TMI Blog2008 (12) TMI 676X X X X Extracts X X X X X X X X Extracts X X X X ..... ected that Annual General Meetings for the years 1996 to 2003 be held. Pursuant thereto meetings were held and some Directors were elected. 3. 24th December, 2004 was the date fixed for holding of 82nd Annual General Meeting. Appellant, however, filed a suit which was registered as C.S. No.981 of 2004 in the High Court of Judicature at Madras in its ordinary original civil jurisdiction. Indisputably proceedings in contempt in respect of an order relating to the said suit came up for consideration before this Court in Civil Appeal No.3034 of 2006 and by an order dated 12th July, 2006 the matter was remitted to the High Court for consideration thereof afresh, observing:- "In this view of the matter, we are of the opinion that the High Court cannot be said to have committed an error in holding that if a proceeding for contempt was not maintainable, no direction could have been issued therein. We are, however, of the opinion that in view of the order passed by the Division Bench and also for the views we have taken, it is necessary to pass a consequential order, namely, directing the learned Single Judge to consider the matter afresh. Learned Single Judge of the High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anyone concerned (counsel)." 6. Pursuant to or in furtherance of the said direction a meeting was held on 27th July, 2006. However, three items of Agenda, being item Nos. 3, 4 and 5 stood adjourned. Indisputably the said items of the Agenda read as under:- "3. To appoint a director in the place of Thiru P.H. Arvindh Pandian who retires by rotation and being eligible offers himself for reappointment. 4. To appoint a director in the place of Thiru A. Rajagopalan who retires by rotation.. 5. To appoint a director in the place of Thiru P. Prem Vetty who retires by rotation." 7. Standard Chartered Bank, Mumbai, acting as an agent of some of their clients/investors filed applications for transfer of 95,418 (Ninety five thousand four hundred and eighteen) shares. A letter dated 30th March, 2007 issued by the Reserve Bank of India relating thereto was also placed in the meeting. A Resolution was passed by the Board of Directors on 13 th May, 2007 resolving to transfer the said shares. 8. In the meantime 85th Annual General Meeting also fell due. 9. The Bank filed OA No.23 of 2007 seeking suitable directions as regards holding of the 84th Annual Genera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld under the Chairmanship of Justice R. Balasubramaniam on 5th June, 2008. Thereto before, he met all the shareholders who desired to make representations on the mode and manner for conducting the Annual General Meeting on 1st June, 2008. Appellant did not submit any petition on that date. It did so, however, at a later stage. 13. Appellant filed an O.A. No.621 of 2008 in C.S. No. 481 of 2008 seeking for an order of injunction restraining holding of election of the Directors alone. The matter was placed before the Court on 3rd June, 2008 when an adjournment was taken and the application was posted for 9th June, 2008. In the meantime Annual General Meeting was held on 5th June, 2008. 14. Appellant preferred an intra court appeal against the order dated 29 th April, 2008. The Division Bench while observing that the order dated 29 th April, 2009 sufficiently protected the interest of the appellant, dismissed the same. 15. Some other proceedings were also initiated with which we are not concerned. 16. On or about 10th June, 2008 Contempt Petition, being C.P. No.508 of 2008 was filed. Managing Director of the Bank, Shri G. Narayanamurthy, was alone made a party-contemnor. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d for hearing on 21st July, 2008. 21. However, Shri T. Rajakumar withdrew the said application and preferred an intra court appeal. Shri S.C. Sekhar, who is also said to have been elected in the said Annual General Meetings dated 5th June, 2008 also preferred an intra court appeal. Both the appeals were preferred under Section 19(1) of the Contempt of Courts Act, 1971. A question as regards maintainability of said appeal was raised. A Division Bench of the High Court by reason of the impugned order answered the same in the affirmative, stating:- " We have gone through the said provision. Prima facie we are of the considered view that only when some orders adversely affecting any person, who makes a claim that he is intending to prefer an appeal, this court in exercise of the power under the provisions to sub section (3) of Section 19 of the CC Act, 1971 may suspend such an order. We have found that the contempt appellants are the persons aggrieved by the order of the learned Single Judge of this court and this court has only on prima facie consideration held that the contempt appeals are maintainable and the rights of the respondents to canvas their arguments either in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis that the convening of the Annual General Meeting was in violation of the order passed on 26.7.2006, in O.A. Nos. 597, 598 and 599 of 2006 in C.S. No. 981 of 2004." 