TMI Blog2001 (8) TMI 1239X X X X Extracts X X X X X X X X Extracts X X X X ..... arding the correct interpretation of section 20 it follows that the action taken by the special court to punish the appellant for contempt was valid. The special court has only faulted in being unduly lenient in awarding the sentence. We do not think it is necessary, under the circumstances to examine the finding of the special court that this was a continuing wrong or contempt and, therefore, action for contempt was not barred by section 20. - CIVIL APPEAL NOS. 2106-2107 OF 2001 - - - Dated:- 10-8-2001 - B.N. KIRPAL, MRS. RUMA PAL AND BRIJESH KUMAR, JJ. K.K. Venugopal, Dinesh Purandare, Vinod Bobde, R.N. Karanjawala Gopal Jain, Ms. Avantika Keswani, Manik Karanjawala, Nandini Gore, Reshma Ruparrel, Kovin Gulati, Ruby Singh Ahuja, Shiraz Rustomjee, Gourav Joshi and A. Subba Rao for the Appearing Parties. JUDGMENT Kirpal, J. - These appeals by special leave are against the judgment of the Special Court constituted under the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 ( the Special Court Act ) whereby the Appellant has been held to have committed civil contempt as defined under section 2( b ) of the Contempt of Courts Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d these companies were to receive substantial amounts from other companies/individuals. 6. It was also stated by the Income-tax Department that Pallav Sheth had admitted that profits were earned from the activities of these companies in buying and selling of shares and bogus transactions of bill discountings were entered into to show loss, in order to offset the profits, and these monies were actually returned by cash and found their way into the bank accounts. 7. The Custodian then on 18-6-1998 filed Miscellaneous Application No. 276 of 1998 before the Special Court with a prayer that Pallav Sheth should be punished for committing contempt of the Special Court s order dated 24-8-1994 as despite the said order he had set up benami companies and had transferred and/or alienated his property including cash inter alia with a view to defeat the decree passed against him. Though Pallav Sheth in his reply denied that the said five companies were his benami companies the Special Court directed issuance of the show-cause notice to punish Pallav Sheth for contempt. It appears that Pallav Sheth filed an affidavit on 23-7-1999 to the effect that various statements made by him before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. It is clear from the said provision that the Special Court which is established under section 5 of the Special Court Act and has to consist of one or more sitting Judges of the High Court has the same power as the High Court in respect of contempt of itself. This power could be exercised in addition to the exercise of power under the provisions of the Contempt of Courts Act. The implication of this clearly is that just as the High Court, being a Court of record, has the power under article 215 of the Constitution of India to punish for contempt of itself similarly, the Special Court consisting of a judge of the High Court can also exercise that power available under article 215. 10. On behalf of the Custodian, it was contended by Mr. Rustomjee that the power under article 215 cannot be curbed or curtailed by section 20 of the Contempt of Courts Act, 1971. He submitted that the power of High Court to commit for contempt of itself contained in article 215 cannot be abrogated, stultified or restricted by any other statutory provision including the Contempt of Courts Act, 1971. He contended that section 20 can, at best, be regarded as providing for a period of limitation but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d corresponds to the present section 20 of the Contempt of Courts Act, 1971. The Joint Committee Report in respect of this clause 20 opined as follows : "The Committee are of the opinion that contempt procedures by their very nature should be initiated and dealt with as early as possible. It was brought to the notice of the Committee that in some cases contempt proceedings had been initiated long after the alleged contempt had taken place. The Committee therefore consider it necessary and desirable that a period of limitation should be specified in respect of actions for contempt and have accordingly laid down in the new clause a period of one year at the expiration of which no proceedings for contempt should be initiated." 13. The Sanyal Committee s recommendation, which had formed the basis of the Contempt of Courts Bill that was referred to the Joint Select Committee, had not contained any provision of limitation in relation to taking any action for the contempt of courts, but after the report of the Joint Select Committee a new clause was added which resulted in the incorporation of section 20. 14. The Contempt of Courts Act, was enacted, as per the Preamble, with a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tended in the present case, Mr. Rustomjee submitted that the constitutional power contained under article 215 could not in any way be stultified or curtailed by any Act of Parliament including section 20. 17. It will be appropriate to refer to some of the decisions which have a bearing on the point in issue in the present case. 18. In Sukhdev Singh Sodhi v. Chief Justice Judges of the Pepsu High Court [1954] SCR 454 this Court was concerned with the issue whether this Court could transfer contempt proceedings from the Pepsu High Court to any other High Court. For transfer reliance had been placed on section 527 of the Code of Criminal Procedure. While holding that section 527 did not apply in case where a High Court has initiated proceedings for contempt of itself, it was held that even the Contempt of Courts Act, 1952 recognised the existence of a right to punish for contempt in every High Court and this right is vested in it in the High Court by the Constitution. This Court referred to article 215 and observed that so far as contempt of High Court itself is concerned, the Constitution vests this right in every High Court and no Act of a Legislature could take away t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nature of obiter dicta and not binding on this Court in the present case. In any case, Baradakanta Mishra s case ( supra ) decision does not specifically deal with the question as to when or how proceedings for contempt are initiated for the purposes of section 20 and nor has it considered the applicability of the provisions of the Limitation Act, to which we shall presently refer. 