STATE BANK OF INDIA AND ORS versus DR. VIJAY MALLYA
[2022] 15 S.C.R. 384, Supreme Court of India, 2022
Outcome: Disposed off
Segment: Facts
A
B
C
D
E
F
G
H
384
SUPREME COURT REPORTS
[2022] 15 S.C.R.
[2022] 15 S.C.R. 384
384
STATE BANK OF INDIA AND ORS.
v.
DR. VIJAY MALLYA
(Contempt Petition (C) Nos. 421-424 of 2016)
JULY 11, 2022
[UDAY UMESH LALIT, S. RAVINDRA BHAT AND
PAMIDIGHANTAM SRI NARASIMHA, JJ.]
Contempt of Courts Act, 1971: s. 12 – Punishment for contempt
of court – Purging of contempt – On facts, action on part of the
contemnor in disbursing the amount of US$ 40 million against the
text and tenor of orders passed by the High Court and the contemnor
guilty of contempt – Orders regarding punishment for contempt and
purging of contempt – Held: Apart from punishing the contemnor
for his contumacious conduct, the majesty of law may demand that
appropriate directions be issued by the court so that any advantage
secured as a result of such contumacious conduct is completely
nullified – Approach may require the court to pass directions either
for reversal of the transactions in question by declaring said
transactions to be void or passing appropriate directions to the
concerned authorities to see that the contumacious conduct on the
part of the contemnor does not continue to enure to the advantage
of the contemnor or any one claiming under him – On facts, to meet
the ends of justice, the concept of purging of the contempt would
call for complete disgorging of all the benefits secured as a result
of actions found by the court to be contumacious – Thus, adequate
punishment to be imposed upon the Contemnor and
must also pass
necessary directions – Since the Contemnor never showed any
remorse nor tendered any apology for his conduct, sentence of four
months and fine of Rs.2,000/- imposed upon the Contemnor –
Directions to the Government of India to secure the presence of the
Contemnor to undergo the imprisonment imposed upon him – Further
issuance of direction that the transactions referred to, in terms of
which the amount of US$ 40 million was disbursed to the
beneficiaries, the said order is held to be void and inoperative; and
the Contemnor and the beneficiaries under said transactions to
deposit the amount received along with interest at the rate of 8 %
p.a. with the Recovery Officer within the stipulated period.
A
B
C
D
E
F
G
H
385
Delhi Judicial Service Association, Tis Hazari Court,
Delhi v. State of Gujarat and other (1991) 4 SCC 406:
[1991] 3 SCR 936; Supreme Court Bar Association v.
Union of India & Anr. (1998) 4 SCC 409 : [1998] 2 SCR
795; Noorali Babul Thanewala v. K.M.M. Shetty & Ors.
(1990) 1 SCC 259 : [1989] 2 Suppl. SCR 561; Rama
Narang v. Ramesh Narang (2009) 16 SCC 126 : [2007]
3 SCR 1099; Pravin C. Shah v. K.A. Mohd. Ali & Anr.
(2001) 8 SCC 650 : [2001] 3 Suppl. SCR 675 – referred
to.
Rose v. Laskington (1989) 3 AllER 306; Mir v. Mir
(1992) 1 AllER 765; Richardson v. Richardson (1989)
3 AllER 779 – referred to.
Case Law Reference
[1991] 3 SCR 936
referred to
Para 2(26)
[1998] 2 SCR 795
referred to
Para 8
[1989] 2 Suppl. SCR 561
referred to
Para 8
[2007] 3 SCR 1099
referred to
Para 8
[2001] 3 Suppl. SCR 675
referred to
Para 8
INHERENT JURISDICTION: Contempt Petition (C) Nos. 421-
424 Of 2016 in Special Leave Petition (C) Nos. 6828-6831 of 2016.
Petition filed for willful disobidience of Court’s Order dated
09.05.2017 passed by the Supreme Court of India in “I.A. Nos.9-12 &
13-16 of 2016 in SLP (C) Nos.6828-6831 of 2016 with I.A. Nos.1-4 of
2016 in and with Contempt Petition (C) Nos.421-424 of 2016 in SLP (C)
Nos.6828-6831 of 2016”.
Jaideep Gupta, Sr. Adv., Kunal Chatterji, Sanjay Kapur, Ms. Megha
Karnwal, Arjun Bhatia, Ms. Shubhra Kapur, Lalit Rajput, Ankur Saigal,
E. C. Agrawala, Ms. Fereshte D. Sethna, Abhishek Tilak, Ms. B.
Vijayalakshmi Menon, M/s Dua Associates,
Anand Sukumar, Dheeraj
Nair, Vipin Kumar Jai, Advs. for the appearing parties.
