1. License agreement — Default in payment — Settlement agreement — Non-compliance with interim court order for payment of use and occupation charges — Contempt petition. (Para 1 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 )
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2025 Supreme(SC) 712
SUPREME COURT OF INDIA
ABHAY S. OKA, AUGUSTINE GEORGE MASIH, JJ.
M/S Chithra Woods Manors Welfare Association – Petitioner
Versus
Shaji Augustine Alleged – Contemnor/Respondent
Contempt Petition (Civil) No. 712 of 2023 In SLP (Civil) No. 17433 of 2021
Decided on : 24-04-2025
Important Points
IMPORTANT POINT
Contempt of Court – Any person who misuses process of Court with ulterior motives cannot be said to be a person having approached Court with clean hands – A person who tries to tarnish process of litigation to the extent of misguiding and misleading proceedings before Court resulting in passing of order(s) which are to his benefit at the cost of loss of dignity, leading to shrinkage of faith of common man in judicial process cannot be permitted.
Contempt of Court – Any person who misuses process of Court with ulterior motives cannot be said to be a person having approached Court with clean hands – A person who tries to tarnish process of litigation to the extent of misguiding and misleading proceedings before Court resulting in passing of order(s) which are to his benefit at the cost of loss of dignity, leading to shrinkage of faith of common man in judicial process cannot be permitted.
Subject
Contempt of Court - Civil Contempt
Act Referred
Headnote
Contempt of Courts Act, 1971 – Section 2(b) – Contempt of Court – Respondent-Contemnor has deliberately and with malafide intention, not only mislead and misused process of courts but has also intentionally violated Order passed by this Court by not making payment as directed therein – There has been intentional and deliberate non-compliance on part of Respondent-Contemnor of order passed by this Court, contempt of which stands committed, but on getting an interim order of continuing in possession usurped earnings instead of paying off dues – Malafide is writ large and reflect misuse of process of Court – Any person who misuses process of Court with ulterior motives cannot be said to be a person having approached Court with clean hands – A person who tries to tarnish process of litigation to the extent of misguiding and misleading proceedings before Court resulting in passing of order(s) which are to his benefit at the cost of loss of dignity, leading to shrinkage of faith of common man in judicial process cannot be permitted – In instant case, opportunity having been availed, time having been sought and granted by Court further reflects intent on part of Respondent-Contemnor to discard and tarnish judicial process by polluting it – Disobedience of order of Court in such circumstances would be only result and thus, civil contempt – Respondent-Contemnor cannot be allowed to go scot-free – Punishment of Simple Imprisonment for three months along with fine of INR 20,000/- imposed on Respondent. (Paras 19, 29, 30, 33, 36, 39, 40 and 41)
Facts of the case:
Instant Contempt Petition (Civil) No. 712 of 2023 in SLP (C) No. 17433 of 2021 was filed during its pendency by M/s Chithra Woods Manors Welfare Association, being Respondent No. 01 therein (“Petitioner Association”), alleging non-payment of arrears of use and occupation charges for period between 20.09.2021 and 31.11.2022 in six monthly instalments beginning 31.12.2022, as directed by this Court vide Order dated 07.11.2022 in the main Petition.
Findings of Court:
Punishment would come into effect in case directions as contained in Order dated 07.11.2022 are not complied with, within 30 days of pronouncement of this judgment.
Result : Contempt proceedings disposed of.
Legal Category Hierarchy
Advocates appeared:
For the Petitioner(s): Mr. Nishe Rajen Shonker, AOR Mr. Alim Anvar, Adv. Ms. Anu K Joy, Adv. Mr. Santhosh K, Adv.
For the Respondent(s): Mr. Lakshmeesh S. Kamath, AOR Mrs. Samriti Ahuja, Adv. Ms. Aditi Prakash, Adv.
For the Petitioner(s): Mr. Nishe Rajen Shonker, AOR Mr. Alim Anvar, Adv. Ms. Anu K Joy, Adv. Mr. Santhosh K, Adv.
For the Respondent(s): Mr. Lakshmeesh S. Kamath, AOR Mrs. Samriti Ahuja, Adv. Ms. Aditi Prakash, Adv.
