VERDICTUM.

IN

REPORTABLE

IN THE SUPREME COURT OF INDIA

INHERENT APPELLATE JURISDICTION

CONTEMPT PETITION (C) NO. 940 OF 2021

IN

MISCELLANEOUS APPLICATION NO. 1668 OF 2021

IN

SPECIAL LEAVE PETITION (C) NO. 14724 OF 2021

Urban Infrastructure Real Estate Fund …Petitioner(s)

Versus

Dharmesh S. Jain and Anr. …Respondent(s)

JUDGMENT

M.R. SHAH, J.

1. The present contempt petition has been filed by the petitioner

herein – Urban Infrastructure Real Estate Fund – the Award Creditor

in whose favour there is an award passed by the learned Arbitrator

to punish the respondents under the Contempt of Courts Act, 1971

for wilful disobedience of the order dated 17.09.2021 passed by this

Court in Special Leave Petition (C) No. 14724 of 2021 and the
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subsequent order dated 28.10.2021 passed in Miscellaneous

Application No. 1668 of 2021 in the very same Special Leave

Petition (C) No. 14724 of 2021.

2. Before considering the submissions made by learned senior

counsel appearing on behalf of the respective parties, the

chronological dates and events leading up to the filing of this

contempt petition are required to be referred to and considered,

which are as under:-

2.1 That by Arbitral Award dated 30.08.2018 passed in arbitral

proceedings filed by the petitioner herein against the respondents -

alleged contemnors, the learned Arbitrator awarded specific

performance of the Share Purchase Agreement and held that the

petitioner is entitled to recover an amount of Rs. 78,33,37,500/- with

interest at the rate of 18% p.a. with effect from 20.12.2014 till

realization.

2.2 Challenging the award passed by the learned Arbitrator, the

respondent herein preferred Commercial Arbitration Petition No. 55

of 2019 before the High Court under Section 34 of the Arbitration

and Conciliation Act, 1996 (hereinafter referred to as “Act of 1996”).

In the said arbitration petition, the respondents herein – original

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applicants took out a Notice of Motion No. 960 of 2019 praying for

stay of the award.

2.3 The learned Single Judge of the High Court disposed of the

said Notice of Motion in terms of the prayer clause “a” on the

condition that the respondents herein deposit 50% of the awarded

sum within twelve weeks. The learned Single Judge also observed

that if such deposit is not made within the time prescribed, the

interim stay granted shall stand vacated without further reference to

the Court. Simultaneously, the petitioner was also directed to

deposit 50% of its shareholding in the respondent No. 2 company

within one week of deposit of amount. The learned Single Judge

also made it clear that if the respondents – original applicants

commit any default in making payments as directed, the respondent

(applicant herein) is not required to deposit such shares.

2.4 It appears that even before the application under Section 34

of the Act of 1996 challenging the award was made, the Award

Creditor had filed the execution petition before the High Court being

Commercial Execution Application No. 2908 of 2018. After the

order was passed by the learned Single Judge dated 08.08.2019, a

Notice of Motion No. 960 of 2019 was filed. The learned Single

Judge being the Executing Court passed the order dated

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18.11.2019 in the Chamber Summons No. 357 of 2019 taken out by

the Award Creditor. The learned Single Judge directed the

respondent herein to file the disclosure affidavit declaring their

assets vide order dated 18.11.2019. The order dated 18.11.2019

was, however, not complied with by the respondents and repeated

extensions were sought.

2.5 That in the meantime, respondents herein instituted

Commercial Appeal No. 521 of 2019 challenging the order dated

08.08.2019 by which, while staying the award passed by the

learned Arbitrator, the High Court directed them to deposit 50% of

the awarded amount. It is required to be noted that during the

pendency of the Commercial Appeal No. 521 of 2019, the

respondents herein i.e., the contemnors – appellants before the

High Court prayed for a number of extensions to deposit the amount

as directed by the learned Single Judge vide order dated

08.08.2019.

2.6 The aforesaid appeal came to be dismissed as not

maintainable vide order dated 29.07.2021 and the interim

application was also disposed of. Being aggrieved, the respondents

herein preferred special leave petition before this Court challenging

the order dated 08.08.2019 in Notice of Motion No. 960 of 2019 and
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in Commercial Arbitration Petition No. 55 of 2019. That by order

dated 17.09.2021, this Court dismissed the said special leave

petition on merits. However, a prayer was made on behalf of the

respondents herein – petitioners before this Court to grant further

eight weeks’ time from 17.09.2021 to comply with the order dated

08.08.2019 by which they would deposit 50% of the amount as

awarded by the Arbitrator. This Court granted further eight weeks’

time as prayed. As the order dated 17.09.2021 was passed ex-

parte and without notice to the applicant herein – respondents in

special leave petition, the applicant herein preferred Miscellaneous

Application No. 1668 of 2021 to recall the order dated 17.09.2021

by which further eight weeks’ time was granted to the respondents –

petitioners before this Court.

2.7 It was the case on behalf of the applicants that the

respondents have no intention to comply with the order and deposit

50% of the amount awarded by the learned Arbitrator and further

eight weeks’ time is sought only to kill time as there is no intention

to deposit the amount and/or comply with the order dated

08.08.2019 passed by the High Court.

