Sanjay Kalra v. State

Delhi High Court · 11 Jul 2023 · 2023:DHC:4650
Chandra Dhari Singh
CCP(O) 11/2022
2023:DHC:4650
civil petition_dismissed Significant

AI Summary

The Delhi High Court dismissed a civil contempt petition alleging wilful disobedience of a 2014 order, holding that subsequent court permissions and compelling circumstances negated any wilful contempt.

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CCP(O) 11/2022
HIGH COURT OF DELHI
Reserved on : 17th May, 2023 Pronounced on: 11th July, 2023
TEST.CAS. 54/2014
SANJAY KALRA ..... Petitioner
Through: Mrs. Kajal Chandra, Ms. Prerna Chopra, Ms. Sakshi Anand and Mr. Divye Puri, Advocates
VERSUS
STATE ..... Respondent
Through: Mr. Darpan Wadhwa, Sr. Advocate with Ms. Ruby Singh Ahuja, Mr. Varun Khanna, Mr. Akshay Aggrawal, Mr. Vasu Singh, Ms. Megha Dugar, Ms. Neelakshi Bhadauria and Ms. Aditi Mohan, Advocates for LRs-1 and 4
Mr. Harish Malhotra, Sr. Advocate with Mr. Rajiv Bahl, Advocate for
LR-5/Ms. Priya Jain Mr. Rajeev Mehra, Sr. Advocate with Mr. Amol Sharma, Advocate for R-3 and 4 in CCP(O) 11/2022
CORAM:
HON’BLE MR. JUSTICE CHANDRA DHARI SINGH
JUDGMENT
CHANDRA DHARI SINGH, J.

1. The instant contempt petition under Section 10 and 12 of the Contempt of Courts Act, 1971 read with Order XXXIX Rule 2A of the Code of Civil Procedure, 1908 (hereinafter “CPC”) has been filed on behalf of the respondent no. 5, Priya Jain, who has been referred to as the “petitioner” for the sake of convenience of adjudication of the instant petition, against the alleged contemnors seeking the following reliefs: “a) punish respondents/contemnors for willful disobedience of the order dated 14.11.2014 passed by this Hon'ble Court in Test. Cas.54 of 2014 by putting them in civil imprisonment and attaching their properties; and b) direct the Contemnors to purge the contempt by restoring status quo ante in respect of the charge on the subject properties, i.e., F-89, Okhla Industrial Estate, Phase III, New Delhi, and 229, Okhla Industrial Estate Phase III, New Delhi; and/or c) pass any such other or further orders‟ as deem fit and proper in the interest of justice;” BACKGROUND

2. The captioned Testamentary Case has been filed by one Sanjay Kalra, seeking probate of purported Will dated 11th December 2004 of Devender Kumar Jain who passed away on 18th March 2014. The petitioner herein, Priya Jain, daughter and a Legal Representative of the deceased, has filed the instant petition against the other Legal Representatives of the deceased, being his wife, Contemnor No. 1, his other daughter, Contemnor No. 2- Pooja Jain Gupta, as well as the officers of the alleged Contemnor Bank. Apart from the instant Testamentary Case, the parties, i.e., the LRs of the deceased, are also involved in a Partition Suit titled Payal Kapoor & Anr. vs. Pankaj Jain & Ors., CS (OS) 3156/2015. Both the cases surround the issue of devolution and division of the estate of the deceased which Devender Kumar Jain, inclusive of the immoveable properties as well as intangible assets in the forms of shareholding in the Luxor Writing Instruments Private Limited (hereinafter “LWIPL”) and the Luxor International Private Limited (hereinafter “LIPL”), which is also the subject matter of the instant contempt proceedings. The deceased Devender Kumar Jain was the founder and erstwhile owner of the said Luxor Group.

3. The Contemnor No. 1 filed an Interim Application in the Testamentary Case bearing I.A. No. 22174/2014 seeking permission to execute certain documents to continue equitable mortgage created by the deceased with respect to his properties located at F-229, Okhla Industrial Estate Phase-III, New Delhi and F-89, Okhla Industrial Estate Phase-III, New Delhi (hereinafter “subject properties”). In the said application, the order dated 14th November 2014 was passed by the Coordinate Bench of this Court whereby the following directions were passed, which are the subject matter of the instant contempt petition:

“6. Having regard to the urgency in the matter, it is deemed appropriate to direct wife, Smt. Usha Jain, to sign the renewal documents of the bank. 7. It is made clear that the bank shall not extend or increase or grant any additional facility, nor create any further charge on either of the two properties on the basis of which loan has been granted. The execution of the documents by the wife of deceased shall not create any special equity in her favour; and all rights and contentions of all the parties as raised by them in their respective objections are kept open.”

