STATE BANK OF INDIA AND ORS. VERSUS DR. VIJAY MALLYA - Supreme Court Contempt Case

STATE BANK OF INDIA AND ORS. VERSUS DR. VIJAY MALLYA - Supreme Court Contempt Case

Landmark Cases of India / सुप्रीम कोर्ट के ऐतिहासिक फैसले

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REPORTABLE

IN THE SUPREME COURT OF INDIA

INHERENT JURISDICTION

CONTEMPT PETITION (C) NOS.421-424 OF 2016

IN

SPECIAL LEAVE PETITION (C) NOS.6828-6831 OF 2016

 STATE BANK OF INDIA AND ORS. ...PETITIONERS

VERSUS

DR. VIJAY MALLYA …RESPONDENT

O R D E R

Uday Umesh Lalit, J.

1. These Contempt Petitions have come up before us pursuant to the

Judgment and Order dated 9.5.2017 passed by this Court in “I.A Nos.9-12

& 13-16 of 2016 in SLP (C) Nos.6828-6831 of 2016 with I.A. Nos.1-4 of

2016 in and with Contempt Petition (C) Nos.421-424 of 2016 in SLP (C)

Nos.6828-6831 of 2016”.

2. After dealing with the facts which led to the filing of the aforestated

Interim Applications and Contempt Petitions, this Court found

Respondent No.3 (Dr. Vijay Mallya) guilty of committing contempt of

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Court on two counts. Paragraphs 22 to 30 of said Judgment and Order

dated 9.5.2017 were: -

“22. We now turn to the alleged violation of orders dated

03.09.2013 and 13.11.2013 passed by the High Court of

Karnataka. It is not disputed that such orders were passed

restraining the concerned respondents including Respondent

No.3 and that the orders were passed in proceedings arising

from O.A. No.766 of 2013 before DRT Bengaluru. The

present proceedings before this court have also arisen from

the very same O.A. No.766 of 2013. The orders of restraints

passed by the High Court were therefore in the very same

proceedings with which we are presently concerned. Said

orders bound the concerned respondents including

Respondent No.3 and restrained them from transferring,

alienating, disposing or creating third party rights in respect

of movable as well as immovable properties belonging to

them till further orders in the proceedings. A question has

been raised by Mr. Vaidyanathan learned senior advocate

whether the orders would be restricted only so far as the

properties which were in the hands of the concerned

respondents as on the date when those orders of restraint

were passed. In other words, whether any properties which

in future or subsequent to the Orders had come in the hands

or control of the concerned respondent would be covered by

such orders or not. On plain reading of the Orders, in our

view, whether the properties were in the hands of the

concerned respondents on the date when the orders of

restraint were passed by the High Court or had come in their

hands or under their control at a later point in time,

regardless of such qualification all properties whether

movable or immovable were governed by the orders of

restraint. There is no ambiguity of any sort and the Orders

of restraint are quite clear. Consequently, funds amounting

to US$ 40 million which came to be under the control of

and in the hands of Respondent No.3 were completely

covered and governed by said orders of restraint.

23. The memo dated 28.06.2016 filed by Respondent No.10

in said O.A. No.766 of 2013 annexed, “Extract confirming

payment of US$ (US Dollars) 40 Million to Defendant No.3

on 25.02.2016”. It is thus beyond any doubt that the

payment of US$ 40Million was received by Respondent

No.3 on 25.02.2016. These facts are admitted by

Respondent No.3 in Paragraph 3 of his “further counter

affidavit”. The explanation that the funds now stand

transferred in favour of the trusts over which Respondent

No.3 has no control at all, in fact aggravates the extent of

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violation. It is clear that the funds which were in control of

Respondent No.3 have now been sought to be put beyond

the reach of processes of court, which is reflective of the

intent.

