WORK :- 22/6/2017

The concerned Employee was in violation of Certain Orders (for breaching the terms of the
Service Contract Agreement) of the Court and hence guilty of civil contempt of court as
provided under Sec 2(a) of the Contempt Of Courts Act 1961. Informing the clients of Such
important status of the employee was within its responsibility under Sec 166(2) of Companies
Act.

Relevant Sec :- [Sec166(2) of The Companies Act 2013]

LEGAL PRINCIPLE :-The duties and responsibilities of directors stipulated by the Indian
Companies Act of 2013, can broadly be classified into the following two categories: ---

[i] The duties and liabilities which encourage and promote the sincerest investment of the best
efforts of directors in the efficient and prudent corporate management, in providing elegant and
swift resolutions of various business-related issues including those which are raised through "red
flags", and in taking fully mature and wise decisions to avert unnecessary risks to the company.

[ii] Fiduciary duties which ensure and secure that the directors of companies always keep
the interests of the company and its stakeholders, ahead and above their own personal
interests

“A director of the company shall act in good faith, in order to promote the objects of the
company, for the benefits of the company as a whole, and in the best interests of the
stakeholders”

1.Judgement:- Rajeev Saumitra vs Neetu Singh & Ors

Court:- Delhi HC

Citation:- Judgment pronounced on: 27th January, 2016

(I.A. No.17545/2015 in CS(OS) No.2528/2015)

Facts:- The main reason for the litigation was that defendant No.1 who is the wife of the plaintiff
incorporated another company being the Director of defendant No.3-Company under the name of
K.D. Campus Pvt. Ltd. (defendant No.2). She is the founder and director of the company for the
purposes of competing with defendant No.3. The said company of defendant No.2 was
incorporated by defendant No.1 in February, 2015 for the purposes of competing with and
diverting the business, staff, students and monies of defendant No.3. It is also involved in
imparting education, training and preparation for various national examinations.
Held: it appears to the Court that defendant No.1 being the Director of the Company has not
acted in good faith. It is obvious done by her in order to promote the object of the Company, in
the best interest of the Company, its employees and for protection of environment; she has not
exercised her duty with due and reasonable care, diligence and she was involved in the situation
in which there was a direct interest that conflicted with the interest of the Company.

2. In the case of Delhi Judicial Service Association, Tis Hazari Court, Delhi v.
State of Gujarat and Ors 1991CriLJ3086, a three Judge Bench of the Hon'ble Supreme
Court observed as under:

"The definition of contempt is wide enough to include any act by a person which would tend to
interfere with the administration of justice or which would lower the authority of court. The
public have a vital stake in effective and orderly administration of justice. The Court has the
duty of protecting the interest of the community in the due administration of justice and, so, it is
entrusted with the power to commit for contempt of court, not to protect the dignity of the Court
against insult or injury, but, to protect and vindicate the right of the public so that the
administration of justice is not perverted, prejudiced, obstructed or interfered with."