TaxTMI 
TaxTMI 
1988 (9) TMI 273
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion of contempt proceedings against the proprietors of Indian Express Newspapers, Bombay Pvt. Ltd., Shri Arun Shourie, Indian Express Newspapers, Bombay Pvt. Ltd., Shri Hari Jaisingh, resident editor, Indian Express Newspapers Bombay Pvt. Ltd., Shri A. C. Saxena, news editor, Indian Express Newspapers Pvt. Ltd., Delhi, Shri H. K. Dua, Chief, New Delhi Bureau, Indian Express Newspapers Pvt. Ltd., New Delhi, and Shri V. Ranganathan, Indian Express Bombay Pvt. Ltd. The petition was moved on behalf of Reliance Petrochemicals Ltd. (hereinafter called "Reliance Petrochemicals"). It was stated therein that this court should take cognisance of the contempt alleged to have been committed by the respondents and it was further prayed that, pending the consideration of the question of criminal contempt, this court should pass an order restraining the Express Group of Newspapers and their related publications from publishing any materials or articles in relation to the subject matter of the proceedings in Transfer Petitions Nos. 192 and 193 of 1988 which was sub-judice issue in Writ Petition No. 1276 of 1988 in the Karnataka High Court, Writ Petition No. 1791 of 1988 in the Delhi High Court, Wr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....In such circumstances, an application for transfer of these proceedings under article 139A of the Constitution of India read with Part IV-A of the Supreme Court Rules, 1966, was moved by Reliance Petrochemicals Ltd., against the Union of India, Controller of Capital Issues and the petitioner in the suit in Bangalore and writ petition in Delhi. It was stated that the certificate of incorporation was granted to the petitioner on or about January 11, 1988, and the Certificate of Commencement of Business was granted on January 21, 1988. On May 4, 1988, an application was made to the Controller of Capital Issues for raising Equity Share Capital/Cumulative Convertible Preference Shares/ Convertible Debentures for financing the proposed projects for manufacture of PVC, HDPE and MEG. On July 4, 1988, as mentioned before, the consent of the Controller of Capital Issues wa9 granted to the petitioner for capital issue of 5,75,00,000 equity shares of Rs. 10 each inclusive of retainable excess subscription of Rs. 75 crores and for 2,96,70,000 12.5% secured fully convertible debentures of Rs. 200 each for cash at par to public. It is not necessary for the present purpose to set out the details o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ut let or hindrance, notwithstanding any proceedings instituted or that may be instituted in or before any court or Tribunal or other authority. Any order, direction or injunction of any court, Tribunal or authority in any proceeding already passed or which may be passed will, by operation of this order, be and remain suspended till further orders of this court." In substance, the order was that the issue be proceeded "without let or hindrance", notwithstanding any proceedings instituted or that may be instituted in or before any court or Tribunal or other authority. This court vacated all orders of injunction in respect of the said issue. It was asserted on behalf of the petitioner that this court must have been prima facie satisfied that there was no legal infirmity which should stand in the way of the public issue of the said debentures going through and further, in any event, must have been satisfied that there should not be any let or hindrance to the said public issue. The petitioner had drawn our attention to an article published on August 25, 1988, under the heading, "Infractions of Law has Unique Features RPL Debentures". It is not necessary for the present purpose to se....