24. The applications moved by the petitioners-banks on

02.03.2016 themselves had made clear reference to the fact

that as disclosed by respondent Nos.10 and 11 to London

Stock Exchange and Bombay Stock Exchange respectively

Respondent No.10 would pay to Respondent No.3 a sum of

US$75 million and accordingly petitioners-banks had

moved four interlocutory applications for orders against

respondent Nos.10 and 11 for disbursing said amount of

US$ 75 million. The amount of US$ 40 Million so received

by Respondent No.3 was therefore subject matter of the

present controversy. The least that was expected of

Respondent No.3 was to disclose relevant facts pertaining to

receipt and disbursement of US$ 40 million. The violation

on that count is thus not only against the directions issued

by this court but also against express mandate of orders

dated 03.09.2013 and 13.11.2013 passed in the proceedings

in question.

25. Having thus found that the actions on the part of

Respondent No.3 in disbursing the amount of US$ 40

million was against the text and tenor of the orders passed

by the High Court of Karnataka, the question then arises

whether this Court can take cognizance of such violation or

should it leave it to be decided by the High Court of

Karnataka itself in a properly instituted legal proceeding.

26. In Delhi Judicial Service Association, Tis Hazari

Court, Delhi v. State of Gujarat and others1

, a question

arose whether the power and jurisdiction of this Court under

Article 129 of the Constitution is confined to “the contempt

of this Court” alone. Submissions advanced in that behalf

were noted in paragraph 14 of the judgment which sets out

the submission of the learned Attorney General:

“...The Supreme Court as the Apex Court is the

protector and guardian of justice throughout the

land, therefore, it has a right and also a duty to

protect the courts whose orders and judgments are

amenable to correction, from commission of

contempt against them.”

The subsequent paragraphs of the judgment namely

paragraph 26 onwards show that the contentions so

advanced by the learned Attorney General were accepted by

this Court. It is true that the discussion was in the context of

1 (1991) 4 SCC 406

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the contempt of a subordinate court. However, the nature of

power exercisable by this Court was considered in the

backdrop that this Court has supreme appellate jurisdiction

over all courts and tribunals in the country which is clear

from the observations in paragraph 31 of the judgment. We

must say that Mr. Vaidyanathan did not seriously contend to

the contrary but his submission was that if the jurisdiction is

so assumed and cognizance is taken by this Court,

Respondent No.3 would lose one opportunity of having the

matter assessed at the level of the High Court. In our

considered view, since we are dealing with the very same

cause in which the orders of restraint were passed by the

High Court and since it is coupled with the violation of

orders of this Court as well, the matter can and ought to be

dealt with by this Court.

27. The record shows that by order dated 11.01.2017 the

violation of those orders for restraint passed by the High

Court of Karnataka was taken note of by this Court and the

Counsel appearing for respondent had sought time to file an

appropriate reply. However, no such reply was filed.

Respondent No.3 was thus put to clear notice about the

violation of those orders of restraints passed by the High

Court of Karnataka. As such, no prejudice has been caused

or visited upon Respondent No.3.

28. We find that the allegations against Respondent No.3 of

committing of contempt are on two counts, in that –

a) He is guilty of disobeying the Orders passed by this

Court in not disclosing full particulars of the assets as

was directed by this Court.

b) He is guilty of violating the express Orders of

Restraint passed by the High Court of Karnataka in the

same Cause from which the present proceedings have

arisen.

Though the contempt on the second count is theoretically

of the orders passed by the High Court of Karnataka since

those orders pertain to the very same Cause and the actions

on part of Respondent No.3 in not disclosing the account in

question through which the transfers were affected also fall

with respect to contempt on first count, we proceed to

exercise our contempt jurisdiction even with regard to the

second count. As stated above, Respondent No.3 was

adequately put to notice and no prejudice has been caused

as a result of such assumption of jurisdiction by this court.

