TaxTMI 
TaxTMI 
2016 (2) TMI 536
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....graph-18 and it reads as under :- "..........Furthermore the amount of 12% on Rs. 67.5 crores under the agreement needs to be paid. The same shall be paid within three weeks from today.........." 2 Admittedly this direction has not been complied with. Moreover, it is not the case of any of the respondents that they could not comply with despite efforts. It is the case of the respondents that they were not bound to comply with the said order. 3 The respondent nos.1 to 3 have been represented by Shri Sancheti i/by M/s.Legasis partners and respondent no.4 was represented by Shri Ankit Lohia i/by Argus Partners. 4 At the outset it should be mentioned that no formal order of admitting the petition or court notice to the alleged Contemnors was issued. I asked a specific question to the counsel appearing for the respondents and they stated that they have instructions to waive such a notice and they would proceed on the basis that they have been served and the petition can be disposed of at the admission stage itself. I also said then in that case they should not later raise the defence that they were not given a formal notice or contempt petition was not served personally on the res....
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.... and is not intended to be used for enforcement of money decree or directions / orders for payment of money. 7 The additional defence that respondent nos.1 & 2 have taken is that they, any way ceased to be the directors of VMPL w.e.f. November, 2014 and therefore, there cannot be any contempt against them. 8 As regards respondent no.4, the counsel adopted the submissions made by Shri Sancheti and also made the following submissions :- (i) The order dated 21st October, 2013 did not require any compliance by Respondent No.4 ; (ii) The direction, if any, was to the learned Observer appointed by this Hon'ble Court to ensure that appropriate steps for recovery of money are taken ; (iii) The order dated 21st October, 2013 had ceased to operate at the time when the petition was filed ; (iv) The fact that the order dated 21st October, 2013 did not contain any direction against Respondent No.4 is also clear from the Order dated 9th December, 2013 which holds Respondent Nos.1 and 2 liable for non-compliance of the directions contained in the Order dated 21st October, 2013 ; (v) SPCPL is not a party either to the proceedings which led to the Order dated 21st October, 2013....
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....re in 2010 and before that all the Indian companies were entirely held by the petitioner and his wife Veena Malhotra with Rajiv and his wife Kunika holding some small equity. In 2008 restructuring was proposed whereby the Indian companies' assets, businesses and balances were to be transferred to a newly incorporated company under the control of respondent no.3. The Indian companies were to receive substantial funds in consideration. Various business restructuring agreements were entered into including some supplementary agreements. Respondent no.3 was given sole authority to represent the entire family in all the transactions. The principal object of the proposed restructuring was to allow the petitioner and his younger son an exit from full time involvement in the affairs of the Supermax group while respondent no.3 was to take control of the businesses. Respondent no.3 also had sole bank account operation authority. It appears that the other son Rajeev Malhotra also had similar authority but jointly with respondent no.3. Clearly the family had faith and trust in respondent no.3, which he betrayed as it appears from the various orders and judgments passed in matters involving ....
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....he parties where the stand of the respondent no.3 was he was given complete control of SPCPL. In the 4 appeals in which the said order was passed, SPCPL was not a respondent but the respondents herein were respondents. In the said order in paragraph-11, it is stated as under :- "............The Company Law Board while passing the impugned order has rightly taken note of this fact. The Company Law Board has observed in attempting to harm each other, the dispute between the father and sons will destroy the company. The applicant-father owns 99.99% shares in the concerned company. The directors are not acting as per the will of the applicant-father who owns the company. It appears that the directors are acting against the applicant at the behest of respondent no.6..........." 12 It is also necessary to reproduce paragraphs 14 to 17 along with paragraphs 18 and 21 of the said order in order to comprehend as to how the directions in paragraphs 18 and 21 came to be passed. They read as under :- "14. Both the learned counsel for the parties have advanced detailed arguments as regards the amount of Rs. 67.5 crores which according to the applicant comes to respondent no.1 Vidyut, but ....
