IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL Civil Contempt Application No. 80 of 2008 M/S Colts Cement (P) Ltd. and another ..……… Applicants Versus Ms. Archana Agrwal, Managing Director ……… Respondent Mr. L.P. Naithani, Senior Advocate assisted by Mr. P.S. Bohara, Advocate for the applicants. Mr. Naresh Pant, Advocate assisted by Ms. Menka Tripathi, Advocate for the respondent. Hon’ble Tarun Agarwala, J. Heard Shri L.P. Naithani, the learned senior counsel duly assisted by Shri P.S. Bohara, the learned counsel for the applicants and Shri Naresh Pant, the learned counsel duly assisted by Ms. Menka Tripathi, the learned counsel for the respondent. The present contempt application has been filed for willful disobedience of the order of the writ court dated 16th May, 2006 passed in Writ Petition No. 898 of 2003 (M/B). The facts, leading to the filing of the present contempt application is essential for the disposal of the present contempt application. It transpires that the applicants obtained a loan of Rs. 71 lacs from Pardeshiya Industrial and Investment Corporation of U.P. (hereinafter referred to as ‘PICUP’) in the year 1989 for setting up a factory for the manufacture of cement. The loan was required to be repaid in various installments. It also appears that the applicants had also taken a loan from UPFC. Since the applicants did not adhere to the repayment schedule, recovery notices/ recovery certificates were issued by the two financial institutions. From the record, it transpires that various writ petitions, namely, writ Petition Nos. 30142 of 1995, 13215 of 1998, 14475 of 1998, 53051 of 1999, 22509 of 1998 and 35822 of 1993 were filed before the Allahabad High Court challenging the action of the financial institutions in issuing the recovery certificates/ recovery notices. Various interim orders were passed staying the recovery 2 proceedings subject to certain conditions. Eventually, all these writ petitions were either dismissed or disposed of by various directions. Writ petition No. 14475 of 1998 was disposed of by the Allahabad High Court by an order dated 23rd April, 1998 directing the applicants to pay a sum of Rs. 15 lacs and also file a representation which was required to be disposed of accordingly by the respondents. It is alleged that inspite of depositing a sum of Rs. 15 lacs, the application for grant of one time settlement/ OTS was not disposed of and, accordingly, contempt application No. 102 of 2000 was filed and, based on the contempt proceedings, the respondents agreed to issue a one time settlement by its order dated 02/11/2000. This fact is, however, disputed by the respondents who states that the one time settlement was issued pursuant to the request made by the applicant by its letter dated 13th August, 2000. However, the one time settlement indicates payment of Rs. 75.25 lacs in a time bound schedule. It also indicates that for the first six months interest would not be payable and thereafter interest on the installments would be paid @ 16% p.a. Further, the applicants were required to pay ARO dues as per the settlement. Since the amount was not paid as per the settlement, recovery proceedings was again initiated. It is alleged that at some stage, the applicants paid a sum of Rs. 75.25 lacs in full and final settlement as per the one time settlement arrived at between the parties. However, the respondents issued a notice dated 11th July, 2003 demanding an additional payment of Rs. 32.02 lacs to be paid on or before the 31st July, 2003. This led to the filing of the writ petition No. 898 of 2003 which was disposed of by an order dated 16/05/2006 with the following directions:- 3 “On due consideration, it is directed that on the petitioners making a representation in regard to their surviving grievances to the Managing Director of the Pradeshiya Industrial and Investment Corporation of U.P. Ltd. (PICUP), the same shall be considered and decided by the Managing Director by passing a speaking order after providing an opportunity of hearing to the petitioners within a period of two months from the date of submission of the representation.” Pursuant to the directions of the Court dated 16/05/2006, the applicants submitted a representation dated 25th May, 2006 contending that no interest should be charged by the respondents since the delay in making the payment by the applicants was on account of the fact that permission to sell the land was not granted by the respondents and that a sum of Rs. 15 lacs deposited by the applicants pursuant to the order dated 23rd April, 1998 passed by the High Court in Writ Petition No. 14475 of 1998 was also not adjusted. Since the representation of the applicants was not decided as per the order dated 16/05/2006, the present contempt