29. Having considered the entirety of the matter, we find

that Respondent No.3 is guilty of having committed

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contempt of court on both the counts. At this stage it must

be stated that in terms of Rule 6 (1) of Rules to Regulate

Proceeding for Contempt of Supreme Court 1975,

Respondent No.3 was obliged and duty bound to appear in

person in response to the notice issued by this Court in

Contempt Petition. Instead, he chose to file application

seeking recall of the orders issuing notice. Having

considered the matter, we see no reason to recall that order

and dismiss I.A. Nos.1 to 4 of 2016 preferred by

Respondent No.3 in Contempt Petition Civil Nos.421-424

of 2016. Respondent No.3 is therefore duty bound to appear

in person in the present contempt proceedings.

30. Since Respondent No.3 has not filed any reply to the

Contempt Petition nor did he appear in person, though we

have found him guilty of having committed contempt of

court, we deem it necessary to give him one more

opportunity and also hear him on the proposed punishment.

We therefore adjourn matter to 10.07.2017 for hearing

Respondent No.3 in person on matters in issue including

one regarding the proposed punishment to be awarded to

him for contempt of court. The instant contempt petitions

and connected cases shall now be listed at 2 o'clock on

10.07.2017. Respondent No.3 may keep his affidavit ready

to be tendered on the same day by stating mitigating

circumstances, if any and any other submissions he chooses

to advance.

31. We direct the Ministry of Home Affairs, Government of

India, New Delhi to secure and ensure presence of

Respondent No.3 before this Court on 10.07.2017. A copy

of this Judgment be sent to the Ministry of Home Affairs for

compliance”.

3. The disbursement of US$ 40 million which had entered the account held

in Edmond De Rothschild (Suisse) S.A. was dealt with in detail and

paragraph 3 of the “further counter affidavit” filed by Respondent No.3

was also quoted by this Court as follows: -

“16. Respondent No.3 thereafter filed “further counter

affidavit” in aforementioned I.A. Nos.9-12 of 2016 on

23.11.2016. The affidavit enclosed letter dated 18.11.2016

issued by Edmond De Rothschild (Suisse) S.A. Paragraph 3

of the affidavit was to the following effect:

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“On a mere perusal of the letter dated 18th

November, 2016 issued by Edmond De Rothschild

(Suisse) S.A. (Annex. “R-2” hereto), it is evident that

the US$ 39,999,994 million paid by Diageo Plc was

received on 25th February, 2016. On instructions of

Respondent No.3, an aggregate sum of US$

39,999,993.99 was paid to the following parties on

26th and 29th February, 2016 respectively:

NAME OF PARTY AMOUNT

S. Three Gift Settlement

(a Trust the sole

beneficiary of which is

Siddartha Mallya, son of

Respondent No.3)

US$13,000,000 (On

26.02.2016) & US$

333,331.33

(on 29.02.2016)

L. Three Gift Settlement

(a Trust the sole

beneficiary of which is

Leena Mallya, daughter

of Respondent No.3)

US$13,000,000 (On

26.02.2016) & US$

333,331.33

(on 29.02.2016)

T. Three Gift Settlement

(a Trust the sole

beneficiary of which is

Tanya Mallya, daughter

of Respondent No.3)

US$13,000,000 (On

26.02.2016) & US$

333,331.33

(on 29.02.2016)

TOTAL US$ 39,999,993.99

Each of the three children of Respondent No.3,

who are the sole beneficiaries of the aforesaid Trusts,

are majors and are citizens of the United States of

America. Respondent No.3 is neither the Settlor nor

the Trustee nor the beneficiary of any of the aforesaid

named Trusts, and has no control over the Trusts or

the manner in which the respective corpuses of each

of the aforesaid Trusts is utilized. However, the

respective corpuses as they stood on 31st March, 2016

have been included in the statements of assets of the

three children handed over to this Hon’ble Court in

sealed envelope on 26th April, 2016.” ”

4. As stated in paragraphs 29 and 30 quoted hereinabove, an opportunity

was given to Respondent No.3 (hereafter referred to as the Contemnor) to

file his response and advance submissions on the proposed punishment.

The matter was accordingly adjourned to 10.7.2017.

