Madras High Court
M/S.Transworld Garnet India Private ... vs Mr.N.Rajalingam on 25 May, 2017
Author: M.V.Muralidaran
Bench: M.V.Muralidaran
1
BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
Reserved on : 30.01.2019
Delivered on : 26.02.2019
Coram
THE HONOURABLE MR. JUSTICE M.V.MURALIDARAN
Cont.P.(MD).Nos.1150 and 1180 of 2018 and
Sub.A.(MD)Nos.170 and 171 of 2018 and
Sub.A.(MD)Nos.219 and 220 of 2018
Cont.P.(MD)No.1150 of 2018
M/s.Transworld Garnet India Private Ltd.,
Palayamkottai High Road,
Kuttudankadu Village, Tuticorin – 628 103
Represented by its Managing Director,
S.Jegatheesan ... Petitioner
vs
Mr.N.Rajalingam,
The Assistant Development Commissioner,
Madras Export Processing Zone,
Special Economic Zone & HEOUs in Tamilnadu,
Pondicherry & Andaman and Nicobar Islands,
Administrative Office Building,
National Highway-45, Tambaram,
Chennai – 600 045. ... Respondent
Prayer : Contempt Petition filed under Section 11 of Contempt of
Courts Act, 1971, praying to punish the contemnor / 3rd respondent for
willfully and deliberately disobeying the order of this Court made in
W.M.P.(MD)No.7513 of 2017 in W.P.(MD)No.9806 of 2017 dated
25.05.2017.
http://www.judis.nic.in
2
Cont.P.(MD)No.1180 of 2018
M/s.Vetrivel Minerals (V.V.Minerals),
Sy.No:424 and 416,
AMRL Hi Tech City Limited (SEZ)
Nanguneri, Tirunelveli,
Represented by its Managing Partner ... Petitioner
vs
1.Mr.Dr.M.K.Shanmuga Sundaram, IAS,
The Development Commissioner,
MEPZ Special Economic Zone,
National Highway – 45,
Tambaram,
Chennai – 45.
2.Mr.N.Rajalingam,
The Assistant Development Commissioner,
MEPZ Special Economic Zone,
National Highway-45, Tambaram,
Chennai – 600 045. ... Respondents
Prayer : Contempt Petition filed under Section 11 of Contempt of
Courts Act, 1971, praying to punish the respondents under the
Contempt of Court Act for the willful disobedience of the order of this
Court dated 25.05.2017 in W.M.P.(MD)No.7319 of 2017 in W.P.
(MD)No.9589 of 2017.
(In both Contempt Petitions)
For Petitioner : Mr.S.Meenakshi Sundaram
for M/s.N.Ga.Natraj
For Respondents : M/s.L.Victoria Gowri
http://www.judis.nic.in
3
COMMON ORDER
For the sake of clarity, this Court takes up Contempt Petition (MD) No.1150 of 2018 as the lead case and proceeds to narrate the facts of the said case infra, which are materially similar to the facts in Contempt Petition (MD) No.1180 of 2018.
2. Contempt Petition (MD) No.1150 of 2018 has been filed by the writ petitioner, i.e., Transworld Garnet India Private Limited, seeking to punish the sole contemnor (third respondent in the writ petition) for willfully and deliberately disobeying the order of the Court dated 25.5.2017 passed in W.M.P. (MD) No.7513 of 2017 in W.P. (MD) No. 9806 of 2017.
3. In the writ petition, being W.P. (MD) No.9806 of 2017, the petitioner has sought issuance of a writ of certiorari to call for the records relating to the order passed by the respondent herein (third respondent in the writ petition) in Lr.No.19/32/96/EOU/TN/5760, dated 28.10.2016 suspending the Letter of Permission bearing No.Per/207/95/EOB/51/95, dated 4.5.1995 on the file of the third respondent herein, and all other consequential orders, including orders http://www.judis.nic.in 4 affecting manufacturing activities of all other respondents and quash the same.
4. By the said proceedings dated 28.10.2016, the respondent passed the following order:
“The Letter of Permission bearing No.PER:
207/95/EOB/95, dated 4.5.1995 issued to your Unit and further renewed vide letter No.19/32/96/EOU/TN dated 04.05.2012 has been suspended with immediate effect till further orders by the Unit Approval Committee in its 12th meeting held on 21.12.2016 on the basis of the letters received from the District Collector, Tirunelveli and the Additional Commissioner, Customs, Tuticorin dated 17.12.2016 and 14.12.2016 respectively, and the Public Notice No.50 dated 23.11.2016 issued by the Commissioner, Customs, Tuticorin besides other facts.
Therefore, you are requested to kindly suspend all manufacturing and export activities which were hitherto being undertaken by your Unit on the strength of the aforementioned Letter of Permission.
