1950 (2) TMI 13 - HC - Indian Laws

Summary

Issues Involved:
1. Whether an undertaking given in a consent decree can be considered an undertaking to the Court.
2. Whether the defendants' failure to get a third party to join as a confirming party to the lease constitutes contempt of court.
3. Whether the default by the defendants was wilful.

Detailed Analysis:

1. Whether an undertaking given in a consent decree can be considered an undertaking to the Court:
The Court examined the nature of the undertaking given in the consent decree. The defendants argued that the undertaking was merely a solemn promise to the plaintiffs and not to the Court. However, the Court rejected this argument, stating that "there is no reason why even in a consent decree a party may not give an undertaking to the Court." The Court emphasized that an undertaking given to the Court is equivalent to an order of the Court and can be enforced by committal proceedings. The Court further clarified that when the term "undertake" is used in consent decrees, it has come to acquire a technical meaning, implying an undertaking to the Court. This interpretation is consistent with long-standing practice both in this Court and in England. Therefore, the Court concluded that the undertaking given by the defendants in the consent decree was indeed an undertaking to the Court.

2. Whether the defendants' failure to get a third party to join as a confirming party to the lease constitutes contempt of court:
The Court analyzed the specific terms of the consent decree, particularly clause 8, which required the defendants to get the Paradise Cinema, Limited, to join as a confirming party to the lease. The Court noted that the defendants had failed to comply with this requirement, leading to the plaintiffs' motion for contempt. The Court emphasized that the defendants' failure to get the third party to join the lease was a serious matter, as the lease executed by the defendants alone would be futile without the confirmation by Paradise Cinema, Limited. The Court held that the defendants' failure to comply with this term of the consent decree constituted contempt of court, as the undertaking given by the defendants had become an order of the Court.

3. Whether the default by the defendants was wilful:
The Court considered whether the defendants' default was wilful, which is a necessary condition for contempt proceedings. The Court stated that "the mere fact that the defendants have failed to carry out their undertaking is itself not sufficient to invoke the jurisdiction of the Court." The plaintiffs must demonstrate that the defendants deliberately refused to carry out their undertaking. The Court found that the defendants had not provided any evidence to show that they had made any effort to get the Paradise Cinema, Limited, to join as a confirming party to the lease. The Court also highlighted that the defendants had significant control over the company, as they held a majority of the shares and occupied key positions within the company. Therefore, the Court concluded that the defendants' default was wilful, as they had the ability to get the company to join the lease but failed to do so.

Conclusion:
The appeal was dismissed with costs, and the order of the lower court was confirmed. The Court extended the time for the defendants to comply with the order by one month. The Court advised the defendants to get the company to join as a confirming party to the lease, stating that there should be no difficulty in doing so if the defendants seriously intended to comply with the order. The Court emphasized the importance of adhering to undertakings given to the Court and the serious consequences of failing to do so.