TaxTMI 
TaxTMI 
2007 (3) TMI 799
X X X X Extracts X X X X
X X X X Extracts X X X X
....istrict Magistrate, 24-Parganas as contesting respondents and 5) Pradyut Kumar Saha, General Secretary of All Bengal Excise Licensees Association, Kolkata as proforma respondent. 3. The above appeal is directed against the final judgment and order dated 29.08.2006 of the Calcutta High Court passed in CC No. 62 of 2005 arising out of Writ Petition No. 2248 of 2004 whereby a learned Single Judge of the said High Court has dismissed the application for contempt filed by the appellant herein. According to the appellant, the contesting respondents have deliberately and willfully violated and were in utter disregard of the solemn order dated 04.01.2005, 19.01.2005 and 20.01.2005 passed by Hon'ble Mr. Justice Pranab Kumar Chattopadhyay in Writ Petition No. 2248 of 2004 filed by All Bengal Excise Licensees Assn. and Anr. v. State of West Bengal and Ors. 4. The background facts are as under: By an order dated 04.01.2005, a learned Single Judge passed an interim order to the effect that the respondent-authorities will be at liberty to process the applications in respect of grant of licenses for excise shops but no final selection in respect of such shops shall be made with....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Ghosh), after hearing the advocates for the parties on 24.11.2004 passed an order, inter alia as follows: ...that the respondent authorities will process the matter but will not finalise and issue the licence without the leave of the court. The matter will appear on 9th December, 2004. 7. Thereafter, the above-mentioned matter appeared in the list on 09.12.2004 before the very same Judge. The learned Judge, after hearing the advocates for the parties, gave a direction to file affidavit and the matter was directed to appear 4 weeks after vacation and also further directed that the interim order already passed in the matter will continue. 8. Although there was no direction for making any further advertisement by the respondent-authorities inviting any application for obtaining excise licenses for the new excise shops proposed to be give on or about 20.12.2004, some of the members of the appellant came to know that an advertisement was published on 30.11.2004 in the Bengali Daily newspaper Janashakti by the Excise Department, Government of West Bengal, whereby applications had been invited for giving new licenses for excise including country spirit shops withi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d lottery in respect of applications already received. In spite of repeated requests, the respondents have pre- determined to hold the lottery on 05.01.2005 which amounts to finalization of the applications for granting of licenses and they are also trying to issue supplementary licenses to the existing shop owners. 9. On 04.01.2005, the Court passed the following order: Let this matter be listed before the regular bench one week after the Christmas vacation. In the meantime, let there be an interim order only to the effect that the respondent authorities herein will be at liberty to process the applications in respect of grant of licence for excise shops but no final selection in respect of such shops shall be made without obtaining specific leave of this Court. I also make it clear that the respondent authorities will also not hold any lottery for the purpose of final selection of the aforesaid excise shops in question without obtaining further orders from this Court. All parties are to act on a Xerox signed copy of this dictated order on the usual undertaking. 10. Again, the interim order was directed to continue until further orders on ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hey requested the High Court to issue rule nisi calling upon the respondents and each of them to show cause as to why the respondents and each of them should not be committed to prison or otherwise be suitably dealt with and/or punished for deliberate and willful violation and utter disregard of the solemn orders dated 04/19 and 20.01.2005 passed in writ petition No. 2248 of 2004. 11. In the contempt petition, rule was issued on 23.03.2005. The respondents filed an application praying for discharge of the rule issued in the contempt proceedings on 02.05.2005 North 24 Parganas Excise Licensees Assn. filed SLP (C) No. 10820 of 2005 against the order dated 15.03.2005 passed by the Division Bench of the High Court. The State of West Bengal filed an application for vacating the interim order dated 04.01.2005 passed in writ petition No. 2248 of 2004. On 26.07.2005, a learned Single Judge allowed the application and vacated the interim order but, however, directed the Government that they would be free to take steps in issuing license in terms of the policy but it will be mentioned in the license that it is subject to the result of the writ petition and further directed that all steps ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Bench on 4th January, 2005 passed an interim order restraining the alleged contemnors from holding any lottery for the purpose of final selection of the excise shops in question without obtaining further order from this Court but the alleged contemnors published an advertisement in the daily newspaper for holding lottery for the purpose of final selection of excise shops in question. Therefore, there is no doubt that the alleged contemnors have disobeyed the specific direction passed earlier by this Bench. The Division Bench of this Hon'ble court in two different proceedings passed two separate orders on 15th March, 2005 and 18th March, 2005 respectively whereby and whereunder the alleged contemnors herein were permitted to grant excise licenses. The alleged contemnors herein reasonably understood that the orders passed by the Division Bench will have overriding effect on the order passed by the learned Single Judge of this Hon'ble court and thus committed mistake by not realising the implication of the order passed by this Bench which remained operative at the relevant time. If there is any doubt regarding interpretation and/or understanding of the orders....