Delhi High Court
Dholi Spintex Private Limited vs Louis Dreyfus Company India Pvt. ... on 24 November, 2020
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Reserved on: 18th November, 2020
Decided on: 24th November, 2020
+ CS(COMM) 286/2020
DHOLI SPINTEX PVT. LTD. ..... Plaintiff
Represented by: Mr.Nakul Dewan and Mr.Devang
Nanavati, Sr. Advocates with
Mr.Rishi Agrawala, Mr.Karan Luthra,
Ms.Prachiti Shah, Ms.Aarushi Tiku,
Ms.Anushka Shah, Mr.Sambit Nanda
and Mr.Dev Shah, Advocates.
versus
LOUIS DREYFUS COMPANY INDIA PVT. LTD...... Defendant
Represented by: Mr.Jayant K. Mehta, Mr.Rakesh K.
Ojha, Mr.Sanjeev Sarawast,
Mr.Achintya Dwivedi, Mr.Surya
Kapoor, Mr.Pranay Chitale,
Mr.Ankush Chattopadhyay and
Mr.Arjun Parashar, Advocates.
CORAM:
HON'BLE MS. JUSTICE MUKTA GUPTA
I.A. 8685/2020 (under Order XXXIX Rule 1 and 2 CPC-By plaintiff)
1. In the above noted suit arguments were concluded by the parties on
24th September, 2020 when the suit was reserved for orders, whereafter the
plaintiff-Dholi Spintex Pvt. Ltd. (in short „Dholi Spintex‟) filed this
application seeking interim injunction inter-alia on the ground that the
defendant-Louis Dreyfus Company India Pvt. Ltd (in short „Louis Dreyfus‟)
in utter disregard to the undertakings before this Court has been
clandestinely participating in the proceedings before the ICA despite having
made a statement before this Court that it is not required any further to
participate in the same and has virtually rendered the suit infructuous.
Signature Not Verified
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Therefore, Dholi Spintex prays for a temporary injunction restraining the
defendant-Louis Dreyfus from proceeding with and/or continuing with
and/or participating in any manner whatsoever in the proceedings referred to
as ICA Reference No.LOU005.0004/AO1 2020 24 initiated before the
International Cotton Association (in short „ICA‟) including making any
payments pursuant to the directions of the ICA in its email dated 24th
September, 2020.
2. When this application came up before this Court on 28 th September,
2020 this Court besides issuing notice in the application, passed the
following order issuing show cause notice to the Managing Director of the
defendant as to why proceedings under the Contempt of Court Act be not
initiated against him:
―I.A. 8685/2020 (under Order XXXIX Rule 1 and 2 CPC-By
plaintiff)
1. Arguments in CS (Comm.) 286/2020 along with I.A.
6298/2020 (under Order XXXIX Rule 1 and 2 CPC), I.A.
6299/2020 (under Order II Rule 2 CPC) and I.A. 6701/2020
(under Section 45 of the Arbitration and Conciliation Act-by
defendant) had been concluded on 24th September, 2020 when
judgment was reserved and the parties were given time to file
their comprehensive written submissions by 28th September,
2020. However in the wake of a communication dated 24 th
September, 2020 received from ICA, the present application
has been filed by the plaintiff.
2. According to learned counsel for the plaintiff in the
technical arbitration sought by the defendant, despite learned
counsel for the defendant having made the statement before this
Court on 31st July, 2020 to the effect that not only the defendant
but the plaintiff has already subjected itself to the jurisdiction
of the Arbitral Tribunal and that the defendant is required to
take no further action, the defendant did not communicate this
order of 31st July, 2020 wherein statement on behalf of the
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defendant was noted by this Court that the defendant has to
take no further action in the arbitration proceedings, till 9 th
September, 2020. Further, besides not informing the Arbitral
Tribunal about the statement made on behalf of the defendant
before this Court, it appears that the defendant sent an email
dated 4th August, 2020 wherein detailed replies have been given
to the queries raised by the Tribunal.
