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2017 DIGILAW 724 (CAL)

JIBANGSHU KUMAR CHAKRABORTY v. PRADIP CHURIWAL

2017-08-28

NISHITA MHATRE, TAPABRATA CHAKRABORTY

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JUDGMENT : Tapabrata Chakraborty J. 1. Both the contempt applications have been preferred alleging violation of an order dated 21st September, 2005 passed by the Hon’ble Division Bench of this Court in APO No.460 of 2003 and ACO No.36 of 2005. The first contempt application being C.C. No.60 of 2008 has been preferred by Williamson Magor & Company Limited and Associated Concerns’ Officers Association (hereinafter referred to as the said Association) and the second contempt application being C.C. No.94 of 2006 has been preferred by twenty six members of the said Association. 2. The history of the legal battle among the parties needs to be described shortly in order to appreciate the background of the contempt applications. Williamson Magor & Company Limited (hereinafter referred to as WML) got amalgamated with Macneil & Barry Limited (hereinafter referred to as MBL) under Section 291 of the Companies Act with effect from 1st January, 1974 and the assets and liabilities of WML got vested to MBL. Subsequently, an application was filed before this Court under Section 391(1) read with section 394 of the Companies Act, 1956 for a scheme of arrangement by WML and Macneil Engineering Limited (hereinafter referred to as MEL), a company incorporated under the Companies Act, 1956 which started functioning from April, 1991. In the said application an order was passed on March 4, 1991 transferring the Material Handling Equipment Division and the Electrical Division of WML to MEL. Initially, the said Association opposed the scheme, however, ultimately the matter was settled on the basis of a tripartite agreement dated September 10, 1990 wherein it was expressly indicated that all existing permanent management staff of Material Handling Equipment Division and Electrical Division shall be transferred to MEL without interruption in service and on their existing terms and conditions of service. On 4th March, 1991 the said scheme was sanctioned by the Company Court. Subsequent thereto, the said Association filed an application for appropriate order as MEL was not in a position to pay pension and as such a direction was sought for upon WML to arrange for payment on the basis of guarantee given by WML at the time of sanctioning of the said scheme. Subsequent thereto, the said Association filed an application for appropriate order as MEL was not in a position to pay pension and as such a direction was sought for upon WML to arrange for payment on the basis of guarantee given by WML at the time of sanctioning of the said scheme. On April 9, 2003 the Company Court passed an order to the effect that MEL was to pay pension to the members of Association and in case the cheque is dishonoured within 30 days, WML will arrange payment and MEL was to create a fund within 6 months from the date of order. As MEL failed to arrange the payment, WML paid certain amount but the same was not regular and as such an application for modification was moved seeking direction upon WML to make such payment of pension. MEL also filed an application for recalling of the said order but by an order dated 15th July, 2003 leave was granted to approach the Appeal Court as in the midst thereof an appeal was preferred against the earlier order dated 9th April, 2003. In the appeal the only question which arose for consideration was as to whether WML was under any obligation to make any payment of pension in the event of failure on the part of MEL to contribute to superannuation fund after creation of the same on 18th April, 1999. The said appeal was disposed of by the order dated 21st September, 2005. As no order was passed in the modification application, the said Association challenged the orders dated 9th April, 2003 and 15th July, 2003 and the said appeals were disposed of by the order dated 21st September, 2005 observing, inter alia, that it is the duty of MEL to make payment of pension to the members of the said Association and MEL was directed to take steps in the matter accordingly. 3. Mr. 3. Mr. Chatterjee, learned advocate appearing for Pradip Churiwal (Contemnor no.2 in C.C.No.60 of 2008 and Contemnor no.4 in C.C.No.94 of 2006), Anita Churiwal (Contemnor no.11 in C.C.No.60 of 2008 and Contemnor no.10 in C.C.No.94 of 2006), Gourab Churiwal (Contemnor no.4 in C.C.No.60 of 2008) and Bijay Sharma (Contemnor no.5 in C.C.No.94 of 2006 & C.C.No.60 of 2008) submits that the directions issued by the Court have been complied with and the pension amount has been disbursed in favour of the members of the said Association. Whatever was to be legally done has been so done and such action of the alleged contemnors is neither contemptuous nor disrespectful. 