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2006 DIGILAW 1637 (MAD)

S. A. Rajan & Another v. A. Venkatesan

2006-07-04

P.D.DINAKARAN, P.P.S.JANARTHANA RAJA

body2006
Judgment :- (PRAYER: Against the judgment dated 14.10.1997 of the learned Single Judge in Contempt Application No.154 of 1996.) P.D. Dinakaran, J. This contempt appeal is directed against the judgment dated 14.10.1997 made in Contempt Application No.154 of 1996, whereunder the appellants herein (respondents 3 and 4 in the contempt application), who are practicing advocates were found guilty of contempt under Section 14 of the Contempt of Courts Act, 1971, for having committed a fraud on the Court by false representation and withdrawing the suit without the knowledge of the contempt applicant, one A. Venkatesan, who is the respondent herein, and punished with simple imprisonment for a term of 30 days and 15 days respectively in addition to the fine of Rs.2,000/- and Rs.500/- respectively; the first respondent in the contempt application, V. Krishnan, was sentenced to undergo simple imprisonment for a term of six months and also to pay a fine of Rs.2000/-; the second respondent in the contempt application, one M.S. Dhananjayan, the owner of the property/ seller, who is nonetheless the client of the appellants herein, was discharged in the contempt application 2. For better appreciation of the case, the following facts are stated in brief: 2.1. The contempt applicant, A. Venkatesan is the Power Agent of one V. Krishnan, who is arrayed as the first respondent in the contempt application. The said V. Krishnan, hereinafter referred to as the Principal, entered into a sale agreement with one M.S. Dhananjayan, second respondent in the contempt application, who is the owner of the property, on 18.10.1988 for sale of his property in question. 2.2. On the ground that M.S. Dhananjayan was not honouring the sale agreement dated 18.10.1988, the Principal, V. Krishnan, gave a power of attorney to A. Venkatesan, the respondent herein on 22.8.1994 to file a suit for specific performance of the agreement dated 18.10.1988. Accordingly, A. Venkatesan, as a power agent of the Principal filed a suit for specific performance in C.S.No.1269 of 1994 on the file of this Court against M.S. Dhananjayan (second respondent in the contempt application). 2.3. In the suit, C.S.No.1269 of 1994 on the file of this Court, the appellants in the contempt appeal, practicing advocates of this Court filed a Vakalat on behalf of M.S.Dhananjayan, the owner of the property/Seller. 2.4. 2.3. In the suit, C.S.No.1269 of 1994 on the file of this Court, the appellants in the contempt appeal, practicing advocates of this Court filed a Vakalat on behalf of M.S.Dhananjayan, the owner of the property/Seller. 2.4. A memorandum dated 22.12.1995 was entered into between V.Krishnan, who is the Principal/agreement holder/purchaser and M.S.Dhananjayan, the owner of the property/seller and the same was filed in the Court. The memorandum dated 22.12.1995 reads as follows: "Memo filed by the Plaintiff The plaintiff declares the suit has been settled out of Court and hence he withdraws the suit as not pressed and prays that this Hon'ble Court may be pleased to dismiss the suit as not pressed and withdrawn and prays that half court may be refunded in the name of the Counsel. Dated at Madras this 22nd December, 1995. sd/- xxxx sd/- V.Krishnan Counsel for Plaintiff Plaintiff" 2.5. Based on the said memorandum dated 22.12.1995, the suit was dismissed on 22.12.1995 as settled out of Court and the judgment dated 22.12.1995 reads as follows: "Learned counsel appearing for the plaintiff has filed a memo stating that the suit claim has been settled out of Court. In view of this Memo, the suit is dismissed as settled out of Court. Issue Certificate to the refund of half of the Court-fee paid on the plaint, and the same may be issued in the name of learned counsel for the plaintiff." 2.6. Thereafter, the power agent, A. Venkatesan, on a specific allegation that he was not informed about the withdrawal of the suit by his Principal and that the Principal/Agreement Holder/Purchaser and the Owner of the Property/Seller, M.S. Dhanjayan as well as the appellants herein colluded and committed a fraud on the Court by false representation for having withdrawn the suit without the knowledge of the contempt applicant, who is the power agent, filed an application for contempt of Court proceedings under Section 14 of the Contempt of Courts Act. 2.7. On receipt of the notice in the above contempt application, the appellants filed counters denying their role in the matter, however, they expressed unconditional apology for the act, if any, alleged against them. 2.8. The learned Single Judge took the contempt application for trial and passed the following order on 14.10.1997: " .. 