Engineering Projects (P) Ltd. vs Ishwari Parsad Ganeriwala
1990 Latest Caselaw 160 Del

JUDGMENT

Santosh Duggal, J.

(1) By this application moved under sections 11 and 12 of the Contempt of Courts Act, 1971 read with section 151 of the Code of Civil Procedure, the petitioner seeks initiation of contempt of court proceedings against the respondent I.P. Ganeriwala alleging willful disobedience on his part of this Court's order as also abuse of the process of law.

(2) The facts which have occasioned filing of this petition are that the petitioner herein had filed a petition under section 11 of the Arbitration Act seeking removal of the arbitrator to whom the disputes between the parties were referred. After the respondent put in appearance and sought time to file the reply to that petition, he moved and interim application (I.A. 2919/82) on 13th August 1982 praying, inter alia, that appropriate injunction be issued against the petitioners restraining them from encashing the bank guarantees which he had furnished, as per details given in the body of the interim application, which according to him were furnished either for release, of the raw material or by way of security deposits.

(3) On this application being taken up, G.C. Jain, J. (as he then was) and before whom the main petition under section 11 of the Arbitration Act (OMP No. 68/82) was pending, passed the following order on August 16, 1982 : "PRESENT:Shri G.N. Aggarwal, Advocate. "I.A. 2919 of1982. Notice to the respondent-petitioner for the date fixed 23.8.1982. In the meantime the petitioner is restrained from encashing the bank guarantees subject to the condition that the respondent-applicant would keep the bank guarantees alive till further orders. dusty."

On the subsequent date, after the petitioner, respondent to this interim application, had put in appearance and time for reply was allowed, an order for continuance of the order of stay was passed in the following terms : "I.A.2919 of 1982. Reply to be filed within 2 weeks. To be listed for the same date for arguments. Stay granted in IAs 1993 of 1982 and 2919 of 1982 to continue till further orders."

(4) PETITIONER'S allegation in this contempt of court petition, which is dated 22nd November 1984 but filed on 21st December 1984, is that respondent inspite of these orders of the Court while issuing interim injunction ex parte and then ordering it to continue till disposal of the petition did not take any steps to keep the bank guarantees alive and that it was thus a clear case of disobedience of the orders of this Court and also was tantamount to abuse of the process of the Court inasmuch as he obtained an order of interim injunction against the petitioners restraining them from encashing the bank guarantees and in compliance of which they refrained from encashing the bank guarantees but the respondent failed to keep the bank guarantees alive or take fresh bank guarantees in lieu thereof in terms of the Court's order. On coming to know from the State Bank of India that the respondent has failed to keep the bank guarantees alive, even a notice was issued by the petitioners to the respondent on October 8, 1984 calling upon him to renew the bank guarantees as per Court's order;-further putting him on notice that failing that they would be compelled to approach the Court for contempt of court proceedings and that inspite of this the respondent did not take any steps to renew or revive the bank guarantees.

(5) On notice of this petition being issued, the respondent has filed reply where the allegation is not controverter that after this Court's order passed on 16th August 1982 and then on 23rd August 1982 the respondent failed to keep the bank guarantees alive. There is a plea though that the State Bank of India was requested by the respondent to keep the bank guarantees alive but they failed to do so and as such the respondent was not guilty of any disobedience of the Court's order. A preliminary objection has, however, been taken as to the maintainability of the present petition under the Contempt of Courts Act, 1971, (hereinafter referred to as 'the Act'), contending that it was a case of misuse of the process of law and provision of Sections 11 and 12 of the Act are not attracted. It is also pleaded that the respondent had not given any undertaking to this Court that he would keep the bank guarantees alive, and as such there was no violation on his part of any undertakings, and that even if the matter was covered by the provisions of sections 11 and 12 of the Act even then the present petition was barred by time inasmuch as the bank guarantees expired in April 1982 and June 1982 and thus cause of action arose in favor of the petitioner at that time for which contempt of court petition could he moved within a years in view of the clear provisions of section 20 of the Act and that the present petition moved after more than two years was clearly barred by time; thus not entertainable. At the end a plea is added that in case the Court comes to the conclusion that there has been contempt, then the respondent tenders unqualified apology.