X X X X Extracts X X X X
X X X X Extracts X X X X
....88. The attention of the court was drawn to an article proposed to be published in the Indian Express which was annexure "B" to the said affidavit. Submissions were made on the validity or the propriety of the interim order. Upon hearing learned counsel for both the parties, this court observed that it was sufficient to say that the article proposed to be published and forming part of annexure "B" did not violate the order of injunction passed by this court on August 25, 1988. In other words, this court was of the view that the article in question which was intended to be published and shown to this court on August 26, 1988 did not question the legality or the validity of the order which was in issue in the proceedings in this court. In those circumstances, no question of variation or vacation of the said interim order arose. The said article proposed at that time has since been published before August 31, 1988. It was stated in the affidavit as well as in the submissions made from the Bar that the shares have been over-subscribed but the day of allotment, of course, has not yet expired and before the allotment, the subscribers, it was submitted, could withdraw their subscriptions.....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... as follows: "19. Protection of certain rights regarding freedom of speech, etc.- (1)All citizens shall have the right- (a)to freedom of speech and expression; (b)to assemble peaceably and without arms; (c)to form associations or unions ; (d)to move freely throughout the territory of India ; (e)to reside and settle in any part of the territory of India; (f)(Omitted). Before its omission, sub-clause (f) read as follows : "to acquire, hold and dispose of property; and") (g)to practise any profession, or to carry on any occupation, trade or business. (2).Nothing in sub-clause (a ) of clause (1) shall affect the operation of any existing law, or prevent the State from making any law, in so far as such law imposes reasonable restrictions on the exercise of the right conferred by the said sub-clause in the interests of the sovereignty and integrity of India), the security of the State, friendly relations with foreign States, public order, decerfcy or morality or in relation to contempt of court, defamation or incitement to an offence." The effect of article 19 on the freedom of the press was analysed in the decision of this court in Express Newspapers (Pvt.) Ltd. v. Union of I....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tate Government, the State Chief Minister broadcast a speech seeking to justify the propriety of the order. The High Court issued rule requiring the Chief Minister to show cause as to why he should not be committed for contempt of court. The High Court found him guilty of contempt and fined him. The matter came up before this court and the conviction was upheld. It was held that the speech was ex facie calculated to interfere with the administration of justice. This court reiterated that in all cases of comment on pending proceedings, the question is not whether the publication did interfere, but whether it tended to interfere with the due course of justice. The question is not so much of the intention of the contemnor as to whether it is calculated to interfere with the administration of justice. But, for the instant case, this decision cannot be of much assistance. Firstly, the contents of the speech of the Chief Minister were entirely different. The Chief Minister, in his speech, had characterised the preparation of any food with milk product as amounting to a crime. There was a tendency, in the speech of the Chief Minister, of intimidating the litigants or the potential litigan....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ntiers. This article shall not prevent States from requiring the licensing of broadcasting, television or cinema enterprise. (2) The exercise of these freedoms: since it carries with it duties and responsibilities, may be subject to such formalities, conditions, restrictions or penalties as are prescribed by law and are necessary in a democratic society, in the interests of national security, teritorrial integrity or public safety, for the prevention of disorder or crime, for the protection of health or morals, for the protection of the reputation or rights of others, for preventing the disclosure of information received in confidence, or for maintaining the authority and impartiality of the judiciary." The First Amendment to the Constitution of the U.S.A. provides as follows: "Amendment 1-Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances." Keeping the constitutional requirements of the Indian law in the background, it would be appropriate to refer to certain A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....na Carta. Justice Frankfurter further reiterated that the dependence of society upon an unswerved judiciary is such a commonplace in the history of freedom that the means by which it is maintained are too frequently taken for granted without heed to the conditions which alone make it possible. (emphasis supplied). The rule of courts of justice in our society has been the theme of statesmen and historians and constitution-makers, and best illustrated in the Massachusetts Declaration of Rights as the right of every citizen to be tried by judges as free, impartial and independent as the lot of humanity will admit. Justice Frankfurter in his dissenting judgment, with whom Justice Stone, Justice Roberts and Justice Byrnes agreed, reiterated at page 284 of the report that the Constitution is an instrument of Government and is not conceived as a doctrinaire document, nor was the Bill of Rights intended as a collection of popular slogans. It is well to remember that Justice Frankfurter recognised that we cannot read into the 14th Amendment the freedom of speech and of the press protected by the First Amendment and at the same time leave out the age-old means employed by States for securin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....test. Hence, we must examine the gravity of the