Judgment :- (Contempt Appeals filed against the order passed by the learned single Judge of this Court in Cont.P.No.1081 of 2003 dated 29.12.2004.) COMMON JUDGMENT M. Karpagavinayagam, J. The short facts leading to the filing of these appeals are as follows: “(a) Office Tiger Database Systems India Private Limited is primarily involved in out-sourcing business to various corporate bodies in the United States and Europe. Shalini Koshy, Anand, Ashish Devkar and Masood Ameen were the employees of this company. (b) The employees while joining the Company agreed to maintain the highest degree of secrecy and to keep the information confidentially. They also agreed that in the event of their termination, they would not be concerned with, engaged with or interested in or advice or own any business, which is in competition with the business carried on by the Office Tiger Database Systems for a period of one year. (c) In February 2003, these four employees tendered their resignation to the Office Tiger Database Systems. From next day onwards, they were directed not to attend the office. On coming to know that these employees were induced by Datamatics Information Technology Limited (DITL) and Datamatics Staffing Services (DSS) to breach their contracts and to take employment with them by adopting unfair trade practices, the Office Tiger Database Systems on 11.2.2003 filed a suit in C.S.No.153 of 2003 in the Madras High Court against the DITL and DSS and the four employees for permanent injunction. (d) On 24.2.2003, the High Court granted ex parte injunction restraining DITL and DSS, the defendants 1 and 2 from employing the four employees, the defendants 3 to 6 and ex parte injunction restraining the defendants 3 to 6, the four employees from joining the defendants 1 and 2, the DITL and DSS respectively. (e) All the defendants entered their appearance through their counsel and filed their respective counters praying for dismissing the injunction applications. Ultimately, the undertaking was given by the defendants to the effect that the defendants 1 and 2, the companies would not take the employees, the defendants 3 to 6 and that the defendants 3 to 6, the employees would not join the first and second defendants, viz., DITL and DTS, on 18.7.2003. This undertaking was recorded and the injunction application was closed. This undertaking was recorded and the injunction application was closed. (f) Some times later, the plaintiff came to know through the detective agency that the said employees, the defendants 3 to 6, in breach of the undertaking given to the Court, joined DITL and DSS, the defendants 1 and 2 and were working in their premises. Hence, the plaintiff filed Contempt Petition No.1081 of 2003 seeking for action for the contempt committed against the Companies and its Directors as well as the ex-employees. (g) This contempt petition was contested by the defendants through their respective counters stating that the defendants 1 and 2 did not employ the defendants 3 to 6 and they have already joined Datamatics Technologies Limited, which is a different company and as such, there is no breach of undertaking. (h) After hearing the parties, the learned single Judge by the order dated 29.12.2004 found the contemners guilty holding that the DTL, viz., Datamatics Technologies Limited where the plaintiff’s ex-employees are working belongs to a group companies forming the single economic entity comprising DITL and DSS, the defendants 1 and 2 also and therefore, there is a breach of undertaking and punished all the contemners for contempt. This order of the contempt is the subject matter of challenge in these appeals filed by the contemners.” 2. The case of the Office Tiger Database Systems (P) Limited, the plaintiff/petitioner in the contempt petition is as follows: “The petitioner’s employees were employed by the petitioner on agreeing for the terms of the agreement to the effect that the employees should maintain the highest degree of secrecy of the company and in the event of their termination, they would not join with any other company doing the same business for a period of one year. Despite this, immediately after their resignation, they tried to join Datamatics Information Technology Limited (DITL), the first respondent and Datamatics Staffing Services (DSS), the second respondent. The fact of their attempt to join with the respondents 1 and 2 came to be known to the petitioner. Therefore, the petitioner filed a suit in C.S.No.153 of 2003 for permanent injunction restraining DITL (R1) and DSS (R2) from employing its employees, viz., respondents 7 to 10/defendants 3 to 6 and for permanent injunction restraining the employees, the defendants 3 to 6 from joining the first and second defendants. Therefore, the petitioner filed a suit in C.S.No.153 of 2003 for permanent injunction restraining DITL (R1) and DSS (R2) from employing its employees, viz., respondents 7 to 10/defendants 3 to 6 and for permanent injunction restraining the employees, the defendants 3 to 6 from joining the first and second defendants. On 24.2.2003, the petitioner/plaintiff obtained temporary