19. In Firm Ganpat Ram Rajkumar v. Kalu Ram [1989] Supp. 1 SCR 223 where an order of this Court ordering delivering of premises had not been complied with, an application was filed for initiation of contempt proceedings. A contention was raised on behalf of the alleged condemner based on section 20. Dealing with this contention, this Court observed as follows : "Another point was taken about limitation of this application under section 20 of the Act. Section 20 states that no court shall initiate any proceedings for contempt, either on its own motion or otherwise, after the expiry of a period of one year from the date on which the contempt is alleged to have been committed. In this case, the present application was filed on or about 3-11-1988 as appears from the affidavit in support of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7, 8 and 9 specify matters which do not amount to contempt and the defence which may be taken. Section 10 relates to the power of High Court to punish for contempt of subordinate courts. Section 10 like section 2 of 1926 Act and section 3 of 1952 Act reiterates and reaffirms the jurisdiction and power of a High Court in respect of its own contempt and of subordinate courts. The Act does not confer any new jurisdiction instead it reaffirms the High Court s power and jurisdiction for taking action for the contempt of itself as well as of it subordinate courts. . . ." 23. The view in Delhi Judicial Service Association Tis Hazari Court s case ( supra ) was reiterated and reaffirmed in the case of In re : Vinay Chandra Mishra [1995] 2 SCC 584 and it was held that the amplitude and power of this Court to punish for contempt could not be curtailed by the law made by the Parliament or State Legislature. As observed in ITAT v. V.K. Agarwal [1999] 1 SCC 16 at page 25 that the judgment in Vinay Chandra Mishra s case ( supra ) was partially set aside in Supreme Court Bar Association v. Union of India [1998] 4 SCC 409 on the question of power to suspend an advocate s licence u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the power of this Court in respect of investigation or punishment of any contempt including contempt of itself, is expressly made subject to the provisions of any law made in this behalf by Parliament by Article 142(2). However, the power to punish for contempt being inherent in a court of record, it follows that no Act of Parliament can take away that inherent jurisdiction of the court of record to punish for contempt and Parliament s power of legislation on the subject cannot, therefore, be so exercised as to stultify the status and dignity of the Supreme Court and/or the High Courts, though such a legislation may serve as a guide for the determination of the nature of punishment which this Court may impose in the case of established contempt. Parliament has not enacted any law dealing with the powers of the Supreme Court with regard to investigation and punishment of contempt of itself, (we shall refer to section 15 of the Contempt of Courts Act, 1971, later on) and this Court, therefore, exercises the power to investigate and punish for contempt of itself by virtue of the powers vested in it under articles 129 and 142(2) of the Constitution of India." "24. Thus, under the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n that case an undertaking had been given before the High Court on 19-12-1986 that the Municipal Corporation would nor demolish or disturb a construction till disposal of the write petition. Despite this undertaking, demolition took place on 11-1-1987. Soon thereafter the Appellant filed an application before the High Court seeking the initiation of proceedings under section 12 of the Contempt of Courts Act, 1971. On 15-1-1987 the High Court issued a show-cause notice to the opposite party as to why contempt proceedings should not be initiated against him for defiance of the Court s order dated 19-12-1986. On 6-1-1988, on a concession being made by the Advocate-General, the High Court ordered that notices be issued to show-cause why the opposite party be not punished for disobeying the order dated 19-12-1986. Subsequently, on 23-11-1989 the High Court came to the conclusion that issuing of a show-cause notice did not amount to initiation of proceedings and, therefore, the bar enacted by section 20 was attracted and the application was liable to be rejected. This Court had to consider whether the order of 6-1-1988 amounted to initiation of proceedings for contempt. Dealing with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he court has formed an opinion that a prima facie case for initiating proceedings for contempt is made out and that the respondents or the alleged condemners should be called upon to show cause why they should not be punished; then the court can be said to have initiated proceedings for contempt. It is the result of a conscious application of the mind of the court to the facts and the material before it. Such initiation of proceedings for contempt based on application of mind by the court to the facts of the case and the material before it must take place within a period of one year from the date on which the contempt is alleged to have been committed failing which the jurisdiction to initiate any proceedings for contempt is lost. The heading of section 20 is limitation for actions for contempt . Strictly speaking, this section does not provide limitation in the sense in which the term is understood in the Limitation Act. Section 5 of the Limitation Act also does not, therefore, apply. Section 20 strikes at the jurisdiction of the court to initiate any proceedings for contempt." (p. 177) 29. It was contended by Mr. Venugopal that section 20 was mandatory and it imposes a pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strued harmoniously. 