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IN THE HIGH COURT OF BOMBAY
R.M. Lodha, J.
Rashtriya Mill Mazdoor Sangh ..... Petitioner.
Versus
M/s. Khatau Makanji Spg. Wvg. Co. Ltd. others..... Respondents.
Show Cause Notice No. 51 of 1997 in Writ Petition No. 525 of 1997, decided on 20-8-1997.
Advocates appeared :
Ms. N.D. Buch with H.D. Buch, for petitioner in the writ petition.
Colin Gonsalves, amicus curiae.
D.D. Madon i/by Gagrat Co., for Noticee Sham Shri Sunder Kumar.
T.K. Cooper i/b Gagrat Co., for Noticee Mrs. Panna Khatau.
Virag Tulzapurkar with Rahul Chitnis i/b Amarchand Mangaldas, for noticee K. Madhav Kumar, Melvin P. Tellis and B.D. Basu.
Ms. Vibha Salvi, for notice H.L. Saxena-Nominee Director S.B.I.
Kailash Prasad present in person.
Article 215-See Contempt of Courts Act, 1971, Sections 2 and 12(5).
Articles 226 and 21S-See Contempt of Courts Act, 1971, Sections 2 and 12(5).
Sections 2 and 12(5)-Constitution of India, Article 215-Bombay High Court (Original Side) Rules, 1980, Rule 647-Industrial Disputes Act, 1947, Section 33-C-High Court ordering payment of wages-Fixing a period-Directors delaying on one or other reason-Directions not complied with-Contention that-No question of contempt-Matter being of civil nature-Held-Non-compliance of directions issued under Article 226, amounts to Contempt of Court.-In this fact situation, once the order passed by this Court on 6.5.1997 to make payment of wages to the workers for the month of February 1997, before 20.5.1997, the said direction was required to be obeyed by the company and the financial difficulty cannot be permitted to be set up as a defence for disobeying the direction of this Court, particularly when it related to the payment of wages to the workers which was earned by them. It would be thus seen that the order passed by this Court on 6.5.1997 which has been maintained by the division bench in letters patent appeal remains not complied with by the company. In these circumstances, the question that falls for determination is whether by not complying with the order passed by the Court on 6.5.1997, the company and its directors have committed civil contempt and if so what order should be passed. The affidavit filed by Mr. 5, Director Finance, shows that all the Directors of the Company, are equally responsible for the management and the affairs of the company. According to him, though he is whole time director, there is no distinction between whole time director and part time directors as regards the liabilities of the company is concerned. He has in this affidavit tried to pass on blame substantially on Mrs. P, for her omissions and in actions and not honouring her commitments at every stage and in every proceeding namely, commitment made by her, before the BIFR commitment made by her in the meeting held before the Chief Minister and the commitment made before this Court. The management of the affairs of the company and its administration are in the hands of the Board and in view of the affidavit filed by S that the entire financial powers of the company are vested in the Board of Directors and all directors are equally responsible, in courts view, it can be safely held that all directors are responsible for the management of the company or lack of it and all of them are responsible for having not taken positive steps and ensuring that the direction issued by this Court on 6.5.1997 is complied with by the company.
Section 12(5)-Constitution of India, Article 226-Contempt of Court-Non-compliance of orders by Directors-Punishment-Held - On the basis of facts, contempt is proved-Apology not granted-Directors penalised-Rs. 2,000/- fine and simple improvement for one month each ordered.-The conduct of both S and K is reprehensible and despite all opportunities granted to them to ensure that the order passed by this Court on 6.5.1997 is complied with by the company of which they were Finance Director and Executive Director, respectively, they failed in discharging their duty and honouring their commitment which has resulted in tremendous hardship to the six thousand employees of the company and of course non-compliance of this Courts order. As regards punishment their case is different from the other directors. P, though has tendered apology, the same does not deserve to be accepted for the reasons above stated. Mr. Saxena has not even tendered apology and is also absent today without intimation to his counsel. The ultimate objective of the contempt jurisdiction is to uphold the dignity of the Court and Majesty of Law and users of the Court for whom the maintenance of the authority of the Court is of supreme importance. Contempt jurisdiction is sparingly invoked and punishment by way of imprisonment still rarely and in exceptional circumstances yet keeping in view suffering of large number of employees around 6000 in number and the persistent deliberate disobedience, the custodial sentence of S and P becomes inevitable. In the facts and circumstances of the case it would be expedient and the interest of Justice would be served if both H and P are awarded sentence of simple imprisonment for one month and fine of Rs. 2,000/ - each.
