CASE NO.: Contempt Petition (civil) 148 of 2003 PETITIONER: Rama Narang RESPONDENT: Ramesh Narang & Anr DATE OF JUDGMENT: 12/04/2006 BENCH: Ruma Pal, B.N. Srikrishna & Dalveer Bhandari JUDGMENT:
J U D G E M E N T
CONTEMPT PETITION NO.148 OF 2003
IN
CP NOS. 265-267 OF 1999 IN CP NO.209 OF 1998
IN
CIVIL APPEAL NO. 366 OF 1998
RUMA PAL, J.
In this contempt petition the petitioner alleged that the
respondents 1 and 2 have violated this Court’s orders dated
12th December, 2001 and 8th January, 2002 disposing of
Contempt Petition (Civil) Nos. 265-267/1999 in Contempt
Petition (Civil) No.209 of 1998 in Civil Appeal Nos. 366/1998,
603/1998 and 605/1998. The petitioner and the respondents
represent two groups of members of one family. The petitioner,
Rama Narang is the father of Ramesh and Rajesh the two
respondents herein. They are the children of his first wife,
whom he divorced in 1963. The petitioner also has children by
the second wife. Disputes have been raging between the
parties for over a decade. Several suits and counter suits have
been filed. In contempt proceedings filed by the respondent
No.1 against the petitioner an order was passed by this Court
on 12th December, 2001 to the following effect:-
“The following cases are pending between
the parties who are parties in the present
proceedings before us one way or the
other. We are told that all the parties
have settled their disputes in respect of
all the litigations specified below.
1. O.S. No.3535 of 1994 before the
Bombay High Court.
2. O.S. No.3578 of 1994 before the
Bombay High Court
3. O.S. No.1105 of 1998 before the
Bombay High Court
4. O.S. No.3469 of 1996 before the
Bombay High Court
5. O.S. No.1792 of 1998 before the
Bombay High Court
6. O.S. No.320 of 1991 before the
Bombay High Court
7. Company Petition No.28 1992 before
the Bombay High Court
Before the Principal Bench, Company
Law Board, New Delhi.
8. Arbitration Suit No.5110 of 1994
before the Bombay High Court.
Today they filed a document styled it as
“MINUTES OF CONSENT ORDER” signed
by all the parties. Learned counsel
appearing on both sides submitted that
all the parties have signed this document.
Today except Mona Narang and Ramona
Narang (two ladies), all the rest of the
parties are present before us when these
proceedings are dictated. As for Mona
Narang and Ramona Narang learned
counsel submitted that Mona Narang had
affixed the signatures and the power of
attorney holder of Ramona Narang has
signed the above document in his
presence. This is recorded.
Both sides agreed that all the suits can
be disposed of in terms of the settlement
evidenced by “MINUTES OF CONSENT
ORDER” produced before us. For
disposal of those cases and/or for
passing decrees in them we have to
pronounce the final formal order in terms
of the settlement now produced before us.
We, therefore, withdraw all the aforesaid
suits to this Court under Article 139-A
of the Constitution of India.
Prothonotory and Senior Master of the
Bombay High Court is directed to
transmit the records in the above
mentioned suits by special messenger to
this Court so as to reach the Registry
here within ten days from today. The
Bench Officer of the Principal Bench of
the Company Law Board, New Delhi is
directed to forward the records relating
to company petition No.28 of 1992 to the
Registry of this Court so as to reach the
Registry within ten days from today.
All the parties have undertaken before
us that they will implement the terms of
the “MINUTES OF CONSENT ORDER” on
or before 1.1.2002 and that no further
time will be sought for in the matter.
Clause (f) of the compromise relates to
the operation of the bank accounts. That
clause will come into force from today
onwards.
All the afore-mentioned suits and the
company petition will be posted for final
formal orders on 8.1.2002 at 10.30 a.m.
along with these contempt proceedings.”
The Minutes of the Consent Order referred to in the order
dated 12th December, 2001 was as an agreement between the
parties, which was duly executed by them.