injunction as prayed for pending the main suit in O.A.Nos.213 and 214 of 2003. However, on 18.7.2003, the counsel for the defendants 1 and 2, viz., DITL and DSS gave undertaking that they would not employ the employees of the plaintiff. Similarly, the counsel for the defendants 3 to 6, viz., the employees, also gave undertaking that they would not join the defendants 1 and 2. On the basis of this undertaking, the injunction application was closed after recording the said undertaking. Thereupon, the plaintiff/petitioner learnt through the detective agency engaged by them that the defendants 3 to 6, the employees of the plaintiff/petitioner have been employed by the defendants 1 and 2. As this is breach of undertaking given to the Court on 18.7.2003, the petitioner/plaintiff filed a petition for contempt on 1.12.2003. Since the counter filed by the defendants/respondents stating that the employees, viz., the defendants 3 to 6 were not employed by the defendants 1 and 2 and they were employed by some other company, viz., Datamatics Technologies Limited (DTL), the petitioner/plaintiff conducted their own enquiry and found that DITL, DSS and DTL are one and the same company and all these companies are one and single economic entity and the companies in which now they are employed are the companies under the control of the same management which managing the defendants 1 and 2 also and as such, they are liable to be punished for the breach of undertaking.” 3. The case put forward by the respondents in the contempt petition, is as follows: “The undertaking given by the defendants in the injunction application on 18.7.2003 has not been breached. As a matter of fact, the four employees, the defendants 3 to 6 have already been employed in Datamatics Technologies Limited on 17.2.2003 itself even prior to the undertaking given on 18.7.2003. As a matter of fact, the four employees, the defendants 3 to 6 have already been employed in Datamatics Technologies Limited on 17.2.2003 itself even prior to the undertaking given on 18.7.2003. The plaintiff/petitioner even though knew that these persons have joined DTL, they did not choose to mention the same in the suit filed by them on 11.2.2003 in C.S.No.153 of 2003 nor made the said DTL as one of the defendants. As a matter of fact, the plaintiff/petitioner wrote a letter on 6.2.2003 to the DTL threatening that legal action would be taken if the plaintiff’s employees are employed in the said company and the DTL sent a reply on 12.2.2003 stating that they intend to take those employees in their company as they already left the plaintiff company. Thus, it is clear that knowing fully well that the employees who resigned their job from the plaintiff company have joined DTL, the plaintiff filed the vexatious suit against DITL and DSS and employees without making DTL as a party to the suit. Having known about the same and having not chosen to oppose the undertaking which was recorded by the Court on 18.7.2003, the plaintiff cannot now complain that the undertaking has been breached by employing its employees in DTL which is the sister concern of the defendants 1 and 2, which is not actually true." 4. The learned single Judge, having perused the records and having heard the counsel for the parties, found DITL and DSS and Directors of DITL and also the employees guilty of contempt of Court and imposed punishment. 5. Mr. A.L. Somayaji, Mr. Arvind P. Dattar and Mr. N.R. Chandran, the learned senior counsel appearing for the appellants, would assail the finding contending that the finding of the learned single Judge holding the contemners guilty is not based upon the materials available on record and on the other hand, the learned single Judge has exceeded his limit and gave a wrong finding on the basis of the incorrect particulars by indulging in the process of lifting corporate veil. The senior counsel would cite the following authorities to substantiate their contention: 1) CHHAGANBHAI v. SONI CHANDU BHAI (A.I.R.1976 S.C.1909); 2) R.N. DEY v. BHAGYABATI PRAMANIK (200(4) S.C.C.400); 3) BHATNAGARS & CO. LTD. The senior counsel would cite the following authorities to substantiate their contention: 1) CHHAGANBHAI v. SONI CHANDU BHAI (A.I.R.1976 S.C.1909); 2) R.N. DEY v. BHAGYABATI PRAMANIK (200(4) S.C.C.400); 3) BHATNAGARS & CO. LTD. v. UNION OF INDIA (A.I.R.1957 S.C.478); 4) BANK OF BARODA v. SADRUDDIN HASAN DAYA (2004(1) S.C.C.360); 5) MRITYUNJOY DAS v. SAYED HASIBUR RAHAMAN (2001(3) S.C.C.739); 6) BABU RAM v. SUDHIR BHASIN (A.I.R.1979 S.C.1528); 7) ROSHAN SAM JOYCE v. S.R.COTTON MILLS LTD. (A.I.R.1990 S.C.1881); 8) STATE OF U.P. v. RENUSAGAR POWER CO. (A.I.R.1988 S.C.1737); 9) DELHI DEVELOPMENT AUTHORITY v. SKIPER CONSTRUCTION COMPANY (P) LTD. (A.I.R.1996 S.C.2005); 10) RE POLLY PECK INTERNATIONAL (1996(1) BCLC 428); 11) RATHINASABAPTHY.N. v. K.S.PALANIAPPA KANDAR (1996(I) CTC 605); 12) SEARLE (INDIA) LIMITED v. M.A. MAJID (2003(1)CTC 397). 6. Mr.Sri Ram Panchu, the learned senior counsel appearing for the first respondent/plaintiff, in justification of the reasonings given by the learned single Judge, would contend that the finding of the learned single judge cannot be said to be wrong. He would cite the decision in ROSHAN SAM JOYCE v. S.R.COTTON MILLS LTD.