Case: Bharat S. Shah &amp; Others Vs. Rajkumar Jugalkishore Sarad

The brief facts leading to the filing of the Contempt Petition can be summed up asThe contempt petition stems out of litigation between the parties filed in the Small Causes Court at Bombay. The appellants (original plaintiffs) hereinafter referred to as the owner initiated proceedings against the respondents (original defendants) hereinafter referred to as the tenant in the Small Causes Court for eviction. In the course of the proceedings, consent terms came to be drawn between the parties pursuant to which the tenants vacated the demised premises to enable the plaintiffs/owners to develop the property on the condition that the defendants/tenants would be provided two flats on the 7th floor in the said building. The consent terms came to be accepted by the Court by its order dated 4th August, 1998. The Court passed an order taking the consent terms on record which came to be marked Exhibit A and the undertaking given by the plaintiffs in paras 6, 9 and 10 of the consent terms and the undertaking given by the defendants in para 6 of the consent terms came to be accepted by the Court and the suit was disposed of with no order as to costs.4. It appears that as the plaintiffs/owners were not able to provide the two flats on the 7th floor of the said building to the defendants/tenants, the defendants exercised the option by calling upon the plaintiffs to pay a sum of Rs. 5 crores along with an agreement to that effect. It is the case of the defendants/tenants that though he opted for accepting a sum of Rs. 5 crores from the plaintiffs/owners, he is also entitled to a sum of Rs. 32.0 lakhs @ Rs. 1.0 lakh per month for a period of 32 months on account of the failure on the part of the plaintiffs/owners to pay the said sum of money though as per Clause 9 of the consent terms, the plaintiffs had agreed to pay the sum on his failure to complete the construction within a period of 3 years from the date of the defendant vacating the premises (which was vacated in April, 1999 i.e. 36 months got completed at the end of April, 2002).5. It was further their case that the plaintiffs had no intention to provide the flats to the defendants. At the very inception they did not obtain sanction of the building plan to carve out the flats of which undertaking was given for being provided to the defendants. It is in this backdrop that the parties exchanged notices through their advocates. Not only this, the tenant initiated various proceedings against the plaintiffs by filing Company Petition No.426 of 2005 seeking winding up of the Company which came to be dismissed by the Company Judge by its order datedContempt Petition No.230 of 2005 has been admitted by the learned single Judge under the impugned order dt.The tenants also resorted to Summary Suit No.3234 of 2005 being filed on the Original Side of this Court where the learned single Judge by an order dt.granted leave to the defendant to defend the suit.

Court's reasoning:
We do not think it necessary to reproduce the terms and conditions recorded in the consent terms but needless to state that there are undertakings given to the Court by the parties which have been accepted by the learned Judge of the Small Causes while disposing of the suit between the parties.In the case at hand, the question relates to abiding by the undertaking given to the Court as recorded in the Consent Terms may be that the undertakings were given on happening of certain contingencies that is the issue which will be examined by the learned Judge while dealing with the petition onthe Supreme Court, the issue contended on behalf of the appellants was that in the circumstances, there was no basis for the contempt application and that the High Court ought not to have issued rule in the matter at all and that is how the Supreme Court came to the conclusion that under the coercion of contempt proceeding, the appellants cannot be directed to pay the compensation amount which they are disputing by asserting that the claimants were not the owners of the property in question and that decree was obtained by suppressing material facts and by fraud and if at all the High Court did not grant any stay to the compensation awarded by the trial Court they could have recovered the same by executing the award and, therefore, in such a situation there was no wilful disobedience of the order and the initiation of contempt proceedings was wholly unjustified.In our view, that was in the context that an appeal from an order imitating the contempt proceedings in a given case can be entertained, particularly those where the order decides some disputes raised before the Court by the contemnor asking it to drop the proceedings on one ground or the other. But in the case of Purshotam Dass Goel vs. Justice B. S. Dhillon (supra), the Supreme Court has in terms accepted the preliminary objection raised on behalf of the respondent i.e. the Learned Solicitor General that no appeal lies to this Court under section 19 of the Act from an order issuing notice as nothing yet has been decided by the High Court. The Supreme Court has expressed that it would appear from a plain reading of the section that an appeal shall lie to this Court as a matter of right from any order or decision of the Bench of the High Court if the order has been made in the exercise of its Jurisdiction to punish for contempt. No appeal can lie as a matter of right from any kind of order made by the High Court in the proceeding for contempt. The proceeding is initiated under section 17 by issuance of a notice. Thereafter, there may be many interlocutory orders passed in the said proceeding by the High Court. It could not be the intention of the legislature to provide for an appeal to this Court as a matter of right from each and every such order made by the High Court. The order or the decision must be such that it decides some bone of contention raised before the High Court affecting the right of the party aggrieved. Mere initiation of a proceeding for contempt by the issuance of a notice on the prima facie view that the case is a fit one, for drawing up the proceeding, does not decide any question. (emphasisIn the present case, the learned single Judge while considering whether to initiate the proceedings for contempt has only expressed a prima facie view for justifying initiation of the proceedings without anything further and has not decided any issue against the alleged contemnor i.e. the appellant and therefore, there was no decision in the matter of the nature affecting the right of the party aggrieved.The Court has also taken into consideration the decision of the Court in the case of Purshotam Dass Goel vs. Justice B. S. Dhillon (supra) and after taking into consideration various decisions in regard to the appeal against order in contempt proceedings, in reply to the first issue has summarized thusI) 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.II) Neither an order declining to initiate proceedings for 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.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 in the exercise of "Jurisdiction to punish 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 intraCourt 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).