2022 (3) TMI 1550 - SC - Indian Laws

Wilful disobedience - it was the specific case on behalf of the respondents that the order dated 28.10.2021 is a mandatory direction and therefore it was prayed to recall the order dated 28.10.2021 - Mandatory direction or not - HELD THAT - In the order dated 28.10.2021, there is a specific direction issued by this Court directing the respondents herein original petitioners in special leave petition to comply with and deposit the amount to be deposited as per the order passed by the High Court positively and within the time granted by this Court (eight weeks) as mentioned in the order dated 17.09.2021. Moreover, it was specifically observed by this Court that non-compliance of the said order shall be treated very seriously and non-deposit of the amount as directed by the High Court shall be treated as non-compliance of the order of this Court and also having a serious consequence. The stand taken by the respondents now that they are not in a position to deposit the amount and/or comply with the order passed by the High Court and this Court because of the financial difficulties and therefore there is no wilful disobedience by the respondents in not complying with the order passed by the High Court dated 08.08.2019 and the order passed by this Court dated 28.10.2021 in Miscellaneous Application No. 1668 of 2021 in Special Leave Petition (C) No. 14724 of 2021 lacks bonafides and the same is not at all acceptable. The respondents have willfully disobeyed the order passed by the High Court and have willfully disobeyed the order dated 28.10.2021 passed by this Court in Miscellaneous Application No. 1668 of 2021 in Special Leave Petition (C) No. 14724 of 2021 and thereby the respondents are guilty of civil contempt and have rendered themselves liable for suitable punishment under the provisions of Contempt of Courts Act.

2023 (5) TMI 1 - HC

Issues Involved:
1. Wilful disobedience of court orders dated 17.09.2021 and 28.10.2021.
2. Compliance with the arbitral award and subsequent court orders.
3. Contempt of Court proceedings and their validity.
4. Financial incapacity as a defense for non-compliance.
5. Abuse of process of law and court by the respondents.

Detailed Analysis:

1. Wilful disobedience of court orders dated 17.09.2021 and 28.10.2021:
The contempt petition was filed by the petitioner for the wilful disobedience of the Supreme Court order dated 17.09.2021 and the subsequent order dated 28.10.2021. The respondents were directed to deposit 50% of the awarded amount as per the High Court's order dated 08.08.2019. Despite extensions and clear instructions that non-compliance would be taken seriously, the respondents failed to deposit the amount.

2. Compliance with the arbitral award and subsequent court orders:
The arbitral award dated 30.08.2018 required the respondents to pay Rs. 78,33,37,500/- with interest at 18% p.a. from 20.12.2014 till realization. The respondents challenged the award and sought a stay, which was granted conditionally by the High Court on 08.08.2019, requiring a 50% deposit of the awarded amount. The respondents repeatedly sought extensions and failed to comply with the deposit requirement, leading to the filing of execution proceedings by the petitioner.

3. Contempt of Court proceedings and their validity:
The respondents argued that non-compliance with the order dated 08.08.2019 would only render the award executable and did not warrant contempt proceedings. However, the court noted that the respondents had benefited from extensions and had obstructed the execution proceedings. The court held that the respondents' conduct amounted to an abuse of process of law and that contempt proceedings were valid given the wilful disobedience of the court orders.

4. Financial incapacity as a defense for non-compliance:
The respondents claimed financial constraints as the reason for non-compliance. The court found this argument to be an afterthought and lacking bona fides, noting that the respondents had not raised this issue earlier. The court observed that the respondents had the financial capacity to comply, as evidenced by their assets and development rights worth Rs. 100 crores.

5. Abuse of process of law and court by the respondents:
The court condemned the respondents' conduct as an abuse of process, noting their repeated attempts to delay compliance and execution of the award. The respondents' failure to disclose their assets for two years further demonstrated their disregard for court orders.

Conclusion:
The respondents were found guilty of civil contempt for wilful disobedience of the High Court order dated 08.08.2019 and the Supreme Court order dated 28.10.2021. The court held that the respondents' conduct justified the invocation of contempt jurisdiction and that they were liable for suitable punishment under the Contempt of Courts Act. The respondents were to be heard on the sentence.

← Previous Next →