Nancowry Trading Co. v. UNION OF INDIA — 1968 DIGILAW 31 (CAL)

JUDGMENT 1. THIS is a Rule for contempt of court against Mahabir Singh (Respondent no. 1) and Baldev Malhotra (Respondent No. 2), the Chief Commissioner and Deputy Commissioner respectively, of the Andaman and Nicobar Islands, for an alleged violation of the interim order issued on 4.9.67. in the principal rule - C. R. 1630 (W) of 1967 -a proceeding under Article 226 of the Constitution. The interim order was issued on the following terms : "there will be an interim order of injunction in term of prayer (e) of the petition. But the opposite parties shall be at liberty to determine in accordance with law, the application for renewal of the licence, if any, by the petitioner." In order to appreciate the scope of the interim order, we have, therefore, to advert to the text of prayer (e) of the petition under Article 226, which was as follows : "interim injunction restrainng the respondents, their servants and or agents from obstructing and/or interfering with the business of your petitioner and from giving any further effect to the said purported decision and the said communication till the disposal of this application. " 2. WE are, again, led to what the "said purported decision and the communication" was, as to giving any further effect to which the respondents were enjoined by the interim order at injunction. This decision and the communication, dated the 6th and 11th April, 1967, respectively, are to be found at Anns. B. and C of the application for proceeding in contempt, and the contents thereof, in short are as follows: ann. B. the decision of 6.4.67: this is a letter addressed by the secretary to the Chief Commissioner to the petitioner-applicant, a firm called nancowrie Trading Company on the subject of grant of trading licence and says – "I am to forward herewith Licence no. 2 authorising you to carry on general trade or business in the Reserved area mentioned therein for a period of six months from the 1st. April, 1967 to 30th September, 1967. 2. 2 authorising you to carry on general trade or business in the Reserved area mentioned therein for a period of six months from the 1st. April, 1967 to 30th September, 1967. 2. I am to add that no extension of the licence will be granted after the 30th September, 1967 and you are therefore requested to formulate a purely Nancowrian trading Company so as to take over the trade, failing which it would be taken over by the Administration at the expiry of the period of six months from the 1st of April, 1967." ann. C the communication of 11.4.67 : this letter issued by the Deputy commissioner (Respondent No. 2) to the petitioner Co. is in the nature of elucidation of the decision contained in ann. B. Three of the paragraphs of this letter are relevant: "the trade licence would, under no circumstances, be extended beyond the 30th September, 1967. I am to request that urgent steps should be taken to reorganise the Nancowrie trading Company into a cooperative society or a company of purely tribals of Nancorie and other Islands in the southern group so as to enable them to take over the entire trade with effect from the 1st October, 1967. It may be noted that in case the tribals of southern group of the Nicobar islands fail to organise themselves to take over the trade with effect from 1.10.67 the trade in its entirety would be taken over by the Administration with effect from the 2nd October, 1967." At this stage, a brief narration of the facts leading to the petition under article 226 would be useful. The andaman and Nicobar Islands (Protection of Aboriginal Tribes) Rules, 1957, provides for the grant of a pass authorising the pass-holder to enter and remain in the Reserved Area of the Islands for the purposes mentioned in the Pass and a Licence authorising the licensee to carry on the trade or business mentioned in the License and subject to the conditions thereof. According to section 6 (1) of the Andaman and Nicobar islands (Protection of Aboriginal Tribes) Regulation, 1956, no person can carry on any trade or business within the Reserved Area without obtaining a licence from the Chief Commissioner. Admittedly the Nancowry group of Islands to which the petition relates, falls within the Reserved Area. According to section 6 (1) of the Andaman and Nicobar islands (Protection of Aboriginal Tribes) Regulation, 1956, no person can carry on any trade or business within the Reserved Area without obtaining a licence from the Chief Commissioner. Admittedly the Nancowry group of Islands to which the petition relates, falls within the Reserved Area. The conditions of the licence oblige the licencee, inter alia, to maintain "an efficient system of procurement, supply and distribution" of the authorised articles, to hold a sufficient stock of them, and the sale or purchase of those articles shall be subject to the rates specified by the chief Commissioner. 3. THE petitioner, Nancowry Trading Company is a partnership firm consisting of nine persons, of whom 4 are members of the aboriginal tribes for the protection of which the Regulations were made and the aforesaid Rules have been issued under these Regulations. On the strength of licences granted, from time to time under the Regulations, the petitioner firm has been carrying on general trade including the supply of consumer goods in the Nancowry group of Islands, consisting of the 18 islands named in Ann A to the petition. The last licence granted was for 6 months from 1.4.67. 