evil. In other words, a balance of convenience in the conventional phrase of Anglo-Saxon common law jurisprudence would, perhaps, be the proper test to follow. In this background, it would be appropriate to refer to some of the English decisions to which our attention was drawn. Mr. Jethmalani relied on the observations of Lord Denning in the Court of Appeal in Attorney-General v. British Broadcasting Corporation [1979] 3 All ER 45, where the Master of Rolls, Lord Denning, characterised some of these similar types of injunctions as "gagging injunctions". Mr. Baig, however, protested that in view of the terms in which the injunction was issued in the instant case, the order did not "gag" anything that was legitimate. The House of Lords, however, did not approve the observations of Lord Denning. We may refer to the observations of the House of Lords in Attorney-General v. British Broadcasting Corporation [1981] AC 303, wherein the Attorney-General brought proceedings for an injunction to restrain the defendants from broadcasting a programme dealing with matters which related to an appeal pending before a local valuation court on the gr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ard or read outside the court and he will not knowingly let himself be influenced in anyway by the media, nor, in my view, will any layman experienced in the discharge of judicial duties. Nevertheless, it should, I think, be recognised that a man may not be able to put that which he has seen, heard or read entirely out of his mind and that he may be subconsciously affected by it. As Lord Denning M. R. said, the stream of justice must be kept clean and pure. It is the law, and it remains the law until it is changed by Parliament that the publication of matter likely to prejudice the hearing of a case before a court of law will constitute a contempt of court punishable by fine or imprisonment or both. In this appeal, we do not have to pronounce on whether the proposed broadcast would have prejudicially affected the hearing before the local valuation court. Although it clearly was likely to have aroused hostility to the Exclusive Brethren, it by no means follows that it would have prejudiced their claim to relief from rates. The mere assertion in the course of the broadcast that they were not entitled to that relief was in my view unlikely to have affected in any way a decision on wh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ete factual accuracy, on the testing, manufacture and marketing of the drug. On the Attorney-General's motion, the Divisional Court of the Queen's Bench Division granted an injunction restraining publication on the ground that it would be contempt of court. After the grant of the injunction on November 17, 1972, and while the newspaper's appeal was pending, the thalidomide tragedy was, on November 29, debated in Parliament and speeches were made and reported which expressed opinions and stated facts similar to those in the banned article. Thereafter, there was a national compaign in the press and among the general public directed to bringing pressure on the company to make a better offer for the children and their parents; and the company in fact made a substantially increased offer. The Court of Appeal, having discharged the injunction, the Attorney-General appealed to the House of Lords. It was held that the contempt of court to publish material which prejudged the issue of pending litigation or was likely to cause public pre-judgment of that issue, and accordingly the publication of this article, which in effect charged the company with negligence, would constitute a contempt, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....elation to the matter which is under discussion or with respect to some other matters." Lord Reid made certain observations upon which Mr. Baig relied, i.e., at page 300, which are as follows : "I think that anything in the nature of prejudgment of a case or of specific issues in it is objectionable, not only because of its possible effect on that particular case but also because of its side effects which may be far-reaching. Responsible 'mass media' will do their best to be fair, but there will also be ill-informed, slapdash or prejudiced attempts to influence the public. If people are led to think that it is easy to find the truth, disrespect for the processes of the law could follow, and, if mass media are allowed to judge, unpopular people and unpopular causes will fare very badly. Most cases of prejudging of issues fall within the existing authorities on contempt. I do not think that the freedom of the press would suffer ; and I think that the law would be clearer and easier to apply in practice if it is made a general rule that it is not permissible to prejudge issues in pending cases" (Emphasis supplied) Lord Diplock stated at page 309 of the report that the due administr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f speech, and I agree with my noble and learned friend that we should maintain the rule that any 'prejudging' of issues, whether of fact or of law, in pending proceedings-whether civil or criminal-is in principle an interference with the administration of justice although in any particular case the offence may be so trifling that to bring it to the notice of the court would be unjustifiable. " Mr. Baig emphasised that there is an inherent jurisdiction to restrain by injunction any publication that interferes with a fair trial or a pending case or with the administration of justice in general. He further urged that trial of a newspaper in a sub judice matter is wrong. Publication is permissible provided it does not amount to prejudgment or prejudice of a matter in court. Liberty or freedom of the press must subserve the due administration of justice. He submitted that there is need to continue the injunction because contribution to the debentures could be withdrawn as the final allotment has not yet been made. On the other hand, Mr. Diwan submitted that there is no jury-trial involved here and no likelihood of the trial being prejudiced because trial is by professionally trained j....