32. The Contempt of Courts Act, 1971 inter alia provides for what is not to be regarded as contempt; it specifies in section 12 the maximum punishment which can be imposed; procedure to be followed where contempt is in the face of the Supreme Court or in the High Court or cognizance of criminal contempt in other cases is provided by sections 14 and 15; the procedure to be followed after taking cognizance is provided by section 17; section 18 provides that in every case of criminal contempt under section 15 the same shall be heard and determined by a Bench of not less than two Judges; section 19 gives the right of appeal from any order or decision of High Court in the exercise of its jurisdiction to punish for contempt. There is no challenge to the validity of any of the provisions of the Contempt of Courts Act as being violative or in conflict with any provisions of the Constitution. Barring observations of this Court in the Supreme Court Bar Association s case ( supra ), where it did not express any opinion on the question whether maximum punishment fixed by the 1971 Act was binding on the Court, no doubt has been expressed about the validity of any pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vision similar to section 20. It is only the Joint Parliamentary Committee which recommended the insertion of clause 20 so as to provide for a period of limitation. There can be little doubt that section 20, as framed, is not happily worded. The heading of the section, however, indicates what it was to provide for Limitation for actions for contempt . The wording of the section are negative but it is clear that terminus ad quem is the initiation of proceedings for contempt. The question that arise as to how or when are the proceedings for contempt initiated. 35. In Webster s Third New International Dictionary the word initiate has inter alia been defined thus : "to begin or set going : make a beginning of : perform or facilitate the first actions, steps, or stages of" In Shorter Oxford English Dictionary the word initiate is defined as : "to begin, commence, enter upon, to introduce, set going, originates" 36. Under section 23 power has been given to this Court and to the High Courts to make rules not inconsistent with the provisions of the Act providing for any matter relating to its procedure. Our attention has been drawn to Rules framed under section 23 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a motion made by the Advocate-General or the Law Officer of the Central Government in the case of Union Territory. This reference or motion can conceivably commence on an application being filed by a person whereupon the subordinate court or the Advocate-General if it is so satisfied may refer the matter to the High Court. Proceedings for civil contempt normally commence with a person aggrieved bringing to the notice of the Court the wilful disobedience of any judgment, decree, order, etc. which could amount to the commission of the offence. The attention of the Court is drawn to such a contempt being committed only by a person filing an application in that behalf. In other words, unless a Court was to take a suo motu action, the proceeding under the Contempt of Courts Act, would normally commence with the filing of an application drawing to the attention of the Court to the contempt having been committed. When the judicial procedure requires an application being filed either before the Court or consent being sought by a person from the Advocate-General or a law officer it must logically follow that proceeding for contempt are initiated when the applications are made. 39. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld perpetrate injustice. A provision like section 20 has to be interpreted having regard to the realities of the situation. For instance, in a case where a contempt of a subordinate court is committed a report is prepared whether on an application to Court or otherwise, and reference made by the subordinate court to he High Court. It is only thereafter that a High Court can take further action under section 15. In the process, more often than not, a period of one year elapses. If the interpretation of section 20 put in Om Prakash Jaiswal s case ( supra ) is correct, it would mean that notwithstanding both the subordinate court and the High Court being prima facie satisfied that contempt has been committed the High Court would become powerless to take any action. On the other hand, if the filing of an application before the subordinate court or the High Court making of a reference by a subordinate court on its own motion on the filing an application before an Advocate-General for permission to initiate contempt proceedings is regarded as initiation by the Court for the purposes of section 20, then such an interpretation would not impinge on or stultify the power of the High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n proceeded to observe in paras 13 and 19 as follows : "13. Once that is so, one must now proceed to analyse and construe section 20 independently. A plain reading thereof would indicate that the legislature drew a clear line of distinction betwixt proceedings for contempt initiated by the Court on its own motion, and those not so done. Suo motu action by the High Court is thus clearly a class by itself. Consequently the statute in express terms refers to these two classes separately, namely, any proceedings for contempt on Court s own motion, and proceedings for contempt initiated "otherwise". The use of the word otherwise is significant and indeed provides the clue to be the true interpretation of section 20. Therefore, initiation of contempt proceedings otherwise than one Court s own motion would include within its sweep a motion by the Advocate General, a reference by a subordinate Court to the High Court to take action for contempt and an application before the Advocate General seeking his consent by any other person under section 15 and lastly in cases of civil contempt the motion by a private litigant directly in the Court. "19. To finally conclude it must be held th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tinely only from a letter dated 5-5-1998 from the income-tax authorities. It is soon thereafter that on 18-6-1998 a petition was filed for initiating action in contempt and notice of issue by special court on 9-4-1999. Section 29(2) of the Limitation Act, 1963 provides where any special or local law prescribes for any suit, appeal or application a period of limitation different from the period prescribed by the Schedule, the provisions of section 3 shall apply as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by any special or local law, the provisions contained in sections 4 to 24 (inclusive) shall apply insofar as, and to the extent to which, they are not expressly excluded by such special or local law. This Court in the case of Kartick Chandra Das ( supra ) has held that by virtue of section 29(2), read with section 3 of the Limitation Act, limitation stands prescribed as a special law under section 19 of the Contempt of Courts Act, 1971 and in consequence thereof the provisions of sections 4 to 24 of the Limitation Act stands attracted. 46. Section 17, in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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