Supreme Court Allows Appeal, Sets Aside High Court Order Exceeding Contempt Scope; Bank Can Act on 2002 Inquiry Report.

The SC allowed CA No. 1727/2002, setting aside the Calcutta HC's order in MAT No. 4075/1998, and deleted specific directions issued by the Single Judge that exceeded the scope of contempt proceedings. The SLP (C) Nos. 13045-46/2003 were dismissed as infructuous. The appellant-Bank may proceed with actions based on the Inquiry Report dated 18.7.2002, and each party will bear its own costs.

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Issues Involved:
1. Appealability under Section 19 of the Contempt of Courts Act, 1971.
2. Availability of intra-court appeal under clause 15 of the Letters Patent.
3. Scope of directions that can be issued in contempt proceedings.

Issue-wise Detailed Analysis:

Re: Point No. (i) - Appealability under Section 19 of the Contempt of Courts Act, 1971:
Section 19 of the Contempt of Courts Act, 1971, allows appeals only against orders or decisions of the High Court that punish for contempt. The Supreme Court, referencing precedents such as *Baradakanta Mishra v. Justice Gatikrushna Misra* and *D.N. Taneja v. Bhajan Lal*, clarified that appeals under Section 19 are maintainable only against orders imposing punishment for contempt. Orders that initiate, refuse to initiate, or drop contempt proceedings, or acquit the contemnor, are not appealable under this section. Such orders may be challenged under Article 136 of the Constitution in special circumstances. The Court emphasized that in contempt proceedings, the High Court should not adjudicate on the merits of the dispute between the parties.

Re: Point No. (ii) - Availability of intra-court appeal under clause 15 of the Letters Patent:
Clause 15 of the Letters Patent allows for an intra-court appeal from a 'judgment' of a single Judge. The Supreme Court, referencing *Shah Babulal Khimji v. Jayaben D. Kania & Anr.*, explained that a 'judgment' under clause 15 includes final judgments, preliminary judgments, and intermediary or interlocutory judgments that decide matters of moment or affect vital and valuable rights of the parties. The Court held that the order dated 20.11.1998, which contained directions on the merits of the dispute, was an 'interlocutory judgment' and thus appealable under clause 15. The Division Bench erred in holding that the appeal was not maintainable because it was filed by the Chairman and Secretary-in-Charge eo nomine and not by the Bank itself.

Re: Point No. (iii) - Scope of directions that can be issued in contempt proceedings:
The Court noted that the learned Single Judge had issued several directions in the contempt proceedings, including reinstating the complainant, revoking the suspension, and appointing a new Enquiry Officer. The Supreme Court held that these directions were beyond the scope of contempt proceedings and amounted to adjudication of rights and liabilities not in issue in the contempt proceedings. The Court emphasized that the High Court, in contempt proceedings, should focus on whether there was willful disobedience of its orders and, if so, punish for contempt. The directions to reinstate the employee, pay arrears of salary, and revoke the suspension were set aside.

Conclusion:
1. CA No. 1727/2002: The appeal is allowed. The order dated 26.2.2001 of the Calcutta High Court in MAT No. 4075/1998 is set aside. Directions (2) and (3) and the direction that "the suspension shall be immediately deemed to have been revoked" in the order dated 20.11.1998 of the learned Single Judge are deleted.
2. SLP (C) Nos. 13045-46/2003: These special leave petitions are dismissed as infructuous.
3. Further Action: The appellant-Bank is at liberty to take further action based on the Inquiry Report dated 18.7.2002, in accordance with law.
4. Costs: Parties to bear their respective costs.

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