Contempt of Courts Act, 1971: ss. 2(b), 19 – Contempt of court – Wilful breach of the undertaking given to the Court – On facts, bank filed a petition u/ss. 10 and 12 for punishing the petitioners for wilful and deliberate breach of their undertaking – Petitioners case that breach of an undertaking made with a view to secure a conditional order of stay may not tantamount to contempt, especially when the consequences of breach of such undertaking are spelt out in the Court order itself – Single judge of the High Court held the petitioners guilty of contempt and sentenced to simple imprisonment for three months with fine – Division Bench upheld the said order – On appeal, held: Held: Wilful breach of the undertaking given to the Court amounts to contempt of Court u/s. 2(b) – However, the Court has to see, the nature of the undertaking made; the benefit if any, reaped by the party giving the undertaking; and whether the filing of the undertaking was with a view to play fraud upon the court or to mislead the opposite party – Series of acts committed by the petitioners, subsequent to the undertaking given by the petitioners, convinced the High Court to believe that the undertaking given was not based upon good faith but intended to mislead the Court – Subsequent conduct of the petitioners seems to have tilted the balance against them – Thus, the Single Judge as well as the Division Bench of the High Court rightly held the petitioners guilty of contempt of court, however, the period of sentence is reduced from three months to the period of imprisonment already suffered/undergone by the petitioners.
Disposing of the SLP, the Court
HELD: 1.1 The undertaking dated 08.04.15 given by the first petitioner was also accompanied by an affidavit sworn to by the second petitioner. On the basis of the undertaking filed, the High Court passed an order in the Writ Petition on the same day, namely, 08.04.2015. It is seen from the portion of the order of the High Court that it was not an order passed on the basis of an affidavit/undertaking. It was on the basis of an offer made by the petitioners, the first of whom was actually present in Court. The offer so made was accepted by the Bank and hence the order was actually based upon the consent of parties. [Para 13-15][379-GH; 380-G-H]
1.2 This Court has held that the wilful breach of the undertaking given to the Court amounts to contempt of Court under Section 2(b) of the Contempts of Courts Act, 1971. But the Court has always seen (i) the nature of the undertaking made; (ii) the benefit if any, reaped by the party giving the undertaking; and (iii) whether the filing of the undertaking was with a view to play fraud upon the court or to hoodwink the opposite party. [Para 16][381-D-E]
1.3 It is true that an undertaking given by a party should be seen in the context in which it was made and (i) the benefits that accrued to the undertaking party; and (ii) the detriment/injury suffered by the counter party. It is also true that normally the question whether a party is guilty of contempt is to be seen in the specific context of the disobedience and the wilful nature of the same and not on the basis of the conduct subsequent thereto. While it is open to the court to see whether the subsequent conduct of the alleged contemnor would tantamount to an aggravation of the contempt already committed, the very determination of an act of contempt cannot simply be based upon the subsequent conduct. But the subsequent conduct of the party may throw light upon one important aspect namely whether it was just the inability of the party to honour the commitment or it was part of a larger design to hoodwink the court. [Para 25-26][384A-D]
1.4 The subsequent conduct of the petitioners after the order dated 08.04.2015, seems to have tilted the balance against the petitioners. All the events that happened after 08.04.2015, convinced the High Court to come to the conclusion that the petitioners had actually played a fraud upon the Court. This is why the Single Judge as well as the Division Bench of the High Court held the petitioners guilty of contempt of court. [Para 19, 24][382-F; 383-G-H; 384-A]
1.5 In the instant case, the series of acts committed by the petitioners (i) in issuing post-dated cheques, which were dated beyond the date within which they had agreed to make payment;
(ii) in allowing those cheques to be dishonoured; (iii) in not appearing before the Court on the first date of hearing with an excuse that was found to be false; (iv) in coming up with an explanation about their own debtors committing default; and (v) in getting exposed through the report of the SFIO, convinced the High Court to believe that the undertaking given by the petitioners on 08.04.2015 was not based upon good faith but intended to hoodwink the Court. Therefore, there is no fault with the High Court holding the petitioners guilty of contempt. [Para 27][384-D-F]
1.6 The submission that the failure to honour a commitment made while securing a conditional order of stay, cannot be treated as wilful disobedience, could have been accepted, but for the fact that the petitioners issued post-dated cheques purportedly in compliance of the undertaking, but allowed them to be dishonoured. The story cooked up for the dishonor of the cheques having been found to be false, it is not open to the petitioners to raise the submission that there was no wilful disobedience. [Para 28][384-G-H]
1.7 The submission based upon the language of Section 13(a) of the Act also does not appeal in the light of what had happened after 08.04.2015. The fact that the order dated 08.04.2015 also indicated certain other consequences to follow, may not take away the contempt jurisdiction of the Court. In appropriate cases where a party had acted bonafide while giving an undertaking, but could not honour the undertaking on account of reasons that are reasonable and genuine, the Court could certainly withhold its stick from being wielded. But in this case there are findings of fact to the effect that the petitioners did not act bonafide. Therefore, the submission is also unsustainable. [Para 29][385-A-C]
1.8 The submission that if the order dated 08.04.2015 is capable of being interpreted and understood in more than one way as to the consequences flowing out of the same, the party understanding and interpreting the said order in one particular manner must be allowed the benefit, is perfectly correct, as a pure and simple proposition of law. But in the instant case, the same cannot be permitted to be used, tocover up whatever the petitioners have done. On the submission was that the disobedience, if any, was not wilful and intentional, less said the better. [Para 30][385-C-D]
1.9 The finding of the High Court that the petitioners are guilty of contempt, does not call for interference under Article 136. It is not disputed that the mortgaged properties have now been sold and with extraordinary efforts, the Bank has also taken possession. The petitioners have also spent 11 days in custody out of the total period of imprisonment of three months imposed by the High Court. In such circumstances, it is sufficient punishment for the petitioners. The finding of the Single Judge and the Division Bench of the High Court that the petitioners are guilty of contempt of court is upheld, but the period of sentence is reduced from three months to the period of imprisonment already suffered/undergone by the petitioners. [Para 31, 33, 34][385-E; 385-F-H; 386-A]
Narain Singh v. Lala Rajendra Lal & Ors. (1976) SCC Online All 425; Indian Overseas Bank v. Lalit Kumar Aggarwal & Anr. (2000) SCC Online Del 710;
K.Saravankumar v. Sheela & Ors. 2008 (3) CTC 669; National Agricultural Cor.Marketing v. Reliance Polycrete Ltd. (2009) 163 DLT 441; Dinesh Kumar Gupta v. United India Insurance Company Limited (2010) 12 SCC 770 : [2010] 13 SCR 599; Niaz
Mohammad v. State of Haryana (1994) 6 SCC 332 : [1994] 3 Suppl. SCR 720; Bank of Baroda v. Sadruddin Hasan Daya & Anr. (2004) 1 SCC 360 : [2003] 6 Suppl. SCR 764; Rama Narang v. Ramesh Narang & Another (2006) 11 SCC 114 : [2006] 3 SCR 1068; Rama
Narang v. Ramesh Narang and Another (2009) 16 SCC
126 : [2007] 3 SCR 1099; Babu Ram Gupta v. Sudhir Bhasin 10, (1980) 3 SCC 47 : [1979] 3 SCR 685 – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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