Lalit Modi vs Bdr Builders And Developers Pvt. ...
2021 Latest Caselaw 479 Del

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*    IN THE HIGH COURT OF DELHI AT NEW DELHI

+     EFA (OS) 1/2021 & CM APPLs. 3003-05/2021

      LALIT MODI                                         .....Appellant
                        Through:      Mr.Ravi Sikri, Sr.Advocate with
                                      Mr.Sachin Chopra, Mr.Karan
                                      Babuta and Mr.Daksh, Advocates.

                        Versus

      BDR BUILDERS AND DEVELOPERS PVT. LTD .....Respondent
                   Through: Mr.Sanjay Goswami with
                            Mr.Vipin Singh, Advocates.

%                                  Date of Decision: 12th February, 2021

CORAM:
HON'BLE MR. JUSTICE MANMOHAN
HON'BLE MS. JUSTICE ASHA MENON

                    JUDGMENT

MANMOHAN, J (Oral):

1. The appeal has been heard by way of video conferencing.

2. Present appeal has been filed challenging the order dated 17th December, 2020 passed by the learned Single Judge of this Court in Ex.P.69/2017, whereby the appellant has been held guilty of civil contempt on account of violation of injunction orders dated 15th April, 2019 as well as 28th January, 2020 in EA No. 85/2019. The relevant portion of the impugned order is reproduced hereinbelow:-

"21. The order dated 17.06.2020 passed in CS(OS) No.109/2017 also shows that the JD received those cheques in the name of his daughter - Ms. Sonia Modi, which cheques have admittedly been encashed. Correspondingly, the JD had begun taking other steps to ensure that he keeps up his side of the bargain under the settlement agreement, in collusion with Mr. Romi Garg. To that end, Mr. Romi Garg withdrew his stay application filed in FAO (OS) No.116/2018 which resulted in vacation of the stay order (second injunction) directing the parties to main status quo with respect to the subject property since 18.07.2018. Considering the fact that this Court had already been called on to exercise its jurisdiction as an executing court and was concerned with the status of the subject property, neither the JD nor Mr. Romi Garg felt it necessary to inform this Court of their purported settlement agreement. Furthermore, despite the fact that he was engaged in a litigation battle pertaining to this very property, even the DH was not informed of this settlement by either the JD, rather it is only by virtue of being a party to the aforesaid FAO that he learnt about the same. The DH responded to this development by immediately filing a suit to assail the settlement, being CS(OS) No.150/2020, and protect his rights under the award passed in his favour on 21.11.2016/12.01.2017. Finally, the Court dealing with CS(OS) No.150/2020, on 26.06.2020, after noticing the fact that the JD had entered into agreements to sell with the two parties and had obtained huge amounts in lieu thereof from each of them, directed the JD to deposit the keys of the subject property with the Registrar General of this Court in order to prevent it from creating any further charges on the property. Although this order was assailed by the JD in FAO(OS) No 34/2020, the learned Division Bench modified the same on 06.07.2020 only after recording the statement of undertaking given by the JD and Mr. Romi Garg that they will not execute the sale deed till further orders are passed by the Court dealing with CS(OS)150/2020. Be that as it may, the fact remains that even though the JD has not yet successfully executed the sale deed in favour of Mr. Romi Garg/his nominee as per his explicit commitment in the settlement, he has

appropriated an enormous sum of INR 7,01,00,000/- from Mr. Romi Garg by promising to immediately execute the sale deed in lieu thereof. The intention of the JD, reflected from his voluntary acceptance of the sale consideration notwithstanding the injunction orders operating on the subject property, is plainly mala fide and an attempt to overreach the orders of this Court.

22. Were it not for the intervention of the DH, who preferred a suit, and the Court, which passed the orders on 26.06.2020 and 06.07.2020, the JD would have been successful in its endeavour to get the sale deed executed in favour of Mr. Romi Garg which would have not only been in blatant violation of the various injunction orders operating against him, but would have also seriously prejudiced the rights of the DH. Thus, I do not find any merit in the JD‟s plea that since no third -party rights have been created, the JD cannot be said to have violated the orders passed by this Court. The facts noted hereinabove show that the JD took active steps to ensure immediate execution of the sale deed and handing over of possession of the subject property to Mr. Romi Garg/his nominee, which failed only because the DH filed CS(OS) No.150/2020 on time.

