Madras High Court
ANANTANARAYANAN,NATESAN
Nalla Senapathi Sarkarai Manradiar, Palayakottai, Dharapuram Taluk - Appellant
Versus
Ambal Mills (P) Ltd. - Respondent
Decided On : 02/03/1965
CONTEMPT OF COURT - INTERIM INJUNCTION - JURISDICTION - FLOTING OF ORDER - LEGAL ADVISER'S ROLE - CONTEMPT BY NON-PARTY - APOLOGY - DISCHARGE FROM PROCEEDINGS - COSTS.
Fact of the Case:
A company's extraordinary general meeting was prohibited by an interim injunction. Despite the injunction, the meeting was held, and a resolution was passed. The petitioner, a shareholder, filed a contempt of court proceeding against the company, its directors, and its legal adviser.
Finding of the Court:
The court found that the respondents had flouted the interim injunction order and were guilty of contempt of court. However, the court accepted their unconditional apologies and discharged them from the proceedings, considering their bona fide belief that the order was void due to lack of jurisdiction and their lack of intention to disrespect judicial authority.
Issues: 1. Whether an interim injunction order passed without territorial jurisdiction is void and can be flouted with impunity? 2. Whether a legal adviser who attends a meeting held in violation of an injunction order is guilty of contempt of court? 3. Whether non-parties who participate in a meeting held in violation of an injunction order are guilty of contempt of court? 4. Whether an apology can purge the contempt of court?
Ratio Decidendi: 1. An interim injunction order passed without territorial jurisdiction is not void and cannot be flouted with impunity. 2. A legal adviser who attends a meeting held in violation of an injunction order is guilty of contempt of court if he does not advise against holding the meeting or express apprehension that it might amount to contempt of court. 3. Non-parties who participate in a meeting held in violation of an injunction order are guilty of contempt of court. 4. An unconditional apology can purge the contempt of court if the contemnor acted bona fide and had no intention to disrespect judicial authority.
Final Decision: The court discharged all the respondents from the contempt of court proceedings, accepting their unconditional apologies and considering their bona fide belief that the injunction order was void and their lack of intention to disrespect judicial authority. The court also directed that the costs of the proceedings be paid from the funds of the company.
ANANTANARAYANAN, OFFG., C. J. : This proceeding is sought to be filed under Ss. 3 and 4 of the Contempt of Courts Act against the respondents on record, of whom the first respondent is Sri Ambal Mills (Pvt.) Ltd., a company in Coimbatore, the second respondent is the Managing director of the company, the third respondent is another director, and the eleventh respondent is an Advocate who is the legal Adviser of the company. The facts essential for an appreciation of the scope of this proceeding are simple, and, for the most part, not in controversy. It appears that the petitioner, who is a shareholder in this company, holding 2001 shares, instituted O. S. 1441 of 1964 in the court of the District Munsif, Coimbatore, against respondents 1 and 2 for a permanent injunction, restraining them from convening or conducting an extraordinary general meeting which was to be held on 14th December 1964, in pursuance of a notice issued by the second respondent. Along with the plaint, the petitioner filed I. A. No. 1840 of 1964 for an interim injunction pending disposal of the suit, restraining respondents 1 and 2. The learned District Munsif, Coimbatore, made an order in open court for an interim injunction and notice returnable on 16-1-1965.
2. At 4 p.m. on that date, 11th December 1964, the 11th respondent, viz, the advocate and legal adviser of this company, appeared in court, presented a vakalat and also an unnumbered application, requesting the court to advance the hearing of the application in which interim injunction had been directed to the 14th instant.
3. It appears from the record that the extraordinary general meeting, the holding of which was inhibited by the interim injunction, had been convened for 9-30 a.m. on 14th December 1964. The Court had issued two telegrams on 11th December 1964 to respondents 1 and 2, informing them of the prohibitory orders. It is stated that learned counsel for the petitioner also sent similar telegrams. The petitioner himself went to the notified place of meeting at 9-30 a.m. on 14-12-1964. He found several shareholders and directors present, including respondents 3 to 6. Respondents 7 to 10 were also alleged to have been present. The third respondent (Sri. V. Ayyaswami Naidu, director) occupied the chair, and the 11th respondent, the legal adviser, was by his side. The petitioner then informed those present of the ex parte interim injunction directed by the orders of court, and pointed out that holding and passing the contemplated resolution would amount to flouting the orders of court, and to contempt of court. In spite of this apparently due to an earlier written legal opinion furnished by the 11th respondent, concerning the validity and legal effect of the interim orders of injunction, the meeting was actually held, and the resolution passed. On these facts, and on the further fact that the petitioner himself entered his objections in writing in the minutes book on the occasion of the meeting, the petitioner claims that all the respondents have been guilty of contempt of court, since they deliberately flouted orders of court, being very well aware of the facts of the prohibitory orders, that they should be suitably punished for their contumacy, and that the resolution passed at the extraordinary general meeting held on 14-12-1964, has to be set aside as void.
4. These facts are adequate for a disposal of the proceedings, as far as the merits are concerned. We shall very briefly refer to the counter-affidavits of certain of the respondents. As far as the first respondent (Sri Ambal Mills (P) Ltd.) is concerned, the statement is that, in view of the furnished legal opinion that the orders of court were null and void, the meeting already convened was held in spite of the orders. In the counter-affidavits of respondents 2 and 3, there are further particulars. The second respondent did not attend the meeting, and he disclaims the averments that he deliberately permitted the meeting to be con
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