Telangana High Court
Smt. Penumalli Sulochana vs Harish Rawtani on 19 March, 2021
Bench: M.S.Ramachandra Rao, T.Amarnath Goud
HONOURABLE SRI JUSTICE M.S.RAMACHANDRA RAO
AND
HONOURABLE SRI JUSTICE T.AMARNATH GOUD
CONTEMPT CASE NOS.649 AND 650 OF 2020
COMMON ORDER:
(Per Sri Justice M.S.Ramachandra Rao)
C.C.Nos.649 and 650 of 2020 are filed by the petitioners
therein to punish the respondents for willfully and deliberately
violating the common judgment and decree dt.22.11.2017 passed by a
Division Bench of this Court in C.C.C.A.Nos.172 of 2015 and 175 of
2015.
2. The said Appeals had been disposed of in terms of a joint
Memorandum of Compromise dt.21.11.2017 executed by the parties.
3. It is the contention of the petitioners that the respondents had
failed to comply with the same in spite of specifically undertaking to
comply with the terms and conditions set out therein.
4. There is no dispute that petitioner No.1 was the absolute owner
and possessor of premises bearing Municipal No.8-2-293/82/A/796-A
in Plot No.796-A admeasuring 1162 square yards situated at Road
No.36, Jubilee Hills, Hyderabad-500033.
5. The said premises had been let out to the respondent under
registered lease deed dt.06.12.2006.
6. On expiry of the said lease, petitioner No.1 had filed
O.S.No.172 of 2012 before the II Additional Chief Judge, City Civil
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Court at Hyderabad seeking eviction of the respondent and also
recovery of mesne profits.
7. The respondent filed O.S.No.560 of 2012 in the same Court
against the petitioners for specific performance of an alleged oral
agreement for renewal of lease of the said premises for five years.
8. By a common judgment dt.17.10.2015, the trial Court had
dismissed O.S.No.172 of 2012 filed by petitioner No.1 for eviction of
the respondent and had decreed O.S.No.560 of 2012 filed by the
respondent for specific performance.
9. This was questioned by petitioner No.1 by filing
C.C.C.A.No.175 of 2015 against the judgment passed in O.S.No.172
of 2012.
10. Petitioners had also filed C.C.C.A.No.172 of 2015 against the
judgment in O.S.No.560 of 2012.
11. An interim order was passed on 17.11.2016 by this Court
asking the respondent to vacate the said premises and hand it over to
petitioner No.1 on 31.01.2017 and it was observed that the entitlement
to arrears of rents and other taxes payable by the respondent would be
decided at the time of final hearing of the Appeals.
12. This was challenged by the respondent and the petitioners in
SLP (C) No.2870 of 2017 and SLP (C) No.2279 of 2017 respectively
in the Supreme Court.
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13. In the Supreme Court, there was an interim arrangement agreed
between the parties and a consent order was passed disposing of both
the Special Leave Petitions on 06.02.2017. As per the terms of the
said consent order, the respondent was directed to furnish bank
guarantee for Rs.69,34,180/- within one month; a sum of
Rs.34,75,000/- being the difference of rental amounts for the period
17.10.2015 to 31.01.2017 along with the applicable service tax
amounting to Rs.16,88,500/- and property tax amounting to
Rs.4,57,000/- were directed to be paid by the respondent to petitioner
No.1 within two months subject to the outcome of the Appeals
pending before this Court. The respondent was also directed to pay
monthly user charges of Rs.7,50,000/- to petitioner No.1.
14. Alleging that the respondent had deliberately and willfully
disobeyed the order passed by the Supreme Court, the petitioners filed
Contempt Petition No.829 of 2017 before the Supreme Court.
15. Thereafter, the respondent complied with all the directions
passed by the Supreme Court except payment of service tax which
was required to be paid after 31.01.2017. On the basis of the
undertaking given by the counsel representing the respondent that
service tax, being a quarterly obligation, it will be paid accordingly,
the Supreme Court disposed of the Contempt Petition on 05.05.2017.
16. Thereafter, the parties entered into a Joint Memo of
Compromise on 21.11.2017.
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Contentions of petitioners
17. It is the contention of the petitioners that :
(a) under the compromise decree, the respondent was
permitted to make only interior decoration or internal
temporary partitions without damaging the original
structure and he had agreed to handover the schedule
premises on the expiry of the lease period in 'as is where is'
condition. But in August, 2018, the respondent had cut the
slab by about 1200 square feet in the showroom of
'Sketchers' permanently altering/damaging the structure of
the above premises in complete violation of the terms of the
compromise and the judgment and decree passed in the
Appeals.
