Thomas V.V vs Madhu S.Nair
2021 Latest Caselaw 1233 Ker

              IN THE HIGH COURT OF KERALA AT ERNAKULAM

                                PRESENT

            THE HONOURABLE MR. JUSTICE P.B.SURESH KUMAR

   WEDNESDAY, THE 13TH DAY OF JANUARY 2021 / 23TH POUSHA, 1942

          Con.Case(C).No.1527 OF 2020 IN WP(C). 22318/2016

AGAINST THE ORDER/JUDGMENT IN WP(C) 22318/2016(L) OF HIGH COURT OF
                              KERALA


PETITIONER/PETITIONER IN WPC:

             THOMAS V.V,
             AGED 62 YEARS,
             S/O.LATE V.T.VARGHESE,
             RESIDING AT VADAKKAL HOUSE,
             MUPPATHADOM P.O., ALUVA,
             PROPRIETOR, M/S.TECHS INDIA COMPANY,
             V/747, EDAYAR, KADUNGALLUR,
             MUPPATHADOM P.O., ALUVA-683110.

             BY ADVS.
             SRI.JOSE JACOB
             SHRI.JAZIL DEV FERDINANTO

RESPONDENT/CONTEMNORS/RESPONDENT IN WPC   :

      1      MADHU S.NAIR,
             AGE AND FATHERS NAME NOT KNOWN TO THE PETITIONER,
             PRESENTLY CHAIRMAN AND MANAGING DIRECTOR,
             M/S.COCHIN SHIPYARD LTD.,
             PERUMANOOR P.O., COCHIN-682015.

      2      JOSE V.J.,
             AGE AND FATHERS NAME NOT KNOWN TO THE PETITIONER,
             PRESENTLY DIRECTOR FINANCE, COCHIN SHIPYARD LTD.,
             PERUMANOOR P.O., COCHIN-682015.

             R1-2 BY ADV. SRI.M.GOPIKRISHNAN NAMBIAR
             R1-2 BY ADV. SRI.K.JOHN MATHAI
             R1-2 BY ADV. SRI.JOSON MANAVALAN
             R1-2 BY ADV. SRI.KURYAN THOMAS
             R1-2 BY ADV. SRI.PAULOSE C. ABRAHAM
             BY SRI.RAJA KANNAN, STANDING COUNSEL

     THIS CONTEMPT OF COURT CASE (CIVIL) HAVING COME UP FOR
ADMISSION ON 13.01.2021, THE COURT ON THE SAME DAY DELIVERED THE
FOLLOWING:
 Contempt Case (C) No.1527 of 2020
                                                   2




                          Contempt Case (C) No.1527 of 2020
                          -------------------------------------------------
                                            JUDGMENT

A batch of writ petitions were filed by the contractors of

M/s.Cochin Shipyard Ltd. challenging the demand notices issued

by the official respondents in the writ petitions claiming service tax

payable by them in respect of the works of M/s.Cochin Shipyard

Ltd. undertaken by them. The case set out by the petitioners in the

writ petitions was that they are not liable to pay the service tax

demanded from them and that if at all there is any liability for

them, the same have to be borne by M/s.Cochin Shipyard Ltd.

2. While the writ petitions were pending, the

Government of India has introduced 'Sabka Vishwas (Legacy

Dispute Resolution) Scheme, 2019' (the Scheme) for settlement of

service tax liability. In the light of the Scheme, at the instance of

the petitioners, this Court passed Annexure A1 interim order

directing M/s.Cochin Shipyard Ltd. to consider and report as to

whether they would settle the service tax liability of the petitioners

under the Scheme, if the petitioners prefer the requisite

applications for the same. Pursuant to Annexure A1 interim order,

an affidavit has been filed on behalf of M/s.Cochin Shipyard Ltd. on Contempt Case (C) No.1527 of 2020

16.12.2019 undertaking to reimburse to the petitioners the

amounts payable by them under the Scheme towards settlement of

their service tax liability, on the petitioners producing evidence of

settlement under the Scheme and payment of the settlement

amount. Annexure A2 is the affidavit filed on behalf of M/s.Cochin

Shipyard Ltd. The case set out by the petitioner in the contempt

case is that as the petitioners in the writ petitions were unable to

raise the funds required for making payments under the Scheme

for settlement of their liability, M/s.Cochin Shipyard Ltd. agreed to

effect payment on behalf of the petitioners under the Scheme and

accordingly, settled the liabilities of all the petitioners in the writ

petitions except the petitioner in the contempt case and a few

others. It is stated that payments were not effected on behalf of

the petitioner taking the stand that the entire demand for service

tax raised against petitioner was not in respect of the works of

M/s.Cochin Shipyard Ltd. undertaken by him. According to the

petitioner, the said stand is baseless and the entire demand for

service tax raised against the petitioner was in respect of the works

of M/s.Cochin Shipyard Ltd. undertaken by them and the refusal

on the part of M/s.Cochin Shipyard Ltd. to settle the service tax

liability of the petitioner would amount to willful breach of

Annexure A2 undertaking given to this Court.

