2021 (10) TMI 1435 - SC - Indian Laws

Supreme Court sets aside contempt order against appellants for alleged disobedience of levy implementation under Section 21

The SC set aside the HC's contempt order against appellants for alleged wilful disobedience regarding levy implementation under Section 21 of the Assam ... Wilful disobedience of the order - levy made while upholding Section 21 of the Assam Agricultural Produce Market Act, 1972 - HELD THAT:- The High Court on the earlier occasion while dealing with the challenge made to Section 21 of the Act, made a categorical assertion that it did not wish to go into the disputed questions of fact. However, in the order under challenge it was done. A finding has been given on the documents produced by the Respondent No. 1 which could at best be pieces of evidence to be appreciated by the committee constituted already. It is the specific case of the Appellants that they did not violate the directives of the court. There is no material to either establish their knowledge on the action of their subordinates, or that they acted in collusion with each other. Vicarious liability as a principle cannot be applied to a case of contempt. The question as to whether the drivers of two members of the Respondent No. 1 showed the order passed by the court and the documents produced are true and genuine being in the realm of adjudication, ought not to have been taken up by the High Court while exercising contempt jurisdiction. It is noted that it is the Respondent No. 1 who not being satisfied with the order passed by the High Court, filed the special leave petition. Even in the communications sent apart from the Press Note, it is nowhere stated that the order passed by the court could be violated. It is found that the subsequent developments also shall enure to the benefit of the Appellants. The impugned order is set aside - appeal allowed. Issues Involved:1. Willful disobedience of the High Court's order.2. Jurisdiction of the High Court in contempt proceedings.3. Vicarious liability in contempt jurisdiction.4. Adequacy of evidence and disputed facts in contempt proceedings.Issue-wise Detailed Analysis:1. Willful disobedience of the High Court's order:The appeal was filed against the Division Bench of the High Court's order finding the Appellants guilty of willful disobedience of the order dated 12.09.2008. The High Court upheld Section 21 of the Assam Agricultural Produce Market Act, 1972, which allowed the Board to levy cess on agricultural produce. The contempt petition alleged that the Appellants did not scrutinize the direct evidence provided by the Respondent No. 1 members while levying cess, leading to a finding of willful disobedience. However, the Supreme Court emphasized that for civil contempt, what is relevant is 'willful' disobedience, which involves a mental element and requires proof beyond reasonable doubt. The Court found no material to establish the Appellants' knowledge or intentional disobedience.2. Jurisdiction of the High Court in contempt proceedings:The High Court, while upholding the constitutional validity of Section 21A, had earlier declined to go into disputed questions of fact, suggesting that such disputes be dealt with by a constituted committee. Despite this, in the contempt proceedings, the High Court examined factual assertions and documents, which the Supreme Court found inappropriate. The Supreme Court reiterated that a court dealing with a contempt petition should not conduct a roving inquiry beyond the judgment allegedly violated and should respect the mechanism provided in the original judgment for resolving disputes.3. Vicarious liability in contempt jurisdiction:The Appellants argued that the concept of vicarious liability is alien to contempt jurisdiction, and there was no material to implicate them with the actions of their subordinates. The Supreme Court agreed, stating that liability cannot be fastened on a higher official in the absence of knowledge and that vicarious liability does not apply in contempt cases. The Court found no evidence of collusion or knowledge on the part of the Appellants regarding the alleged disobedience by their subordinates.4. Adequacy of evidence and disputed facts in contempt proceedings:The High Court had earlier declined to address disputed questions of fact but later did so in the contempt proceedings. The Supreme Court found this contradictory and emphasized that such factual disputes should be resolved by the committee constituted for this purpose. The Court noted that the documents produced by Respondent No. 1, such as sale invoices and lorry challans, were pieces of evidence to be appreciated by the committee, not in contempt proceedings. The Supreme Court held that the High Court's exercise of jurisdiction in this manner was unwarranted and that the aggrieved parties should have sought alternative remedies.Conclusion:The Supreme Court set aside the High Court's order dated 23.10.2009, allowing the appeal filed by the Appellants. The Court emphasized the principles of willful disobedience, the limits of contempt jurisdiction, and the inapplicability of vicarious liability in contempt cases. The judgment highlighted the need for parties to exhaust alternative remedies and respect the mechanisms provided in the original judgment for resolving disputes.