Delhi High Court
Deepak Khosla vs Nemo on 8 September, 2014
Author: S.Ravindra Bhat
Bench: S. Ravindra Bhat, J.R. Midha
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* IN THE HIGH COURT OF DELHI AT NEW DELHI
% DECIDED ON: 08.09.2014
+ LPA 583/2014 & LPA 550/2014
DEEPAK KHOSLA ..... Appellant
Through: Mr. Deepak Khosla,
Appellant in person.
versus
NEMO ..... Respondent
Through: None.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE J.R. MIDHA S.RAVINDRA BHAT, J. (OPEN COURT)
1. The present letter patents appeals arise out of two orders, made by a learned single judge. The first, i.e., LPA 550/2014 impugns an order dated 21-08-2014 made in the course of contempt proceedings;
the second, i.e., LPA 583/2014 challenges an order of the learned single judge made in the course of a company appeal, pending before him under Section 10-F of the Companies Act, 1956 (hereafter called "Companies Act"). This common order deals with the question of maintainability of the present proceedings.
2. The facts briefly in LPA 550/2014, are that a contempt Petition (Contempt Case No 165/2008) was pending, in which the appellant, Shri Deepak Khosla, was apparently a party. The order dated LPA 583 & 550/2014 Page 1 21.08.2014 traced the sequence of events in respect of certain proceedings, including the judgment of a Division Bench of this Court dated 24-04-2012 in LPA 16/2014. The Division Bench had directed that the order of the learned single judge, dated 04-01-2012 in these proceedings be treated as a show cause notice, to be answered by Shri Khosla. His grievance in the appeal, LPA 550/2014 is in respect of directions made by the learned single judge, specially pertaining to his enrolment as an Advocate by the Karnataka Bar Council. He argues that such directions were unwarranted, made beyond jurisdiction of the learned single judge who was bound by the provisions of the Contempt of Courts Act to strictly proceed to decide whether the conduct complained of amounted to contempt. It was submitted that though ostensibly made in the course of contempt proceedings, the single judge's directions travelled beyond what was permissible. It is argued, therefore, that the present appeal is maintainable.
3. Mr. Khosla, who represented himself argued that the appeal is maintainable, in terms of the judgement and directions of the Supreme Court's ruling in Midnapore Peoples' Co-Op. Bank v Chunilal Nanda (2006) 5 SCC 399). Particular reliance is placed on the following observations:
"11. The position emerging from these decisions, in regard to appeals against orders in contempt proceedings may be summarized thus:
I. An appeal under section 19 is maintainable only against an order or decision of the High Court passed in exercise of its LPA 583 & 550/2014 Page 2 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 for contempt' and therefore, not appealable under section 19 of 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 intra-court 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)."
4. It is argued that all directions which had no bearing on the alleged contempt or related matters were extraneous and consequently an appeal is maintainable in respect of such order or directions. The LPA 583 & 550/2014 Page 3 decision in Midnapore Peoples' Co-Op. Bank (supra) was relied on for the proposition.
5. In LPA No.583/2014, the order of a learned single judge, dated 03.09.2014 (in Co.A (SB) 35/2014) is challenged. It is argued that the previous ex-parte interim order made earlier, on 24-07-2014 has caused immense prejudice to Mr. Khosla. Describing the background of the order, it was submitted that on 03.06.2014 the Company Law Board ("CLB") directed the appellants (in the said appeal) to remain personally present on 11.07.2014 and further to file an affidavit that they were present in the Board meeting held on 27.08.2007 and also to file the Minutes of the Board meeting on oath with the affidavit. Stressing that the ex-parte order staying the directions of the CLB - made by the Single Judge in the first hearing (dated 11-07-2014) has caused him prejudice, it was argued by Mr. Khosla that his attempt to have the applications -for vacation of the said ex-parte order- have not been taken up, despite his request to the learned single judge who brushed aside his arguments and listed the matter for consideration now on 14-10-2014. It was argued that in these circumstances, the present appeal is maintainable. It was argued that the Division Bench is not denuded of the power to do justice. It was argued in this context that Section 10-F of the Companies Act no doubt enables a learned single judge to hear and decide appeals against orders of CLB; however, latter patents appeals to the Division Bench cannot be barred
-especially in respect of matters which do not fall within the scope of Section 10-F, or do not raise questions of law. Mr. Khosla relied on LPA 583 & 550/2014 Page 4 the ruling in Tamil Nadu Mercantile Bank Shareholders Welfare Association vs. S.C. Sekar 2009 (2) SCC 784 and stated that interests of justice are the paramount consideration which should outweigh all technicalities; if an appeal is provided for specifically in respect of some matters, grievances against a judicial order in respect of other matters cannot be barred. Mr. Khosla also relied on the order of a learned single judge in R.P. Khosla v Hon'ble Company Law Board (RP No. 527/2013 in WP 6002/2013) to say that an appeal to the Division Bench is maintainable against an order made in exercise of jurisdiction under Section 10-F of the Companies Act.