****** 9. This order is only being passed with a view that the loans granted by the bank are not recalled, which would have an adverse affect on the business of the parties, in which all

the parties have some interest. ******

11. Copy of this order will be brought to the notice of the Kotak Mahindra bank. It is made clear that the bank will not create an additional liability or an additional charge on the properties.”

4. The petitioner is before this Court alleging wilful disobedience on the part of the respondents/alleged contemnors with regard to the order dated 14th November 2014 on the ground that they have created charge on the aforesaid subject properties.

SUBMISSIONS

5. Mr. Harish Malhotra, the learned senior counsel assisted by Mr. Rajiv Bahl, the learned counsel appearing on behalf of the petitioner submitted that after the death of the testator, Devender Kumar Jain, on 18th March 2014, the probate case was instituted on the strength of a purported Will dated 18th December 2004 by the alleged executor, Sanjay Kalra. Vide the said purported Will, the entire estate of the testator had been bequeathed in favour of his wife, i.e., respondent no. 1/alleged contemnor no. 1 herein. It is submitted that the respondent no. 1, alongwith her daughter, Pooja Gupta/respondent no. 2, has supported the existence of the purported Will. Moreover, the children of the respondent no. 1 and the testator, Payal Kapoor, and Pankaj Jain also stopped contesting the matter upon reaching a settlement and supported the case of the respondent no. 1. It is submitted that on the strength of the purported Will, the Directorships, Managing Directorships and shares of the deceased in the LWIPL and LIPL were transferred to the respondent no. 1 and 2 herein.

6. The learned senior counsel submitted that in the Testamentary Case, the respondent no. 1 filed the application bearing I.A. NO. 22174/2014 seeking execution of documents to continue equitable mortgage created by the testator with respect to the subject properties to renew the loan facilities granted by the respondents no. 3 and 4 herein. It is submitted that the Predecessor Bench of this Court in the said application passed the order dated 14th November 2014 with the direction that the Bank, i.e., respondent no. 3 and 4, shall not extend, increase, grant any additional facility or create further charge on the basis of which the loan had been granted towards the LWIPL and LIPL.

7. It is further submitted that while passing the said order and permitting to execute and sign the renewal documents, the Court had the intention to protect all the parties and not just the respondents no. 1 and 2. The Court recognized that the ouster of the petitioner as well as other heirs from the shareholding of LWIPL and LIPL was subject to the outcome of the probate proceedings and in the event of the Testamentary Case failed, the petitioner would be entitled to her share from her deceased father's shareholding in both entities, hence, all parties were held to have some interest in the businesses.

8. The learned senior counsel submitted that even in the Partition Suit, when the respondent no. 1 herein filed the application bearing I.A. No. 23310/2015 under Section 10 of the CPC seeking stay of the partition proceedings pending the probate proceedings, the parties voluntarily agreed on a stay similar to the one in operation in the Testamentary Case wherein it was noted by the Coordinate Bench of this Court as under: “'The learned counsel for the parties submit that in a related probate matter, the principal underlying the interim orders has been the preservation of the estate of late Mr. D.K. Jain, so that none of the parties would be entitled to fritter away his estate or take any action detriment to the interest of the estate.”

9. It further submitted that the order of interim stay was made absolute and status quo was also granted by the Coordinate Bench of this Court by way of an order passed in the I.A. 22073/2015 in the Partition Suit.

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10. The learned senior counsel for the petitioner submitted that despite several orders so passed pertaining to the protection of the estate of the testator, the LWIPL and LIPL approached the respondents no. 3 and 4 for further credit facilities by creation of a second charge on the subject properties. It is submitted that loans were disbursed by the respondents no. 3 and 4 on 31st December 2020.

11. The learned senior counsel submitted that thereafter, in an attempt to hoodwink this Court and to ex post facto sanctify the gross illegalities already committed, by concealing the material fact that the loan already stood availed on the condition that second charge would be created, the respondent no. 1 herein filed the I.A. bearing no. 7247/2021 in the Partition Suit seeking modification of the order dated 27th February 2019, whereby the Coordinate Bench of this Court was of the view that the assets of deceased would have to be preserved till the disposal of the suit, thereby seeking post facto permission for creation of second charge. The said IA came to be disposed of vide order dated 3rd September 2021, permitting the creation of second charge to avail the loan.

12. It is further submitted that it is evident that at the time of adjudication of the said I.A. 7247/2021, the fact of creation of a second charge was concealed by the respondent no. 1. Moreover, despite such contumacious actions already having been undertaken by the respondents/contemnors, they committed further contempt and perjury by terming the requirement for modification of the restraint orders as mere measures of abundant caution. Moreover, in an attempt to circumvent the restraint orders, patent falsehood has been pleaded that the second charge does not lead to parting of possession or creation of any third-party interest, so as to suggest that the charge is not even a legal encumbrance on the subject properties.

