Maruti Udyog Limited vs Mahinder C. Mehta And Others

Petitioner herein is manufacturer of cars. Alleged contemnors were Directors of a Company known as M/s. Mahalaxmi Motors Limited (Company). The Company obtained various advances from the customers on behalf of the petitioner. It, however, did not pay the amount to petitioner herein. Respondents admitted their liability of the petitioner to the extent of Rs. 7.63 crores in respect of supply of vehicles made by it, as would appear from the minutes of the meeting dated 5.04.1997 which is as under:

4. On the basis of the said representations, this Court by an order dated 6.09.2002 referred the subject matter of the dispute to the arbitration of Justice A.M. Ahmadi, a former Chief Justice of this Court.

6. An interlocutory application was filed by the respondents before this Court being IA No. 2 of 2003. But, the same was withdrawn on 6.05.2003. An application was thereafter filed by them before the learned Arbitrator for modification of the said order dated 25.03.2003 by offering to furnish property security purported to have been situate at Secunderabad in the State of Andhra Pradesh instead of bank guarantee. Curiously enough, it was not disclosed that the said property was encumbered in more than one way and, as would appear from the discussions made hereinafter, the property was being claimed by the State of Andhra Pradesh as having vested in it. However, on or about 28.06.2003, it was disclosed that the property was encumbered. The learned Arbitrator rejected the application for modification by an order dated 2.08.2003 but extended time for furnishing bank guarantee upto 27.08.2003. In the meantime, the petitioner filed a contempt petition before this Court on 26.07.2003.

An award was made on 10.04.2005 as against the Company for a sum of Rs. 7.63 crores with interest at the rate of 8% in favour of the petitioner along with costs and expenses.

10. It may be informed to this Honble Court that on detailed enquiry by the revenue officials it is learnt that one Sri R. Praveen Kumar, S/0 R. Vijay Kumar, claiming to be GPA holder (Un-registered) of M/s Mahalakshmi Motors Ltd. is reportedly running Mahalaxmi Motors workshop on the suit schedule land but on ground a company under the name and style of M/s Hyundai Lakshmi is being run, involving business of buying, selling and servicing of vehicles. Further, there are two prominent display boards at the entrance showing as Hyundai Lakshmi. The copy of the GPA furnished by Sri Praveen Kumar, is not registered and has no legal authenticity. This office has reason to believe that a third party is in illegal possession of the land and the relationship between M/s Mahalaxmi Motors and present occupant is not known. In this regard, necessary action is being initiated separately It was, therefore, opined:

23. We, therefore, are of the opinion that the alleged contemnors have misled this Court and have committed gross contempt of this Court.

Normally, it cannot be used for execution of the decree or implementation of an order for which alternative remedy in law is provided for.

28. We, therefore, keeping in view the peculiar facts and circumstances of this case and the conduct of the alleged contemnors, are of the opinion that they have committed contempt of this Court. We are clearly of the opinion that it is eminently a fit case where jurisdiction of this Court under Article 129 of the Constitution of India as also the provisions of the Contempt of Courts Act, 1970 should be invoked.

29. However, the fact that the alleged contemnor No. 3 has resigned, being not in dispute, no action is being taken against him. So far as, the alleged contemnor No. 1 is concerned, we are of the opinion that he being the Managing Director of the Company, is liable to be punished. He is sentenced to undergo six months imprisonment. The alleged contemnor No. 2 is also held guilty but as he was not the Managing Director, we are of the view that sentencing him three months imprisonment shall meet the ends of justice.

30. The contempt petition is allowed with the aforementioned directions.