1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION CONTEMPT PETITION NO. 59 OF 2006 IN SUIT NO.3686 OF 1999 M/s.Mahesh Associates & Anr. ...Petitioners Vs. Mrs. Rakhi Asandas Teckwani & Ors. ...Respondents ----- Mr.S.J. Khera and Mr.A.S. Khandeparkar and T.K. Cooper i/b. Mr. S.J. Khera for Petitioners Ms.Gauri Godse i/b. Ms.Purnima Bhatia, Mr.G.S. Bhatt for Respondent No.19(a) Mr.Vishin N. Punjabi for Respondent Nos.39(a) Mr. S.P. Pandey for Respondent Nos.9,18,41,42, 43 and 48. Mr.Shailesh Shah with Ms. Mamta Sadh i/b. Ms.Smita Gaidhani for Respondent Nos.39, 39A, 40A, 44,44A & 47. Ms.Kavita Lalwani for Respondent Nos.45, 46. Ms. Asha Bhambawani for Respondent Nos.23, 26 and 29. ----- CORAM: V.M. KANADE J. DATED: 23RD SEPTEMBER, 2009 P.C. 1. This matter was mentioned in the morning and Mr.Khandeparkar, the learned Counsel appearing on behalf of the Petitioners sought time. The learned Counsel appearing on behalf of the Respondents opposed the request made by the learned Counsel for the Petitioners, on the ground that the matter was adjourned on number of occasions at the instance of the Petitioners. Request for adjournment was, therefore, declined and the matter was kept at 3 2 O clock. At 3 O clock, when the matter was called out, Mr.Cooper, another learned Counsel sought time. However, request for adjournment is declined. 2. I have heard Mr.Khera, the advocate on record, who has filed the Contempt Petition on behalf of the Petitioners at length and the learned Counsel appearing on behalf of the Respondents and Ms. Gauri Godse, Mr.Shailesh Shah, learned Counsel appearing on behalf of some other Respondents. 3. Brief facts are as under: The Plaintiffs filed the suit for a declaration that the agreement for sale in respect of the flats in the proposed building is valid, subsisting and enforceable and the Plaintiffs are entitled for the specific performance against the Defendant Nos.1 to 7. In the said suit, a Notice of Motion was filed by the Plaintiffs for interim reliefs. However, interim relief was not granted and, therefore, an appeal was filed. The said appeal was allowed by a judgment and order dated 19th July, 1994. In the said appeal, Court Receiver was appointed and he was directed to get the building constructed and secure completion certificate and occupancy certificate from the Municipal Corporation, after the requisite amount was deposited by the Plaintiffs with the Court Receiver. The Court Receiver was also directed to recover all the documents in respect of the said construction including all the 3 agreements which Respondent Nos.5 to 7 had allegedly entered into for sale of the flats. Further direction was given that after the construction was completed and the occupancy certificate was granted by the Corporation, the Court Receiver should induct the Appellants in the flats as the agents of the Court Receiver but without demanding any security or royalty. It is alleged that in gross violation of the said order, the Respondents have created third party rights before occupation certificate was granted by the Corporation. Show cause notice was issued by this Court by order dated 6th March, 2007. 4. Mr.Khera, the learned Counsel appearing on behalf of the Petitioners vehemently urged that after the contempt petition was filed, the Respondents had filed review petition and in the said review petition, it was specifically admitted that the Plaintiffs had taken possession of the suit flats without obtaining permission of the Court Receiver. He submitted that the contention of the Respondents in the affidavit in reply that the contempt petition was barred by law of limitation as laid down under section 20 of the Contempt of Courts Act was incorrect since the Plaintiffs had learnt about the alleged contempt in the Court Receiver's report dated 8.4.2006 and, thereafter, within one year from the said knowledge of the report, contempt petition has been filed. 4 5. On the other hand, Ms. Gauri Godse, the learned counsel appearing on behalf of the Respondents submitted that in in paragraph 6 of the contempt petition, a specific averment was made that the Court Receiver's report dated 18.6.2005 was listed for hearing before the Hon'ble Court on 8.7.2005 and that the details were also furnished in the said report dated 18.6.2005 of the third party rights which were created by the plaintiffs. It was, therefore, submitted that the present petition which was filed on 10.7.2007 was filed after two years and, therefore, there was a gross delay in filing the petition and on that ground alone the petition is liable to be dismissed. She also pointed out from the said report that the Court Receiver had recorded that the Defendant Nos.1 to 7 were present at the time of Court Receiver's meeting and that the copy of the report was served on the Petitioners herein and that they were aware of the facts which are mentioned in the report dated 18.6.2005. 