2017 (5) TMI 733 - SC - Indian Laws

Respondent guilty of contempt for failing to disclose assets and violating court orders

Respondent No. 3 was found guilty of contempt by the Supreme Court for failing to disclose assets as directed and violating restraint orders of the High ... Contempt of court - Held that:- We find that the allegations against Respondent No.3 of committing of contempt are on two counts, in that - a) He is guilty of disobeying the Orders passed by this Court in not disclosing full particulars of the assets as was directed by this Court. b) He is guilty of violating the express Orders of Restraint passed by the High Court of Karnataka in the same Cause from which the present proceedings have arisen. Though the contempt on the second count is theoretically of the orders passed by the High Court of Karnataka since those orders pertain to the very same Cause and the actions on part of Respondent No.3 in not disclosing the account in question through which the transfers were affected also fall with respect to contempt on first count, we proceed to exercise our contempt jurisdiction even with regard to the second count. As stated above, Respondent No.3 was adequately put to notice and no prejudice has been caused as a result of such assumption of jurisdiction by this court. We find that Respondent No.3 is guilty of having committed contempt of court on both the counts. At this stage it must be stated that in terms of Rule 6 (1) of Rules to Regulate Proceeding for Contempt of Supreme Court 1975, Respondent No.3 was obliged and duty bound to appear in person in response to the notice issued by this Court in Contempt Petition. Instead, he chose to file application seeking recall of the orders issuing notice. Having considered the matter, we see no reason to recall that order and dismiss I.A. Nos.1 to 4 of 2016 preferred by Respondent No.3 in Contempt Petition Civil No.421-424 of 2016. Respondent No.3 is therefore duty bound to appear in person in the present contempt proceedings. Since Respondent No.3 has not filed any reply to the Contempt Petition nor did he appear in person, though we have found him guilty of having committed contempt of court, we deem it necessary to give him one more opportunity and also hear him on the proposed punishment. We therefore adjourn matter to 10.07.2017 for hearing Respondent No.3 in person on matters in issue including one regarding the proposed punishment to be awarded to him for contempt of court. The instant contempt petitions and connected cases shall now be listed at 2 o'clock on 10.07.2017. Respondent No.3 may keep his affidavit ready to be tendered on the same day by stating mitigating circumstances, if any and any other submissions he chooses to advance. We direct the Ministry of Home Affairs, Government of India, New Delhi to secure and ensure presence of Respondent No.3 before this Court on 10.07.2017. A copy of this Judgment be sent to the Ministry of Home Affairs for compliance. Issues Involved:1. Non-disclosure of assets by Respondent No. 3.2. Violation of High Court of Karnataka's restraint orders.3. Contempt of court by Respondent No. 3.Issue-Wise Detailed Analysis:1. Non-disclosure of Assets by Respondent No. 3:The petitioners, a consortium of banks, alleged that Respondent No. 3 failed to disclose his assets fully as directed by the Supreme Court in its order dated 07.04.2016. The court had required Respondent No. 3 to disclose all properties, including movable, immovable, tangible, intangible, shareholdings, and any right, title, or interest in various entities both in India and abroad. The disclosure provided by Respondent No. 3 was found to be vague and lacking in material particulars, failing to identify the location of the properties clearly. Additionally, Respondent No. 3 did not disclose the receipt of US$ 40 million, which he had received on 25.02.2016 and subsequently transferred to trusts benefiting his children. The Supreme Court found that Respondent No. 3 had not made a proper disclosure and directed him to make a complete disclosure of all his properties, including the receipt and disbursement of the US$ 40 million.2. Violation of High Court of Karnataka's Restraint Orders:The High Court of Karnataka had passed orders on 03.09.2013 and 13.11.2013 restraining Respondent No. 3 from transferring, alienating, disposing, or creating third-party rights in respect of his movable and immovable properties. Despite these orders, Respondent No. 3 transferred US$ 40 million to trusts benefiting his children. The Supreme Court found that these funds, which came under the control of Respondent No. 3 after the restraint orders were passed, were covered by the orders and that the transfer was in violation of the High Court's orders. The court noted that the actions of Respondent No. 3 in disbursing the amount were reflective of an intent to put the funds beyond the reach of the court's processes.3. Contempt of Court by Respondent No. 3:The Supreme Court found Respondent No. 3 guilty of contempt on two counts: (a) disobeying the orders of the Supreme Court by not disclosing full particulars of his assets, and (b) violating the restraint orders passed by the High Court of Karnataka. The court emphasized that the orders of restraint were clear and unambiguous, covering all properties under the control of Respondent No. 3, regardless of when they came into his possession. The court also noted that Respondent No. 3 had not filed any reply to the contempt petition nor appeared in person as required by the rules. Consequently, the court directed the Ministry of Home Affairs to ensure the presence of Respondent No. 3 before the Supreme Court on 10.07.2017 for a hearing on the proposed punishment for contempt of court.Conclusion:The Supreme Court found Respondent No. 3 guilty of contempt for non-disclosure of assets and violation of the High Court of Karnataka's restraint orders. The court directed Respondent No. 3 to appear in person for a hearing on the proposed punishment and instructed the Ministry of Home Affairs to ensure his presence. The judgment highlights the importance of compliance with court orders and the severe consequences of attempting to subvert the course of justice.