4. Drawing the attention of this Court to the deed dated 8th April, 1999 and the definition of the terms ‘beneficiary’, ‘member’, ‘normal retire age’ and ‘service’, Mr. Chatterjee submits that MEL decided to establish a Superannuation Fund (hereinafter referred to as the said Fund) for the sole purpose of providing pension for the management staff of the company. It is his contention that on and from the date the employees were promoted as management staff they became entitled to the benefits of the said Fund. 5. He further submits that the superannuation scheme of MEL was framed in deviation of the original scheme of WML and such alteration was done by the trustees of the newly created MEL superannuation fund without approval of the Company’s Board of Directors, with a view to enable the employees to resign and retire before attaining the retiring age of 55 years and claim pension at full rate without any deduction as per the original WML scheme. Taking advantage of the said deviation/inadvertent mistake in the newly created MEL scheme, employees started resigning or taking early retirement and availing superannuation pension benefit at full rate immediately even prior to the retirement age of 55 years. The trustees allowed such benefits to employees without rectifying the errors and omission in the scheme compared to the original superannuation scheme of the WML. By reason of such errors and deviations some ex employees were allowed pension for the full tenure of their services even prior to their appointment as management staff, ignoring that the superannuation scheme was meant originally for management staff. This caused excessive payments to be made to certain pensioners which created further deficit in the superannuation fund which already commenced with a massive shortfall. This caused excessive payments to be made to certain pensioners which created further deficit in the superannuation fund which already commenced with a massive shortfall. To stop such syphoning of fund, MEL executed the deed of variation on 16th March, 2015 amending the Trust deed and the said deed of variation was duly approved by the Principal Commissioner of Income Tax-1 on 25th May, 2015. 6. Mr. Chatterjee further argues that the non-compliance of an order has to be wilful and deliberate and not mere accidental and unintentional. Once an order has been passed by a party to a proceeding on the basis of the direction issued by the Court, there arises a fresh cause of action to seek redressal in an appropriate forum and such action does not constitute contempt. In the order dated 21st September, 2015 the Court has only observed that it is the duty of MEL to pay pension. Such duty has been appropriately discharged by the alleged contemnors by disbursing pension. The petitioners are disputing the quantum of such pension. The Court did not direct disbursement of any determined quantum of pension. Even if assuming there is any error in quantification, such error can be assailed by the petitioners before the appropriate forum and not in the contempt application. 7. He further submits that while dealing with an application for contempt the Court cannot traverse beyond the order and cannot test correctness or otherwise of the order or give any additional direction or delete any direction. The Court exercising contempt jurisdiction is primarily concerned with the question of contumacious conduct of the party who is alleged to have committed default in complying with the directions. If there is any ambiguity and indefiniteness in the order, such a question necessarily has to be agitated before the higher Court. In support of his arguments, Mr. Chatterjee has placed reliance upon the judgment delivered in the case of Noor Saba Vs- Anoop Mishra and Another, reported in (2013)10 SCC 248 . 8. He further submits that during pendency of the contempt application some of the members of the said Association being the petitioners in C.C. No.94 of 2006 arrived at a onetime settlement with the contemnors. 9. For and on behalf of the alleged contemnors, Mr. Chatterjee tenders unqualified apology for any unintentional violation of the order on their part and prays for acceptance of such apology. 10. 9. For and on behalf of the alleged contemnors, Mr. Chatterjee tenders unqualified apology for any unintentional violation of the order on their part and prays for acceptance of such apology. 