Willful Breach Of Assurance In Form Of Undertaking Given By Counsel On Behalf Of His Client To Court Would Amount To Civil Contempt: SC

In a notable legal case, while addressing an interconnected Contempt of Court appeals arising from deliberate disobedience of a Court undertaking recorded in 2015, the Supreme Court emphasized on the deterrent role of contempt proceedings and rejected insincere apologies where the case involved parties found guilty of contempt by the High Court of Gujarat, leading to fines and imprisonment.

The Supreme Court held that although Section 52 of the Transfer of Property Act, 1882 does not render a transfer pendente lite void yet the court while exercising contempt jurisdiction may be justified to pass directions either for reversal of the transactions in question by declaring the said transactions to be void or proceed to pass appropriate directions to the concerned authorities to ensure that the contumacious conduct on the part of the contemnor does not continue to enure to the advantage of the contemnor or anyone claiming under him.

Referring to the decision of the Apex Court in case of Ashok Paper Kamgar Union v. Dharam Godha and Others [(2003) 11 SCC 1], the Two Judge Bench of Justice J. B. Pardiwala and Justice Manoj Mishra observed that “the expression or word “wilful” means act or omission which is done voluntarily or intentionally and with the specific intent to do something which the law forbids or with the specific intent to fail to do something the law requires to be done, that is to say with bad purpose either to disobey or to disregard the law. It signifies a deliberate action done with evil intent or with a bad motive or purpose”.

The Bench therefore held that “An undertaking or an assurance given by a lawyer based upon which the court decides upon a particular course of action would definitely fall within the confines of “undertaking” as stipulated under Section 2(b) of the Act 1971 and the breach of which would constitute “civil contempt”.

Advocate Shamik Shirishbhai Sanjanwala appeared for the Appellant, whereas Advocate Taruna Singh Gohil appeared for the Respondent.

The brief facts of the case involved cluster of interrelated appeals involving Contempt of Court cases, originating from the deliberate and willful disobedience of a court undertaking recorded in 2015. Two statutory appeals were filed by parties found guilty of contempt by the High Court of Gujarat. They were subjected to fines and two-month imprisonment sentences as consequence of their defiance of court orders. Importantly, the High Court also declared certain sale transactions organized by these appellants as void. Simultaneously, another appeal was filed by individuals who had purchased properties involved in the contentious transactions. These purchasers sought to challenge the High Court's declaration of the transactions as void.

Recognizing the intertwined nature of these cases, the Supreme Court consolidated them for a comprehensive review.

Throughout the proceedings, the Supreme Court emphasized the critical significance of upholding the rule of law and maintaining the authority of the judicial system.

The Apex Court explained that Section 2(b) of the Contempt of Courts Act, 1971, which defines civil contempt, consists of two different parts and categories, namely, (i) willful disobedience to any judgment, decree, direction, order, writ or other process of a court or (ii) willful breach of an undertaking given to a court.

The Apex Court highlighted that the expression “any” used with reference to the first category indicates the wide nature of power given to the Court and that the statute does not draw a difference between an order passed after adjudication or an order passed by consent. The first part or category is distinct and cannot be treated as a part or taking colour from the second category.

The Apex Court further elucidated that there is a difference between “standard of proof” and “manner of proof” in contempt proceedings, since contempt proceedings are sui generis in the sense that strict law of evidence and Code of Criminal Procedure, 1973 are not applicable.

However, the procedure adopted in the contempt proceedings must be fair and just, added the Court.

The Apex Court went on to observe that “the expression a party “undertakes” or “gives a solemn promise” or “it is stated at the Bar on instructions from clients that the property shall not be sold” used in the statements of the parties or their counsel or in the orders and decrees of the court, unless the context otherwise suggests, means an implied undertaking to the court. The undertaking is always understood to be an undertaking to the court, which undertaking could be enforced by committal proceedings”.

The Bench agreed that every undertaking given by a party to a litigation may not be an undertaking to the court, and there is a difference between an undertaking given to the other party and an undertaking given to the court.

“In the case on hand, it is not the case of the appellants that they had negotiated a settlement with the other side outside the court and reported the same to the High Court and the High Court proceeded to pass the order incorporating the undertaking given by the counsel upon instructions from the clients. Even if the parties, had negotiated a settlement outside the court and reported the same to the court and the court would have passed an order, in terms of such understanding, there would be no scope to warrant that the undertaking was not given to the court”, added the Court.

The Apex Court further added that “The High Court declared all the sale deeds executed by the contemnors in favour of the purchasers as non-est. The High Court ordered that the sale deeds stand cancelled and set aside. The contemnors were directed to restore the position which was prevailing at the time of the order dated 14.10.2015 passed by the High Court. In our opinion, the High Court was fully justified in declaring the sale deeds as non-est or void”.

Therefore, finding that the appellants' apology for contemptuous actions should not be accepted as it was insincere and a mere attempt to avoid consequences, the Apex Court dismissed the appeal.

Cause Title: Balwantbhai Somabhai Bhandari V Hiralal Somabhai Contractor [Neutral Citation: 2023: INSC: 805]

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