3. When this issue of participation of the defendant in
arbitration proceedings earlier cropped up before this Court,
learned counsel for the defendant stated that the ICA was only
informed about the documents where they existed, constraining
this Court to pass order dated 1st September, 2020 wherein in
paras-3 to 6 this Court noted as under:
―3. Learned Senior Counsel for the plaintiff at the start of
hearing pointed out that an email has been received by
the plaintiff informing that there has been some
participation on behalf of the defendant before the ICA.
The said email has also been forwarded to this Court. The
message from the Tribunal notes that a document was
being looked into by the ICA Tribunal for which the
defendant through a call informed the ICA Secretariat
where the document was located.
4. Vide order dated 31st July, 2020 when summons in the
suit and notice in the application were issued, this Court
had noted the statement of learned counsel for the
defendant that the defendant has already subjected itself
to the Arbitral Tribunal and has to take no further action
therein, in view whereof this Court did not deem it fit to
pass any interim order, however the defendant was bound
by its statement.
5. Learned counsel for the defendant states that
defendant would abide by his statement and would issue a
clarification to the Tribunal that pending decision in the
applications before this Court, the defendant is not
participating in the proceedings before the ICA.
6. Learned counsel for the defendant further states that
the defendant has abided by the statement made through
learned counsel on 31st July, 2020 and would continue to
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abide by the same.‖
4. Despite learned counsel for the defendant having made
the statement that the defendant would issue a clarification to
the Tribunal, no such clarification was issued rather only a
copy of the order dated 31st July, 2020 was communicated to
the Arbitral Tribunal on 9th September, 2020. Thus, on 9th
September, 2020 for the first time, the order dated 31 st July,
2020 of this Court and the statement made on behalf of the
defendant was communicated to the Arbitral Tribunal much
after the defendant vide its email dated 4th August, 2020 had
effectively participated in the proceedings before the Tribunal.
On 18th September, 2020 when the clarification, as directed
vide order dated 1st September, 2020, was not issued, this Court
noted the statement of learned counsel for the defendant in
para-3 of the order dated 18th September, 2020 which reads as
under:
―3. Learned counsel for the defendant states that the
defendant had written a letter intimating their statement
made before this Court on 31st July, 2020. Learned
counsel for the defendant further states that the
defendant will also communicate to the Tribunal the
order of this Court dated 1st September, 2020.‖
5. It is only thereafter on 24th September, 2020 that the
defendant sent the copy of the order dated 1st September, 2020
of this Court having effectively participated in the technical
arbitration which was based on documents only.
6. The plaintiff has been constrained to file the present
application in view of the communication now received from
the ICA dated 24th September, 2020 which indicates that the
Tribunal is publishing an Award on 2nd October, 2020 however,
the Award will not be released until payment of an additional
deposit of £4277.50p received from either of the parties.
7. Issue show cause notice to the Managing Director of the
defendant as to why proceedings under the Contempt of Courts
Act be not initiated against him.
8. Learned counsel for the defendant accepts notice.
9. Reply affidavit to the show cause notice be filed within one
week.
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10. Rejoinder affidavit be filed within one week thereafter.
11. List this application on 15th October, 2020.
12. In the meantime, defendant would take no further action
in the proceedings in the arbitration being ICA Reference
LOU005.0004/A01 2020 24 initiated by the defendant.