This is issued with the approval of the Competent Authority.” http://www.judis.nic.in 5
5. Pending the writ petition, this Court by order dated 25.5.2017 passed an interim order in W.M.P. (MD) No.7513 of 2017 in W.P. (MD) No.9806 of 2017, which reads as under:
“The petitioner is an EOU Unit, which was suspended without issuing any show cause notice or hearing the petitioner. Since there is no provision for suspending the units without giving the opportunity to the petitioner, the license can be suspended by following the Section 9 of the Foreign Trade (Development and Regulation) Act, 1992, if the licensee contravened any of the provisions of the Act.
2. No doubt, the petitioner has to fulfil export commitment, otherwise, not only their reputation will be affected, they have to face lot of other legal consequences and compensation, etc.
3. Therefore, there shall be an order of interim stay.
4. Notice to the returnable by eight weeks.”
6. When the said interim order was in subsistence and the proceedings of the respondent dated 28.10.2016 was stayed, the Development Commissioner, Chairperson, Unit Approval Committee, http://www.judis.nic.in 6 vide memorandum dated 9.10.2017, directed the petitioner to show cause within thirty days as to why their request for renewal of Letter of Permission should not be rejected.
7. In such backdrop, the petitioner has filed Contempt Petition No.1150 of 2018 for the relief stated supra.
8. The case in Contempt Petition (MD) No.1180 of 2018 is also on the same lines, the only difference being the name of the petitioner, viz., Vetrivel Minerals (V.V.Minerals) and the contemnors being (i) Dr.M.K.Shanmuga Sundaram, IAS, Development Commissioner, Chennai – 45; and (ii) N.Rajalingam, Assistant Development Commissioner, Chennai – 45.
9. Pending the present contempt petitions, the petitioners filed Sub Applications, being Sub.A.(MD) Nos.170 and 171 of 2018 to stay the proceedings dated 9.10.2017 and this Court, by order dated 3.8.2018, granted an order of interim stay of the said show cause notice dated 9.10.2017.
10. Pursuant to the aforesaid order, this Court issued series of http://www.judis.nic.in 7 directions in the contempt petition and one such order is dated 28.11.2018 and the said order, being of vital importance, is reproduced hereunder for the sake of convenience and clarity on the gamut of the controversy in the writ petitions:
“2. This Court wants to clarify the following questionnaires:
(1)When the complaint of illegal mining operation are not in the scope of your office as mentioned in your counter para-3, what is the necessity to call for report from other departments? (2)All the allegations in the complaint petitions are not relating to MEPZ activities. Then why it is placed in the UAC?
(3)Produce the relevant portion of the Rule or Act of SEZ Act or Foreign Trade Development Act or Foreign Trade Policy authorizing you or the UAC to call for report from the District Collector in connection with complaint not relevant to EOU Activities?
(4)When the EOU operations are under bonded warehouse notified under Customs Act who are the authorised persons to inspect the same, whether District Collector or the State Government officials are authorised persons? If yes, produce the notification or rule? (5) Produce the permission granted by the competent authorities to the State Government http://www.judis.nic.in 8 officials particularly District Collector, Tirunelveli or its Subordinates for inspection of the bonded ware house notified under Customs Act under EOU Scheme?
(6) When the District Collector replied all are relating to mining operation and the quantities of raw sand etc., available with the lessee to be treated illegally mined under MMDR Act and Rules, as per para 8 of your reply, what is the necessity to take action under Foreign Trade Development Act?
(7) When the stocks are received and acknowledged by the bonding officer, without call for any report from the bonding officer, why you call for report from the District Collector who has no authority under Foreign Trade Development Act? (8) Which are the conditions of LOA and LOP were violated or which are the provisions of policy or procedure were violated?
(9) Based on the background activities of other departments, which provision authorize UAC for consideration of LOA and LOP?
(10) As per Hand Book of Procedures Clause 6.01(i) notified under Foreign Trade Development Act, if the EOU unit made an application to continue under 100% EOU Scheme, the DC will extend the approval period. If no intimation is received within 6 months of expiry of the approval period, http://www.judis.nic.in 9 then only the DC can take action. Whether in this case, they have applied or not? (11) Whether you are ready to rectify the mistakes or not?
(12)If you are ready to rectify the mistakes, discuss with the petitioner and rectify the same and inform to the Court.” The above questionnaire was directed to be answered on or before 17.12.2018.