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.... of Rs. 67.50 crores as per the agreement is being paid to respondent no.1-company which is reflected in the bank accounts. The matter was adjourned for respondent to produce such record. On the next date, the learned counsel for the respondent conceded that the statement made on instructions was incorrect and no such interest is paid. 17. As per the agreement, the Supermax Personal Care Private Limited is liable to pay 12% interst to Vidyut Metallics Private Limited on the amount of 67.5 crores. This fact as stated above, has also been acknowledged by the respondent and admittedly the amount is not paid. The conduct of the respondent is not only evasive but leads an inference, that the respondents are not candid and forthcoming in disclosing true state of affairs in the companies. The money due to the company is not being paid. The owner of 99.99% shares cannot be treated in such manner. More the reason now that the companies need to be safeguarded till the disposal of the appeals. In addition to the injunction not to create third party right in respect of assets, there is a need to provide further safeguard to ensure that companies retain their substratum till the appeals are ....
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....as undertaken by them to be done within four weeks." In paragraph-14 the court has observed "during the course of hearing, the learned counsel for the respondents on instructions, made a statement that the said amount of Rs. 67.5 crores is not utilized by the respondents but it has been kept in a fixed deposit and interest thereof has been paid to respondent no.1." In paragraph-16 of the said order it is recorded that " a specific statement was made by the learned counsel for the respondent on instructions that the interest of 12% on the amount of Rs. 67.50 crores as per the agreement is being paid to respondent no.1 company which is reflected in the bank accounts.........."; On the next date, the learned counsel for the respondents conceded that the statement made on instructions was incorrect and no such interest is paid." In paragraph-15 it is recorded as "............Abhishek Kumar is presently the director of SPCPL and at that relevant time, he was a director of Vidyut Metalics Private Limited. It has been submitted by the learned counsel for the applicant that it is the hostile directors who have signed an agreement which takes way the benefit which was supposed to accrue t....
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....erim order dated 21.10.2013, all interim orders including the said order and the order dated 9.12.2013 and all directions thereunder have ceased to exist since the same have merged into the final order dated 12-20/8/2014. As such contempt proceedings against such interim order does not lie. The counsel relied on (2009) 11 Supreme Court Cases 479Prem Chandra Agarwal Vs. Uttar Pradesh Financial Corporation, (2000) 6 Supreme Court Cases 359Kunhayammed & Ors Vs. State of Kerala, (2012) 4 Supreme Court Cases 307Kanwar Singh Saini Vs. High Court of Delhi, (2004) 2 Supreme Court Cases 747Union of India & Ors Vs. West Coast Paper Mills Ltd., (2002) SCC Online Bom.376Ramesh Akre & Ors. Vs. Smt.Mangalabai Pralhad Akre & Ors., to submit that the logic that underlined the doctrine of merger is that there cannot be more than one decree or operative order governing the same subject matter at a given point of time. Once the matter is finally disposed, it is that decree or order of final disposal that is final, binding and operative and all other interim order merges into that final order passed by the court. 15 The respondents also submitted that the contempt petition for an interim order is not....
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....dents have placed very strong reliance, only states that there will be no interim order other than the 2 orders mentioned therein as regards any of the 4 respondent-companies. SPCPL is not one of the 4 respondent-companies and the respondents herein are not companies. That conclusion on para 139 had no bearing to the respondents herein or SPCPL. Moreover, even if there is a merger, that would not absolve the respondents from their consequences of failure to comply with the order while it was in force. Contempt is between the court and the alleged contempnor. When the court asked the respondents as to why they had not complied with the directions contained in the order dated 21.10.2013, the respondents cannot cock a snook and tell the court now that the appeal itself is disposed of, you cannot question us. 17 The Apex court's judgment in Prem Chandra Agarwal (supra) is of no help to the respondents in as much as it is not in context of contempt proceedings. It was a case where an appeal had been filed against an interim order and when that was pending, subsequently a final judgment came to be passed by the High Court. It also relates to a writ petition. 18 As regards the judgm....