(6) The petition has been pending for quite some time and on one of the dates Y.K. Sabharwal, 7., who was then seized of the matter, passed an order on August 3, 1988 that in view of the fact that it is not disputed by the condemner/respondent that the bank guarantees were not kept alive in terms of the orders made on 16th August 1982 and 23rd August 1982, enquired of Mr. Aggarwal, respondent's counsel whether he (respondent) was prepared even now to either keep the bank guarantees alive or give fresh bank guarantees. Thereupon Mr. G.N. Aggarwal, counsel for the respondent, made statement that since his client was at Calcutta and he could not make any statement in this regard without taking instructions. It was than direct that Mr. Aggarwal shall take instructions from, the respondent before the next date, and further directed personal appearance of the respondent on that date, which was fixed 23rd September 1988. On the adjourned date, an affidavit was filed by Mr. Arvind Kumar stating to be the son of the respondent to the effect that the respondent Shri I.P. Ganeriwala was detained in the civil prison at Bokaro on 7th April 1988 and that the period of detention in civil prison was not known to the deponent and as such it was not possible for the respondent to appear in Court in terms of the order passed on 23rd August 1988. The then adjourned the matter to 19th January 1989 in view of this position stated in the affidavit and directed that in case the respondent is set free before that date, he will appear in Court on that day and also inform whether he was prepared to keep alive the bank guarantees or give fresh bank guarantees.

(7) This order was repeated on the date next fixed. There is no mention in the order sheets about the respondent having appeared but Mr G.N. Aggarwal, Advocate made statement at the Bar during this of hearing contempt petition that on one of the dates, the respondent did come to Court and made an oral statement about his inability to furnish bank guarantees because of lack of finances and that thereupon the learned Judge ordered that the respondent shall be exempted from appearing in person on the next date. This later position, namely, grant of exemption from appearance on the following dates is reflected in the order passed on 25th January 1989 though there is no mention that the respondent was present or had made any statement before the Court. Be that at it may, the fact remains that the respondent has not furnished any fresh bank guarantee pursuant to the order passed on 3rd August 1988. .

(8) It was put to Mr. G.N. Aggarwal when this petition was being heard as to whether the respondent was even now prepared to furnish a bank guarantee in lieu of the previous bank guarantees which were not encashed by the petitioner because of the injunction order issued by this Court on respondent's application, but Mr. Aggarwal made a categorical statement at the Bar that he had instructions from the respondent to make a statement that the respondent was not in a position either to revive the bank guarantees or to furnish fresh bank guarantees and further submitted that no purpose would be served by again directing the respondent to be present in Court for the purpose, and the he was making this statement with full responsibility, and on instructions. It was that the matter has been heard.

(9) Mr. P.P. Malhotra appearing for the petitioner in these contempt of court proceedings, after giving a resume of all the facts and orders of the Court, as outlined above, submitted that this was a very clear case of contempt of court because of the persistent disobedience on the part of the respondent to comply with the Court's order. He argued that the contempt of order by virtue of the disobedience to the Court's order was continuing because the respondent was obliged under the orders passed on 16th August 1982 and extended by the order dated 23rd August 1982 to keep the bank guarantees alive at all times till that petition was finally disposed of and that it was not a case where the contempt was committed at one point of time so as to attract the provisions of section 20 cf the Act. He further argued that in view of the reply of the respondent to the contempt of court petition, and also his conduct during the proceedings when inspite of a further opportunity being given by this Court by order dated 3rd August 1988, that the previous conduct could be condoned in case the respondent now revives the bank guarantees or furnish a fresh bank guarantee; the respondent has failed to comply with those orders and thus there is a persistent contempt of court calling for an action under section 12 of the Act.

(10) The learned counsel submitted that in the interest of administration of justice and to ensure that the orders of the Court are given full respect and every one concerned renders due obedience to the orders made by the Court, it was necessary that in the event of failure of compliance the contemner is dealt with severely. He read from the observations of the Supreme Court in the case of Bigyan Kumar and others v. Union of India and others. Judgment Today 1988 (1) S.C. 591, laying down the following guidelines in this respect : "IN order that the system may efficiently work and the purpose for which the courts are established is duly served, it is necessary that everyone within the framework of the Rule of Jaw must accent the system, render due obedience to orders made and in the event of failure of compliance, the rod of justice must descend down to punish We hope and trust that everyone within the system realises this situation and does not unnecessarily get into a confrontation."

(11) Mr. Malthotra argued that the present was a case where the respond dent has entered into confrontation with the Court, because despite repeat orders made by the Court he persisted in non-compliance and has come up with pleas of of wanes jurisdiction or non-maintainability of the petition or the same being time barred and also with factual plea, disowning responsibility by pleading that State Bank of India was approached by him to revive the bank guarantees but the said bank did not cooperative which plea according to the learned counsel remained unsubstantiated because no further particulars are supplied and otherwise also it was for the. respondent to take steps to keep the bank guarantees alive or to renew them and that in the absence of details as to in what conditions the bank had imposed and how there was lack of cooperation on the part of said bank, this plea has to be rejected as being a false one and thus the conduct of the respondent makes it to be a case of blatant non-compliance of Court's order calling for action for contempt, of court.

