Court cannot issue warrants of arrest against Directors of a Company if notice has not been issued against them in a Contempt matter

Delhi High Court: In the present cases, the order dated 02.12.2015 passed by the learned Single Judge in CCP No.71/2015 in CS(OS) 442/2013 is assailed. Telefonaktiebolaget LM Ericsson (Publ) (Respondent 1 in both the appeals) sought permanent injunction against Mercury Electronics Limited and Micromax Informatics Limited restraining them from infringing the plaintiffs’ registered patents. By order dated 12.11.2014 in IAs No.3825/2013 and 4694/2013, the learned Single Judge directed payment of the royalty to the plaintiff for sales made in India. The Plaintiff filed CCP No.71/2015 under Sections 11 and 12 of the Contempt of Courts Act, 1971 alleging that Micromax Informatics Limited had deliberately and wilfully violated the order dated 12.11.2014 and praying to hold Micromax Informatics Limited guilty of contempt of court and initiate appropriate proceedings against Micromax Informatics Limited as well as its officers/Directors. The Learned Single Judge thereon issued bailable warrants against the Directors of Micromax Informatics Ltd to ensure their presence in next hearing.

Senior Advocates Sandeep Sethi and Dayan Krishnan arguing for the appellants (Directors of the Company) challenged the order passed by Learned Single Judge and raised the issue that no proceedings can be maintained against the Directors either under the Contempt of Courts Act or under Order 39 Rule 2A of CPC on the ground of the alleged violation of the order dated 12.11.2014 since they were not parties to the suit and there is no order of injunction operating against them. The Court held that unless notices were issued individually to Directors in a contempt case, they could not declared straightway guilty of contempt. Finding of Single Judge found unsustainable and could not be treated as conclusive. Bailable warrants issued against the Directors also recalled. [YU TELEVENTURES PRIVATE LIMITED v. TELEFONAKTIEBOLAGET LM ERICSSON (PUBL), 2015 SCC Online Del 13903, order dated 11.12.2015]

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