Delhi District Court
Sh Rakesh Nayak vs Smt. Navjeet Kaur on 13 August, 2020
IN THE COURT OF MS NEENA BANSAL KRISHNA
DISTRICT & SESSIONS JUDGE
SOUTH EAST : SAKET COURT, NEW DELHI.
Misc. DJ No. 1428/2016
SH RAKESH NAYAK
S/O LATE SHRI HANUMAN NAYAK
R/O H. NO. B57, TIGRI EXTN.
NEW DELHI110062
......APPLICANT
Versus
SMT. NAVJEET KAUR
W/O SHRI CHARANJEET SINGH
SOLE PROP. M/s NAVJEET TOUR & TRAVELS
R/O H. NO. 1807/9 SECOND FLOOR
GOBINDPURI EXTN. KALKAJI
NEW DELHI110019.
......RESPONDENT
Date of filing : 14.03.2016
First date before this court : 14.03.2016
Date of Decision : 13.08.2020
JUDGMENT
1. This petition under Section 12 read with Section 2 of Contempt of Court Act, 1971 has been filed by the petitioner for seeking redressal of breach of Undertaking given to this court while entering into a settlement dated 25.02.2015 with the respondent in the appeal against conviction of the respondent under Section 138 of Negotiable Instruments Act, and seeking directions to be issued to the Misc. DJ No. 1428/2016 Rakesh Nayak Vs. Smt. Navjeet Kaur Page 1 of 19 pages respondent / contemnor to make payment in the sum of Rs. 10,50,000/ and to refer this contempt to Hon'ble High Court.
2. The facts in brief are that the respondent Smt. Navjeet Kaur was convicted in CC No. 751/13 under Section 138 NI Act vide judgment dated 31.10.2013 and was sentenced vide order dated 08.11.2013 to imprisonment till rising of the court and to pay compensation of Rs.10,50,000/ to the petitioner Shri Rakesh Nayak and in default, to undergo simple imprisonment for 30 days and sentenced. A criminal appeal No. 85/2013 was preferred by the respondent against her conviction and sentence. The petitioner had also filed the civil suit No. 111/2014 for recovery of Rs.14,05,000/. The matter was settled between the parties and an undertaking was given by the respondent to make payment of Rs 10,50,000/ in monthly installments of Rs.30,000/ per month till the entire settled amount was paid to the petitioner. The undertaking of the respondent was accepted by the Ld. ADJ, Saket Courts and the suit was decreed vide judgment dated 18.04.2015 in terms of the compromise. The criminal appeal was also compounded in view of the settlement in the Civil Court and the respondent was acquitted vide order dated 25.02.2015. Consequent to the failure of the respondent to abide by her undertaking to pay the installments in terms of the settlement, the petitioner filed the present Contempt Petition.
3. The petitioner has asserted that the respondent has committed civil contempt by willful disobedience of the under taking Misc. DJ No. 1428/2016 Rakesh Nayak Vs. Smt. Navjeet Kaur Page 2 of 19 pages given to this court to pay the installments in terms of settlement. A prayer is therefore made that the contempt proceedings be initiated to punish the respondent for committing civil contempt and alternatively to compel the respondent to pay the arrears in terms of the settlement between the parties.
4. The respondent in her reply took the preliminary objections that the petitioner has not approached the court with clean hands and has concealed material facts. On merits, it is claimed that after the settlement, the husband of respondent issued a bank draft of Rs.30,000/ and 56 post dated cheques towards monthly installments in favour of the petitioner as per the settlement but due to heavy losses in the business, the cheques got dishonoured and the petitioner threatened to file fresh cases against her. The respondent and her husband borrowed a loan from a family friend Shri Ram Rattan Sharma in the sum of Rs.5,00,000/ on 10.06.2015 and Rs.4,00,000/ on 10.08.2015 to clear all the outstanding amounts. The respondent along with her husband paid Rs.30,000/ through bank draft, Rs.5,30,000/ on 12.06.2015 and Rs.4,22,000/ on 12.08.2015 against which the receipts were duly issued by the petitioner. The signatures of the petitioner on the two receipts can also be verified through CFSL. A total sum of Rs.9,82,000/ has been paid and only a balance of Rs.68,000/ remains which the respondent is willing to pay by issuing two post dated cheques. The assertions made in the petition are denied and the contempt petition is claimed to be without merit.