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5. The Contemnor however sought review of the Judgment and Order dated

9.5.2017, which application remained pending for some time and was

rejected by this Court vide Order dated 03.08.2020. By said order the

Contemnor was directed to appear before this Court; and the Ministry of

Home Affairs, Government of India, New Delhi, was directed to facilitate

and ensure the presence of the Contemnor on the date of such appearance.

6. The subsequent developments in the matter stand captured in the Order

dated 30.11.2021 passed by this Court, which for facility, is extracted

here:-

“By judgment dated 09.05.2017 passed by this Court

in I.A. Nos.9-12 and 13-16 of 2016 in SLP (Civil)

Nos.6828-6831 of 2016 and I.A. Nos.1-4 of 2016 in

Contempt Petition (C) Nos.421-424 of 2016 in SLP (Civil)

Nos.6828-6831 of 2016, respondent no.3 Dr. Vijay Mallya

was found to be guilty of having committed contempt of

court. The judgment directed that the matter be listed on

10.07.2017 to hear respondent no.3 on matters in issue

including one regarding the proposed punishment to be

awarded to him for contempt of court. However, because of

proceedings, which at the relevant time, were going on in

the Courts of United Kingdom, the presence of respondent

no.3 could not be secured.

In its subsequent order dated 02.11.2020, this Court

noted that certain proceedings were going on in United

Kingdom, though the details of such proceedings were not

forthcoming. This Court rejected the submission made by

Mr. E.C. Agrawala, learned Advocate seeking discharge and

it was directed that the learned Advocate would continue to

appear for respondent no.3. Mr. Tushar Mehta, learned

Solicitor General was then granted time to place Status

Report on record.

The matter was thereafter adjourned on few occasions

and because of COVID-19 pandemic situation, the matter

could not be listed and taken up.

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Today when the matter was called out, Mr. Tushar

Mehta, learned Solicitor General invited our attention to the

Office Memorandum dated 30.11.2021 issued under

signature of Deputy Secretary (Extradition), CPV Division,

Ministry of External Affairs, Government of India.

Paragraphs 2 to 5 of the Memorandum read as under:

“2. It may be recalled that an extradition request in

respect of VM was forwarded to UK side on 9

February 2017 in CBI Case under Sections 120B read

with 420 of the Indian Penal Code and Section 13(2)

read with Section 13(1)(d) of the Prevention of

Corruption Act, 1988. On 10 December 2018, the

Senior District Judge Westminster Magistrate’s Court,

London recommended VM’s extradition to India. VM

appealed the Order of his extradition before the High

Court of London. The appeal was admitted on the sole

ground of sufficiency of prima facie case. The High

Court of London dismissed the appeal on 20 April

2020. VM applied leave to appeal to the Supreme

Court in the High Court. On 14 May 2020 the High

Court of London rejected his application for

permission to appeal to Supreme Court. VM has thus

exhausted all avenues of appeal in the UK.

3. Following the refusal of leave to appeal, VM’s

surrender to India should, in principle, have been

completed within 28 days. However, the UK Home

Office intimated that there is a further legal issue

which needs to be resolved before VM’s extradition

may take place. The UK side further said that this

issue is outside and apart from the extradition process,

but it has the effect that under the United Kingdom

law, extradition cannot take place until it is resolved.

The High Commission was further informed that the

issue is confidential and so it cannot be disclosed.

4. In compliance with the Order of the Hon’ble

Supreme Court dated 31.08.2020, the Government of

India again took up the pending extradition case of

VM with the Government of UK so as to seek his

early extradition and facilitate his presence before the

Hon’ble Supreme Court on 5 October 2020.

5. The UK side has informed that extradition of VM

cannot take place until a separate legal issue, which is

judicial and confidential in nature is resolved. The UK

side emphasized that neither they can provide any

more details nor intervene in the process. They have

also indicated that through the designated channel, the

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UK Home Office has received a request to serve

summons on VM for his hearing before the Hon’ble

Supreme Court. The British Home Office has

forwarded the Hon’ble Supreme Court’s Order

through the Hertfordshire Police on 17 September

2020 for serving it to VM.”

