Indus Towers Limited v. Quadrant Televentures Limited

v. A.V. Papayya Sastry & Ors. v. Govt. of A.P. & Ors., vi. Dalip Singh v. State of Uttar Pradesh & Ors., (2010) 2 SCC 114 vii. Kanwar Singh Saini v. High Court of Delhi, (2012) 4 SCC 307 viii. State of J& K v Mohd.Yaqoob Khan & Ors.. (1992) 4 SCC 167

12. It is submitted that there has never been any deliberate or intentional non-compliance of the aforesaid order by the Respondents. Respondent No. 1 has not committed any deliberate or willful breach and/or disobedience of the aforesaid order. When the order dated 18.08.2017 came to the knowledge of the Respondents, it then filed an application under Order XXXIX Rule 4 being I.A. No. 14289/2017 inter alia seeking vacation of the said order because the said order was obtained by misrepresentation and suppression of material facts by the Petitioner.

13. It is further submitted that the directions passed in the interim order dated 18.08.2017 has merged with the directions passed by the Arbitrator in its interim order dated 31.08.2018 in arbitration between the parties and therefore, ceased to exist. The Respondents filed an appeal against the said order dated 31.08.2018 before this Court, which is still pending before this Court. Thus, in view of the pendency of appeal against the order dated 31.08.2018, it is submitted that this Court should not proceed with the contempt.

14. Heard learned counsels for the parties and perused the record.

15. It is pertinent to peruse the statutory provisions and the precedents on the law of contempt.

16. Contempt of court can be characterised either as civil or criminal. Any wilful disobedience of a court order to do or abstain from doing any act is a civil contempt. Civil contempt arises when the power of the court is invoked or exercised to enforce obedience to court orders. The Contempt of Courts Act, 1971, is a comprehensive law circling around the offence of contempt, of both civil and criminal nature. In the instant matter, the petitioners have alleged civil contempt against the respondents, which is defined under the Act as follows:-

17. A bare reading of the provision reveals that preconditions to the offence of civil contempt are that there is a judgment, order or decree of a Court in existence and there is disobedience to such judgment, which is wilful.

18. In the case of R.N. Dey v. Bhagyabati Pramanik (2000) 4 SCC 400, the Hon‟ble Supreme Court expounded in para 7 as follows: „7. We may reiterate that the weapon of contempt is not to be used in abundance or misused. Normally, it cannot be used for execution of the decree or implementation of an order for which alternative remedy in law is provided for. Discretion given to the court is to be exercised for maintenance of the court's dignity and majesty of law. Further, an aggrieved party has no right to insist that the court should exercise such jurisdiction as contempt is between a contemner and the court. It is true that in the present case, the High Court has kept the matter pending and has ordered that it should be heard along with the first appeal. But, at the same time, it is to be noticed that under the coercion of contempt proceeding, the appellants cannot be directed to pay the compensation amount which they are disputing by asserting that claimants were not the owners of the property in question and that decree was obtained by suppressing the material fact and by fraud. Even presuming that the claimants are entitled to recover the amount of compensation as awarded by the trial court as no stay order is granted by the High Court, at the most they are entitled to recover the same by executing the said award wherein the State can or may contend that the award is a nullity. In such a situation, as there was no wilful or deliberate disobedience of the order, the initiation of contempt proceedings was wholly unjustified.‟

19. The Hon‟ble Supreme Court in Jhareswar Prasad Paul v. Tarak Nath Ganguly (2002) 5 SCC 352, in para 11, opined as under: „11. … The court exercising contempt jurisdiction is not entitled to enter into questions which have not been dealt with and decided in the judgment or order, violation of which is alleged by the applicant. The court has to consider the direction issued in the judgment or order and not to consider the question as to what the judgment or order should have contained. At the cost of repetition, be it stated here that the court exercising contempt jurisdiction is primarily concerned with the question of contumacious conduct of the party, which is alleged to have committed deliberate default in complying with the directions in the judgment or order. If the judgment or order does not contain any specific direction regarding a matter or if there is any ambiguity in the directions issued therein then it will be better to direct the parties to approach the court which disposed of the matter for clarification of the order instead of the court exercising contempt jurisdiction taking upon itself the power to decide the original proceeding in a manner not dealt with by the court passing the judgment or order. If this limitation is borne in mind then criticisms which are sometimes levelled against the courts exercising contempt of court jurisdiction “that it has exceeded its powers in granting substantive relief and issuing a direction regarding the same without proper adjudication of the dispute” in its entirety can be avoided. This will also avoid multiplicity of proceedings because the party which is prejudicially affected by the judgment or order passed in the contempt proceeding and granting relief and issuing fresh directions is likely to challenge that order and that may give rise to another round of litigation arising from a proceeding which is intended to maintain the majesty and image of courts.‟

20. The Hon‟ble Supreme Court in Dinesh Kumar Gupta vs. United India Insurance Co. Ltd., (2010) 12 SCC 770 has reiterated the requisites of the civil contempt and held as reproduced hereunder:-

