TMI Blog2006 (4) TMI 553X X X X Extracts X X X X X X X X Extracts X X X X ..... stion which must be left for decision while disposing of the contempt petition on merits. It may be argued as an extenuating or mitigating factor once the respondents are held guilty of contempt. The submission does not pertain to the maintainability of the petition for contempt. The preliminary objection raised by the respondents regarding the non-maintainability of the petition for contempt is, for the reasons stated, dismissed. The issue as to whether the respondents have in fact acted in violation of the terms of the consent order will now have to be decided on merits. Let the matter be listed for this purpose. Costs of this petition will be costs in the contempt petition. - Ruma Pal, B.N. Srikrishna and Dalveer Bhandari, JJ. For Appellant: H.N. Salve and Firoz Andhiyarujina, Sr. Advs., Gopal Jain, R.N. Karanjawala, P.S. Baghel, Ritu Sharma, Manik Karanjawala, S.V. Deshpande and Vandana Sharma, Advs For Respondents: F.S. Nariman, Sr. Adv., Subhash Sharma, A. Sibal, Rakhi Ray, Binu Gupta, I. Barooah, Simanti Chakrabarti, Advs. JUDGMENT Ruma Pal,. 1. In this contempt petition the petitioner alleged that the respondents 1 and 2 have violated this Court's orders dated 12th De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said suits to this Court under Article 139A of the Constitution of India. Prothonotary and Senior Master of the Bombay High Court is directed to transmit the records in the above mentioned suits by special messenger to this Court so as to reach the Registry here within ten days from today. The Bench Officer of the Principal Bench of the Company Law Board, New Delhi is directed to forward the records relating to company petition No. 28 of 1992 to the Registry of this Court so as to reach the Registry within ten days from today. All the parties have undertaken before us that they will implement the terms of the MINUTES OF CONSENT ORDER on or before 1.1.2002 and that no further time will be sought for in the matter. Clause (f) of the compromise relates to the operation of the bank accounts. That clause will come into force from today onwards. All the afore-mentioned suits and the company petition will be posted for final formal orders on 8.1.2002 at 10.30 a.m. along with these contempt proceedings. The Minutes of the Consent Order referred to in the order dated 12th December, 2001 was as an agreement between the parties, which was duly executed by them. 2. The bone of contention betwe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... drawn up in terms of the Minutes of the Consent Order. 4. On the allegation that the two respondents had violated the terms of the orders specially the clauses 3(c), (d) and (f) of the consent minutes, this contempt petition has been filed. It is also the case of the petitioner that the violations of the orders had been admitted by the respondents. According to the petitioner the violations amounted to a willful disobedience of the orders dated 12.12.2001 and 8.1.2002 and were punishable under this Court's power of contempt. 5. Initially a notice was issued by this Court on the petitioners' application on 9th May, 2003 to the respondents for ascertaining the facts and to enable them to respond to the averments in the petition. After the filing of the responses, on 15th September, 2003, a notice in contempt proceedings was issued to the respondents. In an attempt to bring the disputes between the parties to amicable end, the Court appointed a retired Chief Justice of Orissa High Court as a mediator. The mediation was however, unsuccessful. Since the settlement of disputes was not possible, the proceedings before the mediator were terminated and the contempt petition was dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... done the law did not treat those actions as contumacious. 7. Learned counsel appearing on behalf of the petitioners has submitted that a decree for injunction whether directory or prohibitory can only be enforced by way of contempt proceedings. It was argued that there was nothing in principle to draw a rational distinction between the orders passed on merits and orders passed by consent. Our attention was also drawn to the language of the order dated 12.12.2001 which directed Clause (f) of the minutes to be enforced from that date onwards. In fact the various suits referred to in the order dated 8th January, 2002 had been decreed in terms of the mutual consent order. It has also been submitted that all the relevant clauses in the consent minutes could be read both as prohibitory and directory. The petitioner has submitted that in a civil contempt, the issue is not so much the punishment of the alleged contemnor, but the execution of the decree. According to the petitioner, all the decisions cited by the respondents were distinguishable. Reliance has been placed on the definition of civil contempt in the Contempt of Courts Act, 1971 as well as on the decisions in Rosnan Sam Boyce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge. It was also said that: It must be remembered that a compromise decree is nothing more than an agreement of the parties with the sanction of the Court super-added. It has really no greater sanctity than the agreement itself. It certainly cannot mean anything more than the agreement itself. 10. When it was pointed out that the practice on the original side of the High Court was to record an undertaking to the Court in that manner and that this practice had been endorsed in several earlier decisions, the Division Bench opined that if that was so then sooner the practice is stopped is better . It was affirmed that if it was the intention of the parties that an undertaking should be given to the Court then the compromise should have made it clear that such was the case. 11. A different view was taken by the Division Bench of the Bombay High Court in Bajranglal Gangadhar Khemka and Anr. v. Kapurchand Ltd. AIR1950Bom336 . In that case, a suit for specific performance by execution of a lease was compromised and consent terms were filed in Court and an order passed thereon. One of the terms in the compromise recorded an undertaking by the defendants to have a third party joined as a con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 360 . The Calcutta High Court's judgment to the contrary in Nisha Kanto Roy Chowdhury (supra) does not therefore correctly reflect the law. 13. In the face of such apparent divergence, the Sanyal Committee was set up and asked to examine the law of contempt with a view to its clarification and reforming it wherever necessary. The present statute is the outcome of those suggestions. 