As indicated in paragraph 2 of the Memorandum, the

proceedings for extradition have attained finality and

respondent no.3 has exhausted all avenues of appeal in the

United Kingdom. However, paragraphs 4 and 5 deal with

some proceedings which are stated to be confidential and

with regard to which no details are forthcoming. It appears

that these are the same proceedings which were referred to

in the order dated 02.11.2020.

Having considered all the circumstances on record, it is

directed:

a. The matter in terms of the directions issued by this

Court in its order dated 09.05.2017 shall now be listed

on 18.01.2022.

b. Respondent No.3 is at liberty to advance such

submissions, as are deemed appropriate, pertaining to

the issues set out in the order dated 09.05.2017.

c. If, for any reason, respondent no.3 is not present to

advance such submissions, learned counsel on his

behalf can advance such submissions as are open to

respondent no.3, in law.

d. We request Mr. Jaideep Gupta, learned Senior

Advocate of this Court to assist the Court as Amicus

Curiae in the matter.

Mr. Gupta will be at liberty to avail services of any

Advocate-on-Record of his own choice in the instant

matter.

The Registry is directed to supply papers of this matter

to Mr. Gupta within a week.

e. The matter shall be dealt with finally on 18.01.2022.”

7. The matter thereafter came up before this Court on 10.03.2022 on which

date the following Order was passed: -

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“1. Pursuant to orders passed from time to time and more

particularly orders dated 30.11.2021 and 10.02.2022, the

matter is posted today for hearing.

2. In terms of Directions (b) and (c) issued by this Court

vide order dated 30.11.2021, the contemnor was given

specific liberty to advance submissions pertaining to the

issues set-out in the judgment dated 09.05.2017.

Additionally, he was given further liberty to advance such

submissions through his learned Counsel.

3. Mr. Ankur Saigal, learned counsel appearing on behalf

of the contemnor submits that all the orders including the

orders dated 30.11.2021 and 10.02.2022 were brought to

the notice of the contemnor and that there was exchange of

communications between the learned counsel and the

contemnor. A copy of the communication dated 17.01.2022

has been placed for our perusal which communication inter

alia states inability on part of the Solicitors of the

contemnor to provide any information about the nature of

proceedings and the relief sought in the pending

proceedings in the United Kingdom.

4. We then invited Mr. Ankur Saigal, learned counsel to

advance submissions on merits of the matter in keeping

with the directions issued in last two orders. Mr. Saigal

expressed his inability to advance the submissions.

5. We have heard Mr. Jaideep Gupta, learned Senior

Advocate, who has assisted this Court as Amicus Curiae

very ably. He has invited our attention to various aspects of

the record including the judgment dated 09.05.2017 in

State Bank of India & Others v. Kingfisher Airlines Ltd. &

Others, (2017) 6 SCC 654, provisions of the Contempt of

Courts Act and the Supreme Court Rules, 2013. He has

also relied upon various decisions of this Court including

the decision in Supreme Court Bar Association v. Union of

India & Another, (1998) 4 SCC 409.

6. Mr. Gupta may file his written submissions on or before

12.03.2022.

7. Even though Mr. Ankur Saigal, learned counsel has

expressed his inability to advance submissions though he

was invited to do so, we still grant one more opportunity to

file his submissions on or before 15.03.2022, with an

advance copy to the learned Amicus Curiae.”

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8. The oral arguments advanced by Mr. Jaideep Gupta, learned Amicus

Curiae were summarized in his Written Submissions as under: -

“A. The sum of the money which was received by

Edmond deRothschild (Suisse) M.A. was, on the

instruction of the Respondent No.3/ contemnor, paid to

three trusts wherein the sole beneficiaries were the son and

two daughters of the Respondent No.3/ Contemnor. The

aforementioned amount had been transferred in violation of

order of court by taking advantage of the very act of

contempt which has been held against the Contemnor/

Respondent No.3. It is, therefore, submitted that this

Hon’ble Court may give appropriate direction for reversal

of the aforesaid transactions by declaring the said

transactions to be void.