4. FROM some time ago, the respondents have been contemplating to take over by the Administration of the trading from private hands and, in pursuance of this policy, they issued a letter on 5.4.67, by which they proposed to lake over the stevedoring business which was amongst the commerical activities carried on by the petitioner firm and as against that the petitioner obtained Rule Nisi in C R 592 (W) of 1967 on 15.5.67 to which affidavit-in-opposition has been filed by the respondents on 21.7.67. The impugned decision at Ann. B of the application, not to extend the trading licence of the petitioner firm beyond 30.9.67 and to take over the entire trading by the administration thereafter took place on 6.4.67, i.e. one day after the date of the communication as to the deprivation of the petitioner firm of its stevedoring business, and may, therefore, be taken as part of the same scheme. 5. IT is the issue of Anns. 5. IT is the issue of Anns. B and C to the application that brought the petitioner to this court again on 4.9.67 and it challenged the validity of these Annexures on the ground, inter alia, that they infringed the fundamental rights of the petitioner under Article 19 (1) (g)of the Constitution. As stated earlier the petitioner asked for an interim injunction pending the disposal of the instant Rule which was issued on the motion, to restrain the respondents- (a) from interfering with the business of the petitioner. (b) from giving any further effect to Anns. B and C. Anns. B and C had two elements, namely- (i) that the petitioner's licence would not be extended, beyond 30.9.67 ; in any case (ii) that the business hitherto carried on by the petitioner would be taken over by the Administration from 2.10.67 unless, in the meantime, a new trading society was formed consign exclusively of tribals. 6. BUT for Anns. B and C, the petitioner would have been entitled to apply for a renewal of its licence on the expiry of the six months' term for which it had been granted ; the court therefore, took care that in granting an ad interim injunction, the court should not prevent the respondents from considering, in due course, such application, which, it was understood was already pending with the respondents, the court made a reservation to this effect and, subject, to this reservation, granted the petitioner the interim injunction sought for, in all other respects. The result of the injunction, read with Anns. B and c, therefore was that- (1) Pending disposal of the Rule, the Respondents should not, in any way, interfere with the business of the petitioner; and in particular, - (2) The respondents should not give effect to their decision not to renew the petitioner's licence beyond 30.9.67 and that, accordingly, subject to the ultimate decision in the Rule on the merits, it was open to the petitioner to apply for a renewal and for the respondents to consider such application, on its merits, regardless of their decision as communicated by Anns. B and C. (3) Trading in the Reserved Area, which was hitherto being carried on by the petitioner, should not be taken over by the Administration with effect from 2.10.67, even though the tribals failed to set up an exclusive organisation of their own in the meantime. B and C. (3) Trading in the Reserved Area, which was hitherto being carried on by the petitioner, should not be taken over by the Administration with effect from 2.10.67, even though the tribals failed to set up an exclusive organisation of their own in the meantime. It is admitted by the respondents that the aforesaid interim order was communicated to them on 6.9.67, so that there is no question that the respondents were aware of the court's order before the Act complained of in the application for contempt was done by them. That act is, as stated in paragraph 20 of the Application, the opening of new government shops since 11.10.67 under the ownership of the union of India at six places in the Reserved Area, thereby giving effect to the impugned decision at Anns. B and C. The applicant's case, in short, is that the opening of these six shops, dealing in the same consumer goods which the petitioner had been selling, within an Area having a limited population has interfered with the petitioner's business, and that it has been done in pursuance of the impugned decision which the respondents had by the interim injunction been prohibted from giving effect to. The applicant further alleges that this violation of the court's order has, been deliberate as would appear from, the conduct of the respondents as alleged in paragraphs 17-18 of the application namely that the respondents on 19.9.67 gave notice to the applicant that they would move an oral application for variation of the interim injunction granted by this court, to give the respondents liberty to open, fair price shops at five of the six places referred to above but that on that date fixed by the court for hearing of the said oral application, "the: learned Advocate for the respondents informed Honourable Court that he would not ask for any order at that time." 7. SHORTLY, thereafer, the respondents opened the six shops complained of. without moving for or obtaining any variation of the interim injunction, which thus stands. 