13. It is submitted that the conduct of the respondents/contemnors is tantamount to criminal contempt under Section 14 of the Contempt of Courts Act, 1971. The respondents have committed contempt by concealing material particulars and then seeking ex post facto permission to flout them. Moreover, the respondents are continuing to commit contempt since the second charge remains over the subject properties.

14. It is, hence, submitted that since the respondents are deliberately and wilfully not complying with the directions of this Court, they are liable to be held in contempt of the Court‟s order dated 14th November

2014.

15. Per Contra, Mr. Darpan Wadhwa, learned senior counsel alongwith Ms. Ruby Singh Ahuja, learned counsel for the respondent NO. 1/contemnor no. 1 vehemently opposed the instant civil contempt petition. The learned senior counsel submitted that certain credit facilities had been sanctioned by the Bank to the two companies, namely LWIPL and LIPL which were secured by a security package consisting of all the immoveable properties owned by the group companies, the stock in trade, receivables, work in progress, inventories of the companies and certain other immoveable properties, personal guarantees of the respondents no. 1 and 2. Moreover, after the demise of Devender Kumar Jain, the personal guarantees of respondent no. 1 and 2 had been given as a part of the security package as delineated above with regard to the subject properties.

16. It is submitted that upon the demise of Devender Kumar Jain, the first charge of the Bank on the subject properties, which had been made during his lifetime, had to be renewed/ extended by completing formal documentations with respect to succession. Accordingly, the application bearing I.A. No. 22174/2014 was filed by the respondent no. 1 herein in the Testamentary Case seeking directions for executing the charge documents with respect to the said properties. It is submitted that the Court vide order dated 14th November 2014 granted permission to the respondent no. 1 to execute the necessary documents.

17. The learned senior counsel submitted that an undertaking was given on behalf of the respondent no. 1 that no charge would be created without the leave of the Court. Accordingly, the respondent no. 1 filed the application and duly obtained the leave and permission of the Court before executing the documents requisite for creating any charge on the subject properties.

18. It is submitted that vide order dated 27th February 2019, the Coordinate Bench in the Partition Suit directed parties to maintain status quo with respect to the title and possession of certain immovable properties and shares. The effect of order dated 27th February 2019 as passed by the Court in I.A. No. 13244/2016 was that a status quo was granted in respect of Item No. 1 of Schedule A, and Schedule B of the Plaint, other than properties mentioned in item No. 3, 4 and 5 situated in Village Jasola, New Delhi, but only with respect to title and possession. The properties mentioned at Serial no. 7 and 8 are the concerned subject properties for the matter at hand.

19. It is further submitted that the respondents no. 1 and 2 herein have put several years of efforts into the companies, i.e., the LWIPL and the LIPL to ensure that their business grows and the exposure to lenders reduces. Moreover, the respondent no. 1 has been responsible for reduction of loan undertaken by Devender Kumar Jain during his lifetime by a significant amount of approximately Rs. 26.50 Crores.

20. It is submitted that with the outbreak of the Covid-19 Pandemic, which followed lockdown restrictions, the businesses of LWIPL and LIPL were drastically affected. The turnover dropped significantly for the succeeding financial years and even the productions were severely affected.

21. It has been submitted that the Government of India launched the Emergency Credit Line Guarantee Scheme to provide a lifeline to industries that suffered in the aftermath of the Pandemic and consequent lockdowns and other restrictions. Both LWIPL and LIPL, being eligible under Scheme, sought the said financial assistance, vide request letters addressed to the Bank dated 19th November 2020, requesting for working capital funding under the Scheme. Accordingly, the respondent no. 1 for the benefit of the companies, LWIPL and LIPL sought to avail the said facility and the Bank sanctioned an amount of Rs. 13.17 Crores to the LWIPL and Rs. 11.19 Crores to the LIPL on the undertaking that necessary steps would be taken by the companies and the respondents NO. 1 and 2 herein to create second charge on the already mortgaged properties.

22. The learned senior counsel submitted that since the extension of the first charge of the Bank and the creation of second charge on the subject properties could be completed only subject to vacation/ modification of the order dated 14th November 2014 passed in probate proceedings and order dated 27th February 2019 passed in the partition proceedings by this Court, the respondent no. 1 filed the requisite applications for vacation/ modification of the said orders by way of abundant caution in both the probate as well as the suit.

23. Reliance has been placed upon the order dated 3rd September 2021 to submit that the order dated 27th February 2019 was modified to the extent that the respondents no. 1 and 2 can execute necessary documents for creation of security charge with respect to the subject properties.

24. The learned senior counsel appearing on behalf of the respondents no. 1 vehemently submitted that the petitioner herein deliberately concealed the order dated 10th February 2022 passed in the FAO (OS) No. 39/2021 preferred against the order dated 3rd September 2021 wherein the Coordinate Bench of this Court dismissed the same, as placing the said order before this Court would have conclusively led to the dismissal of the instant petition.

