O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 1 of 31

$~

* IN THE HIGH COURT OF DELHI AT NEW DELHI

% Judgment reserved on: 15.04.2026

Judgment pronounced on:29.05.2026

+ O.M.P. 1150/2012

KRR INFRA PROJECTS PVT LTD .....Petitioner

Through: Mr. Anmol Wadhwa,

Contemnor No. 1.

Dr. Amit George, Mr. Rajeev

Kumar and Mr. Adhishwar

Suri, Advocates for Contemnor

Nos. 3 to 5.

versus

UNION OF INDIA & ORS .....Respondents

Through: Ms. Anubha Bhardwaj, CGSC

along with Ms. Ananya

Shamshery, Ms. Riddhi Grover,

Mr. Mayank Bawa, Advocates

along with Mr. Yogesh Mittal,

DGMAP.

+ O.M.P. 1151/2012

KRR INFRA PROJECTS PVT LTD .....Petitioner

Through: Mr. Anmol Wadhwa,

Contemnor No. 1.

Dr. Amit George, Mr. Rajeev

Kumar and Mr. Adhishwar

Suri, Advocates for Contemnor

Nos. 3 to 5.

versus

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 2 of 31

UNION OF INDIA & ORS .....Respondents

Through: Ms. Anubha Bhardwaj, CGSC

along with Ms. Ananya

Shamshery, Ms. Riddhi Grover,

Mr. Mayank Bawa, Advocates

along with Mr. Yogesh Mittal,

DGMAP.

CORAM:

HON'BLE MR. JUSTICE HARISH VAIDYANATHAN

SHANKAR

J U D G M E N T

HARISH VAIDYANATHAN SHANKAR, J.

CCP(O) 97/2013 (Contempt petition under Sections 10 & 11 of the

Contempt of Court Act) in O.M.P. 1150/2012

CCP(O) 96/2013 (Contempt petition under Sections 10 & 11 of the

Contempt of Court Act) in O.M.P. 1151/2012

1. The present Contempt Petitions, being CCP(O) No. 97/2013

and CCP(O) No. 96/2013, have been instituted under Sections 10 and

11 of the Contempt of Courts Act, 1971

1

read with Section 151 of

the Code of Civil Procedure, 1908

2

, arising out of O.M.P. No.

1150/2012 and O.M.P. No. 1151/2012

3

, respectively, by the Petitioner

herein, i.e., Union of India

4

, seeking the reliefs in the following

terms:

“(a) Summon the respondent and further be pleased to initiate

the contempt proceedings and punish the contemnor for the

contempt of order dated 15.02.2013; and/or;

(b) Pass any other appropriate order or direction that this

Hon‟ble Court may deem fit and proper in the facts and

circumstances of the present case and in the interest of justice;”

1

CCP Act

2

CPC

3

Section 9 Petitions

4

UOI

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 3 of 31

2. By way of the said Contempt Petitions, the UOI alleges wilful

disobedience of the directions passed by this Court vide Order dated

15.02.2013 in the Section 9 Petitions, which were similarly worded.

The relevant extract of the said Order passed in one of the Section 9

Petitions, namely, O.M.P. No. 1151/2012, reads as follows:

“Rejoinder has not been filed. Same be filed within one week.

Learned counsel for the respondents states that the bank guarantees

are expiring on 2nd March, 2013. Learned counsel for the

petitioner states that he will verify the position and in case the

same are not renewed, the petitioner shall see that the same are

kept alive till the disposal of the petition. Subject to keeping the

bank guarantees alive, the interim order to continue.

List on 19.03.2013.”

3. This Judgment shall decide the aforesaid Contempt Petitions

instituted by the UOI seeking initiation of contempt proceedings

against the common Respondents/Contemnors, namely,

(i) B. Vasu/Respondent No. 1,

(ii) KRR Infra Projects Pvt Ltd

5

/ Respondent No. 2,

(iii) Kunam Raghava Reddy/ Respondent No. 3,

(iv) Kunam Rajani/ Respondent No. 4,

(v) Anil Reddy Kunam/ Respondent No. 5,

for the alleged deliberate and wilful disobedience of the Order dated

15.02.2013 passed by this Court in the Petitions filed under Section 9

of the Arbitration and Conciliation Act, 1996.

4. Since both the Contempt Petitions arise out of substantially

identical facts and circumstances, emanate from similar orders passed

by this Court, involve common parties, and raise overlapping

questions of law and fact concerning the alleged non-renewal of Bank

5

KRR

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 4 of 31

Guarantees

6

despite statements made before this Court, the same are

being disposed of by way of this common Judgment.

5. For the sake of convenience and brevity, the facts, pleadings,

and documents in CCP(O) No. 97/2013 shall be referred to as the lead

case, unless the context otherwise requires.

BRIEF FACTS:

6. KRR is stated to be a private limited company incorporated

under the provisions of the Companies Act, 1956, and engaged in the

execution of civil construction and infrastructure projects.

7. The present dispute arises out of two construction contracts

awarded by the UOI, acting through the Directorate General, Married

Accommodation Project, in relation to the construction of dwelling

units along with allied services at Kolkata.

8. The first contract pertained to the construction of dwelling

units, including allied services for Officers at RRC Line, OD Line,

Rasponja, Hasting Line, and Dakshinishwar, Kolkata, whereas the

second contract pertained to the construction of dwelling units,

including allied services for Officers at Commissionate Road, II Line,

and Salt Lake, Kolkata.

9. Pursuant to the tenders floated by the UOI, KRR submitted its

bids. After following the due procedure, agreements were executed

between the parties. In terms of Clause 26 of the Special Conditions

of Contract

7

, KRR furnished various BGs for Rs. 3,24,00,000/- and

Rs. 1,75,80,000/-, respectively. For ease of reference, the relevant

details with respect to the bank guarantees, which are the subject

6

BGs

7

SCC

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 5 of 31

matter of the present petitions, are reproduced below:

(i) BGs for First Project -

S.

