Contempt jurisdiction would not cease merely because order is executable
The Hon’ble Supreme Court (hereinafter referred to as SC) vide its order dated 10.03.2022 in the matter of “Urban Infrastructure Real Estate Fund vs. Dharmesh S. Jain & Anr., Contempt Petition (C) no. 940 of 2021” had the occasion to deal with whether contempt jurisdiction ceases if the order is executable.
Factual matrix:
An arbitral award dated 30.08.2018 was passed in favour of the Petitioner. The Respondent filed an appeal u/s 34 of the Arbitration & Conciliation Act, 1996 challenging the award wherein the High Court granted an interim stay on the said award contingent on the Petitioner depositing 50% of the awarded sum within 12 weeks of this order dated 08.08.2019.
The Respondents further challenged the order dated 08.08.2019 vide an appeal and kept praying for further extensions which were duly granted by the High Court. However, the aforesaid appeal came to be dismissed as not maintainable vide order dated 29.07.2021.
Aggrieved, the Respondent filed an SLP before the SC challenging the order of the HC dated 08.08.2019 which came to be dismissed vide order dated 17.09.2021 with a direction that the Petitioner had to deposit the above-mentioned amount within 8 weeks of the date of the order.
This led the Petitioner to file a Miscellaneous Application praying for the recall of the order dated 17.09.2021 mainly objecting to the extension 8 weeks of time granted to the Respondent.
The SC vide its order dated 28.10.2021 disposed of the said Miscellaneous application by holding that the Respondent shall comply with the time-line of 8 weeks as stipulated in order dated 17.09.2021. It was further held that non-compliance of this order shall be treated very seriously and non-deposit of the amount as directed by the High Court in the impugned order shall be treated as non-compliance of the order of the Supreme Court.
When the Respondent still did not comply with the above-mentioned directions, the Petitioner filed the present Contempt Petition against the Respondent for wilful disobedience of the orders dated 17.09.2021 & 28.10.202. The SC vide its order dated 10.03.2022 found the Respondents guilty of civil contempt under Contempt of Courts Act, 1971
Analysis of the judgment:
The Respondents contended that vide order dated 17.09.2021, the SC had directed the Respondent to comply with the order passed by the High Court dated 08.08.2019 within 8 weeks. This order passed by the High Court was itself not a mandatory order and the effect of non compliance of the order would simply be that the interim stay on the award would vacate on its own and the petitioner’s would then have the recourse of Section 36 of the. As the order was not of a mandatory nature, no contempt of court was made out.
The SC rejected this contention and held that the Respondents kept praying for and were granted extensions to comply with order dated 08.08.2019 by the High Court. Thereafter, when the Respondents filed an SLP, again an extension of 8 weeks was granted vide order dated 17.09.2022. Thus, extensions for a period of approximately 2 years and more was granted and hence, it was not open for the respondents to contend that since they have not deposited the amount as per the order dated 08.08.2019, necessary consequences under Section 36 of the Act of 1996 shall follow and the execution proceedings have to be proceeded further.
Further, the Supreme Court held that vide its order dated 28.10.2021, it had specifically directed the Respondent to comply with the order dated 08.08.2019 passed by the High Court within the time granted by the Supreme Court in its order dated 17.09.2021. However, the Respondent failed to comply with the same and hence is guilty of civil contempt.
It was further held when a party which is required to comply with the terms or directions in an order has not done so within such time as stipulated in the order, two options are available to the party which was required to comply with such order: (a) give an explanation to the Court as to the circumstances due to which the party could not comply with the order of the Court; (b) seek for further time to
comply with the order of the Court. If a delay has occurred in complying with the terms of an order and the party which was to comply with the order has not resorted to either of the two
aforestated options, then, the party responsible for delay in
compliance, may be held to have committed contempt
Lastly, the SC held that it is trite law that the jurisdiction of a Court under the Contempt of Courts Act, 1971 would not cease, merely because the order or decree of which contempt is alleged, is executable under law, even without having recourse to contempt proceedings.