Delhi High Court
Sanjeev Srivastava & Anr vs Zion Biotechnologies Pvt Ltd on 15 July, 2025
Author: Prathiba M. Singh
Bench: Prathiba M. Singh
$~79 & 80
* IN THE HIGH COURT OF DELHI AT NEW DELHI
Date of decision: 15th July, 2025
+ CONT.APP.(C) 6/2019
SANJEEV SRIVASTAVA &ANR .....Appellants
Through: Mr. Rishi K. Awasthi, Mr. Piyush
Vatsa, Mr. Rahul Raj Mishra and Mr.
Rahul K. Gupta, Advs.
versus
ZION BIOTECHNOLOGIES PVT LTD .....Respondent
Through: Mr. Sanjeev Sindhwani, Sr. Adv. with
Mr. Sanjay Dua and Mr. Gaurav
Sindhwani, Advs. (M: 9811114524)
80 AND
+ CONT.APP.(C) 7/2019
SANJEEV SRIVASTAVA &ANR .....Appellants
Through: Mr. Rishi K. Awasthi, Mr. Piyush
Vatsa, Mr. Rahul Raj Mishra and Mr.
Rahul K. Gupta, Advs.
versus
JSRM ESTATES PVT LTD .....Respondent
Through: Mr. Sanjeev Sindhwani, Sr. Adv. with
Mr. Sanjay Dua and Mr. Gaurav
Sindhwani, Advs.
CORAM:
JUSTICE PRATHIBA M. SINGH
JUSTICE RAJNEESH KUMAR GUPTA
JUDGMENT
Prathiba M. Singh, J.
1. This hearing has been done through hybrid mode.
2. These appeals under the Contempt of Courts Act, 1971 (hereinafter,
'the Act'), have been filed by the Appellants challenging the impugned order
dated 8th April, 2019 passed by the ld. Single Judge of this Court in CONT.
CAS.(C) No. 221/2016.
3. The brief background of the case is that bookings were made by the
Respondents- M/s JSRM Estates Pvt. Ltd. and Zion Biotechnologies Pvt. Ltd.
for two flats in 'Celeste Towers'. The said project was a residential project
floated by M/s Assotech Limited of which the Appellants i.e., Mr. Sanjeev
Srivastava and Mr. Sandeep Jain are the Ex-Managing Director and
Authorised Representative respectively.
4. For the said bookings, the Respondents had made a payment of a sum
of Rs. 1 crore for each of the flats way back on 4 th November, 2011 and 12th
November, 2011 respectively. Flat No. 27 was allotted to M/s JSRM Estates
Pvt. Ltd. and flat No. 32 was allotted to Zion Biotechnologies Pvt. Ltd. against
a payment of Rs 1 crore each which was paid to M/s Assotech Limited.
5. The possession of the said flats were, however, not delivered to the
Respondents which led to filing of an arbitration petition under Section 9 of
the Arbitration and Conciliation Act, 1996, seeking interim relief. The
disputes in the said petition were referred to mediation and a settlement
agreement dated 14th July, 2015 was executed under the aegis of the Delhi
High Court Mediation and Conciliation Centre. The terms of the settlement
which were recorded are as under:
Settlement Agreement in CONT.APP.(C) 6/2019
"9. The following settlement, has been arrived at
between the Parties hereto:
a. The Second Party has agreed to pay to the
First Party a sum of Rs. 1,34,00,032/- (Rupees
One Crore Thirty Four Lakhs and Thirty Two
Only) which includes service tax and interest
and the First Party has agreed to receive the
aforesaid amount in full and final settlement
of its claims against the Second Party.
c. The Second Party has delivered to the First
Party the following post dated cheques for Rs.
1,33,71,913/-(Rupees One Crore Thirty three
Lakhs and Nine hundred and Thirteen Only)
which includes service tax, interest and
interest drawn on Karur Vyasa Bank Ltd, the
details of which are as under:-
i. Cheque No. 014651 dated 15.01.2016
for Rs. 20,00,000/-
ii. Cheque No. 014657 dated 15.01.2016
for Rs. 6,06,945/-.
iii. Cheque No. 014652 dated 15.04.2016
for Rs. 20,00,000/-.
iv. Cheque No. 014658 dated 15.04.2016
for Rs. 6,06,945/-.
v. Cheque No. 014672 dated 15.07.2016
for Rs. 25,00,000/-.
vi. Cheque No. 014659 dated 15.07.2016
for Rs 6,06,945/-
vii. Cheque No. 014655 dated 15.10.2016
for Rs. 17,50,000/-.
viii. Cheque No. 014660 dated 15,10.2016
for Rs. 6,06,945/-.
ix. Cheque No. 014656 dated 15.12.2016
for Rs. 17,50,000/-.