2.8 That after hearing the learned counsel appearing on behalf of

the respective parties including the counsel on behalf of the

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respondents, this Court passed an order dated 28.10.2021 in

Miscellaneous Application No. 1668 of 2021 of which also non-

compliance is alleged. By order dated 28.10.2021, this Court had

directed the respondents herein – petitioners before this Court in

Special Leave Petition (C) No. 14724 of 2021 to comply with and

deposit the amount to be deposited as per the order passed by the

High Court dated 08.08.2019 positively and within the time granted

by this Court (eight weeks). This Court also further observed that

non-compliance of the same shall be treated very seriously and

non-deposit of the amount as directed by the High Court in the

impugned order shall be treated as non-compliance of the order of

this Court and also having serious consequences.

2.9 Despite the specific directions issued by this Court, the

respondents neither complied with the order passed by the High

Court dated 08.08.2019 nor complied with the order passed by this

Court dated 28.10.2021 in Miscellaneous Application No. 1668 of

2021 in Special Leave Petition (C) No. 14724 of 2021.

2.10 That the applicant herein served a legal notice upon the

respondents dated 16.11.2021 by which the respondents were

called upon to comply with the order dated 08.08.2019 passed by

the High Court as well as the orders passed by this Court dated
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17.09.2021 and 28.10.2021. In the said legal notice, it was

specifically mentioned that if the aforesaid orders are not complied

with, the petitioners shall be constrained to proceed further to

initiate appropriate proceedings for wilful disobedience of orders

passed by the Court. One other legal notice was served upon the

respondents informing that the time granted by this Court in Special

Leave Petition (C) No. 14724 of 2021 to comply with the order

dated 08.08.2019 had expired. Despite the above, neither the order

passed by the High Court dated 08.08.2019 was complied with nor

the orders passed by this Court dated 17.09.2021 and 28.10.2021

was obeyed. Instead, having realized that the non-compliance of

the order dated 28.10.2021 may invite serious consequences, the

respondents herein filed Miscellaneous Application No. 61 of 2022

on 17.01.2022 requesting to recall the order dated 28.10.2021

passed by this Court in Miscellaneous Application No. 1668 of 2021.

2.11 By a detailed order dated 25.01.2022, this Court had

dismissed the said application by which the respondents herein had

requested recall of the order dated 28.10.2021 passed in

Miscellaneous Application No. 1668 of 2021.

2.12 At this stage, it is required to be noted that a number of

submissions were made by the learned counsel appearing on behalf

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of the respondents – applicants before this Court in Miscellaneous

Application No. 61 of 2022 on the directions issued by this Court

vide order dated 28.10.2021, which are again made by the learned

counsel appearing on behalf of the respondents before this Court in

the present proceedings and all the submissions were dealt with by

this Court while deciding Miscellaneous Application No. 61 of 2022.

2.13 At this stage, it is required to be noted that prior to filing of the

Miscellaneous Application No. 61 of 2022, the petitioners had

already filed the present application alleging disobedience of the

order dated 28.10.2021 passed in Miscellaneous Application

No. 1668 of 2021, which was filed on 18.11.2021 in which this Court

directed to issue notice upon the respondents vide order dated

10.12.2021 making it returnable on 10.01.2022 and having been

served with the notice of this Court in the present contempt

petitions, the respondents filed the aforesaid Miscellaneous

Application No. 61 of 2022 and have prayed to recall the order

dated 28.10.2021, which as observed hereinabove has already

been dismissed by this Court vide order dated 25.01.2022.

3. Shri Shyam Divan, learned Senior Advocate appearing on

behalf of the respondents – alleged contemnors has as such

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reiterated what was submitted earlier while deciding Miscellaneous

Application No. 61 of 2022.

3.1 Shri Divan, learned Senior Advocate has submitted that as

such there is no direction issued by this Court of which non-

compliance is alleged. Elaborating the same he submitted that by

order dated 17.09.2021, this Court while dismissing the special

leave petition preferred by the respondents extended the time to

comply with the order dated 08.08.2019 passed by the learned

Single Judge. It is submitted that the said order dated 08.08.2019

was an interim order passed on Notice of Motion by which, while

granting stay of the award passed by the learned Arbitrator, the

respondents were directed to deposit 50% of the amount awarded.

It is submitted that in the order dated 08.08.2019 itself, the learned

Single Judge specifically observed that on non-compliance of the

same, the interim stay granted would stand vacated. It is

contended that by not deposing 50% of the awarded amount within

the stipulated period of time and the extended period of time, there

shall not be any stay of the award passed by the learned Arbitrator

and therefore the said award shall be executable and the execution

proceedings are required to be heard and proceeded further. It is

therefore urged that non-compliance of the order dated 08.08.2019

does not warrant any proceedings under the Contempt of Courts

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Act, 1971, as the order dated 08.08.2019 cannot be said to be a

mandatory order or a direction to deposit 50% of the amount

awarded. It is also submitted that the order dated 17.09.2021

cannot be said to be any order or direction issued by this Court.