25. It is submitted that the instant petition is nothing but an abuse of process of law and has been used as a tool to harass the respondents. It is submitted that since the respondents took the appropriate permission from the Court by way of an application seeking such leave as well as application seeking modification, they cannot be held in contempt of the Court‟s order dated 14th November 2014. The petitioner has not been able to show that the respondents have wilfully disobeyed the orders of the Court passed in the lis pending between the parties.

26. Mr. Rajeev Mehra, the learned senior counsel assisted by Mr.Amol Sharma, the learned counsel appearing on behalf of the respondents no. 3 and 4/ contemnors no. 3 and 4 also vehemently opposed the instant civil contempt petition and submitted that the instant petition is misconceived and has also become infructuous after passing of the order dated 10th February 2022 and 3rd September 2021, which have already attained finality.

27. The learned senior counsel submitted that merely disbursing the working capital term loans under the Scheme did not amount to creation of equitable charge on the subject properties. It is submitted that in the case of the respondents no. 1 and 2 the security creation by way of second mortgage charge was done by the party by executing necessary mortgage documents on 20th September 2021 only after permission of the Court vide order dated 3rd September 2021. Moreover, the mortgage charge was created/extended for securing facilities to LWIPL and LIPL after passing of the order dated 3rd September 2021. Therefore, there is no wilful disobedience on the part of the respondents/alleged contemnors.

28. Heard the learned counsel for the parties and perused the records. I have given a thorough consideration to the civil contempt petition moved by the petitioner, the reply filed on behalf of the alleged contemnors as well as the arguments advanced during the course of final hearing of the instant contempt petition.

ANALYSIS AND FINDINGS

29. The petitioner has alleged that the respondents/contemnors are liable to be held in contempt of the order of the Court dated 14th November 2014. In order to seek action against the respondents, the petitioner has invoked Section 10 and 12 of the Contempt of Courts Act,

1971. The law regarding contempt of courts, especially civil contempt, which is the subject matter of the instant petition is settled and no more res integra. Not only this Court, but the Hon‟ble Supreme Court has also time and again reiterated the principles governing the law regarding contempt of courts.

30. In the instant case, since the petitioner has invoked civil contempt proceedings against the respondents/alleged contemnors, the relevant provisions and the principle in its entirety is deemed necessary to be analyzed to ascertain the responsibility and liability of the parties vis-àvis the orders passed by this Court in any lis pending between them.

31. The term „civil contempt‟ has been elaborated to include „wilful disobedience‟ towards any judgment, decree, direction, order, writ or other process of court and also a wilful breach of any undertaking given before and to a court, as per the terms laid under Section 2 (b) of the Contempt of Courts Act, 1971. A person is held to be in civil contempt when he is found to have been „wilfully‟ „disobeying‟ any order of the court or „wilfully‟ „breaching‟ any undertaking given by him to the court, the principal keyword being „wilful‟. Therefore, the petitioner to succeed in the instant petition shall establish disobedience of the order of the Court on the part of the respondents/alleged contemnors at the first instance and then, that the said disobedience was wilful.

32. The Hon‟ble Supreme Court has settled the position of law while adjudicating a contempt petition listed before it in the matter of Dinesh Kumar Gupta vs. United India Insurance Co. Ltd., (2010) 12 SCC 770, while observing as under:

“9. For holding the respondents to have committed contempt, civil contempt at that, it has to be shown that there has been wilful disobedience of the judgment or order of the court. Power to punish for contempt is to be resorted to when there is clear violation of the court's order. Since notice of contempt and punishment for contempt is of far-reaching consequence, these powers should be invoked only when a clear case of wilful disobedience of the court's order has been made out. Whether disobedience is wilful in a particular case depends on the facts and circumstances of that case. Judicial orders are to be properly understood and complied with. Even negligence and carelessness can amount to disobedience particularly when the attention of the person is drawn to the court's orders and its implications. Disobedience of the court's order strikes at the very root of
the rule of law on which our system of governance is based. Power to punish for contempt is necessary for the maintenance of effective legal system. It is exercised to prevent perversion of the course of justice.
11. No person can defy the court's order. Wilful would exclude casual, accidental, bona fide or unintentional acts or genuine inability to comply with the terms of the order. A petitioner who complains breach of the court's order must allege deliberate or contumacious disobedience of the court's order.”