13. Order be uploaded on the website of this Court.‖
3. Before proceeding to deal with the prayers in the present application
as also the show cause notice issued to the Managing Director of the
defendant, a brief background of the case is that pursuant to a contract dated
30th May, 2019 which provided in Clause-6 of the agreement that in case of
any dispute arising out of this contract, the same will be resolved through
arbitration in accordance with the ICA Rules and ICA procedure, venue of
the arbitration being London, Louis Dreyfus invoked the technical
arbitration before the ICA on 13th April, 2020 and appointed its nominee
arbitrator. On 29th April, 2020 ICA wrote to Dholi Spintex informing the
request for arbitration and asking Dholi Spintex to nominate its arbitrator in
14 days. Since Dholi Spintex failed to nominate its arbitrator, on 2 nd June,
2020 ICA appointed the nominee arbitrator for Dholi Spintex being
Mr.David Adcroft. On 11th June, 2020 Louis Dreyfus filed its claim before
the ICA which was responded by Dholi Spintex on 6th July, 2020 requesting
for 30 days for necessary action citing COVID-19 situation. On 16th July,
2020, Louis Dreyfus submitted its reply to Dholi Spintex‟s jurisdictional
objections to the Arbitral Tribunal and on 20th July, 2020 ICA wrote to
Dholi Spintex to reply to/provide additional comments received from Louis
Dreyfus. Dholi Spintex did not reply to the Tribunal and instituted the suit
being CS (Comm.) 286/2020 before this Court seeking a decree of
declaration declaring Clause-6 of the Contract dated 30th May, 2019
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providing for reference of disputes to ICA being invalid, null, void and
unenforceable and consequently the letter dated 29th April, 22020 issued by
ICA and the ICA reference as null and void besides a decree of permanent
injunction restraining the defendant-Louis Dreyfus from proceeding with the
arbitration. The issues raised in the suit are not relevant for the decision of
this application as judgment on the same is being separately pronounced.
4. When the present suit came up before this Court for the first time on
31st July, 2020, this Court noted the contentions of the parties as also the
statement of learned counsel for Louis Dreyfus who stated that not only
Louis Dreyfus but Dholi Spintex has already subjected itself to the
jurisdiction of arbitration under ICA Byelaws and Regulations and to the
Arbitral Tribunal and that Louis Dreyfus is not required to take any further
action thereon. In view of the statement made by the learned counsel for
Louis Dreyfus that Louis Dreyfus has to take no further action before the
Arbitral Tribunal, this Court did not deem it fit to pass any further ad-
interim order at that stage in I.A. 6298/2020 (under Order XXXIX Rule 1
and 2 CPC) and heard arguments on the suit advanced by the learned
counsel for the parties on number of dates.
5. On 1st September, 2020, learned counsel for Dholi Spintex at the start
of the hearing pointed out that an email had been received by Dholi Spintex
informing that there has been some participation on behalf of Louis Dreyfus
before the ICA. This Court noted that on 31st July, 2020 statement of learned
counsel for the defendant as noted above was recorded and the defendant
was bound by the said statement. Learned counsel for Louis Dreyfus also
stated that Louis Dreyfus would be bound by its statement and would issue a
clarification to the Tribunal that pending decision in the applications before
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this Court, Louis Dreyfus is not participating in the proceedings before the
ICA. Learned counsel for Louis Dreyfus further stated that the defendant
has abided by the statement made through learned counsel on 31st July, 2020
and would continue to abide by the same. As noted above after the
judgment was reserved on 24th September, 2020, by the present application
Dholi Spintex pointed out the facts as noted above resulting in this Court
passing the order dated 28th September, 2020 when the show cause notice as
to why proceedings under the Contempt of Courts Act be not initiated
against the Managing Director of Louis Dreyfus was issued.
6. According to learned counsel for Dholi Spintex, Louis Dreyfus has
transgressed the undertaking before this Court on three counts; firstly that an
email was received on 28th July, 2020 from ICA to which despite having
undertaken before this Court on 31st July, 2020, Louis Dreyfus sent a
detailed email to the ICA and as the arbitration was a technical arbitration,
based on documents only, sending the documents in reply constituted an
action taken before the ICA. The second transgression by Louis Dreyfus
was that despite having undertaken before this Court, this undertaking was
never communicated to the ICA. Thirdly, despite this Court specifically
noting the undertaking on behalf of the defendant as stated by learned
counsel on 1st September, 2020 that Louis Dreyfus would abide by its
statement and would issue a clarification to the Tribunal that pending
decision in the applications before this Court, Louis Dreyfus is not
participating in the proceedings before the ICA, Louis Dreyfus did not bring
this clarification to the notice of the Arbitral Tribunal and communicated the
same only on 24th September, 2020 having effectively participated in the
proceedings. Further not only has repeatedly violated the undertakings
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made before this Court, Mr.Madhu Sharma on behalf of Louis Dreyfus has
filed two contradictory and false affidavits before this Court.
