Alora Trading Co. Ltd. Vs Mr. Sanjay Ghai

Delhi High Court 8 Mar 2002 CCP 56/98 and IAs 1695 and 6342/01 in Suit 2528/98 (2002) 03 DEL CK 0109
Bench: Single Bench
Result Published

Judgement Snapshot

Case Number

CCP 56/98 and IAs 1695 and 6342/01 in Suit 2528/98

Hon'ble Bench

Sharda Aggarwal, J

Advocates

Gopal Jain and Namita Sood, for the Appellant; Samriti Pandey, for the Respondent

Final Decision

Dismissed

Judgement Text

Translate:

Sharda Aggarwal, J.@mdashBy virtue of the present petition under the Contempt of Courts Act, this Court is called upon to exercise its jurisdiction u/s 2(b) of the Contempt of Courts Act against the contemner/respondent for willful disobedience of the orders of the Court dated 10th February, 2000 and 15th February, 2000 in Suit No. 2528/98.

2. A short background of the facts giving rise to the present petition is that the petitioner and the respondent/condemner had entered into a compromise and on the joint application moved under Order 23 Rule 3 CPC, compromise was recorded in the suit and vide orders dated 15th February, 2000 suit was decreed in terms thereof. As per the terms of the compromise, respondent had agreed to pay a sum of Rs. 36,30,200/- by way of cheques in thirty three equal monthly Installments of Rs. 1,10,000/- each. This amount was payable w.e.f. 10th March, 2000. The first two cheques of Rs. 1,10,000/- each, when presented to the bank, were dishonoured on 11th April, 2000 on the ground of insufficiency of funds. The respondent/condemner after entering into compromise and having made a statement before the Court to abide by the terms thereof, failed to comply with the consent decree passed by the Court. The petitioner instead of taking out Execution, filed the present contempt petition. In order to initiate the contempt proceedings, prima facie case for contempt has to be made out. Though the respondent had appeared in these proceedings through counsel, but no show cause notice for contempt was issued against him.

3. Contempt is alleged to have been committed by the respondent for non-compliance of the orders dated 10th February, 2000 and 15th February, 2000 passed in the Suit. The parties moved a joint application under Order 23 Rule 3 CPC which came up for hearing on 10th February, 2000. The statement of the respondent recorded on the said application, is reproduced as under:

"I have read the application under Order 23 Rule 3. It has been prepared by my counsel under my instructions and I have signed the same. I agree to abide by the terms and contents of the same."

4. On the basis of the statement made by the respondent/condemner, decree in terms of the compromise was passed on 15th February, 2000. The following consent order was passed:

"IA. No. 1554/2000 & S. No. 2528/98

This is a joint application on behalf of both the parties under Order XXIII Rule 3 CPC praying for decreeing the suit in terms of the compromise arrived at between the parties, leaving the parties to bear their own costs.

This application along with affidavits is signed by both the parties as well as by both the counsel for the parties.

Accordingly, the application is allowed. Suit is decreed in terms of the compromise arrived at between the parties in this compromise application. The application to form part of the decree. Decree be drawn up accordingly. Parties are left to bear their respective costs.

Suit & is stand disposed of."

5. One of the essential ingredients for civil contempt is "willful disobedience" and not any other disobedience due to various reasons, such as delay due to unavoidable circumstances or inadvertence. That it was "willful", has to be proved. "Willful" means clear intention to flout. Likewise breach of an undertaking has to be proved, to be willful. If willfulness is not made out, the Court will refuse to exercise its contempt jurisdiction to punish the alleged contemner. In the present case, parties had compromised the dispute and the terms were incorporated in the compromise petition on the basis of which consent decree dated 15th February, 2000 was passed. Neither the consent decree nor the statement dated 10th February, 2000 was an undertaking to the Court. The Supreme Court in Babu Ram Gupta Vs. Sudhir Bhasin and Another, , while dealing with the question as to whether a consent order on the agreement of the parties and by which a Receiver was appointed, included an undertaking given by the contemner to carry out the directions contained in the order, held as under:

"In the absence of any express undertaking given by the appellant or any undertaking incorporated in the order impugned, it will be difficult to hold that the appellant willfully disobeyed or committed breach of such an undertaking. What the High Court appears to have done is that it took the consent order passed which was agreed to by the parties and by which a receiver was appointed, to include an undertaking given by the contemner to carry out the directions contained in the order. With due respect, we are unable to agree with this view taken by the High Court. A few examples would show how unsustainable in law the view taken by the High Court is. Take the instance of a suit where the defendant agrees that a decree for Rs. 10,000 may be passed against him and the Court accordingly passes the decree. The defendant does not pay the decree. Can it be said in these circumstances that merely because the defendant has failed to pay the decretal amount he is guilty of contempt of Court? The answer must necessarily be in the negative. Take another instance where a compromise is arrived at between the parties and a particular property having been allotted to A, he has to be put in possession thereof by B. B does not give possession of this property to A. Can it be said that because the compromise decree has not been implemented by B, he commits the offence of contempt of Court? Here also the answer must be in the negative and the remedy of B would be not to pray for drawing up proceedings for contempt of court against B but to approach the executing court for directing a warrant of delivery of possession under the provisions of the Code of Civil Procedure. Indeed, if we were to hold that non-compliance of a compromise decree or consent order amounts to contempt of court, the provisions of the CPC relating to execution of decrees may not be resorted to at all. Infact, 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 a 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 cases."