8. I. The primary question for de-termination in this proceeding for contempt, therefore, is whether the interim injunction of 4.9.67 has been violated by the opening of the six shops complained of, which latter fact is admitted by the respondents to have been done on legal advice, as will be adverted to hereafter. 8. I. The primary question for de-termination in this proceeding for contempt, therefore, is whether the interim injunction of 4.9.67 has been violated by the opening of the six shops complained of, which latter fact is admitted by the respondents to have been done on legal advice, as will be adverted to hereafter. It has been argued on behalf of the respondents that since the existing licence of the petitioner was going to expire on 30.9.67, the court cannot be taken to have intended to enjoin the respondents against the doing of any act subsequent, to that date, because that would amount to granting a renewal of the licence to the petitioner which the court had no power to do. But though the court does not possess the power to grant or renew a licence it has the unquestionable power to maintain the status quo pending the hearing of the merits of a pending cause, so that the eventual decision of the court may not be rendered nugatory by any action taken by the respondents after the aggrieved party has reached the precincts of the court of justice. In this case, the petitioner had, in its petition under Article 226, challenged the constitutional validity of the impugned decision not to renew the licence of the petitioner beyond 30.9.67 in any case, and to take over the business of the petitioner by the administration after 30.9.67. Unable to determine the merits of that case of the pettioners at once, the court, by the interim injunction, restrained the respondents from altering the status quo, by doing anything to interfere with the business of the petitioner as it existed on 4.9.1967; not to throw out the petitioner's application for licence without any consideration in pusuance of the impugned policy decision ; and not to take over the business in the Reserved Area with effect from. 2.10.67, as contemplated by the impugned decision. Any possible hardship to the respondents by such an ex-parte order could be avoided by the respondents by moving the court for a variation of the injunction, which was always open to them. 9. THE opening of the six new shops complained of by the petitioner would be in breach of the interim injunction if thereby the petitioner's business is affected and if it is done in pursuance of the impugned decision, which the court asked the respondents not to implement. 9. THE opening of the six new shops complained of by the petitioner would be in breach of the interim injunction if thereby the petitioner's business is affected and if it is done in pursuance of the impugned decision, which the court asked the respondents not to implement. 10. IT has been argued by the learned Solicitor-General, firstly, that the opening of the six shops is an act independent of the impugned policy decision and, hence, the Respondents were free to do that, as advised by the law Ministry of the Government of india. But this argument gave way after the production, at a late stage of the hearing, of the minutes of the proceedings of the meeting presided over by the Chief Commissioner and attended, amongst others by the Deputy Commissioner, which was held at the former's Chamber on 5.9.67. The opening sentence of the proceedings show that the meeting was convened to discuss the question of 'taking over the trade by the State in Nancowry group of Islands after the expiry of the trade licence of Nancowrie Trading Co. ", and, at the out-set, "the Chief Commissioner pointed out that the existing trading licence of Nancowrie Trading Company was going to expire on 30th September 1967 and the Administration, has, therefore, to make necessary arrangements to maintain the essential supplies and take over trade in betelnut, copra and other local produce of the islands. " though it was stated that all this would happen if the tribals failed to start an exclusive organisation by the given date, that possibility was excluded by the statement of the Deputy Commissioner that they "were not yet prepared to take over trade in Noncowrie group of islands". The meeting, accordingly, authorised the Deputy Commissioner "to go ahead to make necessary arrangements to ensure supplies of consumer goods to the inhabitants of these islands" and in pursuance of this authorisation, the Deputy Commissioner proposed that 16 new shops be opened at different parts of the Islands, including the places mentioned in the application where the petitioner was already doing business under the licence. It is evident from the above that the opening of the new shops was a part and parcel of the decision to take aver the entire trading by the Adminisration. On 5.9.67, this decision was quite inoccuous because then there was no injunction. It is evident from the above that the opening of the new shops was a part and parcel of