6. The learned Counsel appearing on behalf of the Petitioners submitted that third party rights have also been created by entering into leave and licence agreements even during the pendency of the contempt petition. He submitted that the Respondents have committed gross and willful contempt by committing breach of the order passed by a Division Bench of this 5 Court. He submitted that even the parties who had entered into agreement were very well aware of the pendency of the proceedings in this Court and yet they had entered into the leave and licence agreement and, therefore, they are not bonafide purchasers. He invited my attention to the Court Receiver's report dated 8.4.2006 and other reports of the Court Commissioner, clearly indicating that third party rights have been created in clear breach of the order passed by the Division Bench, which had directed the Court Receiver to hand over the possession of the premises only after the occupation certificate was obtained. 7. On the other hand, the learned Counsel appearing on behalf of the Respondents pointed out that the appeal which was filed by the Plaintiffs was allowed by the Division Bench since the Division Bench had specifically recorded that the Defendant No.1 had assigned rights in favour of the Respondent Nos.5 to 7 and had abandoned the construction work after receiving 80% amount from the flat purchasers. She submitted that in order to protect the rights of the flat purchasers, the Court Receiver was appointed. She submitted that the Plaintiffs had to get the building constructed through the Court Receiver after spending money from their own pocket because the Petitioners had abandoned the work. She, therefore, submitted that the 6 Respondents had not committed willful contempt as alleged by the Petitioners. She submitted that thereafter a review petition was filed before the learned Single Judge in which various orders were passed by the learned Single Judge in order to ensure that the occupancy certificate was obtained by the Court Receiver in favour of the Plaintiffs. She submitted that now all the formalities had been completed and the occupancy certificate was likely to be received by the Court Receiver at any time. She submitted that therefore, the contempt petition may be dismissed. 8. Shri Shailesh Shah, the learned Counsel appearing on behalf of some of the Respondents submitted that the Petitioners had no locus to file the contempt petition and there was a gross delay in filing the contempt petition. He submitted that present situation has arisen only because of the conduct of the Petitioners herein who had abandoned the work after receiving 80% monies from the flat purchasers. He submitted that no willfull contempt was committed by the Respondents and that there was several mitigating circumstances, as a result of which possession was taken by the Respondents before the occupancy certificate could be obtained. He submitted that initially flat purchasers had obtained loan which could not be repaid and, therefore, the flats were sold. He submitted that in some cases 7 leave and licence agreements were executed since the flat purchasers could not repay the loan amount. He submitted that flat purchasers will have to pay the huge amount towards BMC Taxes to the tune of Rs. 36,00,000/- He relied on one judgment of the Apex Court reported in AIR 2002 Supreme Court page 459. 9. Shri Khera, the learned counsel appearing on behalf of the Petitioners, on the other hand, relied on the judgment of a learned Single Judge of this Court reported in 2002 Vol. 104(3) Bom. L.R.441 and the judgment of a Full Bench of the Madras High Court in the case of Vidya Charan Shukla v. Tamil Nadu Olympic Association and another reported in AIR 1991 Madras 323. 10. After having heard the learned Counsel appearing on behalf of the Petitioners and the Respondents at length, I am of the view that there is a gross delay in filing the contempt petition. The Petitioners in their petition have clearly stated that they came to know about the Court Receiver's report dated 8.6.2005 to be placed for hearing on 8.7.2005. The report clearly indicates that when the said order was passed by the Court Receiver, the Defendant nos.1 to 7 were present in person before the Court Receiver. It is an admitted position that the present petition has been filed in July, 2007 i.e. almost after three years. Section 20 of the Contempt of Courts Act lays down that the 8 contempt petition has to be filed within a period of one year from the date of knowledge. Section 20 reads as under: 20.Limitation for actions for contempt- No Court shall initiate any proceedings for contempt, either on its own motion or otherwise, after the expiry of a period of one year from the date on which the contempt is alleged to have been committed . 