Contempt Case (C) No.1527 of 2020

3. A counter affidavit has been filed on behalf of

M/s.Cochin Shipyard Ltd. The stand taken by M/s. Cochin Shipyard

Ltd. in the counter affidavit in essence is that having found that the

entire demand for service tax raised against the petitioner was not

in respect of the works of M/s.Cochin Shipyard Ltd. undertaken by

the petitioner, the petitioner was required to pay the portion of the

amount payable by him under the Scheme for settlement of the

liability other than the liability in respect of the works of M/s.Cochin

Shipyard Ltd. and he has refused to do so and had the petitioner

made available the said amount with M/s.Cochin Shipyard Ltd., the

same together with the demand relating to the works of M/s.Cochin

Shipyard Ltd undertaken by the petitioner would have been

remitted by M/s.Cochin Shipyard Ltd. and the liability of the

petitioner would have also been settled under the Scheme.

4. Heard the learned counsel for the petitioner as also

the learned counsel for the respondents.

5. Paragraph 7 of Annexure A2 affidavit containing

the undertaking allegedly violated by M/s.Cochin Shipyard Ltd.

reads thus:

"7. This respondent is willing to reimburse the subcontractors to the extent of the liability they have to pay under the Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 under the demand notices issued to them for sub-contract works done by them for this respondent and upto an amount of Rs.12,40,10,983/- (Rupees Twelve Crores Forty Lakhs Ten Thousand Nine Hundred and Eighty Contempt Case (C) No.1527 of 2020

Three) as reported in the statement filed by the petitioners with this respondent as full and final settlement of the entire liabilities under the said demand notices. A true copy of the statements filed by the petitioners summarizing the liability arising of the orders and show cause notices issued by the Department are produced herewith and marked as Exhibits R5(a) and R5(b) for identification. This respondent would clarify that the payments made by the petitioners can be reimbursed only on production of evidence of settlement under the SVLDRS and payment of the settlement amount, by the petitioners, to the department account under the scheme. This respondent would further clarify that it has not and would not assume any further liabilities on the demand notices issued to the petitioners and the amount as stated above shall be reduced and limited to the actual amount payable and paid by the petitioners to the service tax department under the above Scheme, and which is with regard to the works undertaken by the petitioners for this respondent."

As discernible from the extracted portion of the affidavit,

M/s.Cochin Shipyard Ltd. did not undertake before this court to

settle the liability of the petitioners in the writ petition. Instead, the

undertaking made by M/s.Cochin Shipyard Ltd. is only that they

would reimburse to the petitioners the amounts payable by them

under the Scheme towards settlement of their service tax liability

on the petitioners producing evidence of settlement under the

Scheme and payment of the settlement amount. The petitioner has

no case that he has settled his service tax liability under the

Scheme and M/s.Cochin Shipyard Ltd. is refusing to reimburse to

him the amounts paid by him towards settlement of the liability. His

case, on the other hand, is only that M/s.Cochin Shipyard Ltd. has Contempt Case (C) No.1527 of 2020

not settled his liability as done in the case of the petitioners in the

remaining writ petitions. I have taken note of the stand taken by

M/s.Cochin Shipyard Ltd. for having not settled the liability of the

petitioner as done in the case of petitioners in the remaining cases.

The case of the petitioner is that the said stand is incorrect and

unsustainable. Even if it is accepted that the said stand of

M/s.Cochin Shipyard Ltd. is incorrect and unsustainable, according

to me, the petitioner cannot be heard to contend that the same

would amount to willful breach of Annexure A2 undertaking, so as

to constitute a case of civil contempt.

The contempt case, in the circumstances, is devoid of

merits and the same is, accordingly, dismissed.

Sd/-

P.B.SURESH KUMAR, JUDGE ds 13.01.2021 Contempt Case (C) No.1527 of 2020

APPENDIX PETITIONER'S/S EXHIBITS:

ANNEXURE A1 A CERTIFIED COPY OF THE INTERIM ORDER DATED 27.11.2019 IN WPC NO.22318/2016 AND CONNECTED CASES.

   ANNEXURE A2                      A TRUE COPY OF THE AFFIDAVIT DATED
                                    16.12.2019 FILED BY THE COCHIN SHIPYARD
                                    LTD., REPRESENTED BY THE 1ST RESPONDENT
                                    HEREIN BEFORE THIS HON'BLE COURT PURSUANT
                                    TO INTERIM ORDER DATED 27.11.2019,
                                    INCLUDING ITS EXHIBITS.

   ANNEXURE A3 SERIES               TRUE COPIES OF THE FORM SVLDRS-3 ISSUED
                                    TO THE PETITIONER.

   ANNEXURE A4                      A TRUE COPY OF THE EMAIL DATED 30.06.2020
                                    ADDRESSED BY THE OFFICERS UNDER THE
                                    CONTROL AND SUPERVISION OF THE CONTEMNOR.