Mr. Pankaj Dhanuka, Liquidator of Lanco Kondapalli Power Limited Vs Lanco Kondapalli Power Limited (NCLAT Chennai)
National Company Law Appellate Tribunal (NCLAT) in Chennai recently dismissed a contempt petition filed by Pankaj Dhanuka against Lanco Kondapalli Power Limited. The petition was based on an alleged violation of an earlier order dated 02.08.2023. In his petition, Dhanuka sought contempt proceedings under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, along with Section 425 of the Companies Act, 2013. He argued that the respondent, a juristic person, had failed to comply with the order, which required certain financial arrangements regarding rent for the use of land. However, the NCLAT ruled that no contempt had occurred, as the alleged violation was not attributable to the company as a juristic entity.
The judgment emphasized the proper application of the provisions under Section 425 of the Companies Act, which allows contempt proceedings to be initiated against individuals representing a company, not against the company itself. The Tribunal pointed out that contempt proceedings can only be maintained if the non-compliance is attributable to an individual, rather than the company as an inanimate juristic person. In this case, the alleged contemnor, M/s. MCM Pacific Pte Limited, did not have an individual responsible for the non-compliance, making the petition untenable. The tribunal also noted that the provisions under Section 60(5) of the IBC cannot be extended beyond their intended scope, particularly when other statutory provisions already govern the situation.