STATE BANK OF INDIA AND ORS. v. DR. VIJAY MALLYA
A
B
C
D
E
F
G
H
386
SUPREME COURT REPORTS
[2022] 15 S.C.R.
The Order of the Court was passed by
UDAY UMESH LALIT, J.
1. These Contempt Petitions have come up before us pursuant to
the Judgment and Order dated 9.5.2017 passed by this Court in “I.A
Nos.9-12 & 13-16 of 2016 in SLP (C) Nos.6828-6831 of 2016 with I.A.
Nos.1-4 of 2016 in and with Contempt Petition (C) Nos.421-424 of 2016
in SLP (C) Nos.6828-6831 of 2016”.
2. After dealing with the facts which led to the filing of the
aforestated Interim Applications and Contempt Petitions, this Court found
Respondent No.3 (Dr. Vijay Mallya) guilty of committing contempt of
Court on two counts. Paragraphs 22 to 30 of said Judgment and Order
dated 9.5.2017 were: -
“22. We now turn to the alleged violation of orders dated 03.09.2013
and 13.11.2013 passed by the High Court of Karnataka. It is not
disputed that such orders were passed restraining the concerned
respondents including Respondent No.3 and that the orders were
passed in proceedings arising from O.A. No.766 of 2013 before
DRT Bengaluru. The present proceedings before this court have
also arisen from the very same O.A. No.766 of 2013. The orders
of restraints passed by the High Court were therefore in the very
same proceedings with which we are presently concerned. Said
orders bound the concerned respondents including Respondent
No.3 and restrained them from transferring, alienating, disposing
or creating third party rights in respect of movable as well as
immovable
properties belonging to them till further orders in the
proceedings. A question has been raised by Mr. Vaidyanathan
learned senior advocate whether the orders would be restricted
only so far as the properties which were in the hands of the
concerned respondents as on the date when those orders of
restraint were passed. In other words, whether any properties
which in future or subsequent to the Orders had come in the hands
or control of the concerned respondent would be covered by such
orders or not. On plain reading of the Orders, in our view, whether
the properties were in the hands of the concerned respondents on
the date when the orders of restraint were passed by the High
Court or had come in their hands or under their control at a later
point in time, regardless of such qualification all properties whether
movable or immovable were governed by the orders of restraint.
A
B
C
D
E
F
G
H
387
There is no ambiguity of any sort and the Orders of restraint are
quite clear. Consequently, funds amounting to US$ 40 million which
came to be under the control of and in the hands of Respondent
No.3 were completely covered and governed by said orders of
restraint.
23. The memo dated 28.06.2016 filed by Respondent No.10 in
said O.A. No.766 of 2013 annexed, “Extract confirming payment
of US$ (US Dollars) 40 Million to Defendant No.3 on 25.02.2016”.
It is thus beyond any doubt that the payment of US$ 40Million
was received by Respondent No.3 on 25.02.2016. These facts
are admitted by Respondent No.3 in Paragraph 3 of his “further
counter affidavit”. The explanation that the funds now stand
transferred in favour of the trusts over which Respondent No.3
has no control at all, in fact aggravates the extent of violation. It is
clear that the funds which were in control of Respondent No.3
have now been sought to be put beyond the reach of processes of
court, which is reflective of the intent.
24. The applications moved by the petitioners-banks on 02.03.2016
themselves had made clear reference to the fact that as disclosed
by respondent Nos.10 and 11 to London Stock Exchange and
Bombay Stock Exchange respectively Respondent No.10 would
pay to Respondent No.3 a sum of US$75 million and accordingly
petitioners-banks had moved four interlocutory applications for
orders against respondent Nos.10 and 11 for disbursing said amount
of US$ 75 million. The amount of US$
40 Million so received by
Respondent No.3 was therefore subject matter of the present
controversy. The least that was expected of Respondent No.3
was to disclose relevant facts pertaining to receipt and
disbursement of US$ 40 million. The violation on that count is
thus not only against the directions issued by this court but also
against express mandate of orders dated 03.09.2013 and
13.11.2013 passed in the proceedings in question.
25. Having thus found that the actions on the part of Respondent
No.3 in disbursing the amount of US$ 40 million was against the
text and tenor of the orders passed by the High Court of Karnataka,
the question then arises whether this Court can take cognizance
of such violation or should it leave it to be decided by the High
Court of Karnataka itself in a properly instituted legal proceeding.
STATE BANK OF INDIA AND ORS. v. DR. VIJAY MALLYA
[UDAY UMESH LALIT, J.]
A
B
C
D
E
F
G
H
388
SUPREME COURT REPORTS
[2022] 15 S.C.R.
26. In Delhi Judicial Service Association, Tis Hazari Court,
Delhi v. State of Gujarat and others1, a question arose whether
the power and jurisdiction of this Court under Article 129 of the
Constitution is confined to “the contempt of this Court” alone.