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5. On the basis of pleadings of the parties, issue was framed on 15.09.2016, as under:
i) Whether the contemnor has made payment of Rs.4,22,000/ and Rs.5,30,000/ as reflected in the two vouchers dated 12.08.2015 and 12.06.2015 respectively?
6. The evidence was led by the respondent who examined RW1 Shri Charanjeet Singh, her husband who has deposed about the payment of Rs.9, 82,000/ in all through receipts Ex.RW1/A and Ex.RW1/B respectively. The respondent RW2 Smt. Navjeet Kaur, deposed on similar lines as RW1.RW3 Shri Ram Rattan Sharma, a friend of the husband of respondent corroborated that he had given a loan to the respondent to be able to pay back the settlement amount.
7. The evidence of petitioner has not been recorded and an opportunity is yet to be given. The matter was however, fixed for arguments. At the stage of arguments, preliminary issue arose in regard to the maintainability of the present petition. The arguments were addressed by the Ld. Counsel for the petitioner on this aspect of maintainability.
8. I have heard the arguments and perused the record. My observations are as under:
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9. The case of the petitioner rests on a settlement in a civil suit on the basis of which the civil suit was decreed. Simultaneously, the appeal against an order of conviction of respondent in a case under S.138 NI Act was also compounded. The contempt application has been filed in regard to compounding of Case under Section 138 NI Act and nonpayment of decreetal amount as was allowed in civil case. The core issue for determination is whether noncompliance of an undertaking which became the basis of a decree, would amount to contempt or the aggrieved party should seek execution of the decree. To appreciate the contentions of the petitioner in regard to contempt, it would be pertinent to understand the scope and purpose of contempt proceedings and its application to settlements in cases under S. 138 and the consequences of non compliance of the settlements.
10. The Contempt of Courts, 1971 provides for both civil and criminal contempt. Its relevant provision reads as under:
In this Act, unless the context otherwise requires,
(a) "contempt of court" means civil contempt or criminal contempt;
(b) "civil contempt" means willful disobedience to any judgment, decree, direction, order, writ or other process of a court or wilful breach of an undertaking given to a court;
(c) "criminal contempt" means....
11. The contempt proceedings can be initiated by two modes, either the Court can initiate the contempt proceedings on its own (suo moto), or otherwise. The word "otherwise" has been interpreted to mean Misc. DJ No. 1428/2016 Rakesh Nayak Vs. Smt. Navjeet Kaur Page 5 of 19 pages that the initiation would have to be done by a party by filing an application within a period of one year from the date on which the contempt is alleged to have been committed as was observed by the Apex Court in the case of Pallav Seth v. Custodian and Others (2001) 7 SCC 549.
12. Essentially contempt of Court is a matter which concerns the administration of justice and the dignity and authority of judicial tribunals; a party can bring to the notice of Court facts constituting what may appear to amount to contempt of Court, for such action as the Court deems it expedient to adopt. But, essentially, jurisdiction in contempt is not a right of a party to be invoked for the redressal of his grievances nor is it a mode by which the rights of a party adjudicated upon by a Tribunal, can be enforced against another party. Having regard to the high function of a Court of justice, proceedings by way of contempt of Court should not be used as a 'legal thumbscrew' by a party against his opponent for enforcement of his claim as was stated by the Apex Court in Pallav Seth (supra).
13. The purpose of law of contempt is to protect the machinery of justice and the interests of the public in order to protect these dual interests, unwarranted interference with administration of justice must be prevented. The power to punish for contempt is conferred on Courts for two reasons. Firstly, the Courts may be armed with the power to enforce their orders. Secondly, they may be able to punish obstruction to the Misc. DJ No. 1428/2016 Rakesh Nayak Vs. Smt. Navjeet Kaur Page 6 of 19 pages administration of justice. The Act empowers the courts to ensure these objectives by proceeding under its provisions to uphold the majesty of the court.