7. The fact that Louis Dreyfus effectively participated is evident from
the email of the defendant dated 4th August, 2020 sent by Mr.Pravin Yadav
on behalf of Louis Dreyfus to ICA which reads as under:
RESPONSE TO ICA EMAIL OF 28-07-2020
1. The Tribunal asks for additional documentation about
the negotiations that led to the conclusion of this
contract.
This transaction was originally between LDCI and a
Chiripal Group company namely Nandan Terry Pvt. Ltd.
Later, Nandan Terry requested LDCI to have this
transaction with its group company in Dubai namely
CPF Packaging, FZE. Subsequently, Chiripal Group
requested to have the transaction with its another group
company Dholi Spintex Pvt. Ltd. on High Seas Sale basis.
Finally, the Sale Contract was signed between LDCI and
Dholi Spintex Pvt. Ltd.
Sr. Email Date Particulars
No.
1. 05-04-2019 from Sending Sale Confirmation in
LDCI to Chiripal favour of Nandan Terry Ltd. (a
Group group company of Chiripal
Group) for 600 MT of imported
American raw cotton
2. 08-04-2019 from Email from Mr. Vijay Thadani of
Nandan Terry Ltd. Chiripal Group stating that 600
to LDCI MT of the cotton referred to in
Sale Confirmation will be
procured by its group company
CPF Packaging, FZE
3. 11-04-2019 from Sale Confirmation in favour of
LDCI to Nandan CPF Packaging, FZE.
Terry
4. Till 01-05-2019 No prepayment received from
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CPF Packaging, FZE.
5. 30-05-2019 from Asking LDCI to change the
Nandan Terry to contract from the name of CPF
LDCI Packaging, FZE to its another
group company Dholi Spintex.
6. 31-05-2019 from Sending Sale Confirmation in
LDCI to Dholi favour of Dholi Spintex Pvt. Ltd.
Spintex
7. 03-06-2020 from Sending Sale Contract in favour
LDCI to Dholi of Dholi Spintex.
Spintex
2. Did there exist a previous business relationship between
the Louis Dreyfus Group of Companies and Dholi
Spintex or any other member of their group? If yes,
please send documentation accordingly.
Yes, there existed previous business relationship between
the LDCI and other group companies of Dholi Spintex
namely Nandan Denim Ltd. and Nandan Terry Private
Limited. List of few such contracts is set out below:
Sr. Contract No. Date Name of the
No. Company
1. SO/GJ/2013-14/162 03-04-2014 Nandan Denim
Ltd.
2. SO/GJ/2013-14/163 03-04-2014 Nandan Denim
Ltd.
3. SO/IMP/2018-19/022 28-03-2019 Nandan Denim
Ltd.
4. SO/IMP/2018-19/023 28-03-2019 Nandan Denim
Ltd.
5. SO/IMP/2018-19/024 28-03-2019 Nandan Denim
Ltd.
6. SO/IMP/2018-19/028 03-04-2019 Nandan Denim
Ltd.
7. SO/IMP/2018-19/029 03-04-2019 Nandan Terry
Pvt. Ltd.
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3. Is there any additional correspondence in this matter
between the parties from End August 2019 to 16 th
December 2019
Sr. Email Date Particulars
No.