Submissions advanced in that behalf were noted in paragraph 14
of the judgment which sets out the submission of the learned
Attorney General:
“...The Supreme Court as the Apex Court is the protector and
guardian of justice throughout the land, therefore, it has a right
and also a duty to protect the courts whose orders and judgments
are amenable to correction, from commission of contempt
against them.”
The subsequent paragraphs of the judgment namely paragraph
26 onwards show that the contentions so advanced by the learned
Attorney General were accepted by this Court. It is true that the
discussion was in the context of the contempt of a subordinate
court. However, the nature of power exercisable by this Court
was considered in the backdrop that this Court has supreme
appellate jurisdiction over all courts and tribunals in the country
which is clear from the observations in paragraph 31 of the
judgment. We must say that Mr. Vaidyanathan did not seriously
contend to the contrary but his submission was that if the
jurisdiction is so assumed and cognizance is taken by this Court,
Respondent No.3 would lose one opportunity of having the matter
assessed at the level of
the High Court. In our considered view,
since we are dealing with the very same cause in which the orders
of restraint were passed by the High Court and since it is coupled
with the violation of orders of this Court as well, the matter can
and ought to be dealt with by this Court.
27. The record shows that by order dated 11.01.2017 the violation
of those orders for restraint passed by the High Court of Karnataka
was taken note of by this Court and the Counsel appearing for
respondent had sought time to file an appropriate reply. However,
no such reply was filed. Respondent No.3 was thus put to clear
notice about the violation of those orders of restraints passed by
the High Court of Karnataka. As such, no prejudice has been
caused or visited upon Respondent No.3.
1 (1991) 4 SCC 406
A
B
C
D
E
F
G
H
389
28. We find that the allegations against Respondent No.3 of
committing of contempt are on two counts, in that –
a) He is guilty of disobeying the Orders passed by this Court in
not disclosing full particulars of the assets as was directed by
this Court.
b) He is guilty of violating the express Orders of Restraint
passed by the High Court of Karnataka in the same Cause
from which the present proceedings have arisen.
Though the contempt on the second count is theoretically of
the orders passed by the High Court of Karnataka since those
orders pertain to the very same Cause and the actions on part of
Respondent No.3 in not disclosing the account in question through
which the transfers were affected also fall with respect to contempt
on first count, we proceed to exercise our contempt jurisdiction
even with regard to the second count. As stated above, Respondent
No.3 was adequately put to notice and no prejudice has been
caused as a result of such assumption of jurisdiction by this court.
29. Having considered the entirety of the matter, we find that
Respondent No.3 is guilty of having committed contempt of court
on both the counts. At this stage it must be stated that in terms of
Rule 6 (1) of Rules to Regulate Proceeding for Contempt of
Supreme Court 1975, Respondent No.3 was obliged and duty
bound to appear in person in response to the notice issued by this
Court in Contempt Petition. Instead, he chose to file application
seeking recall of the orders
issuing notice. Having considered the
matter, we see no reason to recall that order and dismiss I.A.
Nos.1 to 4 of 2016 preferred by Respondent No.3 in Contempt
Petition Civil Nos.421-424 of 2016. Respondent No.3 is therefore
duty bound to appear in person in the present contempt proceedings.
30. Since Respondent No.3 has not filed any reply to the Contempt
Petition nor did he appear in person, though we have found him
guilty of having committed contempt of court, we deem it necessary
to give him one more opportunity and also hear him on the proposed
punishment. We therefore adjourn matter to 10.07.2017 for hearing
Respondent No.3 in person on matters in issue including one
regarding the proposed punishment to be awarded to him for
contempt of court. The instant contempt petitions and connected
cases shall now be listed at 2 o’clock on 10.07.2017. Respondent
STATE BANK OF INDIA AND ORS. v. DR. VIJAY MALLYA
[UDAY UMESH LALIT, J.]
A
B
C
D
E
F
G
H
390
SUPREME COURT REPORTS
[2022] 15 S.C.R.
No.3 may keep his affidavit ready to be tendered on the same
day by stating mitigating circumstances, if any and any other
submissions he chooses to advance.
31. We direct the Ministry of Home Affairs, Government of India,
New Delhi to secure and ensure presence of Respondent No.3
before this Court on 10.07.2017. A copy of this Judgment be sent
to the Ministry of Home Affairs for compliance”.
