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IN THE HIGH COURT OF DELHI AT NEW DELHI
SANJIV KHANNA, CHANDER SHEKHAR, JJ.
Suman Chadha And Another – Appellants
Versus
Central Bank of India – Respondent
Contempt Appeal (Civil) No. 3 of 2017
Decided On : 27-09-2018
CONTEMPT OF COURT - UNDERTAKING TO COURT - WILFUL DISOBEDIENCE - CIVIL CONTEMPT - SECTION 2(B) OF THE CONTEMPT OF COURTS ACT, 1971 - DISTINCTION BETWEEN EXECUTION PROCEEDINGS AND CONTEMPT PROCEEDINGS - INTENT TO COMPLY WITH UNDERTAKING - SENTENCING POLICY IN CONTEMPT CASES.
Fact of the Case:
Appellants, directors of a company that had availed loan facilities from the respondent bank, were held guilty of contempt of court for wilful disobedience and non-compliance of undertakings to the court in a writ petition by way of solemn promise to pay Rs.7 crores in three instalments. The impugned order also sentenced the appellants to simple imprisonment of three months and fine of Rs.2,000/- each.
Finding of the Court:
The court held that the appellants had given an undertaking to the court to make payment of Rs.7 crores, which was accepted and acted upon by the court. The court further held that the appellants had wilfully disobeyed and failed to comply with the statement on oath/undertaking given by them, which amounted to an act of fraudulence practiced on the court to procure an order that otherwise would not have been passed. The court also held that the appellants were guilty of civil contempt as defined under Section 2(b) of the Contempt of Courts Act, 1971.
Issues: 1. Whether the appellants had given an undertaking to the court to make payment of Rs.7 crores? 2. Whether the appellants had wilfully disobeyed and failed to comply with the statement on oath/undertaking given by them? 3. Whether the appellants were guilty of civil contempt as defined under Section 2(b) of the Contempt of Courts Act, 1971?
Ratio Decidendi: 1. The court held that the appellants had given an undertaking to the court to make payment of Rs.7 crores, which was accepted and acted upon by the court. The court relied on the statement on oath made by the first appellant and the affidavit/undertaking filed by the second appellant, which confirmed the statement of the first appellant. The court also noted that the appellants had agreed to pay/deposit Rs.7 crores on or before 30th June, 2015 to stall and defer the action of taking over of physical possession. 2. The court held that the appellants had wilfully disobeyed and failed to comply with the statement on oath/undertaking given by them. The court noted that the appellants had not issued the cheques for encashment as per the order of the court, and that the cheques were not issued by the appellants or their alleged debtors. The court also noted that the appellants had given false and misleading information to the court regarding the issuance of the cheques. 3. The court held that the appellants were guilty of civil contempt as defined under Section 2(b) of the Contempt of Courts Act, 1971. The court held that the appellants' actions amounted to wilful disobedience to an order of the court, and that the appellants had deliberately and intentionally made promises in form of undertaking to the court which they never intended to comply.
Final Decision: The court upheld the decision of the learned Single Judge, holding the appellants guilty of Contempt of Courts. The court also upheld the sentence imposed on the appellants. The appellants were directed to surrender within a period of 10 days from the date of pronouncement of the order, failing which the bail bonds would be forfeited and warrants of arrest would be issued and executed.
SANJIV KHANNA, J.
Suman Chadha and Komal Chadha, husband and wife, have preferred the present appeal under Section 19 of the Contempt of Courts Act, 1971 (the Act, for short) challenging the order dated 18th July, 2017 passed by the learned single Judge in Contempt Case (C) No. 531/2015 filed by the Central Bank of India, the respondent before us.
2. The impugned order holds the two appellants guilty of contempt of court for wilful disobedience and non-compliance of the undertakings to the court in Writ Petition (C) No. 3406/2015 by way of solemn promise to pay Rs.7 crores in three instalments of Rs.2 crores, Rs.2.5 crores and Rs.2.5 crores on 30th April, 2015, 31st May, 2015 and 30th June, 2015, respectively. The impugned order also sentences the appellants to simple imprisonment of three months and fine of Rs.2,000/- each.
3. The present appeal was first listed on 25th July, 2017, when the Division Bench on consideration of facts had passed over the appeal to enable the counsel for the appellants to obtain instructions whether they would deposit Rs.7 crores in the Registry in terms of the undertakings. As the appellants did not offer to deposit Rs.7 crores or even a substantial part of the said amount, the Division Bench vide the order dated 25th July, 2017 had declined and did not suspend the sentence. CM No. 26082/2017 filed in the present appeal for suspension of sentence was adjourned to 3rd August, 2017.
4. Aggrieved the appellants had preferred Special Leave Petition (SLP, for short) before the Supreme Court, vide diary No. 22243/2017 along with an application seeking exemption from surrendering. The application was dismissed by order-in-chamber dated 31st July, 2017, albeit the appellants were granted two weeks time to surrender. Appellants were to file proof of surrender in the Registry of the Supreme Court. The Supreme Court had also directed that if the appellants do not surrender within the extended time of two weeks, warrants issued by the High Court shall be executed.
5. The appellants did not surrender within the time granted by the Supreme Court.
6. By the order dated 3rd August, 2017, a Division Bench of this Court disposed of C.M. No. 26082/2017, seeking suspension of sentence during pendency of the present appeal, as infructuous stating that the order of the Supreme Court dated 31st July, 2017 had not been complied with.
7. The order of the Division Bench dated 3rd August, 2017 was challenged before the Supreme Court in SLP (Criminal) filed vide diary No. 23938/2017 along with an application seeking exemption from surrendering. This application for exemption from surrendering was dismissed vide order-in-chamber dated 18th August, 2017, albeit the appellants were granted two weeks” time to surrender and submit proof thereof in the Registry. It was further directed that if the appellants surrender and submit proof thereof within the aforesaid time, the matter would be posted for consideration before the Court.
8. The appellants had then filed CRL M.P. 84168/2017 before the Supreme Court seeking extension of time to surrender as the second appellant was undergoing medical treatment in the AIIMS, New Delhi. Considering the said fact, the Supreme Court vide order dated 11th September, 2017 had granted extension of time to surrender by three weeks. At the same time it was directed that if the appellants do not surrender within the extended period, it could be presumed that they were not interested in pursuing the matter and the SLP would be deemed to be dismissed for non-prosecution without further reference to the Court.
9. In the meanwhile, hearing in the present Contempt Appeal fixed on 22nd August, 2017 was deferred at the request of the Counsel for the appellants to a date after 1st September, 2017 i.e. the date of surrender fixed by the Supreme Court. Accordingly, the appeal was directed to be listed f
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