The bone of contention between the parties is primarily
the control of a company known as NIHL. The consent
minutes provided inter alia:-
(a) With effect from 4th May, 1999 Rama,
Ramesh and Rajesh are the only
Directors of NIHL (and its
subsidiaries). Any increase in the
Board of Directors shall be with the
mutual consent of Rama and
Ramesh/Rajesh.
(b) None of the Directors (Rama,
Ramesh and Rajesh) can be removed
from directorship.
(c) Rama and Ramesh shall continue to
be in joint management and control
of NIHL and Rajesh shall continue
to be the Permanent Whole Time
Director thereof in charge of day to
day operations/management.
(d) No decision shall be adopted
concerning or affecting the said
Company (and its subsidiaries)
without the consent of Rama and
Ramesh (or Rajesh) in writing. It is
further clarified and agreed that
save and except as provided herein
no prevailing decisions including
appointment of Directors/
Executives or any other persons
shall continue unless Rama and
Ramesh (or Rajesh) consent to the
same in writing.
(e) All the collections coming in cash
shall continue to be remitted in the
bank accounts of the Company and
all transactions will only be made in
the form of cheques and/or as may
hereafter be agreed to between
Rama and Ramesh (or Rajesh).
(f) All bank accounts of the Company
shall continue to be operated jointly
by any two out of the three Directors
namely Rama, Ramesh and Rajesh
and/or as may hereafter be agreed
to between Rama and Ramesh(or
Rajesh). If the amount of any
transaction exceeds Rs. 10 (ten) lacs
the same shall be undertaken
through a cheque signed jointly by
Rama and Ramesh/Rajesh.”
The consent terms also provide for the performance of
various actions by the parties which are not necessary to be
recorded. It is sufficient to note that all the agreed actions
were to be performed by the petitioners group before 1.1.2002.
When the matter appeared in the list on 8.1.2002 the
Court recorded that all the eight suits and proceedings
withdrawn from other courts had been transmitted. The
appellant’s suits were disposed of in terms of the minutes of
the consent order incorporated in the proceedings passed by
the Court on 12.12.2001. The order dated 8th January, 2001
further provided:-
“All the above are now being disposed of
in terms of the Minutes of Consent Order
incorporated in the proceedings passed
by us on 12.12.2001.
The decree will be drawn up in terms of
the Minutes of the Consent Order.”
On the allegation that the two respondents had violated
the terms of the orders specially the clauses 3(c), (d) and (f) of
the consent minutes, this contempt petition has been filed. It
is also the case of the petitioner that the violations of the
orders had been admitted by the respondents. According to
the petitioner the violations amounted to a willful disobedience
of the orders dated 12.12.2001 and 8.1.2002 and were
punishable under this Court’s power of contempt.
Initially a notice was issued by this Court on the
petitioners’ application on 9th May, 2003 to the respondents
for ascertaining the facts and to enable them to respond to the
averments in the petition. After the filing of the responses, on
15th September, 2003, a notice in contempt proceedings was
issued to the respondents.
In an attempt to bring the disputes between the parties
to amicable end, the Court appointed a retired Chief Justice of
Orissa High Court as a mediator. The mediation was however,
unsuccessful. Since the settlement of disputes was not
possible, the proceedings before the mediator were terminated
and the contempt petition was directed to be listed for hearing.
Before taking up the question whether the respondents
are guilty of contempt as alleged by the petitioner, the
preliminary objection raised by the respondents as to the
maintainability of the contempt petition are addressed.
According to the respondents, the consent order did not
contain an undertaking or an injunction of the Court and
could not be the basis of any proceedings for contempt.
Reliance has been placed on the decision of this Court in Babu
Ram Gupta Vs. Sudhir Bhasin And Anr. 1980(3) SCC 47;
Bank of Baroda Vs. Sadruddin Hasan Daya And Anr. 2004
(1) SCC 360; R.N. Dey And Ors. Vs. Bhagyabati Pramanik &
Ors. 2000(4) SCC 400; Rita Markandey Vs. Surjit Singh
Arora 1996 (6) SCC (14); Nisha Kanto Roy Chowdhury Vs.
