TaxTMI 
TaxTMI 
2022 (7) TMI 516
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....s Court found Respondent No.3 (Dr. Vijay Mallya) guilty of committing contempt of Court on two counts. Paragraphs 22 to 30 of said Judgment and Order dated 9.5.2017 were: - "22. We now turn to the alleged violation of orders dated 03.09.2013 and 13.11.2013 passed by the High Court of Karnataka. It is not disputed that such orders were passed restraining the concerned respondents including Respondent No.3 and that the orders were passed in proceedings arising from O.A. No.766 of 2013 before DRT Bengaluru. The present proceedings before this court have also arisen from the very same O.A. No.766 of 2013. The orders of restraints passed by the High Court were therefore in the very same proceedings with which we are presently concerned. Said orders bound the concerned respondents including Respondent No.3 and restrained them from transferring, alienating, disposing or creating third party rights in respect of movable as well as immovable properties belonging to them till further orders in the proceedings. A question has been raised by Mr. Vaidyanathan learned senior advocate whether the orders would be restricted only so far as the properties which were in the hands of the conc....
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....t is thus not only against the directions issued by this court but also against express mandate of orders dated 03.09.2013 and 13.11.2013 passed in the proceedings in question. 25. Having thus found that the actions on the part of Respondent No.3 in disbursing the amount of US$ 40 million was against the text and tenor of the orders passed by the High Court of Karnataka, the question then arises whether this Court can take cognizance of such violation or should it leave it to be decided by the High Court of Karnataka itself in a properly instituted legal proceeding. 26. In Delhi Judicial Service Association, Tis Hazari Court, Delhi v. State of Gujarat and others (1991) 4 SCC 406, a question arose whether the power and jurisdiction of this Court under Article 129 of the Constitution is confined to "the contempt of this Court" alone. Submissions advanced in that behalf were noted in paragraph 14 of the judgment which sets out the submission of the learned Attorney General: "...The Supreme Court as the Apex Court is the protector and guardian of justice throughout the land, therefore, it has a right and also a duty to protect the courts whose orders and judg....
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....h respect to contempt on first count, we proceed to exercise our contempt jurisdiction even with regard to the second count. As stated above, Respondent No.3 was adequately put to notice and no prejudice has been caused as a result of such assumption of jurisdiction by this court. 29. Having considered the entirety of the matter, we find that Respondent No.3 is guilty of having committed contempt of court on both the counts. At this stage it must be stated that in terms of Rule 6 (1) of Rules to Regulate Proceeding for Contempt of Supreme Court 1975, Respondent No.3 was obliged and duty bound to appear in person in response to the notice issued by this Court in Contempt Petition. Instead, he chose to file application seeking recall of the orders issuing notice. Having considered the matter, we see no reason to recall that order and dismiss I.A. Nos.1 to 4 of 2016 preferred by Respondent No.3 in Contempt Petition Civil Nos.421-424 of 2016. Respondent No.3 is therefore duty bound to appear in person in the present contempt proceedings. 30. Since Respondent No.3 has not filed any reply to the Contempt Petition nor did he appear in person, though we have found him gui....
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....hree children of Respondent No.3, who are the sole beneficiaries of the aforesaid Trusts, are majors and are citizens of the United States of America. Respondent No.3 is neither the Settlor nor the Trustee nor the beneficiary of any of the aforesaid named Trusts, and has no control over the Trusts or the manner in which the respective corpuses of each of the aforesaid Trusts is utilized. However, the respective corpuses as they stood on 31st March, 2016 have been included in the statements of assets of the three children handed over to this Hon'ble Court in sealed envelope on 26th April, 2016." " 4. As stated in paragraphs 29 and 30 quoted hereinabove, an opportunity was given to Respondent No.3 (hereafter referred to as the Contemnor) to file his response and advance submissions on the proposed punishment. The matter was accordingly adjourned to 10.7.2017. 5. The Contemnor however sought review of the Judgment and Order dated 9.5.2017, which application remained pending for some time and was rejected by this Court vide Order dated 03.08.2020. By said order the Contemnor was directed to appear before this Court; and the Ministry of Home Affairs, Government of India, New Delhi....