(A.I.R.1990 S.C.1881). 7. We have given our thoughtful consideration to the rival contentions. 8. Before dealing with the core issue, it would be better to refer to some of the observations made by the learned single Judge, which are not factually correct. Those observations are as follows: "(i) From the facts stated above, it is clear that admittedly some of the Managing Directors of R1 and R2 who are parties before the Court in O.A.Nos.213 and 214 of 2003 in C.S.No.153 of 2003 are the Managing Directors of their sister concerns. (ii) From the documents placed before the SEBI by Datamatics Technologies Limited, it is seen that Datamatics Technologies treats all its sister concerns as its own companies for the purpose of financial strength and turn over of business, etc. and on that financial strength they invited investments from prospective investors in those shares. (iii) From the above particulars, it is seen that "Datamatics Technologies Limitied" has a joint venture along with "Datamatics Information Technology Limited" and "Datamatics Staffing Services", which are R1 and R2 in O.A.Nos.213 and 214 of 2003. (iv) When it is a joint venture with another company, which is also managed by the very same managerial personnel and his relatives, it is in fact controlled and managed by the same managerial personnel. (iv) When it is a joint venture with another company, which is also managed by the very same managerial personnel and his relatives, it is in fact controlled and managed by the same managerial personnel. (v) When the corporate veil is lifted, it is clear that the Managing Directors of R1 and R2 are also the Managing Directors of "Datamatics Technologies Limited" of which R1 and R2 are subsidiary companies. (vi) As seen from the prospectus issued, all the subsidiary companies and associate companies are treated as one for its financial strength. Thus, profit or loss of all those companies are treated as profit and loss of Datamatics Technologies Limited." 9. On going through the entire records, it is clear that the above observations on the basis of which the conclusions are arrived at by the learned single Judge, are factually wrong. As such, the learned single Judge has blindly accepted the reply affidavit filed by the plaintiff/petitioner stating that the contemners 1 and 2 are the sister concerns of Datamatics Technologies Limited and all the companies are under the control of the same management without any verification whatsoever. In other words, the learned single Judge has not chosen to conduct further enquiry with regard to the additional particulars given in the reply affidavit filed by the plaintiff/petitioner which is a clear improvement from the original version given by the plaintiff/petitioner in the contempt petition. 10. As per the contempt petition, the plaintiff's employees, i.e. the respondents 7 to 10 have been employed by the respondents 1 and 2 (DITL and DSS)in breach of undertaking given on 18.7.2003 before the Court. On the contrary, according to the second affidavit by way of reply filed by the plaintiff/petitioner in the contempt petition, the employees, the contemners were employed by DTL which is the sister concern of DITL and DSS, the respondents 1 and 2. These two statements at two different stages are not consistent. When such being the case, the learned single Judge ought to have directed the parties to produce the relevant materials by giving opportunity to both of them to verify whether such improved version is true. 11. According to the learned senior counsel for the petitioner/plaintiff, even though the contemners/respondents received the additional affidavit, have not chosen to file their affidavit with reference to the contentions contained in the same. 11. According to the learned senior counsel for the petitioner/plaintiff, even though the contemners/respondents received the additional affidavit, have not chosen to file their affidavit with reference to the contentions contained in the same. On the other hand, according to the learned senior counsel for the contemners, the reply affidavit was not served on them. However, showing the endorsement made by the counsel for the respondents in the additional affidavit filed before the Court, the learned senior counsel appearing for the plaintiff/petitioner would submit that the reply affidavit had been received. 12. Let us assume that the copy of the additional affidavit had been received by the respondents. But, it is the bounden duty of the the learned single Judge to see whether the DTL in which the employees have now been employed is a sister concern or subsidiary company of the respondents 1 and 2 by asking the parties concerned to produce the materials in order to find out truth. This was not done. On the other hand, the learned single Judge, as indicated above, without any verification, has fully placed reliance on the additional affidavit and made incorrect observations and rushed to the hasty conclusion that DTL is a sister concern of DITL and DSS and as such, DITL and DSS are liable to be punished for the breach of undertaking. We are unable to appreciate this approach of the learned single Judge. 