23. The JD‟s actions are further compounded by the previously mentioned failure on his part to adduce any documentary evidence in support of his contention that notwithstanding the settlement he executed with Mr. Romi Garg, he had no intention to discharge his obligations under the settlement without seeking vacation of the injunction orders or the permission of this Court. The overall conduct of the JD clearly shows that Mr. Romi Garg and he had entered into the settlement in June 2020 with the intent of hastily and sneakily transferring the title and possession of the subject property to Mr. Garg by securing an enormous sale consideration of INR 7,01,00,000/- in favour of the JD, which consideration stands admittedly accepted in the name of the JD ‟s daughter. Insofar as the JD‟s decision to accept the sale consideration from Mr Romi Garg in the name of his daughter stands, that is another red flag for which no explanation whatsoever has been forthcoming from the JD.

24. The JD has adopted an additional line of argument in support of its contention that the settlement agreement is bonafide since it is in furtherance of the judgment and order of this Court passed on 14.05.2020 read with the order dated 17.06.2020. In the first place, although the judgment dated 14.05.2020 did decree the suit in the favour of Mr. Romi Garg, the same was passed without making any reference to the rights of the DH on the same property. To remedy this aspect, when Mr. Romi Garg moved an application in FAO (OS) 116/2018 before the Division Bench praying for a direction to modify the second injunction order so that he could obtain the subject property, the DH vehemently resisted the same and successfully got the judgment dated 14.05.2020 modified on 04.06.2020 to protect his own rights to the property. Thus, the judgment dated 14.05.2020 cannot be read in isolation and must necessarily be read with the order of the Division Bench passed on 04.06.2020, which together protect the DH ‟s right upon the subject property by directing Mr. Romi Garg to deposit the balance sale consideration in favour of the DH before the Registrar General of this Court. Equally important, the order dated 17.06.2020 was passed without making any reference to the DH‟s possible rights to the subject property and seemed to record only details of the settlement between Mr. Romi Garg and the JD. Again, when the DH came to know of the order dated 17.06.2020 as also the settlement agreement, he preferred CS(OS) 150 of 2020 whereunder this Court again protected the interests of the DH on 26.06.2020 by directing the JD to deposit the keys of the subject property with the Registrar General of this Court in order to prevent it from creating any further charges on the property. It is a matter of record that the order for deposit of keys was subsequently modified by a Division Bench on 06.07.2020, but that modification was pursuant to receipt of another undertaking by the JD that he will not execute the sale deed with respect to the subject property. Hence, even the order dated 17.06.2020 cannot be read in isolation and ought to be read along with the orders dated 26.06.2020 passed in CS(OS) 150 of 2020 and 06.07.2020 passed in FAO(OS) No 34/2020. Therefore, the JD‟s attempt to

adopt a restricted reading of the orders, without accounting for the subsequent modifications thereto, in order to paint his actions in a favorable and legally sound light is unsustainable.

25. To put it simply, at every instance when the Court was brought up to speed with the pending legal status of the subject property, it would issue directions to protect the rights of the DH and that was the spirit of the orders issued by the Court. Ultimately, instead of obeying the direction of this Court to maintain status quo with respect to the property as he was obligated to do, the JD chose to employ a subterfuge by entering into a farcical settlement agreement with Mr. Romi Garg all with the intent to skirt judicial orders. Not to mention, by failing to honour the assurance he gave to this Court, the JD has played a serious fraud on the Court and has obstructed the course of justice. These actions amount to breach of an undertaking given to the Court by the JD/Contemnor, all with the selfish aim of fraudulently reaping a benefit for himself by misleading this Court.

