Delhi High Court
Som Datt Enterprises Limited vs Vijay Cable Industries & Ors on 28 November, 2016
Author: Rajiv Sahai Endlaw
Bench: Rajiv Sahai Endlaw
*IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of decision: 28th November, 2016
+ CCP(O) No.146/1997 in EX.P. 126/1997
SOM DATT ENTERPRISES LIMITED ..... Decree Holder/Relator
Through: Mr. G.P. Thareja & Mr. Himanshu
Pathak, Advs.
Versus
VIJAY CABLE INDUSTRIES & ORS .... Judgment Debtors/
Alleged Contemnor
Through: Mr. Rajesh Banati & Mr. Vikram
Pratap Singh, Advs.
CORAM:-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1. The Relator/Decree-holder Som Datt Enterprises Ltd. has filed this
petition averring:
(i) that the relator/decree-holder filed Execution Petition
No.126/1997 for execution of the consent decree dated 15th April, 1996 in
Suit No.2428/1995;
(ii) that Vide order dated 29th May, 1997 in the aforesaid execution
petition, various receivables of the judgment-debtors i.e. alleged
contemnors, from Director General of Supplies & Disposals (DGS&D) and
various Electricity Boards as well as the immovable property bearing No.A-
CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 1 of 35
111, New Friends Colony, New Delhi were attached; accordingly the
DGS&D and various State Electricity Boards were restrained and prohibited
from making any payment to the judgment-debtors/alleged contemnors to
the extent of the decretal amount;
(iii) the judgment-debtors / alleged contemnors approached the relator /
decree-holder and offered to pay the decretal amount in installments with a
request to the relator / decree-holder that the interim restraint and attachment
order be withdrawn; the judgment-debtors / alleged contemnors assured that
a large amount was immediately due to them from the DGS&D and the
Andhra Pradesh State Electricity Board (APSEB) and that upon withdrawal
of the attachment, the amount would be paid by the judgment-debtors /
alleged contemnors to the relator / decree-holder;
(iv) that the relator/decree-holder agreed to the said offer and accordingly
a settlement / compromise was entered into whereunder the judgment-
debtors / alleged contemnors agreed to forthwith pay an amount of Rs.46
lacs to the relator / decree-holder and to pay the balance amount in 40 equal
bimonthly installments with effect from 31st August, 1997 till 31st March,
1999;
CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 2 of 35
(v) that the judgment-debtors / alleged contemnors had further agreed to
pay overdue interest amount in the sum of Rs.10,62,000/- upto 30th June,
1997 and Rs.1,00,000/- towards partial cost of legal expenses incurred by
the relator / decree-holder - this amount of Rs.11,62,000/- was agreed to be
paid by the judgment-debtors / alleged contemnors in four equal installments
of Rs.2,90,500/- payable by 31st December, 1997, 31st May, 1998, 31st
October, 1998 and 31st March, 1999;
(vi) that the judgment-debtors/alleged contemnors had also agreed and
given an undertaking to this Court to the effect that they would faithfully
abide by the terms and conditions of the said settlement and shall punctually
discharge all their liabilities thereunder;
(vii) that in view of the said settlement, the parties jointly moved an
application before this Court in Execution Petition No.126/1997 for vacating
the order dated 29th May, 1997 attaching the assets and receivables of the
judgment-debtors / alleged contemnors;
(viii) that the aforesaid application being EA No.233/1997 came up before
this Court on 30th July, 1997 when judgment-debtors/alleged contemnors
through their counsel undertook to the Court that the judgment-debtors /
CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 3 of 35
alleged contemnors shall remain bound by the terms and conditions as
contained in the compromise application and in the agreement dated 24 th
July, 1997;
(ix) that the undertaking given by the judgment-debtors / alleged
contemnors through counsel was accepted and acted upon by this Court and
the following order was passed:
"In view of the above statement given by the learned counsel for both
the parties before this Court today the Execution Petition
(Ex.No.126/97) is directed to be disposed of in terms of compromise
(Ex.C-1) arrived at between the parties. The parties shall remain
bound by the terms and conditions as contained in the application for
compromise (Ex.C-1) and also the Agreement executed between the
parties on 24th July, 1997 (Annexure A-1). The parties shall also
remain bound by the undertaking given by their respective Advocates
before this Court today. The attachment order dated the 29th May,
1997, in view of the fact that the parties have arrived at a compromise,
is hereby vacated. As a measure of abundant caution it is clarified that
in the event of any default by the Judgment Debtors the Decree Holder
is given the liberty to move an application for the revival of the
Execution Petition.
A copy of this order be also sent to the garnishees for information.
A copy of the order be also given „dasti‟ to the parties."
CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 4 of 35
(x) that in terms of the aforesaid settlement / compromise and
undertaking, the judgment-debtors / alleged contemnors were required to
pay an amount of Rs.46 lacs with interest, with Rs.31 lacs being payable
immediately on lifting of the order of attachment and Rs.15 lacs being
payable within three weeks of the settlement and the balance decretal
amount as agreed;
(xi) that however in total disregard, willful disobedience and breach of
undertaking given to this Court, the judgment-debtors / alleged contemnors
did not honour their commitment; the cheques issued by the judgment-
debtors / alleged contemnors towards bimonthly installments payable on 31 st
August, 1997 and 30th September, 1997 were dishonoured and returned
unpaid due to insufficiency of funds in the account of the judgment-debtors /
alleged contemnors; and,
(xii) that as against the undertaking to pay the amount of Rs.46 lacs, the
judgment-debtors / alleged contemnors paid an amount of Rs.13 lacs only by
way of two cheques for Rs.5 lacs and Rs.8 lacs; that though thereafter two
cheques for Rs.16 lacs and Rs.15 lacs dated 4 th September, 1997 and 22nd
CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 5 of 35
September, 1997 respectively were issued, however the said cheques also
were dishonoured and returned unpaid and no further amount has been paid.
2. The CCP(O) aforesaid was entertained and a reply dated 13 th
February, 1998 thereto has been filed by the judgment-debtors / alleged
contemnors tendering unqualified apology for not being in a position to
make the payment in accordance with the agreement dated 24 th July, 1997
and the order dated 30th July, 1997 and pleading:
(a) that according to the agreement dated 24th July, 1997, the
judgment-debtors/alleged contemnors were to make the payment of Rs.46
lacs out of the amounts received from DGS&D and APSEB and at the same
time to continue with their business which would enable them to make
payment of the installments as agreed;
(c) that the judgment-debtors / alleged contemnors raised loan of
Rs.25.5 lacs from their own private sources and deposited a sum of Rs.23
lacs in cash after entering into the said agreement;
(d) that the judgment-debtors / alleged contemnors however could
make a payment of Rs.13 lacs only to the relator / decree-holder and despite
their best efforts could not make any payment over and above the payment
CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 6 of 35
of Rs.13 lacs - this was mainly due to non-release of the funds by the bank
in which payments were received;
(e) that a sum of about Rs.2 crores was adjusted by the bank
towards releasing the various Letters of Credits established by the bank on
behalf of M/s Vijay Cables;
(f) that from 1st August, 1997 till the filing of the reply, a sum of
Rs.5,48,000/- only had been withdrawn by the judgment-debtors / alleged
contemnors in cash for meeting their expenses and no funds have been
diverted by the judgment-debtors / alleged contemnors to their associate
companies, firms or sister concerns;
(g) that though there has been a default in making payment in
accordance with the schedule committed by the judgment-debtors / alleged
contemnors in their agreement dated 24th July, 1997 but the same was not
intentional or willful and owing to the reasons beyond their control;
(h) that the judgment-debtors / alleged contemnors are burdened
with heavy debt liabilities of various financial institutions and private parties
and their liabilities are of approximately Rs.13.5 crores besides the decretal
amount;
CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 7 of 35
(i) that all the immovable properties of the judgment-debtors /
alleged contemnors are mortgaged to the financial institutions;
(j) that there are no recoverable / receivables from any of the
departments;
3. Though the petitioner has filed a rejoinder to the aforesaid reply but
need to refer thereto is not felt.
4. The contempt petition as aforesaid has remained pending in this Court
for the last nearly 18 years and was being taken up along with certain other
proceedings. On 20th September, 2016 the counsel for the relator / decree-
holder stated that though in this contempt petition there are six alleged
contemnors viz. M/s Vijay Cable Industries, Mr. V.K. Bhatia, Mr. V.K.
Bhatia & Sons (HUF), Mr. T.R. Bhatia, Priya Cable Pvt. Ltd., and Mrs.
Priya Bhatia, but the contempt petition is being pursued against the
judgment-debtor/alleged contemnor Mr. V.K. Bhatia only and that the
judgment-debtor/alleged contemnor No.4 Mr. T.R. Bhatia had died.
5. Vide order dated 20th September, 2016, while posting this petition for
hearing on 28th September, 2016, the judgment-debtor / alleged contemnor
V.K. Bhatia was directed to personally remain present in the Court.
CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 8 of 35
6. On 28th September, 2016, the counsel for the relator / decree-holder
and the counsel for the judgment-debtor / alleged contemnor V.K. Bhatia
were heard.
7. The counsel for the judgment-debtor / alleged contemnor V.K. Bhatia
contended stated that the sum of Rs.46 lacs was payable by the judgment-
debtor / alleged contemnor V.K. Bhatia to the relator / decree-holder only on
receipt from DGS&D and APSEB and no amounts were received from
DGS&D and APSEB.
8. The hearing revolved around whether the payment by the judgment-
debtor / alleged contemnor V.K. Bhatia to the relator/decree-holder was
conditional or not. It was also the contention of the counsel for the
judgment-debtor / alleged contemnor V.K. Bhatia that because the
consequences of non payment was also provided, no action by way of
contempt lies and the remedy of the relator / decree-holder upon non-
payment by the judgment-debtor / alleged contemnor V.K. Bhatia is only to
take action which was stipulated. It was further contended that no
undertaking of the judgment-debtor / alleged contemnor V.K. Bhatia to the
Court was recorded and the undertaking given was only of the counsel.
CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 9 of 35
9. To adjudicate the aforesaid contentions, it is important to peruse the
documents and records of Execution No.126/1997 attached to the CCP.
10. On 29th May, 1997, the following order was passed in Execution
Petition No.127/97:
"Let the execution be registered. Along with the execution
application the Decree Holder has filed the details of the assets of
Judgment Debtor No.1 (at pages 23A and 23B of the paper book).
Issue warrants of attachment in respect of monies payable to the
Judgment Debtors by the Delhi Vidyut Board, Delhi, the Director
General of Supplies & Disposals, New Delhi, M.P. State Electricity
Board, Jabalpur (M.P.), Andhra Pradesh State Electricity Board,
Hyderabad, Tamilnadu State Electricity Board, Chennai (Tamilnadu),
Maharashtra State Electricity Board, Mumbai and Kerala State
Electricity Board, Aluva (Kerala) to the extent of the decretal amount,
returnable on 16th August, 1997.
Also issue warrant of attachment under Order XXI Rule 4 CPC in
respect of property No.A-111, New Friends Colony, New Delhi,
returnable on 16th August, 1997.
Decree Holder to take steps within a week.
EA/187/97
List on 16th August, 1997."
11. EA No.215/1997 was filed by the relator/decree-holder for a direction
to the garnishees i.e. Delhi Vidyut Board (DVB), DGS&D, MPSEB,
APSEB, Tamilnadu State Electricity Board (TNSEB), Maharashtra State
CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 10 of 35
Electricity Board (MSEB) and Kerala State Electricity Board (KSEB) to
deposit all the amounts payable to the judgment-debtors / alleged
contemnors into this Court. Vide order dated 16th July, 1997 notice of the
aforesaid application was issued to the judgment-debtors / alleged
contemnors as well as to the garnishees.
12. EA No.233/1997 was filed by the relator/decree-holder and the
judgment-debtors / alleged contemnors and paras 4 to 7 whereof are as
under:
"4. The parties to the Petition submit that the parties has
since entered into a settlement / compromise whereby and
whereunder Judgment Debtors have agreed to forthwith pay an
amount of Rs.46 lacs to the Decree Holder and further to pay the
amount punctually and regularly in 40 (forty) equal by-monthly
instalments with effect from August 31, 1997 till March 31, 1999.
5. That the Judgment Debtors have further agreed to pay an
overdue interest amount in the sum of Rs.10,62,000/- upto June 30,
1997 and Rs.1,00,000/- towards the partial cost of legal expenses
incurred by the Decree Holder in the present Execution proceedings.
The Second amount of Rs.11,62,000/- has been agreed to be paid by
the Judgment Debtors in four (4) equal instalments of Rs.2,90,500/-
payable on December 31; 1997, May 31, 1998; October 31, 1998
and March 31, 1999.
CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 11 of 35
6. That the Judgment Debtors have also agreed to give an
Undertaking to this Hon‟ble Court, inter alia, to the effect that they
would faithfully abide by the terms and conditions of the said
settlement and shall punctually discharge all their liabilities
thereunder. A copy of the said Agreement is appended hereto as
ANNEXURE-A/1.
7. That in view of the said settlement, the applicants submit that
the undertaking of the Judgment Debtors may please be recorded in
terms thereof and the Order dated May 29, 1997 as rendered by this
Hon‟ble Court attaching thereby, the movable and immovable
properties of the Judgment Debtors may please be vacated."
The aforesaid application was accompanied with the affidavit of
judgment-debtor / alleged contemnor V.K. Bhatia.
13. The aforesaid application was also accompanied with agreement dated
24th July, 1997 between the relator/decree-holder and the judgment-debtors /
alleged contemnors and paras 1 to 4, 8 to 10, 12 & 13 whereof are as under:
"1) That the Judgment Debtors shall immediately pay an amount
in the sum of Rs.46,00,000/- (Rupees forty six lacs only) with
interest thereon at the rate of 2.5% per month with effect from July
01, 1997 to the Decree-Holder in part discharge of their liability
under the Decree dated April 15, 1996.
2) That the aforesaid amount of Rs.46,00,000/-, with interest as
detailed above, shall be paid by the Judgment Debtors from and out
of the following sources:-
CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 12 of 35
a) DGS&D Rs.31.00 lacs payable immediately after release of
DGS&D to Judgment Debtors upon
lifting of the order of attachment.
b) APSEB Rs.15.00 lacs payable within 3 weeks from the date
of this settlement with interest at the
rate of 2.5% for the period from 1.7.97
till date of payment.