6. Mr. Khosla's last argument, regarding maintainability of these appeals, was that both orders impugned, are ex-facie null and void; in these circumstances, the court should, ex-debito justitae set aside the impugned orders. Reliance was placed on the decisions reported as United India Insurance Co Ltd. v Rajendra Singh AIR 2000 SC 1165 (to say that an order vitiated on account of fraud or lack jurisdiction can be set aside) and Pramod Bagga & Ors v State 2008 Crl LJ 792.
7. To appreciate the grievance in LPA 550/2014, it would be relevant to mention that Shri Khosla was by an order of 04-01-2012, barred from appearing in any court; other directions were also issued. This was carried in appeal, (LPA 16/2012), which was disposed of by judgment dated 24-02-2012. The Division Bench, on that occasion, inter alia, elaborately considered several contentions made before it, and summarized its conclusions and made operative directions. These conclusions were inter alia to the effect that the order of the learned LPA 583 & 550/2014 Page 5 single judge of 04-01-2012 would be treated as a show cause notice and the single judge was at liberty to issue a supplementary show cause notice, if required. Mr. Khosla was entitled to respond to that show cause notice; however a direction that he would not be heard orally, and given audience and that he would be entitled to seek the assistance of a counsel. The learned single judge- by the order of 21- 08-2014 sought to proceed further with the matter, i.e the show cause notice adverted to in the operative paragraph of the Division Bench judgment dated 24-02-2012, in LPA 16/2012. By the said order (21- 08-2014), he observed and directed as follows:
"6. Sub-para (iii) of paragraph 73 of the said judgment directs that the order dated 04.01.2012 will be treated as a show cause notice. The Single Bench has been directed to examine the other allegations which have been made by the respondent (petitioner herein) and issue a supplementary show cause notice if deemed appropriate and necessary.
7. Since the respondent submits that it is not clear as to what the respondent has to respond to, it is hereby clarified that the respondent has to respond to the part of paragraph No.15 of the order dated 04.01.2012 extracted hereinabove i.e. he has to show cause as to why he should not be restrained from appearing in any Court either in person or as an attorney. He also has to respond to the factual matrix as extracted in the order dated 04.01.2012.
8. Four weeks' time is granted to the respondent to file a response to the above in terms of the directions passed by the Division Bench in order dated 24.04.2012.
9. The Division Bench has directed that the respondent shall not be orally heard or given audience, however, he would be permitted to appoint an advocate for him or make oral submissions.
LPA 583 & 550/2014 Page 6
10. The Respondent is granted four weeks' time to appoint an advocate for him to make oral submissions in terms of the directions of the Division Bench in sub-para (iv) of paragraph
73.
11. The respondent is directed to file a list of all proceedings initiated by the respondent post the directions passed in sub- para (v) of paragraph 73 of order dated 24.04.2012 within four weeks. In terms of sub-para (v) of paragraph 73 of the said order of the Division Bench, all proceedings were liable to be stayed.
12. Learned counsel for the petitioner submits that in terms of the directions passed by the Hon'ble Supreme Court in SLP(C) 6873/2010, the Hon'ble Supreme Court vide order dated
08.05.2014 has directed the Company Law Board to decide Co. Pet No.114/2007 and also decide the application under Section 340 Cr.P.C. filed by Ms. Sonia Khosla in the Company Law Board.
13. The directions passed in LPA 16/2012 staying pending proceedings and initiation of new proceedings would not in any manner come in the way of the directions passed by the Supreme Court and the Company Law Board shall decide the Co. Pet. No.114/2007 and the application under Section 340 Cr. P.C. in accordance with the directions issued by the Supreme Court in the said order.
14. Report dated 18.07.2014 has been received from Delhi High Court Legal Services Committee stating that costs of Rs.20,000/- imposed on the respondent in Cont. Cas(C) 165/2008 by order dated 13.08.2013has not been deposited till date.
15. The respondent states that the cost has not been paid and he states that he is ready to pay the costs on him being shown the provisions of law under which the cost could have been imposed. He further states that a writ petition on the said aspect was also filed which has been dismissed. A review against the LPA 583 & 550/2014 Page 7 said dismissal is stated to have been filed and is stated to be pending.
