Bank Of Maharashtra, A Banking ... vs Rajendra Liladhar Rathi And Ors.
2002 Latest Caselaw 635 Bom

JUDGMENT

V.M. Kanade, J.

1. This criminal contempt petition has been filed by the petitioner-Bank of Maharashtra, which is a Banking Company duly constituted under the provisions of the Banking Companies (Acquisition and Transfer of Undertakings) Act No. V of 1970, against the respondents who were the defendants in a Civil Suit filed by the Bank for recovery of certain amount.

FACTS

2. The respondent Nos. 1 and 2 are the Directors of M/s. Apex Nylocraft Industries Private Limited. The respondent No. 1 is the Director of M/s. Apex Nylocraft Industries Private Limited. The respondent No. 2 was also a Director of the said company, but he expired during the pendency of these proceedings. The petitioner had given a loan to the respondents and since the said loan was not repaid, the petitioner has filed a Civil Suit against the condemners in which they had claimed an amount of Rs. 21,56,992.04. Though notices were served on the contemners in the said suit yet they did not appear before the Court consequently did not file their written statement and, therefore, the suitproceeded ex parte and ultimately an ex parte decree was passed in favour of the petitioner and the decree was drawn up

accordingly. The petitioner filed Execution Proceedings in the Trial Court on 28.07.1998. The Executing Court issued warrant of attachment of the property of the respondents and for fhat purpose the application was made by the petitioner to engage a special bailiff. Accordingly, the order to that effect was passed by the Executing Court and a special bailiff was appointed for the purpose of executing the warrant of attachment for the recovery of Rs. 31,94,981.04. This order was passed on 19.08.1998.

3. When the said warrant of attachment was sought to be enforced by the petitioner, the contemners paid Rs. 5,000/- in cash and issued four post-dated cheques to the petitioner of Rs. 45,000/- each which were drawn on Nagpur Nagrik Sahakari Bank, Nagpur. The bailiff accepted the said cheques and forwarded them to the petitioner-Bank. The Bank, in turn deposited the said cheques and those cheques were dishonored on 14.09.1998 with an endorsement, that there were insufficient funds in the account of the respondents.

4. Thereafter, the contemners approached the petitioner-Bank and gave proposal of compromise by offering to pay Rs. 2,000/- per month towards the decretal amount. The Bank declined to accept the said offer. It is the contention of the petitioner that if the said cheques had not been issued by the respondents they would have proceeded with the execution of the warrant of attachment. It is the case of the petitioner that the respondents had deliberately with an intention to cheat the petitioner, issued the saidpost-dated cheques though they were aware that there were no funds in their account. It is the contention of the petitioner that by giving those cheques to the bailiff, who is an officer of the Court, the respondents had deliberately interfered and obstructed in the process of administration of justice and, therefore, they were liable under Section 2 Sub-clause (c) of the Contempt of Courts Act, 1971.

5. The petitioner herein immediately on the dishonor of the cheques, initially filed a criminal complaint in the Court of II Judicial Magistrate First Class, Nagpur under Section 138 of the Negotiable Instruments Act read with Sections 420 and 406 of the Indian Penal Code. Process was issued by the learned Magistrals against the accused and the said criminal complaint is pending before the II Judicial Magistrate First Class, Nagpur.

6. The respondents appeared in those proceedings and deposited cash security of Rs. 8,000/-.

7. The petitioner, thereafter, filed a contempt petition under Section 15(2) of the Contempt of Courts Act, 1971 against the respondent on 05.11.1998. This petition was admitted on 16.03.1999. The respondent No. 2, in the meantime, expired on 07.08.1999. The son of respondent No. 2, during the pendency of these proceedings, deposited the said amount of Rs. 30,000/- on 15.12.2001 which was entire amount of the cheque which was issued by the respondents at the time of the execution of the warrant of attachment. This amount was accepted by the Bank.

8. In the meantime, the ex parte decree which was passed against the respondents, was set aside on payment of the costs of Rs. 2,000/- and the suit was restored on the file and the said suit was pending in the Court of Jt. Civil Judge, Senior Division, Nagpur and was thereafter transferred to the Debt Recovery Tribunal.

9. Learned Counsel appearing on behalf of the petitioner urged that the respondents had committed criminal contempt by issuing cheques to the bailiff at the time of execution of the warrant of attachment which they knew that they would be dishonored as there was insufficient funds in their account. He submitted that the bailiff being a nominee of the Court,

the respondents had even cheated the Court and, therefore, had committed criminal contempt of Court as it amounted to interference in the administration of justice. He submitted that had those cheques not been issued by the respondents the Bank would have proceeded with the execution of the warrant of attachment. He submitted that, therefore, the respondents had committed a fraud on the Court and, therefore, they were liable to be punished under the provisions of the Contempt of Courts Act, 1971. He submitted that so far as the contempt proceedings are concerned it is the matter between the Court and the contemners and that the Bank had merely brought this fact to the notice of the Court by filing contempt petition.