X X X X Extracts X X X X
X X X X Extracts X X X X
....inform. The question of contempt must be judged in a particular situation. The process of the due course of administration of justice must remain unimpaired. Public interest demands that there should be no interference with the judicial process and the effect of the judicial decision should not be pre-empted or circumvented by public agitation or publication. It has to be remembered that even in turbulent times through which the developing countries are passing, contempt of court means interference with the due administration of justice. In the peculiar facts of this case, now that the subscription to the debentures has closed and, indeed, the debentures have been oversubscribed, we are inclined to think that there is no such imminent danger of the subscription being withdrawn before the allotment and so as to make the issue vulnerable by any publication of article. On a balance of convenience, we are of the opinion that continuance of the injunction is no longer necessary. In this peculiar situation, our task has been difficult and complex. The task of a modern judge, as has been said, is increasingly becoming complex. Furthermore, the lot of a democratic judge is heavier and t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Thalidomide case Attorney-General v. Times Newspapers Limited [1974] AC 273, the observations of this court in Re : P. C. Sen [1969] 2 SCR 649 and the provision contained in section 2(c)(iii ) of the Contempt of Courts Act, 1971, that any such publication would tend to interfere with the fair administration of justice and so constitute criminal contempt and would be liable not merely to punitive action after publication but also to stoppage by a preventive order before publication. On the other hand, for the respondents, it is contended that, in the decisions relied upon for the petitioners, the publications alleged to constitute contempt were of such a nature that they were seen to affect the course of actions actually pending in courts, that even otherwise the decision of the House of Lords has been widely criticised and should not be followed and that the views expressed by Lord Denning, M. R. in Attorney-General v. British Broadcasting Corporation L1979] 3 All ER 45-though reversed by the House of Lords in [1981] AC 303-and by the American courts in Bridges v. State of California (86 LEd 252) and in John D. Pennekamp v. State of Florida (90 L Ed 1295) should be preferred as mo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uch beliefs, then the effect of the order of this court, upholding, prima face, the validity of the debenture issue on the above aspects would stand undermined. In my view, this contention is untenable. I do not think that the contention proceeds on a correct analysis of the ratio of our order dated August 25, 1988, or the earlier order dated August 19, 1988. It should be remembered that the proceedings which gave rise to the transfer applications were writ petitions and a suit filed in various courts challenging, inter alia, the validity or the regularity of the debenture issue of the petitioner company. If these matters had been heard by the various High Courts or other subordinate courts, there was a possibility that one or more of the courts, satisfied with the prima facie tenability of the contentions of the petitioners therein, might issue an order staying the debenture issue pending disposal of the suit or writ petition. In fact, it seems also, that interim orders of this nature had been obtained. The petitioner was apprehensive that, if any such interim order was passed, all the time, labour and money expended in floating the debenture issue might be nullified at the last m....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nds on which stay orders had been sought to be obtained from courts. The article published by the respondents, though not violative of the terms of the injunction granted by this court, could have the effect of circumventing the order of this court and rendering it ineffective. It had prima facie, a tendency to affect the efficacy of, and defeat the object with which this court had passed the interim order dated August 19, 1988. This is the reason why we passed the second order dated August 25, 1988, and also declined to modify or vary it at the request of counsel for the newspapers on the next day. I am of opinion that the said order was rightly passed and that the contention of learned counsel for the respondent that no such injunction ought to have been granted at all is not acceptable. The position today, however, has radically changed. We are told that the issue has been over-subscribed. In my opinion, this stage having been completed, there is no necessity to continue the interim order passed by us on August 25, 1988. Counsel for the petitioner, however, vehemently contended that there has been no material change in the situation. He submitted that many lakhs of people have....