minal Appeal No 129 of 1970
Appeal by Special leave from the Judgment and order dated the 24th July 1969 of the Calcutta High Court in Criminal Misc
Case No 179 of 1969
D Mukherjee and DN
Mukherjee for the appellant
SB Wad for the respondent
The Judgment of the Court was delivered by DWIVEDI J
Seemingly it is a small case
It has not hit the headlines in the news media
Nor it has gripped the public mind
The pecuniary stake is trivial
A tiny sum of Rs 200 is payable as costs by the appellant
However this case brings in to the flash point an issue of great consequence to liberty of contract Where to draw the dividing line between the area of contempt of court and the are of opration of contractual rights
The appellant is the Chairman of the Hindustan Steel Limited hereinafter referred to as the Company
The respondent was employed in the Company on a contract of service
The contract provided for termination of his service by giving three months  notice or three months  pay in lieu thereof and without assigning any cause
On February 21 1968 the Company gave him this notice  It is found that your performance and conduct in this plant have not been good and that you have not proved useful for the Company
You are hereby advised to note this position and also to try for alternative employment elsewhere
You may be released from this company at your request on payment of the amount required under the bond executed by you on pro rota basis as a very special case taking into account the period of service that may be rendered by you at the time of release
in other words if you choose to leave the service of the company before expiry of bond period you will be required to pay the company a sum not exceeding Rs 20000 reduced by the amount calculated on pro rota basis in respect of the service you may render after completion of your training
 Soon thereafter he rushed to the Court
On May 27 1968 he instituted a suit in the Court of the Second Munsif Asansol
The material reliefs claimed in the plaint are 1 a declaration that the notice dated February 21 1968 is illegal bad mala fide without jurisdiction void and inoperative and is not binding on the plaintiff 2 a declaration that the charge sheet dated July 1 1966 confidential character report dated April 27 1967 are ultra vires unenforceable illegal unsustainable mala fide and opposed to rules and natural justice and are not binding on the plaintiff 3 a declaration that the plaintiff is entitled to promotion to the next higher grade namely foreman from October 10 1966 652 4 a mandatory injunction directing the defendant to promote the plaintiff to the grade of foreman and 5 a permanent injunction restraining the defendant from giving effect to the notice dated February 21 1968
He did not ask the Munsif to grant an interim injunction restraining the appellant and the Company from terminating his service during pendency of his suit
So no such interim injunction was operating at the relevant time
Nor did the appellant and the Company give an undertaking to refrain from terminating his service during pendency of the suit
Forgetting the suit for a moment there was no impediment in their way of terminating his service according to the contract
And on February 26 1968 the Company gave him this notice The services of the  respondent are hereby terminated with effect from the date of service of this order on him and payment of three months  pay in lieu of notice in terms of clause vi of his appointment letter dated January 29 1962
 The Calcutta High Court RN Dutt and B Banerji JJ has held that the act of giving this notice amounts to contempt of court
The learned Judges said It seems that he plaintiff was more or less non suited
There is no doubt that since his services have been terminated some of the reliefs which were prayed for in the suit could become infructuous
On these considerations we think that the action of the Chairman in terminating the services of the plaintiff  does amount to obstruction or interference with due course of justice in the petitioner s suit before the Munsif  and so it amounts to contempt of the said court
 When asked counsel for the respondent could not cite any decision holding a Muslim husband s act of divorcing his wife during pendency of her suit for future maintenance as contempt of court
The divorce completely aborts her suit
It is true that the law of contempt of court is essential for keeping the administration of justice pure and undefiled
It is also well to remember that our society is also interested in the fulfillment of a man s expectations under a contract
To that end we have a law of contract in our country
Assigning an unlimited and undefined area to either of them would unduly curtail the area of the other
Each should have a viable area so that  justice may hold high her head and contract is not cribbed and cramped
But what is the yardstick to measure their area of operation
It has been held that initiation in good faith  of a departmental  enquiry under the Customs Act by the Custom authorities on the basis of facts which are the subject of a criminal prosecution under that Act against the appellant would not amount to contempt as the authorities  are acting bona fide and discharging their statutory duties  Ruka Ram G Geokar vs R N Shukla1 see also Jang Bahadur Singh vs Baij Nath Tewari2 In another case it was held that the issue of a notification under the Abolition of Jagirs Act for resumption of Jagirs during pendency of a jagirdar s writ petition for restraining such resumption is not contempt because the Government was acting bona fide in the exercise of its statutory rights
See 1  2  653 Malojirao Shitole vs C G Matkar1 These cases establish that bona fide exercise of a statutory right by a party to a proceeding is not contempt in the absence of an interim injunction against or undertaking by that party
There appears to be so sound  reason why this principle should not extend to the exercise of rights under a contract
The rights of a party under a contract are his legal rights
In our view bonafide or honest exercise of a right under a contract should be the yardstick for allocating their respective area to contempt and it gives to each its proper sphere
So where a party to a suit as here