the decision to take aver the entire trading by the Adminisration. On 5.9.67, this decision was quite inoccuous because then there was no injunction. But to implement this decision by the opening of the new shops after the interim injunction was communicated to the respondents, constituted a patent violation of the injunction. Little authority is required in support of the proposition that even though an act started before the issue of an injunction against its commission, a repetition or contiunance thereof after the issue of an injunction constitutes a violation of the injunction and contempt. It has even been held that where a defendant who was enjoined not to interfere with the plaintiff's possession over a disputed land was already in possession from long before, the continuance of the defendant in passession after service of the injunction constitutes a trespass and violation of the injunction. 11. IN the same strain, the learned solicitor-General argued that the petitioner's licence not being an exclusive licence, the court could not, by any interim injunction grant the petitioner a monopoly nor can there be any violation of the court's order if an element of competition is introduced in the petitioner's business by the opening of new shops in the locality. The scope of the interim injunction however, is to be determined with reference to the state of affairs existing when the suitor comes to Court. The new shops complained of did not exist when the petitioner obtained the Rule and the petitioner was carrying on the business without any Government interference. The court enjoined the respondents not to interfere with that business of the petitioner by doing anything in pursuance of the impugned decision. But that exactly has been done by the respondents, by opening the new shops. 12. IT was further argued by Mr. De that the petitioner's case of injury caused by the opening of the new shops by the Government was unreal or exaggerated. In a proceeding for con-tempt, the quantum of injury is not a relevant consideration as the court is not called upon to assess damages but to determine whether the act complained of is in breach of its order. De that the petitioner's case of injury caused by the opening of the new shops by the Government was unreal or exaggerated. In a proceeding for con-tempt, the quantum of injury is not a relevant consideration as the court is not called upon to assess damages but to determine whether the act complained of is in breach of its order. Once it is found that the opening of the new shops was a part and parcel of the scheme ot taking over of the trade by the Administration, which the respondents were enjoined not to implement, the violation is proved beyond doubt. It is also patent that some injury is bound to be caused by the running of the new shops in an area of extremely limited population if the shops deal in some of the goods in which the petitioners deal. Ii. The next question to be determined is whether the violation of the aforesaid order of the court has been wilful, for, it has been well-established that a violation of a court's order, in order to constitute a contempt must be wilful. 13. BUT, at the same time, it has been equally established that wilfulness, in this context, simply means that the violation or disobedience is not 'casual, accidental or unintentional' (1)Fairclough v. Manchester Canal Co., (1897) WN 7 (CA); (2) Stancomb v. Trowbridge U. D. C., (1910) 2 Ch. 190 (194 ). In the last mentioned case, it was explicitly laid down by Warrington, J. ". . . . . . if a person. . . . . . is restrained by injunction from doing a particular act, that person. . . . . . commits a breach of the injunction, and is liable for process for contempt if he. . . . . . in fact does the act, and it is no answer to say that the act was not contumacious in the sense that there was no direct intention to disobey the order." There is nothing in the Supreme court decision in (3) B. K. Kar's case, (1961) 2 SCA 577 : AIR 1961 SC 1367 (1370), which goes against this wellestablished proposition. The substance of the decision in B. K. Kar's case is that there cannot be an intentional violation of a court's order until the person charged had knowledge of it. The substance of the decision in B. K. Kar's case is that there cannot be an intentional violation of a court's order until the person charged had knowledge of it. (4) S. S. Roy's case, AIR 1960 SC 190 , relied upon by the learned Solicitor-General, again, stands on a different footing altogether because the alleged contemner there was a judicial officer, who is not liable for any official act done by him in the absence of malice, according to ancient principles established by Anglosaxon constitutional jurisprudence. (a) The mere fact that the allegation of contempt involves an interpretation of the relevant order of the court does not excuse the disobedience (5)Lyon v. Goddard, (1950), 3 Mac. and G. 104 (117), if, on a proper interpretation, the court finds that the order has been violated and even a court of appeal can punish for contempt, differing from the interpretation given by the trial court, vide (6) Lenton v. Tegoning, (1960) 1 all ER 717 (CA ). Good faith, in this context, is of no avail in a proceeding for