1. 10-10-2019 from LDCI Intimating that there was no
to Dholi Spintex update on the L/C from Dholi
Spintex. Carry charges,
Warehousing Charges and
other charges were mounting.
2. 22-10-2019 from LDCI Intimating Dholi Spintex that
to Dholi Spintex L/C from Dholi Spintex had not
been received by LDCI yet.
LDCI also stated that if it will
not be received from Dholi
soon, LDCI will be constrained
to call Dholi Spintex in default
of sale contract.
3. 26-11-2019 from LDCI Reminding Dholi Spintex for
to Dholi Spintex payment.
4. 11-12-2019 from LDCI Stating that LDC was waiting
to Dholi Spintex for payment plan from Dholi
Spintex for the 600 MT.
4. What was the intention of the parties when agreeing
clause 7. of the Other Terms & Conditions, ―Only courts
in New Delhi will have jurisdiction.‖?
The intention of the parties while agreeing to Clause 7 of
the Other Terms and Conditions was that Clause 7 was
for the purposes of giving jurisdiction to the court of New
Delhi for the disputes which were beyond the scope of
arbitration like criminal action for fraud etc. or any
other dispute that may not be legally arbitrable. This
Clause 7 also covers execution or enforcement
proceedings that may be initiated in India after award by
ICA.
5. As part of the payment Clause (a) 10% of the contract
value had to be paid by Recipient to Supplier within 3
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days from contract date on the mean contract quantity,
as initial Margin money towards the performance of this
contract. Please confirm whether this Deposit was paid.
Yes, this margin deposit amounting to INR 7,500,000/-
was paid by Dholi Spintex to LDCI which was received
by LDCI on 04-06-2019. Receipt of this Deposit was
acknowledged by LDCI by way of its email dated 06-06-
2019.
6. Any correspondence from the Respondent asking the
Supplier for the goods to be custom cleared and to be
stored into a warehouse?
Dholi Spintex verbally informed to LDCI that they
preferred opening a 90 days L/C post clearance and
transportation to mill and requested that additional
charges for the same be conveyed by LDCI to them.
Accordingly, said charges including the clearing and
transportation charges were spelt out in the email dated
10-09-2019 sent by LDCI to Dholi Spintex (attached to
the Claim filed by LDCI against Dholi Spintex at page
nos. 22 - 23) whereby revised price of cotton of INR
46,898/- per candy was conveyed to Dholi Spintex. By
way of the said email, following table giving head wise
details of additional charges was provided to Dholi
Spintex.
Sr. Particulars Price (per
No. candy)
1. Contract Price INR 44,150/-
2. Customs Clearance, Liner Payment and INR 1,200/-
transportation to warehouse charges
3. Transportation from Kandla to Ahmedabad INR 575/-
4. L/C confirmation and Discounting for90 INR 1043/-
days,
TOTAL INR 46,968/-
Thus, upon arrival of cotton when Dholi Spintex did not custom
clear it, LDCI custom cleared it and stored in the warehouse.‖
―From: Pravin Yadav <[email protected]>
Sent: 04 August 2020 13:48
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To: Lynne Thomas <[email protected]>; Vinay Thadani
<[email protected]>; Del-CottonTraders
<[email protected]>;
[email protected]
Cc: John Gibson <[email protected]>
Subject: RE: A01 2020 24 Louis Dreyfus Company India PVT
Limited (Formerly Known as Louis Dreyfus Commodities India
Pvt) Ltd v Dholi Spintex Pvt. Ltd
Please also find additional emails against Point no.5 and
documents against Point no.2, we have been doing business
with Chiripal Group."
8. From the email sent to ICA Tribunal on 4th August, 2020 it is evident
that defendant did not abide by its undertaking made before this Court on the
31st July, 2020 and fully participated in the proceedings before the ICA
thereby wilfully disobeying the undertaking. Further, Louis Dreyfus also
did not abide by the undertaking and direction dated 1st September, 2020 as
it did not issue the clarification to the ICA that it will not participate in the
proceedings. The undertakings as given before this Court and directed to be
communicated was communicated only on 24th September, 2020 by which
time proceedings before Arbitral Tribunal had already concluded and it was
informed to the parties to furnish the balance fee and that the award will be
available on 2nd October, 2020.