Smt. Saroj Bashini Goho AIR 1948 (Cal.) 294; Bajranglal
Gangadhar Khemka & Anr. Vs. Kapurchand Ltd.AIR 1950
(Bombay), 336. According to the respondents in the absence
of an undertaking given to the Court and an allegation that
such undertaking had been violated, this Court could not
exercise jurisdiction over a mere violation of the terms of
consent order which may have been incorporated in the
consent order. It was also argued that the order dated
12.12.2001 has in fact been carried out and implemented
within the time specified. According to the respondents the
order dated 12.12.2001 had merged in the final order dated
8.1.2002. Reference has been made to the language of the
order dated 8.1.2002 which the respondents submitted, was
the only operative order and which did not in fact contain any
undertaking of the respondents at all. The respondent’s case
is that the mere imprimatur of the Court to a consent
arrangement was not sufficient to attract the contempt
jurisdiction. Only such consent orders which are coupled with
undertakings or injunctions by the Court could be the subject
matter of contempt proceedings. The respondents have
argued that in the facts of this case the final order does not
reflect any undertaking except the petitioner’s undertaking to
Rakesh, who was the brother of the respondents 1 and 2. They
have also submitted that the contempt power must be strictly
construed. Finally, it was submitted that if this Court holds
that the earlier decisions relied upon by the respondents had
been wrongly decided, the same should not serve to proceed
against the respondents, because when the actions
complained were done the law did not treat those actions as
contumacious.
Learned counsel appearing on behalf of the petitioners
has submitted that a decree for injunction whether directory
or prohibitory can only be enforced by way of contempt
proceedings. It was argued that there was nothing in principle
to draw a rational distinction between the orders passed on
merits and orders passed by consent. Our attention was also
drawn to the language of the order dated 12.12.2001 which
directed clause (f) of the minutes to be enforced from that date
onwards. In fact the various suits referred to in the order
dated 8th January, 2002 had been decreed in terms of the
mutual consent order. It has also been submitted that all the
relevant clauses in the consent minutes could be read both as
prohibitory and directory. The petitioner has submitted that
in a civil contempt, the issue is not so much the punishment
of the alleged contemnor, but the execution of the decree.
According to the petitioner, all the decisions cited by the
respondents were distinguishable. Reliance has been placed
on the definition of civil contempt in the Contempt of Courts
Act, 1971 as well as on the decisions in Rosnan Sam Boyce
Vs. B.R. Cotton Mills Ltd. & Ors. 1990 (2) SCC 636; C.H.
Giles V. Morris & Ors. 1972 (1) All ER 1960; and Salkia
Businessmen’s Association & Ors. Vs. Howrah Municipal
Corporation & Ors. 2001 (6) SCC 688.
Prior to the enactment of the Contempt of Courts Act,
1971 (referred to hereafter as the Act), the field was governed
by the Contempt of Courts Act, 1952 which did not contain
many of the provisions which have been introduced for the
first time by the 1971 Act. Till the 1971 Act, the policy of the
legislature was to leave the formulation of the law of contempt
to the Courts. The provisions of the Contempt of Courts Act
1952 were, therefore, broadly framed. Consequently, there
was often a conflict between the practice in a Court and the
judicial decisions and sometimes conflict between the views of
the different High Courts on the law applicable.
An instance of such conflict is the case of Nisha Kanto
Roy Chowdhury V. Smt. Saroj Bashini Goho AIR 1948 Cal
294. In that case, a suit had been filed for ejectment by the
respondent of the appellant. The suit was not contested.
