Everest Enterprises v. N. K. Constructions Pvt. Ltd. & others
2003-08-13
NISHITA MHATRE
body2003
DigiLaw.ai
JUDGMENT - Smt. MHATRE NISHITA, J.:---The present contempt petition has been filed for a breach of the order of this Court dated 28-4-1995 in Notice of Motion No. 1511 of 1995 taken out in Suit No. 1618 of 1995. The facts giving rise to the present contempt petition are as follows: 2. The petitioner filed the Suit No. 1618 of 1995 for specific performance of two agreements dated 26-9-1981 entered into between itself and respondent No. 1. The suit property covered a luxurious mini city project on the suit property described in Exhibit B to the plaint. On 28-4-1995, in the motion filed by the plaintiff that is the petitioner herein, this Court restrained respondent No. 1 from disposing of, alienating, transferring, encumbering or parting with the possession of, or creating any third party rights in respect of the suit property. Soon thereafter on 5-5-1995, a lispendens notice was registered with the Sub-Registrar of Assurances at Bombay by the petitioner. On 21-7-1995, the petitioner learnt that respondent No. 1 in breach of the order of 20-4-1995 purported to transfer almost the entire portion of the suit property in favour of Dynamic Vacation Resorts Pvt. Ltd. On 25-6-1997, the ad interim order of injunction was confirmed in the motion and Receiver was appointed by this Court in respect of the suit property. Being aggrieved by the order, respondent No. 1 preferred an appeal which was dismissed on 27-4-1998. The Apex Court in the special leave petition filed by respondent No. 1 modified the interim order so as to permit respondent No. 1 to start construction work on the suit property. A further direction was given to respondent No. 1 to file regular reports in every 6 months in this Court about the progress made in the construction on the suit property. On 28-10-1999, respondent No. 2 , the director of respondent No. 1 filed an affidavit stating that the work could not be commenced on account of the monsoon. When the matter appeared on 18-2-2000 to consider the progress, nobody appeared for respondent No. 1. On 22-2-2000 when the matter appeared, no report was filed as directed by the Apex Court in its order of 20-8-1999 nor was any affidavit filed explaining the delay. Therefore, the order 25-6-1997 revived and the Court Receiver was to take possession of the suit property.
On 22-2-2000 when the matter appeared, no report was filed as directed by the Apex Court in its order of 20-8-1999 nor was any affidavit filed explaining the delay. Therefore, the order 25-6-1997 revived and the Court Receiver was to take possession of the suit property. On 11-4-2000, an application supported by the affidavit of respondent No. 3 and another director of respondent No. 1 was filed for condoning the delay in filing the report and to set aside the order of 22-2-2000 appointing the Court Receiver. This application was dismissed. The Court Receiver accordingly, fixed an appointment pursuant to the order of this Court for depositing the suit property and taking possession thereof. As the Court Receivers representative was not permitted to enter the suit property, on enquiries made by him with the Tahsildars office at Alibaug, 7 x 12 extract in respect of the suit property was issued to him and the record of rights in Form No. 6 bearing an entry dated 22-7-1995 showing that the suit property was sold by the respondents by a sale deed of 21-7-1995 to one Dynamic Vacation Resorts Pvt. Ltd. for a consideration of Rs. 2,49,51,000/-. 3. It is the case of the petitioner that the respondents all along misled the courts into believing that they were in possession of the suit property and had not transferred the same to anybody after the ad interim injunction dated 28-4-1995. According to the petitioner, the orders of this Court as well as the Apex Court were based on the statement made by the respondents that they were still in possession of the suit property. Affidavit filed by the respondents in this Court and the Apex Court categorically stated that the respondents were in possession of the suit property. In fact, even in the affidavit filed opposing the contempt petition and in reply to show-cause notice issued, respondent No. 2, director of respondent No. 1 has sought to explain the actions of the respondents on the basis that they misunderstood the order of this Court. In the affidavit which was filed by them in the Special leave petition, a positive averment was made that the respondents had not sold or transferred or created any third party rights in respect of the suit property after 28-4-1995.