10. Learned Counsel appearing on behalf of the respondents submitted that the criminal contempt petition filed by the petitioner was not maintainable. He submitted that the alleged act on the part of the respondents did not fall within the four corners of Section 2(c) of the Contempt of Courts Act and it could not be said that the said action amounted to criminal contempt as defined under the said section. He, further, submitted that the respondents also had at no point of time given any undertaking to the bailiff or to the Court while issuing the said cheques and, therefore, he had not committed any breach of undertaking or order passed by the Court and, therefore, even otherwise they had not committed even a civil contempt. He submitted that the contempt proceedings had been initiated by the petitioner-Bank in order to pressurise the respondents and was also an arm twisting method adopted by the petitioner for the purpose of recovering the alleged claim made by the Bank. He submitted that so far as the criminal complaint which is filed by the petitioner under Section 138 of the Negotiable Instruments Act and under Sections 420 and 406 of the Indian Penal Code is concerned, the same is still pending before the Judicial Magistrate, First Class, Nagpur. He therefore, submitted that the said criminal contempt petition had been filed in order to force the respondents to pay the decretal amount. He submitted that it was an abuse of the process of the Court and, therefore, the petition was liable to be dismissed with costs.

11. We have perused the petition, annexures thereto and the reply filed by the respondents. Section 2(a) defines Contempt of Courts which reads as follows :

"2(a) 'contempt of court' means civil contempt or criminal contempt".

Sections 2(b) and 2(c) have defined what is a civil contempt and criminal contempt. Sections 2(b) and 2(c) are as follows-

"2(b) 'civil contempt' means willful disobedience to any judgment decree, direction, order, writ or other process of a Court or wilful breach of an undertaking given to a Court;

2(c) 'criminal contempt' means the publication (whether by words, spoken or written, orby signs, or by visible representations, or otherwise) of any matter or the doing of any other act whatsoever which-

 (i)    scandalises or tends to scandlise, or lowers or tends to lower the authority of any Court; 
 

 (ii)   prejudices, or interferes or tends to interfere with, the due course of any judicial proceeding; or  
 

 (iii) interferes or tends to interfere with, or obstructs or tends to obstruct, the administration of justice in any other manner."   
 

 12. In the present case, it is an admitted position that no undertaking has been given by

the respondents either to the bailiff or to the Court that the cheques which were issued by them would be honoured though undertaking has been given by the respondents that the amount would be paid within a particular time. Secondly, the cheques were issued and signed by the respondent. No. 2, who subsequently expired during the pendency of the proceedings on 07.08.1999. The respondent No. 1 was not asignatory to the said cheques which were issued. The son of the respondent No. 2 had in the meantime deposited the entire amount of the said cheques which were issued by the respondent No. 2.

13. In our view, therefore, the said dishonor of cheques can under no circumstances be termed as civil contempt much less criminal contempt as defined under the Contempt of Courts Act.

14. In our view, there are ample provisions under the Code of Civil Procedure to protect the interest of decree holder and the Bank was at liberty to adopt such steps to execute the said decree. The Bank instead of taking those steps as contemplated under the Code of Civil Procedure, thought it fit to file the present criminal contempt petition in this Court and, that too, after they had filed the criminal complaint before the Judicial Magistrate, First Class, Nagpur under Section 138 of the Negotiable Instruments Act read with Sections 420 and 406 of the Indian Penal Code. It is obvious from the facts and circumstances of the present case that the petitioner-Bank which is a Banking Company under the Companies Act has tried to invoke contempt jurisdiction of this Court only in order to pressurise the respondents. We do not find that the present contempt petition has been bona fidely filed by the petitioner-Bank, particularly when the criminal complaint filed by them was already pending before the Judicial Magistrate, First Class, Nagpur and also when the civil suit which was filed by the Bank had been restored to the file and the ex parte decree has been set aside. We cannot accept the submissions made by the learned Counsel appearing on behalf of the petitioner-Bank that this is a case of obstruction in the administration of justice. It would be profitable to refer to the observations made by the Apex Court in the case of Babu Ram Gupta v. Sudhir Bhasin and Anr., , wherein the Apex Court has taken into consideration various instances and has laid down test to determine whether a Contempt of Court had been committed or not. In para 10 of the said judgment, the Apex Court observed as follows :

"... A few examples would show how unsustainable in law the view taken by the High Court is. Take the instance of a suit where the defendant agrees that a decree for Rs. 10,000/- may be passed against him and the Court accordingly passes the decree. The defendant does not pay the decree. Can it be said in these circumstances that merely because the defendant has failed to pay the decretal amount he is guilty of contempt of Court? The answer must necessarily be in the negative. Take another instance where a compromise is arrived at between the parties and a particular property having been allotted to A, he has to be put in possession thereof by B. B does not give possession of this property to A. Can it be said that because the compromise decree has not been implemented by B, he commits the offence of contempt of Court? Here also the answer must be in the negative and the remedy of A would be not to pray for drawing up proceedings for contempt of Court against B but to approach the Executing Court for directing a warrant of delivery of possession under the provisions of the Code of Civil Procedure. Indeed, if we were to hold that non-compliance of a compromise decree or consent order amounts to contempt of Court, the provisions of the Code of Civil Procedure relating to execution of decrees may not be resorted to at all. In fact, the reason why a breach of clear undertaking given to the Court amounts to contempt of