6. In the instant case no fraud has been played on the Court. Fraud, if any, is practiced by the respondent on the petitioner in not complying with the terms of the compromise. At best it can be treated as an undertaking of one party to the other and not to the Court. In fact, in a case like this, the remedy is not to move for contempt but to approach the executing Court for execution of the decree. The decree passed on 15th February, 2000 is a simple money decree. The entire corpus of execution law exists for enforcement of rights by one party against another which have been the subject matter of adjudication. In such cases, the practice of moving contempt petition instead of filing the Execution, which is a proper and efficacious remedy provided by the Code of Civil Procedure, is deprecated and needs to be discouraged. The contempt proceedings cannot be used as a lever for obtaining speedy execution of even executable decrees instead of resorting to the usual and normal procedure prescribed. In the instant case, there is in fact no ground much less sufficient ground for initiating contempt proceedings against the respondent. In my considered view, it will be inexpedient and undesirable to initiate proceedings in contempt jurisdiction in a situation of this kind. The contempt petition is accordingly dismissed.

IAs. 1695/2001 & 6342/2001 in CCP 56/2000

7. The Petitioner filed these two applications u/s 151 CPC for directions. In IA. 1695/2001 the Petitioner prayed that respondent/condemner be punished for his willful disobedience of the orders of the Court subsequent to the consent decree dated 15th February, 2000. To the same effect is the application IA. 6342/2001. In the second application the Petitioner has specifically averred that the Respondent had given an undertaking to this Court, which is incorporated in the orders dated 17th May, 2001 and as the Respondent has committed breach of the undertaking by not complying with the same, he be punished for contempt of court.

8. After the consent decree was passed in the suit on 15th February, 2000, the Respondent committed defaults and failed to make payment in terms of the compromise. At this the Petitioner filed an application under Order XXXIX Rule 6 CPC in the suit seeking permission of the Court to sell the movable properties of the Respondent as according to the terms of the compromise the Respondent had deposited title deeds/documents of his various belongings as collateral security with the Petitioner agreeing that in the event of any two consecutive defaults in the honouring of the post-dated cheques given by him the Petitioner would be at liberty to dispose of the said properties. In that respect the Respondent had also executed a general power of attorney in favor of the Petitioner empowering him to sell the said properties. Notice of the said application was issued to the Defendant in the suit. The Respondent appeared and on some dates the Respondent made some payments and even stated that he would continue to make future payments. On 26th April, 2001 he failed to appear and the matter came up for consideration on 17th May, 2001 when the Defendant had appeared in person. On that date, he made payment of Rs. 2,20,000/- by way of five bank drafts. In view of the consent decree passed in the suit, another sum of Rs. 4,40,000/- had become due for the period up to May, 2001. The defendant undertook to make payment of Rs. 4,40,000/- by 31st July, 2001. He also undertook to pay future Installments of Rs. 1,10,000/- per month regularly as per the terms recorded in the consent decree and on 17th May, 2001, following order was passed:

"IAs. 3382/00 & 1554/00 in S. No. 2528/98

Defendant is present in the Court today. He has handed over five bank drafts totalling Rs. 2.20 lakhs to the plaintiff which the plaintiff has accepted without prejudice to his contentions in these applications. It is agreed by the parties that as per the consent decree passed in this suit, another sum of Rs. 4.40 lakhs has become due for the period up to May, 2001. The defendant gives an undertaking to this Court that he shall pay this amount of Rs. 4.40 lakhs by 31st July, 2001. He further gives an undertaking that the future Installments of Rs. 1.10 lakhs per month shall be paid regularly every month as per the terms recorded in the consent decree. He further states that the payments shall be made by means of pay order/bank draft. It is made clear that this undertaking given by the defendant is recorded without prejudice to the contention of the plaintiff. Non-bailable warrant issued on the last date of hearing stands cancelled. Defendant shall remain present in Court on the next date of hearing.

List on 13th August, 2001."

9. The contention is that even though the defendant had given an undertaking to the Court as incorporated in order dated 17th May, 2001, he failed to make payments and the breach of the undertaking and non-compliance of the orders is willful and contumacious and as such he be punished for contempt.