14. In The Aligarh Municipal Board & Ors. v. Ekka Tongar Mazdoor Union & Ors. AIR 1970 SC 1767 the Apex Court observed: "Contempt proceeding against a person who has failed to comply with the Court's order serves a dual purpose: (1) vindication of the public interest by punishment of contemptuous conduct and (2) coercion to compel the contemner to do what the law requires of him. The sentence imposed should effectuate both these purposes. It must also be clearly understood in this connection that to employ a subterfuge to avoid compliance of a Court's order about which there could be no reasonable doubt may in certain circumstances aggravate the contempt".
15. However, while it is the duty of the court to punish a person who tries to obstruct the course of justice of brings into disrepute the institution of judiciary, this power has to be exercised not casually or lightly but with great care and circumspection and only in such cases where it is necessary to punish the contemner in order to uphold the majesty of law and the dignity of the court as was observed the Apex Court in Bhatnagars & Co. Ltd. v. Union of India AIR 1957 SC 478.
16. Having understood that the power of contempt is essentially to uphold the dignity of court and prevent obstruction of justice, what Misc. DJ No. 1428/2016 Rakesh Nayak Vs. Smt. Navjeet Kaur Page 7 of 19 pages further needs to be examined is whether non compliance with a decree in a civil suit even if based on settlement and undertaking of the parties, is a fit case for invoking contempt proceedings.
17. The principle for initiating contempt is neatly brought out in Buckley v. Crawford, 18931 QB 105 at p. 107 in Volume I. An application was made for an order to commit the plaintiff in the action for disobedience to an order which had been made directing him to pay a sum of money to the claimant in interpleader proceedings. It was argued in that case that there was a bargain and an undertaking, and a breach of the undertaking to pay amounted to contempt of Court which may be punished by attachment, just as a breach of an injunction may. Wills, J., with whom Lord Cole ridge C.J. concurred, observed:
" it was a simple order to pay money, but it is sought to treat the default in obeying the order as a contempt of Court, on the ground that the order for payment was made in pursuance of an undertaking which had been given by the plaintiff. There is however, no difference between an order to pay money made in pursuance of an undertaking and any other order to pay a sum of money. It is true that the undertaking is the original ground of the liability but attachment is never granted except for disobedience of an order to do or abstain from doing some specific thing.... The penal sanction under the contempt procedure should not be invoked for default of compliance with such order. "
18. In Mohd. Afzal v. M/s Common Wealth Hotel Pvt. Ltd. 1993 (1) ALT 17, dealing with a similar situation it was held that Misc. DJ No. 1428/2016 Rakesh Nayak Vs. Smt. Navjeet Kaur Page 8 of 19 pages failure to deposit the amount as per the orders of this Court will not attract the provisions of the Contempt of Courts Act,1971 and the respondenttenant cannot be said to have committed any contempt. However, the order of this Court cannot be treated as a scrap of paper and it cannot be said that the petitionerlandlord has no remedy whatsoever. Petitionerlandlord is entitled to execute the order of the Court and if such an application for execution of the order is filed, the Court will be bound to execute the same. It is open to the petitioner to execute the said order as per the provisions of the Code of Civil Procedure.
19. In Abdul Razack Sahib v. Azizunnissa Begum and Others Letters Patent Appeal 70 of 1967 and C. M. P. No. 4302 of 1967 decided on 24 July 1968, High Court of Judicature at Madras, the respondent had bargained to deposit the arrears of rent and continue to deposit the future rent pending the civil revision petition, as a condition of his being allowed to continue in possession of the lands undisturbed till the disposal of the civil revision petition. The respondent failed to deposit the rent. The Division Bench of Madras High Court observed that mere failure to deposit into Court moneys claimed by the opposite party cannot be held to constitute contempt of Court and the defaulting party sent to prison.