No.

Bank

Guarantee No.

Amount

(Rs.)

Date Bank

1. 2010-11/49 3,24,00,000/- 24.01.2011 to

21.02.2015

State Bank of

India

(ii) Details of BGs with regard to mobilization of advance are as

follows -

S.

No.

Bank

Guarantee No.

Amount

(Rs.)

Date Bank

1. 2010-11/73 40,00,000 03.02.2011 to

02.03.2013

State Bank of

India

2. 2010-11/74 40,00,000 03.02.2011 to

02.03.2013

State Bank of

India

3. 2010-11/72 40,00,000 03.02.2011 to

02.03.2013

State Bank of

India

4. 2010-11/71 40,00,000 03.02.2011 to

02.03.2013

State Bank of

India

5. 2010-11/70 40,00,000 03.02.2011 to

02.03.2013

State Bank of

India

6. 2010-11/68 40,00,000 24.01.2011 to

21.02.2013

State Bank of

India

(iii) BGs for Second Project -

S.

No.

Bank

Guarantee No.

Amount

(Rs.)

Date Bank

1. 2010-11/27 1,75,80,000 17.01.2011

to 16.02.2015

State Bank of

India

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 6 of 31

(iv) Details of BGs with regard to mobilization of advance are as

follows -

S.

No.

Bank

Guarantee No.

Amount

(Rs.)

Date Bank

1. 2010-11/46 25,00,000 18.01.2011

to 17.02.2013

State Bank

of India

2. 2010-11/48 50,00,000 18.01.2011

to 17.02.2013

State Bank

of India

10. As per the contractual stipulations, both projects were required

to be completed within the prescribed contractual period after handing

over of the respective sites. It is the case of the UOI that KRR failed to

adhere to the agreed timelines and committed defaults in performance

of its contractual obligations. Consequently, the UOI initiated steps

for the invocation and encashment of the aforesaid BGs furnished by

KRR.

11. Aggrieved thereby, KRR instituted the Section 9 Petitions,

being O.M.P. No. 1150/2012 and O.M.P. No. 1151/2012, inter alia,

seeking restraint against the invocation and encashment of the

aforesaid BGs.

12. The Section 9 Petitions were initially listed in December 2012

and thereafter came to be listed on various subsequent dates.

Ultimately, the matters were taken up on 15.02.2013, when this Court

passed the Order dated 15.02.2013 in both the Petitions, from which

the present Contempt Petitions arise.

13. It is stated that on 18.02.2013, KRR allegedly addressed a

communication to the concerned bank requesting extension of the

validity of the BGs. However, notwithstanding the said request, the

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 7 of 31

BGs forming the subject matter of the present Petitions were not

renewed or extended and consequently expired upon the lapse of their

respective validity periods.

14. The grievance of UOI in the present proceedings is that, despite

the continuation of interim protection on the aforesaid condition, the

BGs were allegedly not renewed and were permitted to lapse upon

expiry. Further, in accordance with the Order dated 15.02.2013, while

the UOI refrained from proceeding with the encashment of the BGs in

view of the statement recorded before this Court and the continuance

of the interim order, the Respondents‟ subsequent failure to renew or

perpetuate the validity of the BGs amounted to deliberate and wilful

disobedience of the Order dated 15.02.2013.

15. In these circumstances, the present Contempt Petitions came to

be instituted by UOI alleging the commission of civil contempt.

16. Initially, the Petitions were instituted against Respondent Nos. 1

and 2, namely, B. Vasu and KRR Infra Projects Pvt. Ltd.

17. Subsequently, the array of parties was amended and

proceedings were also pursued against the persons stated to be

directors/promoters of KRR, namely Kunam Raghava

Reddy/Respondent No. 3, Kunam Rajani/Respondent No. 4, and Anil

Reddy Kunam/Respondent No. 5 (now deceased).

18. The Respondents/Contemnors thereafter entered appearance

and filed their respective Replies and Affidavits.

19. Broadly stated, the defence set up on behalf of the Respondents

is that there was no deliberate or wilful disobedience of the Order

dated 15.02.2013; that the company had suffered severe financial

distress during the relevant period; that attempts had allegedly been

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 8 of 31

made to secure extension of the BGs from the State Bank of India; and

that certain Respondents were either not Directors at the relevant point

of time or were merely employees having no authority or control over

the renewal of the BGs.

20. It is also pertinent to note that the Section 9 Petitions

subsequently came to be dismissed for non-prosecution vide Orders

dated 05.12.2013.

21. However, the present Contempt Petitions continued to remain

pending for adjudication in relation to the alleged breach of the Order

dated 15.02.2013 passed therein.

CONTENTIONS ON BEHALF OF THE PETITIONER / UOI:

22. Learned counsel appearing on behalf of the UOI has submitted

that the present Contempt Petitions have been instituted on account of

deliberate and wilful disobedience of the Order dated 15.02.2013

passed by this Court in the Section 9 Petitions, whereby continuation

of interim protection against invocation/encashment of the subject

BGs was expressly made conditional upon the said BGs being kept

alive till disposal of the Petitions.

23. It has been submitted that the KRR had obtained interim

protection restraining the UOI from invoking and encashing the BGs

furnished under the respective contracts and, in order to secure

continuation of the said protection, a categorical statement was made

before this Court on 15.02.2013, that reads as under:

“………. Learned counsel for the petitioner states that he will

verify the position and in case the same are not renewed, the

petitioner shall see that the same are kept alive till the disposal of

the petition. Subject to keeping the bank guarantees alive, the

interim order to continue.

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 9 of 31

List on 19.03.2013.”

(emphasis supplied)

24. Learned counsel has submitted that the UOI, acting upon the

statement recorded before this Court and being bound by the interim

order passed pursuant thereto, refrained from proceeding with the

encashment of the BGs. However, despite having secured the

continuance of the interim protection, the Respondents failed to renew

and keep the BGs alive, as a consequence whereof, the BGs expired

upon the lapse of their respective validity periods.