B. The present contempt proceedings arise out of

recovery proceedings by Banks. It is stated by the

Counsel on behalf of State Bank of India that decrees have

been passed against the Respondent No.3 in the said

recovery proceedings and Recovery Officer has been

appointed for enforcement and execution of the said

decree. It thought fit, this Hon’ble Court may give

appropriate direction to the said Recovery Officer to trace

the said funds into the hands of whoever they may have

been transferred to and use the same in execution of the

decree.

C. In the event the said funds are found inadequate to

purge the said contempt, appropriate orders may be passed

for sequestration of the assets of the respondent no.3/

contemnor both in India and outside. Assistance of the

Banks and/ or the Union of India may be taken to find out

all assets that may be available to the respondent No.3/

Contemnor. Alternatively, a forensic auditor may be

appointed to undertake such an exercise.”

Reliance was placed by the learned Amicus Curiae on the decisions

of this Court in Supreme Court Bar Association v. Union of India & Anr.

2

,

Noorali Babul Thanewala v. K.M.M. Shetty & Ors.3

, Rama Narang v.

2 (1998) 4 SCC 409.

3 (1990) 1 SCC 259.

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Ramesh Narang4

, Pravin C. Shah v. K.A. Mohd. Ali & Anr.5

 to submit that

in contempt jurisdiction the Court can direct the contemnor to purge the

contempt by reversing the very transaction that was found to be

contumacious. On the remedy of sequestration of assets, reliance was

placed on Rose v. Laskington6

, Mir v. Mir7

 and Richardson v. Richardson8

.

9. In spite of repeated opportunities afforded to the Contemnor, no

submissions were advanced on his behalf either on purging of contempt

or on the quantum of punishment.

10. The actions on part of the Contemnor having been found to be

contumacious and established in the Judgment and Order dated

09.05.2017, we are presently concerned with the issues as to what orders

be passed regarding punishment and purging of contempt. The approach

in such cases was succinctly stated by this Court in Pravin C. Shah v.

K.A. Mohd. Ali & Anr.5

as under:

“23. Now we have to consider the crucial question — how

can a contemnor purge himself of the contempt? According

to the Disciplinary Committee of the Bar Council of India,

purging oneself of contempt can be done by apologising to

the court. The said opinion of the Bar Council of India can

be seen from the following portion of the impugned order:

“Purging oneself of contempt can be only by

regretting or apologising in the case of a completed

action of criminal contempt. If it is a case of civil

contempt, by subsequent compliance with the orders

4 (2009) 16 SCC 126.

5 (2001) 8 SCC 650.

6 (1989) 3 AllER 306.

7 (1992) 1 AllER 765.

8 (1989) 3 AllER 779.

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or directions the contempt can be purged of. There is

no procedural provision in law to get purged of

contempt by an order of an appropriate court.”

24. Purging is a process by which an undesirable element is

expelled either from one's own self or from a society. It is a

cleaning process. Purge is a word which acquired

implications first in theological connotations. In the case of

a sin, purging of such sin is made through the expression of

sincere remorse coupled with doing the penance required.

In the case of a guilt, purging means to get himself cleared

of the guilt. The concept of purgatory was evolved from

the word “purge”, which is a state of suffering after this life

in which those souls, who depart this life with their deadly

sins, are purified and rendered fit to enter into heaven

where nothing defiled enters (vide Words and Phrases,

Permanent Edn., Vol. 35-A, p. 307). In Black's Law

Dictionary the word “purge” is given the following

meaning: “To cleanse; to clear. To clear or exonerate from

some charge or imputation of guilt, or from a contempt.” It

is preposterous to suggest that if the convicted person

undergoes punishment or if he tenders the fine amount

imposed on him the purge would be completed.

25. We are told that a learned Single Judge of the

Allahabad High Court has expressed a view that purging

process would be completed when the contemnor

undergoes the penalty [vide Madan Gopal Gupta

(Dr) v. Agra University [AIR 1974 All 39] ]. This is what

the learned Single Judge said about it: (AIR p. 43, para 13)

“In my opinion a party in contempt purged its

contempt by obeying the orders of the court or by

undergoing the penalty imposed by the court.”