16. The respondent is directed to file an affidavit within four weeks disclosing the number of orders passed by this Court in various proceedings/applications in which costs have been imposed on the respondent and status of the costs in those matters.
17. The Registry is also directed to file a list of all such proceedings/applications filed by the respondent in which costs have been imposed on the respondent.
18. The respondent Mr. Deepak Khosla states that he appears as an advocate as well. He states that he appears in cases other than the cases which are his personal cases. He states that he predominantly practices in Delhi. He states that he is enrolled with the Bar Council of Karnataka (Enrolment No. KAR 1280/2013).
19. He states that though there are certain matters in contemplation to be filed in the State of Karnataka, however, no matter has been filed till date in the State of Karnataka.
20. The Respondent is directed to file within four weeks copy of the enrolment application as well as the supporting documents filed by him with the Bar Council of Karnataka for his enrolment.
21. The Secretary, Bar Council of India is directed to obtain a copy of the enrolment application form along with the supporting documents submitted by the respondent with the Bar Council of Karnataka and furnish the same to this Court within a period of four weeks."
8. Mr. Khosla's endeavour -indeed the main argument with regard to the above order - was that the directions (quoted above) are beyond the jurisdiction of a court seized of contempt proceedings. It was submitted that although Section 19 of the Contempt of Courts Act -
LPA 583 & 550/2014 Page 8 which provides for appeals against orders of the single judge, has been interpreted to mean that 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" have been held to be appealable, there are orders against which appeals are maintainable. To say this, he relied on the judgment in Midnapore Peoples' Co-Op. Bank (supra), especially Para 11 (IV) and (V). It was submitted that the directions made in the course of contempt proceedings have nothing to do with the questions likely to arise in that matter and that being wholly extraneous to the decision as to whether contempt had been committed, the single judge had no jurisdiction to make them; consequently a letters patent appeal is maintainable.
9. Midnapore Peoples' Co-Op. Bank (supra) does, in Para 11 (IV) clearly states that a court cannot make any direction as to the merits of the dispute: "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 for contempt' and therefore, not appealable under section 19 of CC Act" . Do the impugned directions in the present case, contained in the order of 21-08-2014 amount to one relating to the merits of the dispute? The answer, in our opinion is clearly in the negative. Undeniably the directions were made in the course of contempt proceedings, pending on the file of this court, since 2008. The learned single judge was, in the opinion of this court, merely following the directions contained in the judgment of the Division Bench in LPA 16/2012- which had attained finality with the LPA 583 & 550/2014 Page 9 dismissal of the special leave petition (by the Supreme Court) preferred by Mr. Deepak Khosla. The Division Bench had required him to respond to a show cause notice; importantly, it had barred him from orally hearing, and was specifically refused audience. That order remains operative. Mr. Khosla's contention was that he is now an enrolled member of the Bar, although his enrolment is from Karnataka. It was in the context of this contention that he was required to produce details; the Single Judge also made observations and directions to the Bar council of India. This, in the opinion of the court, does not amount to deciding the merits, or a direction touching upon the merits of the matter in relation to which contempt proceedings were drawn or initiated. They are however, directly connected with the proceedings, inasmuch as they relate to the right of Mr. Khosla to have an audience and oral hearing, which he insisted. So far as the question of nullity of the order dated 21-08-2014 is concerned on the ground of its being made without jurisdiction at all, the argument is misconceived. The learned single judge had and has the right to regulate the conduct of proceedings before him, especially having regard to the direction contained in Para 73 of the Division Bench judgment dated 24-04-2014. Therefore, the contention that the present appeal - LPA 550/2014 against the order dated 21-08-2014 is maintainable, is without merit. The appeal is not maintainable; it has to fail.
10. Now, coming to LPA 583/2014. The facts were discussed in the previous portions of the judgment. The grievance here is that by LPA 583 & 550/2014 Page 10 an ex-parte order, dated 11-07-2014, the learned single judge stayed directions issued by the CLB requiring presence of the appellants in CoA (SB) 35/2014 and that his attempts to have the application for vacating that interim order have been rebuffed by the single judge, who has chosen to fix the next date of hearing in October, 2014. Mr. Khosla contends here that the appeal to this Division Bench is maintainable, because the impugned order thwarts his right to be heard. His contention is that there is nothing in the Companies Act to bar maintainability of the present appeal, which is under the Letters Patent applicable to this court and that being an order which denies him effective right of hearing and therefore, any redress against the ex- parte order, the impugned order is a nullity.
11. At the outset, this Court notices that the order dated 03-09- 2014 has not been filed with the appeal; however, Mr. Khosla stated that a copy of the order has not been made available so far to him and that his grievance is with respect to the refusal, by the single judge, to hear and decide his application for vacation of the ex-parte order.