10. Mr. Ranajit Chowdhury, learned advocate appearing for the petitioner nos. 5 (Nihar Ranjan Das), 8 (Kalyan Roy) and 12 (Swapan Kumar Sengupta) in C.C.No.94 of 2006 and Mr. K. Ghosh, learned advocate appearing for petitioner nos. 1, 2, 3, 6, 7, 9, 10, 13, 15, 17, 20 and 22 in C.C. No.94 of 2006 submit that in the trust deed dated 8th April, 1999 the term ‘service’ has been defined as continuation and unbroken service with the company and that the length of service of the beneficiary shall be the total of various periods of his service with the Company and shall include authorised leave. Pursuant to the said trustee deed, Nihar Ranjan Das, who retired on 6th August, 2002 enjoying a basic salary of Rs.4,520/-, was initially sanctioned pension at the rate of Rs.3,390/-. Subsequently, without any reason and without granting any opportunity of hearing the management of MEL by a letter dated 1st August, 2009 drastically reduced the pension from Rs.3,390/- to Rs.813.60p. Similarly, Kalyan Roy, who retired on 29th May, 2003 enjoying a basic salary of Rs.4,520/-, was sanctioned pension at the rate of Rs.3,390/- and he was paid pension at the same rate till July, 2005. Thereafter, from September, 2005 till December, 2007 no amount was paid towards pension. However, by a letter dated 6th June, 2008, the management of MEL paid pension for the month of May, 2008 at the rate of Rs.3,390/-. Subsequently, without any reason and without granting any opportunity of hearing, the management of MEL by a letter dated 7th July, 2010 drastically reduced the pension from Rs.3,390/- to Rs.1220.40p. Swapan Kumar Sengupta enjoying the basic salary of Rs.5,520/-, was sanctioned pension at the rate of Rs.4,140/- till July, 2005. Surprisingly thereafter disbursement of pension was stopped from the month of August, 2005 till December, 2007. However, the management of MEL by a letter dated 6th June, 2008 again paid pension to him at the rate of Rs.4,140/- for the month of May, 2008. Subsequently, without any reason and without granting any opportunity of hearing, the management of MEL by a letter dated 7th July, 2010 drastically reduced the pension from Rs.4,140/- to Rs.1324.80p. However, the management of MEL by a letter dated 6th June, 2008 again paid pension to him at the rate of Rs.4,140/- for the month of May, 2008. Subsequently, without any reason and without granting any opportunity of hearing, the management of MEL by a letter dated 7th July, 2010 drastically reduced the pension from Rs.4,140/- to Rs.1324.80p. By charts annexed at pages 100, 98 and 101 of their respective affidavits, Nihar Ranjan Das, Kalyan Roy and Swapan Kumar Sengupta have indicated the total dues towards pension payable to them. According to the petitioners the quantum of pension as sanctioned in terms of the trust deed on 8th April, 1999 could not have been reduced after the order passed by the Court and such action is ex-facie contumacious. 11. Mr. Tiwari, learned advocate appearing for the petitioner in C.C. No. 60 of 2008 submits that on 4th March, 1991 the scheme of arrangement was sanctioned and in terms of such sanction all the liabilities were transferred to and vested in MEL and under the said scheme all the employees of the two divisions of WML in service on the date immediately preceding the completion of procedures date became the employees of MEL “without interruption in service and on terms no less favourable to them as those in service”. The pension amount was thus required to be calculated counting the service of the respective employees from the date of entry into service and not from the date of promotion to the management cadre. 12. He further argues that in the said scheme no distinction was made between employees in management cadre and the other employees and in admission of such fact pension was calculated on the basis of the said scheme and disbursements were made. Even after 21st September, 2005, i.e., the date of the order passed by the Division Bench, the petitioners received pension as calculated on the basis of the service rendered by them on and from the date they entered into service and not from the date they were placed in the management cadre. The quantum of such pension as calculated could not have been reduced by the contemnors when the Court categorically directed that MEL to take steps for disbursement of pension as it was their duty to do so. 13. Heard the learned advocates appearing for the respective parties and considered the materials on record. 14. The quantum of such pension as calculated could not have been reduced by the contemnors when the Court categorically directed that MEL to take steps for disbursement of pension as it was their duty to do so. 13. Heard the learned advocates appearing for the respective parties and considered the materials on record. 14. Indisputably, in the scheme sanctioned by the Court it has been categorically indicated that the period of service would be “without interruption in service and on terms no less favourable to them as those in service”. The order dated 21st September, 2005 was challenged by MEL before the Supreme Court and the Special Leave Petition was dismissed on 10th May, 2006. After dismissal of the same, the petitioners through their learned advocate, by a letter dated 3rd March, 2008 claimed the benefits of pension and in reply thereto, a letter was issued on behalf of MEL stating, inter alia, that Startrack International Limited (hereinafter referred to as SIL) took over the management of MEL on 25th November, 2003 by virtue of a tripartite agreement executed by and between SIL, WML and MEL wherein it was agreed that the shortfall towards pension fund and contingent liabilities as indicated in MEL balance-sheet on 31st March, 2003 will be the responsibility of MEL and SIL/new promoter and that a dispute occasioned in connection with the said agreement and the same was referred to the learned Arbitral Tribunal and that as such MEL has not been able to disburse the pension due to pendency of the arbitration proceeding. Thus, the reason towards stoppage of pension was not due to any dispute as regards calculation of pension. 