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2011 DIGILAW 409 (CAL)

Ashoka Ghose v. Pradip Chaudhuri

2011-03-22

SANJIB BANERJEE

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JUDGMENT : SANJIB BANERJEE, J. The plaintiffs in a suit for eviction complain of the alleged contemnors having willfully and deliberately disobeyed orders dated September 16, 2003 and July 22, 2010 passed in the suit and an order dated May 2, 2008 passed on a contempt petition arising out of the alleged violation of the interlocutory order of September 16, 2003. The material facts have been recorded in a judgment delivered immediately prior to this on an interlocutory application filed by the plaintiffs in the suit. Only some essential additional features are specially recorded in assessing as to whether the acts complained of amount to willful or deliberate disobedience of the relevant orders. The suit was initially for eviction on the grounds of default in payment of rent and alleged damage to the tenanted premises. A subsequent ground has been incorporated by amendment of the plaint on account of alleged sub-letting. On an interlocutory application where the plaintiff complained of the defendant having allegedly sub-let the premises to at least two other companies, an order was passed on September 16, 2003, the material part whereof had this to say; “As regards the question with respect to the injunction. The relationship between the parties being landlord and tenant and the ground of subletting having been introduced petitioner in my view is entitled to protection during the pendency of the suit against induction of any other persons in the suit premises in the occupation of the defendant. In the affidavit-in-opposition in paragraph 12 and 16 it has been stated that BPL Limited, sky-pack, HCL Stores, Sansui, Whirlpool are Distributors ands/or franchising agents of the respondents. Whether the said contention is correct or whether the case of subletting without prior permission of landlord has been made out is not one which can be adjudicated in the present application. That is a matter of adjudication in the suit. The tenant cannot without consent of landlord induct persons or sub-tenants is well settled. To that extent petitioner is entitled to protection without deciding the question as to whether the aforesaid persons are subtenants or franchising agents of the respondent tenant. That is a matter of adjudication in the suit. The tenant cannot without consent of landlord induct persons or sub-tenants is well settled. To that extent petitioner is entitled to protection without deciding the question as to whether the aforesaid persons are subtenants or franchising agents of the respondent tenant. Accordingly there shall be an injunction restraining the respondent tenant from inducting any other person, firm or company or putting such persons into possession either as sub-tenants or as franchises or agents except those specifically named in paragraphs 12 and 16 of the affidavit-in-opposition until disposal of the suit. The application accordingly stands disposed of.” On a previous contempt petition, CC No. 223 of 2007, the Court showed leniency in not issuing any rule but calling for an affidavit from the alleged contemnor. The order dated May 2, 2008, by which that earlier contempt petition was disposed of, provided, inter alia, as follows: “To the extent the defendant permitted Rasika Impex Pvt. Ltd. and Loknath Commercial Pvt. Ltd. to use the suit premises or a part thereof as their registered office, the defendant is in breach of the order of September 16, 2003. The defendant has undertaken to forthwith remove the suit premises as the registered office of Rasika Impex Pvt. Ltd. and Loknath Commercial Pvt. Ltd. and has given a further undertaking that the order of September 16, 2003 would be strictly adhered to.” The matter was left at that. The Court accepted at that stage that the undertaken furnished was bona fide and that future attempts to act in derogation of order September 16, 2003 would be eschewed. No rule was issued, no personal presence of any person sought and no words of censure expended despite the finding of breach on the defendant’s part. The plaintiffs carried a further interlocutory application, GA No. 2301 of 2010, complaining of sub-letting of the suit premises and substantial construction being carried out thereat to change the nature and character of the property. The plaintiffs’ venture was greeted with an ad interim order of July 22, 2010 that directed, in its material part, as follows: “For the moment, the defendant will remain restrained from carrying out construction of any nature at the premises in question. The plaintiffs’ venture was greeted with an ad interim order of July 22, 2010 that directed, in its material part, as