(12) Mr. Aggarwal appearing for the respondent reiterated his con ten Action that this petition was not entertainable having been moved after the expiry of one year from the date of the commission of the alleged contempt as according to him the bank guarantees expired either in April 1982 or June 1982 and the cause of action for renewal of the same accrued to the petitioner from those dates. He argued that the provisions of section 20 of the Act place an embargo on the High Court to initiate contempt of court proceedings after the expiry of period of one year and that the argument as advanced by the learned counsel for the petitioner about contempt being continuing was net tenable because as held by the Division Bench of the Gujarat High Court in the case of Dineshbhai A.Parikh v. Kripalu Coop. Housing Society, Nagarvel Ahemdabad and others, ; it was duty of the person who institutes an action to satisfy the Court that it is within time in terms of section 20 of the Act inasmuch as this provision places absolute fetters on the power of the court to initiate proceedings of contempt, after expiry of period of one year from the date on which contempt is alleged to have been committed and that it will not be correct to say that once contempt is committed, unless it is purged it continues to be committed every day and every moment and that therefore an action can be taken against the contemner at any time. He further pleaded that the Court had observed in that case that if such contention were to be accepted, then the section 20 would be rendered redundant because every act of contempt will ordinarily mean recurring contempt from day to day and from moment to moment unless it is purged by an order of the Court.

(13) Mr. Aggarwal also pleaded in the alternative that it has come sufficiently on record that the respondent was in a position to renew the bank guarantees or take out fresh ones for the reason that he had absolutely no means at his disposal and it is on record that he has already been detained in civil prison in Bokaro some time in April 1988 and that it was not a case of willful disobedience, to call for action under the Act. He submitted at the end that in any case the respondent has tendered unqualified apology, adding that after the amendment to the Act in 1977, it is open to an alleged contemner while pleading justification or offering explanation, to tender apology and that it is not to be rejected merely on the ground that it was qualified or conditional. He contended that even while controverting the allegation of contempt of court or offering justification it was open to the respondent in these proceedings to offer apology and since in this case it is an unqualified apology that may be accepted by the Court in the circumstances of the case.

(14) Mr. Malhotra in a short rejoinder contended that the apology offered at the end of reply was not sincere or genuine and had just been incorporated therein to escape action for contempt of court and that in view of the persistent non-compliance it was not a case where it should be accepted. He also reiterated the plea that the present was a case of clear contempt and the bar of limitation as created by section 20 of the Act was not attracted.

(15) I have given my careful thought to the matter. I find that it is a case where the respondent himself had approached Court with an application under Order 39 Rule 1 & 2 Civil Procedure Code seeking an injunction order against the petitioner, praying inter alia, that the petitioner, (respondent in the application), be restrained from encashing the bank guarantees. It was on this application that the Court passed the ex parte interim Order on August 1982 restraining the Petitioner from encashing the bank guarantees but subject to the condition that the respondent-applicant would keep the bank guarantees alive till further orders. (Italics added). After the petitioner put in appearance in response to the notice, the said order dated 16th August 1982 was extended till further orders by order dated August 23, 1982. Since the application (I.A. 2919/82) was not disposed of, if is a case where the interim orders firstly passed on 16th August 1982 and the extended on 23rd August 1982 continued and the petitioner acting upon the restrained order did not encash the bank guarantees with the result that the same lapsed. Petitioner's case is that out of the four bank guarantees, one for Rs. 50,000.00 was a performance guarantees, and but for this order it would have recovered a sum of Rs. 50,000.00 by encashing this guaranatee. The respondent has thus benefited under this interim restraint order but did not carry out the obligations imposed upon him inspite of the order being a conditional one. Rather than expressing remorse, he has come out with a plea, which is totally untenable, that since he had not furnished any undertaking to keep the bank guarantees alive, he was not liable to do so. The question before the court however, is not that of violation of an undertaking but that of disobedience of the Court's order.

(16) RESPONDENT'S plea urging bar, of limitation created by section 20 of the Act, is also not sustainable in the present case, because the obligation to keep the bank guarantees alive was operative till the Court passed any further orders or the application was disposed of. It is not a case where there was any definite terminus for some act to be done by the respondent. The decision of the Gujarat High Court on which Mr. G.N. Aggarwal relied, rather defeat his arguments because it has been held in that judgment that proceedings under sections 11 and 12 of the Contempt of Court Act are to be initiated by the court either suo moto or on information received, and that the person who files the application before the Court for imitating contempt of court proceedings is only an informant, and not a petitioner in the normal sense of the term; where he has to satisfy that he has come to the Court within limitation. It was in that sense that it was held that plea for extension of time or condensation of delay, as envisaged by the provisions of sections 4 to 24 of the Limitation Act was not entertainable. It was further on the facts of that case only that it was opined that it could not be said that whenever there was a violation of the Court's order, the contempt continues from day to day so as to provide a starting point on each day. That was a case where the respondents therein were restrained from taking possession of certain flats and in violation of the Court's order, possession was taken by some of them and in that setting of facts the Court held that the contempt was committed the day possession was taken by the respondents in defiance of Court's order, and it was not open for the petitioners to approach the Court for contempt of court proceedings after the expiry of one year from that date, urging that since respondents continued to be in possession; the contempt was continuing.