25. It has further been contended that the conduct of the

Respondents in allowing the BGs to lapse, despite continuation of

interim protection solely on the condition that the BGs would be kept

alive, amounted to clear, conscious, and wilful disobedience of the

Order dated 15.02.2013 and the statement made before this Court.

26. Learned counsel for the Petitioner further submitted that under

Clause 26 of the SCC, the mobilization advance released to KRR was

contractually required to be secured and recovered through the

mechanism contemplated under the agreements, including the

furnishing and maintenance of valid BGs. It has been contended that

substantial mobilization advances had been released by the UOI and

that the Respondents had failed to fulfil their contractual obligations,

thereby compelling the UOI to initiate steps towards the invocation of

the BGs.

27. It has additionally been contended that the plea sought to be

raised by the Respondents regarding financial hardship or inability to

secure renewal of the BGs cannot absolve them from compliance with

a solemn statement recorded before this Court, particularly when

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 10 of 31

continuance of the interim protection was expressly made conditional

upon the BGs remaining alive.

28. Learned counsel for the Petitioner has further submitted that the

subsequent stand taken by certain Respondents that they were not

Directors or persons-in-authority of KRR at the relevant point of time

or that they lacked knowledge of the proceedings was an afterthought

and liable to be rejected.

29. In this regard, it has been contended that the Contempt Petitions

initially came to be instituted against Respondent No. 1 and

Respondent No. 2, and thereafter, upon disclosures made during the

course of proceedings regarding the actual management and

directorship of KRR, the additional Directors/Promoters were

impleaded in order to ensure effective adjudication of the Contempt

proceedings.

30. On the aforesaid basis, learned counsel for the UOI has

submitted that the actions of the Respondents disclose deliberate and

contumacious disregard of the said Order passed by this Court and,

therefore, the Respondents are liable to be proceeded against and

punished for civil contempt under Sections 10 and 11 of the CCP Act.

CONTENTIONS ON BEHALF OF THE RESPONDENTS /

CONTEMNORS:

31. Per contra, the Respondents/Contemnors have opposed the

present Contempt Petitions and have contended that there has been no

deliberate, intentional, or wilful disobedience of the Order dated

15.02.2013 passed by this Court in the Section 9 Petitions.

32. As per the record, Respondent No. 1, namely, B. Vasu, filed an

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 11 of 31

Affidavit dated 28.07.2016 in the Contempt Petitions, wherein it has

been contended that he was merely a salaried employee of KRR and

was neither the promoter nor the ultimate decision-maker in relation to

the affairs of KRR. It has further been averred that the decisions

concerning renewal and perpetuation of the BGs were entirely within

the domain of the Promoters/Directors of KRR and that he had no

independent authority to take decisions in that regard.

33. It has further been submitted by Respondent No. 1 that he had

resigned from the Company on health grounds w.e.f. 15.06.2013, and

that his resignation came to be accepted upon completion of the notice

period on 13.07.2013.

34. Respondent No. 1 has also contended that upon being

summoned by this Court, he had duly appeared and furnished

particulars regarding the Promoters/Directors of KRR, pursuant to

which notices were subsequently issued to the said Directors.

35. Respondent No. 1 had further tendered an unconditional

apology and prayed for exoneration from the Contempt proceedings

on the ground that he had acted bona fide and had complied with all

directions issued by this Court.

36. Respondent No. 2/KRR, along with Respondent No. 5, Kunam

Anil Reddy, filed a detailed Counter Affidavit/Reply dated

07.12.2018. In the said reply, the said Respondents have contended

that during the relevant period, the Company was executing multiple

infrastructure projects across different States and had over-extended

itself financially, which allegedly resulted in severe financial distress

and eventual classification of its accounts as Non-Performing Assets

8

8

NPA

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 12 of 31

by the State Bank of India on 27.11.2012.

37. The said Respondents have further contended that several

contracts awarded to KRR by various authorities had also come to be

terminated during the relevant period, thereby aggravating the

financial condition of KRR. In support thereof, reliance has been

placed upon, inter alia, the termination letter dated 25.06.2012 issued

by the Airports Authority of India in relation to the Tirupati Airport

Project.

38. It has further been contended that after the Order dated

15.02.2013 was passed by this Court, the management of KRR

immediately approached the State Bank of India seeking extension

and renewal of the BGs. In this regard, reliance has been placed upon

a letter dated 18.02.2013 addressed by KRR to the State Bank of India

requesting extension of the validity of the BGs. However, according

to the said Respondents, the State Bank of India declined to renew the

BGs in view of the deteriorated financial position of KRR and the

classification of its accounts as NPA.

39. The said Respondents have further contended that despite best

efforts undertaken by KRR to secure renewal of the BGs and to

arrange alternate financial resources, the guarantees could not be kept

alive due to circumstances beyond the control of KRR. It has, thus,

been submitted that the essential ingredient of “wilful disobedience”

was absent and, therefore, no case of Civil Contempt was made out.

40. The said Respondents also contended that substantial recoveries

had already been effected by the UOI against the mobilization

advance and that considerable amounts payable to the Company,

along with plant and machinery belonging to KRR, continued to

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 13 of 31

remain with the UOI. It has additionally been contended that disputes

pertaining to invocation and recovery under the BGs were already the

subject matter of arbitral proceedings and, therefore, no prejudice had

been caused to the Petitioner.

41. Respondent No. 3, namely, Kunam Raghava Reddy, filed his

Reply/Affidavit in December, 2018, wherein he has adopted the stand

taken by Respondent No. 2, KRR, in its Reply dated 07.12.2018 and

reiterated that there had been no deliberate or intentional disobedience

of the Order dated 15.02.2013. It has specifically been contended that

Respondent No. 3 had resigned from the Board of Directors of KRR

w.e.f. 09.09.2016, and that the requisite documents evidencing

resignation and filings before the Registrar of Companies had been

placed on record.