12. As to the maintainability of a letters patent appeal against an order made by the High Court, in exercise of its jurisdiction under Section 10-F, the decision of the Supreme Court in Kamal Kumar Dutta & Anr v. Ruby General Hospital Ltd.& Ors 2006 (7) SCC 613 is conclusive. In that case, the question which the Supreme court had to consider was whether an order under Section 10-F is further appealable in an intra court appeal. The Court ruled in the negative, and observed that:
LPA 583 & 550/2014 Page 11 "But after the amendment the power which was being exercised under Sections 397 & 398 of the Act by learned Single Judge of the High Court is being exercised by the CLB under Section 10E of the Act. Appeal against the order passed by the CLB, lies to the High Court under Section 10F of the Act. Therefore, the position which was obtaining prior to the amendment in 1991 was that any order passed by the Single Judge exercising the power under Sections 397 & 398 of the Act, the appeal used to lie before the Division Bench of the High Court. But after the amendment the power has been given to the CLB and appeal has been provided under Section 10F of the Act. Thus, Part 1A was inserted by the amendment with effect from 1.1.1964. But the constitution of the Company Law Board and the power to decide application under Sections 397 & 398 of the Act was given to the CLB with effect from 31.5.1991 and appeal was provided under Section 10F of the Act with effect from 31.5.1991. Therefore, on reading of Sections 10E, 10F , 397 & 398 of the Act, it becomes clear that it is a complete code that applications under sections 397 & 398 of the Act shall be dealt with by the CLB and the order of the CLB is appealable under Section 10F of the Act before the High Court....
The Parliament while amending section 100A of the Code of Civil Procedure, by amending Act 22 of 2002 with effect from 1.7.2002, took away the Letters Patent power of the High Court in the matter of appeal against an order of learned single Judge to the Division Bench. Section 100A of the Code of Civil Procedure reads as follows:
" 100A. No further appeal in certain cases.-
Notwithstanding anything contained in any Letters Patent for any High Court or in any other instrument having the force of law or in any other law for the time being in force, where any appeal from an original or appellate decree or order is heard and decided by a single Judge of a High Court, no further LPA 583 & 550/2014 Page 12 appeal shall lie from the judgment and decree of such single Judge."
Therefore, where appeal has been decided from an original order by a single Judge, no further appeal has been provided and that power which used to be there under the Letters Patent of the High Court has been subsequently withdrawn. The present order which has been passed by the CLB and against that appeal has been provided before the High Court under Section 10F of the Act, that is an appeal from the original order. Then in that case no further Letters patent appeal shall lie to the Division Bench of the same High Court. This amendment has taken away the power of the Letters Patent in the matter where learned single Judge hears an appeal from the original order. Original order in the present case was passed by the CLB exercising the power under Sections 397 and 398 of the Act and appeal has been preferred under section 10F of the Act before the High Court. Learned single Judge having passed an order, no further appeal will lie as the Parliament in its wisdom has taken away its power."
In LPA No. 198/2008 decided on 20-08-2008 (Avtar Singh Narain Behal v Subhash Chander Behal) a Full Bench had occasion to consider the above decision, and hold that the Letter Patents jurisdiction of this court does not extend to permit appeals in such circumstances. This court is bound by the authority of the Supreme Court -as followed by the decision of the Full Bench in this regard; the appeal is therefore clearly not maintainable. The reliance of Shri Khosla on an order of the learned single judge, to say that such appeal is maintainable in our opinion not apt. The notice of the court, in that case (R.P. Khosla ) does not appear to have been drawn to the decision of the Supreme Court in Kamal Kumar Dutta. This court is bound by the authority of the Supreme Court; the observations to the contrary by LPA 583 & 550/2014 Page 13 one of us (Midha, J) in the case cited by Mr. Khosla would therefore be of no assistance to him. The court is also of the opinion that in any event, letters patent appeals cannot be maintained against orders which postpone the hearing of any case or cause pending on the file of a single judge as they do not decide any matter, or have any such effect. This is clear from the ruling of the Supreme Court in Shah Babulal Khimji v. Jayaben D. Kania & Anr. [AIR 1981 SC 1786]. This decision was considered and relied upon by the Supreme Court in Midnapore People's Co-operative Bank (supra) in the following terms:
"12. We will next consider as to whether an intra-court appeal under clause 15 of the Letters Patent was available against the interlocutory order dated 20.11.1998 containing the directions on merits of the dispute. Clause 15 of the Letters Patent provides for an appeal from a 'judgment' of a single Judge in exercise of original jurisdiction, to a Division Bench. In Shah Babulal Khimji v. Jayaben D. Kania & Anr. [AIR 1981 SC 1786], the scope of clause 15 of the Letters Patent was considered. This Court held :