26. Obeying the orders of the court would be a mode by

which one can make the purging process in a substantial

manner when it is a civil contempt. Even for such a civil

contempt the purging process would not be treated as

completed merely by the contemnor undergoing the

penalty imposed on him unless he has obeyed the order of

the court or he has undone the wrong. If that is the position

in regard to civil contempt the position regarding criminal

contempt must be stronger. Section 2 of the Contempt of

Courts Act categorises contempt of court into two

categories. The first category is “civil contempt” which is

the wilful disobedience of the order of the court including

breach of an undertaking given to the court. But “criminal

contempt” includes doing any act whatsoever, which tends

to scandalise or lowers the authority of any court, or tends

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to interfere with the due course of a judicial proceeding or

interferes with, or obstructs the administration of justice in

any other manner.

27. We cannot therefore approve the view that merely

undergoing the penalty imposed on a contemnor is

sufficient to complete the process of purging himself of the

contempt, particularly in a case where the contemnor is

convicted of criminal contempt. The danger in giving

accord to the said view of the learned Single Judge in the

aforecited decision is that if a contemnor is sentenced to a

fine he can immediately pay it and continue to commit

contempt in the same court, and then again pay the fine and

persist with his contemptuous conduct. There must be

something more to be done to get oneself purged of the

contempt when it is a case of criminal contempt.”

11. Similarly, following observations were made and directions were issued

by this Court in Noorali Babul Thanewala v. K.M.M. Shetty & Ors.3

:

“11. ……..It is settled law that breach of an injunction or

breach of an undertaking given to a court by a person in a

civil proceeding on the faith of which the court sanctions a

particular course of action is misconduct amounting to

contempt. The remedy in such circumstances may be in the

form of a direction to the contemnor to purge the contempt

or a sentence of imprisonment or fine or all of them. On the

facts and circumstances of this case in the light of our

finding that there was a breach of the undertaking we think

that mere imposition of imprisonment or fine will not meet

the ends of justice. There will have to be an order to purge

the contempt by directing respondent 1-contemnor to

deliver vacant possession immediately and issuing

necessary further and consequential directions for

enforcing the same.

12. In the foregoing circumstances, we find respondent 1

guilty of committing contempt by wilful disobedience of

the undertaking given by him in this Court and accordingly

we convict him and sentence him to pay a fine of Rs 500

within the period of four weeks, failing which he shall

suffer simple imprisonment for one month, and also direct

him to deliver vacant possession of the premises forthwith

to the petitioner to the extent possible by him. We further

direct the District Magistrate, Thane, to evict all those who

are in physical possession of the property including

respondent 2 and his men and if necessary, with police help

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and give vacant possession of the premises to the petitioner

forthwith.”

12. The importance of passing appropriate directions, apart from imposing

punishment upon the contemnor, was stressed by the Constitution Bench

of this Court in Supreme Court Bar Association v. Union of India & Anr.

2

as follows:

“33. Thus, the recognised and accepted punishments for

civil or criminal contempt of court in English law, which

have been followed and accepted by the courts in this

country and incorporated in the Indian law insofar as, civil

contempt, is concerned are:

(i) sequestration of assets;

(ii) fine;

(iii) committal to prison.

34. The object of punishment being both curative and

corrective, these coercions are meant to assist an individual

complainant to enforce his remedy and there is also an

element of public policy for punishing civil contempt,

since the administration of justice would be undermined if

the order of any court of law is to be disregarded with

impunity. Under some circumstances, compliance of the

order may be secured without resort to coercion, through

the contempt power. For example, disobedience of an order

to pay a sum of money may be effectively countered by

attaching the earnings of the contemner. In the same

manner, committing the person of the defaulter to prison

for failure to comply with an order of specific performance

of conveyance of property, may be met also by the court

directing that the conveyance be completed by an

appointed person. Disobedience of an undertaking may in

the like manner be enforced through process other than

committal to prison as for example where the breach of

undertaking is to deliver possession of property in a

landlord-tenant dispute. Apart from punishing the

contemner, the court to maintain the majesty of law may

direct the police force to be utilised for recovery of

possession and burden the contemner with costs,

exemplary or otherwise.”