Rs.46.00 lacs
3) That the balance decretal amount as on June 30, 1997, shall
be paid in the following rescheduled manner:-
Decree amount Rs. 300.00 lacs
Less: Received Rs. 54.16 lacs
Less: To be received Rs. 46.00 lacs
Net receivable Rs.199.84 lcas
To be paid in 40 (forty) equal bi-monthly instalments upto 31.3.99 of
Rs.4,99,600/- each payable on the last day of each English Calender
month with effect from August 31, 1997 and fresh post-dated
cheques shall be issued by the Judgment Debtors in respect thereof.
4) That in addition to the above the Judgment Debtors shall also
pay to the Decree Holder an amount in the sum of Rs.11,62,000/-
(Rupees eleven lacs sixty two thousand only) on account of overdue
interest for the period of default upto June 30, 1997 and towards
partial legal expenses incurred by the Decree Holder in the
Execution Petition, as detailed hereunder:-
CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 13 of 35
(i) Over due interest for the
period of default, computed
upto 30.6.97 Rs.10.62 lacs
(ii) Legal Expenses towards
Execution Petition Rs.1.00 lacs
Total Rs.11.62 lcas
The above amount of Rs.11,62,000/- shall be paid by the Judgment
Debtors in four equal instalments of Rs.2,90,500/- each payable on
December 31, 1997; May 31, 1998; October 31, 1998 and March 31,
1999; respectively. The Judgment Debtors shall also issue post
dated cheques in respect thereof and any default on the part of the
Judgment Debtors in honouring the said cheques shall be deemed to
be a default within the meaning of the said expression as used herein,
and shall entail the same consequences, inter alia, as to the interests
thereon, as in regard to the default in payment of bi-monthly
instalments.
...............
8) That in the event of non-payment of APSEB bills relating to
recovery of Rs.15 lacs within 21 days, referred to in para (3) above,
the Judgment Debtors shall make payment from their other sources
within 7 (seven) days, failing which, their receivables with all the
other parties shall get attached with immediate effect.
9) That the injunction / attachment order of movable and
immovable properties rendered by the Hon‟ble High Court of Delhi
on May 29, 1997 in Execution Petition No.126 of 1997 shall be
agreed to be lifted.
CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 14 of 35
10) That out of the payment now due and receivable by the
Judgment Debtors from the APSEB, any amount received by the
Judgment Debtors shall first be paid to the Decree-Holder to the
extent of Rs.15 lacs in terms of clause (3) hereof and towards
payment of any monthly instalment that had fallen due for payment
and the Judgment Debtors are in arrears in respect thereof.
............
12) That in the event of any default or failure on the part of
Judgment Debtors to fulfill and discharge their commitments made
herein and / or to honour their undertaking before the Hon‟ble Court,
the existing attachment order shall be liable to be revived and re-
imposed again in the manner as prescribed in the existing order dated
May 29, 1997 of the Hon‟ble High Court of Delhi.
13) That all other existing terms of the Decree dated April 15,
1996, read with the Settlement dated March 18, 1996, shall continue
to be operative and binding upon all the parties unchanged."
14. The aforesaid joint application being EA No.233/1997 came up before
this Court on 30th July, 1997 when the following order was made:
"Execution application be numbered.
Submission made by the learned counsel for the parties that parties
have arrived at a settlement / compromise and that the parties have
filed a joint application to the above effect. Let the statement of the
learned counsel for the parties be recorded.
Sd/-
July 30, 1997 LOKESHWAR PRASAD, J.
CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 15 of 35
STATEMENT OF Ms. BINDYA LOGANI, COUNSEL FOR
THE JUDGMENT DEBTORS (WITHOUT OATH):-
Under instructions from the Judgment Debtors, who are also
present in the Court today, whom I identify, I have to submit that the
parties have arrived at a compromise and have submitted a joint
application which is Ex.C-1 which bears the signatures of both the
parties. The terms of compromise arrived at between the parties are
reflected in the application Ex.C-1 and also in the Agreement dated
the 24th July, 1997 executed between the parties. A photo copy of
the above said agreement is annexed with the application Ex.C-1 and
is marked as Annexure A-1. In terms of the settlement / agreement
arrived at between the parties the Judgment Debtors have agreed to
pay forthwith to the Decree Holder a sum of Rs. forty six lacs with
interest thereon at the rate of 2.5% per month with effect from
1.7.1997 and have further agreed to pay the balance amount in 40
equal bi-monthly instalments each of Rs.4,99,600/- upto 31st March,
1999 payable on the last date of each English Calender month w.e.f.
