Roshanlal Thakur vs Kishanlal Kapoor

S. Acharya, J.—The Appellant filed Title Suit No. 256 of 1969 in the Court of the Subordinate Judge, Cuttack. In that suit the Plaintiff filed a partition to issue an injunction restraining the Defendant, Respondent herein, from alienating the properties of the firm M/s. Kapoor Motor Engineering Works, Ranihat, Cuttack (hereinafter referred to as the ''firm'') and for other reliefs. The said petition was registered as Misc. Case No. 372./69 and the trial Court, by its order dated 26.6.1969, allowed the Respondent to continue and carry on the business of the said firm on the following conditions:

That he will maintain the accounts showing the income and expenditure of the firm M/s. Kapoor Motor Engineering Works, Cut tack. He will also deposit the receipts of the day regularly in the Bank.

He will operate the account standing in the name of M/s. Kapoor Motor Engineering Works, on joint signature of himself and the Petitioner.

He will keep an amount of Rs. 500/. with him to meet the emergent expenditure to be reimbursed from time to time after proper scrutiny and check by the Petitioner.

The Respondent preferred Misc. Appeal No. 175/69 in this Court against the aforesaid order of the trial Court. In that appeal this Court, by an interim order dated 7.10.1969, stayed the operation of the above quoted condition No. 2 of the trial Court''s order on condition that the Respondent would furnish a bank guarantee of Rs. 20, 000/ -. On 3-11-1971 the said Misc. Appeal was dismissed with an observation that the order regarding the operation of the accounts of the firm passed on 7.10.1969 would continue till the disposal of the suit. On a perusal of the orders dated 7.10.1969 and 3-11-1971 of this Court in Misc. Appeal No. 175/69 it is quite evident that this Court while dismissing the said Misc. Appeal directed that till the disposal of the suit the Defendant would be able to operate the accounts standing in the name of firm only on furnishing bank guarantee of Rs. 20, 0001- in the trial Court. In accordance with the afore said order passed in the Misc. Appeal, the Respondent furnished a bank guarantee of Rs. 20, 000/ - in the trial Court. But he did not renew the Bank guarantee after its expiry, nor did he furnish a fresh Bank guarantee in spite of the Courts order. On 24-3-1973 the learned Counsel for the Defendant, Respondent herein, undertook to produce a fresh bank guarantee by 9-4-1973. But as the same was not filed in accordance with the undertaking given on behalf of the Defendant, the Court below by its order dated 25.4.1973 observed that if the renewed or fresh bank guarantee was not filed by 30-4-1973 that matter would be considered as a deliberate act of not carrying out the order of the Court and the law on that matter would take its own course. Even in spite of that order the required bank guarantee was not furnished even by 30-4-1973 Again on a fresh move by the Defendant''s lawyer on the matter, the Court below on 1-5-1973 granted time, as a last chance to file the renewed bank guarantee by 10-5.1973. As the bank guarantee was still not filed by the said date, the Plaintiff filed a petition in the Court below to initiate a proceeding of contempt of Court against the Defendant for flouting the Court''s order by not filing the bank guarantee and for not acting in accordance with the undertaking given by his counsel in the above matter. On the dismissal of the said petition by the Court below the Plaintiff has filed this appeal.

The said petition of the Plaintiff in the Court below was made under Order 39, Rule 2(3), CPC Code. In the said petition there was no prayer for attachment of any of the properties belonging to the Defendant, nor was there any prayer to send the Defendant to civil prison for disobedience or breach of any of the Court''s orders. The Petitioner in the said petition, did not append a list of properties to be attached in connection with this matter, nor did the Petitioner express his willingness to pay the expenses for sending the Defendant to civil prison. Accordingly, on the said petition, the Court could not have passed an order in the express terms of Order 39, Rule 2(3), Civil I Procedure Code.

