Madan Lal Malhotra vs Clarke''s Hotel Pvt. Ltd. and Another

V.D. Misra, C.J.—This appeal is directed against the judgment of a learned single Judge holding the Appellant guilty for contempt of Court and directing the detention of the Appellant in civil prison for a period of four months in addition to the payment of fine of Rs. 2,000/-. There is also an appeal for enhancement of sentence.

The main question which falls for determination in this appeal is whether the undertaking given by the Appellant was to the Court. It is not denied that an undertaking was in fact given. The learned Counsel for the Appellant has been at pains to show, that the undertaking was not given to the Court and, therefore, the Appellant could not be held guilty.

Now to the facts. M/s Clarke''s Hotel Private Ltd., (referred to as the Plaintiff) is running a hotel on The Mall Simla. There was a vacant plot in front of this hotel. This plot formed a part of the estate known as ''Talbot House''. A multi-storeyed shop-cum-hotel building was planned to be put up there. A building plan was submitted by the Appellant to the Municipal Corporation, Simla. The plan was sanctioned. The Plaintiff appealed to the Deputy Commissioner, Simla, who remanded the case to the Municipal Corporation. However, the Appellant continued with the construction. The Plaintiff, therefore, filed a civil suit No. 28 of 1978. It was, inter alia, prayed that the Appellant be restrained from making any construction.

The Plaintiff also made an application under Order 39, Rules 1 and 2 of the CPC (O.M.P. No. 98 of 1978) praying for an ad-interim injunction restraining the Appellant from making any further construction. This application came up for hearing on the original side before a learned single Judge of this Court on 23rd March, 1979. Shri Yoginder Paul, Advocate, who appeared on behalf of the Appellant, made the following statement:

The Defendant has so far constructed six shops on the ground floor consisting of two blocks each of three shops with a passage in the centre. On the right hand side block of three shops which adjoins the Panwari''s shop, the construction on the ground, first and second floor is complete. On the third floor only two rooms have been constructed so far and the remaining portion is lying vacant. In the other block, the construction of all the three shops on the ground and first floor only is complete. The Defendant undertakes not to raise the height of the construction above the existing height as mentioned above and in addition undertakes not to raise any fresh construction on any adjoining land. The Defendant, however, shall be entitled to enclose the walls of the portions on which the pillars have b en raised and slabs have already been laid. The Defendant shall also be entitled to carry on the internal work for completion of the aforesaid blocks already completed and roofed.

After hearing the statement made by hri Paul, the Plaintiff''s Counsel made the following statement:

In view of the above statement made by the learned Counsel for the Defendant I do not press O.M.P. No. 98 of 1978. It will, however, not prejudice the rights of the Municipal Corporation, Defendant No. 2.

The Court passed the following order:

In view of the statement of the learned Counsel made on behalf of Defendant No. 1, O.M.P. No. 98 of 78 is dismissed as not pressed.

Another material development may also be recorded. The Appellant made an application (O.M.P. No. 49 of 1979) under Order 39, Rule 4 and Section 151 of the CPC praying for modification/clarification of the aforementioned order by allowing the Appellant "to put the slab on the third storey also otherwise the fencing and iron shuttering is likely to be damaged entailing into great loss to the Defendant." A reference was made to the statement made by the Counsel of the Appellant on 23rd March, 1979. The heading of the application reads: "An application under Order 39, Rule 4, read with Section 151 of the CPC for amendment of the orders of injunction passed by this Hon''ble Court on 23rd March, 1979".

The Plaintiff made another application (O.M.P. No. 68/79) on 7th May, 1979, under Order 39, Rules 1 and 2 and Section 151 of the CPC praying that the Appellant be stopped forthwith from raising further construction since he was going ahead with the construction. On 19-6-1979 the Court passed the following order:

In view of the undertaking given on behalf of the Defendants on 23rd March, 1979 this O.M.P. calls for no action. Hence filed.

Despite the undertaking given by the Appellant he did not stop the construction. The Plaintiff approached the Court. Contempt Petition (Civil) No. 6 of 1979 was filed on 5th April, 1979. In reply the Appellant, inter alia, stated "the replying Respondent in good faith gave an undertaking." It was averred that the Appellant was only an agent of Shrimati Santosh Malhotra (Appellant''s wife) and though the Appellant gave an undertaking, Shrimati Santosh Malhotra continued the construction.