x. Cheque No. 014661 dated 15.12.2016
for Rs. 6,06,945/-.
c. The Second Party hereby undertakes to the
Hon'ble Court that the aforesaid cheques
shall be honoured and encashed on their
respective due dates. The second party has
also agreed to file a separate affidavit-cum-
undertaking in this regard.
d. The First Party has no objection if the order
dated 19.03.2015 restraining the Second
Party from creating any third party rights
upon the aforesaid property is modified to
allow the Second Party to enter into an
agreement to sell with the condition that the
proposed buyer would be informed in writing
regarding this agreement and the orders of
this Hon'ble Court and further that all the
amounts received from such prospective
buyer shall first be paid to the First Party
towards the discharge of the liability towards
him as contained in this agreement. If the
second party pays the settlement amount prior
to the schedule of payment made herein, the
first party shall return to the second party the
unused post dated cheques.
d. The Second Party acknowledges that in the
event of dishonour of any of the above
cheques, the first party shall be entitled to
proceed against the second party for
contempt, prosecution, execution and / or for
any other proceedings available to it under
law. The first party in the event of any such
default, shall also be entitled to interest @
18% per annum for delay in payment.
10. By signing this Agreement the parties hereto state
that they have no further claims or demands against
each other and all the disputes and differences in this
regard have been amicably settled by the Parties hereto
through the process of Mediation.
11. That the parties undertake to the Hon'ble Court to
abide by the terms and conditions set out in the
agreement and not to dispute the same hereinafter in
future."
Settlement Agreement in CONT.APP.(C) 7/2019
"9. The following settlement, has been arrived at
between the Parties hereto:
a. The Second Party has agreed to pay to the
First Party a sum of Rs. 1,34,00,032/- (Rupees
One Crore Thirty Four Lakhs and Thirty Two
Only) which includes service tax and interest
and the First Party has agreed to receive the
aforesaid amount in full and final settlement
of its claims against the Second Party.
b. The Second Party has delivered to the First
Party the following post dated cheques for Rs.
1,34,00,032/-(Rupees One Crore Thirty Four
Lakhs and Thirty Two Only) which includes
service tax, interest & TDS drawn on Karur
Vyasa Bank Ltd, the details of which are as
under:-
i. Cheque No. 014662 dated 15.01.2016
for Rs. 20,00,000/-
ii. Cheque No. 014667 dated 15.01.2016
for Rs. 6,12,005/-.
iii. Cheque No. 014663 dated 15.04.2016
for Rs. 20,00,000/-.
iv. Cheque No. 014668 dated 15.04.2016
for Rs. 6,12,005/-.
v. Cheque No. 014664 dated 15.07.2016
for Rs. 25,00,000/-.
vi. Cheque No. 014669 dated 15.07.2015
for Rs 6,12,005/-
vii. Cheque No. 014665 dated 15.10.2016
for Rs. 17,50,000/-.
viii. Cheque No. 014670 dated 15,10.2016
for Rs. 6,12,005/-.
ix. Cheque No. 014666 dated 15.12.2016
for Rs. 17,50,000/-.
x. Cheque No. 014671 dated 15.12.2016
for Rs. 6,12,005/-.
c. The Second Party hereby undertakes to the
Hon'ble Court that the aforesaid cheques
shall be honoured and encashed on their
respective due dates.
d. The First Party has no objection if the order
dated 19.03.2015 restraining the Second
Party from creating any third party rights
upon the aforesaid property is modified to
allow the Second Party to enter into an
agreement to sell with the condition that the
proposed buyer would be informed in writing
regarding this agreement and the orders of
this Hon'ble Court and further that all the
amounts received from such prospective
buyer shall first be paid to the First Party
towards the discharge of the liability towards
him as contained in this agreement. If the
second party pays the settlement amount prior
to the schedule of payment made herein, the
first party shall return to the second party the
unused post dated cheques.
d. The Second Party acknowledges that in the
event of dishonour of any of the above
cheques, the first party shall be entitled to
proceed against the second party for
contempt, prosecution, execution and / or for
any other proceedings available to it under
law. The first party in the event of any such
default, shall also be entitled to interest @
18% per annum for delay in payment.
10. By signing this Agreement the parties hereto state
that they have no further claims or demands against
each other and all the disputes and differences in this
regard have been amicably settled by the Parties hereto
through the process of Mediation.
11. That the parties undertake to the Hon'ble Court to
abide by the terms and conditions set out in the
agreement and not to dispute the same hereinafter in
future."