3.2 Shri Divan, learned Senior Advocate has taken us to Section

36 of the Act of 1996 in support of his submission that on non-

deposit of the amount awarded by the Arbitral Tribunal, the award is

executable. It is submitted that as such an execution application is

already filed and pending.

3.3 It is further submitted that when the petitioner filed

Miscellaneous Application No. 1668 of 2021 seeking recall of the

order dated 17.09.2021 passed by this Court, even the petitioner

did not construe the condition of deposit to be a mandatory direction

to deposit.

3.4 It is further submitted by Shri Divan, learned Senior Advocate

appearing on behalf of the respondents that the order dated

17.09.2021 was not a mandatory order directing the respondents to

deposit 50% of the amount and the order dated 17.09.2021 was an

order extending the time in favour of the respondents to deposit the

amount as per the order passed by the learned Single Judge. Even

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the subsequent order dated 28.10.2021 passed on an application

filed by the petitioner to recall the order dated 17.09.2021, cannot

be said to be a mandatory order and/or direction, the non-

compliance of which warrants any proceedings under the Contempt

of Courts Act, 1971.

3.5 It is further urged by Shri Divan, learned Senior Advocate

appearing on behalf of the respondents that on non-compliance of

the order passed by the learned Single Judge dated 08.08.2019 by

which on non-deposit of 50% of the amount, the interim stay

granted stood vacated and therefore, the award is to be executed

for which the execution proceedings are pending and the contempt

of court proceeding is not the remedy available to the petitioner. It

is submitted that as held by this Court in the case of R.N. Dey and

Ors. Vs. Bhagyabati Pramanik and Ors., (2000) 4 SCC 400, the

weapon of contempt cannot be used for purposes of executing a

decree or implementing an order for which law provides appropriate

procedure.

3.6 Shri Divan, learned Senior Advocate appearing on behalf of

the respondents has contended that as such there is no wilful

disobedience of any of the orders passed by this Court and/or even

the High Court. In fact, the respondents have made honest

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endeavors to comply with the condition of deposit. However,

despite the best efforts during the eight weeks’ time granted by this

Hon’ble Court, the respondents have been unable to comply with

the condition of deposit in view of the grave and unsurmountable

challenges / difficulties being faced by the respondents.

3.7 It is further submitted that the dispute is in the nature of a

commercial dispute and negotiations are going on and final figures

are to be settled. That the respondents have already given a

demand draft of Rs. 5 crores to show their bonafides and are ready

to submit a further sum of Rs. 5 crores with the Registry of the High

Court. It is submitted that therefore, when there is no wilful

disobedience, the present contempt proceedings be dismissed.

Reliance is placed upon the decisions of this Court in the case of

Mrityunjoy Das and Anr. Vs. Sayed Hasibur Rahaman and Ors.,

(2001) 3 SCC 739 (Paras 13 & 14); Ram Kishan Vs. Tarun Bajaj &

Ors., (2014) 16 SCC 204 (Paras 11 to 15); Dinesh Kumar Gupta

Vs. United India Insurance Company Limited & Ors., (2010) 12

SCC 770 (Para 17); Jolly George Varghese & Anr. Vs. The Bank

of Cochin, (1980) 2 SCC 360 (Paras 1, 2, 4, 6, 10 & 11); and Dr.

U.N. Bora, Ex. Chief Executive Officer & Ors. Vs. Assam Roller

Flour Mills Association & Anr. (2022) 1 SCC 101 (Paras 8 & 9).

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4. Shri Jayant Bhushan, learned Senior Advocate appearing on

behalf of the petitioner has submitted that as on today, a total sum

of Rs. 190 crores is due and payable by the respondents pursuant

to the award passed by the learned Arbitrator, which was passed

four years back.

4.1 It is submitted by Shri Bhushan, learned Senior Advocate that

right from the filing of the execution proceedings by the petitioner, at

every stage, the respondents have delayed the execution of the

award on one ground or the other either, by filing Notice of Motion

and obtaining interim stay of the award on condition of deposit of

50% of the awarded amount and thereafter getting extensions even

during the pendency of the appeal and making the Court believe

that they will deposit the amount as per the orders passed by the

learned Single Judge dated 08.08.2019. It is submitted that during

all these periods, the respondents have taken advantage of the

extensions sought by them. It is submitted that therefore it would

not be open for the respondents to now say that on non-deposit of

the 50% of the amount as ordered by the learned Single Judge in

his order dated 08.08.2019, the award is executable.

4.2 It is submitted by Shri Jayant Bhushan, learned Senior

Advocate appearing on behalf of the petitioner that even the

respondents have not complied with the order passed by the High
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Court in the Chamber Summons taken out by the petitioner by

which the respondents were directed to disclose their assets. It is

submitted that despite a number of opportunities given by the High

Court, the respondents have not complied with the direction issued

by the High Court by which the respondents were directed to

disclose their assets, which they declared after a period of almost

two and a half years. It is, therefore, submitted that all throughout

the conduct on the part of the respondents suggest that

respondents are in the habit of not complying with the

orders/directions issued by the Court(s).