terminates the service of the adversary party in the honest exercise of his rights under the contract of service and in the absence of any interim injunction or undertaking his act would not constitute contempt of court
We are satisfied from a combined reading of the two notices relating to termination of service that the appellant had terminated the service of the respondent in the honest exercise of the right vested in the Company by the contract of service
So he has not committed contempt of the Munsif s Court
The order terminating his service does not threaten the respondent to withdraw the whole or part of his suit
The mere circumstance that one or more of the reliefs claimed in the plaint have become infructuous on account of the termination order would not establish contumacy
The respondent is free to amend his plaint and ask for a relief against the termination order
Counsel for the respondent has relied on Pratap Singh V Gurbakah Singh4 and Gobind Sahai vs State of UP5 These cases are clearly distinguishable on facts
In the first case a Government employee had instituted a suit as well as a writ petition against the Government in respect of his service conditions
Thereupon the appropriate authority started a departmental proceeding against the employee
The charge sheet stated that he had gone to a court of law before exhausting all his departmental remedies and that his action was contrary to official propriety and subversive of good discipline
This charge was framed on the strength of a circular letter issued by the Chief Secretary of the Government on June 25 1953
It emphasised that any attempt by a Government servant to seek a decision on such issues in a court of law without first exhausting the normal official channels of redress could only be regarded as contrary to official propriety and subversive of good discipline and could well justify the initiation of disciplinary action against him
This Court held that the authorities have committed contempt of court
In the second case while the respondent s suit challenging the election of his opponent to a committee of a political party was pending the appellant letters expelling him from the party on the strength of an earlier resolution of the party which barred reference of such disputes to a law court and provided for summary removal of any member who initiated a suit
This Court held that the action of expulsion amounted to contempt of court
It should be observed that in both cases the complainant had a right to institute a legal proceeding in a law court for redress of his grievance
This legal right 1 AIR 1953 MB 245
2 1962 Supp 2 SCR 838
3 1969 1 SCR
654 could be taken away only by a valid law
But there was no such law in operation
So neither the officers of the Government nor the political party had a legal right to take any action for punishing the suitor for his mere act of instituting a legal proceeding in a law court
In our case the appellant had a right under the contract to terminate the service of the respondent
Counsel for the respondent has submitted that as the appellant had tendered an unconditional apology
in the High Court we should not interfere with the High Court s order
We are unable to appreciate the submission
Apology goes to sentence and may be accepted only upon a finding that contempt has been committed
The High Court has in fact held that the appellant has committed contempt
But it has accepted his apology and refrained from awarding any punishment
Moreover the appellant has been directed to pay Rs 200as costs to the respondent
So the appellant is entitled to have the order of the High Court set aside
We allow the appeal and set aside the order of the High Court
VPS Appeal allowed
A02SCI74 2500 28 5 75 GIPP


Summary:
The respondent was employed in a company
The contract of service Provided for the termination of service by giving three months notice or three months pay in lieu thereof without assigning any cause
The company gave him a notice that it was found that his performance and conduct have not been good and that he had not proved useful to the company
He was therefore advised to try for alternative employment
He was informed that he would be released from the company at his request on payment by him of the amount under a bond executed by him with some concession
The respondent thereupon filed a suit claiming various reliefs
He did not ask for an interim injunction restraining the appellant and the company from terminating his service during the pendency of the suit nor did the appellant and the company give any such undertaking
The company gave the respondent notice terminating his service with effect from the date of the service of the notice and granted him three months  pay
The High Court hold that the act of giving the second notice amounted to con
tempt of court because as a result of the termination some of the reliefs Prayed for would become infructuous and that would amount to obstruction or interference with due course of justice
Allowing the appeal to this Court HELD Where a party to a suit terminates the service of the adversary party in the honest exercise of his rights under the contract of service and in the absence of any interim injunction or undertaking the act would not constitute contempt of court
653 B C a A combined reading of the two notices shows that the appellant had terminated the service in the honest exercise of the right vested in the company by the contract of service
The order did not threaten the respondent to withdraw the whole or part of the suit
653 C bThe circumstance that one or more of the reliefs claimed in the plaint had become infructuous on account of the termination would not establish contumacy because the respondent was free amend his plaint and ask for an appropriate relief
653 D c The fact that the appellant had tendered an unconditional apology in the High Court is not a ground for this Court refusing to interfere because i the High Court had in fact held that appellant has committed contempt though it did not award punishment because of the apology andiithe High Court had directed the appellant to pay cost to the respondent
654 B Taka Qim Goakar vs R V Shakla   fang Bahadur Singh vs Baij Nath rewari Cand Malojirao Shitole vs C G Matkar AIR 1953 M B 245 referred to
Pratap ginirh vs Gurbaksh Sinqh 1962 Supp
2 SCR 838 and Govind Sahl vs State of U P 1969 1 SCR 176 distinguished