TaxTMI 
TaxTMI 
2019 (12) TMI 1652
X X X X Extracts X X X X
X X X X Extracts X X X X
....ven under Clause 8 thereof to repay the balance outstanding amount to the petitioner bank within a total period of two months and 15 days from 05/05/2017. According to the petitioner bank, this amounts to disobedience of the said consent order and violation of undertaking given by the respondent amounting to civil contempt as defined in Section 2(b) of the aforesaid Act. 2. The brief facts leading up to filing of this contempt petition are that the respondent had taken loan from the petitioner bank in the year 2012 by mortgaging flat No. G-2, situated in Shiv Apartments at Mouza Somalwada, Nagpur. The respondent had defaulted in repayment of loan, as a result of which the petitioner bank was constrained to initiate proceedings under the provisions of the Maharashtra Co-operative Societies Act, 1960. On failure of the respondent in making payment of the amount despite initiation of the proceedings, a revenue recovery certificate was issued and proceedings were undertaken for sale of the said mortgaged flat. One Ashish Sharad Hole, being the highest bidder, purchased the said flat in auction and consequently sale certificate was issued in his favour upon the bid amount being deposit....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... (Rupees Sixty Lac only) to the Petitioner on 08/06/2013 and charge over the Flat No. G-2 was also created. 4. That on 24/11/2015 the Respondent No.2 has taken over physical possession of the movables and immovable property of the petitioner situated at Flat No. G-2 at Manish Nagar. The details of those movables were also given by Respondent No.2 before this Hon'ble Court by purshish Dt. 20/10/2016. 5. That for recovery of the aforesaid loan amounts the Respondent Nos. 1 and 2 on 22/07/2016 conducted auction of Flat No. G-2 and accepted the bid offered by Respondent No.4 amounting Rs.45,50,000/- (Rupees Forty Five Lac Fifty Thousand only) and on 22/08/2016 executed Sale Certificate in favour of the Respondent No.4. 6. It is agreed that the Respondent No. 1 shall pay to the Respondent No.4 an amount of Rs.53,54,000/- (Rupees Fifty three lac fifty thousand four hundred only). The interest component comes to Rs.5,46,000. Out of which Rs.2,73,000/- to be born by respondent No.1 bank and this amount cannot be recovered from the petitioner towards full and final repayment of the amount paid by him towards purchase of Flat No. G-2. The above amount shall be paid by Respondent No.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s. Thereafter, as per the undertaking recorded in Clause 8 of the minutes of the order, the respondent was supposed to repay the balance outstanding amount in the loan account within a period of 15 days. The petitioner bank has pointed out that the respondent failed to do so within the said period of 15 days and, therefore, having failed to abide by the said undertaking, the contempt of the said order of this Court was committed, making the respondent liable for punishment under the provisions of the aforesaid Act. 6. Upon notice being issued by this Court in the present contempt petition, the respondent filed an affidavit submitting that the movable properties that were received from the petitioner bank were in damaged condition because they were lying in the mortgaged flat, which was in the possession of the petitioner bank and thereafter in possession of the said auction purchaser. It was submitted that in this situation, the damaged movable properties could not be sold and amount due to the bank could not be repaid within the period of 2 months under Clause 8 of the minutes of the order. It was submitted that in the next 15 days, although, efforts were made by the respondent, ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....riod of two months movable could not be sold completely, still the Petitioner shall undertake to repay the balance outstanding amount in the loan accounts for which Flat G-2 is mortgaged within period of Fifteen days." 8. In response to the aforesaid charge framed by this Court, a further affidavit was filed on behalf of the respondent, again stating that there was no intentional or willful disobedience by the respondent of the order passed by this Court. It was submitted that despite efforts made for bringing a purchaser of the said flat, the same could not be done because the interior of the said flat had been badly damaged by the auction purchaser, who had taken possession of the flat from the petitioner bank. It was submitted that the respondent had no intention to violate the order passed by this Court and that the petitioner bank in terms of Clause 9 of the minutes of the order could dispose of the flat for realizing the outstanding amount due. It is further pointed out that during pendency of the writ petition, the respondent had deposited Rs.20,00,000/- and during pendency of the contempt petition another amount of Rs.7,00,000/- was deposited by the respondent, thereby sh....