24. Taking notice of the earlier order of the court dated 26th July, 2006 interms whereof the erstwhile Directors were directed to continue in the office and to maintain status quo until further orders of the court and furthermore taking notice of the fact that in the meantime Annual General Meetings had already been held wherein resolution had been passed electing the Directors and that the appellants having failed to obtain any interim order either in the present suit or in the previous suit C.S. No.981 of 2004 and after having allowed the meetings to go on, the first plaintiff has adopted a dubious method of moving a Contempt Petition and getting an interim order of injunction on 20.6.2008 contrary to the statement made across the Bar on 16.6.2008 amounted to an abuse of the process of the Court, observed:- "The interim injunction which the first plaintiff has now obtained on 20.6.2008 in the Contempt Petition is the very same injunction which the plaintiffs have prayed for in the present suit and failed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of injunction merely because only one of the appellants had moved the contempt petition and not the other and therefore, the other appellant was entitled to a fair hearing is something that deserves to be rejected. In fact, it may not be by chance but by design that only one of the appellants chose to file the contempt petition and therefore, to grant any indulgence on this score would be indirectly rewarding the persons who have come to court with unclean hands. In the result, we hold that on the ground of prima facie case and on grounds of equity, the appellants are not entitled to injunction and therefore, the dismissal of the applications by the learned single Judge deserves to be confirmed." 27. Mr. T.R. Andhyarujina, learned senior counsel appearing on behalf of the appellant has raised the following three principal contentions before us. (i) An appeal under Section 19(1) of the Contempt of Courts Act, 1977 was not maintainable against an ad interim order of injunction. (ii) The ad interim order of injunction dated 20th June, 2008 does not satisfy the test of a `judgment' as has been held by this Court in Shah Babulal Khimji v. Jayaben D. Kania, [ (1981) 4 SCC 8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te their office. 30. Indisputably the Annual General Meetings could not be held continuously for three years for one reason or the other. Pursuant to the order of the learned Single Judge dated 26th July,2006, 83rd Annual General Meeting was held in respect of item Nos. 1, 2 and 6 and the same was adjourned in respect of agenda items i.e. Nos. 3 to 5. 31. Indisputably when an adjourned meeting was to be conducted, it must be for the adjourned agenda, i.e., item Nos. 3 to 5. Appellant knew thereabout. It not only filed an application for injunction but also raised objections before the Chairman appointed by the Court in terms of the order dated 27th March, 2008. Reports of the Chairman show that consultative process had been taken recourse to. 32. Appellant had participated in the election. The three reports submitted by the Chairman in sealed covers were read over and opened by the learned Judge, copies whereof were also handed over to the parties. It is in that situation a limited order of injunction, namely that no effect to the said Resolution be given, was passed on 29th April, 2008. 33. Although at one point of time contentions had been raised before us that election ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he orders of this Hon'ble Court dated 2.6.7.2006 in O.A. No. 597 - 599 of 2006 in C.S. No. 081 of 2004 and is liable to be punished or contempt." The prayer made in the said application contained in the affidavit reads :- "It is therefore prayed that this Hon'ble Court may be pleased to declare the election of directors held at the 83rd , 8th and 85th Annual General Meeting as null and void as the sasme is contrary to the orders of this Hon'ble Court dated 26.7.2006 in O.A. No. 597 of 2006 in C.S. No. 981 of 2004 and pass any orders or further orders as this Hon'ble Court may deem fit and proper in the facts and circumstances of the case and thus render justice." 37. Action of the court was not sought for against Mr. Justice R. Balasubramaniam who acted as an officer of the court. The Directors representing the Reserve Bank of India were not made parties in the contempt petition. Full disclosure as regards the subsequent proceedings was not made therein. The contempt petition was taken up by a learned Judge who was not acquainted with the fact of the matter. The question is as to whether in such a situation the purported ad interim order passed by the learned Single Judge i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nable by 21.07.2008 be served on the respondents herein; and 3. That the Sub Application No. 163 of 2008 be posed on 21.07.2008." 