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TMI Blog2022 (3) TMI 1550X X X X Extracts X X X X X X X X Extracts X X X X ..... eferred to and considered, which are as under:- 2.1 That by Arbitral Award dated 30.08.2018 passed in arbitral proceedings filed by the petitioner herein against the respondents - alleged contemnors, the learned Arbitrator awarded specific performance of the Share Purchase Agreement and held that the petitioner is entitled to recover an amount of Rs. 78,33,37,500/- with interest at the rate of 18% p.a. with effect from 20.12.2014 till realization. 2.2 Challenging the award passed by the learned Arbitrator, the respondent herein preferred Commercial Arbitration Petition No. 55 of 2019 before the High Court under Section 34 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as "Act of 1996"). In the said arbitration petition, the respondents herein - original applicants took out a Notice of Motion No. 960 of 2019 praying for stay of the award. 2.3 The learned Single Judge of the High Court disposed of the said Notice of Motion in terms of the prayer clause "a" on the condition that the respondents herein deposit 50% of the awarded sum within twelve weeks. The learned Single Judge also observed that if such deposit is not made within the time prescribed, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 021 to comply with the order dated 08.08.2019 by which they would deposit 50% of the amount as awarded by the Arbitrator. This Court granted further eight weeks' time as prayed. As the order dated 17.09.2021 was passed ex-parte and without notice to the applicant herein - respondents in special leave petition, the applicant herein preferred Miscellaneous Application No. 1668 of 2021 to recall the order dated 17.09.2021 by which further eight weeks' time was granted to the respondents - petitioners before this Court. 2.7 It was the case on behalf of the applicants that the respondents have no intention to comply with the order and deposit 50% of the amount awarded by the learned Arbitrator and further eight weeks' time is sought only to kill time as there is no intention to deposit the amount and/or comply with the order dated 08.08.2019 passed by the High Court. 2.8 That after hearing the learned counsel appearing on behalf of the respective parties including the counsel on behalf of the respondents, this Court passed an order dated 28.10.2021 in Miscellaneous Application No. 1668 of 2021 of which also noncompliance is alleged. By order dated 28.10.2021, this Court had directed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssions were made by the learned counsel appearing on behalf of the respondents - applicants before this Court in Miscellaneous Application No. 61 of 2022 on the directions issued by this Court vide order dated 28.10.2021, which are again made by the learned counsel appearing on behalf of the respondents before this Court in the present proceedings and all the submissions were dealt with by this Court while deciding Miscellaneous Application No. 61 of 2022. 2.13 At this stage, it is required to be noted that prior to filing of the Miscellaneous Application No. 61 of 2022, the petitioners had already filed the present application alleging disobedience of the order dated 28.10.2021 passed in Miscellaneous Application No. 1668 of 2021, which was filed on 18.11.2021 in which this Court directed to issue notice upon the respondents vide order dated 10.12.2021 making it returnable on 10.01.2022 and having been served with the notice of this Court in the present contempt petitions, the respondents filed the aforesaid Miscellaneous Application No. 61 of 2022 and have prayed to recall the order dated 28.10.2021, which as observed hereinabove has already been dismissed by this Court vide or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Senior Advocate appearing on behalf of the respondents that the order dated 17.09.2021 was not a mandatory order directing the respondents to deposit 50% of the amount and the order dated 17.09.2021 was an order extending the time in favour of the respondents to deposit the amount as per the order passed by the learned Single Judge. Even the subsequent order dated 28.10.2021 passed on an application filed by the petitioner to recall the order dated 17.09.2021, cannot be said to be a mandatory order and/or direction, the noncompliance of which warrants any proceedings under the Contempt of Courts Act, 1971. 3.5 It is further urged by Shri Divan, learned Senior Advocate appearing on behalf of the respondents that on non-compliance of the order passed by the learned Single Judge dated 08.08.2019 by which on non-deposit of 50% of the amount, the interim stay granted stood vacated and therefore, the award is to be executed for which the execution proceedings are pending and the contempt of court proceeding is not the remedy available to the petitioner. It is submitted that as held by this Court in the case of R.N. Dey and Ors. Vs. Bhagyabati Pramanik and Ors., (2000) 4 SCC 400, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sions even during the pendency of the appeal and making the Court believe that they will deposit the amount as per the orders passed by the learned Single Judge dated 08.08.2019. It is submitted that during all these periods, the respondents have taken advantage of the extensions sought by them. It is submitted that therefore it would not be open for the respondents to now say that on non-deposit of the 50% of the amount as ordered by the learned Single Judge in his order dated 08.08.2019, the award is executable. 