2022 (7) TMI 568 - SC - Indian Laws

Wilful breach of orders - Allegation of wilful, intentional and deliberate disobedience of the directions issued by this Court - non-deposit of shortfall amount so as to maintain a balance of USD 60 million in the Corporation Bank account maintained by Avitel Post Studioz Limited - resisting the present contempt proceedings, namely, the order passed by the learned Single Judge by the High Court by which the respondents were directed to maintain a balance of USD 60 million in their Corporation Bank account is executable - HELD THAT - It is required to be noted that in the present proceedings it is not the case of noncompliance of the order passed by the learned Single Judge confirmed by this Court alone. There is a further specific direction issued by this Court vide order dated 06.05.2021. Therefore, there is a noncompliance of direction issued by this Court dated 06.05.2021 by which the respondents were directed to deposit the shortfall amount so as to maintain a balance of USD 60 million. That thereafter, a further application for exemption from depositing the shortfall amount pursuant to order dated 06.05.2021 has also been dismissed by this Court. Therefore, thereafter it shall not be open for the respondents to submit that as order dated 22.01.2014 passed by the learned Single Judge is executable, the present contempt proceedings may not be entertained. Taking into consideration the earlier decisions of this Court in the cases of RITA MARKANDEY VERSUS SURJIT SINGH ARORA 1996 (9) TMI 641 - SUPREME COURT and BANK OF BARODA VERSUS SADRUDDIN HASAN DAYA AND ORS. 2003 (12) TMI 665 - SUPREME COURT , it is specifically observed and held by this Court that the petitioner can execute the decree can have no bearing on the contempt committed by the respondents. The respondents guilty for deliberate and wilful disobedience of judgment and order dated 19.08.2020 passed by this Court in Civil Appeal No. 5158/2016 as well as order dated 06.05.2021 passed by this Court in the present petition. The respondents have rendered themselves liable for suitable punishment under the provisions of the Contempt of Courts Act for such deliberate and wilful disobedience - Put up the matter before this Bench on 12.08.2022 for further order on punishment.

Summary

Issues Involved:
1. Alleged wilful, intentional, and deliberate disobedience of court orders.
2. Execution of court orders versus contempt proceedings.
3. Inability to comply with court orders due to lack of funds.
4. Jurisdiction and maintainability of contempt proceedings.
5. Consequences of non-compliance and punishment under the Contempt of Courts Act.

Issue-Wise Detailed Analysis:

1. Alleged Wilful, Intentional, and Deliberate Disobedience of Court Orders:
The petitioner alleged that the respondents wilfully, intentionally, and deliberately disobeyed the Supreme Court's orders dated 19.08.2020 and 06.05.2021 by not depositing the shortfall amount to maintain a balance of USD 60 million in the Corporation Bank account of Avitel. The Supreme Court had restored the order of the learned Single Judge directing the respondents to maintain this balance, which was not complied with by the respondents.

2. Execution of Court Orders Versus Contempt Proceedings:
The respondents contended that the order dated 22.01.2014 by the learned Single Judge, which was confirmed by the Supreme Court, was executable and thus, contempt proceedings were not maintainable. However, the Supreme Court noted that there was a specific direction issued on 06.05.2021, which had not been complied with, and thus, the contempt proceedings were valid. The Court cited several precedents, including *Rama Narang v. Ramesh Narang and Anr.*, to assert that the ability to execute a decree does not preclude contempt proceedings if there is wilful disobedience.

3. Inability to Comply with Court Orders Due to Lack of Funds:
The respondents argued that they were unable to comply with the court orders due to a lack of sufficient funds and despite their best efforts. The Court dismissed their application for exemption from depositing the shortfall amount, noting that the respondents had repeated their submissions, which had already been rejected. The Court found the respondents' defense to lack bona fides and considered their conduct as wilful disobedience.

4. Jurisdiction and Maintainability of Contempt Proceedings:
The respondents challenged the maintainability of the contempt petition, arguing that the petitioner should seek execution of the order through the appropriate court. The Supreme Court rejected this argument, emphasizing that contempt proceedings are distinct from execution proceedings and are necessary to uphold the authority of the court. The Court cited *Welset Engineers & Anr. v. Vikas Auto Industries & Ors.* and *SEBI v. Sahara India Real Estate Corp. Ltd. & Ors.* to highlight the importance of enforcing court orders to maintain the rule of law.

5. Consequences of Non-Compliance and Punishment Under the Contempt of Courts Act:
The Court held the respondents guilty of deliberate and wilful disobedience of its orders and found them liable for suitable punishment under the Contempt of Courts Act. However, before passing any further order of punishment, the Court provided the respondents an additional opportunity to comply with the orders within four weeks. The Court emphasized that maintaining the rule of law and the majesty of justice necessitated such actions.

Conclusion:
The Supreme Court concluded that the respondents had shown the highest form of wilful disobedience and contemptuous action by not complying with the court orders. The Court decided to give the respondents one more chance to comply with the orders before determining the punishment, thus upholding the integrity of the judicial system and ensuring that the rule of law is respected. The matter was adjourned for further orders on punishment.