Table of Contents
2. Respondent claims inability to pay due to penury — Petitioner alleges willful disobedience and misuse of judicial process to retain possession without payment. (Para 16 , 17 , 18 )
3. Respondent's conduct indicates malafide intent to retain property without payment — Plea of penury rejected based on prior conduct and business viability. (Para 19 , 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29 , 30 )
4. Civil contempt constitutes willful disobedience of court orders — Misusing judicial process to obtain benefits without intending to comply constitutes contempt. (Para 31 , 32 , 33 , 35 , 36 , 37 )
5. Respondent found guilty of civil contempt — Sentenced to simple imprisonment and fine, with a final opportunity to purge contempt by complying with payment orders. (Para 40 , 41 , 42 )
6. What constitutes civil contempt under the Contempt of Courts Act, 1971?
Civil contempt is defined as the willful disobedience of any judgment, decree, direction, order, writ, or other process of the court, or a willful breach of an undertaking given to the court. (Para 31 , 32 )
7. Can a plea of financial inability or penury excuse non-compliance with a court order?
Not if the conduct suggests the party intentionally misused the court's process to gain benefits, such as retaining possession of property, without intending to comply, or if prior actions indicate financial capability. (Para 27 , 28 , 29 , 30 )
8. How does the court evaluate willful disobedience in contempt proceedings?
The court considers the party's conduct both before and after the issuance of the notice, including whether they misled the court to obtain favorable orders they never intended to follow. (Para 32 , 35 , 36 )
9. What is the purpose of the court's power to punish for contempt?
It serves to prevent interference with the course of justice, maintain the authority of law, protect the purity of the administration of justice, and safeguard the integrity of the judicial system. (Para 34 , 37 )
JUDGMENT :
AUGUSTINE GEORGE MASIH, J.
1. The instant Contempt Petition (Civil) No. 712 of 2023 (hereinafter referred to as “instant Petition”) in SLP (C) No. 17433 of 2021 (hereinafter referred to as “main Petition”) was filed during its pendency by M/s Chithra Woods Manors Welfare Association, being the Respondent No. 01 therein (hereinafter referred to as “Petitioner Association”), alleging non-payment of arrears of use and occupation charges for period between 20.09.2021 and 31.11.2022 in six monthly instalments beginning 31.12.2022, as directed by this Court vide Order dated 07.11.2022 in the main Petition.
2. This petition was then tagged along with the main Petition vide Order dated 24.02.2023 and eventually, owing to the said non-payment of arrears, the main Petition was disposed of as this Court observed to not entertain the prayer of Mr Shaji Augustine, the Petitioner therein (hereinafter referred to as “Respondent-Contemnor”) but the proceedings in instant Petition sustained.
3. Facts forming the backdrop of the instant Petition are that the Petitioner Association is owner of the decree scheduled building, consisting of 96 furnished studio apartments, at Munnar, Kerala (hereinafter referred to as the “said Property”). An agreement was entered between the Petitioner Association and Respondent-Contemnor on 26.01.2014, permitting the latter to occupy and use the said Property for a period of 10 years as against payment of licence fees of INR 12 Lakhs per month (hereinafter referred to as the “said Agreement).
4. Within a short period of entering into the said Agreement, Respondent-Contemnor defaulted in payment of the license fees. On persistent default, Petitioner Association was constrained to institute OS No.30 of 2015 before the Sub Court at Thodupuzha, Kerala for realization of the arrears and other reliefs. As there was an arbitration clause in the said Agreement and on consent of the parties herein, the dispute was referred to a Sole Arbitrator.
5. Before the Sole Arbitrator, the Petitioner Association moved I.A. No. 01 of 2016 under Section 17 of the Arbitration and Conciliation Act, 1996 (hereinafter referred to as “A&C Act”), seeking direction to the Respondent- Contemnor to deposit INR 1,65,73,459/- (Rupees One crore Sixty-Five Lakhs Seventy-Three Thousand Four Hundred Fifty-Nine only) during pendency of the proceedings. The same was partially allowed vide Order dated 23.06.2016 with direction to deposit INR 1,36,49,439/- (Rupees One crore Thirty-Six Lakhs Forty- Nine Thousand Four Hundred Thirty-Nine only) and per undertaking of the Respondent-Contemnor, payment of INR 12 lakhs per mensem for month of June 2016 onwards, on or before the 10th of the succeeding month, pending disposal of the proceedings.
6. Both Respondent-Contemnor and Petitioner Association moved in appeal under Section 37 of the A&C Act before the District Court at Ernakulam, Kerala. A Common Order dated 21.01.2017 was passed, staying the proceedings before the Sole Arbitrator with reiteration of direction to Respondent-Contemnor to pay arrears at the rate of INR 12 Lakhs per month with effect from 08.09.2016 with a further order to continue to pay INR 12 Lakhs per month towards monthly license fee.
7. This common order was challenged by the Respondent- Contemnor before the High Court of Kerala in O.P. (C) No 552 of 2017. The matter was referred for mediation at the request of the parties. The said mediation proceedings, lead to a Compromise dated 03.04.2017 (hereinafter referred to as the “Settlement Agreement”), Petitioner Association agreed to reduce the monthly license fees to INR 8 Lakhs per month. Arrears, as claimed before the Sole Arbitrator, were also reduced from INR 1,65,73,439/- to INR 75 Lakhs. Moreover, it was specifically recorded that the settlement entered between the parties would form part of the judgment. There was a specific clause that in case of default by any of the parties to any of the terms of the agreement the other woul