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....s admitted on the sole ground of sufficiency of prima facie case. The High Court of London dismissed the appeal on 20 April 2020. VM applied leave to appeal to the Supreme Court in the High Court. On 14 May 2020 the High Court of London rejected his application for permission to appeal to Supreme Court. VM has thus exhausted all avenues of appeal in the UK. 3. Following the refusal of leave to appeal, VM's surrender to India should, in principle, have been completed within 28 days. However, the UK Home Office intimated that there is a further legal issue which needs to be resolved before VM's extradition may take place. The UK side further said that this issue is outside and apart from the extradition process, but it has the effect that under the United Kingdom law, extradition cannot take place until it is resolved. The High Commission was further informed that the issue is confidential and so it cannot be disclosed. 4. In compliance with the Order of the Hon'ble Supreme Court dated 31.08.2020, the Government of India again took up the pending extradition case of VM with the Government of UK so as to seek his early extradition and facilitate his presence before t....
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....order dated 30.11.2021, the contemnor was given specific liberty to advance submissions pertaining to the issues set-out in the judgment dated 09.05.2017. Additionally, he was given further liberty to advance such submissions through his learned Counsel. 3. Mr. Ankur Saigal, learned counsel appearing on behalf of the contemnor submits that all the orders including the orders dated 30.11.2021 and 10.02.2022 were brought to the notice of the contemnor and that there was exchange of communications between the learned counsel and the contemnor. A copy of the communication dated 17.01.2022 has been placed for our perusal which communication inter alia states inability on part of the Solicitors of the contemnor to provide any information about the nature of proceedings and the relief sought in the pending proceedings in the United Kingdom. 4. We then invited Mr. Ankur Saigal, learned counsel to advance submissions on merits of the matter in keeping with the directions issued in last two orders. Mr. Saigal expressed his inability to advance the submissions. 5. We have heard Mr. Jaideep Gupta, learned Senior Advocate, who has assisted this Court as Amicus Curiae ....
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....ll assets that may be available to the respondent No.3/ Contemnor. Alternatively, a forensic auditor may be appointed to undertake such an exercise." Reliance was placed by the learned Amicus Curiae on the decisions of this Court in Supreme Court Bar Association v. Union of India & Anr. (1998) 4 SCC 409, Noorali Babul Thanewala v. K.M.M. Shetty & Ors. (1990) 1 SCC 259, Rama Narang v. Ramesh Narang (2009) 16 SCC 126, Pravin C. Shah v. K.A. Mohd. Ali & Anr. (2001) 8 SCC 650 to submit that in contempt jurisdiction the Court can direct the contemnor to purge the contempt by reversing the very transaction that was found to be contumacious. On the remedy of sequestration of assets, reliance was placed on Rose v. Laskington (1989) 3 AllER 306, Mir v. Mir (1992) 1 AllER 765 and Richardson v. Richardson (1989) 3 AllER 779. 9. In spite of repeated opportunities afforded to the Contemnor, no submissions were advanced on his behalf either on purging of contempt or on the quantum of punishment. 10. The actions on part of the Contemnor having been found to be contumacious and established in the Judgment and Order dated 09.05.2017, we are presently concerned with the issues as to what or....
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....g the orders of the court or by undergoing the penalty imposed by the court." 26. Obeying the orders of the court would be a mode by which one can make the purging process in a substantial manner when it is a civil contempt. Even for such a civil contempt the purging process would not be treated as completed merely by the contemnor undergoing the penalty imposed on him unless he has obeyed the order of the court or he has undone the wrong. If that is the position in regard to civil contempt the position regarding criminal contempt must be stronger. Section 2 of the Contempt of Courts Act categorises contempt of court into two categories. The first category is "civil contempt" which is the wilful disobedience of the order of the court including breach of an undertaking given to the court. But "criminal contempt" includes doing any act whatsoever, which tends to scandalise or lowers the authority of any court, or tends to interfere with the due course of a judicial proceeding or interferes with, or obstructs the administration of justice in any other manner. 27. We cannot therefore approve the view that merely undergoing the penalty imposed on a contemnor is suffici....
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....titution Bench of this Court in Supreme Court Bar Association v. Union of India & Anr. (1998) 4 SCC 409 as follows: "33. Thus, the recognised and accepted punishments for civil or criminal contempt of court in English law, which have been followed and accepted by the courts in this country and incorporated in the Indian law insofar as, civil contempt, is concerned are: (i) sequestration of assets; (ii) fine; (iii) committal to prison. 34. The object of punishment being both curative and corrective, these coercions are meant to assist an individual complainant to enforce his remedy and there is also an element of public policy for punishing civil contempt, since the administration of justice would be undermined if the order of any court of law is to be disregarded with impunity. Under some circumstances, compliance of the order may be secured without resort to coercion, through the contempt power. For example, disobedience of an order to pay a sum of money may be effectively countered by attaching the earnings of the contemner. In the same manner, committing the person of the defaulter to prison for failure to comply with an order of spec....