32. 2.7. On receipt of the notice in the above contempt application, the appellants filed counters denying their role in the matter, however, they expressed unconditional apology for the act, if any, alleged against them. 2.8. The learned Single Judge took the contempt application for trial and passed the following order on 14.10.1997: " .. 32. In view of the unatoning conduct of the first respondent, who misled the court even after the filing of this proceedings, he deserves the maximum punishment. Therefore, he is sentenced to undergo simple imprisonment for a term of six months and also to pay a fine of Rs.2,000/- whereas the respondents 3 and 4 are inflicted with the punishments of simple imprisonment for a term of 30 days and 15 days respectively in addition to the fine of Rs.2,000/- against the third respondent and Rs.500/- against the fourth respondent. The second respondent is discharged." 2.9. Hence, the contempt appeal. 3. It is important to note that throughout the contempt proceedings, the first respondent therein, V. Krishnan, the Principal/Agreement Holder/Purchaser, remained ex-parte and concededly, the memorandum dated 22.12.1995 was signed by V. Krishnan, namely the Principal/ Agreement holder/Purchaser and the appellants herein, practicing advocates were not parties to the memorandum dated 22.12.1995. 4. Mr. C. Ramakrishna, learned senior counsel appearing for the appellants vehemently contends that: (a) the respondent herein, A. Venkatesan is only a power agent of the Principal/Agreement Holder/ Purchaser, V. Krishnan, who gave the power to file a suit for specific performance of an agreement dated 18.10.1988 against the owner of the property/Seller, M.S. Dhananjayan, and therefore, the plaint was filed by A. Venkatesan, only on behalf of V.Krishnan, the Principal/Agreement Holder/Purchaser. Once the Principal/Agreement Holder/Purchaser has entered into a compromise with the owner of the property/Seller for the withdrawal of the suit and filed a memorandum dated 22.12.1995 to that effect, which is signed by one N.Sakthivelu (second appellant herein), who is not engaged by A.Venkatesan (respondent herein), such an act by the Principal/ Agreement Holder/Purchaser would not amount to fraud on the power agent A.Venkatesan, much less on the Court, as there is nothing to defraud or mislead the Court. The spirit behind the memorandum dated 22.12.1995 is to settle the dispute between the Principal/Agreement Holder/ Purchaser and the owner of the property/Seller and in the process, if the power agent has got any grievance he could have independently exercised his right and worked out his remedy against the Principal/ Agreement Holder/ Purchaser, but he has no locus to stand in the way of settling of the dispute between the Principal/ Agreement Holder/Purchaser and owner of the property/Seller; (b) even assuming the respondent herein has got to settle his score against the Principal/Agreement Holder/Purchaser, he cannot have any grievance against the owner of the property/Seller, much less against his counsel. Since the power agent is acting only on behalf of the Principal/ Agreement Holder/Purchaser, it is beyond the imagination that the Principal/Agreement Holder/Purchaser cannot settle his dispute with the owner of the property/Seller, who is the defendant in the suit, and the power given by the Principal/Agreement Holder/Purchaser to the agent, A.Venkatesan cannot be abused or misused as a sword in his hands to blackmail the Principal/Agreement Holder/Purchaser himself, objecting the reaching of a settlement in the suit; (c) Order 23 of the Code of Civil Procedure read with Sections 201 and 207 of the Indian Contract Act, 1872 enables the plaintiff to abandon the suit expressly or impliedly. In the instant case, the suit having been filed by the Power Agent only on behalf of the Principal, the power agent has no independent authority opposing the withdrawal of the suit or abandoning the suit either in full or part; and (d) the order under appeal is liable to be set aside for not complying with the mandatory procedure contemplated under Section 14 of the Contempt of Courts Act, 1971. 5. Per contra, sustaining the order under appeal, Mr.Alagar, learned senior counsel for the respondent contends that: (a) the power given by V.Krishnan, the Principal/ Agreement Holder/Purchaser is to file a suit to enforce the agreement of sale dated 18.10.1988. 