SUPREME COURT HOLDS VACATION OF STAY ORDER IN CONTEMPT PROCEEDINGS IS IMPROPER

A two-Judge Bench of the Supreme Court comprising of Justice Aniruddh Bose and Justice Sanjay Kumar passed a Judgement dated 30-01-2024 in the matter of Amit Kumar Das, Joint Secretary, Baitanik, a Registered Society. vs. Shrimati Hutheesingh Tagore Charitable Respondent in Special Leave Petition (Civil) No(s). 34892 of 2014 and held that the Contempt Proceedings should focus on punishing the Contemnor for disobeying Court Orders rather than altering the substantive rights of the parties involved.

FACTS

i) That the aforesaid Appeal was filed before the Supreme Court by one, Amit Kumar Das, Joint Secretary, Baitanik, a Registered Society (Appellant) against Shrimati Hutheesingh Tagore Charitable Trust Respondent (Respondent), against the Order dated 12.11.2014 of the Division Bench of High Court of Calcutta (High Court) and focus in this Appeal is on the scope and extent of the contempt jurisdiction exercised by a High Court under Article 215 of the Constitution of India (High Courts to be courts of record) read with the provisions of the Contempt of Courts Act, 1971.

ii) The Respondent, initiated Title Suit No. 164 of 2004 for declaration of title, recovery of possession, and damages against Appellant-Baitanik, occupying premises at 4B, Elgin Road (now Lala Lajpat Rai Sarani), Bhawanipore, Kolkata before the Ld. learned 3rd Civil Judge (Senior Division), Alipore, Kolkata (Trial Court). The Trial Court decreed the Suit on 25.02.2009, directing possession of the Suit Premises to the Respondent within 30 days. The Execution Proceedings began on 30.07.2009.

iii) The Appellant filed an Appeal in A.T. No. 321 of 2009, renumbered as F.A. No. 229 of 2009, against the Trial Court Judgment dated 25.02.2009 before the Calcutta High Court, which granted an interim stay on 03.03.2010. The Stay required the Appellant to deposit Rs. 10,00,000/- with the Registrar General of the High Court and pay monthly occupation charges of Rs. 35,000 for the Suit Premises during the Appeal’s pendency. Failure to comply, would result in a vacation of the Stay.

iv) Despite an extension of two months i.e. till 10.08.2010, the Appellant only deposited the sum of Rs. 10 Lakhs on 22.12.2010. Additionally, its Application to let out a portion of the Suit Premises was rejected, vide Order dated 07.03.2011. Subsequently, the Respondent alleged contempt (C.P.A.N. 2113 of 2013) due to the Appellant letting out the Suit Premises for exhibitions. The Division Bench found the Appellant in contempt for violating the Stay Order dated 03.03.2010 by letting third parties use the Suit Premises for events. Consequently, it vacated the Stay and allowed the Execution of the Decree.

v) The Contemnor argued against vacating the Stay in a Contempt Proceeding, but the Respondent contended that the default in making the deposits automatically vacated the Stay. However, the Respondent took no action to revive Execution Proceedings. The Supreme Court, considering precedents, found that the High Court’s action in vacating the Stay within a Contempt Proceeding was improper. As the Respondent hadn’t pursued remedies for the default in deposits, it was directed to take appropriate steps before the High Court or the Executing Court. The matter was remanded to the High Court for further proceedings.

HIGH COURT:

Aggrieved by the Decree dated 25.02.2009 of the Trial Court, the Appellant filed Appeal in F.A.T. No. 321 of 2009 which was thereafter renumbered as F.A. No. 229 of 2009, before the High Court. In the said Appeal, an Interim Order was passed on 03.03.2010 in CAN 7021 of 2009. The High Court has directed the Appellant to deposit Rs. 10 Lakhs with the learned Registrar General of the Court within eight weeks. The Court has also ordered an unconditional stay of all further proceedings in the title Execution Case pending in the Court of the learned Civil Judge (Senior Division), Third Court at Alipore for the next eight weeks. Additionally, the Appellant was directed to deposit Rs. 35000/- to cover the current occupation charges for the Suit Premises while the case is pending. The High Court stated that in case of default, the interim order of stay shall stand vacated, and the Decree shall be executed at once.

