Karnataka High Court
High Court Of Karnataka vs Mr Patrick Lawrence on 13 June, 2013
Equivalent citations: 2014 (1) AKR 418, AIR 2014 (NOC) (SUPP) 796 (KAR)
Author: N Kumar
Bench: N Kumar
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IN THE HIGH COURT OF KARNATAKA AT
®
BANGALORE
DATED THIS THE 13TH DAY OF JUNE 2013
PRESENT
THE HON'BLE MR.JUSTICE N KUMAR
AND
THE HON'BLE MR.JUSTICE V.SURI APPA RAO
C.C.C. No. 418/2013 (Civil)
BETWEEN:
High Court of Karnataka,
Represented by the
Registrar General,
Bengaluru - 560 001. ....Complainant
(Suo motu)
(By Sri. V.S. Hegde, AGA) *
AND:
Mr. Patrick Lawrence,
Proprietor, M/s. Lion Holding's
No.91-92, St. Antony's Colony,
Mariana Palya, Near Coffee
Board Layout, Hebbal Kempapura,
Bangalore - 560 024. ...Accused
(**)
This Suo-Motu Contempt Case is filed under
Article 215 of the Constitution of India r/w Sections
*Corrected & ** deleted vide chamber order Dt.31.10.2013
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11 and 12 of the Contempt of Court Act, 1971, prays
that this Hon'ble Court be pleased to initiate
contempt proceedings against the accused for violated
the order dated 02.04.2011 passed in A.C. No.1/2009
in C.M.P. No.41/2008 and punish the accused in
accordance with law, in the ends of justice.
This Contempt Case coming on for Orders this
day, N KUMAR J., made the following:
ORDER
High Court Registry has registered this contempt petition on the basis of the letter dated 02.04.2011 written by Justice B.S. Raikote, Former Judge of the High Court of Karnataka requesting to initiate contempt proceedings against the accused herein.
2. Facts in brief are as under :
Relying on an agreement dated 12.04.2004 the accused herein filed C.M.P. No.41/2008 before this Court against the Additional Managing Director, National Agricultural Co-Operative Marketing Federation of India Ltd., and M/s. Earthtech 3 Enterprises Limited, seeking appointment of an Arbitrator as per the Arbitration Clause contained in the said agreement. This Court by an order dated 1st December 2008 allowed the petition, appointed Justice Sri. B.S. Raikote, Former Judge of the High Court of Karnataka and Andhra Pradesh. Further, it was directed that the fees of the Arbitrator shall be fixed by him and the Arbitrator shall conclude the proceedings expeditiously. On receipt of the copy of the said order, the Arbitrator entertained the reference, issued notice to both the parties.
Thereafter, the accused herein filed his claim petition praying for an award of Rs.94,82,90,000/-. The Tribunal by its order dated 14.11.2009 fixed the fees of the Arbitration on the basis of the proposal made by both the parties as Rs.20,000/- per sitting, to be shared equally by both the parties. The respondent in the claim petition paid the share of Arbitration fees @ Rs.10,000/- per sitting all along. But the 4 claimant/accused paid Rs.10,000/- on 20.12.2009 and Rs.25,000/- on 24.04.2010. He also did not co-
operate in the progress of the case. He did not file any rejoinder to the statement of objections. In the month of August 2010 the total arrears payable by the claimant towards Arbitration fee was Rs.2,25,000/-. The claimant gave a post-dated cheque to be presented on or after 18.08.2010. On presentation to the bank the said cheque was returned for the reason 'insufficient funds'.
Thereafter, the claimant who was present in person on 11.12.2010 undertook to pay the amount covered by the dishonoured cheque and all the arrears falling due thereafter. The Arbitration fees due as on 29.01.2011 worked out to Rs.3,40,000/-, but the same was not paid. The Arbitral Tribunal relying upon Section 38(2) Proviso of the Act directed the respondent to pay the amount due, by posting the case to 26.02.2011. The respondents submitted that 5 they have paid their share of the Arbitration fees and are not liable to pay the arrears of the Arbitration Fees which is payable by the claimant. They submitted that the claimant has violated the undertaking given to the Tribunal and therefore, the proceedings should be terminated and the claimant punished under the provisions of the Contempt of Courts Act, 1971. Thereafter, as the claimant as well as his Counsel remained absent and the Arbitrator's fees was also not paid, invoking the powers conferred under Section 38(2) of the Act, the Arbitrator terminated the arbitration proceedings. He was of the view that the Arbitral Tribunal was deemed to be a Sub-ordinate Court to the High Court and as the claimant had disobeyed the order of this Court as well as the undertaking given to the Arbitral Tribunal, it amounted to contempt of Court and therefore, proceeded to pass the order dated 2nd April 2011 as under :6
"The arbitral proceedings are hereby terminated under Second Proviso to Section 38(2) of the Arbitration and Conciliation Act 1996. However, it is made clear that if the Claimant, so chooses, he may file an application for reopening of the case within 30 days, from the date of the receipt of this order, by depositing the entire arrears.
