D.S. Marketing Pvt. Ltd. vs Syrus Marketing And Anr.
2005 Latest Caselaw 1705 Del

JUDGMENT

Badar Durrez Ahmed, J.

1. The petitioner has filed this application for proceeding against the respondent as it is alleged that the respondent has committed civil contempt insofar as the judgment and decree dated 8.12.1997 is concerned which was passed in suit No. 2200/1997. Essentially what the petitioner has alleged is that the respondent had agreed to pay a sum of Rs. 12.41 lacs and a cheque for that amount has also been handed over to the petitioner. The same was part of the compromise which was arrived at between the parties and which formed the subject matter of the said judgment and decree. But, as pointed out by the learned counsel for the petitioner, that cheque has not been honoured as a result of which the judgment and decree has been violated. He also referred to the application for compromise which was filed under Order 23 Rule 3 and was marked as Exhibit C-1 in the said suit.

2. On the other hand, the learned counsel for the respondent/alleged contemnor states that there has been no willful disobedience of any judgment or decree of this court nor has there been any willful breach of an undertaking given to this court and, therefore, the question of civil contempt as defined under Section 2(b) of the Contempt of Courts Act, 1971 (hereinafter referred to as the said Act) does not at all arise and the contempt application is liable to be dismissed and the respondent is entitled to be discharged. He submitted that if one were to look at the compromise between the parties as recorded under Exhibit C-1, it would be clear that no case for contempt was made out inasmuch as an alternative situation has been provided for in the compromise itself in case the cheque was not honoured.

3. To appreciate the submissions of the learned counsel for the parties, a brief background would be necessary. The petitioner being the plaintiff in the said suit had filed the same for recovery of a sum of Rs. 21,11,495/- with interest and costs against the defendants being Syrus Marketing (defendant No. 1) and Sunita Jamwal (defendant No. 2). The latter was sued in the capacity of being the sole proprietor of the defendant No. 1 and it is she against whom the present contempt application has been filed. During the pendency of the suit, the parties negotiated and arrived at an amicable settlement. The terms of settlement were recorded in the said application (Exhibit C-1) which are as under:

(i) It is hereby agreed that a decree for the sum of Rs. 21,11,494/- (Rupees Twenty One Lacs Eleven Thousand Four Hundred Ninety Four only) may be passed in favor of the plaintiff and against the defendants with costs as well as interest at the rate of 24% per annum w.e.f. 12.10.1997.

(ii) That the defendants have given post dated cheque No. 658322 dated 15.01.1998, drawn on Punjab National Bank for Rs. 12,41,000/- (Rupees Twelve Lacs Forth One Thousand Only). The defendants undertake that the said cheque shall be duly honoured on presentation of the same by the plaintiff on due date.

(iii) On the honouring of the said cheque, the whole decree shall be treated as satisfied and no further payment shall be required to be made by the defendants to the plaintiff under this decree.

(iv) That the defendants shall neither request for further time for making the aforesaid payment beyond 15.01.1998 nor give instructions to their bank in any circumstances for return of this cheque and provide for sufficient funds for honouring of this cheque.

(v) Defendants gives an Undertaking to this Hon'ble Court that the cheque shall be honoured on presentation as aforesaid.

(vi) That if for any reason, the said cheque is not honoured and the payment is not received by the plaintiff against this cheque on due date, the decree passed in the sum of Rs. 21,11,494.00 along with costs and interest shall immediately become executable.

4. On 8.12.1997 when the said application (Exhibit C-1) came up for disposal, the statement of, inter alia, Sunita Jamwal (defendant No. 2)/respondent herein) was also recorded. Upon a reading of the said statement, it becomes clear that she had categorically stated as under:

"I undertake that the cheque being issued in terms of the compromise shall be honoured by my bankers on presentation. I further state that in case the said cheque is returned un-encashed, I would be liable to pay the entire decretal amount which may be found due in terms of the decree, which may be passed today in favor of the plaintiff and against the defendants in the sum of Rs. 21,11,494/- with interest @ 24% per annum w.e.f. 12th October, 1997 along with costs.

5. In the order dated 08.12.1997 whereby the compromise was recorded and a decree was directed to be passed in terms thereof, this court has also noted as under:

"In her statement the said defendant has undertaken that on presentation the said cheque will be honoured by her bankers.

6. Thereafter, the admitted facts are that the cheque which was handed over for the sum of Rs. 12.41 lacs was not honoured on presentation. However, it is also admitted that during the pendency of the present contempt proceedings, certain payments have been made from time to time in a piecemeal manner which, according to the learned counsel for the petitioner, amounts to a sum of Rs. 11 lacs but according to the learned counsel for the respondent amounts to a sum of Rs. 12 lacs. Be that as it may, the position remains that at least Rs. 11 lacs have been paid by the respondent to the petitioner.

