Court On Its Own Motion vs Vm Trehan & Ors.
2010 Latest Caselaw 3963 Del

*     IN THE HIGH COURT OF DELHI AT NEW DELHI

+     CCP(CO.) 6/2005 in CP No.67/1999

                                        Date of Decision: 27th August, 2010

      COURTS ON ITS OWN MOTION                 ..... Petitioner

                   versus

      VM TREHAN & ORS.                  ..... Respondent
           Through  Mr. H.L. Tiku, Sr. Adv. with Mr. Mohit Khanna,
                    Mr. Thakur Sumit, Advocates
      CORAM:
      HON'BLE MR. JUSTICE SUDERSHAN KUMAR MISRA

1.    Whether Reporters of local papers may be allowed to see the
      judgment? No
2.    To be referred to the Reporter or not? No
3.    Whether the judgment should be reported in the Digest? No


SUDERSHAN KUMAR MISRA, J. (Oral)

1. In February 1999, Co.Pet.No.67/1999 was moved by M/s Sokkia

Singapore Pte. Ltd. praying that M/s Mekaster Telematics Ltd. be wound

up. After a preliminary hearing on 16th February, 1999, notice was

issued by this Court to the respondent company to show cause as to why

the petition be not admitted. Some other interim orders were also

passed on that date. Ultimately, on 16 th November, 1999, following order

came to be passed by this Court:

"C.P.No.67/99 and C.A.Nos.196-197/99

The parties have arrived at amicable settlement and according to the settlement, the respondent shall remit 7,000 US$ per month. The petitioner and the respondent shall complete necessary formalities. The respondent undertakes to obtain necessary permission from the R.B.I. Let the balance amount be paid in instalments on or before 15th day of each calendar month. The first instalment shall be paid by 15th December, 1999. Learned counsel for the respondent undertakes to file undertaking before this Court within two weeks from

today.

In case of any two defaults, the entire amount shall become due and payable forthwith with 12% interest. The petition is given liberty to revive this petition, in case of any default by the respondent.

The Company petition and applications are accordingly disposed of."

2. Since there was no other record of a settlement and nor was any

application with regard to the same, setting down the terms and

conditions therein, moved by either party, the above order constituted

the terms of the mutual settlement between them.

3. A perusal of these terms shows that the respondent, i.e. the

contemnors herein, had agreed to remit US$ 7,000 per month to the

petitioner. However, the amount due, or the number of instalments are

not mentioned. Presumably, in the event of two defaults, the entire

amount mentioned as outstanding in the petition, was to become due

and payable, along with interest. Since the amount was to be remitted

in foreign currency, both parties were required to complete all the

necessary formalities. Obviously, since the respondent was to remit the

money to the petitioner in foreign exchange, it became the duty of the

respondent to obtain the necessary permission from the Reserve Bank of

India and, to that extent, the respondent undertook to do so. Counsel for

the respondent also undertook to file an undertaking before this Court, in

terms of the aforesaid settlement recorded in the order dated 16 th

November, 1999. That undertaking, filed on 14th December, 1999, is in

the form of the affidavit of Sh. Ravi Gandhi, Director of the respondent

company, admitting the liability on the part of the respondent to pay US$

2,19,468.29 and ¥ 1,88,572 to the petitioner, in full and final discharge of

its liability towards the petitioner. The aforesaid amount was undertaken

to be paid at the rate of US$ 7,000 per month, from 15 th December, 1999

onwards. The latter part of the aforesaid order dated 16 th November,

1999 is also noteworthy. It states that in case of two defaults, the entire

amount would become due and payable forthwith with 12% interest

thereon. In addition, the petitioner was also granted liberty to revive the

petition in case of any default on the part of the respondents.

4. Looking to the facts and circumstances of this case, there is

nothing in the order dated 16th November, 1999 to suggest that a specific

undertaking was given by the respondent to this Court to abide by the

terms and conditions mutually agreed between the parties. The relevant

terms of the agreement between the parties are spelt out in the first

three sentences of the order of 16.11.1999 reproduced above. There,

the first sentence is most significant, it says, "the parties have arrived at

amicable settlement and according to the settlement, the respondent

shall remit 7,000 US$ per month". The two sentences that follow merely

state that the necessary formalities shall be completed by the parties and

the respondent will obtain the necessary permissions. It was easy enough

to say that according to the settlement, the respondent undertakes to

this Court to remit US$7,000 per month. That this was not said is

obviously because parties did not have any such intention at that time.