14. The Sanyal Committee Report which preceded the framing the enactment of the Act had opined: The 1952 Act is sound as far as it goes. While its provisions may be retained, its scope requires to be widened considerably. 15. The Act has been duly widened. It provides inter-alia for definitions of the terms and lays down firmer bases for exercise of the Court's jurisdiction in contempt. Section 2(b) of the Contempt of Courts Act, 1971 defines civil contempt as meaning willful disobedience to any judgment decree, direction, order, writ or other process of a Court or willful breach of an undertaking given to Court . Analysed, the definition provides for two categories of cases, namely, (1) willful disobedience to a process of Court and (2) willful breach of an undertaking given to Court. As far as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt had so found. This Court construed the consent order and came to the conclusion that it did not contain any express direction to the appellant to hand over possession of the property to the receiver It was held that no undertaking had been given by the appellant at all. The High Court had proceeded, according to this Court, erroneously by implying an undertaking from the consent order itself. In that context, this Court said: There is a clear-cut distinction between a compromise arrived at between the parties or a consent order passed by the Court at the instance of the parties and a clear and categorical undertaking given by any of the parties. In the former, if there is violation of the compromise or the order no question of contempt of court arises, but the party has a right to enforce the order or the compromise by either executing the order or getting an injunction from the court. 19. The Court then considered various consent orders which could not base proceedings for contempt if the consent order were violated. Thus for example, a decree for payment of money if not complied with could not found an action for contempt. Similarly the allocation of certain property to a pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decree as a decree passed on adjudication. It is not as has been wrongly held by the Calcutta High Court in Nisha Kanto Roy Chowdhury (supra) merely an agreement between the parties. In passing the decree by consent, the Court adds its mandate to the consent. A consent decree is composed of both a command and a contract. The Bombay High Court's view in Bajranglal Gangadhar Khemka (supra) correctly represents the law that a consent decree is a contract with the imprimatur of the Court. 'Imprimatur' means 'authorized' or 'approved'. In other words by passing a decree in terms of a consent order the Court authorizes and approves the course of action consented to. Moreover, the provisions of Order 23 Rule 3 of the Code of Civil Procedure requires the Court to pass a decree in accordance with the consent terms only when it is proved to the satisfaction of the court that a suit has been adjusted wholly or in part by any lawful agreement 21. All decrees and orders are executable under the Code of Civil Procedure. Consent decrees or orders are of course also executable. But merely because an order or decree is executable, would not take away the Courts jurisdict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be evicted under the orders of the court and there is a clear and deliberate breach thereof it amounts to civil contempt but since, in the present case, the respondent did not file any undertaking as envisaged in the order of this Court the question of his being punished for breach thereof does not arise. However, in our considered view even in case where no such undertaking is given, a party to a litigation may be held liable for such contempt if the court is induced to sanction a particular course of action or inaction on the basis of the representation of such a party and the court ultimately finds that the party never intended to act on such representation or such representation was false. This passage is an exposition of the law relating to the second category of cases covered by Section 2(b) of the Act. It does not seek to be an exposition of the law relating to the first category of cases at all. 26. The next decision relied upon by the respondents is the decision of this Court in Bank of Baroda v. Sadruddin Hasan Daya and Anr. (2004)1SCC360 . The petitioner in that case had filed a suit against the respondents for recovery of money. The suit was disposed of by consent and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payable in respect of land acquisition proceedings. The directions were given while disposing of contempt proceedings initiated by the respondent after the Court had accepted the unqualified apology tendered by the appellants. The appellants urged that instead of filing a contempt application, the respondent should have proceeded with the execution of the decree or award made in the land acquisition proceedings. The Court said 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. Furthermore, it has also said that:- the decree-holder, who does not take steps to execute the decree in accordance with the procedure prescribed by law, should not be encouraged to invoke contempt jurisdiction of the court for non- satisfaction of the money decree. 29. Having regard to the facts of the case the Court felt that the contempt proceedings should not have been resorted to and that in any case since the unconditional apology has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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