Jammu & Kashmir High Court Initiates Contempt Proceedings Against Law Firm Shardul Amarchand Mangaldas For Misquoting Judgment

Noting misquotations made by the law firm in a legal notice concerning a hydroelectric project, Sawalkote Hydroelectric Power Project (HEP) Justice Rahul Bharti ordered,

“...this Court suo-moto takes cognizance of the contents of the said legal notice issued by Sharadul Amarchand Mangaldass & Co., New Delhi for the sake of proceeding against it for the contempt of Court, for which purpose a notice is directed to be issued to Sharadul Amarchand Mangaldass & Co., New Delhi to appear and explain its position in the context of legal notice dated 18.04.2022 issued by it to Chairman & Managing Director (CMD), NHPC Ltd on behalf of Sawalkote Consortium”

Background:

The petitioner, M/s Sawalkote Prosjektutvikling AS (SPAS), a Norwegian company incorporated as a special-purpose vehicle had approached the Court seeking to quash communications and agreements between the Jammu and Kashmir Power Development Corporation (JKPDC) and the National Hydro-Electric Power Corporation (NHPC).

The petitioner claimed to represent the Sawalkote Consortium, which initially comprised NCC International AS and Hochtief Aktiengesellschaft, and later included Hindustan Construction Company (HCC) and Ozaltin Construction Trade & Industry Company.

The controversy arose when the NHPC, through a Memorandum of Understanding (MoU) with JKPDC dated January 3, 2021, took over the Sawalkote project. SPAS contended that the NHPC's actions violated the consortium's rights and misinterpreted the High Court's 2010 judgment.

The 2010 judgment was passed in a writ petition filed by the Sawalkote Consortium, comprising SPAS, HCC, and Ozaltin wherein it hadchallenged a government order that canceled an earlier agreement with the consortium for implementing the Sawalkote HEP.

The Court in its judgment had quashed the government order on the ground that it was arbitrary, issued with undue haste, and violative of Article 14 of the Constitution of India. However, the Court explicitly clarified in paragraph 12 that it would not delve into contractual disputes between the parties, as these fell within the domain of private law and were outside the scope of judicial review.

On April 18, 2022, Shardul Amarchand Mangaldas, acting on behalf of the Sawalkote Consortium, issued a legal notice to NHPC, asserting that the 2010 judgment upheld the validity of the consortium's contract and declared it binding and enforceable. The notice claimed that the Court had confirmed the consortium's right to execute the project under the 2001 agreement with JKPDC.

The notice further alleged that NHPC's actions, including floating a global tender for the project, violated the Court's judgment and amounted to contempt of court. These assertions were made to bolster the consortium's demand for recognition and compensation.

Court Observations:

After scrutinising the legal notice the court found it riddled with deliberate misinterpretations. Justice Bharti stated that the 2010 judgment did not affirm the existence or enforceability of any contract between the consortium and JKPDC as it merely examined the arbitrariness of the government's decision.

“Para 18, 20, 23, 27, 28 & 32 of the legal notice dated 18.04.2022 issued by Sharadul Amarchand Mangaldass & Co. (a law firm) through its partner Ritu Bhalla carry and make a misconceived and perverted reference to the judgment dated 01.02.2010 of the High Court of Jammu & Kashmir and, therefore, the said misquoting of the judgment of the High Court of Jammu & Kashmir by none else than law firm is a serious matter to be taken with due seriousness as prima-facie amounting to a criminal contempt undermining the administration of justice and the authority by this Court and its judgment”, Justice Bharti remarked.

Initiating suo motu contempt proceedings against Shardul Amarchand Mangaldas, the court ordered,

“The Registrar Judicial, Jammu is directed to issue notice to Sharadul Amarchand Mangaldass & Co., New Delhi for its appearance”

On merits, the court found the writ petition filed by SPAS was not maintainable as the petitioner lacked the legal status and locus standi to represent the consortium. The Court observed that SPAS, as a special-purpose vehicle, could not independently pursue claims without the participation of the other consortium members.

“As a matter of fact, the petitioner-SPAS is being referred as a leader of the Consortium thereby admitting that the constituents of the Sawalkote Consortium are indispensable from being left out to join the petitioner-SPAS in its purported status of leader for the present writ petition”, the court concluded and dismissed the petition.

Case Title: M/S SAWALKOTE PROSJEKTUTVIKLING AS (“SPAS") Vs UT Of J&K

Citation: 2025 LiveLaw (JKL) 2

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