TaxTMI 
TaxTMI 
2001 (8) TMI 1239
X X X X Extracts X X X X
X X X X Extracts X X X X
....ties belonging to the said notified party stood automatically attached. 3. The Custodian appointed under the Special Court Act filed Misc. Application No. 193 of 1993 and sought a decree for Rs. 50 crores on behalf of the notified party against Pallav Sheth, the Appellant herein. On 24-2-1994 the Appellant submitted to a consent decree for a sum of Rs. 51.49 crores which was to be paid in instalments. Rs. 2.00 crores were paid but thereafter the Appellant defaulted in the payment of further instalments. 4. The Custodian then moved an Execution Application No. 343 of 1994 and the Special Court thereupon required the Appellant to disclose all his assets and at the same time by an interim order restrained him from alienating, encumbering, selling off or parting with possession or transferring in any manner whatsoever any of his assets movable and immovable including the bank accounts. On an affidavit being filed by the appellant declaring his assets, the Special Court on 24-8-1994 passed further interim order of attachment of some of the assets mentioned therein. 5. On 11-11-1997 the Income-tax Department conducted raids on Pallav Sheth. The newspaper reports indicated detect....
X X X X Extracts X X X X
X X X X Extracts X X X X
....noticed that by an order dated 29-10-1999 the Special Court allowed amendment of the Miscellaneous Application No. 276 of 1998 permitting substitution of reference to the order dated 24-8-1994 with order dated 3-8-1994. Ultimately by an order dated 31-1-2001 the Special Court passed an order holding Pallav Sheth to be guilty of Contempt of Court and sentenced him to one month's simple imprisonment and imposed a fine of Rs. 2,000. By a separate order dated 7-2-2001, the Special Court dealt with the contention that its action was not barred by limitation as contemplated by section 20 on the ground that this was a case of continuing wrong. 8. Along with this appeal by Pallav Sheth the aforesaid five companies also filed appeals. Mr. Venugopal appearing on behalf of Pallav Sheth restricted his arguments only to the issue of limitation under section 20 and he chose not to make any submissions on the merits of the issue. In other words, no arguments are addressed on the finding of the Special Court in relation to the aforesaid five companies and to its conclusion that Pallav Sheth had committed a Contempt of Court. As for the appeals filed by the five companies, the same were dismisse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iod of limitation will begin to run from the date of knowledge in cases where the contempt has been concealed by fraud or dishonest conduct of the condemner, like in the present case. 11. The Contempt of Courts Act, 1926 was the first piece of legislation which was enacted with a view to define and limit the powers of certain Courts in punishing for contempt. This Act was enacted with a view to remove doubts about the powers of the High Court to punish for contempt and the doubts whether the High Court could punish for Contempt of Court subordinate to it were removed by section 2 of the said Act. The Contempt of Courts Act, 1952 repealed the 1926 Act and made two significant departures from it. Firstly, the expression 'High Court' was defined to include the Court of Judicial Commissioner, which had been excluded from the purview of the 1926 Act and, furthermore, the High Courts so defined were conferred with the jurisdiction to inquire into or try a contempt of itself or of any court subordinate to it, irrespective of whether the contempt was committed within or outside the local limits of jurisdiction and irrespective of whether the person alleged to be guilty of the contempt w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e of this case, to analyse various sections of the Act in any great detail except to notice that sections 3 to 7 of the Contempt of Courts Act, 1971 provides for what is not to be regarded as contempt. Section 8 specifies that nothing contained in the Act shall be construed as implying that any other valid defence in any proceedings for contempt of court ceases to be available merely by reason of the provisions of the 1971 Act. Section 9 makes it clear that the Act will not to be implied as enlarging the scope of contempt. Section 10 contains the power of the High Court to punish contempts of subordinate Courts, while section 12 specifies the punishment which can be imposed for contempt of court and other related matters. Procedure to be followed where contempt is in the face of the Supreme Court or a High Court is provided in section 14, while cognizance of criminal contempt in other cases is dealt with by section 15. Section 15 has to be read with section 17 which provides for procedure after cognizance has been taken under section 15. A decision of the High Court to punish for contempt is made appealable under section 19. 15. Sections 20 and 22, with which we are concerned in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....procedure which had to be fair and that the condemner was to be made aware of the charge against him and given a fair and reasonable opportunity to defend himself. Reliance was placed by Mr. Venugopal on a decision in Bharadakanta Mishra v. Mr. Justice Gatikrushna Misra, Chief Justice of the Orissa High Court [1975] 3 SCC 535 and it was contended that it was held in this case that section 20 provided a period of limitation by saying that no Court shall initiate any proceeding for contempt either on its own motion or otherwise, after the expiry of a period of one year from the date on which the contempt is alleged to have been committed. In Baradakanta Mishra's case (supra) the Appellant had filed an application before the High Court for initiating contempt proceedings against the Chief Justice and other Judges in their personal capacity. A full Bench of three Judges were of the opinion that no contempt of Court had been committed and the application was rejected. The Appellant then purported to avail the right of appeal under section 19(1) and filed an appeal in this Court. A preliminary objection was taken by the State against the maintainability of the appeal on the ground that w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a contempt in a situation of this nature is a continuing wrong. There was no scope for application of section 20 of the Act." 20. The abovementioned observations indicate that the contention based on section 20 was not accepted for two reasons firstly that the application for initiating action for contempt was filed within one year of the date when the contempt was alleged to have been committed and secondly failure to give possession amounted to continuing wrong and, therefore, there was no scope for application of section 20. This case is important for the reason that the Court regarded the filing of the application for initiating contempt proceedings as the relevant date from the point of view of limitation. 