42. Respondent No. 3 has further contended that KRR had suffered

acute financial distress during the period 2012-2013 and that several

other employers had also invoked BGs issued by KRR, thereby

placing additional financial burden upon the Company and materially

impairing its ability to secure renewal of the subject BGs.

43. Respondent No. 4, namely, Kunam Rajani, filed her

Reply/Affidavit in December-2018, wherein it has been contended

that she was not a Director of KRR on the relevant date, i.e.,

15.02.2013, having already resigned from KRR w.e.f. 25.03.2012. In

support thereof, Respondent No. 4 has relied upon copies of her

resignation letter, acceptance thereof by KRR, and the statutory filings

made before the Registrar of Companies evidencing cessation from

directorship.

44. Respondent No. 4 has further adopted the stand taken by KRR

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 14 of 31

in its Reply dated 07.12.2018 and contended that there was no wilful

or deliberate disobedience of the said Order. It has additionally been

contended that the inability to renew the BGs arose solely on account

of the severe financial condition of KRR and circumstances beyond

the control of the Respondents.

45. Dr. Amit George, learned counsel appearing on behalf of

Respondent Nos. 3 and 4, during the oral arguments, has submitted

that the said Respondents came to know about the pendency of the

present Contempt proceedings only in the year 2018 upon service

being effected upon them. He has submitted that prior thereto,

Respondent No. 1 was managing the affairs of KRR and was

representing himself as being in charge of KRR‟s operations.

46. Learned counsel has further contended that Respondent Nos. 3

and 4 were not directors of KRR at the relevant point in time when the

alleged undertaking was recorded by this Court on 15.02.2013, and,

therefore, no liability for contempt could be attributed to them in the

absence of any direct role, participation, or knowledge concerning the

proceedings in question.

47. Dr. Amit George has also placed reliance upon the judgment

rendered by the Division Bench of this Court in Vijay Kumar Bhatia

v. Som Datt Enterprises Ltd.

9

, to contend that “wilful disobedience”

constitutes an essential ingredient for attracting Civil Contempt

jurisdiction and that where non-compliance arises on account of

genuine financial hardship or circumstances beyond the control of a

party, the same would not amount to contumacious conduct

warranting initiation of Contempt action. The relevant portion of the

9

2018 SCC OnLine Del 12764

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 15 of 31

said Judgment reads as follows:

“19. The above submissions have been considered. The key

question to be addressed by the Court is, keeping in view the facts

and circumstances of the case, can the Appellant be said to have

committed civil contempt as defined under Section 2 (b) of the

Act? In other words is the conduct of the Appellant „wilful

disobedience‟ of „any judgment, decree, direction, order, writ or

other process of a Court‟ or „wilful breach of an undertaking given

to a Court‟? The key adjective that is required to be focused on is

„wilful‟.

*****

27. It is in the above context that the Court has to examine whether

the failure by the Appellant to comply with the undertaking given

to the Court to make payment which was recorded in the order

dated 30

th

July, 1997 in the execution proceedings can be stated to

be „wilful‟. What comes across is the inability of the Appellant to

make payment and not that the Appellant wilfully breached the

undertaking given to the Court.

28. There must be some credible material to show that the

Appellant has deliberately and consciously avoided making

payment despite having the resources. That is absent in the present

case. In other words, there is nothing placed on record either before

the learned Single Judge or this Court that helps conclude that the

present Appellant deliberately misled the Respondent or even the

Court by giving a false undertaking with no intention of complying

with such an undertaking. This was the crucial aspect that was

required to be examined by the learned Single Judge.

29. The Court finds no finding in the impugned order of the

learned Single Judge that the conduct of the Appellant answers the

description of „civil contempt‟ under Section 2 (b) read with

Section 12 of the Act. In other words, there is no finding by the

learned Single Judge that the conduct of the Appellant constitutes

„wilful breach of the undertaking given to the Court.‟

30. To reiterate, while the Appellant could be said to be in breach

of the undertaking given by him to the Court, the facts placed on

record do not persuade this Court to hold that he was in „wilful

breach‟ of such undertaking given to the Court.”

(emphasis supplied)

48. On the aforesaid basis, learned counsel appearing on behalf of

Respondent Nos. 3 and 4, has submitted that the present case does not

disclose any deliberate, conscious, or contumacious disobedience of

the Order dated 15.02.2013 and that the inability to renew the BGs

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 16 of 31

arose solely on account of severe financial constraints and

circumstances beyond the control of the Respondents. It has,

therefore, been prayed that the present Contempt Petitions, being

devoid of the essential ingredient of “wilful disobedience”, are liable

to be dismissed.

ANALYSIS:

49. This Court has perused the record, pleadings, affidavits, and

documents placed on record in the present Contempt Petitions and has

considered the submissions advanced by learned counsel for the

parties. With the assistance of learned counsel, this Court has also

examined the relevant Orders passed in the Section 9 Petitions, along

with the Replies and Affidavits filed on behalf of the respective

Respondents/Contemnors.

50. Before adverting to the merits of the rival submissions and

examining whether the Respondents/Contemnors are liable to be

proceeded against for Civil Contempt, it would be apposite to briefly

examine the scope and purport of Civil Contempt under the CCP Act.

51. Section 2(b) of the CCP Act defines “Civil Contempt” in the

following terms:

“2. Definitions.-

In this Act, unless the context otherwise requires,-

***

(b) „civil contempt‟ means wilful disobedience to any judgment,

decree, direction, order, writ or other process of a court or wilful

breach of an undertaking given to a court;”

52. A plain reading of the aforesaid provision makes it abundantly

clear that every act of non-compliance would not ipso facto amount to

Civil Contempt. The statute consciously employs the expression

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 17 of 31

“wilful disobedience”, thereby requiring the Court to examine whether

the alleged breach was deliberate, intentional, and contumacious in

nature.