10. The order subsequent to 17th May, 2001 show that the counsel for the defendant had been seeking adjournments on the ground of illness of the defendant. However, payment amounting to Rs. 3,30,000/- in cash and by way of bank drafts was made by the defendant''s counsel to the plaintiff''s counsel on 3rd September, 2001. Learned counsel for the defendant on subsequent dates sought further adjournment for seeking instructions and to produce the defendant in person in the Court. Ultimately, the learned counsel for the defendant stated that she could not contact the defendant and she had no instructions. The prayer is for punishing the defendant for committing contempt of the Court, for the breach of his undertaking given to the Court on 17th May, 2001. It cannot be disputed that alleged undertaking given by the defendant is in view of the compromise decree passed on 15th February, 200. Though the order dated 17th May, 2001 shows that he undertaking is incorporated in the order, it has still to be proved that the breach of such an undertaking is willful. Only willful disobedience of the order or breach of an undertaking will be liable to be punished as a civil contempt. The term "willful disobedience" in Section 2(b) of the Contempt of Courts Act has to be proved. There is a possibility that the breach of undertaking of Court''s order may not be willful and intentional. In the instant case, at best the undertaking is to pay the decretal amount within a time frame. The breach of such an undertaking can amount to contempt only if there is proof that the contemner had the means at the specified time to pay the amount, but has willfully refused to make the payment. In order to prove whether the default is willful, an enquiry is required to be held. In this case, facts ex-facie do not show that the default on the part of the defendant is willful. It is difficult to find out without holding an enquiry, as to whether the defendant had the means to make payment when he gave the undertaking or whether he is unable to comply with the undertaking on account of want of means at his end.

11. Jurisdiction in contempt is not a right of the party to be invoked for redressal of his grievance. It is also not a mode for executing the decree. In a situation of the kind in the present case, the whole purpose is to get the money decree executed. The law provides an adequate and efficacious remedy for executing a money decree. The procedure for execution provides even civil imprisonment in addition to attachment and sale of the properties of the judgment debtor. The necessary enquiry about the means of the defendant can be held in execution proceedings. It is not warranted to hold a detailed enquiry on these applications to ascertain the facts before initiating contempt proceedings. Reference at this stage to A. Ramalingam Vs. V.V. Mahalinga Nadar, , where a similar situation had arisen would be appropriate. The Court in that case observed as under:

"We think it is sufficient to stress the following principles, which will be clearly relevant to a situation of the present kind. Essentially, contempt of Court is a matter which concerns the administration of justice and the dignity and authority of judicial tribunals; a party can bring to the notice of Court, facts Constituting what may appear to amount to contempt of Court, for such action as the Court deems it expedient to adopt. But, essentially, jurisdiction in contempt is not a right of a party, to be invoked for the redressal of his grievances; nor is it a mode by which the rights of a party, adjudicated upon by a tribunal, can be enforced against another party. The entire corpus of execution law exists for the enforcement of rights, by one party against another, which have been the subject matter of adjudication. In our view, there are sufficient grounds here to show that it will be inexpedient and undesirable to institute proceedings in contempt jurisdiction, in a situation of this kind. Firstly, the facts themselves may be in controversy, whether a deliberate flouting of a judicial order or decree has occurred, and we state this, irrespective of the merits of the instant case. When they are in controversy, they cannot be ascertained without due enquiry. If the Court is to commence an action in contempt jurisdiction, only after ascertaining facts at such an enquiry, obviously it will be converting itself into an agency for arriving at findings of fact which may be a foundation for contempt jurisdiction. On the contrary, it would be in the interests of justice to exercise contempt jurisdiction, or to commence to do so, only when the facts on the record ex-facie support such a proceeding; any detailed enquiry must be left to the Court which has passed the order and which is presumably fully acquainted with the subject matter of its own decree of temporary prohibitory injunction. For this reason, we are of the view that Order XXXIX Rule 2(3) of the CPC is a far more adequate and satisfactory remedy in such cases. Again, where the situation is strictly inter parties and third party rights are not involved, it is clearly more desirable that the Court which made the order of injunction, should go into the facts, and ascertain the truth of the alleged disobedience, and the extent to which it has been willful."

12. Be that as it may, I am of the considered view that in the given facts it would not be appropriate to hold a detailed enquiry to find out as to whether the defendant has willfully and intentionally breached the undertaking and defaulted in making the payment, for initiating contempt proceedings against him. The proceedings in the suit subsequent to the filing of the application under Order XXXIX Rule 6 CPC show that the Court was adjourning the case from time to time primarily with a view to get the payments towards decretal amount made to the plaintiff and that was the reason that the said application was not considered till date on merits. The proper course for the plaintiff is to find recourse in executing the money decree. Both the applications are, accordingly, dismissed.

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