3. The disbursement of US$ 40 million which had entered the
account held in Edmond De Rothschild (Suisse) S.A. was dealt with in
detail and paragraph 3 of the “further counter affidavit” filed by
Respondent No.3 was also quoted by this Court as follows: -
“16. Respondent No.3 thereafter filed “further counter affidavit”
in aforementioned I.A. Nos.9-12 of 2016 on 23.11.2016. The
affidavit enclosed letter dated 18.11.2016 issued by Edmond De
Rothschild (Suisse) S.A. Paragraph 3 of the affidavit was to the
following effect:
“On a mere perusal of the letter dated 18th November, 2016
issued by Edmond De Rothschild (Suisse) S.A. (Annex. “R-2”
hereto), it is evident that the US$ 39,999,994 million paid by Diageo
Plc was received on 25th February, 2016. On instructions of
Respondent No.3, an aggregate sum of US$ 39,999,993.99 was
paid to the following parties on 26th and 29th February, 2016
respectively:
NAME OF PARTY 
AMOUNT 
S. Three Gift Settlement (a 
Trust the sole beneficiary of 
which is Siddartha Mallya, son 
of Respondent No.3)
US$13,000,000 
(On 26.02.2016) & 
US$ 333,331.33  
(on 29.02.2016) 
L. Three Gift Settlement (a 
Trust the sole beneficiary of 
which is Leena Mallya, daughter 
of Respondent No.3) 
US$13,000,000 
(On 26.02.2016) & 
US$ 333,331.33  
(on 29.02.2016) 
T. Three Gift Settlement (a 
Trust the sole beneficiary of 
which 
is 
Tanya 
Mallya, 
daughter of Respondent No.3) 
US$13,000,000 
(On 26.02.2016) & 
US$ 333,331.33  
(on 29.02.2016) 
TOTAL 
US$ 39,999,993.99
A
B
C
D
E
F
G
H
391
Each of the three children of Respondent No.3, who are the
sole beneficiaries of the aforesaid Trusts, are majors and are
citizens of the United States of America. Respondent No.3 is
neither the Settlor nor the Trustee nor the beneficiary of any of
the aforesaid named Trusts, and has no control over the Trusts or
the manner in which the respective corpuses of each of the
aforesaid Trusts is utilized. However, the respective corpuses as
they stood on 31st March, 2016 have been included in the
statements of assets of the three children handed over to this
Hon’ble Court in sealed envelope on 26th April, 2016.” “
4. As stated in paragraphs 29 and 30 quoted hereinabove, an
opportunity was given to Respondent No.3 (hereafter referred to as the
Contemnor) to file his response and advance submissions on the proposed
punishment. The matter was accordingly adjourned to 10.7.2017.
5. The Contemnor however sought review of the Judgment and
Order dated 9.5.2017, which application remained pending for some time
and was rejected by this Court vide Order dated 03.08.2020. By said
order the Contemnor was directed to appear before this Court; and the
Ministry of Home Affairs, Government of India, New Delhi, was directed
to facilitate and ensure the presence of the Contemnor on the date of
such appearance.
6. The subsequent developments in the matter stand captured in
the Order dated 30.11.2021 passed by this Court, which for facility, is
extracted here:-
“By judgment dated
09.05.2017 passed by this Court in I.A.
Nos.9-12 and 13-16 of 2016 in SLP (Civil) Nos.6828-6831 of 2016
and I.A. Nos.1-4 of 2016 in Contempt Petition (C) Nos.421-424
of 2016 in SLP (Civil) Nos.6828-6831 of 2016, respondent no.3
Dr. Vijay Mallya was found to be guilty of having committed
contempt of court. The judgment directed that the matter be listed
on 10.07.2017 to hear respondent no.3 on matters in issue including
one regarding the proposed punishment to be awarded to him for
contempt of court. However, because of proceedings, which at
the relevant time, were going on in the Courts of United Kingdom,
the presence of respondent no.3 could not be secured.
In its subsequent order dated 02.11.2020, this Court noted that
certain proceedings were going on in United Kingdom, though the
STATE BANK OF INDIA AND ORS. v. DR. VIJAY MALLYA
[UDAY UMESH LALIT, J.]
A
B
C
D
E
F
G
H
392
SUPREME COURT REPORTS
[2022] 15 S.C.R.
details of such proceedings were not forthcoming. This Court
rejected the submission made by Mr. E.C. Agrawala, learned
Advocate seeking discharge and it was directed that the learned
Advocate would continue to appear for respondent no.3. Mr. Tushar
Mehta, learned Solicitor General was then granted time to place
Status Report on record.
The matter was thereafter adjourned on few occasions and
because of COVID-19 pandemic situation, the matter could not
be listed and taken up.
Today when the matter was called out, Mr. Tushar Mehta,
learned Solicitor General invited our attention to the Office
Memorandum dated 30.11.2021 issued under signature of Deputy
Secretary (Extradition), CPV Division, Ministry of External Affairs,
Government of India. Paragraphs 2 to 5 of the Memorandum read
as under:
“2. It may be recalled that an extradition request in respect of
VM was forwarded to UK side on 9 February 2017 in CBI
Case under Sections 120B read with 420 of the Indian Penal
Code and Section 13(2) read with Section 13(1)(d) of the
Prevention of Corruption Act, 1988. On 10 December 2018,
the Senior District Judge Westminster Magistrate’s Court,
London recommended VM’s extradition to India. VM appealed
the Order of his extradition before the High Court of London.