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.... applicability of merger. The superior jurisdiction should be capable of reversing, modifying or affirming the order put in issue before it. Under Article 136 of the Constitution the Supreme Court may reverse, modify or affirm the judgment, decree or order appealed against while exercising its appellate jurisdiction and not while exercising the discretionary jurisdiction disposing of petition for special leave to appeal. The doctrine of merger can therefore be applied to the former and not to the latter." 17. There is, in the light of the above pronouncements, no gainsaying that the doctrine of merger will depend largely on the nature of the jurisdiction exercised by the superior court and the content or the subject-matter of challenge laid or capable of being laid before it." 19 Therefore, it will depend on the nature of jurisdiction exercised and the content and subject matter of challenge laid or capable of being laid shall be determinative of the applicability of merger. On the facts and circumstances of the present case the direction in the interim order to make payment of 12% interest on Rs. 65.7 crores to be made within a stipulated time, i.e., 3 weeks, cannot be said t....
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....licable to the facts and circumstances of the present matter. They were both in the context of proceedings filed under Order 39 Rule 2(A) of the Code of Civil Procedure and the interim order was in the nature of an order for injunction. Even in the case of Union of India Vs. West Coast Paper Mills Limited (supra) the facts are different in as much as that relates to a case where the court came to a conclusion that once an appeal is filed before the Apex Court and the same is entertained the judgment of the High Court or the Tribunal court and the subject matter of the lis unless determined by the last court, cannot be said to have attained finality. Though the Apex Court has dealt with the meaning of "merge", the court has placed reliance on the judgment of Kunhayammed (supra) which as stated above has held that the doctrine of merger cannot be held to be a doctrine of rigid and universal application. Therefore, this judgment is also of no help. 21 The counsel for the respondents relied heavily on the judgment of the High Court of Chatisgarh in the matter of M/s.Milestone Soft. Tech Pvt. Ltd. (supra) to contend that the contempt petition could not be filed after the main proceedin....
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....s in our case. 24 As regards 263 A.D. 384 (1942)Mittman vs. Mittman of Supreme Court, Appellate Division, New York (USA) relied upon by respondents, the court has come to its conclusion in that matter based upon the applicable local Civil Practice Act. Therefore, we cannot accept it as a proposition of law applicable to the present case. 25 In (1997) 3 Supreme Court Cases 443Tayabbhai M.Bagasarwalla Vs. Hind Rubber Industries Pvt. Ltd., (2004) 3 BLJR 1802Prithawi Nath Ram Vs. State of Jharkhand and New Hope Granites, the courts support the proposition that a party is liable to be punished for contempt that is committed of an interim order when it is in force. 26 In Tayabbhai Bagasarwalla (supra) the Apex court has gone to the extent of even holding that even if it is ultimately held that the proceedings in which the order was passed was without jurisdiction, the breach of such an order would nonetheless amount to contempt. Paragraphs-14, 15 & 16 read as under :- "14. The first and foremost question in this appeal is whether the High Court was right in holding that since it has been found ultimately that the Civil Court had no jurisdiction to entertain the suit, the interim ord....
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...., at the hearing of any such application, the court may grant such interim relief as it may consider necessary pending determination by it of the preliminary issue to the jurisdiction." 16...........The defendants filed an appeal against the decision on the question of jurisdiction. While that appeal was pending, several other interim orders were passed both by the Civil Court as well as by the High Court. Ultimately, no doubt, High Court has found that the Civil Court had no jurisdiction of entertain the suit but all this took about six years. Can it be said that orders passed by the Civil Court and the High court during this period of six years were all non-est and that it is open to the defendants to flout them merrily, without fear of any consequence. Admittedly, this could not be done until the High Court's decision on the question of jurisdiction. The question is whether the said decision of the High Court means that no person can be punished for flouting or disobeying the interim/interlocutory orders while they were in force, i.e., for violations and disobedience committed prior to the decision of the High Court on the question of jurisdiction. Holding that by virtue ....