"The concept of a judgment as defined by the Code of Civil Procedure seems to be rather narrow and the limitations engrafted by sub-section (2) of section 2 cannot be physically imported into the definition of the word 'judgment' as used in Cl. 15 of the Letters Patent because the Letters Patent has advisedly not used the term 'order' or 'decree' anywhere. The intention, therefore, of the givers of the Letters Patent was that the word 'judgment' should receive a much wider and more liberal interpretation than the word 'judgment' used in the Code of Civil Procedure. At the same time, it cannot be said that any order passed by a trial Judge would amount to a judgment; otherwise there will be no end to the number of orders which would be appealable under the Letters Patent. It seems to us LPA 583 & 550/2014 Page 14 that the word 'judgment' has undoubtedly a concept of finality in a broader and not a narrower sense. In other words, a judgment can be of three kinds _ (1) A final Judgment.. (2) A preliminary Judgment ... (3) Intermediary or interlocutory judgment - Most of the interlocutory orders which contain the quality of finality are clearly specified in clauses (a) to (w) of Order 43, Rule 1 and have already been held by us to be judgments within the meaning of the Letters Patent and, therefore, appealable. There may also be interlocutory orders which are not covered by Order 43, Rule 1 but which also possess the characteristics and trappings of finality in that, the orders may adversely affect a valuable right of the party or decide an important aspect of the trial in an ancillary proceedings. Before such an order can be a judgment the adverse effect on the party concerned must be direct and immediate rather than indirect or remote....in other words every interlocutory order cannot be regarded as a judgment but only those orders would be judgments which decide matters of moment or affect vital and valuable rights of the parties and which work serious injustice to the party concerned." ..."any discretion exercised or routine orders passed by the trial Judge in the course of the suit which may cause some inconvenience or, to some extent, prejudice one party or the other cannot be treated as a judgment, otherwise the appellate court (Division Bench) will be flooded with appeals from all kinds of orders passed by the trial Judge.... the interlocutory order in order to be a judgment must contain the traits and trappings of finality either when the order decides the questions in controversy in an ancillary proceeding or in the suit itself or in a part of the proceedings."
13. The second argument, i.e., that the Court would have powers under letters patent, or inherently, to ex-debito justitae cure the injustice which has accrued to him as a result of the learned single judges refusal to hear his applications before the next date of hearing. His argument was that appeals are provided under Section 10-F in respect of a restricted category of matters, involving interpretation of LPA 583 & 550/2014 Page 15 questions of law; consequently in respect of other matters, appeals against orders are maintainable. This argument, in our opinion, is ill founded. Firstly, the jurisdiction of the single judge is that in appeal against the CLB's orders; only those which raise questions of law falling within Section 10-F are maintainable. The effect of the appellant's submission is that even though not all orders of the CLB are appealable, those in respect of which appeals are not maintainable can yet be appealed against before the single judge and further the orders made in such matters can be tested in letters patent appeal. This interpretation defeats Parliamentary intention- of permitting appeals to only those that are described in Section 10-F of the Companies Act. The other category of orders of the CLB, are not appealable at all. Secondly, to uphold the contention of Mr. Khosla would mean that the court would admit appeals against orders which are plainly not appealable under the statute. The argument that the impugned order is a nullity, in our opinion, similarly requires rejection. The single judge's authority to set his calendar and schedule having regard to his case load cannot be supervised by the Division Bench. There is no question of any order made in the exercise of organize the workload - which inevitably would mean refusal to hear some matters listed on a particular day- falling outside jurisdiction. Shah Babulal Khimji (supra) recognized this angle, while observing that some orders "may cause some inconvenience or, to some extent.." and that they would not be appealable.
LPA 583 & 550/2014 Page 16
14. This court notes, with disquiet that Mr. Khosla has, in the course of the appeal, LPA 583/2014, made contumacious averments regard the conduct of proceedings by the learned single judge. The language of the averments is offensive and seeks to attribute malice and also states, expressly that the learned judge acted in pique and in malicious retaliation. These averments are serious and cannot be ignored. The Court therefore, proposes to initiate appropriate proceedings through separate orders.
15. In the light of the above conclusions, the appeals are dismissed.
Dasti under signatures of Court Master.
S. RAVINDRA BHAT (JUDGE) J.R. MIDHA (JUDGE) SEPTEMBER 08, 2014 LPA 583 & 550/2014 Page 17