The Registrar General of the High Court is hereby requested to place the matter before My Lord the Chief Justice or before any other appropriate bench of the Hon'ble High Court of Karnataka;
a) For initiating appropriate Contempt Proceedings against the Claimant under The Contempt of Courts Act 1971 and punishing Mr. Patrick Lawrence S/o K.A. Peter, age major, the Proprietor of the Claimants Company, according to law.
b) For a direction against the Claimant under Section 39 (3 & 4) read with Section 42 of the Arbitration and Conciliation Act 1996 7 r/w Art 226 of the Constitution, to pay the entire arbitration fees of Rs.2,25,000=00 covered by Cheque No.525795 dated 18.8.2010 on ICICI Bank, R.T. Nagar Branch, which was bounced back by the Bank on the ground of "Funds Insufficient" and also all arrears of arbitration fees falling due thereafter, and thus total sum due comes to Rs.3,40,000=00.
c) For passing any other appropriate order this Hon'ble Court considers just in the circumstances of this case".
That is how this Contempt Petition came to be registered and the matter is listed before us for orders.
3. This being a suo-motu proceedings, before issue of notice to the accused, we looked into the petition and requested the learned Government Advocate to enlighten us if the facts set out above constitute 8 contempt of Court for initiation of proceedings under the Contempt of Courts Act, 1971.
4. The learned Government Advocate submits the Arbitration and Conciliation Act, 1996 is a self- contained enact. Section 2(e) of the Act defines 'Court'. An Arbitral Tribunal constituted under the Act does not fall within the definition of the Court under the Act. The Arbitration Act is a special law and Section 27 of the Arbitration Act provides for the Arbitral Tribunal to approach the Court for any default or guilty of any contempt to the Arbitral Tribunal, or conduct of the Arbitral proceedings. The Arbitrator has to approach the Court under the Act for assistance. The definition of Civil Contempt in the Contempt of Court Act, 1971 makes it clear that 'Civil Contempt' means willful disobedience of any judgment, decree, direction, order, writ or other process of Court or willful breach of an undertaking 9 given to a Court. As these proceedings arising out of the Arbitration Act, the word 'Court' used in the said definition has to be understood in the context of the Arbitration and Conciliation Act and the Arbitral Tribunal is not a Court. Therefore, the Contempt of Courts Act has no application to any default committed by any of the parties before the Arbitral Tribunal. Nor is a party before the Tribunal is guilty of any contempt of the Arbitral Tribunal during the conduct of Arbitral proceedings. Therefore, the learned Government Advocate submitted that no case of contempt is made out under the Act, as such the proceeding has to be dropped.
5. From the facts set out as above, the contempt alleged against the accused is that he issued a cheque to the Arbitrator towards the fees and the said cheque was dishonoured. Thereafter, he appeared before the Arbitrator, undertook to pay the amount, but not 10 acted according to the undertaking. Therefore, he is guilty of default in payment of Arbitration Fees and the same constitutes a Civil Contempt.
6. The Contempt of Court Act, 1971 was enacted by the Parliament to define and deal with the powers of certain Courts in punishing contempt of court and to regulate their procedure in relation thereto. The reason being that it was held that the existing law relating to contempt of court was some what uncertain, undefined and unsatisfactory. The jurisdiction to punish for contempt touches upon important fundamental rights of the citizens namely., right to personal liberty and the right to freedom of expression. Therefore, a Special Committee was constituted to scrutinize the law and after taking into consideration the law prevailing in other foreign countries, the Committee made a comprehensive examination of the law and problem involved and 11 made its recommendation. Based on the said recommendation, the Act was enacted.
7. The Supreme Court had an occasion to consider the object behind this legislation in the case of Perspective Publications (P) Ltd., and another Vs. The State of Maharashtra reported in AIR 1971 SC 221 at page 230 it is observed as under :
"The summary jurisdiction by way of contempt must be exercised with great care and caution and only when its exercise is necessary for the proper administration of law and justice".
Contempt of court is essentially a matter which concerns the administration of justice and the dignity and authority of judicial Tribunals. It is not a right of a party to be invoked for the redressal of his grievances. It is not also a mode by which the rights of a party, adjudicated upon by a Tribunal, can be 12 enforced against another party. If the matter requires a detailed enquiry, it must be left to the Court which passed the order and which presumably is fully acquainted with the subject matter of its own order. When the matter relates to mere infringement of an order, as between the parties, it is clearly inexpedient to invoke and exercise contempt jurisdiction as a mode of executing the order, merely because other remedies may take time or are more circumlocutory in character. Contempt jurisdiction should be reserved for what essentially brings the administration of justice into contempt or unduly weakens it (Vide (1964) 68 Cal WN 148, AIR 1951 Pat 231, AIR 1966 Mad 21 and AIR 1971 All 231).
