HM Journal

Whether Wilful Breach of Undertaking Given to Court is Contempt

The aforementioned question can be answered righteously by scrutinizing and analysing a landmark judgment, namely “Suman Chadha & Anr. vs Central Bank of India on 9 August, 2021, Bench: Hon’Ble Ms. Banerjee, V. Ramasubramanian. The same has been done as follows.

Background:

After being seen as liable of contempt of Court, the petitioners who are a couple in their mid-40s, were condemned to basic detainment for 90 days alongside a fine of Rs.2000/each, by the honourable judge of the Delhi High Court. The said Order having been affirmed by the Division Bench of the High Court in an allure under Section 19 of the Contempt of Courts Act, 1971 (Act’ for ort), the solicitors have thought of the above Special Leave Petition. On 29th April, 2015, the solicitors gave a letter alongside four checks for Rs. 50 lakhs each dated 06th May, 2015 purportedly in consistence of the request dated 08th April, 2015. In a similar manner, the belonging procedures for one property planned for 30th April, 2015 were conceded by the Bank. In any case, on 08th May, 2015, every one of the four checks had been bounced. Along these lines, the respondent-Bank recorded an appeal under Sections 10 and 12 of the Contempt of Courts Act. 1971 for rebuffing the solicitors for wilful and intentional breach of their undertaking dated 08.04.2015. However, the solicitors opposed the contempt appeal on the ground that breach of an undertaking, made so as to get a conditional order of stay may not commensurate to contempt, particularly when the outcomes of breach of such undertaking are elaborated in the order for the actual Court. the honourable Judge was not persuaded. In this way, by an Order dated 18.07.2017, the honourable Judge of the High Court held the solicitors being guilty of contempt and condemned them basic detainment for 90 days with a fine of Rs.2000 each.

Principles and Statutory Provisions Concerned:

The primary Principle in concern, present in this case law is the sanctity and jurisdiction of the Contempt of Courts Act, 1971 and whether wilful breach of undertaking given to Court would amount to Contempt of Court under S. 2(b) of Contempt of Courts Act.

  1. Whether Wilful Breach of Undertaking Given to Court Is Contempt:

While it is dependable on the court to see whether the resulting behaviour of the asserted contemnor would be equivalent to an extension of the contempt previously dedicated, the actual assurance of a demonstration of contempt of disdain can’t just be founded on the ensuing behaviour. In any case, the ensuing behaviour of the party might illuminate one significant viewpoint in particular whether it was only the failure of the party to respect the responsibility or it was important for a bigger plan to undermine the sanctity of the court. Therefore, the Supreme Court in its judgment stated that the foundation of guilt of a party for contempt of court ought not be done based on resulting behaviour of the party.

  • Section 2(b) of the Contempt of Courts Act 1971:

It constitutes the definition of “civil contempt” which signifies wilful disobedience to any judgment, order, bearing, request, writ or other interaction of a court or wilful break of an endeavour given to a court.

  • Section 10 of the Contempt of Courts Act 1971:

It elucidates the power of the High Court in punishing contempt of subordinate courts and states that each High Court will have and practice a similar jurisdiction, forces and authority, as per a similar technique and practice, in regard of contempt of courts subordinate to it as it has and practices in regard of contempt of itself.

  • Section 12 of the Contempt of Courts Act 1971:

It elucidates the punishment awarded in cases of contempt of court, which varies from case to case and order to order, with punishments like simple imprisonment or others, depending on the gravity of the contempt committed.

  • Section 13 of the Contempt of Courts Act 1971:

It elucidates the contempt that is not punishable under certain circumstances, with the conditions that in any case anything contained in any law for the time being in power—

(a) no court will force a sentence under this Act for a disdain of court except if it is fulfilled that the hatred is of such a nature that it considerably meddles, or tends significantly to meddle with the proper method of equity;

(b) the court might allow, in any procedure for disdain of court, legitimization by truth as a substantial safeguard in case it is fulfilled that it is in broad daylight interest and the solicitation for summoning the said protection is real.