xxx xxx xxx

27. In the present case, neither the injunction orders nor the undertaking of the JD given to the Court on 28.01.2020 are clothed in any ambiguity at all with regard to their effect. Faced with the operation of such an explicit, repetitive and continuing injunction on the subject property, there is no merit to the JD‟s denial of being in wilful and intentional defiance of court ordered injunctions and recorded undertakings. Apart from the JD‟s bald and unsubstantiated averments of bonafide in his defense, which are completely devoid of merit, this Court has taken note of his conduct which involved clandestinely colluding with Mr. Romi Garg to agree on a purported settlement agreement, accepting cheques from Mr. Romi Garg in the name of his daughter and failing to fully disclose the factum of existing judicial orders of injunctions and undertakings operating on the subject property, while appearing before different Benches of this Court in different proceedings. In these circumstances, it stands to reason that the

JD has intentionally indulged in contemptuous actions by wilfully disobeying restraint orders, which were undisputedly within his knowledge, and violating his own undertakings made before this Court. Any further indulgence shown to a litigant, such as him, who has engaged in this sort of conduct without fearing any punitive consequences would be a mockery of the judicial process and cannot be permitted. I, therefore, have no hesitation in holding that the JD is guilty of civil contempt.

28. Accordingly, I hold the JD guilty of civil contempt and grant him an opportunity to show cause within 3 weeks on the aspect of quantum of sentence, which shall be considered on 29.01.2021 when the matter is directed to be listed next.

3. Mr. Ravi Sikri, learned senior counsel for the appellant contends that the learned Single Judge had no material to conclude that the appellant was guilty of violating any order of the Court inasmuch as, the appellant had not taken any steps for creating third party rights in the suit property. He emphasises that the learned Single Judge had failed to appreciate that when the appellant gave a statement before another learned Single Judge in CS(OS) 109/2017 on 17th June, 2020 that the appellant would execute a sale deed within ten days, there was no contempt. He submits that till the time the appellant takes any step to execute a sale deed, it cannot be said that the contempt had been committed. He contends that simplicitor making a statement on 17th June, 2020 does not amount to violation of Court's orders dated 15th April, 2019 and 28th January, 2020. He further submits that apprehension to commit contempt or an apprehension that contempt might have been committed is not contemptuous and no punishment can be given for the same.

4. He submits that there is no wilful disobedience or wilful intent to violate any injunction order in the present instance - a sine qua non for holding a person guilty of civil contempt. In support of his submission, he relies upon the judgment of the Supreme Court in Rama Narang Vs. Ramesh Narang and Ors.; 2021 SCC OnLine SC 29, Kanwar Singh Saini Vs. High Court of Delhi; (2012) 4 SCC 307 and Hukum Chand Deswal Vs. Satish Raj Deswal; 2020 SCC OnLine SC 438.

5. Learned senior counsel for the appellant points out that the appellant and Romi Garg had initiated the process of getting the injunction orders vacated in pursuance to the order dated 17th June, 2020 inasmuch as he had moved an application in FAO(OS) No. 116/2018 to vacate the injunction orders dated 18th July, 2018 and 16th January, 2020 granted by the Division Bench.

6. He lastly states that the learned Single Judge should have accepted the unconditional apology tendered by the appellant.

7. This Court finds that a learned Single Judge in Ex.P.69/2017 filed by the respondent/decree holder passed an injunction order dated 15th April, 2019 against the appellant/judgment debtor. The relevant portion of the said order reads as under:-

"6. Till the next date of hearing, the non-applicant/judgment debtor is restrained from creating any third party rights in property described as Property No.32, Paschimi Marg, Vasant Vihar, New Delhi -110057."

8. On 28th January, 2020, the appellant/judgment debtor in Ex.P.69/2017 denied the respondent/decree holder's apprehension that the latter would handover possession of suit premises to Romi Garg in

CS(OS) No.109/2017. The order dated 28th January, 2020 is reproduced hereinbelow:-

"1. Learned senior counsel for the decree holder prays that hearing of the present petition be deferred as the requisite documents are presently not available on record. He, however, submits that the decree holder apprehends that in case the suit filed by the Objector/applicant in Execution Application (OS) 169/2018, wherein judgment has already been reserved, is decreed, the judgment debtor may, in order to scuttle the rights of the decree holder in the present petition, hand over possession of the suit premises to the said applicant without any execution proceedings being initiated by the said applicant. He, therefore, prays that the judgment debtor be restrained from handing over possession of the premises in question, even if the applicant's suit were to be decreed in the meanwhile.