In the affidavit which was filed by them in the Special leave petition, a positive averment was made that the respondents had not sold or transferred or created any third party rights in respect of the suit property after 28-4-1995. Respondent No. 5 instead stated in the affidavit that the agreement to transfer the suit property to Dynamic Vacation Resorts Pvt. Ltd. was arrived at prior to 28-4-1995 and, accordingly, consideration was received by the respondents for the suit property. According to the respondents, only a portion of the suit property was covered by the ad interim order of 28-4-1995 that is a Bungalow situate on the suit property and not the rest of the land. It is in these circumstances that the present contempt petition has been filed. 4. Mr. Sekasaria, learned Advocate for the petitioner, submitted that there was a deliberate attempt on the part of the respondents to ignore the orders of this Court and to mislead the Court. He submits that all along the respondents gave an impression to the courts as well as the petitioner that they were still in possession of the land and that they have full control over the same. He relied on the judgment in the case of (Pallav Sheth v. Custodian others)1, 2003(Supp.) Bom.C.R. (S.C.)51. 5. On the other hand, Mr. Jain, learned Advocate for the respondents, submits that contempt petition is hopelessly barred by limitation and, therefore, no cognisance ought to have been taken and no show-cause notice ought to have been issued to the respondents on 19-7-2000. He submits that under the Contempt of Courts Act, cognisance of violation of an order can be taken only within a year from the date on which the breach of violation occurred and, therefore, no action could be taken thereafter. He further submits that in any event, by 26-2-1999, the petitioner had knowledge of all the facts that they had conveyed the property to Dynamic Vacation Resorts Pvt. Ltd. and, therefore, action should have been taken immediately. He submits that the provisions of Contempt of Courts Act are punitive in nature and cannot be interpreted widely but and must be strictly constructed. He further submits that there is not even an application made nor any averment in the contempt petition that delay if any be condoned.
He submits that the provisions of Contempt of Courts Act are punitive in nature and cannot be interpreted widely but and must be strictly constructed. He further submits that there is not even an application made nor any averment in the contempt petition that delay if any be condoned. He relies on the judgment of the Apex Court in the case of (Union of India v. Popular Construction Co.)2, 2002(2) Bom.C.R. 123 to submit that just as under section 34 of the Arbitration and Conciliation Act, 1996, the time limit specified is absolute and unextenable under section 5 of the Limitation Act, the case would also apply to the Contempt of Courts Act also cannot be extended. However, on the merits of the case, the learned Counsel was unable to show any justification for the breach of the orders passed by this Court on 28-4-1995. He relied on the observations made in Om Prakash Jaiswals case. 6. As regards limitation, Mr. Seksaira submitted that the petitioners Advocate had written letters on 6-2-1999 and 12-2-1999 to the contemnors stating that they had learnt that the contemnors had alienated the property. However, no reply to this letter was issued by the contemnors or their Advocate. On 26-2-1999, an affidavit was filed in the Supreme Court wherein a categorical statement was made that the respondent-contemnor was still in possession of the suit property. It is for this reason according to the learned Counsel that the Supreme Court on 20-8-1999 passed an order modifying the ad interim order of this Court by allowing the contemnors to construct on the suit property. It was only since the contemnors did not comply with the further directions of the Apex Court, to submit regular reports regarding the progress of the construction work that the Court Receiver stood appointed. On 26-4-2000, the Court Receiver submitted a report whereby the petitioner was informed that the property no longer was in possession of the respondent-contemnors. It is after this that the present contempt petition was filed on 5-5-2000. Mr. Seksaria submits that the default on part of the respondent-contemnors being a continuous breach, the petition is maintainable and action can be taken by this Court against the respondent-contemnors under the Contempt of Courts Act.
It is after this that the present contempt petition was filed on 5-5-2000. Mr. Seksaria submits that the default on part of the respondent-contemnors being a continuous breach, the petition is maintainable and action can be taken by this Court against the respondent-contemnors under the Contempt of Courts Act. He further submits that assuming this is not a continuing offence, the petition was filed within a year of the Apex Court passing its order on 20-8-1999 and, therefore, there is no delay in filing the present contempt petition. He also submits that section 5 of the Limitation Act would apply to the contempt proceedings. He urges that section 29(2) of the Limitation Act expressly provides that the provisions of sections 4 to 24 of the Limitation Act are attracted when limitation as prescribed by the said law. The Contempt of Courts Act limitation of one year from the breach complained of and this period could be extended under the provisions of section 5 of the Limitation Act. He further submitted that a party who has committed fraud on the Court should not be allowed to gain the benefit of limitation running in his favour by virtue of such fraud. 7. While considering the issue of limitation, certain provisions of the Contempt of Courts Act and the Limitation Act will have to be noticed. Section 20 of the Contempt of Courts Act reads as follows: "20. Limitation for actions for contempt.—No Court shall initiate any proceedings for contempt, either on its own motion or otherwise, after the expiry of a period of one year from the date on which the contempt is alleged to have been committed." 8. Section 29 of the Limitation Act reads as follows: "29.