4.3 It is also submitted by Shri Jayant Bhushan, learned Senior

Advocate appearing on behalf of the petitioner that despite the

dismissal of the Miscellaneous Application No. 61 of 2022, the

respondents have the audacity to now say that the order dated

28.10.2021 cannot be said to be a mandatory direction. He has

taken us to the averments in the Miscellaneous Application No. 61

of 2022 in which the very respondents have stated that the order

dated 28.10.2021 is a mandatory order/direction. It is submitted

that by taking such a stand, the respondents have aggravated their

contumacious conduct.

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4.4 Now, so far as the submission on behalf of the respondents

that, the order passed by the learned Single Judge dated

08.08.2019 and the subsequent order passed by this Hon’ble Court

dated 17.09.2021 cannot be said to be a direction and if there is

non-compliance of the same, the consequences under Section 36

of the Act of 1996 shall follow and the award thereafter will have to

be executed, it is vehemently submitted by Shri Jayant Bhushan,

learned Senior Advocate appearing on behalf of the petitioner that

the non-compliance alleged is not only of the order dated

08.08.2019 passed by the learned Single Judge of the High Court

and the order dated 17.09.2021 passed by this Hon’ble Court but

the non-compliance alleged is of the order dated 28.10.2021 also by

which the specific mandatory direction has been issued by this

Court directing the respondents to deposit the amount as ordered

by the learned Single Judge. It is submitted that in the said order

itself, it has been specifically mentioned that non-compliance of the

directions would be having serious consequences. It is submitted

that despite the above, the respondents have not deposited the

amount as ordered by the learned Single Judge vide order dated

08.08.2019.

4.5 Now, so far as the submission on behalf of the respondents

that there is no wilful disobedience and that despite their best

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efforts, they are not in a position to deposit the amount as ordered

due to financial crunch and other adverse circumstances, it is

vehemently submitted by Shri Jayant Bhushan, learned Senior

Advocate appearing on behalf of the petitioner that the aforesaid

stand now taken is nothing but an afterthought and as such even

when the Miscellaneous Application No. 61 of 2022 was filed, it was

not the case on behalf of the respondents that due to financial

constraint and/or adverse circumstances, they are not in a position

to deposit the amount. It is submitted that even the respondents

can sell the development rights worth Rs. 100 crores and they have

the financial capacity but have willfully disobeyed the orders of this

Court.

4.6 Making the above submissions and relying upon the decisions

of this Court in the case of Rama Narang Vs. Ramesh Narang &

Anr., (2006) 11 SCC 114 (Paras 24, 25, 30 & 32); Bank of Baroda

Vs. Sadruddin Hasan Daya & Anr. (2004) 1 SCC 360 (Paras 12 &

14); and Rita Markandey Vs. Surjit Singh Arora, (1996) 6 SCC 14

(Para 12), it is prayed to suitably punish respondent No. 1 for wilful

disobedience of the direction issued by this Court vide order dated

28.10.2021.

5. Heard learned senior counsel for the respective parties at

length.
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6. In the present petition, it is prayed to punish the respondents

under the provisions of the Contempt of Courts Act for wilful

disobedience of the order dated 17.09.2021 passed by this Court in

Special Leave Petition (C) No. 14724 of 2021 and also the order

dated 28.10.2021 passed in Miscellaneous Application No. 1668 of

2021 in Special Leave Petition (C) No. 14724 of 2021. For

immediate reference the said orders are extracted as under:

Order dated 17.09.2021

“Delay condoned.

Having heard Shri Shyam Divan, learned senior

counsel appearing for the petitioners and considering
the fact that the impugned order passed by the High
Court is in a notice of motion application and an
interim order, we see no reason to interfere with the
impugned order.

The Special Leave petition is dismissed.

Pending application(s), if any, shall stand

disposed of.

However, as prayed, we grant further eight

weeks time from today to the applicants to comply
with the impugned order passed by the High Court.”

Order dated 28.10.2021

“Having heard Shri Jayant Bhushan, learned

senior counsel appearing on behalf of the respondent
no. 1 herein/Applicants -Urban Infrastructure Real
Estate Fund and Shri Kunal Vajani, learned counsel
appearing on behalf of the original petitioners before
this Court, we dispose of the present application with
an observation that the petitioners before this Court
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in SLP (C) No. 14724/2021 shall have to comply with

and deposit the amount to be deposited as per the
impugned order passed by the High Court positively
and within the time granted by this Court and non-
compliance of the same shall be treated very
seriously and non-deposit of the amount as directed
by the High Court in the impugned order shall be
treated as non-compliance of our order also having a
serious consequences.

With this, the present application stands

disposed of.”

