Mumbai, Jan 15: The National Company Law Tribunal (NCLT) has held Sagar Sharma and Vishal Sharma, suspended directors of Juhu-based hotel company Horizon Private Limited, guilty of civil contempt for wilfully disobeying repeated directions of the tribunal and failing to cooperate with the Corporate Insolvency Resolution Process (CIRP).
Tribunal notes wilful disobedience
In a strongly worded order, the tribunal observed that despite multiple opportunities and clear directions, the suspended board persistently failed to extend cooperation to the Resolution Professional (RP), thereby obstructing the insolvency process. The bench noted that their conduct amounted to “wilful, deliberate, and contumacious disobedience” of judicial orders.
One-week imprisonment ordered
The tribunal has sentenced the suspended directors to one week of simple imprisonment in civil prison. However, considering that the respondents are MSME promoters and claiming attachment to the enterprise, the tribunal granted them a final opportunity to purge the contempt.
The bench directed them to hand over possession and control of all properties and assets of the corporate debtor, including the Juhu property, to the Resolution Professional within 30 days from communication of the order. Failing this, the RP has been directed to inform prison authorities for initiating appropriate action.
CIRP background
Hotel Horizon Private Limited is undergoing a Corporate Insolvency Resolution Process (CIRP) pursuant to an order passed on November 19, 2024, on a Section 7 petition filed by Asset Care & Reconstruction Limited (ACRE).
The resolution plan submitted by a consortium comprising Oberoi Realty Limited, Shree Naman Developers Private Limited, and JM Financial Properties and Holdings Limited was approved by the CoC with a 100 per cent voting share on July 14, 2025.
Application by resolution professional
The order was passed on an application filed by the Resolution Professional, Pravin R. Navandar, who sought contempt action against the promoters under the Contempt of Courts Act.
The RP alleged repeated non-compliance with orders dated March 6, March 12, April 2 and June 3, 2025, passed under Section 19 of the IBC, which mandates cooperation by the suspended management.
The RP, in his application, stated that despite emails, directions and warnings—including the possibility of penal action under Section 70 of the IBC—the promoters allegedly failed to hand over books of accounts, records and custody of assets, and even obstructed transaction audits.
Earlier costs, delays noted
The tribunal also took note of earlier orders imposing costs of Rs 1 lakh on the suspended directors for filing frivolous applications and attempting to delay the proceedings. It observed that the repeated filing of interlocutory applications and refusal to comply with binding orders clearly demonstrated an intent to derail the CIRP.
Supreme Court rulings cited
Referring to Supreme Court judgments, the NCLT held that such conduct substantially interfered with the due course of justice and undermined the authority of the tribunal. It noted that insolvency proceedings are time-bound and any obstruction defeats the very object of the IBC.
Proceedings held ex parte
The bench further proceeded ex parte against the respondents after they failed to file replies despite multiple opportunities and did not appear before the tribunal when directed, terming their conduct as showing “lack of respect for the authority of this Tribunal.”
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“The failure to hand over custody and control of assets and withholding of records has materially impeded the Resolution Professional from discharging his statutory duties, including determination of avoidance transactions,” the tribunal observed.
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