IMPORTANT POINTS
1. A legal plea taken by a party that a decree passed by a Court (including Supreme Court) is without jurisdiction and therefore a nullity, will not normally amount to a contemptuous statement but such a plea is to be considered in the factual background of the case.
2. The power to punish for contempt must always be exercised consciously, wisely and with circumspection but at the same time, the Court should act with seriousness and severity where justice is jeopardized by a grossly contemptuous act of a party.

Headnote:Contempt of Courts Act-Section 2(b)-Civil Contempt-Breach of undertaking given in Court-Bank recovery suit-Decree passed by the Supreme Court in consent terms filed by respondents before the Court-It was clearly mentioned therein that certain properties specified shall remain under attachment in execution-Respondents undertook not to sell, mortgage, alienate, encumber or charge the aforesaid properties to anyone until the decree was satisfied-Respondents did not make any payment-However, just two months thereafter, in Summary Suit instituted by another Bank, respondents entered into a settlement where under they offered and placed same three properties and one more under attachment till satisfaction of decree passed in the suit-Plea taken in that suit that decree passed by the Supreme Court in previous suit was without jurisdiction, therefore, a nullity-Case of wilful breach of an undertaking given to the Court-Respondents not having deposited any amount-Sentence of four months imprisonment.
       Held : A legal plea taken by a party that a decree passed by a Court (including Supreme Court) is without jurisdiction and therefore a nullity, will not normally amount to a contemptuous statement. However, the written submission made by the respondents before the Debts Recovery Tribunal, wherein they said that the Supreme Court had no jurisdiction to pass the decree dated 28.7.1999 and the decree had no validity and is a nullity, has to be seen in the factual background of the case. It may be noted that the decree had been passed on the basis of consent terms. It is not the case of the respondents that any fraud was played upon them by any party when they entered into a settlement and signed the minutes of the decree. It appears that the respondents from the very inception had no intention of paying the amount, but they agreed for a settlement and consent terms only for the purpose of gaining time whereunder instalments were fixed. They adopted the same procedure in the suit instituted by Oman International Bank, SAOD, wherein they offered the same property to remain under attachment till the decree was satisfied. Placing the same property under attachment is bound to create problems for the decree holders of either of the suits as no one wants to buy such property in court auction which may land him in further litigation. The respondents intentionally and deliberately adopted such a course of action so that further hurdles may come in the way of execution of the decree and therefore it is clearly a case of willful breach of an undertaking given to the Court. (Para 10)
       The respondents had filed consent terms in this Court but the same contained an undertaking that they would not alienate, encumber or charge the properties to anyone until the decree was satisfied. Acting upon this undertaking and the consent terms, this Court passed the decree whereunder the respondents (defendants) were given the facility of depositing the amount in eight quarterly installments commencing from 1st November, 1999 to 1st August, 2001. This Court, therefore, put its imprimatur upon the consent terms and made it a decree of the Court. The violation or breach of the undertaking which became part of the decree of the Court certainly amounts to contempt of Court, irrespective of the fact that it is open to the decree holder to execute the decree. Contempt is a matter between the Court and the alleged contemner and is not affected in any manner by the rights or obligations of the parties to the litigation inter se. (Para 14)
       Coming to the question of sentence, we are conscious of the fact that the power to punish for contempt must always be exercised consciously, wisely and with circumspection. At the same time, the Court should act with seriousness and severity where justice is jeopardized by a grossly contemptuous act of a party. If the judiciary is to perform its duties and functions effectively and true to the spirit with which they are sacredly entrusted, the dignity and authority of the Courts have to be respected and protected at all costs. Otherwise the very cornerstone of our constitutional scheme will give way and with it will disappear the rule of law and the civilized life in the society (See In re Vinay Chandra Misra 1995(2) SCC 584) The present petition was heard on 27.8.2003 when we enquired whether the respondents would be willing to deposit the amount. Learned counsel for the respondents sought time and the case was adjourned to 23.9.2003 and then to 14.10.2003 and finally to 28.10.2003. However, even on the said date, learned counsel for the respondents reiterated the problems of the respondents in depositing the amount and so the matter was heard on merits. The position remains that though under the consent decree passed by this Court on 28.7.1999, the respondents had to deposit the first instalment on or before 1.11.1999 and the last instalment by 1.8.2001, but they have not deposited or paid even a single penny. In these circumstances, we are of the opinion that there is no occasion for showing any leniency in the matter of punishment. (Para 16)
        We accordingly hold that the respondents have committed contempt of Court for which they are sentenced to undergo four months imprisonment. It is, however, directed that after they have undergone 15 days imprisonment, they shall be released on short term bail for a period of three months on their furnishing bail bonds, etc., to the satisfaction of the Registrar, Bombay High Court. If during this period of three months, they deposit the entire amount in terms of the consent decree dated 28.7.1999, the sentence of four months imprisonment imposed upon them shall be reduced to the period already undergone, failing which they will undergo the balance period of imprisonment. (Para 17)

