ECL FINANCE LTD.  versus HARIKISHAN SHANKARJI GUDIPATI & ORS.
[2017] 11 S.C.R. 1036, Supreme Court of India, 2017
Outcome: Disposed off
Segment: Ratio
A 
[2017] 11S.C.R.1036 
ECL FINANCE LTD. 
v. 
HARIKISHAN SHANKARJI GUDIPATI & ORS. 
(Civi!Appea!No.18834of2017) 
B 
NOVEMBER 16, 2017 
[KURIAN JOSEPH AND R. BANUMATHI, JJ.J 
Contempt of Courts Act, 1971 - s.19 - Appellant filed a 
contempt petition alleging that the respondents had not honoured 
the consent decree - Single Judge of High Court admitted the 
C 
contempt petition and issued notice to the respondents - Intra-Court 
appeal u/s. 19 of the Act filed by the respondents, which was 
admitted by the Division Bench of High Court - Propriety of- Held: 
Observations made by the Single Judge, while issuing notice in the 
contempt petition, is only for the prima facie satisfaction as to 
D 
whether the contempt petition needs to be considered on merits -
Only after such a preliminary stage, notice can be issued - Now, it 
is open to the respondents to file their reply and after considering 
the defence, the Single Judge to take a call as to whether it is a 
case to be proceeded against for punishing the respondents - In 
case such a decision is taken by the High Court, it is, at that stage, 
E 
that the respondents get a right to file an appeal before the 
Division Bench in terms of s.19( I)( a) of the Act - Such a stage 
having not arisen, the impugned order passed by the Division Bench 
set aside. 
F 
G 
H 
Midnapore Peoples' Coop. Bank Ltd. and Others v. 
Chunilal Nanda and Others (2006) S SCC 399 : 
(2006] 2 Suppl. SCR 986 - relied on. 
R.N. Dey and Others v. Bhagyabati
Pramanik and 
Others (2000) 4 SCC 400 : [2000] 3 SCR 172 ; 
Tamilnad Mercantile Bank Shareholders Welfare 
Association (2) v. S.C. Sekar and Others (2009) 2 SCC 
784 : [2008] 17 SCR 8S - referred to. 
Case Law Reference 
[2000] 3 SCR 172 
referred to 
[2008] 17 SCR 8S · 
referred to 
[2006] 2 Suppl. SCR 986 
relied on 
1036 
Paras 
Paras 
Para6
ECL FINANCE LTD. v. HARIKISHAN SHANKARJI GUDIPATI. 103} 
& ORS. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 18834 
A 
of2017. 
From the Judgment and Order dated 14.02.2017 of the High Court 
of Bombay in Appeal (LDG.) No. 2/17. · 
Ms. lndu Malhotra, Sr. Adv, Prashant Singh, Tanvir Nayar, Vikas 
13 
Mehta, Ad vs for the Appellant. 
Ankur Mirta!, Adv for the Respondents. 
The Judgment of the Court was delivered by 
c 
KURIAN, J. 1. Leave granted. 
2. The appellant is before this Court aggrieved by an order dated 
141h February, 2017 passed by the Division Bench of the High Court of 
Bombay in Appeal (LDG.) No.2 of 2017. The said appeal was filed 
against the order dated 22..i December, 2016 in Contempt Petition No. 
D 
17of2016inSuitNo.802of2014. 
· 
3. The appellant filed a Contempt Petition alleging that the 
respondents herein had not honoured the consent decree drawn on 141h 
August, 2015, and hence they are liable to be punished for contempt. It 
appears that the appellant had also initiated execution proceedings, since 
E 
in the decree, it is stated that in case the terms of the consent are violated, 
the suit would stand decreed in terms of the prayer made in the plaint. 
Be that as it may, we find from the order dated 22"d December, 2016 of 
the learned Single Judge that the learned Single Judge has admitted the 
contempt petition and has issued notice to the respondents. It is, at that 
F 
stage that the respondents filed an intra-Court appeal under Section 19
of the Contempt of Courts Act, 1971 (hereinafter referred to as "the 
Act"). The Court admitted the appeal, despite the objections regarding 
the maintainability, leaving the question of the maintainability of the appeal 
to be considered al the time of final hearing. 
4. It appears from the impugned order passed by the Division 
Bench that, during the pendency of the appeal before the Division Bench, 
a direction was issued to deposit an amount of Re. 1,00,00,000/- Which 
has subsequently been withdrawn by the appellant-as per Order dated 
21" July, 2017 passed by this Court. 
G 
H
1038 
A 
B 
SUPREME COURT REPORTS 
[2017) 1 I S.C.R. 
5. Learned counsel for the respondents has referred to two 
decisions of this Court in R.N. Dey and Others v. Bha1,?yabati 
Pramanik and Others 1 and Tamilnad Mercantile Bank 
filiareholders Welfare Association (2) v. S.C. Sekar and Others2 
and made a persuasive submission regarding the maintainability of the 
appeal. We are afraid that the decisions relied upon by the respondents 
do not further their case, in the given facts and circumstances. R.N. 