Further, it is pertinent to note, that the Appellant also filed an Appeal in Civil Appeal No. 8838 of 2010 before the High Court seeking leave to let out a portion of the Suit Premises. However, by Order dated 07.03.2011, the High Court rejected the said Application.

DIVISION BENCH (HIGH COURT)

Thereafter, Contempt Proceedings by the Respondent was initiated, in Contempt Petition Appeal No. 2113 of 2013, alleging violation of the condition set out in the Stay Order dated 03.03.2010 in which the High Court made the following observations:

a) The Division Bench of the Calcutta High Court found that the Appellant, despite being under a Stay Order, had allowed third parties to use the Suit Premises for events such as exhibitions. This violated the condition of maintaining status quo regarding possession and refraining from creating third-party interests, as stipulated in the Stay Order. The Bench noted that the Appellant had not only violated the Stay Order but also attempted to disguise rental income as donations.

b) Furthermore, the Bench observed that the Appellant’s Application to let out a portion of the Suit Premises had been rejected, indicating that it was not authorized to lease the said property. Despite this, the Appellant continued to let out the Suit Premises for short-term events.

c) Considering these violations, the Division Bench concluded that vacating the Stay Order was appropriate to allow the Execution of the Decree. The Bench emphasized that the Appellant’s actions constituted a willful and deliberate breach of the Court Order and that justice warranted vacating the Stay without the need for a separate Contempt Proceeding.

SUPREME COURT

Aggrieved by the Order dated 12.11.2014 of the High Court, the Appellant filed Special Leave Petition (Civil) No(s). 34892 of 2014 before the Hon’ble Supreme Court against the Order dated 12.11.2014 of the High Court, which vacated the Stay Order instead of initiating Contempt Proceedings. The Apex Court made the following observations:

1) The Supreme Court found that the High Court’s decision to vacate the Stay Order within the Contempt Proceedings was not in line with the principles of contempt jurisdiction. While acknowledging that the Appellant had violated the Stay Order by allowing third parties to use the Suit Premises, the Supreme Court noted that the High Court’s action went beyond the scope of contempt jurisdiction.

2) The Apex Court emphasized that Contempt Proceedings should focus on punishing the Contemnor for disobeying Court Orders rather than altering the substantive rights of the parties involved. It was noted that the High Court’s decision to vacate the Stay Order did not have a restitutive or remedying character but rather altered the substantive rights of the Parties.

3) The Supreme Court highlighted that the High Court should have taken appropriate steps within the Contempt Proceedings to address the violation of the Stay Order. However, instead of resorting to vacate the Stay Order, the high Court should have focused on enforcing compliance with the Order through Contempt Proceedings.

4) Therefore, the Bench set aside the High Court’s decision to vacate the Stay Order within the Contempt Proceedings and directed the High Court to continue with the Contempt Proceedings. Additionally, the Supreme Court instructed the Respondent to take appropriate legal measures to address the default in deposits made by the Appellant, either before the High Court or the Executing Court.

CONCLUSION

Based on the aforementioned facts, the Supreme Court set aside the decision of the High Court to vacate the Stay Order within the Contempt Proceedings. The Apex Court emphasized that Contempt Proceedings should focus on punishing the Contemnor for disobeying Court Orders rather than altering substantive rights. The Supreme Court directed the High Court to continue with the Contempt Proceedings and instructed the Respondent to take appropriate legal steps to address the default in deposits made by the Appellant.

Hence, the Apex Court partly allowed the Appeal filed by the Appellant-Contemnor and underscored the importance of adhering to legal procedures and principles within Contempt Proceedings and enforcing compliance with Court Orders.

 

Sakshi Raghuvanshi

Legal Associate

The Indian Lawyer