5. Per contra, sustaining the order under appeal, Mr.Alagar, learned senior counsel for the respondent contends that: (a) the power given by V.Krishnan, the Principal/ Agreement Holder/Purchaser is to file a suit to enforce the agreement of sale dated 18.10.1988. Once such power is given to the respondent herein, the Principal/Agreement Holder/Purchaser has no authority to ignore the terms of the power and arrive at a compromise with the owner of the property/seller independently, without the knowledge of the power agent; (b) the plaintiff is not the Principal/Agreement Holder/Purchaser, but the power agent, whose power was effectively in force on the date of filing of the memorandum dated 22.12.1995 and who was also represented by counsel by name, Sittaranjandass, but not by N.Sakthivelu, the second appellant herein and therefore, the contention advanced on behalf of the appellants that the plaintiff in the suit was only V.Krishnan, the Principal/Agreement Holder/Purchaser and not A.Venkatesan is not tenable in law; (c) Order 23 of the Code of Civil Procedure read with Sections 201 and 207 of the Indian Contract Act, 1872 is applicable only if A.Venkatesan, the power agent files the memorandum and would not, in any event, come to the aid of V.Krishnan, the Principal/ Agreement Holder/Purchaser, much less M.S.Dhananjayan, the owner of the property/seller; and (d) the notice issued under Section 14 of the Contempt of Courts Act, 1971 is a sufficient compliance of the procedure contemplated under Section 14 of the Contempt of Courts Act, 1971. 6. We have given our careful consideration to the submissions of both sides. 7. On the rival contentions made by both sides, the following only point arises for our consideration, whether, under the facts and in the circumstances of the case, the appellants have committed any contempt? 8. For better appreciation of the point in issue, it is apposite to extract Order XXIII of the Code of Civil Procedure, and Sections 201 and 207 of the Indian Contract Act, 1872, herein below in extenso: ORDER XXIII of the Code of Civil Procedure - WITHDRAWAL AND ADJUSTMENT OF SUITS 1. 8. For better appreciation of the point in issue, it is apposite to extract Order XXIII of the Code of Civil Procedure, and Sections 201 and 207 of the Indian Contract Act, 1872, herein below in extenso: ORDER XXIII of the Code of Civil Procedure - WITHDRAWAL AND ADJUSTMENT OF SUITS 1. Withdrawal of suit or abandonment of part of claim— (1) At any time after the institution of a suit, the plaintiff may as against all or any of the defendants abandon his suit or abandon a part of his claim: Provided that where the plaintiff is a minor or other person to whom the provisions contained in rules 1 to 14 of Order XXXII extend, neither the suit nor any part of the claim shall be abandoned without the leave of the Court. (2) An application for leave under the proviso to sub-rule (1) shall be accompanied by an affidavit of the next friend and also, if the minor or such other person is represented by a pleader, by a certificate of the pleader to the effect that the abandonment proposed is, in his opinion, for the benefit of the minor or such other person. (3) Where the Court is satisfied,— (a) that a suit must fail by reason of some formal defect, or (b) that there are sufficient grounds for allowing the plaintiff to institute a fresh suit for the subject-matter of a suit or part of a claim, it may, on such terms as it thinks fit, grant the plaintiff permission to withdraw from such suit or such part of the claim with liberty to institute a fresh suit in respect of the subject- matter of such suit or such part of the claim. (4) Where the plaintiff— (a) abandons any suit or part of claim under sub-rule (1), or (b) withdraws from a suit or part of a claim without the permission referred to in sub-rule (3), he shall be liable for such costs as the Court may award and shall be preclude from instituting any fresh suit in respect of such subject-matter or such part of the claim. (5) Nothing in this rule shall be deemed to authorise the Court to permit one of several plaintiffs to abandon a suit or part of a claim under sub-rule (1), or to withdraw, under sub-rule (3), any suit or part of a claim, without the consent of the other plaintiffs." "Section 201 of the Indian Contract Act, 1872 - Termination of agency: An agency is terminated by the principal revoking his authority, or by the agent renouncing the business of the agency; or by the business of the agency being completed; or by either the principal or agent dying or becoming of unsound mind; or by the principal