2. In response, learned counsel for the judgment debtor submits that the apprehension of the decree holder is misconceived as the judgment debtor is conscious of the fact that there are various orders passed by various courts directing the judgment debtor to maintain status quo, which it does not intend to violate.

3. In view of the stand taken by the learned counsel for the judgment debtor, no orders as prayed for are required to be passed at this stage.

4. List on 21.04.2020."

9. It is pertinent to mention that on 17th June, 2020, the appellant in CS(OS) No. 109/2017, wherein a decree dated 14th May, 2020 for specific performance had been passed against the appellant, made a statement that he had received four cheques totaling to Rupees Seven Crores (Rs. 7,00,00,000/-) in the name of his daughter "and the sale deed

will be executed within ten days". Since the statement made in CS(OS) No. 109/2017 on 17th June, 2020 has been found to be contemptuous by the learned Single Judge in the impugned order in Ex.P.69/2017, the relevant portion of the said order is reproduced hereinbelow:-

"5. The plaintiff has handed-over four cheques bearing Nos. 721530, 721531, 721532 and 721533 dated 16th June, 2020; first two cheques for a sum of Rs.2 crores each and third and fourth cheque for a sum of Rs.1,50,50,000/- each, all drawn on Corporation Bank, Hauz Khas Branch, New Delhi.

6. Mr. Lalit Modi states that he has received the four cheques and the sale deed will be executed within 10 days.

7. Application is accordingly disposed of modifying the operative portion of the judgment dated 14th May, 2020 permitting the plaintiff to hand-over a sum of Rs.5,69,00,000/- with interest @ 8% per annum minus TDS, instead of Mr. Lalit Modi in the name of Ms. Sonia Modi for which four cheques have been handed-over and sale deed in terms of agreement to sell be executed in the name of nominee of the plaintiff i.e. Ganesh Info Services Pvt. Ltd., when the physical and vacant possession of the suit property will also be handed-over to the plaintiff or his nominee by the defendant."

(emphasis supplied)

10. This Court is of the prima facie opinion that in view of the orders dated 15th April, 2019 and 28th January, 2020, the appellant could not have made a solemn statement before the other learned Single Judge in CS(OS) No. 109/2017 on 17th June, 2020 that he would execute a sale deed within ten days. In fact, the statement made by the appellant before another learned Single Judge on 17th June, 2020 in CS(OS) No.109/2017

is not an innocuous statement and has sanctity attached to it as it was accompanied by a receipt of Rupees Seven Crores (Rs.7,00,00,000/-).

Prima facie, the said statement constitutes an unconditional undertaking to execute the sale deed in favour of the Romi Garg.

11. The argument that no contempt had been committed as the appellant had neither executed the sale deed nor handed over the possession of the suit property to Romi Garg is fallacious. This Court is in agreement with the view of learned Single Judge that the appellant could not execute the Sale Deed as the respondent-decree holder had immediately filed a fresh suit being CS (OS) No. 150/2020 challenging the settlement dated 17th June, 2020 and to protect its rights under the Award passed in its favour on 21st November, 2016 / 12th January, 2017. Though initially the learned Single Judge on 20th June, 2020 in CS (OS) 150/2020 had directed the appellant to deposit the keys of the subject property with the Registrar General of this Court, yet upon an appeal being filed by the appellant being FAO(OS) 34/2020, the said order was modified by the Division Bench on 06th July, 2020 after recording the undertakings given by the appellant and Romi Garg that they would not execute the sale deed till further orders were passed in CS(OS) 150/2020. Consequently, it was not for want of trying or lack of effort on the part of the appellant that the sale deed could not be executed and/or possession of the suit property could not be delivered!

