2006 (4) TMI 553 - SC - Indian Laws

Court Dismisses Objection, Confirms Accountability for Willful Disobedience of Orders; Further Hearings Scheduled.

Rama Narang Versus Ramesh Narang and Anr.

The SC dismissed the preliminary objection concerning the maintainability of the contempt petition, affirming that respondents could be held accountable ... Maintainability of the Contempt proceedings - violated the terms of the orders specially the clauses 3(c), (d) and (f) of the consent minutes - HELD THAT:- In the present case, the consent terms arrived at between the parties was incorporated in the orders passed by the Court on 12th December 2001 and 8th January 2002. The decree as drawn up shows that order dated 8th January, 2002 was to be 'punctually observed and carried into execution by all concerned'. A violation of the terms of the consent order would amount to a violation of the Court's orders dated 12th December 2001 and 8th January 2002 and, therefore be punishable under the first limb of Section 2(b) of the Contempt of Courts Act, 1971. The question whether the respondents should not be held guilty of contempt because of any earlier confusion in the law reflected in the case of Babu Ram Gupta [1979 (4) TMI 164 - SUPREME COURT], is a question which must be left for decision while disposing of the contempt petition on merits. It may be argued as an extenuating or mitigating factor once the respondents are held guilty of contempt. The submission does not pertain to the maintainability of the petition for contempt. The preliminary objection raised by the respondents regarding the non-maintainability of the petition for contempt is, for the reasons stated, dismissed. The issue as to whether the respondents have in fact acted in violation of the terms of the consent order will now have to be decided on merits. Let the matter be listed for this purpose. Costs of this petition will be costs in the contempt petition. Issues Involved:1. Alleged violation of Supreme Court orders dated 12th December 2001 and 8th January 2002.2. Maintainability of the contempt petition.3. Interpretation of consent orders and their enforceability under contempt jurisdiction.4. Distinction between consent orders and orders passed on merits.5. Applicability of the Contempt of Courts Act, 1971.Detailed Analysis:1. Alleged Violation of Supreme Court Orders:The petitioner alleged that the respondents violated the Supreme Court's orders dated 12th December 2001 and 8th January 2002. These orders disposed of several contempt petitions and suits between family members, primarily concerning the control of a company, NIHL. The orders included specific terms agreed upon by the parties, such as the roles and powers of directors, operational controls, and financial transactions. The petitioner claimed that the respondents violated clauses 3(c), (d), and (f) of the consent minutes, amounting to willful disobedience of the Court's orders.2. Maintainability of the Contempt Petition:The respondents raised a preliminary objection regarding the maintainability of the contempt petition, arguing that the consent order did not contain an undertaking or injunction of the Court and could not be the basis for contempt proceedings. They relied on precedents such as Babu Ram Gupta v. Sudhir Bhasin and Bank of Baroda v. Sadruddin Hasan Daya, which suggested that a mere violation of consent terms without an express undertaking to the Court does not constitute contempt. The petitioner countered that a decree for injunction, whether directory or prohibitory, can only be enforced through contempt proceedings, and there was no rational distinction between orders passed on merits and those passed by consent.3. Interpretation of Consent Orders and Their Enforceability:The Court analyzed the definition of civil contempt under Section 2(b) of the Contempt of Courts Act, 1971, which includes willful disobedience to any judgment, decree, direction, order, or other process of a Court or willful breach of an undertaking given to the Court. The Court noted that the legislative intention was to distinguish between these two categories of contumacious behavior and that no distinction is drawn between an order passed after adjudication and an order passed by consent. The Court referred to English jurisprudence and previous Indian cases to support the view that breach of a consent decree can be punishable by contempt.4. Distinction Between Consent Orders and Orders Passed on Merits:The Court rejected the respondents' argument that a consent decree is merely an agreement between parties without the Court's mandate. It held that a consent decree is a contract with the imprimatur of the Court, meaning it is authorized and approved by the Court. The Court emphasized that all decrees and orders, including consent decrees, are executable under the Code of Civil Procedure, and the fact that an order is executable does not take away the Court's jurisdiction to deal with contempt.5. Applicability of the Contempt of Courts Act, 1971:The Court examined the historical context and the legislative changes brought by the Contempt of Courts Act, 1971, which provided clearer definitions and broader scope for the exercise of contempt jurisdiction. The Court distinguished between the two categories of contempt under Section 2(b) and concluded that willful violation of any order or decree, including consent decrees, falls within the first category and is punishable under the Act.Conclusion:The Supreme Court dismissed the preliminary objection regarding the non-maintainability of the contempt petition, holding that the respondents could be called upon to answer for willful disobedience of the Court's orders dated 12th December 2001 and 8th January 2002. The Court clarified that the issue of whether the respondents acted in violation of the consent order would be decided on merits. The matter was listed for further hearing to determine the respondents' guilt in the alleged contempt.