4.2 It is submitted by Shri Jayant Bhushan, learned Senior Advocate appearing on behalf of the petitioner that even the respondents have not complied with the order passed by the High Court in the Chamber Summons taken out by the petitioner by which the respondents were directed to disclose their assets. It is submitted that despite a number of opportunities given by the High Court, the respondents have not complied with the direction issued by the High Court by which the respondents were directed to disclose their assets, which they declared after a period of almost two and a half years. It is, therefore, submitted that all throughout the conduct on the part of the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s such even when the Miscellaneous Application No. 61 of 2022 was filed, it was not the case on behalf of the respondents that due to financial constraint and/or adverse circumstances, they are not in a position to deposit the amount. It is submitted that even the respondents can sell the development rights worth Rs. 100 crores and they have the financial capacity but have willfully disobeyed the orders of this Court. 4.6 Making the above submissions and relying upon the decisions of this Court in the case of Rama Narang Vs. Ramesh Narang & Anr., (2006) 11 SCC 114 (Paras 24, 25, 30 & 32); Bank of Baroda Vs. Sadruddin Hasan Daya & Anr. (2004) 1 SCC 360 (Paras 12 & 14); and Rita Markandey Vs. Surjit Singh Arora, (1996) 6 SCC 14 (Para 12), it is prayed to suitably punish respondent No. 1 for wilful disobedience of the direction issued by this Court vide order dated 28.10.2021. 5. Heard learned senior counsel for the respective parties at length. 6. In the present petition, it is prayed to punish the respondents under the provisions of the Contempt of Courts Act for wilful disobedience of the order dated 17.09.2021 passed by this Court in Special Leave Petition (C) No. 14724 of 202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs to execute the award has to be proceeded further. It is submitted therefore that as the order dated 08.08.2019 cannot be said to be a direction and in view of the remedy available to the applicants to proceed further with the execution proceedings, no proceedings under the Contempt of Courts Act for disobedience of the order dated 08.08.2019 and/or the order passed by this Court dated 17.09.2021 in Special Leave Petition (C) No. 14724 of 2021 shall be maintainable. In the facts and circumstances of the case and considering the conduct on the part of the respondents, this submission cannot be accepted. 8. It is to be noted that there is an award dated 30.08.2018 in favour of the applicant and the learned Arbitrator had awarded specific performance of the Share Purchase Agreement and held that the applicant is entitled to recover an amount of Rs. 78,33,37,500/- with interest at the rate of 18% p.a. with effect from 20.12.2014 till realization and had also awarded Rs. 50 lakhs against the respondent company. Thereafter the Award Creditor had filed the Execution Petition on 10.12.2018 and since then, the respondents have successfully avoided the execution of the award till date by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 14724 of 2021, which is reproduced hereinabove. 10. After the present contempt proceedings were initiated and the respondents were served with notice in the present proceedings the respondents thereafter filed Miscellaneous Application No. 61 of 2022 to recall the order dated 28.10.2021 in Miscellaneous Application No. 1668 of 2021 in Special Leave Petition (C) No. 14724 of 2021. The very submissions, which are now made were made at the time of hearing of the Miscellaneous Application No. 61 of 2022 and by a detailed order dated 25.01.2022, this Court dismissed the said application. The order passed in Miscellaneous Application No. 61 of 2022 is reproduced hereinbelow:- "1. The present miscellaneous application has been preferred by the applicants - original petitioners with a prayer to recall order dated 28.10.2021 passed in Miscellaneous Application No. 1668 of 2021. 2. Shri Shyam Divan, learned Senior Advocate has appeared on behalf of the applicants and Shri Jayant Bhushan, learned Senior Advocate has appeared on behalf of the contesting respondent. 2.1 Shri Shyam Divan, learned Senior Advocate appearing on behalf of the applicants has made the following submissions i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e applicants to make a grievance with respect to non-maintainability of M.A. No. 1668/2021 and/or that no notice was issued. 4. Even otherwise, it is required to be noted that the present application is nothing but an afterthought and only with a view to get out the contempt proceedings initiated by the respondent by way of Contempt Petition No. 940/2021. It is to be noted that order dated 28.10.2021 was passed in the presence of the learned counsel appearing on behalf of the applicants. Learned counsel who appeared on behalf of the applicants was heard. The present application to recall order dated 28.10.2021 has been preferred after a period of almost two and a half months, i.e., on 17.01.2022 and that too after this Court issued notice in the contempt proceedings and after the notice of contempt petition was served upon the applicants. Therefore, the present application is, as such, nothing but an afterthought and only with a view to get out the contempt proceedings, which have been initiated and filed as far back as on 18.11.2021 and notice was issued on 10.12.2021. 