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....allowed to flout or disobey such interim orders, it would seriously affect the dignity and the authority of the courts. In fact, paragraphs-22, 23 & 27 of Tayabhai Bagasarwalla (supra) read as under :- "22. In D.M. Samyulla v. Commissioner, Corporation of the City of Bangalore & Ors. [1991 Karnataka Law Journey 352], the Karnataka High Court stated the law in the following terms, with reference to the decision of the Court of Appeal in Hadkinson v. Hadkinson: "the principle laid down in the said decision is, a party who knows an order, whether it is null or valid, regular or irregular, cannot be permitted to disobey it and it would be dangerous to allow the party to decide as to whether an order was null or valid or whether it was regular or irregular". 23. In Hadkinson v. Hadkinson [1952 All. E.R.567] the Court of Appeal held: "It is the plain and unqualified obligation of every person against, or in respect of whom an order is made by a court of competent jurisdiction to obey it unless and until that order is discharged. The uncompromising nature of this obligation is shown by the fact that it extends even to cases where the person affected by an order believes it to be i....
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....rim injunction, as the case may be, pending decision on the question of jurisdiction. The orders made were within the jurisdiction of the Court and once this is so, they have to be obeyed and implemented. It is not as if the defendants are being sought to be punished for violations committed after the decision of the High Court on the question of jurisdiction of the Civil Court. Here the defendants are sought to be punished for the disobedience and violation of the order of injunction committed before the decision of the High Court in Vishanji Virji Mepani. According to Section 9-A, the Civil Courtand the High Court - did have the power to pass interim orders until that decision. If they had that power they must also have the power to enforce them. In the light of the said provision, it cannot also be held that those orders could be enforced only till the said decision but not thereafter. The said decision does not render them (the interim orders passed meanwhile) either non-est or without jurisdiction. Punishing the defendants for violation of the said order committed before the said decision (Vishanji Virji Mepani) does not amount, in any event, to enforcing them after the said d....
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.... 34 At the outset learned counsel Shri Sancheti submitted that the direction to pay is against SPCPL as could be seen from paragraph-17 read with paragraphs 18 & 21 of the said order dated 21.10.2013, minutes of the meeting held on 31.10.2013, the letter dated 4.1.2015 exchanged between VMPL and SPCPL and also as alleged in the petition. There is no doubt that the amount had to come from the pockets of SPCPL. The order is very clear that SPCPL should pay. 35 As could be seen from paragraphs reproduced above, from the said order dated 21.10.2013, SPCPL was not a party to the 4 appeals in which the said order was passed. Though it has been raised for the first time across the bar that the direction is not binding on respondent nos.1 to 3 but only against SPCPL, the respondents and in particular respondent no.3, always represented to the court that they were in control of SPCPL and the payment of interest was a matter within their knowledge and control. This could be seen from the paragraphs of the said order quoted above. Moreover, respondent no.3 through his Constituted Attorney respondent no.2, during the meeting held on 31.10.2013 before the court appointed observer Mr.Justice Su....
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....esentation made in court by respondent no.3 at the time of the hearing. Of course, respondent no.3 is now attempting to distance himself from SPCPL as an after thought. We shall deal with that subsequently. 36 Therefore, the respondents were admittedly in a position to comply with the directions referred in the order dated 21.10.2013 but consciously chose not to do so. In fact to a specific question put by the court to counsel Shri Sancheti, he replied that it is not the case of any of the respondents that they were not in a position to ensure compliance with the order. The approach was they are not liable to be punished for a breach or disobedience and/or it is legally impermissible for the court to punish them in its contempt jurisdiction. Respondent nos.1 & 2 have also contended that they have ceased to act as directors of VMPL since 20.11.2014. The stand of respondent no.3 is that he did not control SPCPL and just because he was the main beneficiary of the trust that controlled SPCPL, he cannot be held to be guilty of any breach of any order. This also is a false stand as could be seen later. 37 It appears from the affidavit filed by respondent nos.1 to 4 in reply to the cont....