being adjudicated an insolvent under the provisions of any Act for the time being in force for the relief of insolvent debtors. Section 207 of the Indian Contract Act, 1872 - Revocation and renunciation may be expressed or implied: Revocation or renunciation may be expressed or may be implied in the conduct of that principal or agent respectively. (emphasis supplied) 9. It is true that but for the power given by V.Krishnan, the Principal/Agreement holder/Purchaser, A. Venkatesan, the power agent has no right. The source of right to file the suit flows only from the power, which was admittedly in existence on 22.12.1995. At the same time, but for the power agent filing the plaint, the Principal/ Agreement holder/Purchaser could not abandon the suit. The basis for filing the suit by the power agent flows from the power of attorney executed by the Principal/ Agreement holder/Purchaser. Equally, the basis for abandoning the suit by the Principal/ Agreement holder/Purchaser flows from the power of attorney. Therefore, on the date of withdrawing the suit, the terms of the power between the Principal/ Agreement holder/Purchaser and the Power Agent have not been properly honoured, which in our considered opinion, would definitely give rise to a cause of action for the power agent to proceed against the Principal/ Agreement holder/Purchaser, who can also defend himself in a manner known to law in independent and appropriate proceedings. 10. However, the point that arises for consideration is, can, this Court, attribute any fraud on any third party, much less M.S.Dhananjayan, the owner of the property/Seller, or his counsel, who were not parties to the memorandum dated 22.12.1995. 11. 10. However, the point that arises for consideration is, can, this Court, attribute any fraud on any third party, much less M.S.Dhananjayan, the owner of the property/Seller, or his counsel, who were not parties to the memorandum dated 22.12.1995. 11. Assuming the advocate Chitranjandas, is sharing the same chamber of S.A.Rajan, in the eye of law, it is difficult to come to the conclusion that either M.S.Dhananjayan, the owner of the property/seller or his counsel has committed a fraud either against the power agent, much less against the Court, abusing the process of Court, as neither of them is a party to the memorandum dated 22.12.1995 and in any event, the appellants have filed an affidavit tendering unconditional apology, for the act, if any, alleged against them. Therefore, if there is any abandonment of right by the Principal/Agreement holder/ purchaser contrary to the interest of the power agent and the terms of the power of attorney, under the shield of Order 23 of the Code of Civil Procedure read with Sections 201 and 207 of the Indian Contract Act, 1872, such a violation, in our considered opinion, by itself, would not give rise to a cause of action for initiating contempt proceedings under Section 14 of the Contempt of Courts Act, 1971, even though the power agent has the right to proceed against the Principal/Agreement Holder/Purchaser independently in the manner known to law. 12. In our considered opinion, the finding of the learned Single Judge that the appellants herein committed a contempt of court warranting initiation of suo motu contempt is not sustainable in law. 13. In view of the above finding arrived at, we feel there is no need to go into the other contentions raised by the learned senior counsel. 14. Resultantly, the appeal is allowed and the judgment dated 14.10.1997 made in Contempt Application No.154 of 1996 is set aside and the appellants herein are discharged and consequently, the amount deposited as fine by the respective appellants shall be refunded to them. 15. At this stage, Mr. C. Ramakrishna, learned senior counsel comes forward to donate the amount deposited as fine in the contempt application by the appellants to the Tamil Nadu State Legal Services Authority. If that be so, on such refund of the fine amount deposited, the appellants are at liberty to donate the same to the Tamil Nadu State Legal Services Authority. 16. C. Ramakrishna, learned senior counsel comes forward to donate the amount deposited as fine in the contempt application by the appellants to the Tamil Nadu State Legal Services Authority. If that be so, on such refund of the fine amount deposited, the appellants are at liberty to donate the same to the Tamil Nadu State Legal Services Authority. 16. It is however made clear that the finding rendered or the observation made in this contempt appeal, will not stand in the way to decide the rights of either side in the suit which is restored.