33. The Hon‟ble Supreme Court emphasized on the principle that the court adjudicating a contempt petition shall be satisfied that there is a „clear‟ violation of the order. The contempt proceedings have a farreaching bearing and consequence on the parties involved, hence, according to the Hon‟ble Supreme Court, the powers of holding a party liable in contempt of Court should be invoked only when a clear case of wilful disobedience of a Court's order has been made out. It has also been categorically stated by the Hon‟ble Supreme Court that the element of will and intention excludes casual, accidental, bona fide or unintentional acts or genuine inability to comply with the terms of the order.

34. Similarly, while elucidating the principle of contempt in Dinesh Kumar Gupta vs. United India Insurance Co. Ltd., (2010) 12 SCC 770, the Hon‟ble Supreme Court held as under:

“15. Nevertheless, it would not be correct on behalf of the appellant to contend that the learned Single Judge was not authorised to initiate contempt proceeding against the appellant merely because he was sitting in a Single Bench although he might have been in a position to notice whether the alleged action at the instance of any party or anyone else who obstructed the cause of justice, amounted to contempt of
court of a civil or criminal nature and yet would be precluded from initiating suo motu contempt proceedings. The Contempt of Courts Act, 1971 clearly postulates the existence of only the following preconditions before a person can be held to have committed civil contempt:
(i) There must be a judgment or order or decree or direction or writ or other process of a court; or An undertaking given to a court;
(ii) The judgment, etc. must be of the court and undertaking must have been given to a court;
(iii) There must be a disobedience to such judgment, etc. or breach of such undertaking;
(iv) The disobedience or breach, as the case may be, must be wilful.
17. This now leads us to the next question and a more relevant one, as to whether a proceeding for contempt initiated against the appellant can be held to be sustainable merely on speculation, assumption and inference drawn from facts and circumstances of the instant case. In our considered opinion, the answer clearly has to be in the negative in view of the well-settled legal position reflected in a catena of decisions of this Court that contempt of a civil nature can be held to have been made out only if there has been a wilful disobedience of the order and even though there may be disobedience, yet if the same does not reflect that it has been a conscious and wilful disobedience, a case for contempt cannot be held to have been made out. In fact, if an order is capable of more than one interpretation giving rise to variety of consequences, non-compliance with the same cannot be held to be wilful disobedience of the order so as to make out a case of contempt entailing the serious consequence including imposition of punishment. However, when the courts are confronted with a question as to whether a given situation could be treated to be a case of wilful disobedience, or a case of a lame excuse, in order to subvert its compliance, howsoever articulate it may be, will obviously depend on the facts and circumstances of a particular case; but while deciding so, it would not be legally correct to be too speculative based on assumption as the Contempt of Courts Act, 1971 clearly postulates and emphasises that the ingredient of wilful disobedience must be there before anyone can be hauled up for the charge of contempt of a civil nature.
23. Besides this, it would also not be correct to overlook or ignore an important statutory ingredient of contempt of a civil nature given out under Section 2(b) of the Contempt of Courts Act, 1971 that the disobedience to the order alleging contempt has to satisfy the test that it is a wilful disobedience to the order. Bearing this important factor in mind, it is relevant to note that a proceeding for civil contempt would not lie if the order alleged to have been disobeyed itself provides scope for reasonable or rational interpretation of an order or circumstance which is the factual position in the instant matter. It would equally not be correct to infer that a party although acting due to misapprehension of the correct legal position and in good faith without any motive to defeat or defy the order of the Court, should be viewed as a serious ground so as to give rise to a contempt proceeding. 24 [Ed.: Para 24 corrected vide Official Corrigendum No. F.3/Ed.B.J./146/2010 dated 14-12-2010.]. To reinforce the aforesaid legal position further, it would be relevant and appropriate to take into consideration the settled legal position as reflected in the judgment and order delivered in Ahmed Ali v. Supdt., District Jail [1987 Cri LJ 1845 (Gau)] as also in B.K. Kar v. High Court of Orissa [AIR 1961 SC 1367: (1961) 2 Cri LJ 438] that mere unintentional disobedience is not enough to hold anyone guilty of contempt and although disobedience might have been established, absence of wilful disobedience on the part of the contemnor, will not hold him guilty unless the contempt involves a degree of fault or misconduct. Thus, accidental or unintentional disobedience is not sufficient to justify for holding one guilty of contempt. It is further relevant to bear in mind the settled law on the law of contempt that casual or accidental or unintentional acts of disobedience under the circumstances which negate any suggestion of contumacy, would amount to a contempt in theory only and does not render the contemnor liable to punishment and this was the view expressed also in State of Bihar v. Rani Sonabati Kumari [AIR 1954 Pat 513] and N. Baksi v. O.K. Ghosh [AIR 1957 Pat 528].”

35. The law as settled in the aforesaid precedent is a testament to the liberal approach to be taken while adjudicating upon civil contempt cases.