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.... of the Supermax Group of Companies, and as such is under his control. Reproduced below are Respondent No.3's own admissions in this regard which are made by him in various legal proceedings between members of the Malhotra family and /or entities controlled by them. (a) Witness Statements dated 23.03.2012, 30.05.2012, 14.06.2012, 19.09.2012, 27.09.2012 and 01.10.2012 filed by Respondent No.3 before the Queens Bench Commercial Court, London in Case no.2012 Folio 463 : "I Rakesh Malhotra, do state I am a Chairman of the SuperMax group of companies." (@ pg.1 of the witness statements) (b) 7th Witness statement dated 4th December, 2014 filed by Respondent No.3 before the Queens Bench Commercial Court, London in Case no.2012 Folio 463 : "16 One of the aims of the restructuring exercise was to allow RKM and RJM to exit from the day to day involvement in the running of the SuperMax group. It was intended that I would take over the management of the business. Accordingly the parties to the SSD (including RKM and RJM) chose to grant me very wideranging powers under the SSD to take all necessary actions in that behalf. I was given complete control over the SuperMax group comp....
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.... of the Supermax group, while Rakesh was to assume control of the business..."(Emphasis Supplied) "134. Rakesh, then a young man his family trusted implicitly, appears prima facie to have betrayed that confidence, and to have done so in a most egregious manner. He is primarily responsible for the fractures in the family relationships and business. RKM and Rajiv acted in good faith; Rakesh was, as agreed, given full control of the SuperMax companies. The funds that were, in exchange, to come to the RKM-controlled Indian companies (the Transauto companies) were wrested - perhaps hijacked might be a more apposite term -and deployed to further the interests of the entities Rakesh controls. In effect, Rakesh engineered a coup d'état and assumed control of the entire group. Keeping the directors of the Transauto companies under his thumb, he not only created significant liabilities in the Indian companies but did so without notice or intimation to their owners, RKM, Transauto and the other family members. When these owners sought information, it was denied. Rakesh went so far as to threaten the directors should they make any disclosure. With orders from the CLB, these directors....
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....re fought against RKM before the CLB and/or before this Court or before the Hon'ble Supreme Court, and in the event of SPCPL having financed Rakesh to pursue the litigation against his father, whether the Board of Directors of SPCPL has passed any Resolution approving the same. This Court had also clarified that if any such litigation of SPCPL is financed by SPCPL, the same would amount to SPCPL having made a false representation to the Court in their Appeal/affidavits as set out hereinabove." 4.6 After seeking time from this Court on two occasions, the Court was informed by the Counsel appearing for SPCPL that the entire litigation fought by Rakesh against RKM (i.e., since the year 2012) has been financed throughout by SPCPL and there is no Board Resolution on record of SPCPL qua the litigation costs having been borne by SPCPL on behalf of Rakesh. 4.7 It is therefore clear that the entire cost incurred throughout by Rakesh in the fight between RKM and Rakesh is borne by SPCPL and shown by SPCPL in its accounts as legal expenses of SPCPL. This fact therefore clearly demonstrates that incorrect statements have been made by SPCPL in the Appeal, in the affidavits filed on be....
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....he SuperMax Companies, should any of the existing contracts be terminated, the consequences to the SuperMax group would be crippling. Thus Rakesh, as petitioner in the SLP, has categorically admitted that he is in control of SPCPL and if RKM shall take control of the Indian Companies (including VMPL) and cancel all agreements mandated to be entered into by the Share Subscription Deed (SSD) the business of SPCPL will come to a standstill. It will again not be out of place to mention here that Rakesh who admitted before the Hon'ble Supreme Court to be in control of SPCPL............... 5.32 ........ However, the said erstwhile Directors for the first time now orally alleged that SPCPL (which is admittedly controlled by Rakesh)............ 20............Rakesh who admittedly controlls SPCPL started prevailing upon Vyas and Chaudhari and through them was dealing with the finance and assets of VMPL as per his wishes.......... Since Vyas and Chaudhari have during the interregnum throughout denied access to RKM qua the working and affairs of VMPL and have acted as per the directions of Rakesh who admittedly controlled SPCPL and allowed Rakesh to deal with the finances and ass....