(b) As per Clause 13 of the Joint Memo of Compromise
dt.21.11.2017 which is Clause 14 of the judgment and
decree dt.22.11.2017, the respondent is obligated to pay the
applicable municipal tax to the municipal authorities on or
before the due date and handover the receipt to the
petitioners; the petitioners addressed a letter dt.03.08.2018
asking the respondent to pay the outstanding property tax
of Rs.4,34,084/- within 15 days; and the respondent gave a
letter on 10.08.2018 informing the petitioners that he had
paid the property tax through two cheques bearing
Nos.039224 dt.28.07.2018 and 039223 dt.28.07.2018. It is
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contended that no proof of such payment was furnished to
the petitioners and the online status on the portal of GHMC
shows that the property tax is still outstanding.
(c) The 1st petitioner gave a legal notice on 24.08.2019 to the
respondent asking him to pay the outstanding property tax
amounting to Rs.2,15,098/- which includes Rs.2,312/-
towards cheque bounce penalty as per the online payment
status within 15 days and handover the payment receipt to
petitioner No.1; the petitioner No.1 asked the respondent to
deposit rent as per the agreed terms of the Joint
Compromise, i.e., within 10th of every month. But the
respondent issued a letter in April, 2020 through e-mail and
Whatsapp to the petitioners stating that due to the
lockdown imposed by the Government of India and
Government of Telangana under the Disaster Management
Act, 2005 and Epidemic Diseases Act, 1897, business
operations were not permitted and it was not in a position
to pay the rent for the month of April, 2020.
(d) Petitioner No.1 then sent another reply by way of legal
notice dt.24.04.2020 asking the respondent to pay up the
rent and pointing out that he cannot take shelter under the
lockdown in view of the judgment and decree
dt.22.11.2017 in C.C.C.A.Nos.172 of 2015 and 175 of
2015.
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18. According to the petitioners, despite issuance of notices, the
respondent continued to violate the undertakings given to the
petitioners to make timely payment of monthly rentals along with the
applicable GST on or before 10th of every month and had willfully and
deliberately violated orders of this Court.
According to the petitioners, the respondent has to pay
Rs.9,99,000/- including GST and after deducting TDS for the month
of April, 2020 and similar amounts for the months of May and June,
2020, and the respondent had also failed to handover proof of
payment of property taxes for the subject premises.
According to the petitioner, the respondent on 15.06.2020 paid
only a part of the outstanding rentals due of Rs.5,00,000/- on
15.06.2020 leaving a balance of Rs.24,99,997/- and had also not
cleared the property tax dues by 31.07.2020 as agreed in the
compromise decree.
It is contended that this conduct of the respondent amounts to
willful disobedience of the orders passed by this Court and so the
respondent should be punished for contempt.
The stand of the respondent
19. Counter affidavit is filed on 25.01.2021 by the respondent in
both these matters stating that he had good respect for the orders of
the Court and had no intention to violate the orders of this Court.
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20. Firstly it is contended that the consequences for default/breach
of any of the terms contained the compromise decree are also
mentioned in Clause 18 of the Joint Memo of Compromise
dt.21.11.2017 and the petitioners have to file execution petition and
avail those remedies and the Contempt Case is not maintainable.
21. According to him, the terms of the compromise decree cannot
be equated to an undertaking given by the respondent.
22. It is contended that allegation regarding alteration of the
structure allegedly made by the respondent is barred by limitation as
contained in Section 21 of the Contempt of Courts Act, 1971 as the
Contempt Case had been filed in July, 2020 and the violation had
allegedly occurred in August, 2018.
23. It is then contended that property tax dues amounting to
Rs.2,15,098/- claimed by the petitioners in the legal notice
dt.24.08.2019 had been cleared by him.
24. It is contended that the respondent is running two showrooms,
i.e., Centro and Sketchers, but both of them were ordered to be closed
till the end of May, 2020 on account of Covid-19 pandemic when
lockdown was imposed by the State Government.
According to the respondent, though alternate shops were
permitted to be opened for some time, due to severity of Covid-19
pandemic till October, 2020, there were hardly any sales in his shops.