Court is that the contemner by making a false representation to the Court obtains a benefit for himself and if he fails to honour the undertaking, he plays a serious fraud on the Court itself and thereby obstructs the course of justice and brings into disrepute the judicial institution. The same cannot, however, be said of a consent order or a compromise decree where the fraud, if any, is practised by the person concerned not on the Court but on one of the parties. Thus, the offence committed by the person concerned is qua the party not qua the Court, and, therefore, the very foundation for proceeding for contempt of Court is completely absent in such cases. In these circumstances, we are satisfied that unless there is an express undertaking given in writing before the Court by the contemner or incorporated by the Court in its order, there can be no question of wilful disobedience of such an undertaking. In the instant case, we have already held that there is neither any written undertaking filed by the appellant nor was any such undertaking impliedly or expressly incorporated in the order impugned. Thus, there being no undertaking at all the question of breach of such an undertaking does not arise."

Similarly, in para II, the Apex Court has observed that, however improper or reprehensible the conduct of the contemner may be yet the act of the appellant in not complying with the terms of the consent order does not amount to an offence under Section 2(b) of the Act. We cannot accept the submissions made by the learned Counsel appearing on behalf of the petitioner that the observations of the Supreme Court in this judgment would not be applicable to the facts of the present case since the present petition has been filed under Section 15(2) of the Contempt of Courts Act and that in the facts of the case before the Apex Court, the petitioner had claimed that the contemner therein had committed civil contempt. We cannot accept the submissions made by the learned Counsel appearing on behalf of the petitioner. The Apex Court has clearly observed that merely because the amount payable under a money decree is not paid, it will not amount to contempt of Court and decree holder should execute the decree as per the provisions of the Code of Civil Procedure. Similar view has been taken by this Court in the case of Ahmed K. V. Peermohcmed v. Jogi S. Bhar and Ors., . A Single Judge of this Court has observed in para 7 as under:

"Turning to the consent decree itself, one searches in vain for any nexus with contempt. There is, at best and at the highest, difference between the parties on the correct construction and interpretation of certain clauses thereof. And that, strangely enough, is sought to be made the substratum of these contemptproceedings. Now, either party, only because it does not agree with or accept the rival interpretation of a decree is, therefore, surely enough, not guilty of contempt. Asjudicial experience demonstrates, rival versions qua one or the other clauses of aconsus decree, or for that matter, a decree in invitum are not unknown. But that is a far cry from contempt. Court will not permit execution, directly or indirectly, of aconsent decree (which contains no undertaking) through the medium of a contempt proceeding. Such short circuiting of the normal process cannot be encouraged. Contempt jurisdiction is not to be invoked as an easy escape from the normal judicial route to justice. Nor is it a substitute or an alternative thereto."

15. The Apex Court, in several cases, has laid down what amounts to a criminal contempt as defined under Section 2(c) of the Contempt of Courts Act, 1971. The Apex Court has observed that it is only in cases where there is an injury to the public at large and where, by the action of the contemner the image of the Court is lowered in the eyes of the public at large,

only in such cases, it can be said that the criminal contempt has been committed by the contemner. In our view if each and every infarction or inaction or omission by any of the parties to the execution proceedings is considered as a contempt then this Court will be overburdened with contempt proceedings. The parties who are non-suited cannot be permitted, to circumvent the procedure laid down either under the Code of Civil Procedure or the Code of Criminal Procedure and to invoke the contempt jurisdiction of this Court.

16. In our view, therefore, there is no merit in the submissions made by the learned Counsel appearing on behalf of the petitioner and the contempt petition is, therefore, liable to be dismissed. We would however like to add here that the petitioner-Bank has continued to pursue the said criminal contempt petition though the criminal complaint filed by the Bank is still pending in the Court of II Judicial Magistrate, First Class, Nagpur. It was open for the Bank to make such appropriate application either in the Civil Court or to continue to prosecute the respondents in the Criminal Court.

17. We have heard the petitioner and respondents at length. In the facts and circumstances, we had, in tact, given an option to the petitioner to withdraw the contempt proceedings but the petitioner insisted to continue with the same and valuable time of this Court has been consumed in this process. Under these circumstances, we feel that the interest of justice would be met if costs are imposed on the petitioner. We also feel that it is clear case of misuse of process of the Court and, therefore, we are imposing costs of Rs. 5,000/- (rupees five thousand only). We are, however, not inclined to direct the petitioner to pay these costs to the respondents as their conduct was certainly not proper. We, however, direct the petitioner to deposit the costs with the Secretary, Legal Services Sub Committee, High Court, Nagpur within four weeks of issue of certified copy to it. In the result, Rule is discharged and the criminal contempt petition is dismissed.