The appeal was admitted on the sole ground of sufficiency of
prima facie case. The High Court of London dismissed the
appeal on 20 April 2020. VM applied leave to appeal
to the
Supreme Court in the High Court. On 14 May 2020 the High
Court of London rejected his application for permission to appeal
to Supreme Court. VM has thus exhausted all avenues of
appeal in the UK.
3. Following the refusal of leave to appeal, VM’s surrender to
India should, in principle, have been completed within 28 days.
However, the UK Home Office intimated that there is a further
legal issue which needs to be resolved before VM’s extradition
may take place. The UK side further said that this issue is
outside and apart from the extradition process, but it has the
effect that under the United Kingdom law, extradition cannot
A
B
C
D
E
F
G
H
393
take place until it is resolved. The High Commission was further
informed that the issue is confidential and so it cannot be
disclosed.
4. In compliance with the Order of the Hon’ble Supreme Court
dated 31.08.2020, the Government of India again took up the
pending extradition case of VM with the Government of UK
so as to seek his early extradition and facilitate his presence
before the Hon’ble Supreme Court on 5 October 2020.
5. The UK side has informed that extradition of VM cannot
take place until a separate legal issue, which is judicial and
confidential in nature is resolved. The UK side emphasized
that neither they can provide any more details nor intervene in
the process. They have also indicated that through the
designated channel, the UK Home Office has received a
request to serve summons on VM for his hearing before the
Hon’ble Supreme Court. The British Home Office has
forwarded the Hon’ble Supreme Court’s Order through the
Hertfordshire Police on 17 September 2020 for serving it to
VM.”
As indicated in paragraph 2 of the Memorandum, the
proceedings for extradition have attained finality and respondent
no.3 has exhausted all avenues of appeal in the United Kingdom.
However, paragraphs 4 and 5 deal with some proceedings which
are stated to be confidential and with regard to which no details
are forthcoming. It appears that these are the same proceedings
which were referred to in the order dated 02.11.2020.
Having considered all the circumstances
on record, it is directed:
a. The matter in terms of the directions issued by this Court in
its order dated 09.05.2017 shall now be listed on 18.01.2022.
b. Respondent No.3 is at liberty to advance such submissions,
as are deemed appropriate, pertaining to the issues set out in
the order dated 09.05.2017.
c. If, for any reason, respondent no.3 is not present to advance
such submissions, learned counsel on his behalf can advance
such submissions as are open to respondent no.3, in law.
d. We request Mr. Jaideep Gupta, learned Senior Advocate of
this Court to assist the Court as Amicus Curiae in the matter.
STATE BANK OF INDIA AND ORS. v. DR. VIJAY MALLYA
[UDAY UMESH LALIT, J.]
A
B
C
D
E
F
G
H
394
SUPREME COURT REPORTS
[2022] 15 S.C.R.
Mr. Gupta will be at liberty to avail services of any Advocate-
on-Record of his own choice in the instant matter.
The Registry is directed to supply papers of this matter to Mr.
Gupta within a week.
e. The matter shall be dealt with finally on 18.01.2022.”
7. The matter thereafter came up before this Court on 10.03.2022
on which date the following Order was passed: -
“1. Pursuant to orders passed from time to time and more
particularly orders dated 30.11.2021 and 10.02.2022, the matter is
posted today for hearing.
2. In terms of Directions (b) and (c) issued by this Court vide
order dated 30.11.2021, the contemnor was given specific liberty
to advance submissions pertaining to the issues set-out in the
judgment dated 09.05.2017. Additionally, he was given further
liberty to advance such submissions through his learned Counsel.
3. Mr. Ankur Saigal, learned counsel appearing on behalf of the
contemnor submits that all the orders including the orders dated
30.11.2021 and 10.02.2022 were brought to the notice of the
contemnor and that there was exchange of communications
between the learned counsel and the contemnor. A copy of the
communication dated 17.01.2022 has been placed for our perusal
which communication inter alia states inability on part of the
Solicitors of the contemnor to provide any information about the
nature of proceedings and the relief sought in the pending
proceedings in the United Kingdom.
4. We
then invited Mr. Ankur Saigal, learned counsel to advance
submissions on merits of the matter in keeping with the directions
issued in last two orders. Mr. Saigal expressed his inability to
advance the submissions.
