2016 (6) TMI 1467 - HC - Indian Laws

Court dismisses contempt petition for lack of willful disobedience. SICA provisions not applicable to properties outside India.

Ashapura Minechem Ltd. Versus Armada (Singapore) Pte. Ltd. ; Mr. Tam Chee Chong, Judicial Manager; Mr. Jamil Raza Syed, Judicial Manager; Mr. Tay Boon Suan Judicial Manager, Armada (Singapore) Pte. Ltd.

The court dismissed the contempt petition, ruling that the respondents did not willfully disobey the court's order dated 8th September 2015. The court ... Contempt of Court - wilful breach and are in contempt of the order dated 8th September 2015 passed by this Court - execution of the foreign awards - permission of the BIFR under Section 22 of the SICA for seeking enforcement of the foreign awards and to file garnishee proceedings in respect of the properties of the petitioner judgment debtor situated outside India - genuine difference of opinion between the petitioner and the respondents on the issue whether prior permission of the BIFR was mandatory before taking any steps in execution of the foreign awards against the petitioner or not - difference of opinion on interpretation of the order passed by this Court, whether any action under the provisions of Contempt of Courts Act, 1971 can be initiated against the contemnors based on the alleged willful breach of the order passed by this Court or not - standard of proof required for initiating the action for contempt of the orders passed by this Court against the alleged contemnors under the provisions of the Contempt of Courts Act, 1971. Whether the respondent no.1 was required to obtain any prior consent of the BIFR under Section 22 of the SICA for taking steps in execution of the said two foreign awards in respect of the properties of the petitioner situated outside India? HELD THAT:- A conjoint reading of Section 1(2) and Section 21 of the SICA clearly indicates that the provisions of the SICA are extended only to the whole of India and not outside India. The expression “any of the properties of the Industrial Company” in Section 22 of the SICA will have to be read with Section 1(2) of the SICA which provides for territorial jurisdiction of the BIFR which is extended only to any part of this country and not outside India. A reference to the judgment of this Court in the case of MURABLACK INDIA LTD. VERSUS UBS AG [2000 (9) TMI 927 - HIGH COURT OF BOMBAY]will be useful to deal with this issue raised by the learned senior counsel for the respondents. It is held by this Court in the said judgment that prima facie, provisions of Section 22 which have only territorial application would not be attracted to restrain a party from proceeding with the suit instituted outside India even before an application was moved by other party before the BIFR. It is held that the Courts would not injunct proceedings in a foreign Court unless this Court by itself would have jurisdiction to grant the relief and considering other factors. The facts before this Court in the case of Murablack India Limited are identical to the facts of this case. Though this Court had made such observation prima facie to this effect in paragraph 7 of the said judgment, on interpretation of Section 1(2) read with Section 22 of the SICA, prior consent of the BIFR under Section 22 was not required to be obtained by the respondent no.1 to execute the said two foreign awards against the petitioner in any country other than India. The steps taken by the respondent no.1 prior to the date of delivery of the judgment of this Court i.e. on 8th September 2015 in execution of the foreign awards against the petitioner in respect of the properties situated outside India cannot be considered as contemptuous conduct on the part of the respondents for which an action under the provisions of the Contempt of Courts Act, 1971 can be initiated against them - the petitioner though having alleged contempt against the respondents, has failed to discharge the burden of proof which cast upon them. Contempt petition dismissed. Issues Involved:1. Interpretation of the court order dated 8th September 2015 regarding execution of foreign awards.2. Requirement of BIFR permission for enforcement of foreign awards and garnishee proceedings outside India.3. Genuine difference of opinion on the necessity of BIFR permission for execution of foreign awards outside India.4. Applicability of contempt action based on the interpretation of the court order.5. Standard of proof required for initiating contempt action.Detailed Analysis:Issue 1: Interpretation of the Court Order Dated 8th September 2015The petitioner sought a declaration that the respondents were in contempt of the court's order dated 8th September 2015, which they alleged prohibited the respondents from taking steps in execution of foreign awards without BIFR's permission. The court noted that the order made an observation that steps in execution of the award should not violate Section 22 of SICA without BIFR's permission but did not issue an injunction restraining such actions.Issue 2: Requirement of BIFR Permission for Enforcement of Foreign Awards and Garnishee Proceedings Outside IndiaThe court examined whether the respondents needed BIFR's permission under Section 22 of SICA for executing foreign awards against the petitioner's properties outside India. It was concluded that Section 22 of SICA, read with Section 1(2), extends only to India and does not have extra-territorial application. Thus, the respondents were not required to obtain BIFR's permission for execution proceedings outside India.Issue 3: Genuine Difference of Opinion on the Necessity of BIFR Permission for Execution of Foreign Awards Outside IndiaThe court acknowledged the genuine difference of opinion between the parties regarding the interpretation of the court's order and the applicability of SICA's provisions to properties outside India. The court emphasized that such differences in interpretation do not amount to contempt.Issue 4: Applicability of Contempt Action Based on the Interpretation of the Court OrderThe court held that contempt proceedings cannot be initiated based on mere observations or suggestions in a court order. There must be an express direction or command. The observations in the court's order dated 8th September 2015 were not in the nature of a command or authoritative instruction and, therefore, did not constitute an enforceable order.Issue 5: Standard of Proof Required for Initiating Contempt ActionThe court reiterated that contempt proceedings are quasi-criminal and require proof beyond a reasonable doubt. The burden of proof lies on the petitioner to establish willful disobedience of the court's order. The court found that the petitioner failed to meet this standard of proof, and the respondents' actions did not constitute willful disobedience.Conclusion:The court dismissed the contempt petition, stating that the respondents did not willfully disobey the court's order dated 8th September 2015. The observations in the order were not enforceable commands, and the provisions of SICA do not apply to properties outside India. The court emphasized the need for a high standard of proof in contempt proceedings and found that the petitioner did not meet this requirement.