7. It is the case on behalf of the respondents – alleged

contemnors that by the order passed by this Hon’ble Court dated

17.09.2021 in Special Leave Petition (C) No. 14724 of 2021, this

Court while dismissing the said special leave petition has granted

further eight weeks’ time to the original applicants to comply with the

order passed by the High Court dated 08.08.2019 by which the High

Court passed a conditional stay order in favour of the original

applicants – respondents herein and to deposit 50% of the awarded

amount, failing which the stay to stand vacated. It is the case on

behalf of the respondents that on non-compliance of the order dated

08.08.2019, the necessary consequences under Section 36 of the

Act of 1996 shall follow and the proceedings to execute the award

has to be proceeded further. It is submitted therefore that as the

order dated 08.08.2019 cannot be said to be a direction and in view

of the remedy available to the applicants to proceed further with the

execution proceedings, no proceedings under the Contempt of

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Courts Act for disobedience of the order dated 08.08.2019 and/or

the order passed by this Court dated 17.09.2021 in Special Leave

Petition (C) No. 14724 of 2021 shall be maintainable. In the facts

and circumstances of the case and considering the conduct on the

part of the respondents, this submission cannot be accepted.

8. It is to be noted that there is an award dated 30.08.2018 in

favour of the applicant and the learned Arbitrator had awarded

specific performance of the Share Purchase Agreement and held

that the applicant is entitled to recover an amount of

Rs. 78,33,37,500/- with interest at the rate of 18% p.a. with effect

from 20.12.2014 till realization and had also awarded Rs. 50 lakhs

against the respondent company. Thereafter the Award Creditor

had filed the Execution Petition on 10.12.2018 and since then, the

respondents have successfully avoided the execution of the award

till date by initiating proceedings one after another and by getting

extensions of the interim order passed by the High Court dated

08.08.2019 passed on Notice of Motion No. 960 of 2019 and in

Commercial Arbitration Petition No. 55 of 2019. After the order

dated 08.08.2019, the respondents sought a number of extensions

which the High Court granted on the belief that the respondents will

deposit the amount as ordered vide order dated 08.08.2019. Thus,

the respondents took the benefit of the extensions granted by the

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Court and the respondents were granted the extension of time to

make the deposit as per the order dated 08.08.2019, which were

granted on their requests.

Having taken the benefit of the extensions for a period of

approximately two years and more, thereafter, it is not open for the

respondents to contend that since they have not deposited the

amount as per the order dated 08.08.2019, necessary

consequences under Section 36 of the Act of 1996 shall follow and

the execution proceedings have to be proceeded further. As

observed hereinabove, the execution proceedings have been

delayed in view of the interim order dated 08.08.2019 and the

subsequent extensions granted by the High Court, which were at

the behest of the respondents. The respondents herein have had

the benefit of extensions of time being granted for depositing the

amount as per order dated 08.08.2019 and consequently have

successfully obstructed the execution proceedings for over two

years. Having done so, respondents cannot now be permitted to

contend that there was no mandatory direction to comply with the

order dated 08.08.2019 passed by the High Court. Such a conduct

on the part of the respondents is nothing but an abuse of process of

law and the Court, which is deprecated. At this stage, it is required

to be noted that even the order passed by the High Court passed in

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Chamber Summons directing the respondents to disclose their

assets was even not complied with for a period of approximately two

years. This demonstrates the intention and the conduct on the part

of the respondents to disregard and disrespect the orders passed

by the High Court.

9. Even otherwise, it is required to be noted that it is alleged that

there is a wilful disobedience and/or non-compliance of the order

passed by this Court dated 28.10.2021 passed in Miscellaneous

Application No. 1668 of 2021 in Special Leave Petition (C) No.

14724 of 2021, which is reproduced hereinabove.

10. After the present contempt proceedings were initiated and the

respondents were served with notice in the present proceedings the

respondents thereafter filed Miscellaneous Application No. 61 of

2022 to recall the order dated 28.10.2021 in Miscellaneous

Application No. 1668 of 2021 in Special Leave Petition (C) No.

14724 of 2021. The very submissions, which are now made were

made at the time of hearing of the Miscellaneous Application No. 61

of 2022 and by a detailed order dated 25.01.2022, this Court

dismissed the said application. The order passed in Miscellaneous

Application No. 61 of 2022 is reproduced hereinbelow:-

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“1. The present miscellaneous application has been

preferred by the applicants – original petitioners with
a prayer to recall order dated 28.10.2021 passed in
Miscellaneous Application No. 1668 of 2021.

2. Shri Shyam Divan, learned Senior Advocate has

appeared on behalf of the applicants and Shri Jayant
Bhushan, learned Senior Advocate has appeared on
behalf of the contesting respondent.

2.1 Shri Shyam Divan, learned Senior Advocate

appearing on behalf of the applicants has made the
following submissions in support of his prayer to
recall order dated 28.10.2021 passed in M.A. No.
1668/2021:

i) that Miscellaneous Application No. 1668/2021 itself

was not maintainable as the same was filed in a
disposed of matter;

ii) that no notice was issued to the applicants, i.e.,

the original petitioners in Miscellaneous Application
No. 1668/2021 and that no reply was filed on behalf
of the applicants; and

iii) in a special leave petition filed by the applicants,

such a direction could not have been issued by this
Court as passed vide order dated 28.10.2021. It is
submitted, assuming that the applicants had not
complied with the order passed by the High Court
dated 08.08.2019, which was impugned before this
Court, and the amount was not deposited even within
the extended period of time, as extended by this
Court, in that case, the only consequence would be
that there was no stay of the arbitral award and that
the execution proceedings are to be proceeded
further. Therefore, the direction issued in order dated
28.10.2021 directing the applicants – original
petitioners to deposit the amount to be deposited as
per the order of the High Court positively and within
the time granted by this Court and non-compliance of
the same shall be treated very seriously and non-
deposit of the amount as directed by the High Court
in the impugned order shall be treated as
noncompliance of our order also having a serious
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consequences, was not at all warranted and/or such

an order could not have been passed.