12. Further, this Court is of the prima facie view that the aforesaid undertaking dated 17th June, 2020 is misleading, false, mischievous and based on half truth as the appellant did not disclose the subsisting injunction orders dated 15th April, 2019 and 28th January, 2020 to the

other learned Single Judge on 17th June, 2020 in CS(OS) No.109/2017 and he did not qualify his undertaking by stating that he would seek vacation of the aforesaid subsisting injunction orders.

13. A feeble attempt was made to suggest that the injunction orders dated 15th April, 2019 and 28th January, 2020 were on record in CS(OS) No.109/2017. But it is an admitted position that the said injunction orders were neither annexed to the application being I.A. No.4558/2020 nor highlighted or brought to the notice of the Court that passed the order dated 17th June, 2020. Consequently, the disclosure of injunction orders dated 15th April, 2019 and 28th January, 2020 had not been done in a forthright manner, as no Court can be expected to go through a voluminous file while deciding an interim application in a disposed of suit.

14. While it is true that the Romi Garg had taken steps to vacate the injunction in his appeal being FAO(OS) No. 116/2018, yet this Court finds that the appellant had taken no steps to get the injunction orders dated 15th April, 2019 and 28th January, 2020 vacated within ten days.

15. This Court is also of the prima facie opinion that the unqualified statement/undertaking made by the appellant accompanied by receipt of Rupees Seven Crores (Rs.7,00,00,000/-) was part of a stratagem to obtain a 'direction / legal cover' from the other learned Single Judge in CS(OS) 109/2017 to execute a sale deed and to hand over possession of the suit property in favour of nominee of Romi Garg in violation of the injunction orders in subsistence in Ex.P.69/2017.

16. This Court is of the prima facie view that 'litigants cannot play one Court against the other' without disclosing full facts upfront. In fact, it

prima facie seems that the appellant tried to use another Court proceeding [CS (OS) 109/2017] as a 'shield' to violate subsisting injunction orders in Ex.P. 69/2017.

17. Keeping in view the aforesaid, this Court is of the prima facie opinion that the judgments cited by learned senior counsel for the appellant are inapplicable to the present case. In fact, this Court is of the prima facie view, as stated hereinabove, that not only receipt of Rs.7,00,00,000/- as sale consideration, but also the undertaking to execute the sale deed within ten days without moving the Coordinate Bench in Ex.P. 69/2017 for vacation of the binding injunction orders, was a wilful violation of the subsisting injunction orders but also to prejudice and/or with intent to interfere with due course of judicial proceeding or obstruct or tends to obstruct, the administration of justice. Consequently, this Court is of the view that it is a fit case to initiate suo moto criminal contempt proceeding against the appellant. Registry is directed to open a separate file wherein a copy of the present appeal along with today's order shall be placed on record.

18. Issue notice.

19. Mr. Karan Babuta, learned counsel accepts notice on behalf of the appellant. He is directed to file a reply affidavit within four weeks in the criminal contempt petition.

20. The appellant is directed to deposit the sale consideration of Rs.7,00,00,000/- received on his behalf in pursuance to his statement dated 17th June, 2020, with the Registry of this Court within four weeks.

21. The appellant shall be personally present in Court on the next date of hearing.

22. Mr.Sanjay Goswami, Advocate, accepts notice on behalf of respondents in EFA(OS) 1/2021.

23. The respondents in EFA(OS) 1/2021 may also file a reply affidavit within three weeks. Rejoinder affidavit, if any, be filed before the next date of hearing.

24. Since the matter is still pending before the learned Single Judge for sentencing, we clarify that the learned Single Judge shall be at liberty to proceed ahead with the order of sentence. However, it is clarified that the sentence imposed shall not be given effect to till further orders.

25. List the matter on 05th April, 2021.

26. The order be uploaded on the website forthwith. Copy of the order be also forwarded to the learned counsel through e-mail.

MANMOHAN, J

ASHA MENON, J FEBRUARY 12, 2021 TS/KA