21. The power of this Court and the High Court under the Constitution for taking action for contempt of subordinate court came up for consideration in Delhi Judicial Service Association, Tis Hazari Court v. State of Gujarat [1991] 4 SCC 406. It referred to Sukhdev Singh Sodhi's case (supra) and held that even after codification of the law of contempt in India the High Courts jurisdiction as the Court of Record to initiate proceedings and take seisin of the matter remai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....urt held the respondent in V.K. Agarwal's case (supra) guilty of Contempt of Court as he had tired to influence or question the decision making process of the Tribunal. 24. The applicability of the Limitation Act to Contempt of Courts Act, 1971 came up for consideration in State of West Bengal v. Kartick Chandra Das [1996] 5 SCC 342. In that case against a notice of contempt which had been issued by the Single Judge a letters patent appeal were filed under section 19 which was dismissed on the ground that the delay was not condonable as section 5 of the Limitation Act did not apply. While reversing this decision of the Calcutta High Court, this Court observed as follows : "7. In consequence, by operation of section 29(2) read with section 3 of the Limitation Act, limitation stands prescribed as a special law under section 19 of the Contempt of Courts Act and limitation in filing letters Patent appeal stands attracted. In consequence, sections 4 to 24 of the Limitation Act stands attracted to letters patent appeal insofar as and to the extent to which they are not expressly excluded either by special or local law. Since the rules made on the appellate side, either for en....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ich could be imposed on a condemner by the High Courts or the Chief Courts. The second proviso to section 4 of the 1952 Act (supra) expressly restricted the powers of the courts not to 'impose any sentence in excess of what is specified in the section' for any contempt either of itself or of a court subordinate to it." 26. Referring to the powers of the High Court under article 215 to impose punishment with reference to the Contempt of Courts Act, 1971, at page 428, the Court held as follows : "37. The nature and types of punishment which a court of record can impose in a case of established contempt under the common law have now been specifically incorporated in the Contempt of Courts Act, 1971 insofar as the High Courts are concerned and therefore to the extent the Contempt of Courts Act, 1971 identifies the nature or types of punishments which can be awarded in the case of established contempt, it does not impinge upon the inherent powers of the High Court under Article 215 either. No new type of punishment can be created or assumed." 27. In Dr. L.P. Mishra v. State of U.P. [1998] 7 SCC 379 a contention was raised that while exercising powers under article 215 in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ealing with contempt proceedings. These are: (i)(a) a private party may file or present an application or petition for initiating any proceedings for civil contempt; or (b) the court may receive a motion or reference from the Advocate General or with his consent in writing from any other person or a specified law officer or a court subordinate to the High Court; (ii)(a) the court may in routine issue notice to the person sought to be proceeded against; or (b) the court may issue notice to the respondent calling upon him to show cause why the proceedings for contempt be not initiated; (iii) the court may issue notice to the person sought to be proceeded against calling upon him to show cause why he be not punished for contempt. 15. In the cases contemplated by (i ) or (ii) above, it cannot be said that any proceedings for contempt have been initiated. Filing of an application or petition for initiating proceedings for contempt or a mere receipt of such reference by the court does not amount to initiation of the proceedings by court. On receiving any such document, it is usual with the courts to commence some proceedings by ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n Act would have no application. Relying upon Baradakanta Mishra's case (supra) he submitted that an action of contempt was between the Court and the alleged condemner and hence the date of filing of the petition was not relevant. He submitted that the judgment in Om Prakash Jaiswal's case (supra) had not been correctly decided to the extent that the judgment held that mere issuance of a show-cause notice was not the initiation of contempt proceedings by the Court. He, however, submitted that contempt proceedings are initiated within the meaning of section 20 when the Court, on the application of mind, issued even a show-cause notice within a period of one year of the committal of alleged contempt. 