M/S Spotasia Digital PVT. LTD. vs. Mr. Naveen Kumar & Ors.

Facts

This matter before the Delhi High Court was a contempt petition filed by M/s Spotasia Digital Pvt. Ltd. (Petitioner) alleging wilful disobedience of a previous order dated February 19, 2024, passed in ARB. A (COMM) No. 13/2024. The previous order directed the Respondent to pay maintenance charges, inclusive of GST, amounting to Rs. 1,90,000/- per month and to deposit Rs. 1,18,000/- per month in a fixed deposit. The Petitioner contended that the Respondent was not complying with these directions. The Respondent, through their counsel, stated that while Rs. 1,90,000/- was being paid, the GST component was being reversed by the Petitioner, preventing input tax credit. Furthermore, the Rs. 1,18,000/- deposit was not made due to confusion regarding the GST component.

Held

The Court held that the Petitioner ought to raise invoices for Rs. 1,90,000/- with a qualification that this amount was as per the Court's order dated February 19, 2025, and subject to the directions of the Arbitrator. The second amount of Rs. 1,18,000/- per month, inclusive of GST, was to be deposited as directed by the Respondent. The Court noted that the Respondent's counsel stated that this amount would be deposited within six weeks in a fixed deposit as previously directed. The Court reiterated that issues related to interest could be adjudicated by the Arbitrator, as the original order was passed in an application under Section 37 of the Arbitration & Conciliation Act, 1996. The Court emphasized that its observations in the previous order and the present judgment would not influence the Arbitrator's final decision. The Court directed that the directions passed in the order dated February 19, 2024, would continue and there should be no further confusion that triggers late deposition of amounts. The contempt petition was disposed of.

Key Issues

1. Whether the Respondent has wilfully disobeyed the order dated February 19, 2024, by not making the payments and deposits as directed, thereby constituting contempt of court? (Mixed question of law and fact, concerning compliance with court orders). 2. Whether the confusion regarding the GST component in the payments and deposits justifies the non-compliance with the Court's order? (Mixed question of law and fact, concerning interpretation of payment terms and court directions). Petitioner's Contention: The Petitioner argued that the Respondent's failure to make the full payments and deposits as per the February 19, 2024 order amounted to wilful disobedience and contempt. They sought adherence to the court's directions. Respondent's Contention: The Respondent, through their counsel, argued that the non-compliance was due to confusion surrounding the GST component. They stated that the Petitioner was issuing invoices for Rs. 3,08,000/- inclusive of GST, but the Respondent was facing issues with claiming input tax credit on the Rs. 1,90,000/- portion, and the Rs. 1,18,000/- deposit was also affected by this GST confusion.