5. We have heard Mr. Jaideep Gupta, learned Senior Advocate,
who has assisted this Court as Amicus Curiae very ably. He has
invited our attention to various aspects of the record including the
judgment dated 09.05.2017 in State Bank of India & Others v.
Kingfisher Airlines Ltd. & Others, (2017) 6 SCC 654, provisions
of the Contempt of Courts Act and the Supreme Court Rules,
2013. He has also relied upon various decisions of this Court
A
B
C
D
E
F
G
H
395
including the decision in Supreme Court Bar Association v. Union
of India & Another, (1998) 4 SCC 409.
6. Mr. Gupta may file his written submissions on or before
12.03.2022.
7. Even though Mr. Ankur Saigal, learned counsel has expressed
his inability to advance submissions though he was invited to do
so, we still grant one more opportunity to file his submissions on
or before 15.03.2022, with an advance copy to the learned Amicus
Curiae.”
8. The oral arguments advanced by Mr. Jaideep Gupta, learned
Amicus Curiae were summarized in his Written Submissions as under: -
“A. The sum of the money which was received by Edmond
deRothschild (Suisse) M.A. was, on the instruction of the
Respondent No.3/ contemnor, paid to three trusts wherein the
sole beneficiaries were the son and two daughters of the
Respondent No.3/ Contemnor. The aforementioned amount had
been transferred in violation of order of court by taking advantage
of the very act of contempt which has been held against the
Contemnor/ Respondent No.3. It is, therefore, submitted that this
Hon’ble Court may give appropriate direction for reversal of the
aforesaid transactions by declaring the said transactions to be
void.
B. The present contempt proceedings arise out of recovery
proceedings by Banks. It is stated by the Counsel on behalf of
State Bank of India that decrees have been passed against the
Respondent No.3 in the said recovery proceedings and Recovery
Officer has been appointed for enforcement
and execution of the
said decree. It thought fit, this Hon’ble Court may give appropriate
direction to the said Recovery Officer to trace the said funds into
the hands of whoever they may have been transferred to and use
the same in execution of the decree.
C. In the event the said funds are found inadequate to purge the
said contempt, appropriate orders may be passed for sequestration
of the assets of the respondent no.3/ contemnor both in India and
outside. Assistance of the Banks and/ or the Union of India may
be taken to find out all assets that may be available to the respondent
No.3/ Contemnor. Alternatively, a forensic auditor may be
appointed to undertake such an exercise.”
STATE BANK OF INDIA AND ORS. v. DR. VIJAY MALLYA
[UDAY UMESH LALIT, J.]
A
B
C
D
E
F
G
H
396
SUPREME COURT REPORTS
[2022] 15 S.C.R.
Reliance was placed by the learned Amicus Curiae on the
decisions of this Court in Supreme Court Bar Association v. Union of
India & Anr.2, Noorali Babul Thanewala v. K.M.M. Shetty & Ors.3,
Rama Narang v. Ramesh Narang4, Pravin C. Shah v. K.A. Mohd. Ali
& Anr.5 to submit that in contempt jurisdiction the Court can direct the
contemnor to purge the contempt by reversing the very transaction that
was found to be contumacious. On the remedy of sequestration of assets,
reliance was placed on Rose v. Laskington6, Mir v. Mir7 and Richardson
v. Richardson8.
9. In spite of repeated opportunities afforded to the Contemnor,
no submissions were advanced on his behalf either on purging of contempt
or on the quantum of punishment.
10. The actions on part of the Contemnor having been found to be
contumacious and established in the Judgment and Order dated
09.05.2017, we are presently concerned with the issues as to what orders
be passed regarding punishment and purging of contempt. The approach
in such cases was succinctly stated by this Court in Pravin C. Shah v.
K.A. Mohd. Ali & Anr.5 as under:
“23. Now we have to consider the crucial question — how can a
contemnor purge himself of the contempt? According to the
Disciplinary Committee of the Bar Council of India, purging oneself
of contempt can be done by apologising to the court. The said
opinion of the Bar Council of India can be seen from the following
portion of the impugned
order:
“Purging oneself of contempt can be only by regretting or
apologising in the case of a completed action of criminal
contempt. If it is a case of civil contempt, by subsequent
compliance with the orders or directions the contempt can be
purged of. There is no procedural provision in law to get purged
of contempt by an order of an appropriate court.”
2 (1998) 4 SCC 409.
3 (1990) 1 SCC 259.
4 (2009) 16 SCC 126.
5 (2001) 8 SCC 650.
6 (1989) 3 AllER 306.
7 (1992) 1 AllER 765.
8 (1989) 3 AllER 779.