Section 3-See Contempt of Courts Act, 1971-Sections 2 and 12(5).
2.The matter came before me on 9-6-1997 and Ms. Buch, the learned Counsel appearing for the writ petitioner submitted that the order dated 6-5-1997 has not been complied with by the company. On that date, Mr. K.V. Yakkundi, the learned Counsel appeared for the company and did not dispute the fact of non-compliance of the order dated 6-5-97 by the company. He admitted that the payment to the workers towards salary for February 1997 was not made till that date. The said non-compliance on the part of the company was indeed serious. At that time Mr. Yakkundi, the learned Counsel appearing for the company prayed for short time to file affidavit setting out the reasons for not complying the order dated 6-5-97. As requested by Mr. Yakkundi, the matter was adjourned to 13-6-1997.
3.On 17-6-1997, Mr. Naik, the learned Counsel appeared for the company and he also admitted that the order dated 6-5-1997 has not been complied with by the company and no payment of the salary to the workers for the month of February 1997 has been made though it was required to be made on or before 20-5-1997. An affidavit on behalf of the company was filed by Mr. Ashok Chellaram Rangani, the Mill Manager of the company. On perusal of the said affidavit, prima facie I found that there was no justification for the company for not making payment of the salary to the workers for the month of February 1997 as directed by this Court and prima facie case of civil contempt was made out against the company. I accordingly ordered issuance of show cause notices to the company and its two directors, directors, namely, Smt. Panna S. Khatau and Shri Shymsunder Kumar whose names were disclosed. Mr. Naik, the learned Counsel for the company on that day waived service of the show cause notice of the company. The notices of two directors, namely Smt. Panna S. Khatau and Shri Shyamsunder Kumar were made returnable on 10-7-1997.
4.In response to the show cause notices, the two directors of the company namely Smt. Panna S. Khatau and Shri Shyamsunder Kumar appeared. Shri Shyamsunder Kumar also filed his affidavit. In paragraph 10 of his affidavit he stated that the affairs of the company are managed by the management committee appointed under the directions of the B.I.F.R. which comprises of a nominee director of the State Bank of India designated as a Director Finance, a nominee director of I.C.I.C.I. Ltd. a representative of the State Government of Maharashtra, a Special Director nominated by B.I.F.R. and Smt. Panna S. Khatau (the Executive Director). In view of the averments made in the affidavit of Mr. Kumar, office was directed to issue notice to Mr. H.L Saxena, Director Finance of the company returnable on 29-7-1997.
5.On 29-7-1997, Mr. D.S. Chopra, Advocate appeared for Mr. H.L. Saxena, Director Finance. Ms. Panna Khatau filed her affidavit on that date. Upon perusal of the affidavit filed by Smt. Panna S. Khatau, I found prima facie that the company and its directors were not desirous of obeying the order passed by this Court on 6-5-1997 and no serious steps were taken by the company and its directors in due compliance of this Court's order. Each director was seeking to pass on the buck to the other director and that they were unable to comply with the order of this Court. Therefore, I thought it fit that all directors of the company should answer and show cause why they should not be committed to civil contempt for disobedience of the order of this Court by the company. Accordingly show cause notices were ordered to be issued to remaining directors viz., Shri Kailash Prasad, Special Director, B.I.F.R., Shri K. Madhava Kumar, Nominee of Unit Trust of India, Shri Melvin P. Tellis, nominee director from I.C.I.C.I. Ltd., and
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