The Bombay High Court has issued show cause notice to founder trustee of Lilavati Hospital Kishore Mehta and his son Rajesh asking why action under the Contempt of Courts Act should not be taken against them for wilful breach of its earlier order. The notice was issued for allegedly failing to deposit 25% of the debt amount in a proceedings initiated by the HDFC Bank.
The court issued the notice on a contempt plea filed by HDFC Bank alleging that they deposited only Rs 3.68 crore whereas they were supposed to deposit 25% of Rs. 14.74 crore with 16% interest from 2004.
“The aforesaid reasons are prima facie sufficient for the Court to proceed in accordance with Rule 1036 of the Contempt of Courts (Bombay High Court) Rules, 1994,” a bench of Justices AS Chandurkar and Jitendra Jain said on February 27. The court noted that the duo avoided execution of the arrest warrant and automatic dismissal of their appeal, by affirming payment of amount.
HDFC Bank initiated proceedings with the Debt Recovery Tribunal, following which the Recovery Officer issued arrest warrants against Kishore and Rajesh Mehta on October 25, 2003, and directed attachment of their bank accounts, lockers and shares. The recovery officer further granted recovery of due along with 16% interest. Kishore and Rajesh challenged this order before the HC.
The high court, on November 8, 2023, granted them interim relief and directed them to deposit 25% of the debt amount “as of today in this Court” within two weeks failing which the petition would stand dismissed. The court stayed their arrest till the next date of hearing on the condition that the two would file an affidavit stating that amount was deposited.
Mehtas approached the Supreme COurt, which extended the time to file the undertaking till December 15 and to deposit the amount till December 31.
They deposited Rs 3,68,63,000 by December 27, against which HDFC filed contempt petition before the HC.
HDFC’s counsel Kevic Setalvad submitted that Mehtas “made a show” of seeking to deposit part of the said amount as if the november 8 order was being complied with and deferred the execution of the arrest warrants.
However, Anil Anturkar, counsel for Mehtas, argued that the apex court’s order was not breached. He said that the condition to deposit 25% of the debt amount was only so that the court could “consider” their petition against the DRT order and not a direction to deposit the amount.
Anturkar contended that non-compliance of depositing 25% would only result in dismissal of the petition and would not amount to the breach of the order or civil contempt.
The bench, however, opined that a prima facie case for contempt is made out as the amount deposited falls short of the 25% debt amount stipulated in its November 8 order. The order had categorically stated any breach of undertaking will be considered as contempt of court. In addition, by depositing a part of the amount, the respondents sought deferment of the arrest warrant, the court said.
While issuing show cause notice, the HC asked them to reply in four weeks.
