2023 (9) TMI 1526 - SC - Indian Laws

Contempt of Court - wilful breach of an assurance in the form of an undertaking given by a counsel/ advocate on behalf of his client to the court would amount to civil contempt as defined under Section 2(b) of the Act 1971 or not - undertaking could be said to have been given to the court or not - contempt court has the power to declare any contemptuous transaction non est or void or not - beneficiaries of a contemptuous transaction have a right to be heard in the contempt proceedings on the ground that they are necessary or proper parties or not - apology tendered by the contemnors deserves to be accepted or is it a legal trick to wriggle out of responsibility - Whether the High Court committed any error in passing the impugned judgment and order? What is wilful disobedience? - HELD THAT - In ASHOK PAPER KAMGAR UNION AND ORS. VERSUS DHARAM GODHA AND ORS. 2003 (9) TMI 802 - SUPREME COURT , the expression wilful disobedience in the context of Section 2(b) of the Act was read to mean an act or omission done voluntarily and intentionally with the specific intent to do something, which the law forbids or with the specific intention to fail to do something which the law requires to be done. Wilfulness signifies deliberate action done with evil intent and bad motive and purpose. It should not be an act, which requires and is dependent upon, either wholly or partly, any act or omission by a third party for compliance. Hence, the expression or word wilful means act or omission which is done voluntarily or intentionally and with the specific intent to do something which the law forbids or with the specific intent to fail to do something the law requires to be done, that is to say with bad purpose either to disobey or to disregard the law. It signifies a deliberate action done with evil intent or with a bad motive or purpose. Whether the statement made by the learned counsel before the High Court was an undertaking on behalf of his clients and if yes then whether such undertaking could be said to have been given to the court, we must look into two decisions on this point? - HELD THAT - The Bombay High Court in Bajranglal Gangadhar Khemka and another v. Kapurchand Ltd. 1950 (2) TMI 13 - BOMBAY HIGH COURT , took notice of a practice wherein the undertaking would not expressly mention that it was given to the court but the High Court took cognizance of the fact that the expression undertake had come to acquire through long practice, a technical meaning. The expression a party undertakes or gives a solemn promise or it is stated at the Bar on instructions from clients that the property shall not be sold used in the statements of the parties or their counsel or in the orders and decrees of the court, unless the context otherwise suggests, means an implied undertaking to the court. The undertaking is always understood to be an undertaking to the court, which undertaking could be enforced by committal proceedings. The High Court is right in saying that it is this undertaking given to the court on 14.10.2015 that persuaded the respondents herein to withdraw the said appeal and it is such solemn assurance given to the court which per forced them to withdraw the appeal by recording the statement made by the learned Senior Counsel appearing on behalf of the contemnors - the wilful breach of an assurance in the form of an undertaking given by a counsel /advocate on behalf of his client to the court would amount to civil contempt as defined under Section 2(b) of the Act 1971. Having regard to all the facts on record that the undertaking in the case on hand could be said to have been given to the court. Are contemptious transactiosn void? - HELD THAT - A Three-Judge Bench of this Court in the case of State Bank of India and Others v. Dr. Vijay Mallya 2022 (7) TMI 516 - SUPREME COURT , in clear terms said that apart from punishing the contemnor for his contumacious conduct, the majesty of law may demand that appropriate directions be issued by the Court so that any advantage secured as a result of such contumacious conduct is completely nullified. The approach may require the Court to issue directions either for reversal of the transactions in question by declaring said transactions to be void or passing appropriate directions to the concerned authorities to see that the contumacious conduct on the part of the contemnor does not continue to enure to the advantage of the contemnor or anyone claiming under him. Although Section 52 of the Act 1882 does not render a transfer pendente lite void yet the court while exercising contempt jurisdiction may be justified to pass directions either for reversal of the transactions in question by declaring the said transactions to be void or proceed to pass appropriate directions to the concerned authorities to ensure that the contumacious conduct on the part of the contemnor does not continue to enure to the advantage of the contemnor or anyone claiming under him - The High Court declared all the sale deeds executed by the contemnors in favour of the purchasers as non est. The High Court ordered that the sale deeds stand cancelled and set aside. The contemnors were directed to restore the position which was prevailing at the time of the order dated 14.10.2015 passed by the High Court - the High Court was fully justified in declaring the sale deeds as non est or void. Impleadment of purchasers as necessary parties - whether the clients of Mr. Shyam Divan i.e., purchasers should have been impleaded as party respondents in the contempt proceedings before the High Court and whether they should have been heard before passing the final order? - HELD THAT - In the case of Satyabrata Biswas 1994 (1) TMI 320 - SUPREME COURT , it was held that no person can gain an advantage in derogation of rights of the parties. In the said matter an order was passed, directing the parties to maintain status quo with respect to the disputed property. The appellant therein however, acted in contempt and created a sub-tenancy in favour of one Somani Builders, who was not made a party to the contempt proceedings before the High Court. Somani Builders contended that they should have been made a party to the proceedings as they possessed a right in the disputed property. In Surjit Singh and others etc. etc. v. Harbans Singh 1995 (9) TMI 382 - SUPREME COURT , this Court considered the question whether a person to whom the suit property is alienated after passing of the preliminary decree by the trial court, which had restrained the parties from alienating or otherwise transferring the suit property, has the right to be impleaded as a party. The trial court accepted the application filed by the transferees and the order of the trial court was confirmed by the lower appellate court and the High Court. Thus, it is evident that it was not necessary for the High Court to implead the purchasers in the contempt proceedings. In fact, we may go to the extent of observing having regard to the facts of the case that the purchasers were quietly watching the proceedings. It is not as if they were not aware of what was happening however, when things went wrong, they now cry foul of not being impleaded as parties and heard by the High Court. Contempt of apology - HELD THAT - In the case of Sub-Judge, First Class, Hoshangabad v. Jawahar Lal Ramchand Parwar 1938 (9) TMI 16 - BOMBAY HIGH COURT , Justice Bose (as he then was) said that an apology is not a weapon of defence forged to purge the guilty of their offences. It is not an additional insult to be hurled at the heads of those who have been wronged. It is intended to be evidence of real contriteness, the manly consciousness of a wrong done, of an injury inflicted, and the earnest desire to make such reparation as lies in the wrong-doer's power. An apology, which the learned Judge says should be evidence of real contriteness and manly consciousness of the wrong done; it ceases to be so if it is belated, and it becomes instead, to borrow the language of Justice Bose, again the cringing of a coward shivering at the prospect of the stern hand of justice about to descend upon his head. In the case of Sevakram 1999 (8) TMI 1024 - GUJARAT HIGH COURT , it was held that an apology neither purges nor washes away the act of contempt and at best it is a mitigating circumstance while considering the consequential order following finding of contempt having been committed. The law is very clear that the court should not get compassionate and dilute an indictment and not follow it with conviction. The fact that the appellants have committed contempt is not in doubt. The law enjoins that a punishment must follow. All the three appeals fail and are hereby dismissed.