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e order passed by the High Court which remain operative at the relevant time and on that basis dismissing the application for contempt without making any order for restoration of the status quo ante to undo the mischief caused by such violation of the interim order. According to the learned senior counsel for the appellant, the impugned order is not sustainable in law and should not be allowed to operate as a precedent and the wrong perpetrated by the respondent/contemnors in contumacious disregard of the orders of the High Court should not be permitted to hold. Likewise, the High Court also committed a grievous error of law in holding that the alleged contemnors did not understand the implication and consequences of a prohibitory order passed in an independent proceedings and by sheer mis- conception thought that there is no bar to issue excise licenses in view of the order dated 15.03.2005 and 18.03.2005 by two different Division Benches of the High Court. In support of their contention, they cited the following rulings: 1. Kapildeo Prasad Sah and Ors. Vs. State of Bihar & Ors., (1999) 7 SCC 569 2) Tayabbhai M. Bagasarwalla and Anr. Vs. Hind Rubber Industries Pv....
X X X X Extracts X X X X
X X X X Extracts X X X X
....005. Under such circumstances, the High Court is not justified in holding that the highly qualified and well placed government officials did not understand the implication and/or consequence of prohibitory order in an independent proceedings and by sheer mis-conception though that there is no bar to issue excise licenses as was held by the learned Judge in the impugned order. This Court can only say it is rather unfortunate that such officers who are not capable of or not able to understand the implication of the prohibitory orders passed by the High Court should be allowed to hold such high offices. During the course of the hearing of the contempt application, the matter was adjourned by the High Court to enable the respondent to consider whether the contemnors was prepared to cancel the lottery held on 20, 21 and 22.03.2005 in violation of the Court's orders and on such adjourned date, the contemnors did not agree to cancel the lottery. Under such circumstances, the plea of mistake of understanding the order cannot at all be accepted. Likewise, the High Court also was not justified in not directing the contemnors to cancel the lottery held on 20, 21 and 22.03.2005 in violatio....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ondent-contemnors did not understand the implication of the order dated 04.01.2005. In our opinion, such officers are required to be dealt with effectively to uphold the dignity of the High Court and the efficiency of the system itself. The High Court committed a grave error of law by not taking into consideration the most important fact that in the course of the hearing of the contempt application the matter was adjourned in order to enable the contemnor to consider whether they were prepared to cancel the lottery held on 20, 21 and 22.03.2005 and on the adjourned date, the respondents did not agree to cancel the lottery. In such view of the matter, the significant stand being the plea of mistake of understanding cannot, in our opinion, prevail. The High Court in that view of the matter committed a grave mis-carriage of justice by not taking into consideration another most important fact that if actually the lottery was held by mistake or by misunderstanding of the orders, then the respondent would have immediately rectified it and would have cancelled the lottery but in the instant case, instead of cancelling the lottery, the respondents have justified their conduct from which th....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to disobedience particularly when the attention of the person is drawn to the court's orders and its implications. Disobedience of the court's order strikes at the very root of the rule of law on which Indian system of governance is based. Power to punish for contempt is for the maintenance of effective legal system. It is exercised to prevent perversion of the course of justice. Jurisdiction to punish for contempt exists to provide ultimate sanction against the person who refuses to comply with court's order or disregards the order continuously. No person can defy court's order. Wilful would exclude casual, accidental, bona fide or unintentional acts or genuine inability to comply with the terms of the order. A petitioner who complains breach of the court's order must allege deliberate or contumacious disobedience of the court's order. 