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2002 DIGILAW 547 (CAL)

SUMMIT USHA MARTIN FINANCE LTD v. JAGJIT SINGH

2002-08-16

AMITAVA LALA

body2002
AMITAVA LALA, J. ( 1 ) THIS is an application for contempt for violation of the order passed by this Court on 23rd September, 1999. ( 2 ) IT appears from the order dated 23rd September, 1999 that in an application arising out of arbitration matter, a Receiver was appointed by the Court for making an inventory in respect of vehicle and to take symbolic possession. A prayer for injunction was also granted by the Court. ( 3 ) THE entire gammut of the application is that the respondent in non-cooperative with the Receiver and failed and/or refused to produce the vehicle to the petitioner in compliance with the order and allow to make an inventory. Initially a Rule of contempt was issued on 13th October, 1999. learned counsel, appearing for the petitioner submitted that unless and until order for physical possession of the vehicle by the Receiver is passed, the entire effort of the petitioner will be frustrated. Upon being satisfied with such submission, an order of taking physical possession of the vehicle by the Receiver was passed by the Court in addition to the issuance of the Rule. ( 4 ) THE subject matter of controversy arose from there. The contemner appeared before this Court, as against the Rule, on 3rd December, 1999 in spite of the matter not being listed. The Court accepted his appearance on being mentioned and dispensed with his personal appearance subject to further order or orders to be passed by this Court. Since two applications, including vacating application were made by the respective respondent/contemner under G. A. No. 4633 of 1999 and G. A. No. 4634 of 1999, this Court was pleased to take up such applications along with the contempt maters on 10th December, 2000 and directed to appear on 4th February, 2000 the completion of the work by the Receiver about taking physical possession of the vehicle etc. and directed the matter to appear on 3rd February, 2000. The petitioner was directed to provide his place for keeping the vehicles under the custody of the Receiver. The respondents/contemners who applied for vacating interim order had given an undertaking to comply with the order of the Court accordingly through their respective counsel. The Receivers were directed to take steps for taking physical possession. The petitioner was directed to provide his place for keeping the vehicles under the custody of the Receiver. The respondents/contemners who applied for vacating interim order had given an undertaking to comply with the order of the Court accordingly through their respective counsel. The Receivers were directed to take steps for taking physical possession. The respondents/contemners who made vacating application, was directed to pay the arear amount, if any, to the petitioner/financier without prejudice to the rights and contentions to the parties. ( 5 ) AT this juncture, I find an appeal was appeared to have been preferred before a Division Bench of this Court by the respondents/contemners on 17th February, 2000 the Division Bench held that an oral compromise has been arrived at between the parties whereby the appellant/respondent (the contemner/s herein) undertook to pay Rs. 13 lakhs towards the principal and Rs. 5. 31 lakhs towards the interest to the petitioner herein. He further undertook to the Court that the first instalment of a sum of Rs. 5 lakhs shall be paid by him within the month of February, 2000 and the rest of the amount shall be paid within three months thereafter. As against default clause, the Division Bench held that the appellant (contemner), if commits any default of payment, it will be open for the Receiver to act in terms of the order passed by the learned single Judge. Upon holding such view the Division Bench disposed of appeals/applications and contempt application pending before this Court. ( 6 ) ON 15th March, 2000 this Court formally recorded the disposal of the contempt application in view of the order of the Division Bench. Subject to the result for application for modification pending before this Division Bench as pointed out by the petitioner before this Court. Certain amount was directed to be paid by the respondent in spite of the expiry of the period by recording the grounds of non-payment within such period. ( 7 ) ON 31st March, 2000 a review application has been placed before this Division Bench in respect of deletion of the undertaking given by the learned counsel appearing for the appellant. The appellant failed to pay such amount. The Division Bench held that there cannot be any review of undertaking. Thus, the application was dismissed. However, on 7th May, 2001 a further direction was given by the Division Bench to pay certain amount. The appellant failed to pay such amount. The Division Bench held that there cannot be any review of undertaking. Thus, the application was dismissed. However, on 7th May, 2001 a further direction was given by the Division Bench to pay certain amount. ( 8 ) ON 20th August, 2001 the Division Bench was pleased to pass to a very important order. In an application for recalling the earlier order dated 17th February, 2000 under which the appeal, application before the Division Bench and contempt application before this Court were disposed of and the undertaking of the respondent/appellant (contemner herein) was recorded, the Division Bench held that the order need not be recalled as the Bench already directed that in the event the appellant commits a default it will be open for the receiver to act in terms of the order passed by the learned single Judge. Since the part has failed to abide by the commitment as per the order passed by this Court on 17th February, 2000 it will be open for the petitioner to proceed in terms of the order passed by the learned single Judge. Since the Division Bench further observed that the