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1992 Supreme(Cal) 444

IN THE HIGH COURT AT CALCUTTA
Shamsuddin Ahmed, Amal Kanti Bhattacharji, JJ.
Arthur Branwell & Company Limited & Anr. – Appellants
Versus
Indian Fibers Limited – Respondent
Appeal No. 120 of 1989
Decided On : December 21, 1992

Advocates Appeared:
Mr. Dipankar Ghosh and Asok Ganguly, for the Appellants
Mr. S. K. Kapur and C. M. Jain, for the Respondent

The High Court has jurisdiction to punish for contempt of itself, and this power cannot be taken away by parliamentary legislation, except by way of constitutional amendment. However, the parliament is competent to provide for laying down procedure in a contempt application.

Headnote:

CONTEMPT OF COURT - JURISDICTION - INJUNCTION - LIMITATION - SECTION 20 OF THE CONTEMPT OF COURTS ACT, 1971 - FOREIGN AWARDS (RECOGNITION & ENFORCEMENT) ACT, 1961 - ARBITRATION ACT, 1940 - LETTERS PATENT, CLAUSE 12 - DECREES AND ORDERS VALIDITY ACT, 1936 - CIVIL PROCEDURE CODE, SECTION 20 - PRIVATE INTERNATIONAL LAW - JURISDICTION OF HIGH COURT TO PUNISH FOR CONTEMPT - PROCEDURE IN CONTEMPT PROCEEDINGS - LIMITATION FOR INITIATING CONTEMPT PROCEEDINGS.

Fact of the Case:

An Indian company and an English company entered into a contract for the sale and purchase of guar gum. A dispute arose between the parties, and the English company invoked the arbitration clause in the contract. The Indian company filed an application before the Calcutta High Court under Section 33 of the Arbitration Act, seeking a declaration that the contract did not contain any arbitration clause. The High Court granted the declaration and passed an order of injunction restraining the English company from proceeding with the arbitration in England. The English company did not come within the jurisdiction of the Calcutta High Court and proceeded with the arbitration in England. An award was made in favor of the English company, and the English company filed a suit in the Court of the District Judge at Jaipur, Rajasthan, for enforcement of the award under the provisions of the Foreign Awards (Recognition & Enforcement) Act, 1961. The Indian company filed a contempt application in the Calcutta High Court, alleging that the filing of the suit at Jaipur by the English company was an act of contempt of court.

Finding of the Court:

The High Court held that the order of injunction passed by the Trial Judge, violation of which has been alleged was without jurisdiction. The High Court also held that Section 20 of the Contempt of Courts Act, 1971, is not ultra vires, and no contempt proceeding can be initiated after the period of limitation prescribed by Section 20 of the Contempt of Courts Act, 1971.

Issues: 1. Whether the High Court had jurisdiction to pass an order of injunction restraining the English company from proceeding with the arbitration in England? 2. Whether the contempt application was barred by limitation under Section 20 of the Contempt of Courts Act, 1971?

Ratio Decidendi: 1. The High Court had jurisdiction to pass an order of injunction restraining the English company from proceeding with the arbitration in England, as the English company had submitted to the jurisdiction of the High Court by obtaining leave under Clause 12 of the letters patent. 2. Section 20 of the Contempt of Courts Act, 1971, is not ultra vires, and no contempt proceeding can be initiated after the period of limitation prescribed by Section 20 of the Contempt of Courts Act, 1971.

Final Decision: The High Court allowed the appeal and set aside the order impugned and the Rule on which order impugned was passed, shall stand discharged.

JUDGMENT

Ahmed, J.: This appeal is directed against the judgment and order dated 13.2.1989 passed in matter No. 146 of 1988 by a learned single Judge of this Court.

2. To appreciate the contentions raised in this appeal, it is necessary to set out the brief facts giving rise to the same. In between 24th May, 1984 to 29th May, 1984, a contract was entered into by and between the respondents, Indian Fibers Limited (Indian Company) and Arthur Branwell & Company Limited (English Company). By exchange of telex messages Indian Company agreed to sell F. O. B. Bombay and English Company agreed to purchase 60 m.t. of Guargum of agreed specifications on agreed terms and conditions. On 27.6.84, Indian Company shipped 1600 bags of Guargum from Calcutta to England pursuant to the said contract. The goods were discharged at Felix Stowed on 2.3.84. The English Company sold 5 m.t. of Guargum to "M/s. Loyns Maid", the well-known manufacturer of icecream on 2.8.84. The said "M/s. Loyns Maid" rejected the goods on the ground that it was contaminated by insecticides. The English Company immediately kept the Indian Company informed. A dispute arose between the English Company, Arthur Branwell, appellants and "M/s. Loyns Maid". The dispute was settled on Payment of 10,000 sterling by the English Company to "M/s. Loyns Maid". English Company asked Indian Company to refund the amount paid by it for the said contaminated bags shipped to England. The English Company by a letter dated 17.3.85 invoked the Arbitration Clause in the contract, and intimated the Indian Company that the disputes between the parties are to be referred to Arbitration under the Rules of General Prosuce Association of London, and called upon the respondent Indian Company to concur in the appointment of an Arbitrator and Umpire. By a letter dated 30.4.85, the Indian Company intimated its refusal to the appointment of an Arbitrator. It took the stand that there was no Arbitration Clause in the agreement for contract between the parties. On 18.6,85, the Indian Company filed an application before this Court under Section 33 of the Arbitration Act with a prayer for declaration that the contract to the parties did not contain any Arbitration Clause, and ex-parte order was obtained restraining English Company from proceeding with the reference in England. The English Company did not come within the jurisdiction of the Calcutta High Court on the plea that the company is not the resident in India and it has no place of business or assets here. On 13.8.85, the learned single Judge disposed of the application granting the declaration, sought for. The Judge further passed an order of injunction against the English Company restraining it from proceeding with the reference in England. On 26.8.85, the appellant, English Company filed an application before the English Court for extention of time in relation to the Arbitration proceedings. In the said application, a reference was made to a judgment of this Court dated 13.8.85. Accordingly, the Indian Company was informed, but the Indian Company took a stand that the English Court has no jurisdiction in the matter, and as such refused to take part in the proceedings. On 22.12.85, Mr. Justice Hirst delivered a judgment in England extending time for Arbitration proceedings. The learned Judge considered the judgment dated 13.8.85 delivered by Single Judge of this Court. He differed from the judgment and held that Arbitration Clause has been incorporated in the contract, and that the order passed by the Indian Court was without jurisdiction and not binding on English Company according to well settled principles of private international law. The English Company proceeded with the reference in England, and on 9.5.86 an award was made in its favour. On 19th November, 1987, the English Company filed a suit in the Court of the District Judge at Jaipur, Rajasthan for enforcement of the said Foreign A ward under the provisions of the Foreign Awards (Recognitio











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