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TMI Blog2006 (4) TMI 553X X X X Extracts X X X X X X X X Extracts X X X X ..... irst wife, whom he divorced in 1963. The petitioner also has children by the second wife. Disputes have been raging between the parties for over a decade. Several suits and counter suits have been filed. In contempt proceedings filed by the respondent No. 1 against the petitioner an order was passed by this Court on 12th December, 2001 to the following effect:- The following cases are pending between the parties who are parties in the present proceedings before us one way or the other. We are told that all the parties have settled their disputes in respect of all the litigations specified below. 1. O.S. No. 3535 of 1994 before the Bombay High Court. 2. O.S. No. 3578 of 1994 before the Bombay High Court 3. O.S. No. 1105 of 1998 before the Bombay High Court 4. O.S. No. 3469 of 1996 before the Bombay High Court 5. O.S. No. 1792 of 1998 before the Bombay High Court 6. O.S. No. 320 of 1991 before the Bombay High Court 7. Company Petition No. 28 1992 before the Bombay High Court Before the Principal Bench, Company Law Board, New Delhi. 8. Arbitration Suit No. 5110 of 1994 before the Bombay High Court. Today they filed a document styled it as "MINUTES OF CONSENT ORDER" ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ma, Ramesh and Rajesh) can be removed from directorship. (c) Rama and Ramesh shall continue to be in joint management and control of NIHL and Rajesh shall continue to be the Permanent Whole Time Director thereof in charge of day to day operations/management. (d) No decision shall be adopted concerning or affecting the said Company (and its subsidiaries) without the consent of Rama and Ramesh (or Rajesh) in writing. It is further clarified and agreed that save and except as provided herein no prevailing decisions including appointment of Directors/ Executives or any other persons shall continue unless Rama and Ramesh (or Rajesh) consent to the same in writing. (e) All the collections coming in cash shall continue to be remitted in the bank accounts of the Company and all transactions will only be made in the form of cheques and/or as may hereafter be agreed to between Rama and Ramesh (or Rajesh). (f) All bank accounts of the Company shall continue to be operated jointly by any two out of the three Directors namely Rama, Ramesh and Rajesh and/or as may hereafter be agreed to between Rama and Ramesh(or Rajesh). If the amount of any transaction exceeds Rs. 10 (ten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndertaking or an injunction of the Court and could not be the basis of any proceedings for contempt. Reliance has been placed on the decision of this Court in Babu Ram Gupta v. Sudhir Bhasin and Anr. 1979CriLJ952 ; Bank of Baroda v. Sadruddin Hasan Daya and Anr. (2004)1SCC360 ; R.N. Dey And Ors. v. Bhagyabati Pramanik and Ors. (2000)4SCC400 ; Rita Markandey v. Surjit Singh Arora 1997CriLJ2503 ; Nisha Kanto Roy Chowdhury v. Smt. Saroj Bashini Goho AIR1948Cal294 ; Bajranglal Gangadhar Khemka and Anr. v. Kapurchand Ltd. AIR1950Bom336 . According to the respondents in the absence of an undertaking given to the Court and an allegation that such undertaking had been violated, this Court could not exercise jurisdiction over a mere violation of the terms of consent order which may have been incorporated in the consent order. It was also argued that the order dated 12.12.2001 has in fact been carried out and implemented within the time specified. According to the respondents the order dated 12.12.2001 had merged in the final order dated 8.1.2002. Reference has been made to the language of the order dated 8.1.2002 which the respondents submitted, was the only operative order and which did no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erned by the Contempt of Courts Act, 1952 which did not contain many of the provisions which have been introduced for the first time by the 1971 Act. Till the 1971 Act, the policy of the legislature was to leave the formulation of the law of contempt to the Courts. The provisions of the Contempt of Courts Act 1952 were, therefore, broadly framed. Consequently, there was often a conflict between the practice in a Court and the judicial decisions and sometimes conflict between the views of the different High Courts on the law applicable. 9. An instance of such conflict is the case of Nisha Kanto Roy Chowdhury v. Smt. Saroj Bashini Goho AIR1948Cal294 . In that case, a suit had been filed for ejectment by the respondent of the appellant. The suit was not contested. Terms of compromise were drafted and a decree passed in terms of the compromise. One of the clauses of the compromise contained an undertaking of the appellant to remove the image of the deity which had been installed by the appellant together with the structures around the deity on demand by the respondent-landlord. However, when the respondent called upon the appellant to remove the image, the appellant refused. The resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terms of his undertaking. The plaintiff took out an application for contempt of Court. The Single Judge allowed the application holding that the defendant was guilty of willful default and asked the defendant to carry out the undertaking within one month failing which a warrant of arrest would issue. In the appeal preferred by the defendant, it was contended by him that no undertaking was given by the defendant to Court. Reliance was placed on the decision of the Calcutta High Court in Nisha Kanto's case. The Division Bench rejected the submission and dismissed the appeal saying: We are not prepared to accept a position which seems to us contrary to the long practice that has been established in this Court. The Court opined that: the expression "undertake" has come to acquire through long practice, a technical meaning. In all orders and decrees of the Court, whenever the expression "a party undertakes" has been used, it has always borne the meaning that the undertaking has been to the Court. What is more, it has been held by Bhagwati J.