53. In this regard, reference may also be made to the meaning

attributed to the expression “wilful” in Black‟s Law Dictionary, Sixth

Edition, wherein the term has been explained to mean an act done

knowingly, intentionally, deliberately, and with a conscious disregard

of legal obligation, as distinguished from an accidental, involuntary,

or unintentional act. The relevant portion of the definition reads as

follows:

“Proceeding from a conscious motion of the will; voluntary;

knowingly; deliberate. Intending the result which actually comes to

pass; designed; intentional; purposeful; not accidental or

involuntary. Premeditated; malicious; done with evil intent, or with

a bad motive or purpose, or with indifference to the natural

consequences; unlawful; without legal justification. An act or

omission is “willfully” done, if done voluntarily and intentionally

and with the specific intent to do something the law forbids, or

with the specific intent to fail to do something the law requires to

be done; that is to say, with bad purpose either to disobey or to

disregard the law. It is a word of many meanings, with its

construction often influenced by its context. In civil actions, the

word (willfully) often denotes an act which is intentional, or

knowing, or voluntary, as distinguished from accidental. But when

used in a criminal context it generally means an act done with a

bad purpose; without justifiable excuse; stubbornly, obstinately,

perversely.”

54. At this juncture, it would be apposite to refer to the decision of

the Hon‟ble Supreme Court in Celir LLP v. Sumati Prasad Bafna

10

,

wherein, while examining the scope and ambit of Civil Contempt

under Section 2(b) of the CCP Act, the Hon‟ble Supreme Court

reiterated that the expression “wilful disobedience” necessarily

connotes a deliberate, conscious, and intentional act of disobedience.

10

2024 SCC OnLine SC 3727

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 18 of 31

The relevant observations are reproduced hereunder:

“184. In Ashok Paper Kamgar Union v. Dharam Godha, (2003)

11 SCC 1, the expression „wilful disobedience‟ in the context of

Section 2(b) of the Act, 1971 was read to mean an act or omission

done voluntarily and intentionally with the specific intent to do

something, which the law forbids or with the specific intention to

fail to do something which the law requires to be done. Wilfulness

signifies deliberate action done with evil intent and bad motive and

purpose. It should not be an act, which requires and is dependent

upon, either wholly or partly, any act or omission by a third party

for compliance.

185. Hence, the expression or word “wilful” means act or omission

which is done voluntarily or intentionally and with the specific

intent to do something which the law forbids or with the specific

intent to fail to do something the law requires to be done, that is to

say with bad purpose either to disobey or to disregard the law. It

signifies a deliberate action done with evil intent or with a bad

motive or purpose.

***

188. In Ram Kishan v. Tarun Bajaj, (2014) 16 SCC 204 it was

held that the contempt jurisdiction conferred on to the law courts

power to punish an offender not only for his wilful disobedience

but also for contumacious conduct or obstruction to the majesty of

law. It further observed that such power has been conferred for the

simple reason that the respect and authority commanded by the

courts of law are the greatest guarantee to an ordinary citizen that

his rights shall be protected and the entire democratic fabric of the

society will crumble down if the respect of the judiciary is

undermined. The relevant observations read as under:-

“11. The contempt jurisdiction conferred on to the law

courts power to punish an offender for his wilful

disobedience/contumacious conduct or obstruction to the

majesty of law, for the reason that respect and authority

commanded by the courts of law are the greatest guarantee

to an ordinary citizen that his rights shall be protected and

the entire democratic fabric of the society will crumble

down if the respect of the judiciary is

undermined. Undoubtedly, the contempt jurisdiction is a

powerful weapon in the hands of the courts of law but that

by itself operates as a string of caution and unless, thus,

otherwise satisfied beyond reasonable doubt, it would

neither be fair nor reasonable for the law courts to exercise

jurisdiction under the Act. The proceedings are quasi-

criminal in nature, and therefore, standard of proof

required in these proceedings is beyond all reasonable

doubt. It would rather be hazardous to impose sentence for

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 19 of 31

contempt on the authorities in exercise of the contempt

jurisdiction on mere probabilities. […]”

(Emphasis supplied)

*****

194. In Patel Rajnikant (supra) this Court upon examining Section

2(b) of the Act, 1971 held that to hold a person guilty of having

committed contempt, there must be a judgment, order, direction

etc. by a court, there must be disobedience of such judgment,

order, direction etc and that such disobedience must be willful. The

relevant provisions read as under:—

“58. The provisions of the Contempt of Courts Act,

1971 have also been invoked. Section 2 of the Act is a

definition clause. Clause (a) enacts that contempt of court

means “civil contempt or criminal contempt”. Clause (b)

defines “civil contempt” thus:

“2. (b) „civil contempt‟ means wilful

disobedience to any judgment, decree,

direction, order, writ or other process of a

court or wilful breach of an undertaking given

to a court;”

Reading of the above clause makes it clear that the

following conditions must be satisfied before a person can

be held to have committed a civil contempt:

(i) there must be a judgment, decree, direction, order, writ

or other process of a court (or an undertaking given to a

court);

(ii) there must be disobedience to such judgment, decree,

direction, order, writ or other process of a court (or breach

of undertaking given to a court); and

(iii) such disobedience of judgment, decree, direction,

order, writ or other process of a court (or breach of

undertaking) must be wilful.”

***

197. Contempt jurisdiction exists to preserve the majesty and

sanctity of the law. Courts are the guardians of justice, and their

decisions must command respect and compliance to ensure the

proper functioning of society. When individuals or entities

challenge the authority of courts through wilful disobedience or

obstructive behaviour, they undermine the rule of law and create

the risk of anarchy. Contempt serves as a mechanism to protect the

integrity of the courts, ensuring that they remain a symbol of

fairness, impartiality, and accountability.