36. Further, in Rama Narang v. Ramesh Narang, (2021) 15 SCC 338, the Hon‟ble Supreme Court observed as under:

“86. Apart from that, for bringing an action for civil contempt, the petitioner has to satisfy the court that there has been a wilful disobedience of any judgment, decree, direction, order, writ or other process of the court. It will be relevant to refer to para 9 of the judgment of this court in Niaz Mohammad v. State of Haryana [Niaz Mohammad v. State of Haryana, (1994) 6 SCC 332] : (SCC p. 337, para 9) “9. Section 2(b) of the Contempt of Courts Act, 1971 (hereinafter referred to as “the Act”) defines “civil contempt” to mean „wilful disobedience to any judgment, decree, direction, order, writ or other process of a court …‟. Where the contempt consists in failure to comply with or carry out an order of a court made in favour of a party, it is a civil contempt. The person or persons in whose favour such order or direction has been made can move the court for initiating proceeding for contempt against the alleged contemnor, with a view to enforce the right flowing from the order or direction in question. But such a proceeding is not like an execution proceeding under
the Code of Civil Procedure. The party in whose favour an order has been passed, is entitled to the benefit of such order. The court while considering the issue as to whether the alleged contemnor should be punished for not having complied with and carried out the direction of the court, has to take into consideration all facts and circumstances of a particular case. That is why the framers of the Act while defining civil contempt, have said that it must be wilful disobedience to any judgment, decree, direction, order, writ or other process of a court. Before a contemnor is punished for non-compliance of the direction of a court, the court must not only be satisfied about the disobedience of any judgment, decree, direction or writ but should also be satisfied that such disobedience was wilful and intentional. The civil court while executing a decree against the judgment-debtor is not concerned and bothered whether the disobedience to any judgment, or decree, was wilful. Once a decree has been passed it is the duty of the court to execute the decree whatever may be consequence thereof. But while examining the grievance of the person who has invoked the jurisdiction of the court to initiate the proceeding for contempt for disobedience of its order, before any such contemnor is held guilty and punished, the court has to record a finding that such disobedience was wilful and intentional. If from the circumstances of a particular case, brought to the notice of the court, the court is satisfied that although there has been a disobedience but such disobedience is the result of some compelling circumstances under which it was not possible for the contemnor to comply with the order, the court may not punish the alleged contemnor.”

87. It can thus be seen that this Court has held that the contempt proceeding is not like an execution proceeding under the Code of Civil Procedure. It has been held that though the parties in whose favour an order has been passed is entitled to the benefits of such order, but the Court while considering the issue as to whether the alleged contemnor should be punished for not having complied with and carried out the directions of the Court has to take into consideration all facts and circumstances of a particular case. It has been held that is why the framers of the Act while defining civil contempt have said that it must be wilful disobedience of any judgment, decree, direction, order, writ or other process of the Court. It has been held that before punishing the contemnor for non-compliance of the decision of the Court, the Court must not only be satisfied about the disobedience of any judgment, decree, direction, writ or other process but should also be satisfied that such disobedience was wilful and intentional. Though, the civil court while executing a decree against the judgment-debtor is not concerned and bothered as to whether the disobedience to any judgment or decree was wilful and once the decree had been passed, it was the duty of the court to execute the decree, whatever may be the consequences thereof. In a contempt proceeding before a contemnor is held guilty and punished, the Court has to record a finding, that such disobedience was wilful and intentional. It has been held that if from the circumstances of a particular case, though the Court is satisfied that there has been a disobedience but such disobedience is the result of some compelling circumstances, under which it is not possible for the contemnor to comply with the same, the Court may not punish the alleged contemnor.

88. It will also be apposite to refer to the following observations of this Court in Kanwar Singh Saini v. High Court of Delhi [Kanwar Singh Saini v. High Court of Delhi, (2012) 4 SCC 307: (2012) 2 SCC (Civ) 497: (2012) 2 SCC (Cri) 423], taking a similar view: (SCC pp. 323-24, para 30)

“30. In an appropriate case where exceptional circumstances exist, the court may also resort to the provisions applicable in case of civil contempt, in case
of violation/breach of undertaking/judgment/order or decree. However, before passing any final order on such application, the court must satisfy itself that there is violation of such judgment, decree, direction or order and such disobedience is wilful and intentional. Though in a case of execution of a decree, the executing court may not be bothered whether the disobedience of the decree is wilful or not and the court is bound to execute a decree whatever may be the consequence thereof. In a contempt proceeding, the alleged contemnor may satisfy the court that disobedience has been under some compelling circumstances, and in that situation, no punishment can be awarded to him. (See Niaz Mohammad v. State of Haryana [Niaz Mohammad v. State of Haryana, (1994) 6 SCC 332]; Bank of Baroda v. Sadruddin Hasan Daya [Bank of Baroda v. Sadruddin Hasan Daya, (2004) 1 SCC 360] and Rama Narang v. Ramesh Narang [Rama Narang v. Ramesh Narang, (2006) 11 SCC 114].) Thus, for violation of a judgment or decree provisions of the criminal contempt are not attracted.”

