2008 Supreme(SC) 1808

2009(1) Supreme 245
SUPREME COURT OF INDIA
S.B. Sinha and Cyriac Jodeph, JJ.
Tamilnad Mercantile Bank Share Holders Welfare Association — Appellant
versus
S.C. Sekar and others — Respondents
Civil Appeal Nos. 7129-7130 of 2008
(Arising out of SLP (C) Nos. 19378 - 19379 of 2008)
Decided on : 05-12-2008

IMPORTANT POINT
Supreme Court may, not only quash the order appealed against, but also refuse to exercise its jurisdiction if such quashing would give rise to another illegality.

Headnote:(a)Contempt of Courts Act, 1971 – Section 19(1) – An abuse of the process of court cannot be allowed – Further, well settled that forum shopping should not be encouraged – Division Bench of the High Court was right in interfering in the contempt proceeding. (Para 38)

       (1981) 4 SCC 8; 2008 (8) SCALE 156; (2008) 1 S.C.C. 560 – Relied upon.

       (b)Contempt of Courts Act, 1971 – Section 12 – Ordinarily a direction cannot be issued in contempt proceedings without arriving at a finding as to how the contemnor can be said to have flouted the order. (Para 40)

       (2007) 1 SCC 373 – Relied upon.

       (c)Contempt of Courts Act, 1971 – Section 12 – If an interim order was passed wholly without jurisdiction, an appeal would lie thereagainst – The aggrieved person can move the higher Court in appeal. (Para 41)

       (1978) 2 SCC 370 – Relied upon.

       (d)Contempt of Courts Act, 1971 – Section 19 – An appeal would be maintainable where order has been passed adverse to the interest of the alleged contemnor – More so where a judgment has been passed by a court which is beyond its jurisdiction. (Para 44)

       (2000) 4 SCC 400; (1988) 3 SCC 26; (2006) 5 SCC 399 – Relied upon.

       96 CWN 278; 96 CWN 673 – Cited with approval.

       (e)Rules of Madras High Court – Letters Patent – Clause 15 – An interim injunction granted till disposal of the contempt application was a judgment within the meaning of Clause 15. (Para 50)

       (f)Constitution of India – Article 136 r/w Article 142 – Access to justice is a human right – In certain situations it may also be considered to be a fundamental right – Therefore, when the entire matter is before it, the Supreme Court may pass such orders which would do complete justice to the parties. (Para 52)

       (2006) 1 SCC 442; (2007) 6 SCC 120; (2007) 8 SCC 751 – Relied upon.

       (g)Judicial Review – Doctrine of amity or comity requires that different courts exercising separate jurisdiction pass similar orders – Also well settled that even an irregular order can be set aside by the same court or by a higher court. (Para 53)

       (1984) 3 All. E.R. 140 – Relied upon.

       (h)Constitution of India – Article 142 – Supreme Court may, not only quash the order appealed against, but also refuse to exercise its jurisdiction if such quashing would give rise to another illegality – Further, Supreme Court does not exercise its jurisdiction only because it is lawful to do so. (Paras 54 and 57)

       2007 (8) SCALE 51; 2008 (8) SCALE 600 – Relied upon.

       (i)Contempt of Courts Act, 1971 – Section 12 – If two views are possible a contempt petition would not lie. (Para 56)

       2008 (7) SCALE 484; AIR 1961 SC 221 – Relied upon.

       Facts of the case :

       1. Members of the Appellant-Association hold a large number of shares in the company. For one reason or the other its Annual General Meetings could not be held for a number of years. By reason of an order dated 14th October, 2003, the Company Law Board directed that Annual General Meetings for the years 1996 to 2003 be held. Pursuant thereto meetings were held and some Directors were elected.

       2. 24th December, 2004 was the date fixed for holding of 82nd Annual General Meeting.

       3.Appellant, however, filed a suit in the High Court.

       4. Before the High Court applications being OA Nos. 597 to 599 of 2006, praying for grant of injunction were filed in the said suit and by an order dated 26th July, 2006 a learned Single Judge of the High Court passed an order of injunction.

       5.A meeting was held on 27th July, 2006.

       6. 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 Resolution was passed by the Board of Directors on 13th May, 2007 resolving to transfer the said shares.

       7. In the meantime 85th Annual General Meeting also fell due.

       8. The Bank filed OA No.23 of 2007 seeking suitable directions as regards holding of the 84th Annual General Meeting. It was inter alia averred that 84th Annual General Meeting cannot be convened unless the 83rd Annual General Meeting is held in accordance with law.

       9. In the meantime another suit, marked as C.S. No. 481 of 2008 was filed by the appellant questioning the transfer of aforementioned shares.

       10. 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. During the pendency, Annual General Meeting was held on 5th June, 2008.

       11. Appellant preferred an intra court appeal against the order dated 29th April, 2008.

       12.The Division Bench while observing that the order dated 29th April, 2009 sufficiently protected the interest of the appellant, dismissed the same.

       13.On or about 10th June, 2008 Contempt Petition, being C.P. No.508 of 2008 was filed. The petition was filed for alleged disobedience of the order of the learned Single Judge dated 26th July, 2006 passed in O.A. No. 597 to 599 of 2006. The learned Single Judge passed an ad interim ex parte injunction on 12th June, 2008 restraining the Managing Director of the Company from implementing the resolution or item of business in relation to the election of Directors passed at the Annual General Meetings held on 5th June, 2008 till the disposal of contempt petition.

       12. Shri T. Rajakumar 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.

       13.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.

       14.A Division Bench of the High Court by reason of the impugned order answered the same in the affirmative.

       Finding of the Court :

       It is not a case where the Court should exercise its jurisdiction.

       Result : Appeals dismissed with cost.