20. In Babu Ram Gupta v. Sudhir Bhasin and Anr., 1979 Misc. DJ No. 1428/2016 Rakesh Nayak Vs. Smt. Navjeet Kaur Page 9 of 19 pages AIR 1528 SC, while dealing with disobedience of compromise decree or consent order and contempt of court, the Apex Court observed as hereunder:
" Take another instance where a compromise is arrived at between the parties and a particular property having been allotted to A, he has to be put in possession thereof by B. B does not give possession of this property to A. Can it be said that because the compromise decree has not been implemented by B, he commits the offence of contempt of court? Here also the answer must be in the negative and the remedy of A would be not to pray for drawing up proceedings for contempt of court against B but to approach the executing court for directing a warrant of delivery of possession under the provisions of the Code of Civil Procedure. Indeed, if we were to hold that noncompliance of a compromise decree or consent order amounts to contempt of court, the provisions of the Code of Civil Procedure relating to execution of decrees may not be resorted to at all. In fact, the reason why a breach of clear undertaking given to the court amounts to contempt of court is that the contemner 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. The same cannot, however, be said of a consent order or a compromise decree where the fraud, if any, is practiced by the person concerned not on the court but on one of the parties. Thus, the offence committed by the person concerned is qua the party not qua the court, and, therefore, the very foundation for proceeding for contempt of court is completely absent in such cases."
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21. The decision in R. N. Dey and Ors. v. Bhagyabati Pramanik and Ors. (2000) 4 SSC 400, also may be well referred to in this context where the Apex Court had dealt with the powers to be exercised under the Act and the misuse of the jurisdiction. The Apex Court while dealing with the exercise of powers under the Act observed that the weapon of contempt cannot be used for the purpose of execution of the decree or implementing an order of which law provides appropriate procedure and the purpose of discretion granted to the Court is to maintain the dignity of Courts and majesty of law.
22. The decision of Delhi High Court in Indian Overseas Bank v. Lalit Kumar Aggarwal and Anr., 2001 Crl.L.J. 545 also may be referred to in this context. While dealing with the consequences of failure to comply with a money decree passed against the respondents on their undertaking to deposit but failing to deposit the same, the learned Judge of the Delhi High Court observed as hereunder:
"This apart, it appears, that petitioner Bank was using contempt action either to bypass execution process or to use it as its substitute to ensure speedy recovery of its money which had nothing to do with the dignity or majesty of the court or its order. Needless to emphasize that contempt is a matter between the court and the alleged contemner and is not to be used for the purpose of recovery of money or Misc. DJ No. 1428/2016 Rakesh Nayak Vs. Smt. Navjeet Kaur Page 11 of 19 pages executing a decree, more so where a law provides a procedure or mechanism and alternative remedy for it."
23. In Bank of Baroda Vs. Sadruddin Hasan Daya 2004 (1) SCC 360 Apex Court has observed as follows:
""14. ... ... The violation or breach of the undertaking which became part of the decree of the court certainly amounts to contempt of court, irrespective of the fact that it is open to the decreeholder to execute the decree. Contempt is a matter between the court and the alleged contemner and is not affected in any manner by the rights or obligations of the parties to the litigation inter se."
24. However, it was further observed that when a procedure to execute such order or decree is made available under a statute, resort to an attempt to file an application under the Contempt of Courts Act should be avoided as far as possible. Even assuming that there is disobedience of the orders of this Court, it is not a contumacious signifying clearly disrespect to the Court.
25. It can safely be concluded from the above mentioned judgments that mere disobedience of an order will not amount to Contempt of Court. Breach or disobedience must be willful and contumacious signifying clearly disrespect to the Court. It is also well settled that jurisdiction to punish for contempt should be exercised with great care and caution and only in exceptional cases. It is also brought forth that in cases where the compromise between the parties which may Misc. DJ No. 1428/2016 Rakesh Nayak Vs. Smt. Navjeet Kaur Page 12 of 19 pages be in the form of an undertaking but gets formulated into a decree, the execution is the appropriate remedy.
26. Having adumbrated the legal principles, what needs to be considered is whether any such undertaking was given to this Court which was accepted and became the basis for compounding of the case under Section 138 N. I. Act.