13. While the proceedings for the contempt is pending and when the petitioner wants to introduce a new case that the employees were employed in DTL which is the sister company of the respondents 1 and 2, the plaintiff/petitioner should have taken steps to implead DTL at least in the contempt proceeding though not in the suit in order to establish that DTL, which is said to be a sister concern of the respondents 1 and 2, was a party to the contempt. It is strange to see that no such attempt has been made and no reason has been given as to why such steps have not been taken. Similarly, the learned single Judge also has not thought it fit to issue notice to DTL in order to find out whether DTL is a party to the contempt. 14. It is strange to see that no such attempt has been made and no reason has been given as to why such steps have not been taken. Similarly, the learned single Judge also has not thought it fit to issue notice to DTL in order to find out whether DTL is a party to the contempt. 14. In fact, this Court feels that there is a failure both on the part of the learned single Judge and on the part of the plaintiff/petitioner in impleading DTL in which the employees were employed as a party to the contempt proceeding in order to find out as to whether all the three joined together and committed contempt and all the three are responsible for the breach of undertaking. As permitted by this Court, the contemners/appellants have filed the affidavit before this Court by way of reply to the said additional affidavit filed by the petitioner before the learned single Judge. The perusal of the same would indicate that all these three companies are separate economic entities, though all these companies would belong to same group companies. 15. The following paragraphs in the affidavit filed before this Court on behalf of the appellant/contemner in Contempt Appeal No.18 of 2004 would clarify the said position: "6.9 (b) I affirm that I and my wife Mrs.Asha L.Kanodia are the promoters of Datamatics group companies, which comprises of 41 entities. However, this cannot justify the clubbing of all the entities promoted by me as one single economic entity. It is further submitted that though we are the promoters of Datamatics group companies, the management of each entity is done by their respective M.Ds or CEOs are given below: i. Datamatics Technologies Limited: Mr. Manish Modi, MD & CEO, holding an M.S. Degree in Computer Science from the Virginia Tech University, Virginia. The annual reports of Datamatics Technologies Limited for the year 2003 and 2004 are already placed on record. Hereto annexed and marked as Annexure 'C' is the copy of the Form No.18 confirming the registered office address of the Company with the Registrar of Companies, Maharashtra, Mumbai. ii. Datamatics Information Technology Limited: Mr.R.R.Gupta, CEO, M.Tech & Gold Medalist from Banaras Hindu University. Hereto annexed and marked as Annexure 'D' is the copy of the Form No.18 confirming the registered office address of the Company with the Registrar of Companies, Maharashtra, Mumbai. iii. ii. Datamatics Information Technology Limited: Mr.R.R.Gupta, CEO, M.Tech & Gold Medalist from Banaras Hindu University. Hereto annexed and marked as Annexure 'D' is the copy of the Form No.18 confirming the registered office address of the Company with the Registrar of Companies, Maharashtra, Mumbai. iii. Datamatics Staffing Services: (Being the sole proprietaryship firm of Mrs. Asha L.Kanodia) Mr.S.C. Bhatia, CEO, (BA & LL.B) is managing Datamatics Staffing Services since last 20 years. Hereto annexed and marked as Annexure'E' & 'F' are the copies of the Income Tax Returns for the period 2002-2003 & 2003-2004 of Datamatics Staffing Services establishing its principal place of office in Mumbai. (c) I further affirm that the trademarks and logo of the three entities viz. Datamatics Technologies Limited, Datamatics Information Technologies Limited and Datamatics Staffing Services are not similar. This can be verified from their logo/trademark affixed on the letterheads of the respective entity. Hereto annexed in the select papers and marked as Annexure 'G', 'H' and 'I' are the copies of the letterhead of the three entities respectively. (d) I also affirm that the registered office of the three entities viz. Datamatics Technologies Limited, Information Technologies Limited and Datamatics Staffing Services are different. This can also be verified from the annual accounts of the three entities. The Registered/Principal Offices of these three entities as on 31.3.20003 are as follows:- Registered Office of Datamatics Technologies Limited Unit No. 117-120, SDF-IV, SEEPZ,Andheri(East), Mumbai-400 096. Registered Office of Datamatics Information Technology Limited Plot No. F-17, Technology Centre, Andheri (East), Mumbai-400 093. Principal Office of Datamatics Staffing Services for 30 years is located at: Eucharistic Congress Building III, 5 