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2016 (2) TMI 536
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....d to have willfully disobeyed is in paragraph-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 co....
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....ot rely on the documents, not annexed to the Contempt Petition to support its submission; E - Contempt proceedings cannot be invoked 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 ....
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....Supermax group which is supposedly the 2nd largest manufacturer of razor blades and allied products in the world. The entities are spread over India and Overseas. There was a family restructure 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 authori....
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....e affidavits in reply filed by respondent no.3 in those appeals the stand of the respondent no.3 was that he was incharge and management of SPCPL. There were matters pending even in London between the 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 rea....
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....asive manner during the Court proceedings, as they have done. 16. As that was not enough, 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. 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 ti....
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....the other liabilities of the Companies are disclosed to the observer for ascertaining the correctness thereof ; (h) The respondents shall pay a sum of Rs. 1.36 crores or such other amount as required as the pre-deposit amount in regard to the Income Tax Appeal filed by VMPL for A.Y.2010-2011, 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 K....
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....id order dated 21.10.2013 of which contempt is alleged ceased to have any force in law. It was submitted that once a final order is passed, all interim orders merged into the final order and the interim orders ceased to exist. Therefore, on the date of the initiation of the contempt proceedings against the said interim 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 mat....
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....d mismanagement in respondent companies in the appeals. The court while disposing has not stated anywhere that the respondents need not comply with the directions contained in paragraph-18 of the said order. It was for the respondents to get the clarification. Moreover, paragraph-139 of the final order, on which respondents 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 (su....
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....se at hand is in the following words : (SCC p.384) "44. To sum up, our conclusions are : (iii) The doctrine of merger is not a doctrine of universal or unlimited application. It will depend on the nature of jurisdiction exercised by the superior forum and the content or subject-matter of challenge laid or capable of being laid shall be determinative of the 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 t....
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....uently been disposed of. This is absolutely no defence because the requirement of law is that the order has to be obeyed, respected and implemented while it is in force. The subsequent modification of the order can never therefore be pleaded as either a justification or a defence in contempt proceedings." (emphasis supplied) 20 As regards Kanwar Singh Saini (supra) and Ramesh Akre (supra) both are not really applicable 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 (s....
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....eld that an order granting wife temporary alimony during pendency of her divorce suit was merged in judgment and decree granting her divorce and no longer effective or enforceable and contempt proceedings against husband could not be based thereon. In other words, the court held that the outstanding amount payable by way of interim alimony was subsumed into the final decree. The facts in the matter is totally in variance with the facts 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 ho....
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....ion of the court to entertain such suit is taken by any of the parties to the suit, the Court shall proceed to determine at the hearing of such application the issue as to the jurisdiction as a preliminary issue before granting the interim relief. Any such application shall be heard any disposed of by the Court as expeditiously as possible and shall not in any case be adjourned to the hearing of the suit. (2) Notwithstanding anything contained in sub-section (1), 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 flo....
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....e statement of Shri Sancheti, it would mean that the said order passed on 21.10.2013 was non est and the respondents despite having flouted the said order can merrily live without fear of any consequence just because the petitioner had not filed the petition earlier. The issue for consideration is whether the respondents could be punished for flouting or disobeying the said order dated 21.10.2013 when it was in force prior to the disposal of the appeal. Answer is yes. If the parties are 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 ....
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....dversely upon the dignity and authority of the Court. It is also suggested that the plaintiff had instituted the present suit in the Civil Court knowing full well that it had no jurisdiction to try it. It is not possible to agree with any of these submission not only on principle but also in the light of the specific provision contained in Section 9-A of Code of Civil Procedure (Maharashtra Amendment). In the light of the said provision, it would not be right to say that the Civil Court had no jurisdiction to pass interim order or interim 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 interi....
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....as to be obeyed even if the matter is ultimately disposed. This takes care of the 4th ground of defence. 32 The conclusion above would also take care of the 5th defence i.e., A-(v) : The Petitioners contention that Order dated 21 s t October, 2013 did not merge into the final Order dated 12 th /20 th August, 2014 is contrary to settled law, as well as plain language of orders dated 12 th / 20 th August 2014 . 33 The next defence B(i) - direction in paragraph-18 of the order dated 21.10.2013 is against SPCPL and not against respondent nos.1 to 3. 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 ....