It is alleged that with great difficulty, the respondent had paid
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Rs.5,00,000/- on 10.06.2020 and Rs.2,00,000/- each on 31.08.2020,
12.11.2020, 10.12.2020 and 02.01.2021. It is contended that the
respondent could not comply with the terms of the common judgment
and decree dt.22.11.2017 on account of the said lockdown. According
to him, on account of lack of business, and non-availability of funds,
he could not pay the rents and he cannot be said to have intentionally
evaded payment of rents.
The reply affidavit of petitioner
25. Reply affidavit is filed by the petitioners refuting the said
contentions.
26. It is contended by the petitioners that in addition to the
remedies available to them under CPC, they are entitled to initiate the
present contempt proceedings before this Court in view of the
deliberate and willful violation of the judgment and decree passed on
22.11.2017 by this Court in C.C.C.A.Nos.172 and 175 of 2015.
27. They denied that they are only entitled to the remedies available
in Clause 18. They denied that the terms of the compromise cannot be
equated to an undertaking.
28. According to them, the respondent was required to make
monthly payments apart from payment of property tax in a time-
bound manner and unless he complies with the same, he cannot be
allowed to be in possession of the premises in question.
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29. It is contended that even if the respondent could not operate his
shops in the schedule premises until mid-May, 2020 due to the
imposition of lockdown due to Covid-19 by the State Government, the
same would not absolve the respondent from paying rents for the said
period. It is pointed out that the respondent had continued in
possession during the said period and was obligated to pay rents as
agreed in the judgment and decree dt.22.11.2017.
30. It is also stated that businesses were reopened and the
respondent was doing good business in both shops and in spite of the
same, the respondent paid a mere Rs.13,00,000/- from June, 2020 to
January, 2021 and an amount of Rs.91.50 lakhs was outstanding as on
28.01.2021 apart from property tax of Rs.4,60,000/- which had to be
paid on 31.07.2020.
The consideration by the Court
31. We have noted the contentions of both sides.
32. We may extract Clause 18 of the compromise Memo filed by
the parties, on the basis of which the common judgment and decree
dt.22.11.2017 was passed in C.C.C.A.Nos.172 and 175 of 2015. It
states:
"18. The Parties agree that upon default/breach of any of
the terms contained herein in the present Compromise including
but not limited to non-payment of the monthly rentals on or before
10th day of each month in advance and/or the applicable GST on
the monthly rentals on or before 10th day of each month in
advance and/or the Property Tax as assessed by the Greater
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Hyderabad Municipal Corporation from time to time within the
timelines prescribed hereinabove, the First Party will put the
Second Party on Notice of such default/breach for the first two (2)
defaults and the Second Party agrees and undertakes to rectify the
said default/breach within 15 (fifteen) days from the date of
receipt of the such Notice from the First Party. It is made clear
that the issuance of Notice by the First Party to the Second Party
notifying the default/breach committed by the Second Party is only
agreed to be issued in the event of the first two (2) defaults
committed by the Second Party and that no notice of whatsoever
nature is required to be issued by the First Party or any person to
the Second Party for any subsequent default/breach committed by
the Second Party. The Second Party unconditionally agrees and
undertakes that upon the failure of the Second Party to rectify the
default/breach within 15 days from the date of receipt of Notice
for the first two (2) defaults/breaches or in the case of any third
default/breach committed by the Second Party will result in
automatic eviction of the Second Party from the Scheduled
Premises and the First Party will be entitled to immediately
initiate appropriate proceedings to evict the Second Party from
the Scheduled Premises without any further Notice or reference of
whatsoever nature including by initiating Execution Proceedings
for execution of the Decree passed in terms of the present
Compromise in the Appeals vide C.C.C.A. No. 172 of 2015 and
C.C.C.A. No. 175 of 2015 on the file of the Hon'ble High Court of
Judicature at Hyderabad for the State of Telangana and the State
of Andhra Pradesh. Further, the First Party shall also be entitled
to forfeit the entire Security Deposit amount of Rs.15,00,000/-
(Rupees Fifteen lakhs only) without any claims of whatsoever
nature from the Second Party."
33. A reading of the above Clause indicates that if there are two
defaults or breaches or if there is a third default or breach committed
by the respondent, it would result in automatic eviction of the
respondent from the premises and petitioner No.1 would also be
entitled to immediately initiate proceedings to evict the respondent
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without any further notice apart from forfeiting the security deposit of
Rs.15,00,000/.
34. It is not in dispute that the rental amount agreed to be paid was
Rs.9,99,000/- including GST after deducting TDS, and that for the
months of April, May and June, 2020, these amounts were not paid by
the respondent to the petitioners.
