Withdrawal of Money Not Deemed Wilful Disobedience as Respondents Lacked Knowledge of the Restraint Order at the Time | NCLT

Case Details: Asha Kiran Bawa v. Ramesh C. Bawa - [2025] 170 taxmann.com 611 (NCLT-Mum.)

Judiciary and Counsel Details

• Justice Virendra Singh G. Bisht, (Retd.), Judicial Member & Prabhat Kumar, Technical Member

Facts of the Case

In the instant case, Respondent No. 1 was MD and CEO of IL&FS. The Company petition was filed under section 241 and 242 of the Companies Act, 2013 against IL&FS due to continuous failure of IL&FS to service its debt.

The Serious Fraud Investigation Office (SFIO) ordered an investigation into the affairs of IL&FS and its subsidiaries. On basis of the SFIO’s interim report, the petitioner sought interim reliefs against various respondents inter alia seeking disclosures of movable and immovable properties/assets and further restraining them from mortgaging or creating charge or lien or in any way alienating, movable or immovable properties owned by them, including jointly held properties.

The Tribunal granted such relief and restrained respondents from mortgaging or creating charge or lien or creating third party interest or in any way alienating, movable or immovable properties owned by them, including jointly held properties.

Thereafter, the petitioner filed an instant petition alleging that the respondents were guilty of contempt of the court as they withdrew money from their bank account and operated bank lockers after the restraint order was passed.

It was noted that the act of withdrawal of money from accounts when the restraint order had been passed might constitute a fraudulent act to keep assets away from the scope of the said order but in absence of an order in existence of knowledge of respondents on that day, it could not be said that respondents had wilfully disobeyed the said order.

NCLT Held

The NCLT observed that for bringing an act within the scope of the Contempt, there has to be an order in place and such order has to be brought to the knowledge of affected person prior to time such affected party acts in defiance of such an order.

The NCLT held that the withdrawal of money from the Bank Account prior to the release of the said order could not be said to have resulted into wilful disobedience of the said order. However, respondent No.1 was guilty of civil contempt for defying the restraint order.