Terms of compromise were drafted and a decree passed in
terms of the compromise. One of the clauses of the
compromise contained an undertaking of the appellant to
remove the image of the deity which had been installed by the
appellant together with the structures around the deity on
demand by the respondent-landlord. However, when the
respondent called upon the appellant to remove the image, the
appellant refused. The respondent then filed an application
before the High Court to commit the appellant for contempt of
Court on the ground that he had broken an undertaking
which had been given to the Court that he would remove the
image when called upon to do so by the respondent. The
Single Judge allowed the application and committed the
appellant holding that he had violated the order of the Court.
On appeal, however, the Division Bench differed with the
views expressed by the learned Single Judge. It was held that
the clause which recorded the appellant’s undertaking to
remove the image did not state that the defendant undertook
“to the Court” to remove the image. The word “undertakes”
was construed to mean “formal promise or pledge”. It was
held that the appellant had thus merely promised or pledged
the respondent to remove the image. The Court was no party
to that promise at that stage. It was also said that:
“It must be remembered that a
compromise decree is nothing more
than an agreement of the parties
with the sanction of the Court
super-added. It has really no
greater sanctity than the agreement
itself. It certainly cannot mean
anything more than the agreement
itself.”
When it was pointed out that the practice on the original
side of the High Court was to record an undertaking to the
Court in that manner and that this practice had been
endorsed in several earlier decisions, the Division Bench
opined that if that was so then “sooner the practice is
stopped is better”. It was affirmed that if it was the intention
of the parties that an undertaking should be given to the
Court then the compromise should have made it clear that
such was the case.
A different view was taken by the Division Bench of the
Bombay High Court in Bajranglal Gangadhar Khemka and
Anr. V. Kapurchand Ltd. AIR 1950 (Bom.) 336. In that
case, a suit for specific performance by execution of a lease
was compromised and consent terms were filed in Court and
an order passed thereon. One of the terms in the compromise
recorded an undertaking by the defendants to have a third
party joined as a confirming party to the lease which the
defendant had agreed to execute in favour of the plaintiff.
The defendant failed to execute the lease. The plaintiff took
out proceedings for execution and the lease was executed by
an officer of Court. The defendant then refused to get the
third party to confirm the lease in terms of his undertaking.
The plaintiff took out an application for contempt of Court.
The Single Judge allowed the application holding that the
defendant was guilty of willful default and asked the
defendant to carry out the undertaking within one month
failing which a warrant of arrest would issue. In the appeal
preferred by the defendant, it was contended by him that no
undertaking was given by the defendant to Court. Reliance
was placed on the decision of the Calcutta High Court in
Nisha Kanto’s case. The Division Bench rejected the
submission and dismissed the appeal saying:
“We are not prepared to accept a
position which seems to us contrary
to the long practice that has been
established in this Court.”
The Court opined that:
” the expression
“undertake” has come to acquire
through long practice, a technical
meaning. In all orders and decrees
of the Court, whenever the
expression “a party undertakes”
has been used, it has always borne
the meaning that the undertaking
has been to the Court.
What is more, it has been held by
Bhagwati J.— an opinion with
which I entirely agreethat it has
been the long standing practice on
the original side that, whenever
counsel wishes to give an
undertaking to the Court, he never
expressly uses the words ” to the
Court” but merely states that he
undertakes on behalf of his
client.”
Accordingly it was concluded:
“..we can only construe the
undertaking given by the defendants
as an undertaking given to the
Court and not given to the other
side
The very fact that the Court
passed a decree after an
undertaking was embodied in the
consent terms clearly shows that
the Court did sanction a particular
course; and that course was the
putting of its imprimatur upon the
consent terms. The Court was led
to pass an order upon the
defendants to execute a lease in
view of the fact that an undertaking
was given by the defendants to get
the Paradise Cinema, Limited, to
join the lease.”
The view expressed by the Bombay High Court has, in
our opinion, been approved by this Court in Bank of Baroda
V. Sadruddin Hasan Daya 2004 (1) SCC 360. The Calcutta
High Court’s judgment to the contrary in Nisha Kanto Roy
Chowdhury (supra) does not therefore correctly reflect the
law.