8. In this background, when we look at the definition of civil contempt as contained in Section 2, it reads as under :
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"2. Definitions: In this Act, unless the context otherwise requires,
a) "contempt of court" means civil contempt or criminal contempt;
b) "Civil contempt" means willful disobedience to any judgement, decree, direction, order, writ or other process of a court or willful breach of an undertaking given to a court;
c) "criminal contempt" means the publication (whether by words, spoken or written, or by signs, or by visible representation, or otherwise) of any manner or the doing of any other act whatsoever which
(i) scandalises, or tends to scandalise, or lowers of tends to lower the authority of, any court; or
(ii) prejudices, or interferes or tends to interfere with, the due course of any judicial proceeding; or
(iii) interferes or tends to interfere with, or obstructs or tends to 14 obstruct, the administration of justice in any other manner;
(d) "High Court" means the High Court for a State or a Union territory, and includes the court of the Judicial Commissioner in any Union territory".
From the aforesaid definition, it is clear that, there should be a willful disobedience of a judgment, decree, direction, or order of a Court or a willful breach of undertaking given to Court. The word 'Court' is not defined under the Act. Therefore, whenever a complaint is made of disobedience of an order of a Court or undertaking given to a Court, we have to understand the meaning of the Court in the context of right of the party, which is infringed. In the instant case, the order passed under the provisions of the Arbitration and Conciliation Act, 1996, is said to have been disobeyed. The Act of 1996 defines the Court; in Section 2(e), as under : 15
"2(e) "Court" means the Principal Civil Court of original jurisdiction in a district, and includes the High Court in exercise of its ordinary original civil jurisdiction, having jurisdiction to decide the questions forming the subject-matter of the arbitration if the same had been the subject-matter of a suit, but does not include any civil court of a grade inferior to such principal Civil Court, or any Court of Small Causes".
Therefore, Court means the Principal Civil Court of original jurisdiction in a district and includes the High Court. It expressly excludes Civil Court of a Grade inferior to such Principal Civil Court, or any Court of Small Causes. Therefore, an Arbitral Tribunal constituted under the Act is excluded from the definition of the word 'the Court'. Section 11 of the Act empowers the Chief Justice of the High Court to appoint an Arbitrator. Once an Arbitrator is appointed he constitutes an Arbitral Tribunal. 16 Therefore, though an Arbitral Tribunal is constituted by an order of this Court under Section 11 of the Act and the same is not included within the definition of word 'Court' as defined under Section 2, the Arbitral Tribunal is not a Court under the Act.
9. Section 27 of the Act further makes it clear that the Arbitral Tribunal is not vested with the powers which are vested in the Civil Court. Therefore, the said provision enables the Arbitral Tribunal to approach a Court for assistance in the matters set out therein. Section 27 reads as under :
"27. Court assistance in taking evidence.--(1) The arbitral tribunal, or a party with the approval of the arbitral tribunal, may apply to the Court for assistance in taking evidence.
(2) The application shall specify--
(a) the names and addresses of the parties and the arbitrators ;17
(b) the general nature of the claim and the relief sought;
(c) the evidence to be obtained, in particular.--
(i) the name and address of any person to be heard as witness or expert witness and a statement of the subject-matter of the testimony required;
(ii) the description of any document to be produced or property to be inspected.
(3) The Court may, within its competence and according to its rules on taking evidence, execute the request by ordering that the evidence be provided directly to the arbitral tribunal. (4) The Court may, while making an order under sub-section (3), issue the same processes to witnesses as it may issue in suits tried before it.
(5) Persons failing to attend in accordance with such process, or
making any other default, or refusing to give their evidence, or guilty of any contempt to the arbitral tribunal during 18 the conduct of arbitral proceedings, shall be subject to the like disadvantages, penalties and punishments by order of the Court on the representation of the arbitral tribunal as they would incur for the like offences in suits tried before the Court.
(6) In this section the expression "Processes" includes summonses and commissions for the examination of witnesses and summonses to produce documents".
Sub-Section (5) of Section 27 makes it abundantly clear as to what should be done when there is a default by a party before the arbitral Tribunal or is guilty of any contempt of the arbitral Tribunal during the conduct of arbitral proceedings. He would incur the disadvantages, penalties and punishments as he would incur for the like offences in suits tried before the Court. If the arbitral tribunal feels there is default on the part of the party to the arbitration 19 proceedings and is guilty of any contempt of arbitral tribunal, then the arbitral tribunal should seek assistance of the Court for enforcement of its order or for punishing the party guilty of any contempt of the arbitral proceedings.
10. When a Parliamentary legislation prescribes a remedy for contempt of the arbitral Tribunal and Arbitral Tribunal is not a court as defined under the Act of 1996, the disobedience of the orders of such arbitral tribunal would not constitute civil contempt under the provisions of the Contempt of Courts Act. In that view of the matter, this Court has no jurisdiction to entertain this petition and to take any action against the respondent/accused in this proceeding. The Arbitrator has to work out his remedy either under Section 27 of the Act or in any other manner known to law.
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11. In the result, this contempt petition is dismissed as not maintainable.
Sd/-
JUDGE Sd/-
JUDGE.
Rbv/-