6. As per the above settlement agreements, the Respondents Zion
Biotechnologies Pvt. Ltd. and JSRM Estates Pvt. Ltd. were to be paid a sum
of Rs. 1,33,71,913/- and Rs. 1,34,00,032/- respectively. The cheques for the
said amount were signed by Mr. Sanjeev Srivastava and the above stated
settlement agreements were signed by Mr. Sandeep Jain as an Authorised
Representative.
7. However, when the said cheques were presented, they were
dishonoured. Evidently, there was a clear breach of the settlement agreements
and proceedings under Section 138 of the Negotiable Instruments Act, 1881
were also initiated by the Respondents.
8. In the meantime, a provisional liquidator was appointed by an order of
this Court in 'Manmohan Singh Bhalla v. Assotech Limited', Company
Petition No.357 of 2015 and a Court Commissioner was appointed to
supervise the action plan submitted by M/s Assotech Limited.
9. On the strength of the said proceedings in the abovementioned
Company Petition, the Appellants continued to evade payment which finally
led to filing of the CONT. CAS.(C) No. 221/2016.
10. Vide order dated 8th April, 2019 passed in CONT. CAS.(C) No.
221/2016. the ld. Single Judge clearly records that assurances were given as
part of the settlement agreement that the cheques were good for payment. The
dishonouring of the cheques was held to be a clear breach of the directions
given by the Court. The observations of the ld. Single Judge was as under:
"Be that as it may, as noted hereinabove, the respondent
is in contempt of this Court's order insofar as the
aforesaid cheques were dishonoured despite the Court's
order. This Court holds the respondent guilty. Let them
be present in the Court on the next date for orders on
punishment as may be. According to the agreement, the
petitioner is also entitled to 18% interest for the delay
in payment with effect from 16.01.2016. The respondent,
if he so chooses, may bring a cheque of the requisite
amount on the next date.
The learned counsel for the respondent submits that on
22.11.2016, this Court had recorded inter alia as under:
"Today in Court, learned counsel for respondents has
handed over the following three cheques to learned
senior counsel for the petitioner as part payment of
the outstanding dues;-
SI. No. Cheque No.Dated Amount Drawn Upon
1. 017601 29/11/2016 Rs. 20,00,000/- Karur Vysya
Bank, Noida
2. 017602 05/12/2016 Rs. 20,00,000/- Karur Vysya
Bank, Noida
3. 017605 31/01/2017 Rs. 20,00,000/- Karur Vysya
Bank, Noida
Learned counsel for respondent, on
instruction of Mr. Sanjeev Srivastav, respondent no.
1 and Mr. Sandeep Jain, respondent no. 2 who are
personally present in Court, assures this Court that
the aforesaid cheques are good for payment.
However, learned counsel for respondent
states that as a Provisional Liquidator has been
appointed by the Company Court on 8th February,
2016, prior permission from the Company Court
would be required.
Learned senior counsel for the petitioner
assures this Court that without taking prior
permission from the Company Court, the cheques
shall not be submitted for encashment.
The statement made by learned senior counsel
for the petitioner is accepted by this Court and the
petitioner is held bound by the same.
List on 17"' February, 2017. "
The aforesaid order concerns only the replaced
cheques which were issued later in
November/December, 2016. It does not deal with the
dishonouring of the cheque dated 15.01.2016.
Therefore, for the aforesaid reasons, the
respondent is in contempt of the court's order dated
17.07.2015.
Renotify on 02.08.2019."
11. Thus, the present appeal has been filed challenging the above order
dated 8th April, 2019 passed in CONT. CAS.(C) No. 221/2016.
12. At the outset, ld. Counsel for the Appellants was to satisfy this Court
as to how this appeal is maintainable under Section 19 of the Act. Mr.
Awasthi, ld. Counsel submits that, in fact, the Coordinate Bench of this Court
has held on 9th February, 2017 that the Respondents ought to approach the
Company Court or file execution proceedings for realising the money payable
under the settlement agreements with the permission of the Company Court.
It is, further, submitted that the contempt petition itself, therefore, is not
maintainable. Hence, the order passed in such petition shall be set aside.
13. Mr. Awasthi, ld. Counsel has further argued that the Company- M/s
Assotech Limited has been in liquidation since 8th February, 2016.
14. Mr. Sindhwani, ld. Sr. Counsel on the other hand has relied upon the
decision in Ajay Kumar Bhalla & Ors. v. Prakash Kumar Dixit
MANU/SC/0829/2024 to argue that it is the settled position that only an order
imposing punishment for contempt is appealable under Section 19 of the Act.
15. Heard. The present appeal shows the arduous journey that any litigant
has to undertake even after the disputes are settled before the Court. Any
settlement executed under the aegis of the Mediation Centre is a settlement
which is binding on all the parties in terms of Section 89 of the Mediation
Act, 2023 when such solemn undertakings are given before the Court. While
there can be no doubt that an execution petition can be filed however, if parties
have given undertakings, jurisdiction of the contempt court would not be
excluded.