31st August, 1997. It is also agreed that the Judgment Debtors shall
pay to the Decree Holder an amount of Rs.11,62,000/- on account of
over due interest for the period of default upto 30th June, 1997 and
towards partial legal expenses incurred by the Decree Holder in the
present execution proceedings. It is also agreed that the above
amount of Rs.11,62,000/- shall be paid by the Judgment Debtors in
four equal instalments each of Rs.2,90,500/- payable on 31st
December, 1997, 31st May, 1998, 31st October, 1998 and 31st March,
1999. It is also agreed between the parties that M/s Priya Cables Pvt.
Ltd. (J.D. No.5) shall furnish guarantee towards the payment of
decreetal amount as referred to above and for the payment thereof in
the manner as agreed upon between the parties on due dates failing
CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 16 of 35
which Judgment Debtor No.5, namely M/S Priya Cable Pvt. Ltd.
shall be liable to the Decree Holder for all the amount due under the
decree dated 15th April, 1996 along with over due interest and other
charges. It is further agreed between the parties that the Judgment
Debtors shall pledge all their 17,000 shares as per details given in
Para 6 of the Agreement (Annexure A-1) by way of additional
security alongwith the document / papers.
It is also agreed that in the event of default as defined in the
original decree dated the 15th April, 1996 read with settlement dated
March 18, 1996 (namely three consecutive defaults), the entire
decreetal amount of Rs.4.59 crores, minus the instalment amounts
already paid by the Judgment Debtors together with costs and
interest thereon shall become due forthwith and payable by the
Judgment Debtors to the Decree Holder with all costs and interest @
2.5 per cent per month for the entire period of default computed with
effect from the first default in terms of and under the settlement
dated March 18, 1996.
It is further agreed between the parties that in the event of
non-payment of APSEB bills relating to the recovery of Rs.15 lacs
within 21 days, referred to in para (3) of the Agreement, the
Judgment Debtors shall make payment from their other sources
within seven days failing which their receivables with all other
parties shall be liable to be attached.
It is also agreed that the injunction / attachment order of
movable and immovable properties ordered by this Court vide order
dated 29th May, 1997 in Execution No.126/97 shall be vacated. It is
also agreed that in the event of default or failure on the part of the
Judgment Debtors to fulfill and discharge their commitments and / or
to honour their undertaking the existing attachment order shall be
CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 17 of 35
liable to be revived and reimposed. I, on behalf of the Judgment
Debtors, undertake that the Judgment Debtors shall remain bound by
the terms and conditions as contained in the application Ex.C-1 ad
also the terms and conditions as contained in the Agreement dated
the 24th July, 1997 (Annexure A-1).
It is prayed that the present Execution Petition Ex.126/97
filed by the Decree Holder be ordered to be consigned to Record
Room as fully satisfied in terms of the Agreement arrived at between
the parties and referred to above. In the event of any default the
Decree Holder shall have the right to have the Execution Petition
revived.
R.O.& A.C. Sd/-
July 30, 1997 LOKESHWAR PRASAD, J.
RP
STATEMENT OF MR. S.K. MANIKTALA, COUNSEL FOR
THE DECREE HOLDER (WITHOUT OATH):-
I have heard the above statement of the learned counsel for
the Judgment Debtors. I, under instructions of my client, the Decree
Holder, states that the same is acceptable to the Decree Holder also.
The parties have arrived at a compromise and have moved a joint
application (Ex.C-1) which bears the signatures of both the parties
including the Decree Holder. The application Ex.C-1 is supported
by the affidavits which have been duly signed and sworn by the
parties. The Execution Petition (Ex.126/97) be disposed of in terms
of compromise (Ex.C-1) leaving the parties to bear their costs.
CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 18 of 35
R.O.& A.C. Sd/-
July 30, 1997 LOKESHWAR PRASAD, J.
RP
ORDER
In view of the above statement given by the learned counsel for both the parties before this Court today the Execution Petition (Ex.No.126/97) is directed to be disposed of in terms of compromise (Ex.C-1) arrived at between the parties. The parties shall remain bound by the terms and conditions as contained in the application for compromise (Ex.C-1) and also the Agreement executed between the parties on 24th July, 1997 (Annexure A-1). The parties shall also remain bound by the undertaking given by their respective Advocates before this Court today. The attachment order dated the 29th May, 1997, in view of the fact that the parties have arrived at at compromise, is hereby vacated. As a measure of abundant caution it is clarified that in the event of any default by the Judgment Debtors the Decree Holder is given the liberty to move an application for the revival of the Execution Petition.
A copy of this order be also sent to the garnishees for information.
A copy of the order be also given „dasti‟ to the parties."
15. The counsel for the judgment-debtor / alleged contemnor V.K. Bhatia in support of his contentions has relied on R.N. Dey Vs. Bhagyabati Pramanik (2000) 4 SCC 400 and Northern Aromatics Ltd. Vs. Shahzeb Khan 2006 (90) DRJ 23. In the former, it was held that the weapon of contempt is not to be used in abundance or misused and normally cannot be CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 19 of 35 used for execution of the decree or implementation of an order for which alternative remedy in law is provided for. It was further held that the discretion given to the Court is to be exercised for maintenance of the Court‟s dignity and majesty of law. In the latter judgment, it was held that any person appearing before the Court can give an undertaking in two ways; either by filing an application or an affidavit clearly setting out the undertaking given and incorporated in the Court order or by a clear and express oral undertaking incorporated in the Court order. It was further held that to assume the nature of undertaking, there has to be acceptance thereof by the Court and an order of the Court binding the person therewith.