application was filed against the opposite parties u/S 12 of the Contempt of Courts Act. The opposite party has filed her reply contending that there has been no willful disobedience of the order of the writ court and that pursuant to the direction of the Court dated 16/05/2006, the representation of the applicants was decided by an order dated 13/06/2006. Consequently, the order of the writ court was duly complied with and that no contempt of the order of the writ court has been made out against them. The opposite party further contended on the merit of the case that the contention of the applicants that they had paid the entire amount as per the one time 4 settlement was patently erroneous and that the applicants had not complied with the terms and conditions set out in the said settlement and, consequently, the applicants was liable to pay interest, etc. Shri L.P. Naithani, the learned senior counsel submitted that the order of the writ court dated 16/05/2006 contemplated that the representation was required to be decided by the Managing Director of PICUP and that the representation was to be decided by a speaking order after providing an opportunity of hearing to the applicants. The learned counsel further submitted that the order dated 13/06/2006 which is alleged to have been passed by the opposite party in compliance of the order of the writ court has been passed by the Senior Manager (Technical) and has not been passed by the Managing Director. Further, no opportunity of hearing was provided to the applicants before passing such an order. Consequently, the opposite party has not complied with the order of the court either in letter or in spirit and has willfully disobeyed the clear direction of the writ court. Having heard the learned counsel for the parties at some length, the Court finds that the present contempt application is nothing but an abuse of the process of the court and a deliberate attempt has been made by the applicants to file the present contempt application in order to thwart the recovery proceedings initiated against the applicants. No doubt, the order was required to be passed by the Managing Director. No doubt, an opportunity of hearing was required to be provided which has not been done but by not doing so, it cannot be said that the opposite party has willfully disobeyed the order of the writ court. The idea behind the passing of the order of the writ court was that the grievance of the applicants should be addressed and decided by the authority 5 concerned. The same has been decided by the Senior Manager (Technical). There is nothing on record to suggest that the Senior Manager (Technical) was not competent to decide the representation of the applicants. The reason why this Court finds that the present contempt application is an abuse of the process of the court can be seen from the fact that the order of the court is dated 16th May, 2006. The order deciding the representation was passed on 13th June, 2006 and the contempt application was presented before the Court on 4th June, 2008. The period of limitation is 12 months from the date of the cause of action as contemplated u/S 20 of the Contempt of Courts Act. The applicants are silent with regard to the order dated 13th June, 2006 passed by the opposite party. Nothing has been stated in the rejoinder affidavit that the said order was never made known to them and that they came to know for the first time when the counter affidavit was filed in the present proceedings. Contempt proceedings could be initiated against a party who willfully disobeys the order of the writ court. The contempt proceedings cannot be used as a tool to stop recovery proceedings. In the present case, the Court finds that when recovery proceedings was nearing and the noose was getting tighter around the applicants’ neck, a devise to initiate contempt proceedings was intiated by the applicants alleging willful disobedience of the order of the writ court dated 16/05/2006 which was filed admittedly much after the period prescribed u/S 20 of the Contempt of Courts Act. There is another aspect which is required to be considered. The opposite party in paragraph 4 of the reply has alleged that she had taken charge as the Managing Director of PICUP on 11th December, 2007 which has not been 6 denied by the applicants in its rejoinder affidavit. The fact that a decision was taken by PICUP on 13th June, 2006 whether rightly or wrongly, the correctness or incorrectness of which cannot be fastened on opposite party who took charge on 11th December, 2007. In view of the aforesaid, the Court does not find any willful disobedience being committed by the opposite party. Notices are discharged and the contempt application is dismissed. (Tarun Agarwala, J.) Dated 28.08.2010 Shiv