CoC is that despite the order of this Court dated 18 June
2020, DVI has by its conduct
(i) Obstructed the implementation of the resolution plan; and
B
(ii) Set up a plea in the teeth of the rejection of its IA by this
Court on 18 June 2020.
31. Dr Abhishek Manu Singhvi, learned Senior Counsel is correct
in the formulation of legal principle but it is in the application of those
principles where the fine-print of this case lies. There can be no manner C
of doubt that
(i) the contempt jurisdiction is to be exercised with
circumspection;
(ii) the acceptance or rejection of a plea on merits is distinct
from whether a party is in breach of the order of court; D
(iii) the disobedience of an order must be willful before it
constitutes contempt;
(iv) a willful breach must appear clear by the conduct of a party
not by implication; and
E
(v) the exercise of legal rights and remedies would not constitute
contempt.
32. We must at the outset note that on 8 June 2020, this Court
relegated the matter to the NCLT to decide upon the approval application
within a fortnight. NCLT passed an order approving the resolution plan F
submitted by DVI on 9 July 2020. DVI having taken recourse to its
appellate remedy before the NCLAT under the provisions of Section 61
of the IBC does not constitute contempt. The plea of contempt however
proceeds on the conduct of DVI. Bearing on this issue, the following
circumstances have to be noted:
G
(i) the pleas which were set up by DVI in paragraphs 9,12,13,15
and 17 of its IA filed on 12 June 2020, clearly sought to setup
a foundation for force majeure. In paragraph 9, DVI pleaded
that “Covid-19 pandemic has materially and adversely
impacted commercial assumptions underlying the business
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1040 SUPREME COURT REPORTS [2021] 3 S.C.R.

A plan and financial proposal for revival of the corporate debtor
and the feasibility and viability of the resolution plan”. In
paragraph 12, DVI urged that the execution of a letter of
intent and submission of an additional bank guarantee “would
mean that the approved resolution plan is being implemented
without taking into consideration the changed circumstances,
B
and would be directly in conflict with the intent of discussing
the plan after understanding the impact of the changed
financial position of the Company and the market as a whole”;
(ii) Para 13 of the IA stated that DVI “has been placed in an
impossible situation where, on one hand the impact of the
C changed circumstances needs to be taken into consideration
for examining the impact of the same on the resolution
plan…”;
(iii) In para 15, DVI submitted that it was “imperative that the
CoC and the resolution professional do not move forward
D without first giving it [DVI] the opportunity to examine the
impact of the changed circumstances on the plan and its
feasibility and to thereupon discuss the same with the CoC”;
and
(iv) Finally, in para 17, DVI pleaded that it “may be allowed to
E assess the impact of the COVID-19 pandemic on the overall
business and financial health of the Corporate Debtor, and
the consequential impact of these circumstances on feasibility
and viability of DVI’s resolution plan and a period of 2 (two)
months […] may be granted to the parties to negotiate the
F terms of DVI’s resolution plan […]”.
These averments clearly indicate a foundation for the defence of
force majeure.
33. On 3 September 2020, after the order of this Court dated 18
June 2020 rejecting the above IA, an email was addressed on behalf of
G the DVI by Mr Dinesh Pednekar, of Economic Laws Practice (“ELP”),
the advocates representing DVI to the RP. The email inter alia stated
that:
“6. Our client states that in view of outbreak of the Covid-19
pandemic since March 2020 and continuing till date, the business/
H assets/revenues of the Corporate Debtor have been adversely
COC OF AMTEK AUTO LTD. THROUGH CORP. BANK v. DINKAR T 1041
VENKATASUBRAMANIAN [DR DHANANJAYA Y CHANDRACHUD, J.]

and materially affected beyond INR 300 crores triggering clause A
8.7(iii) of the Resolution Plan. This constitutes a ‘Force Majeure
Event’ (as defined in the Amtek Resolution Plan) which is a self-
operating clause providing for the forthwith termination business/
assets/ revenues of the Corporate Debtor have remained
uncontroverted by you in proceedings before the NCLT
B
Chandigarh. In any event, withholding of the information sought
vide the email dated 13 July 2020 only reinforces the fact that the
event of Force Majeure has occurred resulting in the forthwith
termination of the Amtek Resolution Plan.”
On 12 September 2020, in an additional affidavit filed before the
NCLAT, DVI again sought to plead the COVID-19 pandemic as a reason C
for allowing it to re-negotiate the resolution plan. The above
circumstances leave no manner of doubt that despite the rejection of its
IA by this Court on 18 June 2020, DVI continued to persist in raising the
same grounds as a justification to be relieved of the obligations imposed
on it by the terms of its resolution plan. D
34. Dr Abhishek Manu Singhvi, learned Senior Counsel had, in
the course of his submissions which have been recorded earlier, submitted
that neither was force majeure pleaded then (in the IA filed before this
Court) nor thereafter.
35. Faced with the communication dated 3 September 2020of E
ELP made on behalf of DVI, Dr Abhishek Singhvi submitted that the
submission was not before the NCLAT. However, even this is factually
incorrect.
36. Mr Niraj Kishan Kaul, learned Senior Counsel has drawn the
attention of the Court to the fact that on 12 September 2020, additional F
affidavit was filed before the NCLAT where the plea of force majeure
was raised by DVI. Besides this, DVI has, despite the approval of the
resolution plan, failed to
(i) submit a performance bank guarantee for the balance of INR
150 crores; G
(ii) make a nomination to the IMC; and
(iii) failed to attend the meetings of the IMC.
37. The provisions of the IBC are premised on a time bound
process for the resolution of corporate insolvencies. Effectively, the H
1042 SUPREME COURT REPORTS [2021] 3 S.C.R.

