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IN THE HIGH COURT OF DELHI
REKHA PALLI, J.
BDR Builders and Developers Pvt. Ltd. – Appellant
Versus
Lalit Modi – Respondent
EX.P. No. 69 of 2017
Decided On : 17-12-2020
Advocate Appeared:
For the Appellants : Harish Malhotra, Sanjay Goswami.
For the Respondents: Sachin Chopra, Karan Babuta, Daksh Arora, Astha Gupta, Nandni Sahni, Sachin Bandooni.
Headnote:
Contempt of Court - Violation of Injunction Orders - Code of Civil Procedure, 1908, Contempt of Courts Act - [VIOLATION OF INJUNCTION ORDERS] - [ENFORCEMENT OF AWARD] - [Code of Civil Procedure, 1908, Section 151, Order XXXIX Rule 2A; Contempt of Courts Act, Sections 11, 12] - The court discussed the violation of injunction orders and undertakings by the judgment debtor (JD) in a case seeking enforcement of an award. The JD's deliberate actions to execute a settlement agreement and accept a huge sum from a third party, in violation of existing injunction orders, were found to be contemptuous.
Fact of the Case:
The Decree Holder (DH) filed an application seeking initiation of contempt proceedings against the judgment debtor (JD) for deliberately violating the orders of the Court by executing a settlement agreement and accepting a huge sum from a third party, in violation of existing injunction orders.
Finding of the Court:
The court found the JD guilty of civil contempt for intentionally disobeying restraint orders and violating his own undertakings made before the Court. The JD was given an opportunity to show cause on the aspect of the quantum of sentence.
Issues: Violation of injunction orders, deliberate violation of court orders, and the JD's intentional disobedience of restraint orders.
Ratio Decidendi: The JD's deliberate actions to execute a settlement agreement and accept a huge sum from a third party, in violation of existing injunction orders, were found to be contemptuous.
Final Decision: The JD was found guilty of civil contempt and granted an opportunity to show cause on the aspect of the quantum of sentence.
JUDGMENT :
REKHA PALLI, J.
E.A. No. 796/2020
1. This is an application under Order XXXIX Rule 2A and Section 151 of the Code of Civil Procedure, 1908 read with Sections 11 and 12 of the Contempt of Courts Act filed by the Decree Holder (DH) seeking initiation of contempt proceedings against the judgment debtor (JD)/Mr. Lalit Modi for deliberately and intentionally violating the orders of this Court passed on 15.04.2019 and 28.01.2020 in these execution proceedings.
2. The DH preferred the captioned execution petition seeking enforcement of the award dated 21.11.2016/12.01.2017 whereunder he was held entitled to specific performance of a sale agreement dated 24.06.2014. In accordance with the agreement, the award directed the JD to execute a sale-deed with respect to the property bearing No. 32, Paschimi Marg, Vasant Vihar, New Delhi admeasuring 858 sq. yards (hereinafter referred to as the “subject property”) in favour of the DH and hand him physical possession thereof by 31.03.2017. Although the JD has challenged the award by way of a petition under Section 34 of the Arbitration and Conciliation Act, 1996 (‘the Act’) being OMP (Comm.) No. 7/2017, which is still pending adjudication, the award has not been stayed.
Details of injunctions/assurances pertaining to the subject property
3. Shortly after the award was passed and prior to the institution of this execution petition, the DH had preferred a Section 9 petition OMP (I) No. 3/2017 which was disposed of on 04.09.2017 by restraining the JD from creating any third party rights in the subject property till his Section 34 petition or the present execution petition were disposed of (hereinafter referred to as the ‘first injunction’).
4. However, this was not the only order of injunction operating on the subject property. Sometime before these execution proceedings were instituted, one Mr. Romi Garg had instituted a suit against the JD, being CS (OS) No. 109/2017, seeking specific performance of a sale agreement executed between them on 14.07.2016 pertaining to the subject property as well. When Mr. Romi Garg learnt of the Award which forms the subject matter of these enforcement proceedings, he instituted another suit, being CS (OS) No. 14/2018, seeking a declaration to the effect that the Agreement to Sell dated 24.06.2014 and the Award dated 21.11.2016 were void and unenforceable. However, this subsequently preferred suit was dismissed as not being maintainable. Aggrieved thereby, Mr. Romi Garg appealed against this dismissal by preferring FAO (OS) No. 116/2018 wherein, on 18.07.2018, the JD was restrained from creating any third-party interest in the subject property. This interim direction was made absolute on 16.01.2020 (hereinafter referred to as the ‘second injunction’).
5. An injunction of a similar nature was granted on 15.04.2019 in these execution proceedings when this Court took up E.A. No. 85/2019 for the second time, after issuing notice therein on 15.02.2019. By way of this application, the DH had sought appointment of a Receiver to take over possession of the subject property but in the absence of a reply from the JD, the Court adjourned the matter to 13.08.2019 and restrained the JD from creating any third-party rights in the subject property (‘third injunction’).
6. On the next date of hearing, i.e. 28.01.2020, in response to the DH’s apprehension that the JD may hand over possession of the subject property in favour of Mr. Romi Garg if his civil suit were decreed in the meanwhile, a specific assurance was given to this Court by the JD that he was conscious of the various injunctions operating on the subject property and that he had no intent of violating the same. The Court recorded this undertaking and adjourned the matter to 21.04.2020. However, the matter could not be listed thereafter since normal functioning of the Court was suspended owing to the COVID-19 pandemic.
Facts constituting contempt
7. On 14.05.2020, the first suit preferred by Mr. Romi Garg, being CS (OS