3. We have heard Shri Shyam Divan, learned Senior

Advocate appearing on behalf of the applicants at
length.

At the outset, it is required to be noted that

when this Court passed order dated 28.10.2021, Shri
Kunal Vajani, learned advocate appeared on behalf
of the applicants – original petitioners and this Court
passed order dated 28.10.2021 after hearing the
learned counsel appeared on behalf of the applicants
– original petitioners. A copy of M.A. No. 1668/2021
was served upon the counsel and thereafter he
appeared and after hearing Shri Kunal Vajani,
learned advocate who appeared on behalf of the
applicants, this Court passed order dated
28.10.2021. At that time, neither any request was
made to adjourn the matter so as to enable the
applicants to file reply nor any objection was raised
with respect to non-maintainability of M.A. No.
1668/2021. Therefore, now it is not open for the
applicants to make a grievance with respect to non-
maintainability of M.A. No. 1668/2021 and/or that no
notice was issued.

4. Even otherwise, it is required to be noted that the

present application is nothing but an afterthought and
only with a view to get out the contempt proceedings
initiated by the respondent by way of Contempt
Petition No. 940/2021. It is to be noted that order
dated 28.10.2021 was passed in the presence of the
learned counsel appearing on behalf of the
applicants. Learned counsel who appeared on behalf
of the applicants was heard. The present application
to recall order dated 28.10.2021 has been preferred
after a period of almost two and a half months, i.e.,
on 17.01.2022 and that too after this Court issued
notice in the contempt proceedings and after the
notice of contempt petition was served upon the
applicants. Therefore, the present application is, as
such, nothing but an afterthought and only with a
view to get out the contempt proceedings, which

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have been initiated and filed as far back as on

18.11.2021 and notice was issued on 10.12.2021.

5. Even otherwise on merits also, order dated

28.10.2021 passed in M.A. No. 1668/2021 is not
required to be recalled. It is to be noted that the
special leave petition was arising out of the order
passed by the High Court of Judicature at Bombay
dated 08.08.2019 in Notice of Motion No.960/2019 in
Commercial Arbitration Petition No. 55/2019. Notice
of motion was made absolute in terms of the prayer
clause (a) on the condition that the applicants herein
shall deposit 50% of the awarded sum within twelve
weeks from 08.08.2019. Time granted by the High
Court was extended from time to time at the instance
of the applicants herein but the applicants did not
deposit the amount and prolonged the matter and
even the execution of the award. That thereafter after
getting extensions the applicants did not deposit the
amount, belatedly, the applicants preferred the
present special leave petition before this Court on
20.08.2021 with delay. Still, this Court condoned the
delay ex-parte and granted further eight weeks’ time
from 17.09.2021 to comply with the order passed by
the High Court dated 08.08.2019, as prayed by the
learned counsel appeared on behalf of the
applicants.

6. As order dated 17.09.2021 was passed ex-parte

and without notice to the respondent, respondent
preferred M.A. No. 1668/2021 to recall order dated
17.09.2021 contending, inter alia, that all attempts
are made on behalf of the applicants to delay the
execution and even further eight weeks’ time was
sought only to kill the time and there is no intention to
deposit the amount and/or comply with order dated
08.08.2019 passed by the High Court. Therefore,
having heard learned counsel for the respective
parties and considering the apprehensions on behalf
of the respondent that extension of time is sought
only to kill the time and delay the matter further and
there is no intention to comply with order dated
08.08.2019 and that the applicants though sufficient
indulgence have been shown by way of extension of
time by the High Court, the amount has not been
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deposited and therefore in the peculiar facts and

circumstances of the case, we passed the order
dated 28.10.2021. Therefore, when order dated
28.10.2021 was passed in the peculiar facts and
circumstances of the case, the same is not required
to be recalled, which was passed after hearing the
learned counsel appearing on behalf of the
applicants also.

7. At this stage, it is required to be noted that even

after order dated 17.09.2021, by which a further eight
weeks’ time was granted, the original petitioners –
applicants herein have not complied with the order
passed by the High Court for which they sought
extension. This shows the conduct on the part of the
applicants. Even thereafter, there is no application for
extension of time.

Having taken the advantage/benefit of order

dated 17.09.2021 of extension of time to comply with
the order passed by the High Court, thereafter it
would not be open for the applicants to contend that
on noncompliance the necessary consequence
under the Arbitration Act may follow and the
execution proceedings may have to be proceeded
further. Be that as it may, when order dated
28.10.2021 has been passed after hearing the
learned counsel for both the parties and as observed
hereinabove on considering the apprehensions on
the part of the respondent that the applicants have
no intention to comply with the order passed by the
High Court and they just want to delay the
proceedings, order dated 28.10.2021 has been
passed. Therefore, no case is made out to recall
order dated 28.10.2021 passed in M.A. No.
1668/2021.