27. The Trial Court Record shows that a submission was made before the Ld. Predecessor of this Court that the matter has been compounded and on the basis of the statements, the compounding of the matter was allowed and respondent was acquitted. The material part of the order dated 25.02.2015 is as under:
A settlement has been arrived at between the parties and a prayer for compounding the offence was also made. As the complainant is agreed for compounding, there is no impediment in accepting the same. The accused has deposited a sum of Rs. 25,000/ with the SouthEast District Legal Aid accordingly. Offence stand compounded and the accused is acquitted."
28. The scope of settlements and the challenges that arise in their implementation in the proceedings under Section 138 NI Act were comprehensively answered in Dayawati Vs. Yogesh Kumar Gosain Misc. DJ No. 1428/2016 Rakesh Nayak Vs. Smt. Navjeet Kaur Page 13 of 19 pages 243 (2017) Delhi Law Times 117 (DB). It was explained that so far as the offence/proceedings under Section 138 of the NI Act are concerned, the Legislature has provided under Section 147 which specifically stipulates that "every offence punishable under this Act shall be compoundable". It is important to note that Section 147 of the statute contains a nonobstinate provision and is applicable notwithstanding anything contained in the Code of Criminal Procedure. Therefore, irrespective of and apart from the offences stipulated under Section 320 of the Cr.P.C. Section 147 of the NI Act makes the offence under Section 138 specifically compoundable. So what is the process to be followed in disputes under criminal law? So far as criminal matters are concerned, Section 477 of the Cr.P.C. enables the High Court to make rules regarding any other matter which is required to be prescribed. The Mediation and Conciliation Rules stand notified by the Delhi High Court in exercise of the rule making power under Part X of the Code of Civil Procedure, Section 89(2)(d) of the C.P.C. as well as "all other powers enabling the High Court" in this behalf. The Rules therefore, clearly provide for mediation not only in civil suits, but also to "proceeding pending in the High Court of Delhi or in any court subordinate to the High Court of Delhi". So far as Delhi is concerned, these rules would apply to mediation in a matter referred by the court concerned with a criminal case as well as proceedings under Section 138 of the NI Act.
29. The cases under Section 138 may be compromised either through Mediation or the parties may settle the matters amicably on their Misc. DJ No. 1428/2016 Rakesh Nayak Vs. Smt. Navjeet Kaur Page 14 of 19 pages own. In the context of settlements arrived at through mediation, the procedure to be followed by the Referral court for recording the settlement is contained in Mediation and Conciliation Rules, Delhi High Court, 2004.
30. Rule 25 which deals with recording of compromise reads as under:
Rule 25: Court to fix a date for Recording settlement and passing decree
(a) On receipt of any settlement, the Court shall fix a date of hearing normally within seven days but in any case not beyond a period of fourteen days. On such date of hearing, if the Court is satisfied that the parties have settled their dispute(s), it shall pass a decree in accordance with terms thereof.
(b) If the settlement dispose of only certain issues arising in the suit or proceeding, on the basis of which any decree is passed as stated in Clause (a), the Court shall proceed further to decide remaining issues."
31. In the case of Dayawati (supra) it was noted that there is no legal prohibition upon a criminal court seized of such complaint to which a mediated settlement is reported, from adopting the above Rule. The Hon'ble High Court of Delhi described the procedure to be followed where the dispute under Section 138 of the NI Act has already been referred to mediation as follows:
"The settlement agreement which is drawnup must incorporate:
(a)....
(b).....
(c) undertakings of all parties to abide and be bound Misc. DJ No. 1428/2016 Rakesh Nayak Vs. Smt. Navjeet Kaur Page 15 of 19 pages by the terms of the settlement must be contained in the agreement to ensure that the parties comply with the terms agreed upon;
(d) a clear stipulation, if agreed upon, of the penalty which would enure to the party if a default of the agreed terms is committed in addition to the consequences of the breach of the terms of the settlement;
When the parties approach the court after settlement, the magistrate would adopt a procedure akin to that followed by the civil court under Order XXIII of the C.P.C. He should record a statement on oath of the parties affirming the terms of the settlement; that it was entered into voluntarily, of the free will of the parties, after fully understanding the contents and implications thereof, affirming the contents of the agreement placed before the court; confirming their signatures thereon. A clear undertaking to abide by the terms of the settlement should also be recorded as a matter of abundant caution.
