Willful breach of counsel's undertaking constitutes civil contempt under Section 2(b) Contempt of Courts Act 1971

SC held that willful breach of an undertaking given by counsel to the court constitutes civil contempt under Section 2(b) of the Contempt of Courts Act 1971. The court has power to declare contemptuous transactions void to nullify advantages gained through contumacious conduct. Purchasers/beneficiaries of contemptuous transactions need not be impleaded as necessary parties in contempt proceedings. Belated apologies are merely mitigating circumstances and do not purge contempt. HC was justified in declaring sale deeds as non est and ordering restoration of status quo. Appeals dismissed.

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Issues Involved:
1. Wilful breach of an undertaking given by counsel/advocate to the court.
2. Distinction between an undertaking given to a party and an undertaking given to the court.
3. Power of the contempt court to declare contemptuous transactions void.
4. Right of beneficiaries of contemptuous transactions to be heard in contempt proceedings.
5. Acceptance of apology in contempt proceedings.

Detailed Analysis:

1. Wilful Breach of an Undertaking Given by Counsel/Advocate to the Court:
The court held that the wilful breach of an assurance in the form of an undertaking given by a counsel/advocate on behalf of his client to the court would amount to "civil contempt" as defined under Section 2(b) of the Contempt of Courts Act, 1971. The court emphasized that an undertaking given to the court is distinct from a mere agreement between parties and carries the weight of an injunction. The court stated, "An undertaking given to the court by a person or a corporation in pending proceedings on the faith of which the court sanctions a particular course of action or inaction, has the same force as an injunction made by the court and breach of the undertaking is misconduct amounting to contempt."

2. Distinction Between an Undertaking Given to a Party and an Undertaking Given to the Court:
The court clarified that there exists a distinction between an undertaking given to a party to the lis and an undertaking given to the court. The former does not attract the provisions of the Contempt of Courts Act, 1971, whereas the latter does. The court held that the undertaking in the present case was given to the court, as evidenced by the statement made by the learned counsel before the High Court, which was recorded in the court's order. The court stated, "The expression 'undertakes' or 'gives a solemn promise' used in the statements of the parties or their counsel or in the orders and decrees of the court, unless the context otherwise suggests, means an implied undertaking to the court."

3. Power of the Contempt Court to Declare Contemptuous Transactions Void:
The court affirmed that the contempt court has the power to declare any contemptuous transaction non est or void. The court referred to the decision in State Bank of India and Others v. Dr. Vijay Mallya, which held that apart from punishing the contemnor, the court may issue directions to nullify any advantage secured as a result of contumacious conduct. The court noted, "The approach may require the Court to issue directions either for reversal of the transactions in question by declaring said transactions to be void or passing appropriate directions to the concerned authorities to see that the contumacious conduct on the part of the contemnor does not continue to enure to the advantage of the contemnor or anyone claiming under him."

4. Right of Beneficiaries of Contemptuous Transactions to be Heard in Contempt Proceedings:
The court held that the beneficiaries of any contemptuous transaction have no right or locus to be heard in the contempt proceedings on the ground that they are bona fide purchasers of the property for value without notice. The court emphasized that contempt is between the court and the contemnor, and no third party can involve itself in the same. The court stated, "It does not matter that to contempt proceedings Somani Builders was not a party. It cannot gain an advantage in derogation of the rights of the parties, who were litigating originally."

5. Acceptance of Apology in Contempt Proceedings:
The court held that an apology should not be accepted as a matter of course and that the court is not bound to accept the same. The court emphasized that even if the apology is unconditional, unqualified, and bona fide, it should not be accepted if the conduct is serious and has caused damage to the dignity of the institution. The court stated, "There ought not to be a tendency by courts to show compassion when disobedience of an undertaking or an order is with impunity and with total consciousness."

Conclusion:
The court dismissed all three appeals, holding the appellants guilty of civil contempt for the wilful breach of an undertaking given to the court. The court declared the sale deeds executed by the contemnors as void and directed the contemnors to restore the position prevailing prior to the execution of the sale deeds. The court also rejected the apology tendered by the contemnors, emphasizing that it was not genuine and was made to avoid the consequences of their contemptuous conduct. The court granted the appellants two weeks to surrender and serve out the sentence imposed by the High Court.

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