5. Even otherwise on merits also, order dated 28.10.2021 passed in M.A. No. 1668/2021 is not required to be r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... weeks' time was granted, the original petitioners - applicants herein have not complied with the order passed by the High Court for which they sought extension. This shows the conduct on the part of the applicants. Even thereafter, there is no application for extension of time. Having taken the advantage/benefit of order dated 17.09.2021 of extension of time to comply with the order passed by the High Court, thereafter it would not be open for the applicants to contend that on noncompliance the necessary consequence under the Arbitration Act may follow and the execution proceedings may have to be proceeded further. Be that as it may, when order dated 28.10.2021 has been passed after hearing the learned counsel for both the parties and as observed hereinabove on considering the apprehensions on the part of the respondent that the applicants have no intention to comply with the order passed by the High Court and they just want to delay the proceedings, order dated 28.10.2021 has been passed. Therefore, no case is made out to recall order dated 28.10.2021 passed in M.A. No. 1668/2021. 8. In view of the above and for the reasons stated above, the present application stands dismiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry, despite the specific direction issued in the order dated 28.10.2021 and the dismissal of Miscellaneous Application No. 61 of 2022 vide order dated 25.01.2022, the respondents have continued to their abrasive attitude of non-compliance and disobedience and by making the same submissions, which were made earlier which as such were rejected by a detailed order. Despite the direction/order passed by this Court in the order dated 28.10.2021 in Miscellaneous Application No. 1668 of 2021, there is a disobedience/noncompliance of the same and in that view of the matter, the decisions relied upon by Shri Shyam Divan, learned Senior Advocate appearing on behalf of the respondents on the alternative remedy available in the form of execution etc. are not of any assistance nor applicable having regard to the facts of the case on hand. 13.1 In order to buttress his contention that non-compliance with the condition of deposit would only render the Arbitrator's Award enforceable and contempt proceedings ought not to have been initiated for non-compliance with such condition which was not mandatory in nature, learned senior counsel appearing on behalf of the respondent-contemnor cited the fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lea that non-compliance with the condition of deposit would only render the Arbitrator's Award enforceable and that such failure to comply would have no consequences under the Contempt of Courts Act, 1971. 13.2 Further, it is trite law that the jurisdiction of a Court under the Act, would not cease, merely because the order or decree of which contempt is alleged, is executable under law, even without having recourse to contempt proceedings. 13.3 Contempt jurisdiction could be invoked in every case where the conduct of a contemnor is such as would interfere with the due course of justice; vide Rama Narang vs. Ramesh Narang - [(2006) 11 SCC 114. Contempt is a matter which is between the Court passing the order of which contempt is alleged and the contemnor; questions as to executability of such order is a question which concerns the parties inter-se. The power of the Court to invoke contempt jurisdiction, is not, in any way, altered by the rights of the parties inter-se vide Bank of Baroda vs. Sadruddin Hasan Daya - [(2004) 1 SCC 360]. 14. Now, so far as the case on behalf of the respondents that there is no wilful disobedience and because of the financial constraint, the respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arty responsible for delay in compliance, may be held to have committed contempt; vide State of Bihar vs. Subhash Singh - [(1997) 4 SCC 430] 15.1 Further, the decision of this Court in Maruti Udyog vs. Mahinder C. Mehta - AIR 2008 SC 309 suggests that irrespective of whether or not a decree is executable, the question to be considered by this Court in determining whether a case for contempt has been made out was, whether, the conduct of the contemnor was such as would make a fit case for awarding punishment for contempt of Court. 16. Applying the legal propositions discussed supra, to the facts of the case at hand, we are of the view that the conduct of the respondent-contemnors is such as would justify invocation of contempt jurisdiction of this Court. Not only have the contemnors unreasonably delayed and defaulted in compliance of the orders of this Court without explaining the cause for such default, or seeking extension of time for compliance; but they have also sought to avoid compliance of the order, even after taking benefit of the extended time period granted for compliance of the same. The contemnors cannot, at this juncture, claim that the requirement of deposit was no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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