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....pondent no.3 in particular controlled SPCPL and would therefore, be in a position along with respondent nos.1, 2 & 4 to comply with the order by ensuring that the amount was paid by SPCPL to VMPL. It is necessary to note that the learned single Judge proceeded to issue the said order even though SPCPL was not a party to the said proceedings. It is also necessary to note that SPCPL has not even contested the said order. The court issued the direction on the basis of the then undisputed position that respondent no.3 controlled SPCPL on the basis of the statement/ representation 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 punis....
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.... is alleged in paragraphs 5, 6 & 7 as under :- "5. Respondent No.3 has in his affidavit contended that he is not the Chairman of SPCPL and therefore cannot be held liable for having committed contempt of this Hon'ble Court on account of the failure of SPCPL to pay the company i.e. Vidyut Metalics Pvt. Ltd. (VMPL) the interest on the sum of Rs. 67.50 crores. In this respect it is submitted that while Respondent No.3 may have been inadvertently described as the Chairman of SPCPL, it is admitted position that Respondent No.3 is the chairman of the Supermax Group of Companies, and that SPCPL is a part 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....
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....to ensure that interest was paid by SPCPL on the amount of Rs. 67.5 crores to VMPL and that Respondent No.3's attempt to now contend that he does not control SPCPL is a false case, which ought not to be countenanced by this Hon'ble Court." The respondent no.3 has not controverted or denied these allegations. 40 This court in its order dated 12-20.8.2014, while disposing the Appeals, has observed as under :- "5. .....the Indian companies assets, businesses and plants were to be transferred to a newly incorporated company under Rakesh's control ....the principal object of the proposed restructuring was to allow RKM and Rajiv an exit from full - time involvement in the affairs 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....
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....e." 4..........Rakesh therefore arranged for SPCPL to make a false claim for the first time that it is in possession and control..........." 4.5 ..........In view of the above stand on the part of RKM on the one hand that Rakesh has put up SPCPL to make a false claim of being in possession and control of Plant No.2 from the year December 2010/March, 2011, and SPCPL on the other hand contending that SPCPL is in no way concerned with the disputes between RKM and Rakesh, and that Rakesh is neither on the Board of Directors of SPCPL or concerned with the day to day affairs of SPCPL, one of the queries put to the Advocate for SPCPL by this court was whether SPCPL had financed Rakesh qua any of the litigations that were 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 A....
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.... India. Rakesh applied for a stay of the said Judgment and Order dated 20th August, 2014, inter alia on the grounds set out below : A. Because the petitioner is in control of the newly formed Indian Company called Supermax Personal Care Pvt. Ltd. And that if the present order is allowed to continue, the respondent shall take control of the other Indian Companies and cancel all Agreements mandated to be entered into by the SSD and the business of the petitioners' company will come to a standstill. D. Because removing the interim protection would result in irreversible situation inasmuch as permitting an immediate change in the Constitution of the Board of Directors of the Respondent Companies. Since these Companies have contractual obligations with or to the 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 busines....
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....y to day affairs of SPCPL. These false representations on the part of SPCPL stood exposed when this Court enquired from SPCPL whether SPCPL had financed Rakesh qua any of the litigations initiated/defended by Rakesh against RKM before the CLB or before this Court 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 had passed any Resolution approving the same. After seeking time from the Court on two occasions, the Court was informed by the Counsel appearing for SPCPL that the entire litigation initiated/defended by Rakesh i.e., since the year 2012 has been throughout financed by SPCPL and there is no Board of Resolution on record qua the litigation expenses having been borne by SPCPL on behalf of Rakesh............. 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 SPC....
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....3 would have known the stand that he had taken in the other affidavits filed by him, respondent no.4 in proceedings to which he was a party and orders passed by this court in proceedings to which he was a party. He cannot today file a false affidavit and take a contrary stand and state that the petitioner cannot rely on the earlier affidavits or orders to prove that the respondent no.3 is taking a false stand now. This submission of the counsel Shri Sancheti for the respondent no.3 has to be rejected. 44 It is very clear that respondent no.3 does in fact control SPCPL as could be seen from the above and therefore, certainly he was in a position to ensure compliance of the direction to pay the interest on the sum of Rs. 67.5 crores. More so when SPCPL has spent towards respondent no.3's legal costs in his fight against 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 Const....