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....h............. He has therefore put up SPCPL to file the above appeal making statements/submissions which are false and incorrect to the knowledge of SPCPL. SPCPL, which has admittedly financed the entire litigation pursued by Rakesh against his father RKM.........." 23.............. Also in view of the past conduct on the part of Rakesh (who admittedly controls SPCPL) and the ex-Directors Vyas and Chaudhari of refusing to abide by the Orders passed by the CLB/this Court even after the Hon'ble Supreme Court in the SLP filed by Rakesh had specifically declined to stay the same, the CLB was completely justified in directing police assistance which was required to maintain peace and order at the time of implementation of its Order by VMPL/RKM..............." (emphasis supplied) 43 Notwithstanding the above statements and averments made by him on oath in a number of different legal proceedings and notwithstanding the findings contained in the orders referred to above, the message conveyed by respondent no.3, in his affidavit dated 21.8.2015 filed in response to the present Contempt Petition is to the contrary. This is a false denial by respondent no.3 and it also clearly amo....
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....t the petitioner and shown it as legal expenses and that also even without a resolution being passed by SPCPL. It is also not his stand that he could not comply with or he requested/instructed the Board of Directors who refused to comply with his request. Moreover, on 31.10.2013 at a meeting held by the court appointed observer, respondent no.3, through his Constituted Attorney viz. respondent no.2 above named has stated as under :- "One of the items in the order says that the Observer should ensure due payments of interest by SPCPL on the amount of Rs. 67.50 crores. However, Mr.Chaudhari for the Respondents states that according to him, the interest amount comes to about Rs. 20 crores and the coo has some difficulty in paying the amounts, immediately, and that they would be able to pay by installments. However, on seeing para 18 of the said Order which says that the same shall be paid within 3 weeks from the date of the Order (i.e., 21.10.13), the Observer pointed out that he will not be able to give any direction as requested by the Respondents. Mr.Chaudhari then hands over a letter addressed to the Observer stating that they intend to file a Special Leave Petition in the Su....
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....protect the interest of VMPL. After a huge battle and with great difficulty the petitioner who owned 99.9% of VMPL was able to remove the respondent nos.1 and 2 as directors of VMPL. It is alleged by the petitioner that respondent no.3 controlled respondent nos.1 and 2 and that the letter dated 4th January, 2014 was also written more than two months after the order was passed and after two meetings with the court appointed Observer and pursuant to the directions of the court appointed observer at the meeting held on 3rd January, 2014. 50 Be that as it may, it is difficult for me to hold that respondent nos.1 and 2, who were not even the directors in SPCPL, just because they were under the control of respondent no.3 could have ensured that SPCPL made the payment to VMPL. Even if I take the case a step further and say that they deliberately slept over the matter and deliberately did not take steps to recover the amount from SPCPL, can the court hold them guilty of willfully disobeying the order of 21st October, 2013? I am afraid not. It is, therefore, difficult for me to hold that respondent nos.1 and 2 are guilty of contempt. 51 Before I go on to discuss the conduct of Respondent ....
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....e contempt was committed without his knowledge or that he exercised all due diligence to prevent its commission. (5) Notwithstanding anything contained in sub-section (4), where the contempt of court referred to therein has been committed by a company and it is proved that the contempt has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager, secretary or other officer of the company, such director, manager, secretary or other officer shall also be deemed to be guilty of the contempt and the punishment may be enforced, with the leave of the court, by the detention in civil prison of such director, manager, secretary or other officer. Explanation.-For the purposes of sub-sections (4) and (5),- (a) "company" means any body corporate and includes a firm or other association of individuals; and (b) "director", in relation to a firm, means a partner in the firm. 53 The counsel submitted that therefore, prosecution against the directors, officers, etc., of the company without arraying the company as an accused is not maintainable. The counsel further submitted that this statutory provision is based on the pri....