31. There can be no doubt that both this Court and High Courts are Courts of Record and the Constitution has given them the powers to punish for contempt. The decisions of this Court clearly show that this power cannot be abrogated or stultified. But if the power under article 129 and article 215 is absolute can there be any legislation indicating the manner and to the extent that the power can be exercised? If there is any provision of the law which stultifies or abrogates the power ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d a limitation on the amount of punishment which could be imposed. Baradakanta Mishra's case was decided on the interpretation of section 19 of the 1971 Act, namely, there was no right of appeal if the Court did not take action or initiate contempt proceedings. In the case of Firm Ganpat Ram Rajkumar's case (supra) the Court did not hold that section 20 of the 1971 Act was inapplicable. It came to the conclusion that the application for initiating contempt proceedings (was within time and limitation had to be calculated) as for the purpose of limitation date of filing was relevant and furthermore that was a case of continuing wrong. In Kartick Chandra Das's case (supra) the provisions of the Limitation Act were held to be applicable in dealing with application under section 5 in connection with an appeal filed under section 19 of the Limitation Act. A three-Judge Bench in Dr. L.P. Mishra's case (supra) observed that the procedure provided by the Contempt of Courts Act, had to be followed even in exercise of the jurisdiction under article 215 of the Constitution. It would, therefore, follow that if section 20 is so interpreted that it does not stultify the powers under article 129 o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....les, 1975 reads as follows : "Rule 2. (1) Proceedings in connection with a Civil Contempt may be initiated- (a) by a petition presented by a party or parties aggrieved; or (b) by the High Court on its own motion; or (c) on a reference made to the High Court by the subordinate courts as in the case of "Criminal Contempt". (2) Proceedings in connection with a criminal contempt may be initiated- (a) on a motion of the High Court in respect of a contempt committed upon its own view under section 14 of the Act; or (b) on its own motion by the High Court under section 15(1) of the Act; or (c) on a motion founded on a petition presented by the Advocate-General under section 15(1)(a) of the Act; or (d) on a motion founded on a petition presented by any other person with the consent in writing of the Advocate-General under section 15(1)(b) of the Act; or (e) on a reference made to the High Court by the subordinate courts under section 15(2) of the Act, containing the following particulars : (a) a brief statement of the case; (b) the particulars of the contumacious acts; (c) name, a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hment thereafter are only steps following or succeeding to such initiation. Similarly, in the case of a civil contempt filing of an application drawing the attention of the Court is necessary for further steps to be taken under the Contempt of Courts Act. 42. One of the principles underlying the law of limitation is that a litigant must act diligently and not sleep over its rights. In this background such an interpretation should be placed on section 20 which does not lead to an anomalous result causing hardship to the party who may have acted with utmost diligence and because of the inaction on the part of the Court a condemner cannot be made to suffer. Interpreting the section in the manner canvassed by Mr. Venugopal would mean that the Court would be rendered powerless to punish even though it may be fully convinced of the blatant nature of a contempt having been committed and the same having been brought to the notice of the Court soon after the committal of the contempt and within the period of one year of the same. Section 20, therefore, has to be construed in a manner which would avoid such an anomaly and hardship both as regards the litigant as also by placing a pointles....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ognised by the Constitution. 44. A question arose before a Full Bench of the Punjab and Haryana High Court in the case of Manjit Singh v. Darshan Singh [1984] Cri. L.J. 301 with regard to the application of section 20 to the proceedings of criminal contempt. After coming to the conclusion that on the language of section 20 the date when time begins to run is fixed from the point on which the criminal contempt is alleged to have been committed the Court had to decide the terminating point or the terminus ad quem for the limitation under section 20. Four possibilities which fell for consideration in this regard were : (i) the date on which the actual notice of contempt is issued by the Court; (ii) the date on which the Advocate General moves the motion under section 15(1)(a); (iii) the date on which a subordinate Court makes a reference of the criminal contempt under section 15(2); and (iv) the date on which any other person prefers an application to the Advocate-General for his consent under section 15(1)(b). On behalf of the State, the contention raised before the Full Bench was that the sole terminus ad quem was the date of the actual issuance of the notice of criminal contempt....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ction 15. In cases where it is initiated on the Court's own motion it would necessarily be from the issuance of the notice for contempt by the Court. In case of a motion by the Advocate General under section 15(1)(a), the proceedings would initiate from the date of the filing of such a motion in the High Court. Where any other person moves the Advocate General for his consent in writing as prescribed in section 15(1)(b), the initiation of proceedings would be with effect from the date of such application. Lastly, in cases of criminal contempt of a subordinate Court on a reference made by it the proceedings must be deemed to be initiated from the date when such reference is made." 45. Action for contempt is divisible into two categories, namely, that initiated suo motu by the Court and that instituted otherwise than on the Court's own motion. The mode of initiation in each case would necessarily be different. While in the case of suo motu proceedings, it is the Court itself which must initiate by issuing a notice. In other cases initiation can only be by a party filing an application. In our opinion, therefore, the proper construction to be placed on section 20 must be that actio....