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2022 Supreme(Bom) 1429

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
S.J. Kathawalla, Milind N. Jadhav, JJ.
Manojkumar Omprakash Dalmia - Appellant
Versus
Omprakash Dalmia & Ors. - Respondents
Contempt Petition No. 37 of 2019, Appeal (L) No. 396 of 2012, Chamber Summons No. 88 of 2012, Execution Application No. 1359 of 2011 and Interim Application No. 795 of 2022
Decided On : 21-03-2022

Advocates appeared:
Mr. Akash Pai Alongwith Ms. Gauri Patil And Ms. Maansi Gupta, for the Appellant, Mr. Ashok Saraogi With Mr. Anand Mishra, Mr. Rashmin Khandekar, Mr. M.S. Hadi Alongwith Mr. Deepak Gautam, for the Respondent.

Fraudulently obtained consent terms are void; courts can evaluate past orders for legitimacy in contempt proceedings.

Headnote:(A) Contempt of Court - High Court of Judicature at Bombay - Legal principles regarding consent terms and duty of honesty before courts established; parties must present legitimate agreements in good faith. (Paras 1, 30)

(B) Fraud and Collusion - Consent Terms obtained by misrepresentation are a nullity; courts retain authority to examine previous orders for legitimacy. (Paras 30, 35)

(C) Conduct of Parties - Accusations of long-standing litigation rooted in familial greed and deceit; the court notes severe lapses in honesty and integrity. (Paras 3, 41)

Facts of the case:
Parties engaged in protracted litigation over family properties spanning over 22 years, with multiple proceedings initiated, leading to an arbitration award for property related disputes. (Paras 3, 4, 5)

Findings of Court:
Consent Terms were considered to be lopsided and likely obtained through deceit, raising potential fraud allegations; enforcement of terms dismissed due to lack of bona fide adherence by the Applicant. (Paras 46, 49)

Issues: Legitimacy of Consent Terms; whether the terms were signed under duress or misrepresentation and the conduct of the Applicant.

Ratio Decidendi: The Court affirmed that orders obtained by fraud or collusion are void; an examination of consent terms is necessary to uncover authenticity, asserting duty of candor in legal proceedings. (Paras 36, 50)

Result: Contempt Petition dismissed; costs of Rs. 50,000/- ordered to be paid to Respondent Nos. 2 and 3 within two weeks.

Table of Content
1. contempt petition reliefs sought (Para 1)
2. background leading to contempt petition filing (Para 2 , 3 , 4 , 5 , 6 , 7 , 8 , 9 , 10 , 11 , 12 , 13 , 14 , 15 , 16 , 17 , 18 , 19 , 20 , 21 , 22 , 24 , 25 , 26)
3. parties' contentions and arguments (Para 27 , 28)
4. court's observations on consent terms (Para 30 , 31 , 32 , 33 , 34)
5. judicial principles regarding consent terms obtained through fraud (Para 35 , 36 , 38 , 39 , 40 , 41)
6. final decision on contempt petition with cost order (Para 51 , 52)

ORDER

1. The Applicant has filed the present Contempt Petition seeking the following reliefs:

    " (a) The rule be issued;

    (b) This Hon'ble Court be pleased to call for the record and proceeding pertaining to the Appeal (L) No. 396 of 2012 filed by the Petitioner in this Hon'ble Court after perusing the said proceeding be pleased to take the action against the Respondent Nos. 2 and 3 and punish the said Respondent Nos. 2 and 3 in accordance with law.

    (c) That the pending the hearing and final disposal of the petition this Hon'ble Court be pleased to restrain the Respondent Nos. 2 and 3 and their servants, agents, representatives, heirs or any persons claiming through them from selling, transferring, assigning, creating third party or part the possession of the flat bearing Flat No. 51, Rosie Apartment, 9th North Avenue Road, Santacruz (W), Mumbai and also the flat bearing Flat No. B/705 situated in Jay Sheetal CHS Ltd., Bhayander (E), Dist. Thane.

    (d) Pending the hearing and final disposal of this Petition, this Hon'ble Court be pleased to direct the Respondent Nos. 2 and 3 to comply the order dated 23.10.2015 and consent terms dated 23.10.2015.

    (e) Pending the hearing and final disposal of this Petition, this Hon'ble Court be pleased to direct the Respondent Nos. 2 and 3 to permit the Petitioner and his family members to reside in the flat bearing No. 51, Rosy Apartment, 9th Avenue Road, Santacruz (W), Mumbai along with the Respondent Nos. 2 and 3."

2. The cause title shows Respondent No. 1 as two partnership firms. The Applicant/Petitioner is Respondent No. 2 and 3's son.

BACKGROUND OF FACTS LEADING TO FILING OF THE PRESENT CONTEMPT PETITION:

3. This is an extremely unfortunate situation where the parties viz. the son on the one hand, and the parents on the other, have been litigating for over 22 years. Greed, acrimony and deceit are writ large on the conduct of the Applicant. To putthings in context, it will be useful to set out a brief background of the circumstances leading to filing of the present Contempt Petition.

4. In or around the year 1999, disputes arose between the parties inter alia relating to family properties and shares of the respective parties in Respondent No. 1. Ever since, the Parties have filed various proceedings against each other including diverse criminal proceedings.

5. In the year 2000, Respondent Nos. 2 and 3 filed S.C. Suit No. 926 of 2000 before the City Civil Court inter alia against the Applicant. The City Civil Court referred disputes in respect of the shares of the parties in Respondent No. 1 (partnership firm) and partition of a flat situated at Flat No. 51, Rosie Apartment, 9 North Avenue, Santacruz (West), Mumbai 400 0054 ("Santacruz Flat") to arbitration.

6. The Applicant filed a claim before the arbitrator seeking Rs. 2.5 crores.

7. On 22nd October, 2007 an arbitration award ("Arbitration Award") came to be passed wherein it was ordered as follows :

    "a) The report dated 18th June 2007 of the Commissioner Shri A. D. Dave is accepted.

    b) The summary of certificate of the amount payable to the claimant attached to the Commissioner's Report is approved.

    c) The Respondents shall pay to the Claimant [Applicant] the sum of Rs. 37,93,828 (Rs. Thirty Seven Lakhs Ninety Three Thousand Eight hundred Twenty Eight only) on the claimant vacating the flat being No.51, Rosey Apartments, Santacruz (West), Mumbai also with his family and handing over peaceful possession to the Respondents.

    d) The Claimant shall

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