9. From a reading of the orders as noted above and the email dated 4 th
August, 2020, it is evident that the defendant has wilfully not complied the
undertaking before this Court on 31st July, 2020 as also on 1st September,
2020 and hence Mr.Madhu Sharma is guilty of contempt of Court.
10. To worsen the things further Louis Dreyfus's Director/CFO, that is,
Mr.Madhu Sharma has filed two contradictory affidavits before this Court.
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In its reply affidavit dated 5th August, 2020 to I.A.6298/2020 under Order
XXXIX Rule 1 and 2 CPC, Mr.Madhu Sharma has stated that pursuant to
the email of the ICA dated 27th August, 2020 no reply was sent which is
infact false as a detailed email was sent to ICA on 4 th August, 2020
providing all necessary assistance to the Tribunal relating to documents.
However, response of Mr. Madhu Sharma to the show cause notice as to
why action under Contempt of Courts Act be not taken notes the facts
differently giving reasons how reply to ICA email dated 28th July, 2020 was
sent on 4th August, 2020:
19. I say and submit that on 28 July 2020, at 06:48 hours,
the Plaintiff Company issued communication to ICA
informing them that the Plaintiff Company had filed a
suit against the Defendant Company before the High
Court of Delhi on 27 July 2020 interalia challenging the
initiation of ICA Arbitration as null and void. The
Plaintiff Company also requested the ICA not to proceed
with the arbitration reference any further at this stage
and to await the order and outcome of the proceedings
initiated by the Plaintiff Company before the High Court
of Delhi.
20. I say and submit that on 28 July 2020, at 17:05 hours,
the Tribunal through the ICA sought certain further
information from the Parties in relation to the matter in
arbitration.
21. I say and submit that the email dated 28 July 2020 of the
ICA was received and forwarded by Mr. Pravin Yadav,
Senior Manager, Logistics and Execution, to other
employees of the Defendant Company including myself at
05:08 PM on the same date. I say that the email dated 28
July 2020 of the ICA thus, came to my notice.
22. I say that on 29 July 2020, Mr. Sumeet Mittal, the
General Manager -Cotton platform of the Defendant
Company prepared the draft reply to the email dated 28
July 2020 of the ICA and forwarded the same for filing
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by Mr. Pravin Yadav. I further say that on the same day
i.e. 29 July 2020 at 10:59 PM, Mr. Pravesh Kukreti, the
Senior Executive, Execution (International markets) of
the Defendant Company forwarded the documents for
filing of the response to the email dated 29 July 2020 of
the ICA. Accordingly, the response to ICA's query was
already prepared and completed by the Defendant
Company by 29 July 2020 and the same had to be merely
filed by Mr. Pravin Yadav with the ICA. I say that it was
my understanding that the said response would be filed
by Mr.Pravin Yadav with the ICA on 30 July 2020.
23. I say and submit that thereafter the present suit was
listed before this Hon'ble Court on the first occasion on
31 July 2020. Since the Defendant Company had already
filed the claim and supporting documents in the ICA
Arbitration and also completed the response to the ICA
communication of 28 July 2020, the counsels of the
Defendant Company were instructed to inform this
Hon'ble Court accordingly.
24. I say and submit that based upon the instructions of the
Defendant Company, our counsel made the following
submissions, voluntarily, which was recorded in the
order dated 31 July 2020 passed by this Hon'ble Court.