follows: “For the moment, the defendant will remain restrained from carrying out construction of any nature at the premises in question. No construction may be carried out even in the guise of such construction being necessary for the purpose of the defendant’s occupation of the premises.” GA No. 2301 of 2010 was taken up for final hearing on March 14, 2011 along with the present contempt petition. The judgment rendered on GA No. 2301 of 2010 immediately preceding the present pronouncement, has detailed the rival stands. In the affidavit filed in the present proceedings on behalf of the second and third alleged contemnors, a copy of an agreement of June 15, 2010 has been appended. The relevant clauses of the agreement are extracted : “1. That instead of 20% (Twenty percent) share as provided in the said Joint Venture Agreement DEBSONS have agreed to and doth hereby accept to become entitled to 2% (Two percent) share in the said Joint Venture Business at the consideration hereinafter mentioned and the remaining 98% (Ninety eight percent) share in the said Joint Venture Business shall belong to the COMPANY. 2. That in lieu of the 18% (Eighteen percent) share of DEBSONS in the said JOINT VENTURE BUSINESS the said DEBSONS doth hereby and by the receipt hereunder written admit and acknowledge to have this day r received from the COMPANY a lump sum amount of Rs. 10,00,000/- (Rupees ten lacs) only towards part satisfaction of the consideration payable by the COMPANY to DEBSONS in lieu of the aforesaid 18% (Eighteen percent) share in the said premises. 3. That the said COMPANY shall also pay to DEBSONS towards further payment of consideration a sum of Rs. 2,50,000/- (Rupees Two Lac fifty thousand) only, monthly and every month according to English Calendar month during the course of the said Joint Venture Business as and by way of guaranteed amount. 4. That such payment of the monthly amount of Rs. 2,50,000/- (Rupees Two Lac fifty thousand) only shall be made by the COMPANY to DEBSONS irrespective of my profit and loss in the said business and shall be paid within the 7th day of each and every English Calendar Month following the month for which the same is payable. 5. 4. That such payment of the monthly amount of Rs. 2,50,000/- (Rupees Two Lac fifty thousand) only shall be made by the COMPANY to DEBSONS irrespective of my profit and loss in the said business and shall be paid within the 7th day of each and every English Calendar Month following the month for which the same is payable. 5. That the payment of monthly guaranteed amount shall be effective from 15th June, 2010 and shall be continue during the period under the said Joint Venture Agreement and all renewals thereof with an increase of 15% every five years. 6. That DEBSONS upon being satisfied towards payment of the consideration in the manner hereinabove mentioned both hereby release relinquish and forever discharge itself from the said 18% (Eighteen percent) share in the said Joint Venture Business unto and in favour of the COMPANY freed and discharged from all or any claim right or interest therein thereby enabling the COMPANY to hold 98% (Ninety eight percent) share in the said Joint Venture Business absolutely and the remaining 2% (Two percent) share therein shall be held by DEBSONS absolutely. 7. That save and except the aforesaid consideration of Rs.10,00,000/- (Rupees Ten lacs) only and the monthly payment of the guaranteed amount of Rs. 2,50,000/-(Rupees Two Lac fifty thousand) only and subsequent increase by 15% every five years DEBSONS shall not have any claim against the COMPANY or against the said Joint Venture Business in any manner nor shall be entitled to the Accounts of the said Business.… “13. On the parties ceasing to continue with the joint venture for any reason whatsoever then and in that event Debsons shall not be entitled to carry on any business under the name and style of Capital Electronics and the company shall have no claim or right in the space provided by Debsons and shall forthwith quit vacate the said premises.” It is evident from the agreement of June 15, 2010 that there was also a joint venture agreement of June 15, 2010 that had been entered into between the defendant and Anand & Co. Electronic Pvt. Ltd (hereinafter referred to as “Anand”). The joint venture agreement has not been disclosed. Electronic Pvt. Ltd (hereinafter referred to as “Anand”). The joint venture agreement has not been disclosed. The second recital to the other agreement of June 15, 2010 which has been disclosed records that the joint venture agreement (JVA) stipulated that the defendant (the third alleged contemnor herein) would be entitled to 20% share in the net profits arising out of the joint venture business and the remaining share would be Anand’s. The third recital stipulates