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....2014 copy whereof is annexed to the petition, they have sought the status of payment of interest from SPCPL to VMPL and therefore, they have complied with the order. 48 One may wonder as to how respondent nos.1 and 2 who were directors of VMPL could be held guilty of contempt and alleged to have willfully disobeyed orders of the court when in the order dated 21st October, 2013 the direction to pay is only against SPCPL which, was as observed earlier was under the control of respondent no.3. Respondent no.4 is a director of SPCPL. 49 I have mentioned earlier that the dispute primarily is between the petitioner, his wife and another son on one side and the respondent no.3 on the other. It is a family fight. Respondent Nos.1 and 2 were directors of VMPL since 1993 and 2001, respectively. They were continued as directors hoping that they would 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 t....
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....on against any director or officer of a company, it is a mandatory requirement of law that company is impleaded as one of the accused. Section 12(4) and section 12(5) reads as under :- 12. Punishment for contempt of court.- (1) ........ (2) ........ (3) ........ (4) Where the person found guilty of contempt of court in respect of any undertaking given to a court is a company, every person who, at the time the contempt was committed, was in charge of, and was responsible to, the company for the conduct of business of the company, as well as the company, shall 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 each such person: Provided that nothing contained in this sub-section shall render any such person liable to such punishment if he proves that the 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 ....
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....re, in such cases the primary liability is of the company and proceedings against any director of a company cannot be maintained where a company has not been made a party to the proceedings under section 12(5) of the said act. 54 It was further submitted by Shri Sancheti that under section 13 of the said act, no court shall impose a sentence for a contempt of court unless it is satisfied that the contempt is of such a nature that it substantially interferes, or tends substantially to interfere with the due course of justice. The counsel submitted that contempt of the orders of the court in itself is not sufficient to warrant a punishment. A person can be punished for contempt only if it is shown that his act or omission has substantially interfered with the due course of justice. The counsel submitted that in the present case there has been no interference with the due course of justice and he relied 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 con....
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....t SPCPL. The petitioner's case or the charge leveled in the petition is that the said order was against the respondents herein who were also respondents present before the court. It must be remembered SPCPL was not a party to those proceedings. The charge is that the respondents are all acting together and that respondent no.3 controls SPCPL and would, therefore, be in a position to, alongwith respondent nos.1 and 2 and respondent no.4 to comply with the order by ensuring that the aforesaid amount was paid by SPCPL to VMPL. 58 The learned single Judge proceeded to issue the said order even though SPCPL was not a party to the said proceedings on the basis that respondent no.3 controlled SPCPL and on the basis of the statements/representations made in the court by respondent no.3 and other respondents at the time of hearing. 59 Therefore, the submissions that the petition cannot be proceeded with as SPCPL has not been made a party 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 co....
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.... only in contempt but his act should interfere with the due course of justice is the settled position. These are general rules pertaining to law of contempt. The counsel for the respondents also relied on the judgments in (2002) 5 SCC 352 Jhareswar Prasad Paul & another vs. Tarak Nath Ganguly and others; (2001) 7 SCC 530 Chhotu Ram vs. Urvashi Gulati and another; (2014) 3 SCC 373 Sudhir Vasudeva and M. George Ravishekaran and others; 159 (2009) DLT 764 Dr. D.K. Attery vs. Mr. Kanwal Singh Mehra; and AIR 2011 SC 1645Muthu Karuppan vs. Parithi Ilamyazhuthi and another in support of general rules pertaining to the law of contempt that in order to arrive at a finding of contempt a strict case must be made out, the court must not go beyond the four corners of the order and disobedience must be willful and deliberate, etc. There can be no argument on these general rules. Every principle of law has to be applied keeping in mind the facts and circumstances of each case. In a given case a person may 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 ha....
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....N. Dey (supra) has been considered by the Apex Court in the case of (2006) 11 SCC 114Rama Narang vs. Ramesh Narang and another and it is held that ultimately, the matter is one of court's discretion having regard to the facts of the case and just because decree is executable does not take away the court's jurisdiction in contempt. Paragraphs 29 to 32 of the said judgment reads as under :- "29. The next decision relied upon by the respondents is the decision of this Court in Bank of Baroda Vs. Sadruddin Hasan Daya & Anr. 2004(1) SCC 360. The petitioner in that case had filed a suit against the respondents for recovery of money. The suit was disposed of by consent and a decree was passed incorporating the consent terms. The consent terms inter alia, provided for payment of the decretal amount in installments. Pending the clearance of the decretal amount the respondents undertook not to sell, mortgage, alienate, encumber or charge some of its properties. Another creditor also filed the suit against 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 t....