16. Per contra, the counsel for the relator / decree-holder relied on Bank of Baroda Vs. Sadruddin Hasan Daya (2004) 1 SCC 360 rejecting the contention that the Court having passed a consent decree, the remedy of the petitioner lay in executing the same and there was no occasion for initiating contempt proceedings against the respondents and reiterating that willful breach of an undertaking given to a Court amounts to civil contempt within the meaning of Section 2(b) of the Contempt of Courts Act. CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 20 of 35
17. I will first deal with the question whether the payments to be made by the judgment-debtors / alleged contemnors to the relator/decree-holder were dependent upon receipt by the judgment-debtors / alleged contemnors of monies from DGS&D and the various Electricity Boards.
18. For the reasons hereinafter appearing, I am of the view that the payments by the judgment-debtors / alleged contemnors to the relator / decree-holder as agreed to in EA No.233/1997 and agreement dated 24th July, 1997 were not dependent on receipt of monies by the judgment-debtors / alleged contemnors from DGS&D and the Electricity Boards:
(i) In para 4 of EA No.233/1997, the judgment-debtors / alleged contemnors agreed to "forthwith pay an amount of Rs.46 lacs to the Decree Holder and further to pay the amount punctually and regularly in 40 (forty) equal by-monthly instalments with effect from August 31, 1997 till March 31, 1999." The said payments were not made dependent or contingent in any manner whatsoever.
(ii) Similarly in para 5 of EA No.233/1997, the judgment debtors / alleged contemnors agreed to pay overdue interest and costs, in four equal instalments on 31st December, 1997, 31st May, 1998, 31st October, 1998 and CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 21 of 35 31st March, 1999. The said payments were also not made dependent or contingent in any manner whatsoever.
(iii) Thereafter in para 6 of EA No.233/1997, judgment-debtors / alleged-contemnors "agreed to give an undertaking inter alia, to the effect that they would faithfully abide by the terms and conditions of the said settlement and shall punctually discharge all their liabilities thereunder."
The settlement referred to has necessarily to be what is recorded in preceding paras 4&5.
(iv) Though in para 2 of the agreement dated 24th July, 1997 annexed to EA No.233/1997 the aforesaid application, it was stated that the amount of Rs.46 lacs with interest as detailed in para 1 shall be paid by the judgment-debtors / alleged contemnors from the sources mentioned thereunder i.e. from the monies released by DGS&D on lifting of the order of attachment and from APSEB within three weeks from the date of settlement but mere mention of source from which judgment-debtors / alleged contemnors intended to make payments, does not make the payment undertaken to be made contingent on monies being received from that source. Had that been the intention, it would have been stated so. CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 22 of 35 Moreover, in para 8, it was provided that in the event of non-payment by APSEB, the judgment-debtors / alleged contemnors shall make payment from other sources.
(v) The context in which the aforesaid settlement was made is also relevant. As aforesaid, this Court had vide order dated 29th May, 1997 attached the monies payable by the DGS&D and Electricity Boards to the judgment-debtors / alleged contemnors and vide order dated 16th July, 1997, notice of the application of the relator / decree-holder for a direction to the DGS&D and Electricity Boards to deposit in this Court monies due from them to the judgment-debtors / alleged contemnors was issued. The judgment-debtors / alleged contemnors did not wait for the said garnishees to respond to the Court and within less than 10 days thereof compromised with the relator / decree-holder. Had the intention been of the relator / decree-holder receiving monies subject to the garnishees depositing the same, there was no need for the settlement and undertaking.
(vi) The only inference is that the judgment-debtors / alleged contemnors wanted to avoid the said garnishees depositing the monies due from them to the judgment-debtors / alleged contemnors in this Court. CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 23 of 35
(vii) Once the judgment-debtors / alleged contemnors made the relator / decree-holder agree to the lifting of the attachment, the relator/ decree-holder, but for the undertaking of the judgment-debtors / alleged contemnors, was left with no say over the said garnishees and no right to restrain the said garnishees from making payment to the judgment-debtors / alleged contemnors or to ensure that the judgment-debtors / alleged contemnors on receiving such payments from the said garnishees would abide by their word.
(viii) No source of payment of the balance amount in any case was stipulated; that amount also admittedly has not been paid.
(ix) The judgment-debtors / alleged-contemnors in their statement before this Court, through their counsel, on 30th July, 1997 also, did not make their commitment to pay contingent or dependent upon receiving monies from the garnishees.
(x) The judgment-debtors / alleged-contemnors having made the relator / decree-holder change its position i.e. to vacation of the order of attachment, on the basis of the undertaking offered and given by judgment- debtors / alleged contemnors and to the detriment of the relator / decree- CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 24 of 35 holder, even otherwise cannot be heard to interpret the language of EA No.233/1997 and the agreement annexed thereto to defeat the only benefit flowing to the relator / decree-holder therefrom.