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e process of law, for which it was recorded that possession and attachment of the flat shall continue with the petitioner bank. It was submitted that once such Clause was specifically provided in the minutes of the order itself, on the basis of which the writ petition was disposed of, the petitioner bank could have taken steps immediately after the said total period of 2 months and 15 days to sell the said flat afresh for realizing the balance outstanding amount. 12. It was emphasized that the movable properties returned to the respondent by the petitioner bank were in damaged condition and since they could not be disposed of, the amount could not be raised within the period of 2 months specified in Clause 8 of the said order and despite efforts made by the respondent, the amount for repayment could not be raised within the next 15 days also. It was submitted that the respondent did not intend to challenge the authority of this Court and there was no intention to violate the undertaking. It was further submitted that the nature of undertaking in the facts of the present case was to the petitioner, upon failure of which Clause 9 of the order specifically provided for remedy to the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s and 15 days. Therefore, the said undertaking was not honoured by the respondent. The question is, whether failure to honour the said undertaking amounted to willful breach of undertaking given to a Court to constitute civil contempt as defined in Section 2(b) of the aforesaid Act. 15. It is also important to peruse Clause 9 of the said minutes of order. It is stipulated in the said clause that if the respondent is unable to pay the amount due within two months upon sale of movables properties and further fails to pay entire amount within further period of 15 days as per the said undertaking under Clause 8 of the minutes of the order, the petitioner would be at liberty to sell the aforesaid flat afresh by following due process of law. It was also stipulated in Clause 9 of the minutes of the order that possession and attachment of the said flat would continue with the petitioner bank till the entire period of 2 months and 15 days specified in Clause 8 of the minutes of the order was over. It becomes clear that the petitioner bank accepted an arrangement that if the respondent failed to make payment of outstanding amount within 2 months upon sale of movable properties and thereafte....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Vs. High Court of Delhi (2012) 4 SCC 307, that before passing any final order in a case where breach of an undertaking is alleged, the Court must satisfy itself that such breach or violation of undertaking is wilful and intentional. This is so, because the action taken by the Court under the provisions of the said Act, leads to penalty, including an order of imprisonment and, therefore, the alleged contemnor is entitled to protection of all safeguards. The Court must come to a conclusion that the action of the alleged contemnors amounts to contumacious conduct which is a deliberate violation of undertaking given to the Court, thereby challenging the very authority of the Court, inviting punishment under Section 12 of the said Act. 19. The learned counsel for both the parties have placed reliance on the judgment of the Hon'ble Supreme Court in the case of Rama Narang Vs. Ramesh Narang and another (supra) wherein the Court was considering the question as to whether the contempt proceedings were maintainable in a situation where the order or decree of the Court was executable. The Hon'ble Supreme Court considered the position of law upon analyzing the provisions of the said Act as al....
X X X X Extracts X X X X
X X X X Extracts X X X X
....violated by the contemnor. In the process, the Hon'ble Supreme Court deliberated upon the expression "undertaking". It was found by the Hon'ble Supreme Court that an undertaking could be said to be a promise in the course of legal proceedings, generally as condition for obtaining some concession from the Court or opposite party. 22. In an earlier case decided by the Hon'ble Supreme Court in Bank of Baroda Vs. Sadruddin Hasan Daya and another (2004) 1 SCC 360, the Court considered such a situation of breach of undertaking. In that case also, on facts the Court found that the contemnor had wilfully breached the undertaking given to the Court. This was because the contemnor in a consent order had specifically stated that no charge would be brought on specific properties and yet in a subsequent case also disposed of on consent terms, an undertaking was again given creating a charge on the very same properties. This was found by the Court to be unacceptable and clear breach or violation of the undertaking given to the Court in the first proceeding. In this case also on facts, the Court found that there was violation or breach of undertaking amounting to contempt of the Court, inviting ....