35. In the counter affidavit of the respondent, he admitted to have
paid only Rs.13,00,000/- between 10.06.2020 and 02.01.2021.
36. Therefore, even after June, 2020 for the months of July, 2020 to
January, 2021, the rents have not been paid.
37. Thus, admittedly, there have been more than three defaults in
payment of rent since default in payment of rent for each month is to
be counted as a separate default in compliance with the terms of the
compromise decree in the Appeals, which requires the respondent to
pay every month the said amount.
38. It is also not in dispute that notices had been exchanged
between the parties several times in the interregnum period between
April, 2020 and January, 2021 and the requirement of Clause 18 was
fulfilled by the petitioners.
39. Failure on the part of the respondent to comply with the terms
of the compromise would entitle in automatic vacation of the
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respondent from the subject premises as he himself agreed to the same
in clause 18.
40. The Supreme Court in Rama Narang Vs. Ramesh Narang
and another1 observed that all decrees and orders are executable
under the Code of Civil Procedure and consent decrees and orders are
also executable. But merely because an order or decree is executable,
it would not take away the Courts jurisdiction to deal with a matter
under the Contempt of Courts Act, 1971 provided the Court is
satisfied that the violation of the order or decree is such, that if
proved, it would warrant punishment under Section 13 of the Act on
the ground that the contempt substantially interferes or tends
substantially to interfere with the due course of justice. It referred to
the definition of 'civil contempt' in Section 2(b) of the Contempt of
Courts Act, 1971 and noted that in the said provision, wilful
disobedience to any judgment, decree, direction, order, writ or other
process of a Court apart from wilful breach of an undertaking given to
a Court is itself civil contempt, i.e., that the said Section itself
provided that wilful violation of any order or decree etc., would
tantamount to contempt; a compromise decree is as much a decree as
a decree passed on adjudication; and in such circumstances, it would
neither be in consonance with the statute, judicial authority, principle
or logic to draw any distinction between wilful violation of the terms
of the consent decree, and wilful violation of the decree which is
passed on adjudication.
(2006) 11 SCC 114
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41. In view of this authoritative pronouncement of the Supreme
Court, the contention of the respondent that the Contempt Case would
not lie because the decree or order is executable, and that there was no
specific undertaking given by him, is rejected.
42. We may also point out that whatever difficulty the respondent
might have had in paying the agreed rent after April, 2020 on account
of Covid-19 pandemic and the consequent lockdown imposed by the
State and Central Governments on businesses, admittedly even
according to the respondent, by the end of May, 2020, he was
permitted to operate the shops in question.
43. Therefore, even if there was no wilfulness on the part of the
respondent in violating the judgment and decree dt.22.11.2017 in the
Civil Appeals during the period of the lockdown in April, 2020 and
May, 2020, he cannot state that because of lack of business till
October, 2020, his obligation to comply with the direction in the
compromise decree to pay a sum of Rs.9,99,000/- every month stood
suspended and that the payment of Rs.13,00,000/- made by him
between 10.06.2020 and 02.01.2021 should be taken into account to
discharge him from the charge of contempt.
44. In our considered opinion, whatever be the difficulties faced by
the respondent post May, 2020, he cannot ask the petitioners to share
in his misfortune because the obligation to pay rents to the petitioners
cannot be said to be suspended for the period after May, 2020
assuming for the sake of argument without conceding that for the
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months of April and May, 2020 there was no wilfulness in non-
payment of rent by the respondent to petitioner No.1.
45. In this view of the matter, we are of the opinion that the
respondent had wilfully and deliberately violated the common
judgment and decree dt.22.11.2017 in C.C.C.A.Nos.172 and 175 of
2015 and is liable to be punished for contempt of Court.
46. Accordingly, the Contempt Cases are allowed; the respondent is
directed to pay all the arrears of rent due to the petitioners and
Municipal taxes due in respect of the subject premises to the GHMC
within four (4) weeks; he shall also pay costs of Rs.3,00,000/-
(Rupees Three lakhs only) to the petitioners; the respondent shall also
vacate the subject property by 15.04.2021 and pay the rents up to the
said date without fail. In default of compliance with any of these
directions, he shall suffer civil imprisonment for four (4) months and
also pay a fine of Rs.2,000/- (Rupees two thousand only).
47. Pending miscellaneous petitions, if any, in these Contempt
Cases shall stand closed.
____________________________
M.S.RAMACHANDRA RAO, J
_______________________
T.AMARNATH GOUD, J
Date: -03-2021
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