(17) The judgment of a learned Single Judge of this Court in Civil Procedure Code. No. 19 of 1988-Shri Shiv Dayal (deceased) through legal heirs and another v. Shri Amar Nath, decided on 30th September, 1988, relied upon by Mr. G.N. Aggarwal , also altogether on different facts, because there the respondent in the proceedings had failed to vacate the premises within six months, as undertaken by him. It was thus obviously as case where there was a definite terminus, namely, the starting point for computing period of one year because the contempt had been committed when the respondent had failed to deliver possession of the premises on the expiry of six months.

(18) The present is clearly a distinguishable case where the nature of the order was such that the bank guarantees had to be kept subsisting. This is the intention of the Court, which is apparent from the fact, that even during the contempt of court proceedings, it was felt that in case the respondent could now comply with the condition and revive the bank guarantees or take out a fresh bank guarantees, the contempt committed earlier could be condoned. It was obviously on this understanding that order was passed on 3rd August 1988, giving fresh opportunity to the respondent to comply with the conditions of the interim injunction order passed on his application, but he has persistently failed to display obedience by not complying even with that order. Even on the date of hearing, his counsel Mr. G.N. Aggarwal stated, on instructions, that the respondent was not in a position to take out fresh bank guarantees. This thus remains to be a case of continued disobedience of the Court's order. Whether he had offered any undertaking to keep the bank guarantees alive or not, is wholly irrelevant because it was he who had sought orders of the Court restraining the petitioner from encashing the bank guarantees and it was on his application that the Court passed the conditional order saying that the restraint order is being passed subject to the condition that he keeps the bank guarantees alive. The petitioner acting on this order has not encashed the bank guarantees making it clearly to be a case that the interim order has enured to the benefit of the respondent and it was his obligation to comply with the conditions imposed in that order. Even the petitioner gave him opportunity by bringing to his notice the default committed by him and calling upon him to now furnish the bank guarantees vide their registered letter dated October 8, 1984 but the respondent did not take any steps to comply.

(19) Although the respondent has pleaded financial stringency as the reason for the non-compliance but the Court have to keep the total prospective of judicial administration and ensure that its orders are complied with and that the parties do not get away by obtaining orders from the Court and then not caring to comply with the conditions imposed in those orders. It is also a case on facts where the respondent sought an order of the Court restraining the petitioner from encashing the bank guarantees knowing fully well that the restraint order passed by the Court would operate to the prejudice of the petitioner because the bank guarantees would lapse causing loss to the petitioner. The inference cannot be ruled out, in view of his plea of lack of finances that the respondent had no intention of complying with the Court's order at any time. His subsequent conduct in insisting even not to make an effort to renew the bank guarantees, as no steps are shown to have been taken, betrays the conduct of the respondent of willful disobedience verging on confrontation, or defiance as his counsel stated at the Bar that he had full instructions to say that the respondent cannot take out fresh bank guarantees and thus no useful purpose would be served in now requiring his presence in Court to state his position. The Court therefore cannot be oblivious of this fact situation, which calls for an action under the Contempt of Court Act because it is a clear case of blatant non-compliance of the Court's orders.

(20) I am also not satisfied about the bona fides of the apology offered at the end of the reply filed to the contempt of court application after setting up all sorts of pleas. The explanation to section 12 of the Act clearly lays down that even though apology may not be rejected merely because it was qualified or conditional, but still 'it must he made bona fide' (Italics supplied). On the facts of this case where the respondent is insisting that he has no means of furnishing fresh bank guarantees, it is a case where he has abused the process of the Court and availed of the interim order on his application but failed to comply with the conditions imposed.

(21) I therefore think it a fit case to take action against the respondent for contempt of court. Since the respondent has persisted in the contempt for all these years, it is a case where his detention in the civil prison alone can purge the contempt.

(22) I, therefore, hold the respondent guilty of contempt of this Court and order that for this the respondent be detained in the civil prison, for a period of two months from the date of his arrest. Warrants be issued for his arrest and detention in civil prison through proper channels. Matter be listed before the Registrar on 24th May, 1990 for report.