In the face of such apparent divergence, the Sanyal
Committee was set up and asked to examine the law of
contempt with a view to its clarification and reforming it
wherever necessary. The present statute is the outcome of
those suggestions.
The Sanyal Committee Report which preceded the
framing the enactment of the Act had opined:
“The 1952 Act is sound as far as it
goes. While its provisions may be
retained, its scope requires to be
widened considerably.”
The Act has been duly widened. It provides inter-alia for
definitions of the terms and lays down firmer bases for
exercise of the Court’s jurisdiction in contempt. Section 2(b) of
the Contempt of Courts Act, 1971 defines civil contempt as
meaning “willful disobedience to any judgment decree,
direction, order, writ or other process of a Court or willful
breach of an undertaking given to Court”. Analysed, the
definition provides for two categories of cases, namely, (1)
willful disobedience to a process of Court and (2) willful breach
of an undertaking given to Court. As far as the first category
is concerned, the word “any” further indicates the wide nature
of the power. No distinction is statutorily drawn between an
order passed after an adjudication and an order passed by
consent. This first category is separate from the second and
cannot be treated as forming part of or taking colour from the
second category. The legislative intention clearly was to
distinguish between the two and create distinct classes of
contumacious behaviour. Interestingly, the Courts in England
have held that the breach of a consent decree of specific
performance by refusal to execute the agreement is punishable
by way of proceedings in contempt (see C.H. Giles and
Company Ltd. Vs. Morris and Ors. 1972 (1) All ER 960).
The two decisions of the Calcutta and Bombay High
Court are limited to the second category of cases mentioned
against Section 2(b) of the 1971 Act. Incidentally, nether of
the decisions held that a violation of breach of any other
terms of a consent order would not amount to contempt if it
were willful.
We proceed on the basis that no undertaking was given
to Court by the respondents in the consent minutes and that
therefore there was no question of their violating such
undertaking. The only question is, whether the respondents
could be called upon to answer proceedings in contempt for
willful disobedience to this Court’s orders dated 12th
December 2001 and 8th January 2002.
After the Act came into force, in 1980 this Court was
called upon to dispose of an appeal filed under Section 19 of
the Act against a decision of the Division Bench of the Delhi
High Court convicting the appellant under Section 2(b) of the
1971 Act and sentencing him to prison. The case Babu
Ram Gupta V. Sudhir Bhasin 1980 (3) SCC 47, arose out of
a dispute between the partners. The partnership deed
contained an arbitration clause. An application was filed by
one of the parties under Section 20 of the Arbitration Act.
Pending the application, a receiver was appointed. An appeal
was preferred from this order. A consent order was passed
appointing ‘X’ as the receiver. The appellant was then in
possession of the property. He did not hand over possession
of the property to the receiver. An application was filed
alleging that the appellant had committed a serious breach of
the undertaking given to the Court to hand over possession
to the receiver. The High Court had so found. This Court
construed the consent order and came to the conclusion that
it did not contain any express direction to the appellant to
hand over possession of the property to the receiver It was
held that no undertaking had been given by the appellant at
all. The High Court had proceeded, according to this Court,
erroneously by implying an undertaking from the consent
order itself. In that context, this Court said:
“There is a clear-cut distinction
between a compromise arrived at
between the parties or a consent
order passed by the Court at the
instance of the parties and a clear
and categorical undertaking given
by any of the parties. In the former,
if there is violation of the
compromise or the order no
question of contempt of court
arises, but the party has a right to
enforce the order or the compromise
by either executing the order or
getting an injunction from the
court.”
