Ambiguity In Court's Order Absolute Defence To Contempt Action: Delhi High Court

The Court also observed that if there is a possibility of different interpretations of the court's order, this could also be a defence against contempt action.

“Ambiguity in the direction, or the order, of which disobedience is alleged is, therefore, if found to exist, an absolute defence to a contempt action. The possibility of the order being amenable to more than one interpretation is equally fatal to a plea of contempt. This is obviously for the reason that, where the direction is not clear, or unequivocal, it is not possible to return a finding that the disobedience, or breach, is deliberate. The possibility of two interpretations of the directions given by the Court, therefore, fatally imperils any charge of contempt.”

Justice C. Hari Shankar was considering the petitioner-company's allegations of contempt of the court's order dated 3 June 2022 against the respondent-company.

In its order, the court had directed the respondent-company to not sell or create any third party rights in certain immovable, subject to the prior right of any financial institution.

The petitioner alleged that by selling one Siraspur property to the SBI, the respondent committed a breach of the court's order. The petitioner asserted that the title deed of the property with the SBI was incorrect as no equitable mortgage had been created with respect to the said property.

However, the respondent opposed the plea and stated that the order restrained the alienation of the immovable properties subject to the prior right of any financial institution. It contended that the expression used in the order was 'prior right' and not 'mortgage'. It argued that as SBI had a prior right over the property, it was sold only to enforce this prior right.

The Court discussed the factors necessary to hold a party for contempt. The Court observed that wilful obedience under Section 2(b) of the Contempt of Courts Act has to an act or attitude which belittles or undermines the need to comply with court directions.

It stated that contempt arises when a party displays total indifference to the directives or undertaking before the court.

“The duty to respect orders and directives of the court, and to honour undertakings tendered before court, includes, within it, a positive obligation to do so. If, therefore, in awareness of the said directive or undertaking, a party acts in a manner which displays total indifference to the need to comply, that, too, in a given case, may partake of the character of contempt.”

The Court noted that intent is a necessary ingredient for contempt. It stated that the court normally gives the contemnor an opportunity to remedy the breach of court's order, if the intent to commit breach of disobey, was not 'ex facie apparent'. Even after such opportunity, if the breach of disobedience continues, inference of intent could be drawn, the Court stated.

The Court observed that civil contempt is of a 'quasi-criminal character' if the punishment involves the loss of liberty, stating that courts must be 'cautious' when adjudicating contempt cases and should not be overly sensitive in their approach.

“Civil contempt actions, too, partake of quasi-criminal character, inasmuch as, if contempt is found to have been committed, the punishment that follows may entail loss of liberty. Courts have, therefore, to be cautious while arriving at findings of commission of contempt, and can in no case be over-sensitive in their approach. Sensibility, while dealing with contempt actions, is of the essence; sensitivity is to be eschewed.”

The Court observed that courts should not embark on any “lengthy interpretative or inquisitorial exercise” to determine the intent of the order allegedly breached. It stated that what is important is not the intent of the order, but what the order says.

In the present case, the Court was of the view that no contempt was made out by selling the the Siraspur property.

It noted that the submission of the petitioner's counsel acknowledged that the Siraspur property was under the charge of banks. It also noted that SBI's affidavit shows that the respondent created a prior right of the bank over the property.

It agreed with the respondent that the order did not use the expression 'mortgage' but merely referred to financial institutions which had a 'prior right'.

Further, the Court opined that the sale of property by respondent was bona fide. It noted that the respondent-company justified the sale of property in its reply to the contempt petition, which was done in order to meet its financial obligations of towards the banks.

The Court thus found that there was no willful disobedience of the Court's order and dismissed the petition.

Case title: Viterra B.V. vs. Sharp Corp Limited

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