7. The learned counsel for the respondent pointed out that after the compromise was recorded, the respondent faced various financial difficulties. She had already lost her husband and was responsible for raising two children on her own. Because of the financial constraints, the cheque could not be honoured. He further submitted that in any event, the decree that was passed was in terms of the agreement of the compromise which was arrived at between the parties which has been set out in Exhibit C-1 and that compromise itself provided what was to happen in case the cheque was not honoured on presentation. He pointed out that, in the first instance, a decree for a sum of Rs. 21,11,494/- was passed in favor of the plaintiff and against the defendant with costs as well as interest at the rate of 24% per annum w.e.f. 12.10.1997. However, as recorded in the terms of compromise, in view of the fact that the defendant had given a post dated cheque dated 15.1.1998 for an amount of Rs. 12.41 lacs, the plaintiff had agreed that on the honouring of the said cheque, the entire decree shall be treated as satisfied and no further payment would be required to be made by the defendant to the plaintiff under the decree. It was also provided in clause (vi) of the agreement that if for any reason, the said cheque was not honoured and the payment was not received by the plaintiff against this cheque on the due date, the decree passed in the sum of Rs. 21,11,494/- along with costs and interest would immediately become executable. Therefore, it was contended by the learned counsel for the respondent that the alternative of executing the decree for the larger sum was provided in the compromise itself and the undertaking that was given would have to give way to the said provision made in the compromise itself. Thus, according to the learned counsel for the respondent, the respondent has not been guilty of any contumacious conduct inasmuch as there is no willful disobedience of the order and particularly because the respondent has categorically stated that the respondent shall not come in the way of execution and shall abide by the terms of the compromise. According to him, therefore, as the plaintiff/petitioner has already opted for execution of the decree in terms of the compromise, it would not be open for the respondent to be prosecuted for civil contempt. The execution proceedings are already pending before this court in the shape of execution petition No. 68/1998.

8. The learned counsel for the petitioner had relied upon the decision of the Supreme Court in the case of Bank of Baroda v. Sadruddin Hasan Daya and Anr., as well as the decision of a Full Bench of this court in the case of Sardari Lal v. Ram Rakha 1984 Rajdhani Law Reporter 333 in support of the proposition that remedy of execution of a decree was also available and the said remedy would not come in the way of contempt proceedings. He also relied upon the decisions in Mrs. Mohini Sayal v. Shri Kaushal Kumar : and J.P. Goyal v. Ajeet Kaur to draw a parallel between the orders passed in rent proceedings where courts grant time for vacating and an undertaking in the usual manner is recorded from the tenant for vacating the premises. He submitted that in such cases although execution is one remedy available, the courts have never shied away from taking up contempt proceedings whenever there has been a breach of an undertaking given by the tenant for vacating the premises. In the same manner, he submitted that the respondent gave an undertaking that the cheque would not be dishonoured on presentation yet the cheque was dishonoured and the fact that the decree was otherwise executable did not make any difference to the present contempt proceedings.

9. Mr Mehta who appears on behalf of the respondent submitted that these decisions were not applicable to the facts of the present case and he also relied upon a decision of the Supreme Court in the case of R.N.Dey and Ors. v. Bhagyabati Pramanik and Ors., and in particular he referred to paragraph 7 thereof wherein it was stated that the weapon of contempt is not to be used in abundance or misused. It was further mentioned that normally contempt cannot be used for execution of the decree or implementation of an order for which an alternative remedy in law is provided for. Taking a cue from these observations, Mr Mehta submitted that the petitioner/plaintiff has an alternative remedy of executing the decree which option he has already exercised. Having done so, the present contempt proceedings would not lie.

10. It is well settled that contempt proceedings are between the court and the contemner. The petitioner has a role as an informant and he has to point out the contempt that is said to have been committed. Examining the facts of the present case one finds that the compromise terms themselves provided for a situation where the cheque would be dishonoured. The payment through the cheque was only for an amount of Rs. 12.41 lacs which was far less than the amount decreed i.e. Rs. 21,11,494/- along with interest @ 24 % per annum w.e.f. 12.10.1997 as well as costs. Therefore, the facility was provided to the defendant to make a prompt payment and absolve itself of the larger liability. It is in this context that Mr Mehta, who appears for the respondent, submitted that the actions of the respondent were not mala fide inasmuch as the course of the events have unfolded to the detriment of the respondent. Had the respondent been able to make the arrangements for realisation of the said cheque of Rs. 12.41 lacs, the entire liability would have remained crystallized at that amount. In not being able to do so, the respondent has incurred a much larger liability under the terms of the decree for the amount of Rs. 21,11,494/- along with costs as well as interest at the rate of 24% per annum w.e.f. 12.10.1997. Therefore, it cannot be said that the conduct of the respondent has been contumacious or mala fide.

11. I tend to agree with the submissions made by the learned counsel for the respondent. I also note that the compromise itself gave an option and provided for a solution to the situation where the cheque would be dishonoured. It is further to be noted that the statement made by the respondent was not an undertaking simplicitor that the cheque would be honoured by the bankers on presentation. It was suffixed by the further statement that in case the said cheques were returned un-encashed, the respondent would be liable to pay the entire decretal amount in terms of the decree i.e. the larger sum of Rs. 21,11,494/- with costs as well as interest at the rate of 24% per annum w.e.f. 12.10.1997. Therefore, the undertaking with regard to the cheque not being dishonoured cannot be read in isolation. It has to be seen in the context of the statement which followed it. The decisions relied upon by the learned counsel for the petitioner and particularly the one rendered by the Supreme Court in the case of Bank of Baroda (supra) pertains to a clear case of a violation of an undertaking given to the court. It is not so much a case where a person has resoled from the terms for a consent order but that a person had given a solemn undertaking to the court and had not fulfillled the undertaking. The decision in that case would not apply to the facts of the present case inasmuch as the undertaking given by the respondent itself provided that in case the cheque was not en-cashed the entire decretal amount would be found due against the respondent. The facts are entirely different and therefore, neither the aforesaid decision of the Supreme Court nor of the Full Bench or the other two decisions relied upon by the learned counsel for the petitioner would be applicable .

12. In view of the aforesaid discussion, I find that it would be difficult to hold that the respondent was guilty of willful disobedience or willful breach of an undertaking to this court.

Accordingly, this contempt petition is dismissed and the contemner is discharged.

dusty under the signature of the court master.