16. The ld. Single Judge, in order dated 8th April, 2019 passed in CONT.
CAS.(C) No. 221/2016, has rightly observed that there is dishonouring of the
cheques and solemn undertakings have been violated.
17. This Court is of the view that clearly, a settlement of 2016 where a
substantial amount of money had to be paid has still not reached fruition. The
amounts are still due and the Appellants continue to litigate before different
Courts. The company went into liquidation only on 8 th February 2016.
However, the settlement agreements are dated prior to the said date i.e., 14 th
July, 2015. Even the cheques bounced on 16th January, 2016, which is much
prior to the liquidation. Thus, this argument would not be tenable. Such
conduct on behalf of the Appellants cannot be ignored by this Court.
Moreover, in terms of Section 19 of the Contempt of Courts Act, 1971, the
present appeal itself would not be maintainable. The relevant Section is set
out below:
"19. Appeals.--(1) An appeal shall lie as of right from
any order or decision of High Court in the exercise of
its jurisdiction to punish for contempt--
(a) where the order or decision is that of a single
judge, to a Bench of not less
than two Judges of the Court;
(b) where the order or decision is that of a Bench,
to the Supreme Court:
Provided that where the order or decision is that of
the Court of the Judicial Commissioner in any
Union territory, such appeal shall lie to the
Supreme Court.
(2) Pending any appeal, the appellate Court may order
that--
(a) the execution of the punishment or order
appealed against be suspended;
(b) if the appellant is in confinement, he be
released on bail; and
(c) the appeal be heard notwithstanding that the
appellant has not purged his contempt.
(3) Where any person aggrieved by any order against
which an appeal may be filed satisfies the High Court
that he intends to prefer an appeal, the High Court may
also exercise all or any of the powers conferred by sub-
section (2).
(4) An appeal under sub-section (1) shall be filed--
(a) in the case of an appeal to a Bench of the High
Court, within thirty days;
(b) in the case of an appeal to the Supreme Court,
within sixty days, from the date of the order
appealed against."
18. In Ajay Kumar Bhalla (supra), the Supreme Court has also held as
under:
"13. The law on the subject is settled by a judgment of a
two Judge Bench of this Court in Midnapore Peoples'
Coop. Bank Ltd. v. Chunilal Nanda1. Paragraph 11 of
the decision sums up the principles succinctly as
follows:
11. The position emerging from these decisions,
in regard to appeals against orders in contempt
proceedings may be summarised thus:
I. An appeal under Section 19 is
maintainable only against an order or
decision of the High Court passed in
exercise of its jurisdiction to punish for
contempt, that is, an order imposing
punishment for contempt.
II. Neither an order declining to initiate
proceedings for contempt, nor an order
initiating proceedings for contempt nor an
order dropping the proceedings for
contempt nor an order acquitting or
exonerating the contemnor, is appealable
under Section 19 of the CC Act. In special
circumstances, they may be open to
challenge under Article 136 of
the Constitution.
III. In a proceeding for contempt, the High
Court can decide whether any contempt of
court has been committed, and if so, what
should be the punishment and matters
incidental thereto. In such a proceeding, it is
not appropriate to adjudicate or decide any
issue relating to the merits of the dispute
between the parties.
IV. Any direction issued or decision made by
the High Court on the merits of a dispute
between the parties, will not be in the
exercise of "jurisdiction to punish for
contempt" and, therefore, not appealable
under Section 19 of the CC Act. The only
exception is where such direction or
decision is incidental to or inextricably
connected with the order punishing for
contempt, in which event the appeal under
Section 19 of the Act, can also encompass
the incidental or inextricably connected
directions.
V. If the High Court, for whatsoever reason,
decides an issue or makes any direction,
relating to the merits of the dispute between
the parties, in a contempt proceedings, the
aggrieved person is not without remedy.
Such an order is open to challenge in an
intra-court appeal (if the order was of a
learned Single Judge and there is a
provision for an intra-court appeal), or by
seeking special leave to appeal under
Article 136 of the Constitution of India (in
other cases).
The first point is answered accordingly."
19. In view of this position, the present appeals deserve to be rejected.
Pending applications, if any, are also disposed of.
20. The Respondents are, hence, free to pursue the contempt petition in
accordance with law.
21. The Appellants shall pay a sum of Rs. 25,000/- as costs to each of the
Respondents. Let the contempt petition be now listed before the concerned
Bench on 7th August, 2025.
PRATHIBA M. SINGH, J
RAJNEESH KUMAR GUPTA, J
JULY 15, 2025
dj/ss