Convent Street, Colaba, Mumbai-400 039. All the above three entities are also haing their offices/branches in Chennai apart from other cities. It so happened that in the year 2003, all the three entities, being Datamatics group companies, were having their offices in the same building in Chennai viz. 101, Kanagashri Nagar, Gopalapuram, Chennai - 600 086. All the above three entities are also haing their offices/branches in Chennai apart from other cities. It so happened that in the year 2003, all the three entities, being Datamatics group companies, were having their offices in the same building in Chennai viz. 101, Kanagashri Nagar, Gopalapuram, Chennai - 600 086. However, currently, all the three entities are having separate branch offices in Chennai as hereunder: Branch Office of Datamatics Technologies Limited: 36, Barnaby Road, Kilpauk, Chennai-600 010 Office of Datamatics Information Technology Limited: Famous Towers No.42, Cathedral Road, Chennai-600 086 Office of Datamatics Staffing Services: Golden Perch, 1st Floor, No. 3 Wheat Crops Road, Nungambakkam, Chennai-600 034 (e) I submit that the shareholding patterns of all the three entities are entirely different and have been mentioned in detail in the Red-herring Prospectus as per the legal requirements. The copy of the said Red-Herring Prospectus is already on the record. (f) I submit that all the three entities are in separate lines of business. Datamatics Technologies Limited is a 100% export company engaged in the "Business Process Outsourcing". Its principle activities are Content Management, Back Office Processing and Related Software Services. Over 90% of its revenue comes from American clients. This company was publicly listed on the 7th May, 2004, and currently has about 20,000 shareholders. Its independent Directors include: (i) Mr.MG.Diwan, Former Chairman of LIC; (ii) Mr.Shahzaad Dalal, Vice President of IL&FS (iii) Mr.Sudhir Deshpande, M.E.(Civil Engineer), Cambridge, UK. Datamatcis Information Technology Limited is in the business of selling and servicing of security equipments, such as Smoke Detectors, TV surveillance camera, etc. and does business in domestic India. Datamatics Staffing Services is in recruitment business since more than 30 years. It recruits while collared staff for its customers/clients in India and abroad. It has hundreds of companies who call on their services to provide senior level personnel. Over 90% of its revenues come from companies, not in the Datamatics Group." 16. The above paragraphs in the affidavit sworn to by the contemner/appellant would give the following details in gist: (1) Though Kanodia, one of the contemners, and his wife Mrs.Asha L.Kanodia are the promoters of Datamatics group companies, which comprises of 41 entities, the management of each entity is done by their respective M.Ds or CEOs. (2) The trademarks and logo of the three entities viz. (2) The trademarks and logo of the three entities viz. Datamatics Technologies Limited, Datamatics Information Technologies Limited and Datamatics Staffing Services are not similar. (3) The registered office of the three entities viz. Datamatics Technologies Limited, Information Technologies Limited and Datamatics Staffing Services are different. (4) All the above three entities are also having their offices/branches in Chennai apart from other cities. Currently, all the three entities are having separate branch offices in areas in Chennai. (5) They are not single economic entities. The shareholding patterns of all the three entities are entirely different. These things have been mentioned in detail in the Red-Herring Prospectus. (6) All the three entities are in separate lines of business. Datamatics Technologies Limited is a 100% export company. It currently has about 20,000 shareholders. Datamatcis Information Technology Limited is in the business of selling and servicing of security equipments. Datamatics Staffing Services is in recruitment business. 17. These details given in the affidavit filed before this Court on 31.8.2005 have not been disputed by the other side. When there are undisputed materials which would show that they are separate entities, how can we hold conclusively that the Datamatics Technologies Limited (DTL) has employed the plaintiff's employees in breach of undertaking on the mere assertion that DTL is a sister concern of DITL and DSS, that too without hearing DTL which is said to have abetted the contempt? The memo filed by the plaintiff/petitioner before this Court showing some of the Directors are common, would not help in establishing that they are the same economic entities. 18. This could be seen from yet another angle as well. The prayer in the contempt petition filed by the petitioner in C.P.No.1081 of 2003 is to punish the contemners/respondents for contempt of Court for breach of undertaking recorded in the order dated 18.7.2003 in O.A.Nos.213 and 214 of 2003. The order dated 18.7.2003 passed by Justice A.K.Rajan is as follows: "Learned counsel for the respondents 1 and 2 has given an undertaking that respondents 1 and 2 are not taking employees of the plaintiff. This undertaking is placed on record. Learned counsel for the respondents 3 to 6 has also given an undertaking that respondents 3 to 6 have not joined the first and second respondent companies. This undertaking is placed on record." 