The Court then considered various consent orders
which could not base proceedings for contempt if the consent
order were violated. Thus for example, a decree for payment
of money if not complied with could not found an action for
contempt. Similarly the allocation of certain property to a
party by consent would not give rise to proceedings of
contempt if possession of property was not given to that
party. The Court was of the view that:
“In the absence of any express
undertaking given by the appellant
or any undertaking incorporated in
the order impugned, it will be
difficult to hold that the appellant
willfully disobeyed or committed
breach of such an
undertaking
. If we were to hold that
non-compliance of a compromise
decree or consent order amounts to
contempt of court, the provisions of
the Code of Civil Procedure relating
to execution of decrees may not be
resorted to at all. In fact , the
reason why a breach of clear
undertaking given to the court
amounts to contempt of court is
that the contemner by making a
false representation to the court
obtains a benefit for himself and if
he fails to honour the undertaking,
he plays a serious fraud on the
court itself and thereby obstructs
the course of justice and brings into
disrepute the judicial institution.
The same cannot, however, be said
of consent order or a compromise
decree where the fraud, if any, is
practiced by the person concerned
not on the court but on one of the
parties. Thus, the offence
committed by the person concerned
is qua the party not qua the court,
and therefore, the very foundation
for proceeding for contempt of court
is completely absent in such case.”
The appeal was accordingly allowed and the order passed
under Section 2(b) Act set aside.
The question which was before the Court in Babu Ram
Gupta’s case was limited to the issue whether the appellant
had given any undertaking to the Court, either expressly or
impliedly, which he had violated. In other words it was limited
to the second category of cases mentioned under Section 2(b)
of the Act. The Court was not called upon to decide whether
there was any contumacious conduct as envisaged by the first
category of cases under that Section. The observations made
in that regard, are strictly speaking, obiter. The Court was not
called upon to consider nor did it construe the language of
Section 2(b) of the Act. If we were to accept the observations of
the Court as an enunciation of the law, it would run contrary
to the express language of the statute. As we have earlier
noted, the section itself provides that willful violation of any
order or decree etc. would tantamount to contempt. A
compromise decree is as much a decree as a decree passed on
adjudication. It is not as has been wrongly held by the
Calcutta High Court in Nisha Kanto Roy Chowdhury (supra)
merely an agreement between the parties. In passing the
decree by consent, the Court adds its mandate to the consent.
A consent decree is composed of both a command and a
contract. The Bombay High Court’s view in Bajranglal
Gangadhar Khemka (supra) correctly represents the law that
a consent decree is a contract with the imprimatur of the
Court. ‘Imprimatur’ means ‘authorized’ or ‘approved’. In other
words by passing a decree in terms of a consent order the
Court authorizes and approves the course of action consented
to. Moreover, the provisions of Order 23 Rule 3 of the Code of
Civil Procedure requires the Court to pass a decree in
accordance with the consent terms only when it is proved to
the satisfaction of the court that a suit has been adjusted
wholly or in part by any lawful agreement
All decrees and orders are executable under the Code of
Civil Procedure. Consent decrees or orders are of course also
executable. But merely because an order or decree is
executable, would not take away the Courts jurisdiction to
deal with a matter under the Act provided the Court is
satisfied that the violation of the order or decree is such, that
if proved, it would warrant punishment under Section 13 of
the Act on the ground that the contempt substantially
interferes or tends substantially to interfere with the due
course of justice. The decisions relied upon by the
respondents themselves hold so as we shall subsequently see.
In such circumstances it would neither be in consonance
with the statute, judicial authority, principle or logic to draw
any distinction between the willful violation of the terms of a
consent decree and willful violation of a decree which is
passed on adjudication. The decision in Baburam Gupta’s
case must, therefore, be limited to its own peculiar facts.
Rita Markandeya Vs. Surjit Singh Arora (1996) 6 SCC
14, which was also been relied upon by the respondents to
urge that the present application for contempt was not
maintainable, related to proceedings for eviction. The
respondent, who was the tenant had been directed to vacate
the tenanted premises. His appeal before this Court was
dismissed. While dismissing the appeal the Court recorded:-
“However, as agreed to by both the
learned counsel, time to hand over
vacant possession to Smt. Rita
Markandey is granted till
31.3.1995. This shall be subject to
the usual undertaking to be filed by
the appellant-tenant within four
weeks from today.”