A conduct of DVI after the CoC approved the resolution plan on
11 February 2020 has thwarted the entire process, thus, bringing things
to a stand-still. Alive to the realities of the situation, Dr Abhishek Manu
Singhvi, learned Senior Counsel has stated before the Court that in the
proceedings which are pending before the NCLAT, DVI shall not plead
force majeure based on the outbreak of the Covid-19 pandemic.
B
38. The issue which needs to be addressed is whether recourse
to the contempt jurisdiction is valid and whether it should be exercised in
the facts of this case. Undoubtedly, as we have noted earlier, the conduct
of DVI has not been bona fide. The extension of time in the course of
the judicial process before this Court enures to the benefit of DVI as a
C resolution applicant whose proposal was considered under the auspices
of the directions of the Court. DVI attempted to resile from its obligations
and a reading of its application which led to the passing of the order of
this Court dated 18 June 2020 will leave no doubt about the fact that
DVI was not just seeking an extension of time but a re-negotiation of its
D resolution plan after its approval by the CoC. Then again, despite the
order of this Court dated 18 June 2020 rejecting the attempt of DVI, it
continued to persist in raising the same pleas within and outside the
proceedings before the NCLAT. The conduct of DVI is lacking in bona
fides. The issue however is whether this conduct in raising the untenable
plea and in failing to adhere to its obligations under the resolution plan
E can per se be regarded as a contempt of the order of this Court dated 18
June 2020. DVI was undoubtedly placed on notice of the order that
should it proceed in such terms, it would invite the invocation of the
contempt jurisdiction. Having said that, it is evident that the order of this
Court dated 18 June 2020 rejected the IA moved by DVI and as a
F necessary consequence, the basis on which the reliefs in the IA were
sought. Therefore correctly, it has been now stated on behalf of the
DVI that it will not set-up a plea of force majeure in view of the dismissal
of its IA on 18 June 2020. However lacking in bona fides the conduct
of DVI was, we must be circumspect about invoking the contempt
jurisdiction as setting up an untenable plea should not in and by itself
G invite the penal consequences which emanate from the exercise of the
contempt jurisdiction. Likewise, the default of DVI in fulfilling the terms
of the resolution plan may invite consequences as envisaged in law. On
the balance, we are of the considered view that it would not be
appropriate to exercise the contempt jurisdiction of this Court.
H
COC OF AMTEK AUTO LTD. THROUGH CORP. BANK v. DINKAR T 1043
VENKATASUBRAMANIAN [DR DHANANJAYA Y CHANDRACHUD, J.]

During the course of the hearing, Dr Abhishek Manu Singhvi, A
learned Senior Counsel has relied on the affidavit filed in response to the
contempt petition while seeking to urge that DVI will be within in its
rights to urge whether the conditions precedent to the enforcement of
the resolution plan have been fulfilled. Since DVI is in appeal before the
NCLAT, we express no opinion on the merits of the submission. The
B
NCLAT will take a view on the tenability and merits of the submission
of DVI that the conditions precedent under the resolution plan have not
been fulfilled after hearing the parties. This is not an issue which arises
before the Court in the present proceedings either upon the application
for rectification moved by DVI or the contempt petition moved by the
CoC. C
39. For the above reasons, our conclusions and directions are
that :
(i) There is no merit in the application for rectification moved
by DVI. IA No. 58156 of 2020 in Civil Appeal No 6707 of
2020 shall stand dismissed; D

(ii) It is not expedient in the interest of justice to pursue the
contempt proceedings. The Contempt Petition (C) No. 524
of 2020 in Civil Appeal No. 6707 of 2019 shall accordingly
stand dismissed, subject to (iii) below;
E
(iii) In terms of the submission which has been made by DVI
before this Court and even otherwise, as a consequence of
the dismissal of its IA on 18 June 2020, it shall not set-up a
plea for force majeure in the proceedings which are pending
before the NCLAT in appeal against the order of the NCLT
approving the resolution plan; and F
(iv) The appeal filed by DVI against the approval of the resolution
plan by the NCLT shall peremptorily be heard and disposed
of by the NCLAT not later than within a period of one month
from the date of the present judgment.
G
40. There shall be an order in the above terms.

Ankit Gyan Rectification Application and Contempt Petition dismissed.

H