37. Therefore, as stated above, it is the established position of law that the party invoking contempt proceedings against the other must not only be satisfied about the disobedience of any judgment, decree, direction, writ or other process but should also be satisfied that such disobedience was wilful and intentional. Furthermore, the Hon‟ble Supreme Court held that in circumstances of a particular case, although the Court may be satisfied that there has been a disobedience but where such disobedience is the result of some compelling circumstances, under which it is not possible for the contemnor to comply with the same, the Court may not punish or take any legal action against the alleged contemnor.

38. In the instant matter, the petitioner has alleged contempt by the respondents of the order of the Predecessor Bench of this Court dated 14th November 2014. The said order, reproduced above, was passed in the captioned Testamentary Case whereby in the application of the respondent no. 1 seeking execution of certain documents pertaining the subject properties bearing no. 22174/2014, the Coordinate Bench noted as under: “6. Having regard to the urgency in the matter, it is deemed appropriate to direct wife, Smt. Usha Jain, to sign the renewal documents of the bank.

7. It is made clear that the bank shall not extend or increase or grant any additional facility, nor create any further charge on either of the two properties on the basis of which loan has been granted. The execution of the documents by the wife of deceased shall not create any special equity in her favour; and all rights and contentions of all the parties as raised by them in their respective objections are kept open.”

39. By way of the said order, the respondent no. 1 was evidently allowed to sign and renew the documents as sought. Thereafter, in the aftermath of the Covid-19 Pandemic, the respondent no. 1 again approached the Courts by way of filing the I.A. 23310/2015 in the Partition Suit pending between the LRs of the deceased in CS (OS) 3156/2015 seeking stay of the said suit under Section 10 of the CPC on the ground that the respondent no. 2 herein is the sole beneficiary of the estate left behind by her husband, Devender Kumar Jain. In the said application, the Coordinate Bench of this Court passed the following order on 27th February 2019: “Since the present suit is for partition, this Court is of the view that the assets of late Sh.D.K.Jain would have to be preserved till the disposal of the suit. At the same time, to ensure that the business of the existing companies is not hampered, this Court directs the parties to maintain the status quo with regard to the title and possession of the immovable properties and shares as of today mentioned in Schedule „C‟ as well as Item No.1 of Schedule „B‟ and Schedule „A‟ of the plaint other than the properties mentioned in Item Nos. 3, 4 & 5 situated in Village Jasola, New Delhi.”

40. The Coordinate Bench while passing the said order specifically observed that the status quo was required to be maintained qua the subject properties to ensure that the business of the companies, i.e., LWIPL and LIPL, is not hampered. The intention, hence, was to provide a safety net to the business founded by Devender Kumar Jain, while ensuring that the efforts of a lifetime of the deceased did not go in vain, and accordingly, the Coordinate Bench directed the parties to maintain status quo.

41. Subsequently, the respondent no. 1 preferred another application bearing I.A. No. 7274/2021 in the Partition Suit seeking modification of the order dated 27th February 2019, wherein the order dated 3rd September 2021 was passed as under:

“3. On a query from the court, learned senior counsel for defendants No. 2 and 3 states that the properties mentioned in Schedule A of the plaint, namely, D-19, Nizammudin East, New Delhi and D-20, Third Floor, Nizamuddin East, New Delhi are not encumbered properties. He further states that in the eventuality, the plaintiff-Ms.Priya Jain was to succeed in the present suit and the partition of the estate of Late. D.K. Jain takes place, Ms.Usha Jain/defendant No. 2 will from her personal assets ensure that the diminution of the value of the property which was proposed to be subject to the second charge is restored. It is further added that any loss/diminution of the value of the alleged share of Ms. Priya
Jain as claimed in the suit on account of the proposed charge of the above noted properties(explained in order dated 18.08.2021) can also be adjusted against the share of Ms.Usha Jain and Ms.Pooja Jain in the aforenoted properties of Nizammudin.
4. Let an affidavit to the above effect be filed by Ms.Usha Jain and Ms.Pooja Jain within one week from today. On filing of the said affidavits, order dated 27.02.2019 is modified to the extent that defendants No. 2 and 3 can execute necessary documents for creation of security charge in favour of Kotak Mahindra Bank in respect of the two properties, namely, 229, Okhla Industrial Estate, Phase-III, New Delhi and and F-89, Okhla Industrial Estate, Phase- III, New Delhi.”