21. In Ram Kishan vs. Tarun Bajaj, (2014) 16 SCC 204, the Hon‟ble Supreme Court has given an expansive interpretation to what amounts to „wilful disobedience‟ and has observed as under:- “11. The contempt jurisdiction conferred on to the law courts power to punish an offender for his wilful disobedience/contumacious conduct or obstruction to the majesty of law, for the reason that respect and authority commanded by the courts of law are the greatest guarantee to an ordinary citizen that his rights shall be protected and the entire democratic fabric of the society will crumble down if the respect of the judiciary is undermined. Undoubtedly, the contempt jurisdiction is a powerful weapon in the hands of the courts of law but that by itself operates as a string of caution and unless, thus, otherwise satisfied beyond reasonable doubt, it would neither be fair nor reasonable for the law courts to exercise jurisdiction under the Act. The proceedings are quasicriminal in nature, and therefore, standard of proof required in these proceedings is beyond all reasonable doubt. It would rather be hazardous to impose sentence for contempt on the authorities in exercise of the contempt jurisdiction on mere probabilities. (Vide V.G. Nigam v. Kedar Nath Gupta [V.G. Nigam v. Kedar Nath Gupta, (1992) 4 SCC 697: 1993 SCC (L&S) 202], Chhotu Ram v. Urvashi Gulati [Chhotu Ram v. Urvashi Gulati, (2001) 7 SCC 530: 2001 SCC (L&S) 1196], Anil Ratan Sarkar v. Hirak Ghosh [Anil Ratan Sarkar v. Hirak Ghosh, (2002) 4 SCC 21], Bank of Baroda v. Sadruddin Hasan Daya [Bank of Baroda v. Sadruddin Hasan Daya, (2004) 1 SCC 360], Sahdeo v. State of U.P. [Sahdeo v. State of U.P., (2010) 3 SCC 705: (2010) 2 SCC (Cri) 451] and National Fertilizers Ltd. v. Tuncay Alankus [National Fertilizers Ltd. v. Tuncay Alankus, (2013) 9 SCC 600: (2013) 4 SCC (Civ) 481: (2014) 1 SCC (Cri) 172].)

12. Thus, in order to punish a contemnor, it has to be established that disobedience of the order is “wilful”. The word “wilful” introduces a mental element and hence, requires looking into the mind of a person/contemnor by gauging his actions, which is an indication of one's state of mind. “Wilful” means knowingly intentional, conscious, calculated and deliberate with full knowledge of consequences flowing therefrom. It excludes casual, accidental, bona fide or unintentional acts or genuine inability. Wilful acts does not encompass involuntarily or negligent actions. The act has to be done with a “bad purpose or without justifiable excuse or stubbornly, obstinately or perversely”. Wilful act is to be distinguished from an act done carelessly, thoughtlessly, heedlessly or inadvertently. It does not include any act done negligently or involuntarily. The deliberate conduct of a person means that he knows what he is doing and intends to do the same. Therefore, there has to be a calculated action with evil motive on his part. Even if there is a disobedience of an order, 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 contemnor cannot be punished. “Committal or sequestration will not be ordered unless contempt involves a degree of default or misconduct. ***

15. It is well-settled principle of law that if two interpretations are possible, and if the action is not contumacious, a contempt proceeding would not be maintainable. The effect and purport of the order is to be taken into consideration and the same must be read in its entirety. Therefore, the element of willingness is an indispensable requirement to bring home the charge within the meaning of the Act. [See Sushila Raje Holkar v. Anil Kak [Sushila Raje Holkar v. Anil Kak, (2008) 14 SCC 392: (2009) 2 SCC (L&S) 497] and Three Cheers Entertainment (P) Ltd. v. CESC Ltd. [Three Cheers Entertainment (P) Ltd. v. CESC Ltd., (2008) 16 SCC 592] ]

22. Further, in U.N. Bora v. Assam Roller Flour Mills Association and Anr, (2022) 1 SCC 101, Hon‟ble Supreme Court was of the opinion as has been reproduced under: “8. …. The Contempt of Courts Act, 1971 explains a civil contempt to mean a wilful disobedience of a decision of the Court. Therefore, what is relevant is the “wilful” disobedience. Knowledge acquires substantial importance qua a contempt order. Merely because a subordinate official acted in disregard of an order passed by the Court, a liability cannot be fastened on a higher official in the absence of knowledge. When two views are possible, the element of wilfulness vanishes as it involves a mental element…

23. As goes the popular saying – with great power comes great responsibility. As discussed in the aforesaid paragraphs, the contempt jurisdiction is a powerful weapon in the hands of the courts of law and thus must be exercise sparingly and with a note of caution and unless otherwise satisfied beyond reasonable doubt, it would neither be fair nor reasonable for the law courts to exercise jurisdiction under the Act.