Summary

Issues Involved:
1. Wilful breach of an undertaking given by counsel/advocate to the court.
2. Distinction between an undertaking given to a party and an undertaking given to the court.
3. Power of the contempt court to declare contemptuous transactions void.
4. Right of beneficiaries of contemptuous transactions to be heard in contempt proceedings.
5. Acceptance of apology in contempt proceedings.

Detailed Analysis:

1. Wilful Breach of an Undertaking Given by Counsel/Advocate to the Court:
The court held that the wilful breach of an assurance in the form of an undertaking given by a counsel/advocate on behalf of his client to the court would amount to "civil contempt" as defined under Section 2(b) of the Contempt of Courts Act, 1971. The court emphasized that an undertaking given to the court is distinct from a mere agreement between parties and carries the weight of an injunction. The court stated, "An undertaking given to the court by a person or a corporation in pending proceedings on the faith of which the court sanctions a particular course of action or inaction, has the same force as an injunction made by the court and breach of the undertaking is misconduct amounting to contempt."

2. Distinction Between an Undertaking Given to a Party and an Undertaking Given to the Court:
The court clarified that there exists a distinction between an undertaking given to a party to the lis and an undertaking given to the court. The former does not attract the provisions of the Contempt of Courts Act, 1971, whereas the latter does. The court held that the undertaking in the present case was given to the court, as evidenced by the statement made by the learned counsel before the High Court, which was recorded in the court's order. The court stated, "The expression 'undertakes' or 'gives a solemn promise' used in the statements of the parties or their counsel or in the orders and decrees of the court, unless the context otherwise suggests, means an implied undertaking to the court."

3. Power of the Contempt Court to Declare Contemptuous Transactions Void:
The court affirmed that the contempt court has the power to declare any contemptuous transaction non est or void. The court referred to the decision in State Bank of India and Others v. Dr. Vijay Mallya, which held that apart from punishing the contemnor, the court may issue directions to nullify any advantage secured as a result of contumacious conduct. The court noted, "The approach may require the Court to issue directions either for reversal of the transactions in question by declaring said transactions to be void or passing appropriate directions to the concerned authorities to see that the contumacious conduct on the part of the contemnor does not continue to enure to the advantage of the contemnor or anyone claiming under him."

4. Right of Beneficiaries of Contemptuous Transactions to be Heard in Contempt Proceedings:
The court held that the beneficiaries of any contemptuous transaction have no right or locus to be heard in the contempt proceedings on the ground that they are bona fide purchasers of the property for value without notice. The court emphasized that contempt is between the court and the contemnor, and no third party can involve itself in the same. The court stated, "It does not matter that to contempt proceedings Somani Builders was not a party. It cannot gain an advantage in derogation of the rights of the parties, who were litigating originally."

5. Acceptance of Apology in Contempt Proceedings:
The court held that an apology should not be accepted as a matter of course and that the court is not bound to accept the same. The court emphasized that even if the apology is unconditional, unqualified, and bona fide, it should not be accepted if the conduct is serious and has caused damage to the dignity of the institution. The court stated, "There ought not to be a tendency by courts to show compassion when disobedience of an undertaking or an order is with impunity and with total consciousness."

Conclusion:
The court dismissed all three appeals, holding the appellants guilty of civil contempt for the wilful breach of an undertaking given to the court. The court declared the sale deeds executed by the contemnors as void and directed the contemnors to restore the position prevailing prior to the execution of the sale deeds. The court also rejected the apology tendered by the contemnors, emphasizing that it was not genuine and was made to avoid the consequences of their contemptuous conduct. The court granted the appellants two weeks to surrender and serve out the sentence imposed by the High Court.