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....mpt is not to be used in abundance or misused. Normally, it cannot be used for execution of the decree or implementation of an order for which alternative remedy in law is provided for. Discretion given to the court is to be exercised for maintenance of the court's dignity and majesty of law." Furthermore, it has also said that:- " the decree-holder, who does not take steps to execute the decree in accordance with the procedure prescribed by law, should not be encouraged to invoke contempt jurisdiction of the court for non-satisfaction of the money decree." Having regard to the facts of the case the Court felt that the contempt proceedings should not have been resorted to and that in any case since the unconditional apology has been tendered and accepted by the appellant further proceedings should have been dropped. 32. As we read the decision, its ratio runs counter to the submission of the respondents, namely, that the contempt would not lie if the decree or order is executable. Ultimately, the matter is one of the Court'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 t....
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....illful default in compliance with the order. When the judgment of the single Judge in the European Investment Limited case (supra) was impugned before the Appeal Court, the Appeal Court modified the said order. That was taken to the Apex Court. The Apex Court held that the Appeal Court should not have interfered with the order passed by the single Judge and set aside the order of the Appeal Court. In the matter of 2004 (5) Bom. C.R. 341Santosh Dattaram Nadkarni and others vs. New India Industries Limited and others a single Judge of this court again held that contempt proceedings and execution proceedings, are two separate remedies available and can be invoked simultaneously and that contempt is a matter between the court and the person against contempt of court whereas the purpose behind execution proceedings is to enjoy the fruits of the decree in his favour. 68 The division bench of the Madras High Court in the matter of IILLN, High Court, Madras 845India Forge and Drop Stampings Ltd., Madras vs. India Forge and Drop Stampings Employee's Union, Madras has held that a perusal of section 22 of the 1971 Act would show that the provisions of the Contempt of Courts Act, 1971, ....
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....clear distinction taken - having order executed and bringing to notice of the court willful disobedience on the part of the guilty party and seek to have him punished for contempt of court. 70 This has also been reiterated by the Apex Court in the matter of (2004) 1 SCC 360Bank of Baroda vs. Sadruddin Hasan Daya and another. Contempt is a matter between the court and the alleged Contemnor and is not affected in any manner by the rights and obligations of the parties to the litigation inter se. Rama Narang (supra) and (2007) 13 SCC 220Maruti Udyog Limited vs. Mahinder C. Mehta and others, have confirmed this view. Though the Apex Court in the Food Corporation India (supra) has held that one cannot use contempt jurisdiction for enforcement of money decrees, it should be noted that the application in that matter as mentioned in paragraph 13 of the said judgment was for enforcement of the order by attachment of the property by seizing and auctioning the movable and immovable properties of FCI. No such relief in the nature of execution is being sought in the present matter. 71 Coming to Respondent no.4, Respondent no.4 admittedly, at all material times, was a director of SPCPL. It....
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....lication lodging no.70 of 2013 had filed an affidavit dated 27th September, 2013 in his capacity as a director and commercial head of SPCPL stating in paragraph 10 thereto "an amount equivalent to interest of 12% p.a. on Rs. 67.5 Crores has been and is being paid to VMPL, as per the terms of the Supplemental BTA." Knowingly and deliberately and willfully he made a false statement in the said affidavit as no amount has been paid. Infact in paragraph 16 of the said order it is also recorded that the counsel for the respondents on instructions made a specific statement that the interest of 12% on the amount of Rs. 67.50 Crores is being paid to VMPL and is reflected in the bank accounts. When the respondents were told to produce the relevant accounts in this regards, the counsel for the respondents had to concede that he had made an incorrect statement on instructions and no interest is paid. 74 It is necessary to mention at this point that even respondent no.1 had filed an affidavit dated 27th September, 2013 stating that an amount equivalent to interest of 12% p.a. on 67.50 Crores has been and is being paid to VMPL as per the terms of the Supplemental BTA. The respondents have bee....