11. Apparently, this fact was not brought on the notice by the learned Counsel for the Petitioners when the show cause notice was issued. Therefore, the contempt petition filed by the Petitioners is liable to be dismissed on this count alone. 12. Even otherwise, on merits, the Petitioners had already assigned their rights in respect of the suit property to Defendant Nos.5 to 7 which has been recorded by the Appellate Court. The Appellate Court, in fact, had in its order allowed the appeal which was filed by the Plaintiffs against rejection of the Notice of Motion by the learned Single Judge of this Court and had appointed the Court Receiver in order to protect the interest of the flat purchasers, who were left in the lurch by the petitioners herein after accepting 80% of the amount from them. The Petitioners, however, now have chosen to file this 9 contempt petition alleging breach of the order of the Appellate Court. It is a well settled position in law that the Court has to be cautious in holding the contemnor guilty and has to see whether there is any willful disobedience of the order passed by the Court. The sequence of events clearly indicates that the Petitioners herein were partly responsible for the situation and occupancy certificate could not be granted since the Petitioners had not fulfilled their statutory obligations of keeping five flats vacant which were to be given to the Government. This fact has been noticed by the Court Receiver in his report and therefore, subsequently in review petition several orders have been passed by the learned Single Judge in order to enable the Court Receiver to obtain the occupancy certificate for the benefit of the flat purchasers. Taking into consideration the affidavit in reply filed by the Respondents herein, in my view, there is no willful disobedience of the orders passed by this Court. The Appellate Court in its order had clearly stated that the occupants should be appointed as agents of the Court Receiver without any royalty and security deposit. Since the Court Receiver is appointed, subsequent transactions in any case would be subject to the result of the suit. In any event, since the Defendant No.1 has assigned his rights to Defendant Nos.5 to 7 as referred to in the order of the Appellate 10 Court and since they have not made any grievance, in my view, the Petitioners appear to have filed this contempt petition only with a view to harass the Respondents herein. The Apex Court in the case of Suresh Chandra Poddar, Appellant v. Dhani Ram and others, Respondents reported in AIR 2002 Supreme Court 439, has observed in paragraphs 9 and 10 as under:- 9. Section 12 of the Contempt of Courts Act, 1971 has indicated a caution that while dealing with the powers of contempt, the Court should be generous in discharging the contemner if he tenders an apology to the satisfaction of the Court. In the present case the apology tendered was found to be not genuine by the Tribunal. We are dismayed, if not distressed, that despite delineating on all the steps adopted by the appellant for challenging the order of the Tribunal before the High Court and despite the fact that the appellant had implemented the order even though there was no time schedule to do so, the Tribunal has chosen to depict the apology tendered by the appellant as one without contrition. 10. Section 13 of the Contempt of Courts 11 Act says that notwithstanding anything contained in any law for the time being in force, no Court shall impose a sentence unless it is satisfied that the contempt is of such a nature that it substantially interferes, or tends substantially to interfere with the due course of justice. 13. It is also well settled position in law that the Court before punishing a person has to see whether there is a willful disobedience and only after it comes to the conclusion that there is willful disobedience, the Court may punish a person for committing the contempt. In the present case, taking into consideration the peculiar facts and circumstances of the case and the reply filed by the Respondents, in my view, it cannot be said that the Respondents are guilty of having committed contempt of Court, particularly when the Appellate Court had passed the said order in order to protect the right of the flat purchasers on account of non- performance of the statutory obligation of the Defendant No.1 i.e. Original Petitioner No.1, in my view, therefore, the show cause notice issued to the Respondents will have to be discharged for the aforesaid reasons. Contempt Petition is, accordingly, dismissed. (V.M. KANADE J.)