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SUPREME COURT OF INDIA
Indira Banerjee, V. Ramasubramanian, JJ.
SUMAN CHADHA & ANR. – PETITIONER(S)
Versus
CENTRAL BANK OF INDIA – RESPONDENT(S)
SPECIAL LEAVE PETITION (C) No.28592 of 2018
Decided On : 09-08-2021
(A) Contempt of Courts Act, 1971 – Sections 10 and 12 – Contempt of Court – Wilful breach of undertaking given to Court amounts to contempt of Court under Section 2(b) of Act – But Court has always seen nature of undertaking made; benefit if any, reaped by party giving undertaking; and whether filing of undertaking was with a view to play fraud upon court or to hoodwink opposite party – There is distinction between an order passed on consent terms and an order passed solely on the basis of an undertaking given to court and distinction between a person playing fraud on court thereby obstructing course of justice and a person playing fraud on one of parties. (Para 16)
(B) Contempt of Courts Act, 1971 – Sections 10 and 12 – Contempt of Court – Normally, question whether a party is guilty of contempt is to be seen in specific context of disobedience and wilful nature of same and not on the basis of conduct subsequent thereto – While it is open to court to see whether subsequent conduct of alleged contemnor would tantamount to an aggravation of contempt already committed, very determination of an act of contempt cannot simply be based upon subsequent conduct – Subsequent conduct of party may throw light upon one important aspect namely whether it was just inability of party to honour commitment or it was part of a larger design to hoodwink court – In appropriate cases where a party had acted bonafide while giving an undertaking, but could not honour undertaking on account of reasons that are reasonable and genuine, Court could certainly withhold its stick from being wielded – In present case, there are findings of fact to the effect that petitioners did not act bonafide – Finding of High Court that petitioners are guilty of contempt, does not call for our interference under Article 136 – Petitioners have also spent 11 days in custody out of total period of imprisonment of three months imposed by High Court – In such circumstances, it is sufficient punishment for petitioners – SLP disposed of upholding finding of Single Judge and Division Bench of High Court that petitioners are guilty of contempt of court, but reducing period of sentence from three months to period of imprisonment already suffered/undergone by petitioners. (Paras 25, 26, 29, 31, 33 and 34)
Facts of the case:
Upon being found guilty of committing contempt of Court, petitioners who are husband and wife respectively, were sentenced to simple imprisonment for three months along with a fine of Rs.2000/- each, by a Judge of the Delhi High Court. The said Order having been confirmed by Division Bench of the High Court in an appeal under Section 19 of the Contempt of Courts Act, 1971, petitioners have come up with the above Special Leave Petition.
Findings of Court:
In appropriate cases where a party had acted bonafide while giving an undertaking, but could not honour undertaking on account of reasons that are reasonable and genuine, the Court could certainly withhold its stick from being wielded. But in this case there are findings of fact to the effect that the petitioners did not act bonafide.
Result : SLP disposed of with observations.
JUDGMENT
V. Ramasubramanian, J.
1. Upon being found guilty of committing contempt of Court, the petitioners who are husband and wife respectively, were sentenced to simple imprisonment for three months along with a fine of Rs.2000/ each, by a learned Judge of the Delhi High Court. The said Order having been confirmed by the Division Bench of the High Court in an appeal under Section 19 of the Contempt of Courts Act, 1971 (‘Act’ for short), the petitioners have come up with the above Special Leave Petition.
2. We have heard Mr. Santosh Kumar, learned counsel appearing for the petitioners and Mr. Anuj Jain, learned counsel appearing for the respondentBank.
3. The background facts which led to the petitioners being held guilty of contempt of Court, are lucidly recorded in the Order dated 18.07.2017 of the learned Judge. They are as follows:
(i) The petitioners were Directors of a company by name Parul Polymers Private Limited, which availed loan/credit facilities from the respondent Bank. The petitioners guaranteed the repayment of the loan and had also offered immovable properties as security.
(ii) On 24th July, 2014, the loan of the respondents was categorized as a Non Performing Asset due to defaults in repayment. On 18th August, 2014, a notice under Section 13(2) of SARFAESI Act was issued for recovery of Rs. 28,82,25,942.24 plus interest. It was followed by a possession notice under section 13(4) in respect of two properties.
(iii) Aggrieved by the same, the petitioners filed S.A. No. 367/2014 before the Debts Recovery TribunalIII, New Delhi (‘DRTIII’ for short), under Section 17 of the SARFAESI Act. However, the DRTIII declined to grant any interim relief against the physical possession of the aforesaid properties.
(iv) The petitioners filed an appeal but could not deposit Rs. 7 crores being 25% of the amount demanded in the notice under Section 13(2). Eventually the appeal was dismissed as withdrawn on 31.03.2015.
(v) However, on 01st April, 2015, the petitioners secured a conditional order of stay from DRTIII, New Delhi in S.A. No. 367/2014 whereby the petitioners were required to deposit a sum of Rs. 5 crores within thirty days. The order also stipulated that Rs. 2 crores would be deposited by 03rd April, 2015.
vi) On 03rd April, 2015, the petitioners gave a letter to SHO, Police Station Katju Marg, Rohini, Delhi showing their intention to deposit the amount of Rs. 2 crores by way of four cheques. Therefore, the Receiver was unable to take possession of the properties.
(vii) Thereafter, the petitioners challenged the conditional order of stay passed by DRTIII on 01st April, 2015 before the High Court by way of W.P.(C)No.3406/2015 stating that the Bank and DRTIII were acting unfairly and unjustly in not accepting their cheques totalling to Rs. 2 crores.
(viii) When the writ petition came for admission and interim orders on 8th April, 2015, the petitioners admitted liability and offered, by way of a statement under oath, to deposit Rs. 7 crores, i.e. 25% of the notice amount in three instalments on or before 30th June, 2015. The Bank gave its assent and thereafter the Court ordered that the possession of the properties of the petitioners shall not be disturbed subject to the petitioners depositing Rs. 7 crores on or before 30th June, 2015, i.e. Rs. 2 crores on 30th April, 2015, Rs. 2.5 crores each on 31st May, 2015 & 30th June, 2015.
(ix) On 29th April, 2015, the petitioners gave a letter along with four cheques for Rs. 50 lakhs each dated 06th May, 2015 purportedly in compliance of the order dated 08th April, 2015.
(x) Accordingly, the possession proceedings for one property scheduled for 30th April, 2015 were deferred by the Bank. But on 08th May, 2015, all the four cheques bounced.
4. Therefore, the respondentBank filed a petition under Sections 10 and 12 of the Contempt of Courts Act, 1971 for punishing the petitioners for wilful and deliberate breach of their undertaking dated 08.04.2015. Though the petitioners resisted
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