# In the matter of Ashutosh Jain & Ors. Vs. Morpheus Developers Pvt. Ltd. & Ors. Contempt Case (AT) No. 18 & 26 of 2020 in Company Appeal (AT)(Ins.) No. 1155 of 2019

> NCLAT judgment dated 2021-08-10. Citation: TCN-2021-NCLAT-00142. The case involves Contempt Applications filed by Mr. Ashutosh Jain (erstwhile IRP) and Mr.…

- **Court:** NCLAT
- **Order date:** 10 Aug 2021
- **Citation:** TCN-2021-NCLAT-00142
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclat-new-delhi/ashutosh-jain-ors-vs-morpheus-developers-pvt-ltd-ors-contempt-case-13f00c8d

## Summary

### Background

The case involves Contempt Applications filed by Mr. Ashutosh Jain (erstwhile IRP) and Mr. Sandeep Kumar Bhatt (erstwhile RP) against Morpheus Developers Pvt. Ltd. and its directors for non-compliance with an order passed by the Adjudicating Authority (NCLT). The initial issue arose from an application under Section 7 of the IBC filed by Mr. Kapil Arora against Morpheus Developers, which was admitted on 2019-02-12. This admission was challenged by Mr. Prithviraj Kasana. During the appeal's pendency, a settlement was reached between the directors and financial creditors, which was recorded by the Appellate Tribunal. The matter was remitted to the Adjudicating Authority to determine and fix the fees payable to the IRP/RP and CIRP costs. The Adjudicating Authority passed

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## Facts

Mr. Kapil Arora initiated insolvency proceedings against Morpheus Developers Pvt. Ltd. under Section 7 of the IBC, which was admitted on 2019-02-12. Mr. Prithviraj Kasana challenged this admission. During the appeal, a settlement was reached between the directors and financial creditors. The Adjudicating Authority was directed to determine IRP/RP fees and CIRP costs. The Adjudicating Authority ordered Morpheus Developers to pay these costs by 2019-09-18. Morpheus Developers appealed this order but withdrew the appeal, agreeing to pay by 2019-12-02. They failed to pay, leading to Contempt Applications by Mr. Ashutosh Jain and Mr. Sandeep Kumar Bhatt on 2020-06-19 and 2020-07-24, respectively. The respondents paid Rs. 5 Lacs to Mr. Sandeep Kr. Bhatt on 2021-07-20 but did

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## Issues and analysis

### Issue 1: Whether the Respondents, Morpheus Developers Pvt. Ltd. and its directors, deliberately avoided …

**Ratio:** A party is obligated to comply with orders issued by a competent court or tribunal.

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**Reasoning:** The Appellate Tribunal observed that the Respondents had withdrawn their appeal against

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**Interpretation:** This issue involves the interpretation of the principles of contempt of court

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**Application:** The ratio and reasoning are applied to the specific facts of the case, where

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## Parties

- **Judges:** Jarat Kuma…; Ashok Kumar…
- **Appellants:** Ashutosh…
- **Respondents:** Morpheus Developer…

## Timeline

- **2019-02-12 — Admission of IBC…**: Application under Section 7 of the IBC filed by Mr. Kapil Arora against Morpheus…
- **2019-06-04 — Settlement…**: Settlement reached between the Directors…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 7 — Initiation of corporate insolvency resolution…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-7)

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