JUDGMENT

G.P. Mathur, J.-This petition has been preferred by Bank of Baroda for initiating contempt proceedings against the respondents; Sadruddin Hasan Daya and Shohin S. Daya. The facts leading to the filing of the contempt petition are as under.

2. The Bank of Baroda filed Summary Suit No.2949 of 1996 against (1) M/s Dawood & Co. (2) Sadruddin Hasan Daya and (3) Shohin S. Daya for recovery of certain amount of money. The respondents were granted unconditional leave to defend the suit by the order dated 15.4.1998 passed in Summons for Judgment No.580 of 1996. This order was challenged by the petitioner Bank of Baroda by filing Special Leave Petition (Civil) No.2730 of 1999, which was renumbered as Civil Appeal No.4138 of 1999. During the pendency of the Appeal, the parties arrived at a settlement, the minutes of the decree were drawn and the same were placed on record. By the order dated 28.7.1999, the appeal was disposed of with a direction that there shall be a decree in terms of the minutes of the decree drawn by learned counsel for the parties. As per the said consent terms the parties, inter alia, agreed that the respondents (defendants) would pay to the petitioner (plaintiff) Rs. 2,44,71,616/- and Rs. 2,40,69,447/- together with interest thereon as specified, in accordance with the schedule of instalments mentioned in paras 3(a) and 4(a) respectively of the said order. It was further agreed between the parties that in the event of default by the respondents to abide by the said consent terms as per Clauses 3 and 4, the remaining amount shall forthwith become due and payable and the petitioner (plaintiff) will become entitled to execute the decree. Clauses 5(a), 5(b), 7 and 9 of the consent terms, which are relevant, are being reproduced below :

"5(a) The properties namely at Versova, Madh Island and Alibagh mentioned in the Order dated 6th May 1998 shall remain under attachment in Execution till the decree as set out in Clause (2) hereinabove is fully satisfied.

5(b) In case of decree(s) becoming executable as provided in Clauses 3 or 4 above, the said properties at Versova, Madh Island and Alibagh or anyone of them as may be required be sold in execution of the decree by the Court Receiver of the High Court of Bombay. The Court Receiver is hereby appointed in Execution. He shall however proceed only if default is committed in Clauses 3 and 4 above. Leave to execute the decree under Rule 314 of Bombay High Court (O.S.) Rules is granted. The Court Receiver to pay over the net sale proceeds to the plaintiffs in or towards satisfaction of the decree(s) herein. There are other suits against the Defendants in which attachment before judgment orders and or injunctions are passed inter alia in respect of the said properties. However, the same will not affect the sale, which will be in Execution of the decree(s) passed herein.

7. The Defendants undertake not to sell, mortgage, alienate, encumber or charge the said properties described hereinabove to anyone until the decree as per Clause 2 above is satisfied.

8. All the orders passed in Suit No.2949 of 1996 and the proceedings therein including the Summons for Judgment No.580 of 1996, Review Petition No.36 of 1998 and Appeal Nos.540 and 543 of 1998 are set aside and the said suit and all proceedings connected therewith are disposed of in terms of this order."

3. Oman International Bank, SAOD had also filed Summary Suit No.4571 of 1996 against M/s Dawood & Co. and the respondents for recovery of certain amount in Bombay High Court. Against an order passed in Summons for Judgment No. 493 of 1997 in the said suit, an appeal was preferred by M/s Dawood & Co. & others before the Division Bench, wherein the parties entered into a settlement. The appeal was disposed of in terms of the consent terms by the order dated 5,10.1999, which reads as under:

"Undertaking given to this Court by the Appellants in terms of the Consen

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2003 Supreme(SC) 1262

Cases Referred (5)