Now it may straightaway be pointed out that in the grounds of appeal the Appellant has not raised any plea that he had not given any undertaking to the Court. On the other hand it is expressly stated in para 6 of grounds of appeal that the undertaking was given to the Court. This para reads:

That once it is settled that the real owner of the property was not the Appellant and that he did not continue the further construction, the position becomes simple as the Appellant could not compel the real owner not to raise the construction and stop the same forthwith, as it had been undertaken by the Counsel of the Appellant to do so. The undertaking given to the Hon''ble Court was not binding on Smt. Santosh Malhotra as she was not a party to the suit. Consequently the Appellant could not be held guilty for the breach of undertaking as the Appellant was not the owner of the building in dispute at all and had in fact committed no breach of the said undertaking

(Emphasis supplied).

It may be noticed that the same fact is repeated again in para 8 of the grounds of appeal:

That in any case there is no wilful breach of the undertaking given to the Hon''ble Court. The learned single Judge, with respect, is not right in observing that the Appellant showed utter disrespect to this Hon''ble Court. On the other hand the Appellant has the greatest respect for this Hon''ble Court and could not even dream of committing any contempt of this Hon''ble Court.

(Emphasis supplied).

In view of the express stand taken by the Appellant himself in the grounds of appeal, it does not iie in his mouth to say that he gave no undertaking to the Court. It is not only the Appellant who admits having given an undertaking to the Court, but the Court as well as the opposite party always treated it as an undertaking given to the Court. We have already reproduced the orders of the Court dated 23rd March, 1978, as well as 19th June, 1979. The latter order leaves no doubt that it was because of the undertaking given by the Appellant that the Court passed no orders on the subsequent application praying for injunction. It may also be noticed that the Counsel who gave an undertaking on behalf of the Appellant has not been produced by the Appellant to say that the Counsel did not give any undertaking to the Court.

Mr. B.R. Tuli, learned Counsel for the Appellant, strenuously contended that the Appellant never gave an undertaking to the Court. He cites various decisions to show what can be an undertaking given to the Court. Mr. Sood, learned Counsel for the Plaintiff, has also cited some decisions. Though the question loses its significance in view of the stand taken by the Appellant in the grounds of appeal, we may still refer to the; judgments cited before us.

In Nisha Kanto Roy Chowdhury Vs. Smt. Saroj Bashini Goho, the parties had entered into a compromise with respect to a civil litigation. In the compromise deed an undertaking was given by the Defendant. It was:

The Defendant hereby undertakes to remove the said Kali image as also all permanent brick built and other structure.....

Since the Defendant declined to remove the image of Kali, an application to commit the Defendant for contempt of Court was made. The Court considered the import of word "under takes". It was held: ''

It appears to me that each case must be decided on its particular facts and upon the precise words in the compromise under discussion and cases are not very helpful unless the words are precisely similar.

The undertaking in that case was held to be no more than a solemn promise by the Defendant to the Plaintiff. It was observed that the effect of a compromise being accepted by the Court and a decree being passed on the basis of that compromise, would not change the nature of the undertaking. This decision shows that even in the case of a compromise between the parties, a party may give an undertaking to the Courts of course it will depend upon the facts and circumstances of each case.

In Sukumar Mitra Vs. Tarasankar Ghosh, a tenant gave an undertaking to the Court "to vacate and make over peaceful and vacant possession.....to the Petitioner.....on or before....." On failure of the tenant to vacate the premises the landlord was given the right to execute the decree for possession. This undertaking was contained in a compromise executed by the parties. The tenant failed to abide by his undertaking. An application for contempt of Court was, therefore, made. It was ruled that the undertaking given to the Court in the circumstances of that case could not be regarded as an unqualified undertaking and a failure to keep to the terms thereof cannot, therefore, be regarded as justifying the exercise of the discretionary powers of the Court to order committal for contempt. It was observed:

It is well settled that a breach of an undertaking given to the Court by a person in pending proceedings on the faith of which the Court sanctions a particular course of action, is misconduct amounting to contempt.

In other words, even if the undertaking is one of the terms of a compromise between the parties, the circumstances may be such that the failure to abide by the undertaking may result in the contempt of Court.

In Bukhtiarpur Bihar Light Rly. Co. Ltd. Vs. State of Bihar and Others, an interim order of injunction was vacated by a consent order. One of the terms of the consent order was that the party was to take possession only after the purchase had been legally completed. The contempt was alleged to have been committed because the possession was taken before the purchase was legally completed. In these circumstances the Court held that the consent order only recites the agreement arrived at between the parties, and that the term in question did not constitute an undertaking given to the Court.