Paragraphs 8:
" .. . the Defendant is not required to take any further
action thereon. "
Paragraph 11:
" .. . the Defendant has already subjected itself to the
Arbitral Tribunal and has to take no further action
thereon, ... "
25. I say and submit that in the meanwhile Mr. Yadav was
unable to file the reply to the ICA communication dated
28 July 2020 on account of the following difficulties:
(a) The office of the Defendant Company was not
functional on a regular basis on account of closure
and disruption caused by the COVID-19
pandemic.
(b) The intervening period of 01 and 02 August 2020,
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being Saturday and Sunday, the office of the
Defendant Company was completely closed.
(c) On 03 August 2020 due to Raksha Bandhan
festival, the office of the Defendant Company was
completely closed.
26. I say and submit that on 04 August 2020, when office was
resumed, Mr. Pravin Yadav issued the response to the
ICA communication of 28 July 2020 which had remained
waiting with him. I further say that on account of the
above difficulties and inadvertence, Mr. Pravin Yadav
was not informed or aware of the statement made by the
counsel of the Defendant Company before this Hon'ble
Court on 31 July 2020. I say that the communication
dated 04 August 2020 issued by Mr. Pravin Yadav to the
ICA was therefore an inadvertent error resulting from
some communication gap imposed due to the prevailing
irregular and disrupted functioning of the office and
operations of the Defendant Company. I say that the said
communication was not issued with the view to
contravene the statement of the counsel before this
Hon'ble Court or overreach the powers of this Hon'ble
Court.‖
11. Thus the case of Mr. Madhu Sharma in his affidavit to the show cause
notice is that the e-mail dated 4th August, 2020 is bona-fide, inadvertent and
non-deliberate. It is claimed that on 10th June 2020 Louis Dreyfus had
initiated the arbitration and filed its claim with supporting documentary
evidence much prior to the institution of the suit. The arbitration between
Louis Dreyfus and Dholi Spintex was a document only arbitration to be
decided in a time bound manner. Dholi Spintex filed the present suit on 27 th
July, 2020 and informed the ICA of the filing of the suit on 28 th July, 2020
at 06:48 hours and requested the Arbitral Tribunal not to proceed with the
arbitration until the outcome of the present suit. On 28 th July, 2020 at 17:05
hours the Tribunal through ICA sought certain information from the parties.
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The e-mail was received by Mr. Pravin Yadav, Senior Manager, Logistics
and Execution of Louis Dreyfus who forwarded it to the other officers of
Louis Dreyfus at 17:08 hours on the same date. On 29 th July, 2020 Mr.
Sumeet Mittal the General Manager - Cotton Platform of Louis Dreyfus
prepared a draft reply to the said e-mail and forwarded it to Mr. Pravin
Yadav. On the same day at 22.59 hours Mr. Pravesh Kukreti, the Senior
Executive, Execution (International Market) forwarded the documents
required for the reply to Mr. Pravin Yadav. Therefore the reply to ICA‟s
query was already prepared and completed by Louis Dreyfus on 29 th July,
2020 and the same was to be merely filed by Mr. Pravin Yadav with the
ICA.
12. It is in the light of these facts when the suit came up for hearing for
the first time on 31st July, 2020, the learned counsel for Louis Dreyfus made
a statement that since both the parties had submitted to the jurisdiction of the
Arbitral Tribunal constituted under the ICA bye-laws, the defendant is not
required to take any further steps thereon. However, Mr. Yadav did not file
the reply to the ICA mail dated 28th July, 2020 on the 29th July, 2020 or even
30th July, 2020 or 31st July, 2020.