Limitation for actions for contempt.—No Court shall initiate any proceedings for contempt, either on its own motion or otherwise, after the expiry of a period of one year from the date on which the contempt is alleged to have been committed." 8. Section 29 of the Limitation Act reads as follows: "29. Savings.---(1) Nothing in this Act shall affect section 25 of the Indian Contract Act, 1872 (9 of 1872) (2) Where any special or local law prescribes for any suit, appeal or application a period of limitation different from the period of prescribed by the Schedule, the provisions of section 3 shall apply as if such period were the period prescribed by the Schedule and for the purpose of determining any period of limitation prescribed for any suit, appeal or application by an special or local law, the provisions contained in sections 4 to 24 (inclusive) shall apply only in so far as, and to the extent to which, they are not expressly excluded by such special or local law. (3) Save as otherwise provided in any law for the time being in force with respect to marriage and divorce, nothing in this Act shall apply to any suit or other proceeding under any such law. (4) Sections 25 and 26 and the definition of "easement" in section 2 shall not apply to cases arising in the territories to which the Indian Easements Act, 1882 (5 of 1882), may for the time being extend. 9. Section 9 of the Limitation Act, read thus: "5. Extension of prescribed period in certain cases.---Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period, if the appellant or the applicant satisfies the Court that he had sufficient cause for not preferring the appeal or making the application within such period. Explanation.---The fact that the appellant or the applicant was misled by any order, practice or judgment of the High Court in ascertaining or computing the prescribed period may be sufficient cause within the meaning of this section." 10. Now on a consideration of all these provisions together, the Contempt of Courts Act is thus a special Act which prescribes the period of limitation.
Now on a consideration of all these provisions together, the Contempt of Courts Act is thus a special Act which prescribes the period of limitation. Under sub-section (2) of section 29 of the Limitation Act, the provisions of sections 4 to 24 have been made applicable to the Contempt of Courts Act. Section 5 gives a party the liberty to approach the Court belatedly if the party is able to satisfy the Court that it had sufficient cause for not preferring any application within the stipulated period. In Pallav Sheths case (supra), the Apex Court in paragraph 44 of its judgment has observed thus: "44. Action for contempt is divisible into two categories, namely, that initiated suo motu by the Court and that instituted otherwise than on the Courts own motion. The mode of initiation in each case would necessarily be different. While in the case of suo motu proceedings, it is the Court itself which must initiate by issuing a notice, in the other cases initiation can only be by a party filing an application. In our opinion, therefore, the proper construction to be placed on section 20 must be than action must be initiated, either by filing of an application or by the Court issuing notice suo motu, within a period of one year from the date on which the contempt is alleged to have been committed." 11. There is no doubt that the judgment in (Om Prakash Jaiswal)3, reported in 1984 Cri.L.J. 301, has been set aside. The Apex Court observed thus: "42. The decision in Om Prakash Jaiswal (supra) case to the effect that initiation of proceedings under section 20 can only be said to have occurred when the Court formed the prima facie opinion that contempt has been committed and issued notice to the contemnor to show cause why it should not be punished, is taking too narrow a view of section 20 which does not seem to be warranted and is not only going to cause hardship but would penetrate injustice. A provision like section 20 has to be interpreted having regard to the realities of the situation.