I'D: (supra) was a case where the High Court declined to accept the 
unconditional apology tendered by the contemnor. It was in that context 
that this Court held that the contemnor could file an appeal since he was 
otherwise entitled to be discharged in case the unconditional apology 
C had been accepted. In other words, this Court was of the view that the 
decision to reject the unconditional apology and proceed further was an 
order or decision to proceed to punish the contemnor. Hence, it was held 
that such a decision or order was appealable. That is not the situation in 
the present case. And in any case, at paragraph 13, the Court made it 
D clear that "In the present proceedings the question whether appeal under 
Section 19 is maintainable or not is not required to be decided finally as, 
in our view, facts of this case are grossly inadequate and the contempt 
proceedings were not required to be initiated at all." In Tamilnad 
Mercantile Bank (supra), this Court
referred to Midnapore Peoples' 
E 
Coop. Bank Ltd. and Others v. Chunilal Nanda and Others' and 
took the view that though an appeal under Section 19 of the Act, may 
not be maintainable against certain orders, still the aggrieved person can 
file an intra-court appeal if in the impugned order an issue has been 
decided or a direction has been issued, relating to the merits of the disputes 
between the parties, in exercise of its contempt jurisdiction. No doubt, in 
F 
paragraph-39, this Court has held that an appeal would be maintainable 
even against a notice to show cause. But it has to be seen that such a 
notice is in a case where the court, preceding the notice, had decided 
some disputes raised before it. Hence this Court guardedly put a caveat 
as follows: "Thus, in a given situation, an appeal would be maintainable 
even against a notice to show cause". In other words, notice referred in 
G paragraph-39 is a notice apparently after taking decision on contempt 
and proceeding further. For the sake of completion of the discussion, we 
have extracted paragraph-39 also:-
H2000J 4 sec 400 
'(2009J 2 sec 784 
'(2006) s sec 399 
H
ECL FINANCE LTD. v. HARIKISHAN SHANKARJI GUDIPATI 
1039 
& ORS. [KURIAN, J.] 
"39. We may repeat that it may be a different matter if the court 
A 
while passing an order decided some disputes raised before it by 
the contemnor asking it to drop the proceedings on one ground or 
the other. Thus, in a given situation, an appeal would be maintainable 
even against a notice to show cause. Here even such a notice has 
not been issued and thus the question of satisfying the court by 
B 
showing cause that the respondent contemnors had not committed 
any contempt did not arise. Allegations had not been made against 
the Chairman of the meeting. The contempt proceedings had been 
initiated only against the Managing Director of the Bank." 
6. In Midnapore Peoples' Coop. Bank Ltd. and Others v. 
Chunilal Nanda and Others4 after an extensive discussion on various 
C 
case laws, this Court has summarised the legal position as follows: 
"11. The position emerging from these decisions, in regard to 
appeals against orders in contempt proceedings may be 
summarised thus: 
I. An appeal under Section 19 is maintainable only against an 
order or decision of the High Court passed in exercise of 
its jurisdiction to punish for contempt, that is, an order 
imposing punishment for contempt. 
D 
II. Neither an order declining to initiate proceedings for 
E 
contempt, nor an order initiating proceedings for contempt 
nor an order dropping the proceedings for contempt nor 
an order acquitting or
exonerating the contemnor, is 
appealable under Section 19 of the CC Act. In special 
circumstances, they may be open to challenge under 
Article 136 of the Constitution. 
F 
III. In a proceeding for contempt, the High Court can decide 
whether any contempt of court has been committed, and 
if so, what should be the punishment and matters 
incidental thereto. In such a proceeding, it is not 
appropriate to adjudicate or decide any issue relating to 
the merits of the dispute between the parties. 
IV. Any direction issued or decision made by the High Court 
on the merits of a dispute between the parties, will not be 
4(2006) s sec 399 
G 
H
1040 
A 
B 
c 
D 
SUPREME COURT REPORTS 
[2017] ll S.C.R. 
in the exercise of "jurisdiction to punish for contempt" 
and, therefore, not appealable under Section 19 of the CC 
Act. The only exception is where such direction or 
decision is incidental to or inextricably connected with the 
order punishing for contempt, in which event the appeal 
under Section 19 of the Act, can also encompass the 
incidental or inextricably connected directions. 
V. If the High Court, for whatsoever reason, decides an issue 
or makes any direction, relating to the merits of the 
dispute between the parties, in a contempt proceedings, 
the aggrieved person is not without remedy. Such an 
order is open to challenge in an intra-court appeal (if the 
order was of a learned Single Judge and there is a 
provision for an intra-court appeal), or by seeking special 
leave to appeal under Article 136 of the Constitution of 
India (in other cases). 
The first point is answered accordingly." 
7. Learned counsel for the respondents submits that before issuing 
notice, the learned Single Judge had considered the merits of the case 
and had already made his mind to punish the respondents and, therefore, 
an appeal would lie, in view of the decisions referred to above. We are 
E afraid the contention made by learned counsel for the respondents cannot 
be appreciated. The observations made by the learned Single Judge in 
the Order dated 2200 December, 2016, while issuing notice in the contempt 
petition, is
only for the prima facie satisfaction as to whether the contempt 
petition needs to be considered on merits. Only after such a preliminary 
F 
stage, notice can be issued. Now, it is open to the respondents to file 
their reply and after considering the defence, the learned Single Judge 
will have to take a call as to whether it is a case to be proceeded against 
for punishing the respondents. In case such a decision is taken by the 
High Court, it is, at that stage, that the respondents get a right to file an 
appeal before the Division Bench in terms of Section 19(1 )(a) of the 
G Act. Such a stage having not arisen, the impugned order passed by the 
Division Bench is only to be set aside. Ordered accordingly. 
H 
8. Having said so, since it is brought to our notice that the appellant 
has also initiated th.e proceedings for execution of the decree and since 
the said matter is also before us, we request the learned Single Judge
ECL FINANCE LTD. v. HARIKISHAN SHANKARJI GUDIPATI 
1041 
& ORS. [KURIAN, J.] 
who has exercised the contempt jurisdiction, to consolidate the execution 
A 
petition and the contempt proceedings and take a decision as to what 
exactly would be the amount payable by the respondents in terms of the 
decree. We also make it clear that nothing said by us or by the learned 
Single Judge or the Division Bench shall stand in the way of the parties 
settling their disputes. 
B 
9. With these observations, the appeal is disposed of. 
Ankit Gyan 
Appeal disposed of.