15. In view of dismissal of the Special Leave Petition the order dated 21st September, 2005 passed by the Division Bench has attained finality. Thus, when the claim inter se had been adjudicated and had attained finality, it is not open to the contemnors to go behind the orders and to truncate the effect thereof. In the order dated 21st September, 2005 it has been categorically stated that MEL is liable to pay pension and that it should take necessary steps towards such disbursement. Thus, when the claim inter se had been adjudicated and had attained finality, it is not open to the contemnors to go behind the orders and to truncate the effect thereof. In the order dated 21st September, 2005 it has been categorically stated that MEL is liable to pay pension and that it should take necessary steps towards such disbursement. On the basis of such direction the authorities of MEL did disburse pension in favour of the petitioners counting the service of the employees on and from the date of their entry into service and not from the date of promotion as management staff. The contemnors thus cannot deviate from such stand towards calculation of pension and reduce the quantum by calculating the length of service from the date on which the petitioners were promoted as management staff. Such reduction of pension is clearly violative of the order passed by this Court. In arriving at such finding this Court has neither added any direction to the parent order nor has deleted any direction. The order dated 21st September, 2005 is clear and unambiguous and the contemnors are bound to comply with the same. 16. After full-fledged argument, as a mere formality, apology has been tendered on behalf of the contemnors which is neither unquestionable in sincerity nor is it tempered with any sense of genuine remorse and repentance, as such the same is not acceptable. 17. The Contempt of Courts Act has been introduced on the statute-book for securing confidence of people in the administration of justice. If an order passed by a competent Court is clear and unambiguous and not capable of more than one interpretation, disobedience or breach of such order would amount to contempt of Court. There can be no laxity in such a situation because otherwise the Court orders would become the subject of mockery. Misunderstanding or one’s own understanding of the Court’s order would not be a permissible defence. For proper administration of justice and to ensure due compliance with the orders passed by a Court, if it is required to take a strict view, it should not hesitate in wielding the potent weapon of contempt. 18. The present contempt applications perhaps are the last stage of a legal battle of the petitioners’ quest for the benefits of pension. For proper administration of justice and to ensure due compliance with the orders passed by a Court, if it is required to take a strict view, it should not hesitate in wielding the potent weapon of contempt. 18. The present contempt applications perhaps are the last stage of a legal battle of the petitioners’ quest for the benefits of pension. In civil contempt it is not only for taking the contemnor to task appropriately but also to see that order passed by the Court is implemented. The matter involves an issue of disbursement of pension and pensionary benefits are not in the nature of a bounty. 19. Applying the proposition of law to the facts of the case, we are satisfied that there has been a wilful and deliberate violation of this Court’s order and accordingly, we direct the contemnors to disburse the pension amount in favour of the petitioners strictly in terms of the scheme approved by the Court and upon counting the service of the petitioners on and from their respective dates of entry into service and to disburse such pension month by month on and from the month of September, 2017. The contemnors, namely, Pradip Churiwal, Anita Churiwal, Gourab Churiwal and Bijay Sharma are further directed to disburse all the arrears upon such calculation of pension to the respective petitioners within a period of 4 weeks from today. In the event the contemnors fail to disburse the said amount to the petitioners they shall be detained in civil prison for a period of a month. 20. With the above observations and directions the contempt applications and other connected applications are disposed of. There shall, however, be no order as to costs. Urgent Photostat certified copy of this judgment, if applied for, be given to the parties, as expeditiously as possible, upon compliance with the necessary formalities in this regard.