11. In response to the said questionnaire, the respondents submitted a reply in respect of each of the questions raised in the following manner, viz., the answers, referring to the questions raised above in seriatim, are as under:
(1)Though the issue of illegal mining operation does not fall within the purview of the respondents, the issue of legality of source of raw materials, it's processing and exportation stemming from the issue of illegal mining is within the scope and jurisdiction of the respondents. Therefore, the respondents cannot be immune to the allegations of illegal mining or remain silent to the report of the District Collector, Tirunelveli, who had declare the raw materials stocked in the premises of the petitioners as illegal. (2) The allegations of illegal mining may not fall http://www.judis.nic.in 10 within the purview of MEPZ SEZ but the fact that the allegation of illegal mining has a direct bearing on the source of raw materials of the petitioner Units cannot be ignored by the MEPZ SEZ. Therefore, the issue was brought before the UAC, which as members from State Government and Central Government Departments and UAC has been empowered to monitor performance of units, etc., as per the Handbook of Procedures 2015-2020.
(3) As per Para 6.32 (b) of Handbook of Procedures 2015-2020 and Section 14(f) of SEZ Act, the UAC is empowered to monitor and supervise compliance of conditions subject to which the letter of approval or permission is granted. (4) Bonding of premises of EOU/SEZ units by the Customs authorities will not prohibit the District Collector, under whose jurisdiction the premises falls, to enter the premises and carry out inspection. However, the respondent left the issue for answering by the District Collector. (5) The District Collector, Tirunelveli was to answer this question.
(6) Declaration by the District Collector under the MMDR Act that the stock available with the petitioner unit is illegal, has relevance for taking appropriate action under the FTP 2015-20 or FTDR Act, 1992 or the SEZ Act, 2005 and SEZ http://www.judis.nic.in 11 Rules, 2006 also.
(7) The Bonding Officer under the Customs Law has no jurisdiction under MMDR Act, 1957 or Rules to certify the legality of raw materials stored in the petitioner units. Therefore, seeking a report from the Bonding Officer on the legality of the raw materials stocked in the petitioner units would not be appropriate.
(8) The action initiated by the respondents is bona fide and in good faith based on series of complaints alleging illegal mining operations, declaration of the raw materials stocked in the petitioner premises as illegal by the District Level Committee headed by the District Collector and other various actions taken by the Competent Authorities on this issue.
(9) The UAC, which is a multi-departmental body, is empowered to take appropriate action against the petitioner unit.
(10) Since the District Level Committee headed by the District Collector, Tirunelveli has declared the stock of raw materials held by the petitioner units in their premises as illegal and since there is an alleged violation of MMDR Act, 1957 as clarified by the District Collector, the question of automatic renewal of LOP/LOA for the petitioner unit does not arise.
(11)Allowing the petitioner unit to continue to http://www.judis.nic.in 12 operate by utilizing the raw materials declared illegal by the District Level Committee headed by the District Collector, Tirunelveli, would be totally unjustifiable.
(12) To vacate the contempt petition.”
12. The learned counsel for the petitioners vehemently contended that inasmuch as the proceedings dated 28.12.2016 issued by the contemnors have been stayed by this Court and the such order is in force and has not been set aside in the manner known to law, the subsequent proceedings dated 9.10.2017 issuing another show cause notice for the same cause of action is uncalled for and tantamounts to willful disobedience of the order of interim stay granted by this Court.
13. Per contra, the learned counsel for the respondent reiterated the stand taken by them in the questionnaire and justified the action taken by the authorities.
14. Heard the learned counsel on either side and perused the documents available on record.
15. In Satyabrata Biswas & others v. Kalyan Kumar Kisku and http://www.judis.nic.in 13 others, (1994) 2 SCC 266, it was opined that the Court while dealing with contempt proceedings should strictly confine itself to determination of disobedience of the Court and refrain from dealing with other matters.
16. Likewise, in T.N. Godavarman Thirumulpad v. Ashok Khot, (2006) 5 SCC 1, the purpose of court's powers to make findings of contempt was opined to ensure that orders of the court are obeyed in the context of violation of the orders of the Court.
17. It is beyond any cavil that the power of Courts of record is extraordinary in nature and, therefore, the Courts should be reluctant to exercise this power, more particularly in a civil contempt, and this power should not be exercised if the offence complained of is of a slight or trifling nature and does not cause any substantial loss or prejudice to the complainant. Even a civil contempt, when the proceedings are taken under the Contempt of Courts Act, assumes a quasi-criminal nature, therefore, this power should be exercised with scrupulous care and only when the case is clear and beyond reasonable doubt. Before punishing a person under the provision of Contempt of Court Act there must be willful and deliberate defiance of http://www.judis.nic.in 14 the order of Court, it should not be merely accidental and casual in nature. It is not each and every defiance and disobedience of the order of Court can be held willful disobedience of the order of the Court.
