Dismissed

In the matter of Srei Infrastructure Finance Limited Contempt Application No. 05-KB-2022 in I.A. (Ib) No. 75-KB-2022 in C.P. (Ib) No. 295-KB-2021

NCLT17 May 2022

Case brief

AI extract

What is this about?

Contempt application filed against banks for declaring accounts as fraud based on a restricted KPMG report. Court held utilizing report info without redistributing it violates no order and dismissed the petition.

What did the court decide?

Contempt Petition No.05/KB/2022 is hereby dismissed.

In the matter of Srei Infrastructure Finance Limited… — Company and Corporate | NCLT (2022)

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IN THE NATIONAL COMPANY LAW TRIBUNAL KOLKATA BENCH-I, KOLKATA

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Contempt Application No. 05/KB/2022

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I.A. (IB) No. 75/KB/2022

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C.P. (IB) No. 295/KB/2021

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An application under section 425 of the Companies Act, 2013 read with rule 11 of the National Company Law Tribunal Rules, 2016 and section 12 of the Contempt of Courts Act, 1971.

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C.P. (IB) No.295/KB/2021

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In the matter of: Reserve Bank of India ... Appropriate Regulator

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Versus

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SREI Infrastructure Finance Limited ... Financial Service Provider

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Contempt Petition No.05/KB/2022

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In the matter of: Hemant Kanoria

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... Applicant

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Versus

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1. Punjab & Sind Bank

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2. Mr. S. Krishnan, MD & CEO of Punjab & Sind Bank

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3. Kollegal V Raghavendra, Executive Director of Punjab & Sind Bank

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4. Dr. Ram Jass Yadav, Executive of Punjab & Sind Bank

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5. Lalit Kumar Sharma, DGM, Punjab & Sind Bank

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6. Saket Mehrotra, Company Secretary, Punjab & Sind Bank

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7. UCO Bank

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_8. _Axis Bank Limited	...	Respondents
		Order reserved on: 28 April 2022
Coram:		Order pronounced on: 17 May 2022
Shri Rajasekhar V.K.	:	Member (Judicial)
Shri Balraj Joshi	:	Member (Technical)
Appearances (through hybrid mode): For the Applicant	:	Mr. Ratnanko Banerji, Sr Advocate Mr. Rishav Banerjee, Advocate
For Administrator, SIFL	:	Mr. Soumyajit Mishra, Advocate
For Respondent Nos.1, 7 & 8	:	Mr. Abhinav Vasisht, Sr Advocate Mr. Saurav Panda, Advocate Mr. Vishrut Kansal, Advocate

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Page 1 of 3

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IN THE NATIONAL COMPANY LAW TRIBUNAL KOLKATA BENCH-I

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Contempt Application No.05/KB/2022 in IA (IB) No.75/KB/2022 in CP (IB) No. 295/KB/2021

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For the other respondents

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: No representation

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ORDER

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Balraj Joshi, Member (Technical):

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This Court convened through hybrid mode.

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The Contempt Petition No.05/KB/2022 has been filed by Mr. Hemant Kanoria shareholder of SREI Infrastructure Finance Limited (“SIFL”) and SREI Equipment Finance Limited (“SEFL”) and a member of the erstwhile Board of Directors of SREI Infrastructure Finance Limited under section 425 of the Companies Act, 2013 against Respondent Nos. 1 to 6 for alleged wilful, deliberate and contumacious violation of the order dated 07 February 2022 passed by this Adjudicating Authority in IA (IB) No.75/KB/2022 in CP (IB) No. 295/KB/2021.

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The Applicant had filed IA (IB) No.75/KB/2022 in the context of the forensic audit conducted by KPMG Assurance and Consulting Services LLP (“KPMG”).

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During the hearing of IA (IB) No.75/KB/2022, it was disclosed that KPMG had prepared and submitted the report which had already been circulated. This Adjudicating Authority vide order dates 07 February 2022 directed that there shall be no further dissemination of the report submitted by KPMG.

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It is the case of the Applicant that despite the order of this Adjudicating Authority, the Respondent No.1, being one of the Financial Creditors of SEFL and SIFL, declared the accounts of SIFL and SEFL as “fraud accounts” on the basis of the KPMG report, which is the subject matter that is under challenge in IA (IB) No.75/KB/2022.

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Mr. Ratnanko Banerji, Learned Senior Counsel submitted that the Respondent No. 1 along with the other Respondents are in wilful disobedience of the order dated 07 February 2022 by declaring the account of the SIFL and SEFL as fraud accounts and have reported such declaration to BSE Limited and the

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Page 2 of 3

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IN THE NATIONAL COMPANY LAW TRIBUNAL KOLKATA BENCH-I

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Contempt Application No.05/KB/2022 in IA (IB) No.75/KB/2022 in CP (IB) No. 295/KB/2021

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National Stock Exchange of India Limited by letter No. PSB/HO/Shares Cell/ 19/2022-23 dated 19 April 2022.

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Hence, the Applicant has filed the present Contempt Petition against the Respondents.

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We have heard the Learned Senior Counsel appearing for the Applicant and the learned Senior Counsel appearing on behalf of the Respondents.

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The order dated 07 February 2022 directed that “ there shall be no further dissemination of the Report until this Application is disposed of.”

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We had restricted the parties from circulating the report submitted by KPMG any further. The ld. Counsel for the respondent has rightly contended that Respondent No.1 has only utilized the information given in the report submitted by KPMG and has arrived at a result. The Respondent No.1 along with the other Respondents have in no way circulated the KPMG report any further, but have instead analysed the report and acted in furtherance thereof. Therefore, we are of the view that the Respondents are not in violation of the order dated 07 February 2022. In view of the above observations, Contempt Petition No.05/KB/2022 is hereby dismissed.

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The Registry is directed to send e-mail copies of the order forthwith to all the parties and their Ld. Counsel for information and for taking necessary steps.

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