19. For the reasons stated hereinafter, I am also of the view that the judgment-debtors / alleged contemnors did furnish an undertaking to the Court and by which they are bound and on violation thereof the judgment- debtors / alleged contemnors are liable to be proceeded against for contempt of Court:
(a) The decree for execution of which the execution petition was filed was also a consent decree.
(b) The only advantage which the relator / decree-holder got by compromising with the judgment-debtors / alleged contemnors was the undertaking and the additional remedy of contempt available against the judgment-debtors / alleged contemnors. If it were to be held that the only remedy of the relator / decree-holder upon the judgment-debtors / alleged contemnors defaulting from the compromise in execution also was to be to execute the decree, there would have been no need for the decree-holder to CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 25 of 35 compromise with the judgment-debtor as the decree-holder already had the order of attachment in its favour.
(c) The judgment-debtors / alleged contemnors in para 6 of the compromise application being EA No.233/1997 unequivocally "agreed to give an Undertaking to this Hon‟ble Court, inter alia, to the effect that they would faithfully abide by the terms and conditions of the said settlement and shall punctually discharge all their liabilities thereunder."
(d) The relator / decree-holder in para 7 of the said application "in view of the said settlement" prayed to the Court "that the undertaking of the Judgment Debtors may please be recorded" in terms of the agreement dated 24th July, 1997 and to vacate the order dated 29th May, 1997.
(e) In the prayer paragraph of the compromise application also a prayer was made for "recording the undertaking of the judgment-debtors."
(f) The judgment-debtor / alleged contemnor V.K. Bhatia filed his own affidavit along with the compromise application aforesaid.
(g) In the order dated 30th July, 1997 the presence of V.K. Bhatia alongwith his counsel is recorded.
CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 26 of 35
(h) It matters not that the Court instead of recording the statement of the judgment-debtor / alleged contemnor V.K. Bhatia recorded the statement of his counsel.
(i) An advocate is the agent of his client and judgment-debtor / alleged contemnor V.K. Bhatia present in Court at the time of recording of statement of his advocate is bound by the statement recorded of his advocate. Supreme Court in Salil Dutta Vs. T.M.& M.C. Private Ltd. (1993) 2 SCC 185 held that a party cannot disown its advocate at any time and seek relief.
(j) But for the reason of binding the judgment-debtor / alleged contemnor with the undertaking, there was no need for recording the statement in the Court.
(k) The statement in the Court exhibited the compromise application EA 233/1997 as Exhibit C-1 and which as aforesaid contains the undertaking.
(l) In the statement recorded also undertaking to "remain bound by the terms and conditions as contained in the application Exhibit C-1 and also CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 27 of 35 to the terms and conditions as contained in the Agreement dated 24th July, 1997" is recorded.
(m) The Court disposed of the execution petition in terms of Exhibit C-1 and ordered that "the parties shall remain bound by the terms and conditions as contained in the application for compromise (Exhibit C-1) and also the agreement executed between the parties on 24th July, 1997 (Annexure A-1)."
(n) The Court subsequently in the order dated 30 th July, 1997 recorded "the parties shall also remain bound by the undertaking given by their respective advocates before this Court today.".
(o) The judgment-debtor / alleged contemnor V.K. Bhatia has already availed benefits due to him from the order dated 30 th July, 1997 of having the attachment earlier ordered lifted and now cannot deprive the relator / decree-holder of the benefits thereof;
(p) Though the relator / decree-holder also attempted to execute the decree but owing to the judgment-debtors / alleged contemnors having arranged their affairs in a manner that nothing is available for execution of the money decree, the same remained non-executed. CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 28 of 35
20. I am also of the view that merely because the compromise application, the agreement, as well as the order thereon also recorded that upon breach by the judgment-debtors / alleged contemnors of their undertaking, the decree-holder / relator shall be entitled to execute the decree, does not disentitle the decree-holder / relator from invoking the contempt jurisdiction of this Court for punishing the judgment-debtor / alleged contemnor for contempt of court by breach of undertaking. The reasons therefor are as under:
(i) Bank of Baroda Vs. Sadruddin Hasan Daya supra relied upon by the counsel for the relator / decree-holder.
(ii) The reasons as already given hereinabove.
(iii) A litigant is always entitled to claim alternative reliefs / remedies available to him.
(iv) The peculiar facts of this case whereby the judgment-debtor / alleged contemnor has taken advantage of the process of the Court to ward off action against himself and thereafter arrange his affairs in a manner to defeat the money decree against him. CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 29 of 35
(v) The Court cannot allow any party before it to make a mockery of the procedure and to render the process of the Court a farce.
(vi) The judgment-debtor / alleged contemnor no.2 V.K. Bhatia, as has become evident from his statement in the other executions against him, is residing in a house in South Delhi leading a life not of penury and living comfortably by defrauding his creditors.
(vii) The courts if do not ensure that their orders are enforced and complied with will lose their efficacy and purpose and lead the people to jungle raj.