18. The question whether there is contempt of court or not is a serious one as the Court is both the accuser as well as the judge of the accusation requiring the Court to act with as great circumspection as possible making all allowances for errors of judgment and difficulties arising from inveterate practices in Courts and Tribunals. The punishment and that too with such severity would arise only in a case of clear contumacious conduct, which has not been explained. It is only in the case of a deliberate lapse and disregard to ones duties and in defiance of authority that such extreme measures are called for. To take action in a case where the contemnor has unconditionally apologized even though the lapse is not deliberate would “certainly sound the death knell of what Dean Roscoe Pound calls "judicial justice" and the Rule of Law.” (In Re: S. Mulgaonkar (1978) 3 SCC
339)
19. In the case on hand, this Court, by order dated 25.5.2017 granted an order of interim stay of the proceedings dated 28.10.2016. http://www.judis.nic.in 15 Admittedly, as against the said order of interim stay, the respondent contemnors had not chosen to file any appeal or a petition to vacate stay. Therefore, the order of interim stay passed on 25.5.2017, even according to the contemnors, holds the field.
20. Now, coming to the conduct the respondent contemnors. It is seen from the records that, though the order of interim stay has very well been recorded in the memorandum dated 9.10.2017, the Development Commissioner, Chairperson, Unit Approval Committee, proceeded to hold as under:
“10. And whereas the unit filed W.P.No.9806 of 2017 before the Hon'be High Court of Madrs (Madurai Bench) and the Hon'ble High Court granted interim stay of suspension of their LOP vide order dated 25.5.2017.
11. Whereas since the LOP of the Unit had expired on 22.4.2017, the Unit had sent requests for renewal of their LOP and the same was placed before the UAC and the UAC had decided to issue Show Cause notice to the unit as to why their request for renewal of LOP should not be rejected in view of the afore said issues relating to mining and export of Beach Minerals.”
21. When the proceedings dated 28.10.2016 directing the http://www.judis.nic.in 16 petitioner units to suspend all manufacturing and export activities which were hitherto being undertaken by the petitioner units on the strength of the Letters of Permission have been stayed by this Court and is the subject matter of the writ petition, pending adjudication by this Court, it is not known as to how the proceedings dated 9.10.2017 has been passed by the Development Commissioner, Chairperson, Unit Approval Committee, directing the petitioner units to once again show cause within thirty days as to why their request for renewal of Letters of Permission should not be rejected.
22. The Letter of Permissions sought to be rejected are one and the same. The same has already been directed to be suspended by the respondent and this Court granted interim stay of the said order. Thereafter, it does not like in the mouth of another authority to consider the very same issue of granting renewal or rejecting the Letters of Permission, when the matter is pending adjudication before this Court. Therefore, in my considered opinion, willful disobedience of the order of interim stay passed by this Court is obvious and certainly, the respondents committed an act of contempt making themselves liable for punishment. A reading of the proceedings dated 9.10.2017 shows that such proceedings has been passed after recording the http://www.judis.nic.in 17 order of interim stay passed by this Court. Therefore, by no stretch of imagination, the proceedings can be said to have been passed accidentally. Moreover, the petitioners would be put to irreparable loss and hardship. The act of the respondent contemnors certainly amounts to willful and deliberate defiance of the order of Court.
23. Punishing a person for contempt of Court is indeed a drastic step and normally such action should be taken with circumspection. At the same time, it is not only the power conferred upon the Court, but also its duty to uphold and maintain the dignity of Court and majesty of law, which may call for such extreme step. If for proper administration of justice and to ensure due compliance with the order passed by the Court, a compulsion is thrust upon the Court to take a strict view under the Act, the Court should not hesitate to enforce its own order by exercising the power of contempt, inasmuch as it is also the duty of the Court to enforce its own order. Otherwise, the person in whose favour the order, judgment or decree is passed will be not only losing his confidence in the Court for having approached for justice, but the entire proceedings will be rendered meaningless, consequently the sanctity of the Court's proceedings would also become a mockery and an empty formality.
http://www.judis.nic.in 18
24. For all the foregoing discussions and conclusions, these contempt petitions are allowed holding the respondent contemnors guilty of contempt of this Court under Section 2(b) of the Contempt of Courts Act, 1971 read with Article 215 of the Constitution of India.
25.This Court hereby sentences the respondent contemnors to undergo simple imprisonment for a period of two weeks. Further, this Court imposes a fine of Rs.5,000/- (Rupees Five Thousand only) to be paid within three weeks, failing which they shall further undergo imprisonment for two more weeks. It is made clear that the show cause notice dated 09.10.2017 is stayed till the disposal of the writ petition Nos.9806 and 9589 of 2017. Consequently, connected Sub Applications are closed.
26.02.2019 vsv Index : Yes Speaking order http://www.judis.nic.in 19 M.V.MURALIDARAN.J., vsv Pre-delivery order made in Cont.P.(MD).Nos.1150 and 1180 of 2018 and Sub.A.(MD)Nos.170 and 171 of 2018 and Sub.A.(MD)Nos.219 and 220 of 2018 http://www.judis.nic.in 20 26.02.2019 http://www.judis.nic.in