8. In view of the above and for the reasons stated

above, the present application stands dismissed.”

11. Therefore, once Miscellaneous Application No. 61 of 2022 to

recall the order dated 28.10.2021 in Miscellaneous Application

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No. 1668 of 2021 is dismissed, the respondents had to comply with

the order dated 28.10.2021 passed in Miscellaneous Application

No. 1668 of 2021. Even otherwise, the respondents were required

to comply with order dated 28.10.2021.

12. Despite there being a specific direction issued by this Court in

the order dated 28.10.2021 directing the respondents to comply

with and deposit the amount to be deposited as per the order

passed by the High Court dated 08.08.2019 positively and within

the time granted by this Court by order dated 17.09.2021 in Special

Leave Petition (C) No. 14724 of 2021, the respondents have the

audacity to submit before this Court that no direction has been

issued by this Court in the order dated 28.10.2021. At this stage, it

is required to be noted that even in the Miscellaneous Application

No. 61 of 2022, it was the specific case on behalf of the

respondents herein that by virtue of the order dated 28.10.2021, the

condition of deposit has been converted into a mandatory direction

of this Court. Therefore, it was the specific case on behalf of the

respondents that the order dated 28.10.2021 is a mandatory

direction and therefore it was prayed to recall the order dated

28.10.2021. Then, how thereafter the respondents can be

permitted to say that the order dated 28.10.2021 is not a mandatory

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direction? By taking such a stand as such the respondents have

aggravated the contempt and their contumacious conduct.

13. In the order dated 28.10.2021, there is a specific direction

issued by this Court directing the respondents herein – original

petitioners in special leave petition to comply with and deposit the

amount to be deposited as per the order passed by the High Court

positively and within the time granted by this Court (eight weeks) as

mentioned in the order dated 17.09.2021. Moreover, it was

specifically observed by this Court that non-compliance of the said

order shall be treated very seriously and non-deposit of the amount

as directed by the High Court shall be treated as non-compliance of

the order of this Court and also having a serious consequence.

Despite the above, even the order dated 28.10.2021 in

Miscellaneous Application No. 1668 of 2021 has not been complied

with by the respondents. On the contrary, despite the specific

direction issued in the order dated 28.10.2021 and the dismissal of

Miscellaneous Application No. 61 of 2022 vide order dated

25.01.2022, the respondents have continued to their abrasive

attitude of non-compliance and disobedience and by making the

same submissions, which were made earlier which as such were

rejected by a detailed order. Despite the direction/order passed by

this Court in the order dated 28.10.2021 in Miscellaneous

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 VERDICTUM.IN

Application No. 1668 of 2021, there is a disobedience/non-

compliance of the same and in that view of the matter, the decisions

relied upon by Shri Shyam Divan, learned Senior Advocate

appearing on behalf of the respondents on the alternative remedy

available in the form of execution etc. are not of any assistance nor

applicable having regard to the facts of the case on hand.

13.1 In order to buttress his contention that non-compliance with

the condition of deposit would only render the Arbitrator’s Award

enforceable and contempt proceedings ought not to have been

initiated for non-compliance with such condition which was not

mandatory in nature, learned senior counsel appearing on behalf of

the respondent-contemnor cited the following case law:

i) Sudhir Vasudeva vs. M. George Ravishekaran – [(2014)

3 SCC 373] wherein, this Court observed that a Court

exercising jurisdiction under the Contempt of Courts Act,

1971 must not travel beyond the four corners of the order

in relation to which contempt has been alleged. That the

Court hearing a contempt petition ought to restrict the

scope of its inquiry to such directions which are explicit in

the judgment or order of which contempt has been alleged.

We are of the view that this judgment would not, in

any way, come to the aid of the respondent-contemnors

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 VERDICTUM.IN

because, in whatever manner the orders of which contempt

is alleged, are viewed, the orders state in unequivocal

terms that the contemnor is required to deposit the amount,

within such period as specified in the respective orders.

The scope of contempt, however narrow, would enable this

Court to invoke jurisdiction under the Act to redress a

situation such as the instant one, wherein the orders of

which contempt has alleged, expressly and clearly record

that the contemnor was required to deposit the amounts

specified therein. This direction under the orders, could not

be interpret in any other manner.

ii) R.N. Dey & Ors. vs. Bhagyabati Pramanik & Ors. –

[(2000) 4 SCC 400] wherein this Court held that the

weapon of initiating contempt proceedings could not be

used for execution of a decree or implementation of an

order. That is, a Court should not invoke contempt

jurisdiction, where alternate remedies are available to

secure the terms of an order.

We are mindful of the fact that contempt proceedings should

not be of the nature of ‘execution proceedings in disguise.’

However, we hold that the case law cited supra would not come to

the aid of the contemnor herein as the facts of the said case were

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significantly different from the case at hand. In the said case, no

stay was operating on the decree of which contempt was alleged.