In Bajranglal Gangadhar Khemka and Another Vs. Kapurchand Ltd., , it was ruled that an undertaking may be given to a Court in a consent decree. It was also ruled that it was not necessary for a party to expressly use the words "undertakes to the Court" since the expression "undertake" has come to acquire through long practice a technical meaning which can be construed by a party, is an undertaking given to the Court not given to the other side. It was observed:

...in our opinion, the expression ''undertake'' has come to acquire through long practice, a technical meaning. In all orders and decrees of the Court, whenever the expression ''a party undertakes'' has been used, it has always borne the meaning that the undertaking has been to the Court.

Of course it was also ruled that there has to be a wilful default before a person can be proceeded against for contempt o f Court.

In Babu Ram Gupta Vs. Sudhir Bhasin and Another, a receiver was appointed with the consent of the Counsel for the parties. Certain directions were given to the receiver. The contemner was directed not to interfere with the receiver or with the running of the business and was asked to give all co-operation which the receiver may require. The contemner was proceeded against for contempt on the ground that he had failed to hand over the possession of the property to the receiver. In these circumstances it was ruled:

In the absence of any express undertaking given by the Appellant or any undertaking incorporated in the order impugned, it will be difficult to hold that the Appellant wilfully disobeyed or committed breach of such an undertaking.....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 practised 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.

In the case in hand It is obvious that the statement made by the learned Counsel for the Appellant is not by way of any compromise arrived at between the parties. The Court was seized of the application asking for interim injunction. The learned Counsel for the Appellant made a detailed statement clearly undertaking not to construct. Once the undertaking was given, the Counsel for the applicant did not press the application. Both the parties treated the undertaking as one given to the Court. The order of the Court already reproduced is unambiguous. It gives the reason why the application was dismissed. The first reason was the statement made by the Counsel for the Appellant. The second was that the application was not pressed because of the statement. Now there is a clear distinction where the Court dismisses an application as not pressed by the applicant and where the Court dismisses an application because of a statement having been made by the Respondent or his Counsel. In the latter case it is the statement of the Respondent which prevents the Court from passing the necessary order. In the instant case it is apparent from the order passed by the Court that since the Counsel of the Appellant had undertaken not to do what the Court was willing to prohibit, the Court did not find it necessary to pass the prohibitory order. Indeed the Appellant had obtained a benefit by making the statement. He was allowed to carry on certain ancillary works. It may be noticed that the Supreme Court in the aforementioned case of Babu Ram proceeded to hold: "In the instant case, we have already held that there is neither any written undertaking filed, by the Appellant nor was any such undertaking impliedly or expressly incorporated in the order impugned" (emphasis supplied). In other words, an undertaking can even be impliedly incorporated in the order". In the instant case there is no doubt that the undertaking is impliedly given inasmuch as the statement made by the Appellant''s Counsel was expressly taken into consideration in dismissing the application. Again, as already stated, the subsequent order of the Court dated. 19-6-1979 leaves no doubt that because of the undertaking already given on 23rd March, 1979, the Court did not pass any order.

In Chhaganbhai Norsinbhai Vs. Soni Chandubhai Gordhanbhai and Others, the Defendant had given an undertaking to the Court to vacate the suit premises within a fixed time. This undertaking was given while a revision was pending before the High Court. Because of the statement made by the contemner before the Court, the opposite party did not press the revision. The Court passed the following older:

In view of the respective undertakings given by the parties to this proceeding, which undertakings are on record, the Petitioner does not wish to proceed with this C.R.A. and does not therefore survive. The application is dismissed.

It was held that it was not a mere agreement between the parties to which an order of the Court has been appended. The following passage from Halsbury''s Laws of England, Fourth Edition, Vol. 9, page 42, paragraph 71, was quoted with approval:

An undertaking given to the Court by a person or corporation in pending proceedings, on the faith of which the Court sanctions a particular course of action or inaction, has the same force as an injunction made by the Court and a breach of the undertaking is misconduct amounting to contempt.

Therefore, the contention that the Court simply dismissed the application without passing any specific order and, therefore, no order was violated has no force. As already pointed out, it was the statement of the Counsel for the Appellant on account of which the Court dismissed the application. The statement of the Counsel for the opposite party that he does not press the application in view of the statement of the Appellant''s Counsel, does not also mean that this undertaking was given to the opposite party and not to the Court.