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.... on the judgment of 1953 SCR 581Rizwan-Ul-Hasan and another vs. The State of Uttar Pradesh. 55 While deciding any issue, the order has to be read in the context of the factual matrix of the case and has to be read as a whole. It is well settled that an order of a court must be construed having regard to the facts and context in which the same was passed. For that, the order has to be read in its entirety. Observations made should not be read in isolation or out of context ((2010) 5 SCC 388 Goan Real Estate and Construction Limited and another vs. Union of India). When you read the said order dated 21st October, 2013 as a whole, though the order states SPCPL to pay 12% interest on Rs. 67.50 Crores within three weeks, the direction is basically against the persons who could have ensured that the amount is paid. Even the respondents' understanding was the same as could be seen from the court appointed Observer's meeting minutes dated 31st October, 2013 and 3rd January, 2014. Before the affidavits in reply were filed it was not the case of the respondents that the directions were not to them. 56 I also find no ambiguity in the said order. There is no interpretation of the ord....
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.... or section 12(4) and section 12(5) are applicable, is on the basis of misreading the petition. At all times the petitioner has taken a stand that the obligations was cast on the respondents to comply with the order dated 21st October, 2013. The court would have been conscious of the fact that SPCPL is not a party to those appeals but still passed an order directing SPCPL to make the payment. If SPCPL were aggrieved certainly SPCPL would have challenged that order or brought to the notice of the court that an order has been passed against them without being heard. SPCPL was not a stranger because respondent no.4 who was also the respondent in those appeals was also a director in SPCPL and respondent no.3 has stated on oath and it has been observed by the various orders of the court that he controlled SPCPL. Infact in the order dated 30th November, 2015 passed by this court it has also been observed that it was SPCPL that was funding the litigation cost of respondent no.3 against the petitioner. Therefore, in my view, section 12(4) and section 12(5) of the said Act have no bearing in the facts of the present case. Therefore, none of the judgments relied upon by the counsel for the r....
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....have violated the directions of the court by not depositing the amount as directed which would mean he has committed a breach of the order. He may, however, explain that all his bank accounts have been attached by some party or he has no money to pay. That is why we have to see whether there was a willful disobedience. If his stand is not that he has not been able to comply with the orders of the court due to various factors, certainly it will amount to interference with due course of justice. The onus, therefore, is on the alleged Contemnor to set-forth these facts. But in this case it is not the case of any of the respondents that they are unable to comply with the said order of the court. None of the respondents have even stated that they took any steps pursuant to the said order to comply with the same. They have not contended that they did not have it within their power and ability to comply with the order. The only stand throughout is that they are not liable to be punished for a breach or disobedience of the said order and it is legally impermissible to the court in its contempt jurisdiction to punish them for disobedience of the said order. 62 The other submission that was....
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....gainst the respondent for recovery of a certain amount. This second suit was also disposed of by consent and a decree passed in terms of the consent order. Like the first decree the decreed amount was to be satisfied in installments and pending satisfaction of the decree, the respondents undertook to the Court not to alienate, encumber, or create third party rights or part with possession of the same properties which had already formed part of the undertaking in the first decree. The respondents defaulted in making payment of the installments under the first decree. The petitioner put the decree into execution. It also filed a contempt petition alleging that the second consent decree violated the undertaking given in the first decree. The Court found that by placing the same property under attachment in the second decree the respondent had intentionally and deliberately acted in breach of the undertaking given to the Court in the first consent decree. The Court approved the statement of the law by the Bombay High Court in Bajranglal Gangadhar Khemka & Anr. Vs. Kapurchand Ltd.(supra). Significantly, the Court also said: "The violation or breach of the undertaking which become par....