24. Therefore, it is a settled law that the knowledge of the order acquires substantial importance qua a contempt order. The element of willingness is an indispensable requirement to bring home the charge of contempt. It must be a deliberate, conscious and intentional act. When two views are possible, the element of willfulness vanishes as it involves a mental element. What is thus required is a proof beyond reasonable doubt since the proceedings are quasi-criminal in nature.

25. Having dealt with the scope and extent of the contempt provisions, it is now pertinent to apply the law to the facts of the case.

26. What is required for holding a person guilty of civil contempt is the factum of wilful disobedience of a decision of the Court. Therefore, what is relevant to be seen is firstly, whether there was disobedience, and secondly whether the said act of disobedience is “wilful”. In order to exercise its power to punish the contemnor the court has to be satisfied beyond reasonable doubt that the contemnor has willfully, deliberately and intentionally violated the court's order. If the disobedience is result of some compelling circumstances, then the Court may not punish the contemnor.

27. This Court vide its order dated 18.08.2017 passed ad interim directions against the Respondents directing them to secure the Petitioner either by way of a bank guarantee or by offering an appropriate immovable property encumbrance free to the extent of Rs. 14 crores before the next date of hearing in the matter i.e. 04.12.2017.

28. Respondent No. 1 upon becoming aware about the order dated 18.08.2017, filed an application under Order XXXIX Rule 4 being I.A. No. 14289/2017 inter alia seeking vacation of the said order on the ground that the said order was obtained by misrepresentation and material suppression of important facts by the Petitioner. This Court while granting time to the Petitioner to file reply to the said petition, appointed an arbitrator to adjudicate the dispute qua the parties.

29. In the interregnum, the instant contempt petition was filed by the Petitioner. Subsequently, the Petition under Section 9 of Act was transferred to the Arbitrator with directions to treat the said petition as an application under Section 17 of the Arbitration Act. Arbitrator did not vary the order dated 18.08.2017 except for reducing the amount of security from Rs. 14 Crores to Rs. 13 Crores. It is the Respondents‟ case that the directions passed in the interim order dated 18.08.2017 have merged with the directions passed by the Arbitrator in its interim order dated 31.08.2018 in arbitration between the parties.

30. The Respondents have filed appeal against the said order dated 31.08.2018 before this Court. During the pendency of the present petition, the Arbitrator has passed the Award dated 12.06.2019 in favour of the Petitioner. The Respondent has filed a petition under Section 34 to challenge the Award and the Petitioner has filed execution proceedings qua the same.

31. Besides the question of unpaid invoices, the Petitioner had also claimed Exit Amount from the Respondent for an amount of Rs. 50,13,29,759/-. In respect of the said claim for Exit Amount, the Petitioner has also assailed the said award on the ground that the Ld. Arbitrator has passed an incomplete and erroneous award.

32. It has also been submitted that an order obtained by material suppression of facts amounts to fraud and is non-est in the eyes of law. It has been stated by the Respondents that the said order has been obtained by active concealment of material facts on behalf of the Petitioner. The said being disputed questions of fact that fall outside the purview of the contempt proceedings need not be adjudicated in the instant petition. This Court thus leaves it open to the parties to pursue their respective claim as levelled herein in appropriate proceedings as may be permissible in law.

33. In any case, while dealing with a contempt petition, the Court is not expected to conduct a roving inquiry and go beyond the very judgment which was allegedly violated. The said principle has to be applied with more vigour when disputed questions of facts are involved. The element of intention is an undisputedly essential ingredient for commission of a civil contempt of an order of the Court. Therefore, in view of the disputed questions qua the proceedings, it cannot be concluded beyond reasonable doubt that the Respondent No. 1 has committed deliberate or willful breach or disobedience of the aforesaid order. It is also a matter of fact that much water has flown under the bridge since the interim order against which the contempt has been sought was sought to be vacated and the same was transferred by this Court to the arbitrator and was disposed of by making an alteration to the security amount. Subsequently, the arbitrator passed the final award which again has been challenged by the parties.

34. It is also an undisputed fact that the Respondents by way of their submissions, both written and oral, have tendered an unconditional apology. The learned counsel has also placed on record Respondents‟ highest respect and regards for the courts of law and undertakes that the Respondents shall abide and duly follow the law of the land and any order(s) passed by the courts of law. In any case, the contempt proceedings are between the Court and the alleged contemnor, and the role of the person bringing the same to the notice of the Court is that of an informant.

35. In view of the aforesaid and the reasons as delineated therein, it is evident that there is no purpose to continue with the contempt proceedings.

36. Accordingly, the instant petition stands dismissed. OMP (I) (COMM) 303/2017

1. Learned counsel for the petitioner prayed that the instant petition be dismissed as being rendered infructuous. Learned counsel for the respondent states that there is no objection to the same.

2. On the basis of the request made, the petition is dismissed as infructutous. The order be uploaded on the website forthwith.