When Party Violates Status Quo Order, Contempt Proceedings Must Be Initiated Than Merely Vacating Interim Order : Supreme Court

A Bench of Justices Aniruddha Bose and Sanjay Kumar passed the judgment.

Essentially, a trust filed a suit for inter-alia, recovery of possession against a registered society. Pertinently, the occupation of the premises was with the society. The Trial Court decreed the suit in favor of the trust. Thereafter, the execution proceedings were initiated by the Trust.

The society challenged this judgment in an appeal before the Calcutta High Court. During the hearing, the Single Judge Bench of the High Court passed a stay order in the execution proceedings. While doing so, the Court directed the Society to maintain the status quo concerning possession. Further, the Society was also to refrain from creating any third-party interest.

However, the Society had let out the suit premises, resulting in contempt proceedings against it. The Division Bench noted an exhibition was conducted in the suit premises after paying the Society Rs. 6,000/- towards rent.

The Court held that the Society granted licenses for short terms to third parties, thus wilfully violating the stay order. However, the Bench instead vacated the stay of execution proceedings rather than initiating a proceeding for contempt.

Challenging this order, the contemnor approached the Top Court. It was contended that it was not open to the High Court to vacate the the stay order while exercising contempt jurisdiction.

Supreme Court Observations

The Court relied on several decisions to observe that, in addition to punishing a contemnor for disobeying its orders, the Court can also ensure that such a contemnor does not continue to enjoy the benefits of his disobedience.

Amongst the thread of precedents referred was Baranagore Jute Factory PLC. Mazdoor Sangh (BMS) vs. Baranagore Jute Factory PLC., (2017) 5 SCC 506. Therein, it was held that the Court must issue appropriate directions for remedying or rectifying the things done in violation of the Court order. In this respect, the Court may even take restitutive measures at any stage of the proceedings.

Taking a cue from this, the Court observed that vacating the stay order in exercise of contempt jurisdiction was neither restitutive nor of remedying character.

“Violation of the status quo condition in the stay order stood complete, even as per the High Court, and vacating of the stay order did not have the effect of restoring the parties to their original position or deny the contemnor the benefit of the disobedience which already stood concluded.,” the Court explained.

The Court held that the act violating the status quo order amounted to 'civil contempt' under the Contempt of Courts Act, 1971. It opined that the High Court has transgressed the scope and extent of its contempt jurisdiction. Thus, while setting aside the impugned order, the Court remanded the matter to the High Court.

“However, as the High Court desisted from exercising contempt jurisdiction, owing to this misconceived measure, despite finding the contemnor guilty of willfully violating the status quo condition in the stay order, we consider it appropriate to remand the matter to the High Court for continuing with that exercise as we have now set aside the course of action adopted by the High Court in the alternative.”

In view of these facts and circumstances, the Court allowed the appeal.

Case Title: AMIT KUMAR DAS JOINT SECRETARY vs. SHRIMATI HUTHEESINGH TAGORE CHARITABLE TRUST (SOLE RESPONDENT)., Diary No.- 40480 - 2014

Citation : 2024 LiveLaw (SC) 73

Click here to read/ download the judgment