The respondent did not file the undertaking. He also did
not vacate the tenanted premises by the agreed date. The
landlord-appellant then filed a petition alleging that the
respondent had committed contempt of court by gaining time
from the Court to vacate the premises only to file an
undertaking and thereafter refusing to file the undertaking.
The Court found, on an interpretation of its order, that the
court had not itself passed any order fixing the time. In terms
of the agreement between the parties the time had been fixed
and the Court had only “embodied the terms of the agreement
so arrived at.” Therefore, it was held that the respondent could
not be held liable for contempt of that order.
The respondents herein have however, relied upon the
following passage in the judgment claiming that the same
supported their contention:-
“Law is well settled that if any party
gives an undertaking to the court to
vacate the premises from which he is
liable to be evicted under the orders
of the court and there is a clear and
deliberate breach thereof it amounts
to civil contempt but since, in the
present case, the respondent did not
file any undertaking as envisaged in
the order of this Court the question of
his being punished for breach
thereof does not arise. However, in
our considered view even in case
where no such undertaking is given,
a party to a litigation may be held
liable for such contempt if the court
is induced to sanction a particular
course of action or inaction on the
basis of the representation of such a
party and the court ultimately finds
that the party never intended to act
on such representation or such
representation was false.”
This passage is an exposition of the law relating to the
second category of cases covered by Section 2(b) of the Act. It
does not seek to be an exposition of the law relating to the first
category of cases at all.
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
instalments. 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 the decreed amount was to be satisfied in
instalments 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 instalments 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 part of
the decree of the court certainly
amounts to contempt of court,
irrespective of the fact that it is open
to the decree-holder to execute the
decree.” (Emphasis added)
This decision reinforces our view of the law. It does not
in any way run contrary to our opinion as expressed earlier on
the interpretation to be put on Section 2(b) of the Act. On the
other hand the Court repelled the submission of the
respondents that the petitioners remedy lay in executing the
decree in the following words:-
” The fact that the petitioner can
execute the decree can have no
bearing on the contempt committed
by the respondents.”
The decision in R.N. Dey and Anr Vs. Bhagyabati
Pramanik & Ors 2000(4) SCC 400, also relied upon by the
respondents, disposed of an appeal filed from an order
directing the appellants to deposit certain amounts of money
towards compensation money payable in respect of land
acquisition proceedings. The directions were given while
disposing of contempt proceedings initiated by the respondent
after the Court had accepted the unqualified apology tendered
by the appellants. The appellants urged that instead of filing a
contempt application, the respondent should have proceeded
with the execution of the decree or award made in the land
acquisition proceedings. The Court said that:-
” the weapon of contempt 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.
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 the Court’s jurisdiction in
contempt.
In the present case, the consent terms arrived at between
the parties was incorporated in the orders passed by the Court
on 12th December 2001 and 8th January 2002. The decree as
drawn up shows that order dated 8th January, 2002 was to be
“punctually observed and carried into execution by all
concerned”. A violation of the terms of the consent order
would amount to a violation of the Court’s orders dated 12th
December 2001 and 8th January 2002 and, therefore be
punishable under the first limb of Section 2(b) of the Contempt
of Courts Act, 1971. The question whether the respondents
should not be held guilty of contempt because of any earlier
confusion in the law reflected in the case of Babu Ram Gupta
(supra), is a question which must be left for decision while
disposing of the contempt petition on merits. It may be
argued as an extenuating or mitigating factor once the
respondents are held guilty of contempt. The submission
does not pertain to the maintainability of the petition for
contempt. The preliminary objection raised by the
respondents regarding the non-maintainability of the petition
for contempt is, for the reasons stated, dismissed.
The issue as to whether the respondents have in fact
acted in violation of the terms of the consent order will now
have to be decided on merits. Let the matter be listed for this
purpose. Costs of this petition will be costs in the contempt
petition.