No person or institution howsoever powerful can be permitted to misuse the process of the Court, remarked the Supreme Court while considering a contempt petition against directors of Oscar Investments Limited (OIL) and RHC Holding Private Limited.
The court noted that the directors willfully and contumaciously disobeyed the orders of the Court and suppressed relevant material. They had assured the High Court of Delhi that any dealings made by them would not affect the rights of the petitioners.
The bench comprising of Chief Justice of India Ranjan Gogoi, Justice Deepak Gupta and Justice Sanjiv Khanna noted that the contemnors prepared a well thought out scheme of diluting their shareholdings directly or indirectly in FHL to defeat the rights of the petitioner.It said: "These assurances were to the effect that even if the Court permits sale of encumbered shares for payment of debt, it would not have any impact on the (potential) creditors and availability of the funds would only pare down the debt and increase the value of the shares. Contrary to the aforesaid solemn assurances and undertakings, which were repeatedly reiterated to procure orders, the shareholding went into a downward spiral."
"A litigant should always be truthful and honest in court. One who seeks equity must not hide any relevant material.", the Court said. The bench then held that the directors are guilty of committing contempt of court and that they will be heard on the question of sentence.
The court said that their conduct definitely undermines the authority of the Court and the action for committing criminal contempt could have been taken. But by taking a lenient view of the matter we are only treating it as a civil contempt, the bench said.
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