party has not abide by the terms and conditions as laid down in the order dated 17th February, 2000 therefore, it will be open for the applicant to move an application for revival of the contempt application and the order dated 17th February, 2000 will not come in their way. Thereafter, application for revival of the contempt application was made and the same was allowed. A token amount was directed to be paid at the initial stage. Subsequently, at the time of hearing of the contempt application afresh, several legal questions raised by the contemner before this Court to establish why order of contempt cannot be passed in this case. ( 9 ) LEARNED counsel, appearing for the contemner was called upon to give an explanation because the contempt is a matter in between the Court and the contemner. In turn, he said time is the essence of a contract. ( 9 ) LEARNED counsel, appearing for the contemner was called upon to give an explanation because the contempt is a matter in between the Court and the contemner. In turn, he said time is the essence of a contract. The second proviso of section 55 of the Contract Act says in case of contract voidable on account of the promisor's failure to perform his promise at the time agreed, the promise accepts the performance of such promise at any time other than that agreed, the promise cannot claim compensation for any loss occasioned by the non-performance of the promise at the time agreed, unless at the time of such acceptance, he gives notice to the promisor of his intention to do so. ( 10 ) HE extended his argument one step further by citing a judgment reported in AIR 1999 SC 3804 (M/s. Arosan Enterprises Ltd. v. Union of India and Anr.) by saying that Court cannot fix a date on its own for performance of contract. ( 11 ) ADDITIONALLY, he argued on the strength of 1980 (3) SCC 47 (Babu Ram Gupta v. Sudhir Bhasin and Anr.) that in absence of a written undertaking before a Court it can be construed a real sense. Verbal undertaking cannot be construed as undertaking before the Court for the sake of committing a civil contempt. ( 12 ) HOWEVER, my reading of the judgment is not so. According to me, either of the following two conditions are to be fulfilled which are as follows: any person appearing before the Court can give an undertaking in two ways : (1) that he files an application or an affidavit clearly setting out the undertaking given by him to the Court, or (2) by a clear and express oral undertaking given by the contemner and incorporated by the Court in its order. If any of these conditions are satisfied then a willful breach of the undertaking would doubtless amount to an offence under the Act?. ( 13 ) ACCORDING to me question of symbolic possession of the vehicle by the Receiver and an order of injunction was germane for the purpose of issuance of Rule. There was no order of physical possession of the vehicle by the Receiver. ( 13 ) ACCORDING to me question of symbolic possession of the vehicle by the Receiver and an order of injunction was germane for the purpose of issuance of Rule. There was no order of physical possession of the vehicle by the Receiver. Such order was passed additionally with the Rule as prayed for upon observing the non-cooperation with the Receiver by the contemners even in respect of such symbolic possession. There are two sides of the order. One can say this is not an order for the purpose of the Rule. Another can say of the action subsequent to the Rule is aggravation of contempt. Therefore, the test is what is the state of affair on the day of passing final order. On that day there was existence of an undertaking even before this Court. At the time of hearing of the contempt application along with the applications for vacating interim order or orders the contemner No. 1 gave an undertaking before the Court through his/their respective counsel. Recording of such undertaking in the order by this Court dated 10th January, 2000 is as follows :let both the vacating applications being G. A. No. 4633 of 1999 and G. A. No. 4634 of 1999 appear in the list on 4th February, 2000 under the heading 'for orders'. However, handing over physical possession of the vehicle in respect of both the matters to the Receivers respectively appointed in both the matters will be made on 3rd February, 2000. The petitioner will provide for a place where the vehicles will be kept under the custody of the Receivers. The Receivers will furnish a report to this extent as and when the matters will be called on 4th February, 2000. Affidavit of service filed be kept on the record. The petitioner applying for vacating the interim order has given an undertaking to comply with the order of the Court accordingly through their respective counsel. Receivers will take steps accordingly and will have discretion to take steps in respect of taking over physical possession of the vehicles. The petitioner who has made this application for vacating interim order, is, however, directed to pay the arrear amount, if any, to the respondent financier without prejudice to the rights and contentions of the parties. All parties including receivers to act on a xeroxed signed copy of this dictated order on the usual undertaking. The petitioner who has made this application for vacating interim order, is, however, directed to pay the arrear amount, if any, to the respondent financier without prejudice to the rights and contentions of the parties. All parties including receivers to act on a xeroxed signed copy of this dictated order on the usual undertaking. ( 14 ) SUCH petitioner (contemner No. 1 herein) preferred an appeal. In the Appeal Court, a further undertaking has been given on 17th February, 2000. The contemner being appellant therein undertook to pay the sum of Rs. 13 lakhs towards the principal and Rs. 5. 