19. This undertaking is placed on record. Learned counsel for the respondents 3 to 6 has also given an undertaking that respondents 3 to 6 have not joined the first and second respondent companies. This undertaking is placed on record." 19. Originally, the order of injunction was passed in O.A.Nos.213 and 214 of 2003 on 24.2.2003. In that order, the first defendant Datamatics Information Technology Limited (DITL) and the second defendant Datamatics Staffing Services (DSS) were restrained by an interim injunction for a period of four weeks till 24.3.2003 from in any manner directly or indirectly employing the employees. Similarly, the defendants 3 to 6, the employees were restrained by an interim injunction for a period of four weeks till 24.3.2003 from joining the first defendant DITL and the second defendant DSS and their men, agents, assigns, or representatives under them as employees. This was in force till 24.3.2003. Subsequently, the injunction was not extended. 20. However, in the meantime, the counter-affidavits have been filed by the defendants in the injunction application praying for dismissal of the said application. Ultimately, in view of the undertaking given by the learned counsel for the companies as well as the employees on 18.7.2003, the learned single Judge closed the injunction application after recording the undertaking. 21. The core of the contention contained in the affidavit filed on 30.11.2003 in Contempt Petition No.1081 of 2003 filed by the petitioner/plaintiff is that despite the undertaking given on 18.7.2003, the plaintiff's employees were employed by the defendants 1 and 2 in their companies as per the information gathered by a detective agency which has been hired by the plaintiff. The relevant portions in the affidavit relating to the contempt are as follows: "Pursuant to the above order the Applicant came to learn through reliable sources and from some of the Respondents themselves that Respondents 7-10 herein are employed with Respondents 1 and 2 and are operating from the office of the Respondents 1 and 2 at 101 Kanagashri Nagar, Gopalapuram, Chennai-600 086. The information gathered by Force One includes material clearly indicating that Respondents 7-10 are operating from the premises of the First and Second Respondents. The Respondents 7-10 were seen entering and leaving the office premises of Defendant Nos.1 and 2 at 101 Kanagashri Nagar, Gopalapuram, Chennai-600 086. Further the Respondents 7-10 are in contact with many persons presently employed with the Applicant. The Respondents 7-10 were seen entering and leaving the office premises of Defendant Nos.1 and 2 at 101 Kanagashri Nagar, Gopalapuram, Chennai-600 086. Further the Respondents 7-10 are in contact with many persons presently employed with the Applicant. These employees have informed the Applicant that Respondents 7-10 are employed with Respondents 1 and 2. Shockingly it was also discovered that many other ex-employees of the Applicant were employed with or working for the First and Second Respondents. The Applicant submits that this clearly is in violation of the order of this Hon'ble Court dated 18th July 2003. It is submitted that the said order was passed based on the undertaking of the 1st and 2nd Respondents herein that they did not have any employee of the Applicant on their rolls and that they would not employ any employee of the Applicant herein. However, the above facts clearly prove that the First and Second Respondents have contravened the order dated 18-07-2003 of this Hon'ble Court by employing the employes of the Applicant. The First and Second Respondents have shown scant respect to the order of the Hon'ble High Court and have contemptuously employed or have arranged for employment of the employees of the Applicant herein directly or indirectly in order to fraudulently defeat and violate the order of this Hon'ble Court dated 18-07-2003. The 1st and 2nd Respondents are committing a fraud on the proceedings of this Hon'ble Court. The 1st and 2nd Respondents had undertaken not to employ the employees of the Applicant. However, in wilful disobedience they are now employing the services of the employees of the Applicant herein." 22. The above paragraphs in the affidavit would indicate that the contempt petition was filed only on the materials collected by the detective agency and as per the report, as referred to in the paragraphs, the defendants 1 and 2 employed the employees of the plaintiff and the employees have joined the defendants 1 and 2 in breach of the undertaking which was recorded by the order dated 18.7.2003. But the materials placed before the learned single Judge and also the relevant records produced before this Court would clearly indicate that the employees resigned from the plaintiff company on 5.2.2003 and they were employed in DTL, Mumbai on 17.2.2003 itself. 