A
B
C
D
E
F
G
H
397
24. Purging is a process by which an undesirable element is
expelled either from one’s own self or from a society. It is a cleaning
process. Purge is a word which acquired implications first in
theological connotations. In the case of a sin, purging of such sin
is made through the expression of sincere remorse coupled with
doing the penance required. In the case of a guilt, purging means
to get himself cleared of the guilt. The concept of purgatory was
evolved from the word “purge”, which is a state of suffering after
this life in which those souls, who depart this life with their deadly
sins, are purified and rendered fit to enter into heaven where
nothing defiled enters (vide Words and Phrases, Permanent Edn.,
Vol. 35-A, p. 307). In Black’s Law Dictionary the word “purge”
is given the following meaning: “To cleanse; to clear. To clear or
exonerate from some charge or imputation of guilt, or from a
contempt.” It is preposterous to suggest that if the convicted person
undergoes punishment or if he tenders the fine amount imposed
on him the purge would be completed.
25. We are told that a learned Single Judge of the Allahabad High
Court has expressed a view that purging process would be
completed when the contemnor undergoes the penalty [vide Madan
Gopal Gupta (Dr) v. Agra University [AIR 1974 All 39] ]. This is
what the learned Single Judge said about it: (AIR p. 43, para 13)
“In my opinion a party in contempt purged its contempt by
obeying the orders of
the court or by undergoing the penalty
imposed by the court.”
26. Obeying the orders of the court would be a mode by which
one can make the purging process in a substantial manner when it
is a civil contempt. Even for such a civil contempt the purging
process would not be treated as completed merely by the
contemnor undergoing the penalty imposed on him unless he has
obeyed the order of the court or he has undone the wrong. If that
is the position in regard to civil contempt the position regarding
criminal contempt must be stronger. Section 2 of the Contempt of
Courts Act categorises contempt of court into two categories.
The first category is “civil contempt” which is the wilful
disobedience of the order of the court including breach of an
undertaking given to the court. But “criminal contempt” includes
doing any act whatsoever, which tends to scandalise or lowers
STATE BANK OF INDIA AND ORS. v. DR. VIJAY MALLYA
[UDAY UMESH LALIT, J.]
A
B
C
D
E
F
G
H
398
SUPREME COURT REPORTS
[2022] 15 S.C.R.
the authority of any court, or tends to interfere with the due course
of a judicial proceeding or interferes with, or obstructs the
administration of justice in any other manner.
27. We cannot therefore approve the view that merely undergoing
the penalty imposed on a contemnor is sufficient to complete the
process of purging himself of the contempt, particularly in a case
where the contemnor is convicted of criminal contempt. The
danger in giving accord to the said view of the learned Single
Judge in the aforecited decision is that if a contemnor is sentenced
to a fine he can immediately pay it and continue to commit contempt
in the same court, and then again pay the fine and persist with his
contemptuous conduct. There must be something more to be done
to get oneself purged of the contempt when it is a case of criminal
contempt.”
11. Similarly, following observations were made and directions
were issued by this Court in Noorali Babul Thanewala v. K.M.M.
Shetty & Ors.3:
“11. ……..It is settled law that breach of an injunction or breach
of an undertaking given to a court by a person in a civil proceeding
on the faith of which the court sanctions a particular course of
action is misconduct amounting to contempt. The remedy in such
circumstances may be in the form of a direction to the contemnor
to purge the contempt or a sentence of imprisonment or fine or all
of them. On the facts and circumstances of this case in the
light
of our finding that there was a breach of the undertaking we think
that mere imposition of imprisonment or fine will not meet the
ends of justice. There will have to be an order to purge the
contempt by directing respondent 1-contemnor to deliver vacant
possession immediately and issuing necessary further and
consequential directions for enforcing the same.
12. In the foregoing circumstances, we find respondent 1 guilty
of committing contempt by wilful disobedience of the undertaking
given by him in this Court and accordingly we convict him and
sentence him to pay a fine of Rs 500 within the period of four
weeks, failing which he shall suffer simple imprisonment for one
month, and also direct him to deliver vacant possession of the
premises forthwith to the petitioner to the extent possible by him.
A
B
C
D
E
F
G
H
399
We further direct the District Magistrate, Thane, to evict all those
who are in physical possession of the property including respondent
2 and his men and if necessary, with police help and give vacant
possession of the premises to the petitioner forthwith.”
12. The importance of passing appropriate directions, apart from
imposing punishment upon the contemnor, was stressed by the Constitution
Bench of this Court in Supreme Court Bar Association v. Union of
India & Anr.2 as follows:
“33. Thus, the recognised and accepted punishments for civil or
criminal contempt of court in English law, which have been followed
and accepted by the courts in this country and incorporated in the
Indian law insofar as, civil contempt, is concerned are:
(i)
sequestration of assets;
(ii) fine;
(iii) committal to prison.
