Contempt Power Is Not Only For Violation Of Express Orders; Applies To Any Act Intended To Frustrate Judicial Process : Supreme Court

"The Contempt jurisdiction of the court extends beyond the mere direct disobedience of explicit orders or prohibitory directions issued by the court. Even in the absence of such specific mandates, the deliberate conduct of parties aimed at frustrating court proceedings or circumventing its eventual decision may amount to contempt. This is because such actions strike at the heart of the judicial process, undermining its authority and obstructing its ability to deliver justice effectively. The authority of courts must be respected not only in the letter of their orders but also in the broader spirit of the proceedings before them," the Court observed.

"Thus, the mere conduct of parties aimed at frustrating the court proceedings or circumventing its decisions, even without an explicit prohibitory order, constitutes contempt. Such actions interfere with the administration of justice, undermine the respect and authority of the judiciary, and threaten the rule of law," the Court held.

Accordingly, a bench comprising Justice JB Pardiwala and Justice Manoj Misra held that the act of a borrower transferring the property to a third party during the pendency of proceedings before the Supreme Court amounted to contempt of court.

The Court was deciding a contempt petition filed by Celir LLP which was the auction purchaser of the property. As per judgment dated September 21 in Celir LLP v. Bafna Motors (Mumbai), the Supreme Court set aside the High Court's judgment which allowed the borrower to redeem the mortgage. Further, the bank was directed to issue sale certificate to the auction purchaser (petitioner). However, during the pendency of the said proceedings, the borrower had assigned the property to a third party.

The borrower then filed the contempt petition alleging disobedience on the part of the respondents in handing over the possession of the property and annulling the release deed executed in favour of the borrower.

An argument which was raised in the case was that the transfer of the property happened before the Court passed its judgment and hence there was no contempt of court committed.

The Court also noted that there were attempts by the borrower and the subsequent transferee to obstruct the implementation of the judgment. Rejecting this argument, the Court observed :

"Any contumacious conduct of the parties to bypass or nullify the decision of the court or render it ineffective, or to frustrate the proceedings of the court, or to enure any undue advantage therefrom would amount to contempt. Attempts to sidestep the court's jurisdiction or manipulate the course of litigation through dishonest or obstructive conduct or malign or distort the decision of the courts would inevitably tantamount to contempt sans any prohibitory order or direction to such effect."

At the same time, the Court refrained from holding them guilty of contempt and instead chose to give them an opportunity to comply with the judgment.

The Court declared the subsequent transfer to be invalid and passed consequential orders.

Senior Advocates Mukul Rohatgi and Neeraj Kishan Kaul for the petitioners; Senior Adv Dr AM Singhvi for the borrower; Senior Advocate Kapil Sibal for the subsequent transferee; Senior Advocate Raju Ramachandran for the bank.

Also from the judgment- Though S.52 TP Act Doesn't Make Pendente Lite Transfer Void, Court Can Invalidate Such Sale Exercising Contempt Power : Supreme Court

Case : Celir LLP v. Ms Sumati Prasad Bafna and others

Citation : 2024 LiveLaw (SC) 991

Click here to read the judgment