30 lakhs towards the interest. The appellant further undertook to the Court that the first instalment of a sum of Rs. 5 lakhs shall be paid by him within the month of February, 2000 and the rest of the amount shall be paid within three months thereafter i. e. in the months thereafter in equal instalments. The default clause is as follows:in case the appellant commits any default of payment, it will be open for the receiver to act in terms of the order passed by the learned single Judge. ( 15 ) ACCORDINGLY, both the appeals are treated as on day's list and the appeal/s and applications are disposed of as also the contempt petition which is pending before the learned single Judge. The application for review of such order was made in the Court of Appeal but the same was turned down on 31st March, 2000 on the ground that since the petitioner failed to pay the amount as undertook, nothing can be done. There cannot be any review of the undertaking given by the counsel. ( 16 ) HOWEVER, without prejudice to the rights and contentions to the parties by different orders of the Division Bench and single Judge two different sums being Rs. 2 lakhs and 1 lakh were paid by the alleged contemner to the petition but by 20th August, 2001 an important order has been passed by the Division Bench of this Court in an application for recalling the earlier original order dated 17th February, 2000. 2 lakhs and 1 lakh were paid by the alleged contemner to the petition but by 20th August, 2001 an important order has been passed by the Division Bench of this Court in an application for recalling the earlier original order dated 17th February, 2000. The important parts of such order are as follows :the order need not to be recalled as we have already directed that in the event the appellant commits a default it will be open for the Receiver to act in terms of the order passed by the learned single Judge. Since the party has failed to abide by the commitment as per the order passed by this Court on 17. 2. 2000 it will be open for the petitioner to proceed in terms of the order passed by the learned single Judge. Since we have already observed that the party has not abided by the terms and conditions as laid down in the order dated 17. 2. 2000 it will be open for the applicant to have an application for revival of the contempt application and the order dated 17. 2. 2000 will not come in their way. ( 17 ) THEREFORE, from the plain reading of the orders of the Appeal Court it is crystal clear that (a) there was a commitment or undertaking before the Appeal Court in respect of the payment and defaulted amount and for such commitment and/or undertaking the contempt applications pending before this Court were directed to be revived ; (b) the revival is not only restricted for the revival alone but subject to the condition that it will be open for the receiver to act in terms of the order passed by the learned single Judge. ( 18 ) THE orders of the Appeal Court are posterior to the order passed by this Court in the application for contempt for taking physical possession additionally with the Rule and in further, recording an undertaking to comply with the order of the Court. Therefore, although originally the order of symbolic possession but by commitment and/or undertaking of the contemner No. 1 herein posterior to the Rule in respect of giving an actual physical possession to the Receiver cannot automatically evaporate. Therefore, although originally the order of symbolic possession but by commitment and/or undertaking of the contemner No. 1 herein posterior to the Rule in respect of giving an actual physical possession to the Receiver cannot automatically evaporate. On the other hand, the Hon'ble Appeal Court, under no uncertain terms, directed revival of such contempt application with a clear direction that it will be open for the Receiver to act in terms of the order passed by the learned single Judge. Therefore, when an application for revival of the contempt application was allowed, all the orders passed by the single Judge in the contempt application will also be revived, as a result whereof the cause of the respondent No. 1 will have to be hit by the principles laid down by the Supreme Court judgment in 1980 (3) SCC 47 (supra) itself. ( 19 ) THEREFORE, whether any amount is paid or unpaid, is immaterial for the Court of contempt. This is for regular Bench taking the arbitration matter to decide. Court of contempt is only concerned as to whether there is any contempt and/or aggravation of contempt. It is a fit case to construe that there is an aggravation of contempt by not handing over the actual physical possession to the Receiver in violation of the undertaking given to this Court, in addition to the violation of the earlier order. ( 20 ) THEREFORE, I hold that the contemner No. 1 is guilty of contempt. ( 21 ) HOWEVER, as a last chance, I give an opportunity to such contemner to hand over the actual physical possession of the vehicle in question to the Receiver within a period of one month from the date of communication of this order. If such compliance is made the same will be treated as due disposal of the contempt matter as against the Rule. In case of failure, not only the Receiver will take the actual physical possession of the vehicle with the help of the local police there but also such default will be reported by the petitioner to the Sheriff of this Court who, in turn, with the help of the police arrest the contemner and detain in a civil prison for a period of 48 hours. However, no order is passed as to costs. However, no order is passed as to costs. Xeroxed certified copies of this judgment will be supplied to the parties within seven days from the date of putting requisites for drawing up and completion of the order and certified copy of this judgment. All parties including the Receiver, Sheriff, concerned police authority are to act on a signed copy minute of the operative part of this judgment on the usual undertaking and subject to satisfaction of the Officer of the Court in respect as above. Application disposed of.