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13. It is, thus, well settled that apart from punishing the contemnor for his

contumacious conduct, the majesty of law may demand that appropriate

directions be issued by the court so that any advantage secured as a result

of such contumacious conduct is completely nullified. The approach may

require the court to pass directions either for reversal of the transactions

in question by declaring said transactions to be void or passing

appropriate directions to the concerned authorities to see that the

contumacious conduct on the part of the contemnor does not continue to

enure to the advantage of the contemnor or any one claiming under him.

It is precisely for these reasons that the direction to have vacant

possession delivered to the rightful claimant was passed by this Court in

Noorali Babul Thanewala v. K.M.M. Shetty & Ors.3

 Mere passing of an

order of punishment as stated by this Court in Pravin C. Shah v. K.A.

Mohd. Ali & Anr.5

 would not be enough or sufficient. In a given case, to

meet the ends of justice, the concept of purging of the contempt would

call for complete disgorging of all the benefits secured as a result of

actions which are found by the court to be contumacious.

14. In its Judgment and Order dated 09.05.2017, this Court had found that the

action on part of the Contemnor in disbursing the amount of US$ 40

million was against the text and tenor of orders passed by the High Court

of Karnataka and that the Contemnor was guilty of contempt.

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15. In the circumstances, in order to maintain the majesty of law, we must

impose adequate punishment upon the Contemnor and must also pass

necessary directions so that the advantages secured by the Contemnor or

anyone claiming under him are set at naught and the amounts in question

are available in execution of the decrees passed in the concerned

Recovery Proceedings.

16. Considering the facts and circumstances on record and the facts that the

Contemnor never showed any remorse nor tendered any apology for his

conduct, we impose sentence of four months and fine in the sum of

Rs.2,000/- (Rupees Two Thousand Only) upon the Contemnor. The fine

shall be deposited in the Registry of this Court within four weeks and

upon such deposit, the amount shall be made over to the Supreme Court

Legal Services Committee. In case the amount of fine is not deposited

within the time stipulated, the Contemnor shall undergo further sentence

of two months.

We direct the Ministry of Home Affairs, Government of India, New

Delhi to secure the presence of the Contemnor to undergo the

imprisonment imposed upon him. Needless to say, Government of India

including the Ministry of External Affairs and all other agencies or

instrumentalities shall carry out the directions issued by this Court with

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due diligence and utmost expediency. A Compliance Report shall

thereafter be filed in the Registry of this Court.

17. We also direct:

A. The transactions referred to in the Judgment and Order dated

09.05.2017 in terms of which the amount of US$ 40 million was

disbursed to the beneficiaries detailed in paragraph 16 of the said

judgment and order is held to be void and inoperative;

B. The Contemnor and the beneficiaries under said transactions referred to

in the said Paragraph 16 shall be bound to deposit the amount received

by such beneficiaries along with interest at the rate of 8 per cent per

annum with the concerned Recovery Officer within four weeks.

C. In case the amounts are not so deposited, the concerned Recovery

Officer shall be entitled to take appropriate proceedings for recovery of

said amounts; and Government of India and all the concerned agencies

shall extend assistance and complete cooperation. It shall be open to

take such appropriate steps including the appointment of Forensic

Auditor(s).

18. In the end, we must express our sincere gratitude and appreciation for the

efforts put in by Mr. Jaideep Gupta, learned Senior Advocate who assisted

this Court very ably as Amicus Curiae.

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19. These contempt petitions, thus, stand disposed of.

………………………………..J.

[Uday Umesh Lalit]

………………………………..J.

[S. Ravindra Bhat]

………………………………..J.

[Pamidighantam Sri Narasimha]

New Delhi;

July 11, 2022.