34. The object of punishment being both curative and corrective,
these coercions are meant to assist an individual complainant to
enforce his remedy and there is also an element of public policy
for punishing civil contempt, since the administration of justice
would be undermined if the order of any court of law is to be
disregarded with impunity. Under some circumstances, compliance
of the order may be secured without resort to coercion, through
the contempt power. For example, disobedience of an order to
pay a sum of money may be effectively countered by attaching
the earnings of the contemner. In the same manner, committing
the person of the defaulter to
prison for failure to comply with an
order of specific performance of conveyance of property, may be
met also by the court directing that the conveyance be completed
by an appointed person. Disobedience of an undertaking may in
the like manner be enforced through process other than committal
to prison as for example where the breach of undertaking is to
deliver possession of property in a landlord-tenant dispute. Apart
from punishing the contemner, the court to maintain the majesty
of law may direct the police force to be utilised for recovery of
possession and burden the contemner with costs, exemplary or
otherwise.”
STATE BANK OF INDIA AND ORS. v. DR. VIJAY MALLYA
[UDAY UMESH LALIT, J.]
A
B
C
D
E
F
G
H
400
SUPREME COURT REPORTS
[2022] 15 S.C.R.
13. It is, thus, well settled that apart from punishing the contemnor
for his contumacious conduct, the majesty of law may demand that
appropriate directions be issued by the court so that any advantage
secured as a result of such contumacious conduct is completely nullified.
The approach may require the court to pass directions either for reversal
of the transactions in question by declaring said transactions to be void
or passing appropriate directions to the concerned authorities to see that
the contumacious conduct on the part of the contemnor does not continue
to enure to the advantage of the contemnor or any one claiming under
him. It is precisely for these reasons that the direction to have vacant
possession delivered to the rightful claimant was passed by this Court in
Noorali Babul Thanewala v. K.M.M. Shetty & Ors.3 Mere passing of
an order of punishment as stated by this Court in Pravin C. Shah v.
K.A. Mohd. Ali & Anr.5 would not be enough or sufficient. In a given
case, to meet the ends of justice, the concept of purging of the contempt
would call for complete disgorging of all the benefits secured as a result
of actions which are found by the court to be contumacious.
14. In its Judgment and Order dated 09.05.2017, this Court had
found that the action on part of the Contemnor in disbursing the amount
of US$ 40 million was against the text and tenor of orders passed by the
High Court of Karnataka and that
the Contemnor was guilty of contempt.
15. In the circumstances, in order to maintain the majesty of law,
we must impose adequate punishment upon the Contemnor and must
also pass necessary directions so that the advantages secured by the
Contemnor or anyone claiming under him are set at naught and the
amounts in question are available in execution of the decrees passed in
the concerned Recovery Proceedings.
16. Considering the facts and circumstances on record and the
facts that the Contemnor never showed any remorse nor tendered any
apology for his conduct, we impose sentence of four months and fine in
the sum of Rs.2,000/- (Rupees Two Thousand Only) upon the Contemnor.
The fine shall be deposited in the Registry of this Court within four
weeks and upon such deposit, the amount shall be made over to the
Supreme Court Legal Services Committee. In case the amount of fine is
not deposited within the time stipulated, the Contemnor shall undergo
further sentence of two months.
We direct the Ministry of Home Affairs, Government of India,
New Delhi to secure the presence of the Contemnor to undergo the
A
B
C
D
E
F
G
H
401
imprisonment imposed upon him. Needless to say, Government of India
including the Ministry of External Affairs and all other agencies or
instrumentalities shall carry out the directions issued by this Court with
due diligence and utmost expediency. A Compliance Report shall
thereafter be filed in the Registry of this Court.
17. We also direct:
A.
The transactions referred to in the Judgment and Order
dated 09.05.2017 in terms of which the amount of US$ 40
million was disbursed to the beneficiaries detailed in
paragraph 16 of the said judgment and order is held to be
void and inoperative;
B.
The Contemnor and the beneficiaries under said transactions
referred to in the said Paragraph 16 shall be bound to deposit
the amount received by such beneficiaries along with
interest at the rate of 8 per cent per annum with the
concerned Recovery Officer within four weeks.
C.
In case the amounts are not so deposited, the concerned
Recovery Officer shall be entitled to take appropriate
proceedings for recovery of said amounts; and Government
of India and all the concerned agencies shall extend
assistance and complete cooperation. It shall be open to
take such appropriate steps including the appointment of
Forensic Auditor(s).
18. In the end, we must express our sincere gratitude and
appreciation for the efforts put in by Mr. Jaideep Gupta, learned Senior
Advocate who assisted this Court very ably as Amicus Curiae.
19. These contempt petitions, thus, stand disposed of.
Nidhi Jain
Contempt petitions disposed of.
STATE BANK OF INDIA AND ORS. v. DR. VIJAY MALLYA
[UDAY UMESH LALIT, J.]