(xii) A statement to the above effect may be obtained on affidavit. However, the magistrate must record a statement of the parties proving the affidavit and the settlement agreement on court record.
(xiii) The magistrate should independently apply his judicial mind and satisfy himself that the settlement agreement is genuine, equitable, lawful, not opposed to public policy, voluntary and that there is no legal impediment in accepting the same.
(xiv) Pursuant to recording of the statement of the parties, the magistrate should specifically accept the statement of the parties as well as their undertakings and hold them bound by the terms of the settlement terms entered into by and between them. This order should clearly stipulate that in the event of default by either party, the amount agreed to be paid in the Misc. DJ No. 1428/2016 Rakesh Nayak Vs. Smt. Navjeet Kaur Page 16 of 19 pages settlement agreement will be recoverable in terms of Section 431 read with Section 421 of the Cr.P.C."
32. It was further observed that additionally, for breach of the undertaking given to the magistrate/court, the court would take appropriate action permissible in law to enforce compliance with the undertaking as well as the orders of the court based thereon, including proceeding under Section 2 (b) of the Contempt of Courts Act, 1971 for violation thereof.
33. The facts in the present case are however somewhat mixed up. The documents filed by the Petitioner show that a settlement was arrived at between the parties through intervention of family and friends, which was reduced to a settlement Deed dated 12.02.2015. It was filed before the learned ADJ who referred the parties to mediation and the matter was finally settled in Mediation. The statements and undertaking of the parties were recorded in the Civil suit by learned ADJ and the suit was decreed in terms of the settlement vide judgment dated 18.04.2015. The parties appeared before this court where the appeal against conviction under Section 138 NI Act was pending and filed the original settlement dated 12.02.2015 which the parties had arrived at inter se. On their oral submissions, the compounding was allowed and the respondent was acquitted.
34. The settlement agreement dated 12.02.2015 was in writing and signed by the parties and was placed before the court but neither the Misc. DJ No. 1428/2016 Rakesh Nayak Vs. Smt. Navjeet Kaur Page 17 of 19 pages statements/undertakings of the parties were recorded to abide by the settlement nor did the court record its satisfaction that the agreement was lawful and consent of the parties was voluntary and not obtained because of any force, pressure or undue influence. The court also did not pass an appropriate order accepting the agreement, incorporating the terms of the settlement regarding payment under Section 147 of the NI Act and the undertakings of the parties. No consequential and further direction to the respondent to pay the money in terms of the settlement and also to remain bound by the terms thereof, were made. Rather, neither any undertaking was given to the court nor was it accepted nor was any direction given to the parties to be bound by their undertaking. It is a simplicitor case of compounding on the submissions of the parties that they have settled the matter.
35. Once there is neither any statement nor any undertaking of any kind given in this Court, there is no question of any contempt having been committed. In this context, it may be pointed out that the proper procedure was followed in the Court of Ld. ADJ which had referred the parties' to mediation and appropriate statements and undertakings of both the parties were recorded before the Court of Ld. Addl. District Judge, which decreed the case of the petitioner. Thus, the remedy lies before the Court of Ld. Addl. District Judge where the statements of the parties were recorded and not before this Court where no such statement of the parties was recorded.
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36. In view of the above discussion, it is held that the present contempt proceeding is not maintainable in the absence of any undertaking/statement of the parties given to this court. The contempt application is accordingly dismissed.
37. Trial Court Record be sent back along with a copy of this order. File be consigned to Record Room.
Digitally signed by NEENA NEENA BANSAL
BANSAL KRISHNA
Date: 2020.08.17
Announced in the open court on KRISHNA 12:18:22 +0530
this 13th day of August 2020 (NEENA BANSAL KRISHNA)
District & Sessions Judge
South East, Saket Courts
New Delhi
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