contempt (7) Hadkinson v. Hadkinson, (1952) 2 All ER 567 (569, 575); (8)R. v. Odhams Press, (1957) 1 QB 73. The observation in (2) Stancomb v. Trowbridge U. D. C., (1910) 2 Ch. 190 (194), that in a case of alleged contempt for violation of an order it is not necessary to establish that it was (lone with a contumacious intention, has already been referred to. (b) Nor does the fact that the respondents took legal advice before doing the impugned act in the matter of interpretation of the order of the court show that the violation was not wilful; in the circumstances of this case, the seeking of that advice out of court aggravates the offence. For, it has been held in (9) Kuchwar Lime Co. v. Secy, of State. AIR 1937 Pat. 65 (71), following the dictum of the Privy Council in (10) Eastern Trust Co. v. Mckenzle mann and Co. . (1915) AC 750 (759) that if the Government or any administrative authority has any doubt as to its position after an order of injunction has been made by the court, they should ask for directions from the court itself, instead of disregarding the order, after putting its own interpretation to it. v. Mckenzle mann and Co. . (1915) AC 750 (759) that if the Government or any administrative authority has any doubt as to its position after an order of injunction has been made by the court, they should ask for directions from the court itself, instead of disregarding the order, after putting its own interpretation to it. The departmental legal advisers of the union of India should have been aware of this proposition of law, and their position, as employees of the Union of India, to my mind, was somewhat different from that of the members of the legal profession, particularly because the Union of India itself was a party to the Rule in which the relevant interim order was made by this court. 14. THE Privy Council decision, just cited (p. 731, ibid), is also authority for the proposition that "an injunction, although subsequently discharged because the plaintiff's case has failed, must be obeyed while it lasts." The same is true of an order which has been irregularly or improperly obtained, vide (11) Drewry v. Thacker, (1819) 3 Swan. 529 (543); (12) Chuck v. Cremer, (1847)47 ER 820. Hence, the arguments of the learned Solicitor-General to the effect that the court could not, in law, make an order of interim injunction, as interpreted earlier, on the pleading of the petitioner, can be of no avail, simply because, at this interlocutory stage, the merits of the case cannot be determined. As observed by the Privy Council in (1915) AC 750 (759, 761), if the respendents had any doubt as to the legitimacy of the court's order, they should have resorted to this court or any superior tribunal. 15. IN this context, I consider it my duty to bring it to the notice of the respondents as well as of those whose advice has brought the respondents to this plight, to reproduce the words of the court of appeal in (7) Hadkinson v. Hadkinson, (1952) 2 All ER 567 (569): "it is the plain and unqualified obligation of every person against or in respect of, whom an order is made by a court of competent jurisdiction to obey it unless and until that order is discharged. The uncompromising nature of this obligation is shown by the fact that it extends even to cases where the person affected by an order believes it to be irregular or even void. The uncompromising nature of this obligation is shown by the fact that it extends even to cases where the person affected by an order believes it to be irregular or even void. Lord Cottenham, l. C. said in (12) Chuck v. Cremer, (1846) 1 Coop, tern Cott. 338 (342) -'a party who knows of an order, whether null or void, regular or irregular, cannot be permitted to disobey it. . . . . . It would be most dangerous to hold that the suitors, or their solicitors, could themselves judge whether an order was null or void - whether it was regular or irregular. That they should come to the court and not take upon themselves to determine such a question. That the course of a party knowing of an order, which was null or irregular, and who might be affected by it, was plain. He should apply to the court that it might be discharged. As long as it existed, it must riot be disobeyed. ' 16. I have already cited authorities to show that the same principles applies where the order of the court requires interpretation or clarification. Further, the position of a departmental solicitor of a party to the litigation cannot be better when the preceding observation is levelled against members of the independant profession. I have dealt with the point relating to legal advice rather elaborately because this, perhaps, is not the first instance where administrative authorities have been hauled up in contempt for acting according to instructions issued on the basis of departmental legal advice. It is hoped that in view of the aforesaid state of the law, the Departmental advisers will in future, be cautious in such matters, instead of resting complacent with the rule that Government is not bound to disclose what advice was given by its Law Officers. 17. It is hoped that in view of the aforesaid state of the law, the Departmental advisers will in future, be cautious in such matters, instead of resting complacent with the rule that Government is not bound to disclose what advice was given by its Law Officers. 