13. Case of Louis Dreyfus is that its offices were not functional due to
ongoing COVID pandemic and due to 1st August and 2nd August, 2020 being
Saturday/Sunday and 3rd August, 2020 being Rakshabandhan the offices of
Louis Dreyfus was closed and when the defendant office reopened on 4 th
August, 2020, Mr. Pravin Yadav unaware of the statement made in the Court
on 31st July, 2020 issued the reply to the ICA which was already prepared on
29th July, 2020 i.e. prior to the statement being made on 31 st July, 2020. It is
thus claimed that the sending of the e-mail dated 4th August, 2020 was bona-
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fide and inadvertent as a result of the aforesaid communication gap due to
disrupted functioning of the office. To overcome his earlier affidavit dated
5th August, 2020 it is claimed that in the earlier affidavit statement of fact
that no reply to the e-mail dated 28th July, 2020 by the ICA was sent, was
due to the fact that Madhu Sharma did not know about the e-mail being sent
on 4th August, 2020. This is also claimed to be under a bona-fide impression
that the e-mail to the ICA would have been sent on or before 30th July, 2020.
14. This explanation of Madhu Sharma is contrary to the affidavit of Mr.
Madhu Sharma dated 6th August, 2020 wherein in Para 63 it is stated:
"63. That ICA again wrote a communication to the Parties on
28.07.2020 asking for further clarification. The Defendant is
yet to file its reply to the same communication of the Tribunal."
15. Louis Dreyfus being a company, different officers of the company
cannot take different stands and come up with the plea now being taken up
that Mr. Madhu Sharma did not know what the officers/managers were
doing. Further the explanation of Louis Dreyfus now rendered that the
statement made by the counsel on 31st July, 2020 was on the ground that
Dholi Spintex and Louis Dreyfus had submitted to the jurisdiction of
Arbitral Tribunal constituted under the ICA bye-laws is also clearly an
afterthought. Not only Louis Dreyfus has disobeyed the undertaking before
this Court but from the subsequent orders it would also be evident that Louis
Dreyfus continued with its action before the Tribunal. Further vide order
dated 1st September, 2020 as noted above, this Court had noted the statement
of learned counsel for Louis Dreyfus that Louis Dreyfus would abide by the
statement made by the learned counsel and would issue the clarification to
the Tribunal that pending decision in the application before this Court, Louis
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Dreyfus would not be participating in the proceedings before the ICA.
However, despite the undertaking made before this Court to issue a
clarification before the ICA, no e-mail was sent by Louis Dreyfus till 24th
September, 2020.
16. In the present application, this Court is not required to look into
whether the suit of the plaintiff has been rendered infructuous and so no
order granting injunction is being passed, but the observations made
hereinabove are in reference to the show cause notice issued to Mr. Madhu
Sharma by this Court on 28th September, 2020 as to why proceedings under
the Contempt of Court Act be not initiated against him. As noted above, it
is evident that not only has there been a wilful disobedience of the
undertakings before the Court, Mr. Madhu Sharma has filed contrary
affidavits in this Court taking different pleas. This Court holds that Mr.
Madhu Sharma is guilty of violating the undertaking before the Court.
However, this Court is not proceeding further to initiate a criminal contempt
proceedings against Mr. Madhu Sharma for filing contrary affidavit before
this Court.
17. Section 12 of the Contempt of Courts Act, 1971 provides for the
following punishments:
"12. Punishment for contempt of court.--
(1) Save as otherwise expressly provided in this Act or in
any other law, a contempt of court may be punished with
simple imprisonment for a term which may extend to six
months, or with fine which may extend to two thousand
rupees, or with both: --(1) Save as otherwise expressly
provided in this Act or in any other law, a contempt of court
may be punished with simple imprisonment for a term which
may extend to six months, or with fine which may extend to
two thousand rupees, or with both:
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Provided that the accused may be discharged or the
punishment awarded may be remitted on apology being
made to the satisfaction of the court.
Explanation.--An apology shall not be rejected merely on
the ground that it is qualified or conditional if the accused
makes it bona fide."
18. Considering the repeated violations of undertakings committed by
Mr.Madhu Sharma, this Court deems it fit to impose a fine of ₹2000/- on
Mr.Madhu Sharma as provided under Section 12(1) of the Contempt of
Courts Act,1971.
19. Application is accordingly disposed of.
(MUKTA GUPTA)
JUDGE
NOVEMBER 24, 2020
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