(viii) Supreme Court, in Rama Narang Vs. Ramesh Narang (2009) 16 SCC 126, merely on the basis of the order disposing of the proceedings recording that "All the parties have undertaken before us that they will implement the terms of the „MINUTES OF CONSENT ORDER‟ on or before 1.1.2002 and that no further time will be sought for in the matter" and that "All the above are now being disposed of in terms of the minutes of consent order incorporated in the proceedings......... The CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 30 of 35 decree will be drawn up in terms of the minutes of the consent order" held that if a party, or solicitor or counsel on his behalf, so act as to convey to the court the firm conviction that an undertaking is being given, that party will be bound and it will be no answer that he did not think that he was giving it or that he was misunderstood. It was further held that there is no reason why even in a consent decree a party may not give an undertaking to the Court and that although the Court may be bound to record a compromise, still, when the Court passes a decree, it puts its imprimatur upon those terms and makes the terms a rule of the Court and it would be open to the Court, before it did so, to accept an undertaking given by a party to the Court. It was further held that when a party gives a solemn assurance and permits the terms of that assurance to be incorporated as his own undertaking to the Court and allows an order to be passed on those terms, he cannot absolve himself of the responsibility unless he places before the Court sufficient material to justify that he had taken all reasonable steps and precautions to prevent the occurrence. I am afraid the judgment CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 31 of 35 debtors/alleged contemnors in the present case have not done so.
(ix) In Rita Markandey Vs. Surjit Singh Arora (1996) 6 SCC 14, it was concluded that even if the parties do not file an undertaking before the Court but if the Court is induced to sanction a particular course of action or inaction on the basis of the representation of such party and the Court ultimately finds that the party never intended to act on such representation or such representation was false, then the party would be guilty of committing contempt of Court.
(x) In Babu Ram Gupta Vs. Sudhir Bhasin (1980) 3 SCC 47 it was held that if a person, by making a false representation to the Court obtains a benefit for himself and if he fails to honour the undertaking, he plays a serious fraud on the Court itself and thereby obstructs the course of justice and brings into disrepute the judicial institution.
(xi) In Rama Narang Vs. Ramesh Narang (2006) 11 SCC 114 it was held that all decrees and orders are executable under the CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 32 of 35 Code of Civil Procedure, including consent decrees and orders; but merely because an order or decree is executable would not take away the Court‟s jurisdiction to deal with the matter under the Contempt of Courts Act provided the Court is satisfied that the violation of the order or decree is such that if proved it would warrant punishment under Section 13 of the Contempt of Courts Act on the ground that the contempt substantially interferes or tends substantially to interfere with the due course of justice. It was further held that in such circumstances it would neither be in consonance with the statute, judicial authority, principle or logic to draw any distinction between the wilful violation of the terms of the consent decree and wilful violation of the decree which is passed on adjudication and that the fact that the petitioner can execute the decree can have no bearing on the contempt committed by the respondents.
(xii) In the subsequent Rama Narang Vs. Ramesh Narang supra it was held that in order to maintain sanctity of the orders of the court, it has become imperative that those who are guilty of deliberately disregarding the orders of the Court in a CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 33 of 35 clandestine manner should be appropriately punished. It was further held that the Majesty of the Court and the Rule of Law can never be maintained unless this Court ensures meticulous compliance of its orders.
(xiii) The Division Bench of this Court in Mohan Nair Vs. Rajiv Gupta 220 (2015) DLT 332 held that to say that the orders of the Courts are unimplementable and unenforceable has the tendency of making the law and the Court, a laughing stock and it is the duty of every Court to prevent its machinery from being made a sham, thereby running down the Rule of Law and rendering itself an object of ridicule. It was further held that public interest requires that we have a legal system and courts which command public respect and if the courts were to make orders manifestly incapable of achieving their avowed purpose, law would indeed be an ass.
(xiv) Here, we have a judgment debtor/alleged contemnor namely Mr. V.K. Bhatia who, when faced with orders of attachment of monies payable to him by DGS&D and the State Electricity CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 34 of 35 Boards having been issued by the Court, made the Court vacate the said orders of attachment by promising to make the payment to the decree holder as provided therein and who thereafter has neither made the payment nor left the Relator/Decree Holder in a position to execute the money decree in any other way. Supreme Court in Krishnadevi Malchand Kamathia Vs. Bombay Environmental Action Group (2011) 3 SCC 363 observed that justice is only blind or blindfolded to the extent necessary to hold its scales evenly; it is not and must never be allowed to become blind to the reality of the situation, lamentable though that situation may be.
21. I therefore hold the judgment-debtor / alleged contemnor V.K. Bhatia guilty of contempt of Court under Section 12 of the Contempt of Courts Act, 1971 and in the entirety of the facts and circumstances punish him with simple imprisonment of three months.
RAJIV SAHAI ENDLAW, J NOVEMBER 28, 2016/„gsr‟/pp..
CCP(O) No.146/1997 in Ex. P. No.126/1997 Page 35 of 35