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....'s discretion having regard to the facts of the case. As we have said the fact that a decree is executable does not take away the Court's jurisdiction in contempt." 65 The contempt jurisdiction is primarily to ensure compliance of the court's orders and in case of willful disobedience or willful failure there of to punish the Contemnor whereas execution proceedings are to enable the decree holder to enjoy the fruits of the decree. 66 Our court in 2004 (6) Bom. C.R. 356European Investment Limited vs. Triumph International Finance India Limited and others has also held that availability of the remedy of the execution proceeding does not bar the contempt proceedings since it is an additional remedy. Such proceedings are between the court and deemed Contemnor and the complainant therein may not receive any relief to his benefit. The discretion given to the court in its contempt jurisdiction is for the maintenance of the court's dignity and majesty of law. Paragraph 39 of the said judgment reads as under :- "39. Merely because the order is an executable order, it cannot be said that no contempt proceedings would lie against the defaulter in such cases nor it can be ....
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....held that a perusal of section 22 of the 1971 Act would show that the provisions of the Contempt of Courts Act, 1971, "shall be in addition to, and not in derogation of the provisions of any other law." The court has held that the object of proceedings under the Contempt of Courts Act, 1971, is to punish a party guilty of the disobedience as contemplated by section 2(b) of the said act. The purpose is not to "execute" any order, for which purpose the aggrieved party shall have to take recourse to other proceedings known to law. Paragraph 13 of the said judgment reads as under :- "13. The submission on behalf of the learned senior counsel for the appellant that since the order, disobedience of which is complained of, is capable of being enforced in some other manner known to law, an application for contempt of Court for noncompliance of that order is not maintainable, has no merit. There is no warrant for saying that where an order, the disobedience of which is complied of, can be executed, the jurisdiction of the Court to initiate proceedings under the Contempt of Courts Act, 1971, and to punish the offender, if proved guilty, under S.12 of the said Act, is in any way affected. A....
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.... Coming to Respondent no.4, Respondent no.4 admittedly, at all material times, was a director of SPCPL. It is the petitioner's case that the respondent no.4, therefore, was clearly in a position to ensure that the order dated 21st October, 2013 was complied with and he has not given any reason as to why it was not complied with. The defence of respondent no.4 in addition to adopting the submissions made by counsel on behalf of respondent nos.1 to 3, are as under :- (i) The Order dated 21st October, 2013 did not require any compliance by Respondent No. 4; (ii) The direction, if any, was to the Learned Observer appointed by this Hon'ble Court to ensure that appropriate steps for recovery of money are taken; (iii) The Order dated 21st October, 2013 had ceased to operate at the time when the petition was filed; (iv) The fact that the Order dated 21st October, 2013 did not contain any direction against Respondent No. 4 is also clear from the Order dated 9th December, 2013 which holds Respondent Nos. 1 and 2 liable for non-compliance of the directions contained in the Order dated 21st October, 2013; (v) SPCPL is not a party either to the proceedings which led to the Ord....
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....er the terms of the Supplemental BTA. The respondents have been making false statements to the court on affidavits thereby interfering with due course of justice. The statements are being made willfully. The respondent no.4 cannot be trusted at all because he has been exposed and has been lying to the court on affidavits. The statement that the counsel made to the court as recorded in the said order dated 21st October, 2013 could have been made only on instructions from respondent no.3 and respondent no.4 as it was a clear statement made on behalf of SPCPL. 75 The counsel for respondent no.4 also submitted that the petition was filed almost towards the end of expiry of limitation and after the order dated 21st October, 2013 had ceased to operate. As regards the second part that the order had ceased to operate, I have already concluded that it did not cease to operate. Moreover under Article 215 of the Constitution of India every high court shall be a court of record and shall have the powers of such a court including the power to punish for contempt of itself. 76 Therefore, as the direction was against the respondents to the company application which included respondent no.4, the....