198. When judicial orders are openly flouted or court proceedings

are disrespected, it sends a signal that the rule of law is ineffective,

leading to a loss of trust in the system. Judicial decisions must

remain unimpaired, free from external pressures, manipulation, or

circumvention. Acts that attempt to mislead the court, obstruct its

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 20 of 31

functioning or frustrate its decisions distort the process of justice

and would amount to contempt.

199. The contempt jurisdiction of this court cannot be construed by

any formulaic or rigid approach. Merely because there is no

prohibitory order or no specific direction issued the same would

not mean that the parties cannot be held guilty of contempt. The

Contempt jurisdiction of the court extends beyond the mere direct

disobedience of explicit orders or prohibitory directions issued by

the court. Even in the absence of such specific mandates, the

deliberate conduct of parties aimed at frustrating court proceedings

or circumventing its eventual decision may amount to contempt.

This is because such actions strike at the heart of the judicial

process, undermining its authority and obstructing its ability to

deliver justice effectively. The authority of courts must be

respected not only in the letter of their orders but also in the

broader spirit of the proceedings before them.

200. Any contumacious conduct of the parties to bypass or nullify

the decision of the court or render it ineffective, or to frustrate the

proceedings of the court, or to enure any undue advantage

therefrom would amount to contempt. Attempts to sidestep the

court's jurisdiction or manipulate the course of litigation through

dishonest or obstructive conduct or malign or distort the decision

of the courts would inevitably tantamount to contempt sans any

prohibitory order or direction to such effect.

201. Thus, the mere conduct of parties aimed at frustrating the

court proceedings or circumventing its decisions, even without an

explicit prohibitory order, constitutes contempt. Such actions

interfere with the administration of justice, undermine the respect

and authority of the judiciary, and threaten the rule of law.”

(emphasis supplied)

55. Thus, as observed by the Hon‟ble Supreme Court in Celir LLP

(supra), a person can be held guilty of Civil Contempt only when the

Court is satisfied that the following three foundational ingredients are

established:

(i) The existence of a judgment, decree, direction,

order or undertaking of a Court;

(ii) Disobedience or breach thereof; and

(iii) Such disobedience is wilful, deliberate and

intentional in nature.

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 21 of 31

56. In the facts of the present case, there is no dispute with respect

to the first two foundational requirements, namely, the existence of the

orders passed by this Court and the alleged breach or non-compliance

thereof. The principal issue that thus falls for consideration before this

Court is whether such disobedience was wilful, deliberate and

intentional so as to constitute Civil Contempt within the meaning of

the CCP Act.

57. It also requires consideration that, in terms of the Orders dated

15.02.2013, the obligation concerning the renewal and continued

maintenance of the BGs was cast upon a corporate entity, namely,

KRR. Consequently, before any liability for contempt can be fastened

upon the individuals concerned, the requirements contemplated under

Sections 12(4) and (5) of the CCP Act are necessarily required to be

satisfied.

58. In the aforesaid legal backdrop, this Court now proceeds to

examine the facts of the present case, the nature and effect of the

Orders dated 15.02.2013, the conduct of the Respondents/Contemnors

and, more particularly, the role attributable to each of the persons

sought to be proceeded against in the present Contempt Petitions.

Role of B. Vasu (Respondent No. 1)

59. This Court has carefully considered the stand taken by

Respondent No. 1, namely, B. Vasu, in his Affidavit dated

28.07.2016, wherein he has sought to portray himself as a mere

employee of KRR, devoid of any decision-making authority or control

over the affairs of KRR. However, upon a conjoint reading of the

material placed on record, this Court finds the said defence to be

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 22 of 31

untenable and self-contradictory.

60. It is pertinent to note that in IA No. 15789/2013 dated

29.07.2015 filed in CCP(O) No. 97/2013, seeking Cancellation of

Bailable Warrants, Respondent No. 1 himself placed on record his

Resignation letter dated 15.06.2013, wherein he unequivocally

described himself as “Director (Projects)” of KRR Infra Projects Pvt.

Ltd.

61. The relieving letter issued by the Company further evidences

that he continued in such capacity till 15.07.2013. Significantly, the

Orders dated 15.02.2013, which have been violated, was passed

during the period when Respondent No. 1 admittedly continued to

hold office in the Company.

62. The plea sought to be urged, that Respondent No. 1 was merely

a salaried employee and not concerned with the affairs of the

Company, cannot be accepted in light of his own documents and

conduct on record. The material placed before this Court clearly

demonstrates that Respondent No. 1 was actively representing KRR

and was sufficiently entrusted with its operational affairs at the

relevant point of time.

63. That apart, Respondent No. 1 admittedly remained aware of the

proceedings pending before this Court and continued to participate

therein. Even in his own Affidavit, Respondent No. 1 has

acknowledged that he had furnished details regarding the

Promoters/Directors of KRR pursuant to directions of this Court. Such

conduct unmistakably establishes his knowledge of the said Order and

the obligation cast upon KRR to ensure that the BGs remained alive.

64. In the considered opinion of this Court, once interim protection

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 23 of 31

against invocation of the BGs had been continued by this Court

subject to the condition that the BGs would be kept alive, considering

the role that Respondent No. 1 was performing in the Company,

particularly with respect to taking care of the legal affairs and

furnishing particulars to the Court, and admittedly functioning as

Director (Projects) on the relevant date, therefore, he cannot now seek

to evade responsibility by taking a belated plea of absence of

authority.

65. The subsequent failure to renew or perpetuate the validity of the

BGs, despite full knowledge of the Order dated 15.02.2013 and

despite continuation of interim protection operating in favour of KRR,

clearly discloses conscious disregard of the directions passed by this

Court. Accordingly, this Court is of the considered view that

Respondent No. 1 cannot escape liability merely by describing

himself as a nominal employee, when the contemporaneous record

demonstrates otherwise.