Further down in that order, the word, "undertakes" has been used by the

Court in the expression, "respondent undertakes to obtain necessary

permission", to denote a binding commitment that has been accepted by

the respondents qua the petitioner and nothing more. It is an

undertaking given by the respondent to the petitioner to apply for and to

obtain the necessary permission from the Reserve Bank of India. It forms

part of the mutual settlement and was an obligation accepted by the

respondent qua the petitioner, and not that the respondent had

undertaken to this Court that it would obtain the necessary permissions.

5. To my mind, the only undertaking to this Court is contained in the

first part of the last sentence of the order of 16 th November, 1999 which

says, "Learned counsel for the respondent undertakes to file undertaking

before this Court within two weeks from today." Here all that

undertaken to the Court is that a document under the hand of the

respondent setting down all the obligations undertaken by him qua the

petitioner, shall be filed in Court, and nothing more. Admittedly this has

been done.

6. Another factor is that had there been any undertaking given to the

Court, and had the Court been of the mind that an undertaking was being

tendered to it, then, obviously, the Court would have specifically

accepted the same. A reading of the order dated 16 th November, 1999

does not show anywhere that this Court specifically accepted any

undertaking from the respondent. Furthermore, in the concluding

paragraph of the aforesaid order, the consequences of a violation of the

mutual settlement are also set down. Significantly, the consequence is

limited only to the revival of the petition, and the fact that the entire

amount would become due and payable forthwith, i.e. in a lump sum with

12% interest by the respondent, and nothing more.

7. The fact that it is not specifically stated that the respondent is

giving the undertaking to the Court either in the aforesaid order or in the

affidavit of undertaking that followed; nor is any undertaking stated to be

accepted by this Court anywhere; coupled with the fact that likelihood of

initiation of contempt proceedings is also not enumerated by this court as

one of the consequences of its breach by the respondent leads to the

inference that the undertaking mentioned in the court's order was merely

a bilateral one between the parties.

8. Admittedly, the respondent only paid three instalments. On the

respondent's default, the petitioner moved Co.Appln.No.448/2003

praying for revival of the main company petition bearing No.67/1999, in

terms of the order passed by this Court on 16 th November, 1999.

Consequently, the main petition came to be revived on 3 rd November,

2003. I might notice that on 17 th October, 2003, i.e. before the order

reviving the petition came to be passed, certain orders were passed by

BIFR, as a result of which protection under Section 22 of the SICA was

made available to the respondent. Inter alia, this protection would

remain available to the respondent till all proceedings under the SICA

were completed. Of course, there was always a possibility of the BIFR or

the AAIFR also directing the winding up of the company. Be that as it

may, whilst the matter remains pending before BIFR or the AAIFR, this

petition would have remained on this Court's board without any orders

being passed thereon.

9. However, the petitioner itself moved Co.Appln.No.1666/2009 before

this Court seeking withdrawal of its petition, and, on 9 th December, 2009,

this Court passed orders dismissing the petition as withdrawn, after

recording the "no objection" of the respondent. The only thing that was

urged, even by the petitioner through out, was that a mutual settlement

had been arrived at between the parties, and the terms and conditions

thereof had been recorded by this Court in its order dated 16 th November,

1999.

10. As noticed above, a reading of the order dated 16 th November,

1999 does not indicate any specific term whereby the respondent agreed

to give a specific undertaking to this Court to pay a certain amount to the

petitioner, nor does it mention the fact that a violation would render the

respondent liable to face proceedings in the nature of contempt. Such a

condition was not urged by either party, nor was any such undertaking

accepted by this Court. The consequences of breach of that settlement

were also recorded, which were limited to what was stated therein.

11. To my mind, this was merely a bilateral agreement by the parties in

the presence of the Court, and duly recorded by the Court. It might be

true that the respondent had violated the terms of the settlement, but it

was up to the petitioner to enforce its rights under the settlement which

were limited to seeking revival of the main petition and to the payment of

the entire amount in one lump sum, along with 12% interest. In fact, it is

in those very terms that the petitioner sought revival of the main

petition, and thereafter, on 9th December, 2009, withdrew the same.

Significantly, even the petitioner, who had reason to be aggrieved of the

violation of the terms by the respondent, never said that the respondent

was also in contempt because it had violated any undertaking given to

the Court in this behalf.

12. In any event, contempt is a serious matter and as repeatedly held,

inter alia, in the case of S.R. Ramaraj v. Special Court, Bombay, AIR

2003 SC 3039, if two views are possible, the benefit must go to the

respondent. To my mind, the interpretation I have placed is certainly

plausible. It, therefore, follows that there can be no question of contempt

against the respondent in this matter.

13. In that view of the matter, no contempt is made out. The

proceedings are dropped.

SUDERSHAN KUMAR MISRA, J.

AUGUST 27, 2010 dr