23. But the materials placed before the learned single Judge and also the relevant records produced before this Court would clearly indicate that the employees resigned from the plaintiff company on 5.2.2003 and they were employed in DTL, Mumbai on 17.2.2003 itself. 23. In this context, it has to be remembered that injunction has been granted by the learned single Judge only on 24.2.2003 and the same was in force till 24.3.2003. Subsequently, it was not extended. However, on 18.7.2003, on the undertaking given by the defendants 1 and 2, the companies and the defendants 3 to 6, the employees, that they would not be employed in the companies of the defendants 1 and 2, the injunction application was closed. Thus, it is clear that on the date of undertaking, they had already joined DTL and as such, they felt no difficulty in giving such undertaking. 24. According to the learned senior counsel appearing for the lst respondent/plaintiff, it is a deceitful undertaking and as such, the learned single Judge was misled to accept the undertaking and to close the injunction application. 25. It is true that the said undertaking is quite unnecessary as the employees of the plaintiff were already employed in DTL. It is equally true that the employees could have very well informed the Court that they had already been employed in DTL and as such, the injunction application has become infructuous. Yet, they did not choose to mention the same. We are not called upon to decide the question as to why they did not mention the same. On the other hand, the question before this Court is whether the defendants 1 and 2 committed the act of breach of undertaking given on 18.7.2003? 26. As indicated above, the records would show that the employees had joined DTL on 17.2.2003 and as such, nothing happened subsequent to 18.7.2003, i.e. the date of undertaking. In such circumstances, the prayer cannot be for punishing the contemners for breach of undertaking. At the most, it could be said that the contemners, viz., DITL and DSS and the employees have not intimated to the Court on 18.7.2003 the relevant fact of the employees having already been employed in some other company. As indicated above, this is not the subject matter of the accusation in the contempt petition. 27. At the most, it could be said that the contemners, viz., DITL and DSS and the employees have not intimated to the Court on 18.7.2003 the relevant fact of the employees having already been employed in some other company. As indicated above, this is not the subject matter of the accusation in the contempt petition. 27. However, we cannot but express our disapproval for the act of the contemners as respondents in the injunction application in not having informed about the employment in some other concern. But at the same time, we cannot accept the contention of the learned senior counsel appearing for the lst respondent/plaintiff that the said undertaking has been purposely given to mislead the Court. Even if such a fact had been informed the Court on 18.7.2003, then the learned single Judge would have to consider the question as to whether injunction application becomes infructuous or not. 28. The defendants/contemners could have very well requested for dismissal of the injunction application on the ground that the defendants 3 to 6, the employees have already joined the other company and so, the injunction application became infructuous. Instead of doing so, they have simply given undertaking that they would not join the defendants 1 and 2. This undertaking, in our view, has no meaning. On the other hand, the contemners/employees should have informed the Court about their employment by the DTL even prior to the date of injunction and requested the Court to dismiss the injunction application. Strangely, this was not done. 29. Even assuming that the undertaking was given knowing fully well that they have already been employed, the non-disclosure of the same resulting in the Court closing of the injunction application, in our view, would not amount to breach of undertaking which was recorded in the order by the learned single Judge on 18.7.2003. But in fairness, the defendants/contemners ought to have informed the Court so that the learned single Judge would have dismissed the injunction application itself by recording the said fact of their having joined some other company, which again would be advantageous to the employees. 30. Whatever it is. In our considered opinion, the act of obtaining employment in DTL which is not a party to the suit, in violation of the contract entered into between the plaintiff and the employees would not amount to breach of undertaking. 30. Whatever it is. In our considered opinion, the act of obtaining employment in DTL which is not a party to the suit, in violation of the contract entered into between the plaintiff and the employees would not amount to breach of undertaking. It may give rise to a different cause of action for the plaintiff to claim some other relief against the employees. 