Role of KRR Infra Projects Pvt. Ltd. & Kunam Anil Reddy

(Respondent Nos. 2 and 5, respectively)

66. At the outset, it may be noted that Respondent No. 2, namely

KRR Infra Projects Pvt. Ltd., and Respondent No. 5, namely Kunam

Anil Reddy, have filed a common Counter-Affidavit/Reply dated

07.12.2018 and have jointly sought to justify the non-renewal of the

subject BGs.

67. The principal defence sought to be urged by the said

Respondents is that, subsequent to the Order dated 15.02.2013, KRR

had addressed a communication dated 18.02.2013 to the State Bank of

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 24 of 31

India requesting extension of the validity of the BGs. It has been

contended that the said request came to be declined by the Bank in

view of the deteriorated financial position of KRR, termination of

several contracts, and classification of the KRR‟s account as NPA on

27.11.2012.

68. However, beyond placing reliance upon the aforesaid

communication dated 18.02.2013, no cogent material has been placed

on record by KRR to substantiate that any genuine or meaningful

endeavour was undertaken to comply with the Order dated 15.02.2013

passed by this Court. There is no material, evidencing any follow-up

correspondence with the Bank, any alternative arrangement sought to

be created for renewal of BGs, or any attempt to furnish collateral

securities or substitute financial instruments so as to ensure that the

BGs remained alive in terms of the undertaking recorded before this

Court.

69. In the considered view of this Court, once interim protection

against the invocation of the BGs had been continued solely on the

condition that the BGs would remain alive till disposal of the

Petitions, a corresponding obligation was cast upon KRR and the

persons who were part of the management to take all necessary steps

to ensure strict compliance thereof. Mere forwarding of a solitary

request letter to the Bank, unsupported by any subsequent effort or

demonstrable diligence, cannot be construed as sufficient compliance

with the solemn assurance recorded before this Court.

70. This Court also cannot overlook the conduct of KRR during the

pendency of the present proceedings. The record reflects repeated

non-appearance before this Court despite the issuance of notices from

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 25 of 31

time to time. The cumulative conduct of KRR reflects indifference

towards the proceedings and reinforces the conclusion that the

obligation cast by the Order dated 15.02.2013 was not treated with the

seriousness it deserved.

71. Insofar as Respondent No. 5, namely, Kunam Anil Reddy, is

concerned, it has been brought to the notice of this Court that the said

Respondent expired during the pendency of the proceedings. Since

Contempt jurisdiction is personal and quasi-criminal in nature, the

proceedings cannot continue against a deceased contemnor.

Consequently, the contempt proceedings, insofar as they relate to

Respondent No. 5, stand abated.

Role of Kunam Raghava Reddy (Respondent No. 3)

72. Respondent No. 3, namely, Kunam Raghava Reddy, has

substantially adopted the stand taken by KRR in its counter-

Affidavit/Reply dated 07.12.2018 by attributing the non-renewal of

the BGs to the adverse financial condition of KRR.

73. However, upon examination of the material placed on record,

this Court is unable to accept the defence sought to be projected by

Respondent No. 3.

74. The record unequivocally reflects that on the date when the

Order dated 15.02.2013 came to be passed by this Court, Respondent

No. 3 was admittedly functioning as a Director of KRR. The

documents placed on record by Respondent No. 3 himself indicate

that his resignation from the Board of Directors became effective only

on 09.09.2016, i.e., substantially after the alleged act of disobedience

had already occurred upon expiry of the BGs in February/March,

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 26 of 31

2013.

75. In the considered opinion of this Court, a person occupying the

position of Director in a company cannot be permitted to disassociate

himself from obligations arising out of judicial proceedings in which

the company itself had sought and obtained equitable interim

protection from the Court. The continuance of the interim Order was

predicated on the life of the Order, and, therefore, the responsibility to

ensure compliance with the terms of the directions necessarily rested

upon those managing/conducting/taking care of the affairs or

controlling the affairs of KRR at the relevant point of time.

76. Significantly, apart from adopting the explanation furnished by

KRR regarding financial hardship, Respondent No. 3 has failed to

place any independent material demonstrating that any effective or

bona fide steps were undertaken by him to ensure compliance with the

Order dated 15.02.2013 of this Court. Mere reliance upon the alleged

financial incapacity of KRR cannot dilute the binding nature of a

direction passed by a Court, particularly where the benefit of interim

protection had already been availed on the strength of the assurance

recorded before the Court.

77. The subsequent resignation of Respondent No. 3 in the year

2016 does not obliterate or efface the obligations that existed at the

time when the alleged Contempt was committed. The relevant

consideration for the purposes of contempt jurisdiction is the position

held and the responsibility discharged at the time of the occurrence of

the alleged disobedience.

78. Viewed thus, this Court is satisfied that Respondent No. 3,

being a Director of KRR at the relevant point of time and being

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 27 of 31

responsible for the affairs of KRR, failed to ensure compliance with

the directions contained in the said Order, thereby rendering himself

liable for wilful disobedience of the said Order.

79. This Court is also of the considered opinion that reliance placed

by learned counsel for the Respondent Nos. 3 and 4 upon Vijay

Kumar Bhatia (supra) is misplaced and clearly distinguishable on

facts.

80. In the said case, the Division Bench of this Court was dealing

with Contempt arising out of execution proceedings concerning a

money decree, wherein the Court found the absence of any material

demonstrating deliberate or conscious avoidance on the part of the

alleged contemnor. The Division Bench, in fact, noticed that the

Decree Holder itself had failed to diligently pursue the execution

proceedings, and no finding of “wilful breach” had been returned by

the learned Single Judge.

81. The present case stands on an entirely different footing. Here,

the continuation of protection was expressly made conditional upon

keeping the BGs alive. Having availed the benefit of such protection,

the Respondents were under a clear obligation to ensure strict

compliance with the condition imposed by this Court. The subsequent

expiry of the BGs, without any cogent material demonstrating bona

fide efforts for renewal or compliance, cannot be equated with mere

financial inability as contemplated in Vijay Kumar Bhatia (supra).