  • Section 19 of the Contempt of Courts Act 1971:

It elucidates the appeals that can be made in front of the High Court in a contempt of Court case, or to the Supreme Court when dissatisfied with the order of the High Court.

Facts of the case:

  1. The petitioners were Directors of an organization by name Parul Polymers Private Limited.
  2. On 24th July, 2014, the credit of the respondents was sorted as a Non-Performing Asset because of defaults in reimbursement. On eighteenth August, 2014, a notification under Section 13(2) of SARFAESI Act[1] was given for recuperation of Rs. 28,82,942.24 in addition to intrigue.
  3. Bothered by something similar, the petitioners documented S.A. No. 367/2014 preceding the Debts Recovery Tribunal-III, New Delhi (‘DRTIII’ for short), under Section 17 of the SARFAESI Act.
  4. Notwithstanding, on 01st April, 2015, the petitioners got a conditional order of stay from DRT-III, New Delhi[2], whereby the candidates were needed to store an amount of Rs. 5 crores inside thirty days.
  5. From there on, the applicants challenged the conditional order of stay passed by DRT-III on 01st April, 2015 under the High Court[3] expressing that the Bank and DRT-III were acting unjustifiably and shamefully in not tolerating their checks totalling to Rs. 2 crores.
  6. As needs be, the belonging procedures for one property booked for 30th April, 2015 were conceded by the Bank. Yet, on 08th May, 2015, every one of the four checks had been bounced.

Analysis:

The undertaking in question that led to the court proceedings:

It is actually the case that this Court has held in a progression of choices that the wilful breach of the undertaking given to the Court adds up to contempt of Court under Section 2(b) of the Act.

  • In any case, the Court has consistently seen:
  • the idea of the undertaking made;
  • the advantage assuming any, harvested by the party giving the undertaking; and
  • regardless of whether the documenting of the endeavour was so as to play extortion upon the court or to dupe the contrary party.

Further, the Court adds that, the qualification between an order passed on assent terms and order passed exclusively based on an undertaking given to the court and the differentiation between an individual playing misrepresentation on the court accordingly blocking the course of equity and an individual playing extortion on one of the gatherings, was brought out by this Court in Babu Ram Gupta v. Sudhir Bhasin[4].

The Court added that in Rama Narang v. Ramesh Narang[5], this Court called attention to the differentiation between two classifications of cases covered by Section 2(b) of the Act to be specific

  • wilful disobedience of court; and
  • wilful breach of undertaking given to a court.

Reason behind the Court upholding the decisions of the High Court:

The series of acts submitted by the applicants in getting uncovered through the report of the SFIO, persuaded the High Court to accept that the undertaking given by the candidates on 08-04-2015 did not depend on great confidence yet expected to undermine the Court.

While maintaining the findings of the Delhi High Court that the solicitors were liable of contempt of court, however lessening the time of sentence from 90 days to the time of detainment previously endured by the applicants, the SLP reached a conclusion.

Conclusion:

The Bench of the Supreme Court has set out the right legitimate situation on this. The main concern of this outstanding judgment can be just expressed along these lines: The wilful breach of the undertaking given to the Court can add up to contempt under Section 2(b) of the Contempt of Courts Act., which holds individuals accountable for actions against the court, as well as maintains the court’s sanctity.

References:

https://main.sci.gov.in/supremecourt/2018/39780/39780_2018_40_1501_29121_Judgement_09-Aug-2021.pdf

Edited by: Pervez Sadiq Rahman

College Name: Christ University, Bangalore (3rd Sem)


[1] The SARFAESI Act, 2002 essentially empowers banks and other financial institutions to directly auction residential or commercial properties that have been pledged with them to recover loans from borrowers.

[2] S.A. No. 367/2014

[3] W.P.(C)No.3406/2015

[4] (1980) 3 SCC 47

[5] (2006) 11 SCC 114

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