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.”
16
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.
17
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
18
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.
19
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.

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