2) Tayabbhai M. Bagasarwalla and Anr. v. Hind Rubber Industries Pvt. Ltd. and Ors. [1997]2SCR152 16. According to this section, if an objection is raised to the jurisdiction of the court at the hearing of an application for grant of, or for vacating, interim relief, the court should determine that issue in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....gh Court, would indeed be subversive of rule of law and would seriously erode the dignity and the authority of the courts. We must repeat that this is not even a case where a suit was filed in wrong court knowingly or only with a view to snatch an interim order. As pointed out hereinabove, the suit was filed in the Civil Court bonafide. We are of the opinion that in such a case the defendants cannot escape the consequences of their disobedience and violation of the interim injunction committed by them prior to the High Court's decision on the question of jurisdiction. 3) Eastern Trust Company v. MaKenzie Mann & Co., Ltd. AIR 1915 Privy Council 106 There is a well-established practice in England in certain cases where no petition of right will lie, under which the Crown can be sued by the Attorney -General, and a declaratory order obtained, as has been recently explained by the Court of Appeal in England in Dyson v. Attorney-General 1911 (1) KB 410 and in Burghes v. Attorney-General 1912 (1) Ch. 173 . It is the duty of the Crown and of every branch of the Executive to abide by and obey the law. If there is any difficulty in ascertaining it, the courts are open ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....and egalitarian society are not meaningless jargons so that they only remain as the basic factors of our socialistic state on principles only and not to have any application in the realities of every-day life : one section of the employees would stand benefited but a similarly placed employee would not be so favoured why this attitude ? Obviously there is no answer. Surprisingly, this attitude persists even after six rounds of litigation travelling from Calcutta to Delhi more than once the answer as appears in the counter-affidavit is an expression of sorrow by reason of the understanding cannot be countenanced in the facts presently under consideration. A plain reading of the order negates the understanding of the Respondent State and the conduct in no uncertain terms can be ascribed to be the manifestation of an intent to deprive one section of the employees being equally circumstanced come what may and this state of mind is clearly expressed in the counter-affidavit though however in temperate language. The question of bona fide understanding thus does not and cannot arise in the facts presently. Is it a believable state of affairs that the order of the learned Single Judge as e....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iance with the judgment and directions of this Court. The financial capacity of the Government cannot be pleaded as a ground for non-implementation of the directions of the Court inasmuch as even in the matter of determination of the pay-scale of the employees of the Regional Rural Banks and maintenance of parity with their counterparts, serving under the sponsored commercial banks, Justice Obul Reddi had not accepted the said plea and that award reached its finality. Since the financial capacity of the employer cannot be held to be a germane consideration for determination of the wage structure of the employees and the Parliament enacted the Act for bringing into existence these regional rural banks with the idea of helping the rural mass of the country, the employees of such rural banks cannot suffer on account of financial incapacity of the employer. We have no hesitation in coming to the conclusion that the issuance of notification dated 1.4.2001, by the Government of India cannot be held to be in compliance with the judgment and directions of this Court in S.M.G. Bank. But at the same time, we are of the opinion that the appropriate authority need not be punished under the pro....
X X X X Extracts X X X X
X X X X Extracts X X X X
....by order dated December 14, 1990 passed in the said writ petition the High Court had stayed the operation of the said order of disqualification dated December 13, 1990 passed by the Speaker. The effect of the stay of the operation of the order of disqualification dated December 13, 1990 was that with effect from December 14, 1990 the Declaration that Bandekar and Chopdekar were disqualified from being members of Goa Legislative Assembly under order dated December 13, 1991 was not operative and on December 24, 1990, the date of the alleged split, it could not be said that they were not members of Goa Legislative Assembly. One of the reasons given by the Speaker for not giving effect to the stay order passed by the High Court on December 14, 1990, was that the said order came after the order of disqualification was issued by him. We are unable to appreciate this reason. Since the said order was passed in a writ petition challenging the validity of the order dated December 13, 1990 passed by the Speaker it, obviously, had to come after the order of disqualification was issued by the Speaker. The other reason given by the Speaker was that Parliament had held that the Speaker's orde....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... knowledge of the order would be a nullity. That in our opinion is the only difference between an order of injunction to a party and an order of stay to a court. This would mean that the Speaker was bound by the stay order passed by the High Court on December 14, 1990 and any action taken by him in disregard of the said stay order was a nullity. In the instant case the Speaker, in passing the order dated February 15, 1991 relating to disqualification, treated Bandekar and Chopdekar as disqualified members. This action of the Speaker was in disregard of the stay order dated December 14, 1990 passed by the Bombay High Court. 