40. The suit related to 83rd Annual General Meeting. The contempt application related to election of Directors of the Bank at the 83rd, 84th and 85th Annual General Meetings. Although the sub-application was directed to be posted for 23rd July, 2008 the order of injunction was not limited to that date. It was directed to continue till disposal of the contempt application; though it was stated earlier that the ad interim injunction was till 21.7.2008. It does not contain any reason. There is no finding as regards existence of a prima facie case. There is no finding that G. Narayanmoorthy had prima facie committed the contempt. The order is not a speaking one. Ordinarily a direction cannot be issued in contempt proceedings without arriving at a finding as to how the Managing Director of the Bank can be said to have flouted the order. In Municipal Corpn., Jabalpur v. Om Prakash Dubey, [(2007) 1 SCC 373 ], this Court held:- "21. We are in this case not called upon to consider the implication of the awards, which might have been passed in favour o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a notice has not been issued and thus the question of satisfying the court by showing cause that the contemnors/respondents had not committed any contempt did not arise. Allegations had not been made against the Chairman of the meeting. The contempt proceedings had been initiated only against the Managing Director of the Bank. 44. Although we need not go into the larger question of maintainability of the appeal in view of the fact that the matter has been referred to the Three Judge Bench in Dharam Singh v. Gulzari Lal and others (SLP (Civil) No. 18852 of 2005), but prima facie, in view of the decision of this Court in Purshottam Das (supra) there cannot be any doubt that in a situation where order has been passed adverse to the interest of the alleged contemnor an appeal would be maintainable particularly where a judgment has been passed by a court which is beyond its jurisdiction. 45. This aspect of the matter has also been considered in R.N. Dey v. Bhagyabati Pramanik, [ (2000) 4 SCC 400 ] wherein it was opined :- "In our view the aforesaid contention for the learned counsel for the respondents requires to be rejected on the ground that after receipt of the notice, offic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is to punish. When no punishment is imposed by the High Court, it is difficult to say that the High Court has exercised its jurisdiction or power as conferred on it by Article 215 of the Constitution. Punishment in our opinion is not confined only to detention of a person or imposition of fine. A direction to do a particular thing in a particular way would come within the purview of the said terminology. A statute has to be read reasonably. Effort must be made to give effect to every word employed therein. In any event curtailment of a right of appeal cannot be presumed." 48. A similar view had been taken in Ashis Chakraborty and others v. Hindustan Lever Sramik Karamchari Congress and others, [ 96 CWN 673 ], by the Calcutta High Court, stating :- " We are, however, not oblivious of the fact that Section 19(1) does not merely speak of an appeal lying only against punishment for contempt but uses the expression that an appeal lies from any 'order or decision' passed in exercise of the jurisdiction to punish for contempt. As regards the meaning of the expression "any order or decision" We understand a variety of orders and decisions that may be passed by a court in exerci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oop. Bank Ltd. v. Chunilal Nanda, [(2006) 5 SCC 399], opined as under : "If the High Court, for whatsoever reason, decides an issue or makes any direction, relating to the merits of the dispute between the parties, in a contempt proceedings, the aggrieved person is not without remedy. Such an order is open to challenge in an intra-court appeal (if the order was of a learned Single Judge and there is a provision for an intra-court appeal), or by seeking special leave to appeal under Article 136 of the Constitution of India (in other cases). XXX XXX XXX 15. Interim orders/interlocutory orders passed during the pendency of a case, fall under one or the other of the following categories : (i) to (iii) ... (iv) Routine orders which are passed to facilitate the progress of the case till its culmination in the final judgment. (v) Orders which may cause some inconvenience or some prejudice to a party, but which do not finally determine the rights and obligations of the parties." 50. Assuming that an appeal under Section 19 was technically not maintainable, having regard to the fact that the interim injunction was granted till disposal of the contempt application, in our opini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f a court of unlimited jurisdiction been held to fall in a category of court orders that can simply be ignored because they are void ipso facto without there being any need for proceeding to have them set aside. The case that are referred to in these dicta do not support the proposition that there is any category of orders of a court of unlimited jurisdiction of this kind: what they do support is the quite different proposition that there is a category of orders of such a court which a person affected by the order is entitled to apply to have set aside ex debito justitiae in the exercise of the inherent jurisdiction of the court without his needing to have recourse to the rules that deal expressly with proceedings to set aside orders for irregularity and give to the judge a discretion as to the order he will make. The judges in the cases that have drawn the distinction between the two types of orders have cautiously refrained from seeking to lay down a comprehensive definition of defects that bring an order into the category that attracts ex debito justitiae the right to have it set aside, save that specifically it includes orders that have been obtained in breach of rules of natur ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