42. A bare perusal of the aforesaid order definitively demonstrates that the Coordinate Bench of this Court permitted the respondents no. 1 and 2 to execute necessary documents for creation of security charge with respect to the subject properties. This order does not leave any room for the suggestion that the respondents „wilfully disobeyed‟ the order of the Predecessor Bench passed on 14th November 2014. Evidently, before taking any steps towards the creation of charge, the respondents no. 1 and 2 took leave of the Court by way of filing the application seeking modification. Moreover, the credit facilities against the subject properties were extended in the name and for the survival of the business which suffered during the Pandemic by the respondents no. 1 and 2 in their entrepreneurial capacity and not in their personal capacity as the Legal Representatives of the deceased, Devender Kumar Jain, for their personal use or benefit.

43. The attention of this Court has been brought to the order dated 10th February 2022 passed in FAO (OS) No. 39/2021 preferred by the petitioner herein against the order dated 3rd September 2019. The order of the Division Bench of this Court while disposing of the appeal noted as under:

“3. Mr. Sethi, on instructions, states that the respondents would furnish an undertaking to the Court that the funds received from the bank would be utilised only, and only for the purpose of business, and for no other purpose. It certainly would be defrayed for any personal purposes of the said respondents, or any of their exclusive businesses. 4. Let an undertaking to this effect be filed before the learned Single Judge within two weeks. The said respondents shall also furnish every six monthly statement of account of businesses to show utilisation of the loans obtained in the name of the aforesaid two companies. 5. Mr. Malhotra states that the appellant is not interested in delaying the trial. In the light of the aforesaid, we are hopeful that the cross-examination of the appellant shall be concluded at the earliest, and preferably within the next two months. 6. The appeal stands disposed of in the aforesaid terms. All interim orders stand vacated.”

44. In the said appeal, on the first date of hearing, the Division Bench of this Court passed an interim order staying the operation of the order dated 3rd September 2021. Vide the aforesaid order dated 10th February 2022, which was passed by the Division Bench of this Court, the interim order, staying the operation of the order allowing modification, was vacated and the said order remains unchallenged. Therefore, the order certainly attained finality.

45. The creation of charge or extension of credit facilities by the respondents in the above facts and circumstances, cannot said to be an intentional or wilful derogation of the order passed by the Predecessor Bench of this Court on 14th November 2014, since post the passing of the said order, the matter has progressed significantly and several advancements have already taken place including the grant of permission by the Court to the respondents herein to create/extend the charges so sought.

CONCLUSION

46. The Hon‟ble Supreme Court several decades ago in the matter of M.R. Parashar v. Farooq Abdullah, (1984) 2 SCC 343, observed that „The reluctance of courts to resort to the provisions of the Contempt to Courts Act springs from their regard for the rule of law.‟, which holds to be the practice till date considering the greater picture which is involved in a litigation. While the contempt law was originally introduced to maintain the dignity, integrity and of the Court, it is often found to have become another tool of delaying a litigation in the recent past, despite the fact that the Hon‟ble Supreme Court has time and again taken a liberal view with respect to civil contempt cases and has stated that only in the cases where there is a clear violation of the court‟s order and where the disobedience or breach, if any, is wilful, the contempt proceedings may succeed. The tests for initiating contempt proceedings against a party have several riders and conditions which shall be conclusively satisfied to get an order against the alleged contemnor.

47. In the instant case, as stated in the foregoing paragraphs, the matter is to be seen in its entirety, including the directions, observations and decisions of the Coordinate, Predecessor and Division Benches of this Court as well as the peculiar advancements in the matter itself. Hence, even while adjudicating the instant contempt, this Court shall not limit itself to the order dated 14th November 2014, while ignoring the subsequent developments, but shall consider the interpretation given by the Hon‟ble Supreme Court, the other orders passed by this Court as well as intervening facts and circumstances.

48. Therefore, in view of the aforesaid discussion, the facts, circumstances, contentions raised and arguments advances as well as the law laid down, this Court is of the view that there is nothing to show that the respondents/contemnors have done anything to intentionally disobey the orders of the Court. Instead, the respondents have followed the due process to obtain the orders as sought to extend the credit facilities to not only protect the estate of Devender Kumar Jain but expand the business of the companies LWIPL and LIPL. The orders of the Coordinate Benches passed subsequently substantiate the objections raised on behalf of the respondents.

49. Since the petitioner has failed to show that there is a wilful disobedience on the part of the respondents towards the orders of this Court, specifically the order dated 14th November 2014, this Court is not inclined to grant the prayer as sought on behalf of the petitioner for initiating contempt proceedings against the respondents.

50. Therefore, the instant petition being devoid of merit is dismissed along with pending applications, if any.

51. It is made clear that the observations made hereinabove are for the limited purposes of adjudication of the instant contempt proceedings and shall not considered as an opinion on the merits of the other cases pending between the parties.

52. The judgment be uploaded on the website forthwith.

JUDGE JULY 11, 2023 gs/ms