7) Surjit Singh and Ors. v. Harbans Singh and Ors. AIR1996SC135 4. As said before, the assignment is by means of a registered deed. 'The assignment had taken place after the passing of the preliminary decree in which Pritam singh has been allotted 1/3rd share. His right to property to that extent stood established. A decree relating to immovable property worth more than hundred rupees, if being assigned, was required to be registered, that has instantly been done. It is per se property, for it relates to the immovable property invol....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e learned Single Judge made appropriate directions to remedy the breach of undertaking. It was contended before this Court that the learned Judge was not justified in giving the aforesaid directions in addition to punishing the petitioners for contempt of court. The argument was rejected holding that "the Single Judge was quite right in giving appropriate directions to close the breach (of undertaking)". 18. The above principle has been applied even in the case of violation of orders of injunction issued by Civil Courts. In Clarke v. Chadbum [1985] 1 All. E.R. 211, Sir Robert Megarry V-C observed: I need not cite authority for the proposition that it is of high importance that orders of the court should be obeyed. Willful disobedience to an order of the court is punishable as a contempt of court, and I feel no doubt that such disobedience may properly be described as being illegal. If by such disobedience the persons enjoined claim that they have validly effected some charge in the rights and liabilities of others, I cannot see why it should be said that although they are liable to penalties for contempt of court for doing what they did, nevertheless those acts we....
X X X X Extracts X X X X
X X X X Extracts X X X X
....are not subject to any limitation. Where in violation of a stay order or injunction against a party, something has been done in disobedience, it will be the duty of the court as a policy to set the wrong right and not allow the perpetuation of the wrong doing. In our view, the inherent power will not only be available in such a case, but it is bound to be exercised in that manner in the interests of justice. Even apart from Section 151, we should observe that as a matter of judicial policy, the court should guard against itself being stultified in circumstances like this by holding that it is powerless to undo a wrong done in disobedience of the court's orders. But in this case it is not necessary to so to that extent as we hold that the power is available under Section 151. C.P.C. 11) T.M.A. Pai Foundation and Ors. v. State of Karnataka and Ors. 1995CriLJ3220 In this case, suo motu contempt proceedings was initiated by the Court against Secretary, Deputy Secretary and Under Secretary to Medical Education Department and few other officers of the State. Explanation was given by these officers admitting bona fide error made in interpreting this Court's order....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rranted. As though to add insult to injury when the appellant was complaining about this order, the Division Bench goes one step further and directs possession be given to Somani Builders. This direction would amount to putting a premium on the illegality committed by the former alleged tenant A.K. Ghosh. 23. Apart from the fact whether A.K. Ghosh had a legal authority to sub-lease or not it was not open to him to grant a sub-lease in violation of the order. It is no use contending as Mr. Chidambaram, learned Counsel for the respondents does, that there was a bar to such a sub-lease under the terms of the status quo order. It has the effect of violating the preservation of status of the property. This will all the more be so when this is done without the leave of the court to disturb the state of things as they then stood. It would amount to violation of the order. The principle contained in the maxim: 'Actus Curiae Neminem Gravabit' has no application at all to the facts of this case when in violation of status quo order a sub-tenancy has been created. Equally, the contention that even a trespasser cannot be evicted without recourse to law is without merit, becaus....
X X X X Extracts X X X X
X X X X Extracts X X X X
....their alleged confusion. Likewise, this Court while ordering notice in the present appeal @ SLP No. 15224 of 2006 have clearly directed on 18.09.2006 that no license shall be granted on the basis of the lottery and pursuant to the circular dated 20.01.2004. Even after the receipt of the order, the respondents have not cancelled the license, but allowed them to continue the business. The reason is obvious. The respondents though tendered unqualified apology before the High Court, the High Court was not inclined to go into the question of apology in view of the observations made by it in the order impugned in this civil appeal. Even before us no apology whatsoever was tendered by respondent Nos. 1-4. We, therefore, hold them guilty of willful and deliberate act of contempt. As it is evident that respondent Nos. 1-4 have no regard for the orders passed by this Court on 4, 19 and 20.01.2005 and have scant respect for the Court's orders and have deliberately and willfully and with utter disregard violated all the 3 orders and are thus guilty of contempt of Court. However, taking a lenient view and taking into consideration of the future prospects of the officers, respondent Nos. 1-4....