17. THE circumstances in which the advice of the Departmental Law Officers was sought do not go to commend the conduct of the respondents as well, because, as it appears from the averments in paragraphs 17-18 of the Application, read with the corresponding statements in the counter-affidavits of the respondents, the learned Advocates engaged by the respondents, including the Union of India, who may safely be presumed to be eminent counsel, did in fact advise that a variation of the interim injunction was necessary before the respondents could launch into their scheme of opening the new shops after the interim injunction had been served upon them. The notice of the motion did in fact appear on the court's List on several days and eventually it was not moved by the counsel for the respondents, for the reason given in paragraph 17 (g) of the counter-affidavit, namely, that in the meantime the advice of the law Ministry WES available to the effect that no order of the court by way of variation or clarification of the interim injunction was necessary to open the new shops. 18. THE authorities discussed by me already established the proposition that even where the order of the court required interpretation or there was any doubt as regards its scope, it was the duty of the party enjoined, particularly when it was the Government itself whose duty was to uphold the administration of justice, to get the interim injunction discharged or varied instead of committing the act proposed las to the consequences of which the doubt did arise. I have, therefore, not the least doubt the interim injunction has been violated by the respondents and that, wilfully, in their zeal to implement the policy decision to take up the trading in the disputed area. III. The apology contained in paragraph 2 of the counter-affidavit of either respondent is patently conditional and illusory. It is as follows : "I humbly and unconditionally apologise to this Hon'ble Court if any action on my part be construed to be contempt of this Hon'ble Court as alleged in the said petition or otherwise." 19. III. The apology contained in paragraph 2 of the counter-affidavit of either respondent is patently conditional and illusory. It is as follows : "I humbly and unconditionally apologise to this Hon'ble Court if any action on my part be construed to be contempt of this Hon'ble Court as alleged in the said petition or otherwise." 19. IN the early case of (13) R. v. Balfour, (1895) 11 TLR 492, the apology was offered in similar language through counsel. It was stated on be half of the contemner that he apologised - "if, in the opinion of the court, the article was calculated to affect prejudicially the minds of the jury. " the Court refused to accept this apology because-"that did not show that he was really sorry for it. It was not the sort of apology a right-minded man would have been expected to make." 20. THAT is exactly what has happened in this case. The apology tendered by the respondents in their pleading cannot, therefore, be accepted as purging the contempt. Iv. On the question of punishment however, it has been established that though bona fide is no defence to a proceeding for contempt for violation of an order of court, it may be a relevant consideration in awarding punishment (14)R. v. Odham's Press, (1957)I QB 73. 21. HENCE, even though I have held the respondents guilty of contempt for a wilful violation of the interim injunction, I would remit the substantive punishment awarded, in view of the following considerations 22. IN the instant case the petitioner has not made any allegation of personal malice against the respondents, and they do not appear to have any personal interest in the matter of opening the new shops complained. What they have done has been apparently done in pursuance of their overzealousness to implement an administrative policy which had been formulated prior to the relevant interim, order of this court and in doing so they have been encouraged by the Law Officers of the Union of India, by giving them an incorrect interpretation of the order of this court. At the hearing, learned Solicitor-General has tendered verbal apology on behalf of the respondents. Respondents must, however, pay the costs of the application. In the result, the Rule in contempt is made absolute with costs, assessed at twenty gold mohurs. Respondents Nos. At the hearing, learned Solicitor-General has tendered verbal apology on behalf of the respondents. Respondents must, however, pay the costs of the application. In the result, the Rule in contempt is made absolute with costs, assessed at twenty gold mohurs. Respondents Nos. 1 and 2 are held guilty of contempt of court and each is sentenced to pay a fine of Rupees fifty. That punishment is, however, remitted accepting the apology verbally tendered by the learned Solicitor-General on behalf of the respondents at the hearing. 23. THE interim injunction issued by this court by paragraph 2 of the order dated the 4th December 1967 shall continue to operate until the disposal of the main Rule subject to the exception introduced by the order dated the 22nd December 1967 in Civil Rule No. 2372 (W) of 1967.