82. In any event, the claim of financial inability does not inspire the

confidence of this Court. The material relied upon by the Respondents

for the purpose of canvassing their financial difficulty is merely on the

basis of an unsupported averment in the Affidavit that in the year

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 28 of 31

2012-13, the Respondent Company‟s bank accounts were declared

NPA. Additionally, there is an absence of any corroborative evidence

placed on record to substantiate this assertion.

83. Furthermore, it is well known that merely because a borrower‟s

account is declared NPA at a certain point in time, it does not attain

the status of permanence, and upon the borrower displaying financial

prudence and ensuring proper operations of the account, the account

can be declassified from the status of a NPA by a process of

“upgrading”.

84. In fact, and as is evident, the Company appears to have been

admitted into a CIRP process only sometime in the year 2021. There

is thus, clearly, no evidence of the alleged financial difficulty being

faced by the KRR. To the contrary, the letters relied upon by the

Respondents, which have been addressed to the Bank, make it evident

that the Respondent was actively involved in various other high-ticket

projects and generating revenues from them. These communications

also evidence that the Respondent was raising finances from various

other sources for the other projects and did not appear to be

completely strapped for finances.

85. From the material on record, it is apparent that the Respondent

not only had the wherewithal, but also the resources and the attempt

on the part of the Respondent to portray otherwise is unacceptable.

This Court also takes note of the fact that the State Bank of India was

not the only banker with whom the Respondent maintained facilities.

The Respondent maintained financial relations with at least one more

bank, being the Karnataka Bank and had availed of their services for

the issuance of BGs in respect of another project.

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 29 of 31

Role of Kunam Rajani (Respondent No. 4)

86. Respondent No. 4, namely, Kunam Rajani, has filed an

independent Reply/Affidavit wherein she has substantially adopted the

stand taken by KRR while simultaneously asserting that she was not

associated with the affairs of KRR as a Director at the relevant point

of time when the Order dated 15.02.2013, came to be passed by this

Court.

87. A perusal of the material placed on record reveals that

Respondent No. 4 had tendered her resignation from the directorship

of KRR much prior to the passing of the Order dated 15.02.2013.

88. In support thereof, Respondent No. 4 has placed on record

copies of her resignation letter, the acceptance thereof by KRR, and

the corresponding statutory filings made before the Registrar of

Companies, evidencing cessation from directorship w.e.f. 25.03.2012.

89. The aforesaid documents have neither been disputed nor

rebutted by the Petitioner. The contemporaneous corporate records

placed before this Court sufficiently establish that Respondent No. 4

had demitted office nearly one year prior to the date on which the

undertaking came to be recorded, and the directions concerning

continuation of the BGs were passed by this Court.

90. In the considered view of this Court, contempt jurisdiction,

being quasi-criminal in nature, cannot be invoked in the absence of a

clear and demonstrable nexus between the alleged contemnor and the

act constituting wilful disobedience. Liability for Civil Contempt

cannot be fastened merely on account of a past association with a

company, unless it is shown that the person sought to be proceeded

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 30 of 31

against was in charge of and responsible for compliance with the

Order dated 15.02.2013 at the relevant point of time.

91. In the present case, the record does not disclose any material

indicating that Respondent No. 4 continued to exercise any control

over the affairs of KRR after her resignation on 25.03.2012 or that she

participated in the proceedings culminating in the Order dated

15.02.2013. On the contrary, the documents on record clearly indicate

severance of her directorial relationship with KRR well prior to the

alleged act of disobedience.

92. In view of the aforesaid, this Court is unable to hold that

Respondent No. 4 had either the authority, responsibility, or

functional capacity to ensure compliance with the Order dated

15.02.2013. Consequently, no case of wilful disobedience is made out

against Respondent No. 4, and she is accordingly discharged from the

present Contempt proceedings.

DECISION:

93. In view of the aforesaid, this Court finds that Respondent No. 1,

namely, B. Vasu, Respondent No. 2, namely, KRR Infra Projects Pvt.

Ltd., and Respondent No. 3, namely, Kunam Raghava Reddy, were

responsible for the affairs and management of Respondent No. 2

Company at the relevant point of time and were fully aware of the

directions contained in the Orders dated 15.02.2013.

94. However, no cogent material has been placed on record

demonstrating bona fide and diligent efforts undertaken to ensure

compliance with the said order or to keep the BGs alive in terms

thereof.

O.M.P. 1150/2012 & O.M.P. 1151/2012 Page 31 of 31

95. In the considered opinion of this Court, the conduct of

Respondent Nos. 1 to 3 reflects conscious disregard of the condition

imposed by this Court while continuing equitable interim protection in

their favour. Accordingly, this Court holds Respondent No. 1 - B.

Vasu, Respondent No. 2 - KRR Infra Projects Pvt. Ltd., and

Respondent No. 3 - Kunam Raghava Reddy, guilty of Civil Contempt

for wilful disobedience of the Order dated 15.02.2013 passed by this

Court.

96. Insofar as Respondent No. 4, namely, Kunam Rajani, is

concerned, the record sufficiently establishes that she had ceased to be

a Director of KRR much prior to the passing of the Order dated

15.02.2013. Consequently, no case of wilful disobedience is made out

against her, and she stands discharged from the present proceedings.

97. Further, in view of the demise of Respondent No. 5, namely,

Kunam Anil Reddy, the present Contempt proceedings against him

stand abated.

98. In view of the foregoing findings, list these Contempt Petitions

for hearing on sentencing on 17.07.2026.

99. The Contemnors, namely, Respondent No. 1 and Respondent

No. 3 are directed to remain present in person before this Court on that

date.

HARISH VAIDYANATHAN SHANKAR, J.

MAY 29, 2026/kr/kv