In Naraindas Vs. The Government of Madhya Pradesh and Others, Judges of the Supreme Court ruled:

Now there can be no doubt that if a wrong or misleading statement is deliberately and wilfully made by a party to a litigation with a view to obtain a favourable order, it would prejudice or interfere with the due course of the judicial proceeding and thus amount to contempt of Court.

We are, therefore, satisfied that it is a clear case where an undertaking was given to the Court.

The next contention of Mr. Tuli is that since the Petitioner was acting as an agent of his wife, the latter did not care about the undertaking given by the Appellant to the Court and, therefore, the Appellant is not guilty of willful disobedience. He refers to the evidence on record. He also wishes to place more documents to show that the building was being constructed by the wife of the Appellant to whom loans, were advanced by the bank. This indeed is an argument of desperation.

We find that the Appellant has no sanctity for truth and has no hesitation in telling lies. He has shifted his stands from time to time. Evidently he was out to put up the hotel at all costs. In all the proceedings preceding the contempt, the Appellant never took the stand that he had nothing to do with the construction of the hotel. Indeed his stand was that he was the owner, lit is only in the contempt proceedings that he has decided to take shelter behind his wife.

The Appellant had filed Civil Writ Petition No. 39 of 1978 against, inter alia, the Plaintiff and the State. In para 1 of the petition the Appellant claimed himself to be the owner. He stated: "the Petitioner is the owner of plot of land situated to the South of Talbot House Estate which is facing the Clarke''s Hotel, The Mall, Simla." This petition was supported by an affidavit of the Appellant dated 4th April, 1978. The Appellant was then swearing that he was the owner. In para 8 of this petition he stated that it was he who had "again started the construction of the building which he continued in right earnest till 21st of February, 1978. In the meantime, the Petitioner had laid the foundations of the building and had constructed part of two storeys of the building and had put in lintels etc." Along with the writ petition an application u/s 151 of the CPC was made. It was stated by the Appellant that he had already spent about rupees one lac upon the construction. It is, therefore, obvious that the Appellant not only claimed himself to be the owner constructing the building but also claimed having himself spent more than rupees one lac. This application was also supported by an affidavit.

In the suit the Appellant and the Municipal Corporation, Simla, were the only Defendants. In para 12 of the plaint it was specifically averred that it was the Appellant (Defendant No. 1) who kept on constructing the hotel despite the Additional Deputy Commissioner''s remanding the matter to the Municipal Corporation which had sanctioned the building plans for the hotel. The Appellant filed a written statement on 8th August, 1978. It was specifically averred by him that "the Defendant has started constructing in accordance with the directions of the Additional Deputy Commissioner. As the Additional Deputy Commissioner has not ordered the suspension of the sanction given nor the aforesaid suspension of the resolution has been accepted by the State Government, the Defendant is entitled to continue with the work." It may be recorded that the Appellant never stated that he was carrying on the construction as an agent on behalf of his wife who was the owner.

Now, it was for the first time in answer to the contempt application that the Appellant stated that he was only an attorney of his wife Shrimati Santosh Malhotra and was not personally constructing the building. He also stated that he had given the undertaking in good faith but it was his wife who, not being a party to the undertaking, did not stop the construction. In other words, the Appellant now decided to hide behind his wife.

During the contempt proceedings the Appellant produced various witnesses. He examined his wife. Her statement shows that she hardly knows what was going on in respect of the construction of the building. She would not even remember whether the first application for the sanction of the building plans was made by her or by her husband. She could neither admit nor deny whether this application made in June, 1977, was made in the name of the Appellant or the plans were sanctioned in his name. She would not even remember whether she had authorised the Appellant to get the sanction of the plans of the building. She would have us believe that the husband never look any interest in the construction of this building. She even did not know whether any writ petition was filed by her husband relating to the construction in question. She had incurred no expenses on the construction till April, 1978. She specifically stated that she did not want to produce the rough notes of the accounts which she claimed to have maintained in respect of the construction. Time after time she was prevaricating herself. For example, she first admitted that the husband was supervising the construction work but immediately retraced her steps and stated that he never supervised the construction work. She would have us believe that she had purchased all the construction material. She would also have us believe that she had no knowledge of any suit filed against her husband wherein a stay application was made.