that “considering the volume of investment to be made by the company (Anand) towards the business and uncertainty in the profits to be derived” therefrom, the defendant had proposed to Anand that instead of the 20% share in the business the defendant was agreeable to have a fixed share of two per cent upon Anand paying to the defendant an amount of Rs. 10 lakh simultaneously with the execution of such second agreement and upon Anand undertaking to pay the defendant a minimum guaranteed amount of Rs. 2.5 lakh “monthly and every month according to English Calendar month commencing from the commencement of the said Joint Venture Business” subject to as specified in such agreement. The relevant clauses of the agreement have been extracted and speak more eloquently as to the transaction between the defendant and Anand than any inference that is attempted to be drawn therefrom. It is significant that a copy of such second agreement of June 15, 2010 was made over to the special officer in course of his visit on December 24, 2010. Nothing more is said of the special officer’s report pertaining to his visit to the suit premises on December 24, 2010. Whatever may be the impression that the Court may have, in a constitutional democracy that thrives on the rule of law, judicial discipline mandates that orders are founded on facts and reason and scarcely on any suspicion or impression. The special officer’s report following his visit on December 24, 2010 has not been referred to for a specific reason, though nothing therein can be so telling of the defendant’s conduct than what is contained in the second agreement of June 15, 2010. The special officer’s report following his visit on December 24, 2010 has not been referred to for a specific reason, though nothing therein can be so telling of the defendant’s conduct than what is contained in the second agreement of June 15, 2010. Following the Court enquiring of counsel then representing the defendant and the alleged contemnors on March 14, 2011 as to the convenience of the individual alleged contemnors to be present in Court to plead their case on possible sentencing, it was submitted that the matters be kept for March 21, 2011. In the cause list of March 21, 2011, there suddenly appeared and an application by the defendant for challenging some report of the special officer. Directions have been issued for filing affidavits in such application. Since such application is to be considered at a later date, no part of this special officer’s report following his visit on December 24, 2011 has been based for the order that is proposed to be made herein. It must also be recorded with a note of regret that counsel appearing on March 21, 2011 for the defendant and the alleged contemnors attempted to make submission on the merits of either matter despite being reminded that submission on both matters was over but orders had not been made to afford the alleged contemnors an opportunity to submit on the sentence that should be passed. No submission has been made on such score and further argument on the merits of the two matters has not been permitted on March 21, 2011. It may also be recorded that long prior to the affidavits on behalf of the alleged contemnors being filed, this special officer’s report following his visit of December 24, 2010 had been taken on record and copies thereof circulated. On behalf of the defendant and the alleged contemnors it has been submitted that in the copy of the second agreement of June 15, 2010 being made over to the special officer in course of his visit on December 24, 2010, it was evident that the defendant and persons associated with it had nothing to hide and that the transaction reflected in such agreement amounted to the defendant carrying on business at the suit premises; which was well within the parameters of the subsisting orders. It has been asserted on behalf of the defendant and the alleged contemnors that the order subsisting in the suit did not place any embargo on the defendant to associate with any other person or entity in course of the defendant carrying on business from the suit premises. The defendant and the alleged contemnors say that Anand is now a shareholder in the defendant and the entity by the name of Capital Electronics has been described in the municipal corporation trade licence as a unit of the defendant with its directors being Sharmistha Chaudhuri and Subir Majumdar. A copy of the document has been relied upon. The second agreement of June 15, 2010 is, stripped of the deliberate attempt to camouflage it, an arrangement under which the alleged contemnors have allowed a person other than the defendant in the suit to use a part of the suit premises against an upfront premium and an assured monthly payment. In the defendant’s attempt to sugar-coat the