--- an opinion with which I entirely agreethat it has been the long standing practice on the original side that, whenever counsel wishes to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing part of or taking colour from the second category. The legislative intention clearly was to distinguish between the two and create distinct classes of contumacious behavior. Interestingly, the Courts in England have held that the breach of a consent decree of specific performance by refusal to execute the agreement is punishable by way of proceedings in contempt (see C.H. Giles and Company Ltd. v. Morris and Ors. 1972 (1) All ER 960. 16. The two decisions of the Calcutta and Bombay High Court are limited to the second category of cases mentioned against Section 2(b) of the 1971 Act. Incidentally, nether of the decisions held that a violation of breach of any other terms of a consent order would not amount to contempt if it were willful. 17. We proceed on the basis that no undertaking was given to Court by the respondents in the consent minutes and that therefore there was no question of their violating such undertaking. The only question is, whether the respondents could be called upon to answer proceedings in contempt for willful disobedience to this Court's orders dated 12th December 2001 and 8th January 2002. 18. After the Act came into force, in 1980 this Court was c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... difficult to hold that the appellant willfully disobeyed or committed breach of such an undertaking.... If we were to hold that non-compliance of a compromise decree or consent order amounts to contempt of court, the provisions of the Code of Civil Procedure relating to execution of decrees may not be resorted to at all. In fact , the reason why a breach of clear undertaking given to the court amounts to contempt of court is that the contemner by making a false representation to the court obtains a benefit for himself and if he fails to honour the undertaking, he plays a serious fraud on the court itself and thereby obstructs the course of justice and brings into disrepute the judicial institution. The same cannot, however, be said of consent order or a compromise decree where the fraud, if any, is practiced by the person concerned not on the court but on one of the parties. Thus, the offence committed by the person concerned is qua the party not qua the court, and therefore, the very foundation for proceeding for contempt of court is completely absent in such case. The appeal was accordingly allowed and the order passed under Section 2(b) Act set aside. 20. The question which w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o interfere with the due course of justice. The decisions relied upon by the respondents themselves hold so as we shall subsequently see. 22. In such circumstances it would neither be in consonance with the statute, judicial authority, principle or logic to draw any distinction between the willful violation of the terms of a consent decree and willful violation of a decree which is passed on adjudication. The decision in Baburam Gupta's case must, therefore, be limited to its own peculiar facts. 23. Rita Markandeya v. Surjit Singh Arora 1997CriLJ2503 , which was also been relied upon by the respondents to urge that the present application for contempt was not maintainable, related to proceedings for eviction. The respondent, who was the tenant had been directed to vacate the tenanted premises. His appeal before this Court was dismissed. While dismissing the appeal the Court recorded:- However, as agreed to by both the learned Counsel, time to hand over vacant possession to Smt. Rita Markandey is granted till 31.3.1995. This shall be subject to the usual undertaking to be filed by the appellant-tenant within four weeks from today. 24. The respondent did not file the undertak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some of its properties. Another creditor also filed the suit against the respondent for recovery of a certain amount. This second suit was also disposed of by consent and a decree passed in terms of the consent order. Like the first decree the decreed amount was to be satisfied in installments and pending satisfaction of the decree, the respondents undertook to the Court not to alienate, encumber, or create third party rights or part with possession of the same properties which had already formed part of the undertaking in the first decree. The respondents defaulted in making payment of the installments under the first decree. The petitioner put the decree into execution. It also filed a contempt petition alleging that the second consent decree violated the undertaking given in the first decree. The Court found that by placing the same property under attachment in the second decree the respondent had intentionally and deliberately acted in breach of the undertaking given to the Court in the first consent decree. The Court approved the statement of the law by the Bombay High Court in Bajranglal Gangadhar Khemka and Anr. v. Kapurchand Ltd. (supra). Significantly, the Court also said: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. Ultimately, the matter is one of the Court's discretion having regard to the facts of the case. As we have said the fact that a decree is executable does not take away the Court's jurisdiction in contempt. 30. In the present case, the consent terms arrived at between the parties was incorporated in the orders passed by the Court on 12th December 2001 and 8th January 2002. The decree as drawn up shows that order dated 8th January, 2002 was to be "punctually observed and carried into execution by all concerned". A violation of the terms of the consent order would amount to a violation of the Court's orders dated 12th December 2001 and 8th January 2002 and, therefore be punishable under the first limb of Section 2(b) of the Contempt of Courts Act, 1971. The question whether the respondents should not be held guilty of contempt because of any earlier confusion in the law reflected in the case of Babu Ram Gupta (supra), is a question which must be left for decision while disposing of the contempt petition on merits. It may be argued as an extenuating or mitigating factor once the respondents are held guilty of contempt. The submission does not pertain to the maintainabil ..... X X X X Extracts X X X X X X X X Extracts X X X X
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