The statement of the Appellant, who examined himself as R.W. 6, is no better. However, he deposes that he had intimated his wife about the stay order issued by the Court for stopping the work. He goes on to say that the construction work was indeed stopped but his wife cancelled his power of attorney and restarted the construction work. He admits that the first application for getting the plans sanctioned was made by him in his own name and the sanction was also granted by the Municipal Corporation in his name. He admits to have filed the writ petition which we have already referred. He admits that he had stated falsely that he was the owner of the building. He also admits not disclosing anywhere in the suit that he was not the owner of the building in dispute and that he was an agent of his wife. He would have us believe that he never kept any account of the expenses incurred on the construction. He as well as his wife both, however, admitted that they were living together under the same roof.

Mr. Tuli submits that we should not take into consideration the fact that the Appellant has been duping the Court by giving false affidavits. We cannot ignore the material which is already on the record of this case. The Appellant is a self condemned lier. And he wishes us to believe that what he is stating now is the truth. It appears that the Appellant is ready to hoodwink each and everyone, including the Court, if it suits him. He was out to build a hotel (Cosmos Hotel) at The Mall. For him big money was at stake and minor things like telling lies on oath and giving illusory undertaking to the Court did not matter. We have no hesitation in agreeing with the learned single Judge that the Appellant is a perfect lier who cannot be believed. It may be that the land in question stands in the name of the Appellant''s wife and for that reason the loans had been advanced by a bank in the name of his wife. But that makes no difference at all in the present case. We are not called upon to decide the ownership of the building or the source of funds for its construction. We, therefore, dismiss the application for production of additional documents on record. Neither this document are relevant nor was there any occasion for the Appellant not to have produced them during the proceedings if he was so interested. We find that it was the Appellant who was in charge of the construction right from the first day. He must have obtained a power of attorney from his wife in order to goon with the construction and to do all other acts which may be necessary. Finding himself in a quandary after the undertaking was given to the Court, he hit upon the simple idea of getting the power of'' attorney cancelled. All this is an eye wash. In any event it was the Appellant who had given the undertaking and it was his duty to! abide by it. If he had any honesty left in him he should have approached the Court immediately and withdrawn the undertaking after informing the Court about the real facts. But this would have gone against his grain. The circumstances show that at all relevant times he was interested in hiding the truth from everyone as long as he succeeded in his object. The construction is stated to have been carried on in defiance of all rules and regulations. Unfortunately the Municipal Corporation, for reasons best known to it, had decided to connive with the Appellant.

It is also contended that since the Appellant has already tendered an apology it should be accepted. An apology must at least be bona fide. In the instant case we have no hesitation in rejecting the apology. The apology is only an expedient for the Appellant and cannot be treated as sufficient atonement. We are in full agreement with the findings of the learned single judge. It is one of those cases where it is necessary that the contemner should be detained in civil prison since only a fine of Rs. 2,000/- is insignificant. We find that in some what similar circumstances a Division Bench of the Delhi High Court in Kuldip Rastogi and Another Vs. Vishva Nath Khanna, observed:

Having regard to the large financial stakes involved in the case, a fine of that amount could not possibly make any impression on Kuldip Rastogi. He would feel that he has been let off for a song, and disobeying the orders of the Court was not so expensive, after all. I know that in contempt proceedings a Court should not act vindictively or at the behest of the aggrieved party: See Gian Chand Bali v. L.P. Singh 1968 Delhi L.T. 135 ; Uma Dutt Vs. R.K. Sardana, and Gulab Singh and Another Vs. The Principal, Sri Ramji Das, But the punishment must be deterrent: See 1972 Damayanti G. Chandiramani Vs. S. Vaney, Especially, if the contemner has been defiant and shown no sign of remorse: Aligarh Municipal Board v. Ekka Tonga Mazdoor Union AIR 1970 S.C. 1967 and Shri Baradakanta Mishra v. Registrar of Orissa High Court AIR 1964 S.C. 710 . And, more so, if it be not the first time that he has disobeyed an order of the Court: See Kalloo Mal Visheshwar Prasad and Another Vs. Secretary to Government of U.P. and Others,

We have, therefore, no hesitation in dismissing the appeal Contempt Appeal No. 5 of 1981

This is an appeal by the Plaintiff for enhancement of the punishment awarded to the contemner. A preliminary objection has been raised that no such appeal lies. We will not go into this question in this case since we would not like to enhance it, though the punishment seems to be on the lighter side. This appeal is, therefore, also dismissed.