Contempt Jurisdiction Would Not Cease Merely Because Order Is Executable : Supreme Court

The Supreme Court observed that the jurisdiction of a Court under the Contempt of Courts Act would not cease, merely because the order or decree of which contempt is alleged, is executable.

"Questions as to executability of such order is a question which concerns the parties inter-se. The power of the Court to invoke contempt jurisdiction, is not, in any way, altered by the rights of the parties inter-se.", the bench comprising Justices MR Shah and BV Nagarathna said.

The court added that, irrespective of whether or not a decree is executable, the question to be considered in determining whether a case for contempt has been made out is, whether, the conduct of the contemnor is such as would make a fit case for awarding punishment for contempt of Court.

The court was considering a contempt petition filed by Urban Infrastructure Real Estate Fund against respondents Dharmesh S. Jain and one another. The Apex Court had earlier directed the respondents to comply with and deposit the amount to be deposited as per the order passed by the High Court positively and within the time granted by this Court (eight weeks) as mentioned in the order dated 17.09.2021. It was specifically observed by this Court that non-compliance of the said order shall be treated very seriously and non-deposit of the amount as directed by the High Court shall be treated as non-compliance of the order of the Supreme Court.

In this case, the respondents contended that non-compliance with the condition of deposit would only render the Arbitrator's Award enforceable and contempt proceedings ought not to have been initiated for non-compliance with such condition which was not mandatory in nature. In this regard, the court observed thus:

"Further, it is trite law that the jurisdiction of a Court under the Act, would not cease, merely because the order or decree of which contempt is alleged, is executable under law, even without having recourse to contempt proceedings. ..Contempt jurisdiction could be invoked in every case where the conduct of a contemnor is such as would interfere with the due course of justice; vide Rama Narang vs. Ramesh Narang – [(2006) 11 SCC 114. Contempt is a matter which is between the Court passing the order of which contempt is alleged and the contemnor; questions as to executability of such order is a question which concerns the parties inter-se. The power of the Court to invoke contempt jurisdiction, is not, in any way, altered by the rights of the parties inter-se vide Bank of Baroda vs. Sadruddin Hasan Daya – [(2004) 1 SCC 360]."

The court observed that when a party which is required to comply with the terms or directions in an order has not done so within such time as stipulated in the order, two options are available to the party which was required to comply with such order:

(a) give an explanation to the Court as to the circumstances due to which the party could not comply with the order of the Court;

(b) seek for further time to comply with the order of the Court.

If a delay has occurred in complying with the terms of an order and the party which was to  comply with the order has not resorted to either of the two aforestated options, then, the party responsible for delay in compliance, may be held to have committed contempt, the bench said.

While holding the respondents guilty of contempt, the bench observed thus:

"Applying the legal propositions discussed supra, to the facts of the case at hand, we are of the view that the conduct of the respondent-contemnors is such as would justify invocation of contempt jurisdiction of this Court. Not only have the contemnors unreasonably delayed and defaulted in compliance of the orders of this Court without explaining the cause for such default, or seeking extension of time for compliance; but they have also sought to avoid compliance of the order, even after taking benefit of the extended time period granted for compliance of the same. The contemnors cannot, at this juncture, claim that the requirement of deposit was not mandatory, but directory and therefore non-compliance thereof would not constitute contempt."

Headnotes

Contempt of Courts Act, 1971 - Jurisdiction of a Court under the Act, would not cease, merely because the order or decree of which contempt is alleged, is executable under law, even without having recourse to contempt proceedings - Irrespective of whether or not a decree is executable, the question to be considered by this Court in determining whether a case for contempt has been made out was, whether, the conduct of the contemnor was such as would make a fit case for awarding punishment for contempt of Court. (Para 13.2,13.3, 15.1)

Contempt of Courts Act, 1971 - When a party which is required to comply with the terms or directions in an order has not done so within such time as stipulated in the order, two options are available to the party which was required to comply with such order: (a) give an explanation to the Court as to the circumstances due to which the party could not comply with the order of the Court; (b) seek for further time to comply with the order of the Court. If a delay has occurred in complying with the terms of an order and the party which was to comply with the order has not resorted to either of the two aforestated options, then, the party responsible for delay in compliance, may be held to have committed contempt. (Para 15)

Summary: Contempt petition filed alleging non compliance of direction issued to the respondents to comply with and deposit the award amount - Respondents held guilty of contempt - Not only have the contemnors unreasonably delayed and defaulted in compliance of the orders of this Court without explaining the cause for such default, or seeking extension of time for compliance; but they have also sought to avoid compliance of the order, even after taking benefit of the extended time period granted for compliance of the same - Respondents shall be heard on sentence.

Case details: 

Urban Infrastructure Real Estate Fund vs Dharmesh S. Jain | Contempt Petition (C) 940 OF 2021 | 10 March 2022

Citation: 2022 LiveLaw (SC) 264

Coram: Justices MR Shah and BV Nagarathna

Petitioners were represented by Jayant Bhushan Senior Advocate and Puneet Singh Bindra Advocate on Record.

Respondent were represented by Shyam Divan Senior Advocate and Kunal Mimani Advocate on Record

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