A provision like section 20 has to be interpreted having regard to the realities of the situation. For instance, in a case where a contempt of a subordinate Court is committed, a report is prepared whether on an application to Court or otherwise, and reference made by the subordinate Court is committed, a report is prepared whether on an application to Court or otherwise, and reference made by the subordinate Court to the High Court. It is only thereafter that a High Court can take further action under section 15. In the process, more often than not, a period of one year elapses. If the interpretation of section 20 put in Om Prakash Jaiswal case is correct, it would mean that notwithstanding both the subordinate Court and the High Court being prima facie satisfied that contempt has been committed the High Court would become powerless to take any action. On the other hand, if the filing of an application before the subordinate Court or the High Court, making of a reference by a subordinate Court on its own motion or the filing of an application before an Advocate-General for permission to initiate contempt proceedings is regarded as initiation by the Court for the purposes of section 20, then such an interpretation would not impinge on or stultify the power of the High Court to punish for contempt which power, de hors the Contempt of Courts Act, 1971 is enshrined in Article 215 of the Constitution. Such an interpretation of section 20 would harmonise that section with the powers of the courts to punish for contempt which is recognised by the Constitution." 12. In the present case, the reliance placed by Mr. Jain on the case of Union of Indias case (supra) is misplaced as in Pallav Sheths case (supra), the Apex Court has held that section 29(2) of the Limitation Act applies and therefore, section 5 of the Limitation Act would apply in contempt proceedings. The petitioner learnt for the first time that the contemnors have sold the suit property some time in 1999 and accordingly, their Advocate sent a notice to the respondents. However, without replying to the notice on 26-2-1999, an affidavit was filed in the Apex Court wherein the respondents made a categorical statement that the property was still in their possession.
The petitioner learnt for the first time that the contemnors have sold the suit property some time in 1999 and accordingly, their Advocate sent a notice to the respondents. However, without replying to the notice on 26-2-1999, an affidavit was filed in the Apex Court wherein the respondents made a categorical statement that the property was still in their possession. The Supreme Court has passed the order on 20-8-1999 in that special leave petition and, therefore, there is no doubt that the present contempt petition is filed within the period of limitation. Assuming the same is not filed within the period of limitation. I have no doubt that this is a continuing offence as the petitioner had obtained an order of injunction restraining the contemnors from parting with or transferring the property. However, this order was passed on the basis that the respondents were still in possession of the suit land and that the respondents had control over that land. The agreement was entered into by the petitioner with Dynamic Vacation Resorts Pvt. Ltd. in 1995. The 7 x 12 extract of the property shows that the property was conveyed in 1995. Therefore, throughout the period from July, 1995 onwards when the agreement was entered into there has been a breach of the order of April 1995. In fact, the respondents have chosen to mislead the courts in passing the orders on the basis that the respondents are in possession of the suit property. In the case of (U.P. Residents Employees Co-operative Housing Society v. New Okhla Industries Development Authority another)4, 2003 A.I.R. S.C.W. 3304, the Apex Court has taken the view that filing of a false affidavit in Court amounts to contempt. There is no slightest doubt that the affidavit filed by the respondent contemnors before the Apex Court stating that they were still in possession of the land being the owners was a false affidavit and thereby the respondents have committed contempt. Moreover, by concealing the fact that the property had been conveyed, the respondents have committed contempt. 13. The respondent-contemnors have committed contempt by violating the order of 28-4-1995 by conveying the property to Dynamic Vacation Resorts Pvt. Ltd. by sale deed dated 21-7-1995. They have aggravated their contumacious conduct by wilfully and deliberately filing a false affidavit before the Apex Court. Contemnor Nos. 1 to 5 are guilty of committing contempt. Contemnor Nos.
13. The respondent-contemnors have committed contempt by violating the order of 28-4-1995 by conveying the property to Dynamic Vacation Resorts Pvt. Ltd. by sale deed dated 21-7-1995. They have aggravated their contumacious conduct by wilfully and deliberately filing a false affidavit before the Apex Court. Contemnor Nos. 1 to 5 are guilty of committing contempt. Contemnor Nos. 2, 3 and 5 are therefore, committed to a sentence or simple imprisonment of 2 months and a fine of Rs. 2,000/- each. In default a further period of one months simple imprisonment. Contemnor No. 1 shall pay a fine of Rs. 2,000/-. Looking to the advanced age of contemnor No. 4, she and contemnor No. 1 shall pay a fine of Rs. 2,000/- each. 14. Contempt petition and show-cause notice are made absolute. 15. Mr. Jain, learned Counsel appearing for the Contemnors, seeks a stay of this order for eight weeks. Stay granted in view of the statutory appeal provided under the Act. However, contemnor Nos. 2 to 5 shall deposit their passports with the Prothonotary and Senior Master by Saturday, the 16th August, 2003 and shall not leave the country without seeking prior permission of this Court. Parties to act on an ordinary copy of this order duly authenticated by the Chamber Registrar/Court Associate. -----