It, however, could have initiated a proceeding for contempt of Court, if, on a perusal of the facts and circumstances of the case, it found that the Defendant flouted and/or disobeyed any judgment, decree, direction, order, writ or other process of the Court, or wilfully committed breach of an undertaking given by him to the Court.

As stated above, the Defendant, Respondent herein, was allowed to operate upon the accounts standing in the name of M/s. Kapoor Motor Engineering Works on condition that he would furnish a bank guarantee of Rs. 20, 0001- and so long that bank guarantee remains in force he would continue to operate the accounts standing in the name of the firm in accordance with the Court''s order to that effect. That condition was to be observed till the disposal of the suit. Admittedly, the Defendant did not renew the back guarantee after 1971 though the suit remand pending thereafter. The Court, however, granted several adjournments to the Defendant enabling him to file the renewed bank guarantee, but he did not furnish the same. On 24-3-1973 the Defendant''s counsel gave an undertaking before the Court below to furnish the bank guarantee by 9-4-1973, but even after that undertaking also the said bank guarantee was never filed. It is not the case of the Defendant that he did not deal with the accounts and funds standing in the name of the firm after the date of the expiry of the bank guarantee.

u/s 2 of the Contempt of Courts Act, 1971 disobedience of any direction or order of the Court, or wilful breach of an undertaking given to a Court amounts to civil contempt.

In A.B. Gurumurthi Chetty Vs. Sella Perumal Pillai, , Varadachariar, J. has as observed follows:

Whether what has happened in any particular case amounts to an injunction or not must be decided with reference to the substance of the Court''s order and not as a mere matter of form. In the view that I am bound to uphold the authority of the Court so far as is reasonable and within the limits permitted by law, I would hold that when a Court accepts an undertaking given by a party its order amounts in substance to an injunction restraining him from acting in breach thereof. The form only implies that the Court is prepared to deal with him honourably in the expectation that he will treat his undertaking as equivalent to an order of Court. It does not seem to me to come with any grace from the mouth of a person who has given such an undertaking to say that because the Court was good, enough to accept that undertaking and did not pass an order of its own he is not in the position of a person bound by an order of the Court.

The observation contained in the above passage was referred with approval in the decision of this Court in Babulal Parekh v. Lacchminarayan Sawalram and Ors. 29 (1968) C.L.T. 613. Therefore, for the patent disobedience of the Court''s order or for wilful breach of I the Defendant''s undertaking to furnish the renewed bank guarantee, he was prima facie guilty of contempt of Court and steps for initiating a proceeding for contempt of Court against him could have been taken by the Court below within the prescribed period.

In this case the condition to furnish the said bank guarantee was to hold good till the disposal of the suit in which the said order was passed. Admittedly that suit was disposed of on 29-7-1974. After the disposal of the suit this appeal and another appeal, being M.A. No. 199/74, were filed in this Court by the Plaintiff. In none of the appeals this Court directed the Defendant Respondent to furnish the bank guarantee, nor did it pass any order of injunction directing the Defendant not to operate upon the accounts of the said firm or to operate the same on any specific terms or conditions. The disobedience of the Court''s order and/or wilful breach of the undertaking given by the Defendant in connection with the above mentioned direction of the Court to furnish the renewed bank guarantee continued only till the disposal of the suit, i. e. till 29.7.1974. So it cannot be said that the Defendant committed contempt of Court in this connection after the said date of disposal of the suit. As the wilful disobedience and/or breach of the aforesaid undertaking continued only till July, 1974, no proceeding for contempt after the expiry of one year from the said date can be initiated in this case as per the provisions of Section 20 of the Contempt of Courts Act, 1971. Accordingly the Plaintiff Appellant''s prayer for initiating a proceeding for contempt of Court against the Defendant-Respondent cannot be granted at this point of time in view of Section 20 of the Contempt of Courts Act.

There is therefore, no merit in this appeal and it is accordingly dismissed. There will however, be no order as to costs of this appeal.