31. In this context, let us now refer to some of the guidelines given by the Supreme Court, while dealing with the contempt matters. They are as follows: (A) The weapon of contempt is not to be used in abundance or misused. The discretion given to the court is to be exercised to maintain the court's dignity and majesty of law. (B) The power to punish for contempt must always be exercised consciously, wisely and with circumspection. At the same time, the court should act with seriousness and severity where justice is jeopardized by a grossly contemptuous act of a party. (C) Exercise of powers under the Contempt of Courts Act shall have to be rather cautious and use of it rather sparingly after addressing itself to the true effect of the contemptuous conduct. The court must otherwise come to a conclusion that the conduct complained of tantamounts to obstruction of justice which if allowed, would even permeate in our society. (D) The common English phrase "he who asserts must prove" has its due application in the matter of proof of the allegations said to be constituting the act of contempt. As regards the "standard of proof", be it noted that a proceeding under the extraordinary jurisdiction of the court in terms of the provisions of the Contempt of Courts Act is quasi-criminal, and as such, the standard of proof required is that of a criminal proceeding and the breach shall have to be established beyond reasonable doubt. (E) The contempt of court is an offence of a criminal character. A man may be sent to prison for it. It must be satisfactorily proved. To use the time-honoured phrase, it must be proved beyond reasonable doubt. It is not proved by showing that, when the man was asked about it, he told lies. There must be some further evidence to incriminate him. Once some evidence is given, then his lies can be thrown into the scale against him. But there must be some other evidence. It is not proved by showing that, when the man was asked about it, he told lies. There must be some further evidence to incriminate him. Once some evidence is given, then his lies can be thrown into the scale against him. But there must be some other evidence. Where there are two equally consistent possibilities open to the court, it is not right to hold that the offence is proved beyond reasonable doubt. (F) The party giving undertaking to Court based on implications or assumptions which are false to its knowledge is guilty of misconduct amounting to contempt. (G) Of course, willful disobedience of the Court’s order undermines the rule of law. However, Courts are required to exercise with great care and act with circumspection. In view of the fact that this is a drastic jurisdiction where personal freedom is in peril, contempt jurisdiction being quasi-criminal in nature is not to be exercised except in clear cases. (H) No person is to be regarded as having violated the order of the Court unless it is shown with reasonable certainty. First, there exists an order of the Court which directs or prohibits the commission of the act. Second, the order so made is not vague or ambiguous, but is reasonably clear and certain. Third, the person who is alleged to have disobeyed the order had knowledge of the order. Fourth, the disobedience of such an order of the Court by the alleged contemner was willful. 32. In the light of the above guidelines, it we look at the facts of the present case, we are unable to hold that any contempt has been committed by the contemners. It is true that in fairness, the respondents/defendants should have mentioned to the Court, while giving undertaking about the fact of the employees have already been employed in the other company, to enable the Court to decide as to whether merely to record the undertaking or to dispose of the injunction application on merits. This was not done. But, the failure to do the same, as stated above, would not be construed to be the act of contempt as we are concerned with the breach of undertaking dated 18.7.2003. 33. This was not done. But, the failure to do the same, as stated above, would not be construed to be the act of contempt as we are concerned with the breach of undertaking dated 18.7.2003. 33. When we openly expressed our displeasure over the conduct of the contemners/appellants in not informing the Court on 18.7.2003, the learned senior counsel appearing for the appellants, all would in one voice, said that this must have been informed the Court in fairness and as a token of expressing the regret for the same, the contemners have volunteered to pay some costs which can be given as donation to be given to some organization to be spent for good purpose. 34. This gesture on the part of the counsel for the appellants in admitting the appellants’ fault, is quite appreciable. Accordingly, while we hold that the contemners/appellants are not liable for contempt, they are directed to pay costs of Rs.15,000/- as volunteered by them as donation to the Tamil Nadu Mediation and Conciliation Centre, Chennai, within two weeks from today. 35. With the above direction, all the contempt appeals are allowed setting aside the order of the learned single Judge dated 29.12.2004. Fine, if paid, shall be refunded to the appellants. Consequently, all the connected C.M.Ps. are closed.