transaction, there is an implicit acknowledgement of what the defendant was permitted to do and what it was not. There can be no doubt that the contemnor company and those in control thereof and associated therewith, particularly its managing director and its manager, were aware of the purport and the extent of the subsisting orders. In there being the two agreements on the same day, with the second undeniably overriding the first, there was – as the Hindi proverb goes – a set of teeth for the elephant to chew with and a tusk for display. For the present purpose, the petitioners’ suggestion that due to the suddenness of the special officer’s visit to the showroom on a busy afternoon, the agreement that recorded the real transaction slipped out in place of the agreement that was meant to be handed over, is disregarded. But the fact that there were two agreements executed on the same day and only one of them has been produced – or has accidentally come to the fore – and the other has been held back, is more than enough to suggest that one of the documents reflects the apparent transaction and the other the real one. There was unmistakable mischief in the documents being devised the way they have been and the arrangement bears the trade mark signs of a Professor Moriarty at work. There was unmistakable mischief in the documents being devised the way they have been and the arrangement bears the trade mark signs of a Professor Moriarty at work. Much thought and scheming of a trained legal mind is evident; the kind that is adept at wrapping a cloak of authenticity around a fraudulent transaction by preying on the “benefit of doubt” rule. There is no doubt that the defendant in the suit, which is the third alleged contemnor herein, has acted in derogation of the orders dated September 16, 2003 and July 22, 2010 and is in breach of the undertaking as recorded in the order dated May 2, 2008. The more relevant question in the present proceedings is whether the acts and conduct complained of amount to willful or deliberate disobedience of the relevant orders. This jurisdiction is to be sparingly used and punishment under the provisions of the Contempt of Courts Act, 1971 should be meted out even more sparingly. It is apparent that the defendant in the suit and those responsible for it were aware of the fetters put on the use of the premises by orders of Court. In the two agreements of June 15, 2010 being executed and in the second of the agreements which has been produced revealing the one-time initial payment received by the defendant and the monthly payments reserved thereunder, it is an act of subletting devised with careful planning to try and deceive the Court. The contemnors have relied on judgments reported at 77 CWN 642 (Gopal Chandra Biswas v. State of West Bengal); (2003) 1 SCC 504 (Subramanian Swamy v. Hari Bhaskar); and (1969) 3 All ER 1062 (Re Bramblevale, Ltd.). On the strength of such authorities, they claim that if it was possible for the contemnors to interpret the order and chart out a course of action, they should not be held to have wilfully or deliberately disobeyed the order. They suggest that there is reasonable doubt as to whether they have sub-let the premises or have entered into business with another thereat. The contemnors say that there is no subletting in the circumstances since the defendant has retained control of the property. The petitioners have relied on judgments reported at AIR 1975 Mad 270 (Century Flour Mills Ltd v. S. Suppiah) and (1996) 4 SCC 622 (Delhi Development Authority v. Skipper Construction Co. The contemnors say that there is no subletting in the circumstances since the defendant has retained control of the property. The petitioners have relied on judgments reported at AIR 1975 Mad 270 (Century Flour Mills Ltd v. S. Suppiah) and (1996) 4 SCC 622 (Delhi Development Authority v. Skipper Construction Co. (P) Ltd) to urge that devious acts calculated to avoid binding orders must be seen through for the Court to set at naught the acts in derogation of subsisting orders and punish the contemnors. Each of the contemnors is found guilty of having willfully and deliberately disobeyed the orders dated September 16, 2003, July 22, 2010 and May 2, 2008. For any self-respecting person such finding should be punishment enough; but just to remind the individuals who had brazenly tried to be over-smart that such conduct does not pay, the first and second contemnors are fined Re 1 each which should be put in within a fortnight. CC No. 213 of 2010 is disposed of without any order as to costs. Urgent certified photocopies of this judgment, if applied for, be supplied to the parties subject to compliance with all requisite formalities. The contemnors seek a stay of the operation of the order which is unhesitatingly refused.