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IN THE HIGH COURT OF JUDICATURE AT MADRAS
MS. JUSTICE P.T. ASHA, J.
S. Thiagarajan & Others – Appellant
Versus
V.S. Suresh, Managing Director, M/s. Real Value Promoters Pvt. Ltd. – Respondent
Cont.P.No. 494 of 2019
Decided On : 30-03-2021
SARFAESI Act – Section 14 – Constitution of India, 1950 – Article 215 – Contempt of Courts Act – Sections 11, 20 – Code of Civil Procedure, 1908 – Order XXXIX Rule 1 and 2 – Arbitration and Conciliation Act – Section 9 – Act of contempt – Contempt petition has been filed by the applicants contending that the respondent has committed an act of contempt by disobeying the orders of this Court in O.A – Petitioners and the respondent had entered into an agreement for developing the property – Agreement had contained an arbitration clause in and by which parties had resolved to settle their disputes through arbitration – Since disputes arose between the parties the petitioners had filed O.A. seeking an order of an interim injunction restraining the respondent, their men or agents, servants, representatives or any person claiming through the respondent, from alienating, selling, encumbering, mortgaging or otherwise dealing with the property described as the A - Schedule in the arbitral proceedings. –
Finding of the Court:
Alleged act had taken place in the year 2014 and this contempt petition has been filed in the year 2019, 4 years after the alleged act. – A reading of Section 20 of the Contempt of Courts Act would indicate that the period of limitation does not start from the date of knowledge but from the date of the alleged occurrence which in the instant case is the year 2014. – Argument by the respondent that the Bank had taken possession of the property by exercising the rights under Section 14 of the SARFAESI Act and therefore the petition is in time is totally misconceived. – Contempt petition has been filed in the year 2019 alleging contempt on account of the mortgage created by the respondent in the year 2014. – Article 215 of the Constitution of India deals with the contempt of the orders of the High Court. – It is clear that the instant contempt petition filed is beyond the period of limitation. – Mortgage has been created in the year 2014 whereas the contempt proceedings has been initiated only in the year 2019. – Court have held that the Contempt Petition is barred by limitation court is not considering the next argument advanced by the learned counsel for the respondent that the proceedings under Section 9 is akin to the provisions under Order XXXIX Rule 1 and 2 of the Code of Civil Procedure. –
Result: Contempt Petition Dismissed
Judgment :-
(Prayer: Petition is filed under Section 11 of the Contempt of Courts Act to punish the respondent for the wilful disobedience of the order dated 17.05.2012 passed in O.A.No.428 of 2012 and A.No.2311 of 2012.)
This Contempt petition has been filed by the applicants contending that the respondent has committed an act of contempt by disobeying the orders of this Court dated 17.05.2012 in O.A.No.428 of 2012. Considering the fact that the application is one for contempt, I do not wish to delve too much into the facts set out in the Section 9 application and shall narrate the facts relevant for disposing the contempt petition.
2. The petitioners and the respondent had entered into an agreement for developing the property. The agreement had contained an arbitration clause in and by which parties had resolved to settle their disputes through arbitration. Since disputes arose between the parties the petitioners had filed O.A.No.428 of 2012 seeking an order of an interim injunction restraining the respondent, their men or agents, servants, representatives or any person claiming through the respondent, from alienating, selling, encumbering, mortgaging or otherwise dealing with the property described as the A - Schedule in the arbitral proceedings.
3. The A-Schedule property was described as follows:
2800 Sq.ft. UDS together with 781 Sq.ft. in the 8th floor and 5684 Sq.ft. in 9th floor of the building “Prashanth Real Gold Tower”, No.39, North Usman Road, T.Nagar, Chennai – 17.”
4. When the matter had come for the first time, the respondent had appeared through counsel and submitted an undertaking that the respondent shall not alienate 781 Sq.ft. in the 9th floor owned by him so as to avoid multiplicity of proceedings. The Court had recorded the said undertaking and had proceeded to close the application since parties had already agreed to appear before the arbitrators in the arbitration proceedings that had been initiated and they had agreed to abide by the award to be passed by the arbitrators.
5. While so, the petitioners have come forward with the contempt petition stating that in the course of the collateral proceedings, when the petitioners had collected information about the status of the property in respect of which the undertaking was given, they came to learn that in wilful breach of the undertaking given, the respondent had alienated the property. The petitioners came to know that the respondent on 01.10.2014 had created a mortgage by deposit of title deeds in favour of the IDBI Bank and thereafter since the respondent had failed to repay the loan, proceedings under the SARFAESI Act had been undertaken by the Bank. Therefore, it is the contention of the petitioners that there has been a wilful disobedience of the undertaking given to this Court.
6. A statutory notice was issued to the respondent and the respondent had appeared in person before the Court. A counter has been filed, in which apart from tendering an unconditional apology the respondent would submit that the undertaking which was given has not been violated. The respondent would seek to put in perspective the dispute between the parties and the conduct of the petitioners after the initiation of the arbitral proceedings and how orders of this court has not been disobeyed. The respondent would contend that they have not alienated the property as undertaken by them. The respondent would submit that as per agreement between him and the petitioners 50% of the construction of the property has been completed and handed over to the applicants. Completion Certificate has also been issued and the petitioners have also leased out their share in the property to a Jewellery chain, Joy Allukas.
7. However, when the respondent attempted to work in the 8th floor for his purchaser, which fell to their share, the petitioners started interfering in the said work. That apart, they had also canceled the Power of Attorney dated 27.04.2012, which caused a great deal of hardship to the
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