1977 (9) TMI 127 - HC - Companies Law

Summary

Issues Involved:
1. Allegation of criminal contempt by the Petitioner against the Respondents.
2. Proceedings initiated by the Respondents in various courts.
3. Suppression of material facts by the Respondents.
4. Bona fides of the Respondents' actions.
5. Determination of criminal contempt and its consequences.
6. Appropriate relief and injunction against the Respondents.

Detailed Analysis:

1. Allegation of Criminal Contempt by the Petitioner Against the Respondents:
The Petitioner, a company incorporated under the Companies Act, 1956, alleged that the Respondents were guilty of criminal contempt. The Petitioner claimed that the Respondents were initiating multiple frivolous, vexatious, and oppressive proceedings in different courts to delay and defeat the Petitioner's claims in pending money suits. The application was moved with the prior consent of the Advocate-General under Section 15(1)(b) of the Contempt of Courts Act, 1971.

2. Proceedings Initiated by the Respondents in Various Courts:
The Petitioner had instituted several money suits against the Respondents in the Court of the Subordinate Judge, Chinsurah, for recovery of unpaid prices of goods sold and delivered. The Respondents, in turn, initiated various proceedings in the Delhi High Court and the Calcutta High Court, seeking to stay or transfer these suits. The Respondents argued that the suits in Chinsurah were filed with mala fide intentions and that the balance of convenience favored trial in Delhi.

3. Suppression of Material Facts by the Respondents:
The Respondents were found to have suppressed material facts in their applications. For instance, they failed to disclose that similar grounds had already been adjudicated and dismissed by the Delhi High Court. The Calcutta High Court noted that the Respondents obtained interim orders by misleading the court through such suppression.

4. Bona Fides of the Respondents' Actions:
The Respondents contended that their actions were bona fide and taken upon legal advice to protect their legitimate rights. They argued that their proceedings were initiated to secure relief in accordance with the law and were not intended to abuse the court's process. However, the court found that the Respondents' actions were not bona fide, as they repeatedly initiated proceedings on the same grounds that had already been decided against them.

5. Determination of Criminal Contempt and Its Consequences:
The court held that the Respondents' actions amounted to criminal contempt under Section 2(c) of the Contempt of Courts Act, 1971. The court emphasized that such conduct interfered with the due course of judicial proceedings and obstructed the administration of justice. The court convicted Respondents Nos. 1 to 4 of criminal contempt, imposing a fine of Rs. 1,000 on each, with a default sentence of one month's simple imprisonment.

6. Appropriate Relief and Injunction Against the Respondents:
The Petitioner sought an injunction restraining the Respondents from initiating any further proceedings without the leave of the court. The court granted this injunction, recognizing the need to prevent further abuse of the judicial process. The court directed that the Respondents, their servants, and agents be restrained from initiating any suit or proceeding in any court regarding the pending money suits without first obtaining leave from the Calcutta High Court.

Conclusion:
The Calcutta High Court found the Respondents guilty of criminal contempt for abusing the judicial process by initiating multiple frivolous and vexatious proceedings. The court imposed fines on the guilty Respondents and issued an injunction to prevent further abuse. The judgment underscores the importance of maintaining the integrity of judicial proceedings and protecting litigants from oppressive and vexatious litigation.