Therefore, the decree-holder therein could very well initiate

execution proceedings. However, in the instant case, the High

Court, by order dated 08th August, 2019 stayed the Award subject to

the deposit of an amount. The time period of such deposit has been

extended by this Court on two occasions while continuing the order

of stay by implication. Having taken the advantage of the extended

time period, the respondent-contemnor cannot, at this juncture, take

the plea that non-compliance with the condition of deposit would

only render the Arbitrator’s Award enforceable and that such failure

to comply would have no consequences under the Contempt of

Courts Act, 1971.

13.2 Further, it is trite law that the jurisdiction of a Court under the

Act, would not cease, merely because the order or decree of which

contempt is alleged, is executable under law, even without having

recourse to contempt proceedings.

13.3 Contempt jurisdiction could be invoked in every case where

the conduct of a contemnor is such as would interfere with the due

course of justice; vide Rama Narang vs. Ramesh Narang –

[(2006) 11 SCC 114. Contempt is a matter which is between the

Court passing the order of which contempt is alleged and the

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 VERDICTUM.IN

contemnor; questions as to executability of such order is a question

which concerns the parties inter-se. The power of the Court to

invoke contempt jurisdiction, is not, in any way, altered by the rights

of the parties inter-se vide Bank of Baroda vs. Sadruddin Hasan

Daya – [(2004) 1 SCC 360].

14. Now, so far as the case on behalf of the respondents that

there is no wilful disobedience and because of the financial

constraint, the respondents are not in a position to deposit the

amount as ordered by the High Court vide order dated 08.08.2019

and the order passed by this Court is concerned, the same is

nothing but an afterthought. At no point of time earlier, such a plea

was taken. In the facts and circumstances of the case, such a

stand now lacks bonafides. All efforts are being made by the

respondents to get out of the order passed by the High Court dated

08.08.2019 and the order passed by this Court dated 28.10.2021 in

Miscellaneous Application No. 1668 of 2021 in Special Leave

Petition (C) No. 14724 of 2021. If the bonafides of the respondents

were clear and they genuinely wanted to abide by the order passed

by the High court and this Court, but could not deposit because of

the financial difficulties, in that case, they ought to have

straightaway pleaded their financial difficulties and ought not to

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have taken the stand, which was taken in Miscellaneous Application

No. 61 of 2022 and even which are once again taken now.

As observed hereinabove, even the respondents disclosed

their assets after a period of approximately two years from the date

of the passing of the order passed by the High Court in Chamber

Summons. Therefore, we are of the opinion that the stand taken by

the respondents now that they are not in a position to deposit the

amount and/or comply with the order passed by the High Court and

this Court because of the financial difficulties and therefore there is

no wilful disobedience by the respondents in not complying with the

order passed by the High Court dated 08.08.2019 and the order

passed by this Court dated 28.10.2021 in Miscellaneous Application

No. 1668 of 2021 in Special Leave Petition (C) No. 14724 of 2021

lacks bonafides and the same is not at all acceptable by us.

15. When a party which is required to comply with the terms or

directions in an order has not done so within such time as stipulated

in the order, two options are available to the party which was

required to comply with such order: (a) give an explanation to the

Court as to the circumstances due to which the party could not

comply with the order of the Court; (b) seek for further time to

comply with the order of the Court. If a delay has occurred in

complying with the terms of an order and the party which was to

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 VERDICTUM.IN

comply with the order has not resorted to either of the two

aforestated options, then, the party responsible for delay in

compliance, may be held to have committed contempt; vide State

of Bihar vs. Subhash Singh - [(1997) 4 SCC 430]

15.1 Further, the decision of this Court in Maruti Udyog vs.

Mahinder C. Mehta – AIR 2008 SC 309 suggests that irrespective

of whether or not a decree is executable, the question to be

considered by this Court in determining whether a case for

contempt has been made out was, whether, the conduct of the

contemnor was such as would make a fit case for awarding

punishment for contempt of Court.

16. Applying the legal propositions discussed supra, to the facts

of the case at hand, we are of the view that the conduct of the

respondent-contemnors is such as would justify invocation of

contempt jurisdiction of this Court. Not only have the contemnors

unreasonably delayed and defaulted in compliance of the orders of

this Court without explaining the cause for such default, or seeking

extension of time for compliance; but they have also sought to avoid

compliance of the order, even after taking benefit of the extended

time period granted for compliance of the same. The contemnors

cannot, at this juncture, claim that the requirement of deposit was

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not mandatory, but directory and therefore non-compliance thereof

would not constitute contempt.

17. In view of the above and for the reasons stated above, we are
of the firm view that the respondents have willfully disobeyed the
order passed by the High Court dated 08.08.2019 in Notice of
Motion No. 960 of 2019 in Commercial Arbitration Petition No. 55 of
2019 and have willfully disobeyed the order dated 28.10.2021
passed by this Court in Miscellaneous Application No. 1668 of 2021
in Special Leave Petition (C) No. 14724 of 2021 and thereby the
respondents are guilty of civil contempt and have rendered
themselves liable for suitable punishment under the provisions of
Contempt of Courts Act. The respondents, more particularly,
respondent No.1, is hereby held guilty for the contempt of this Court
for wilful disobedience of the order passed by the High Court dated
08.08.2019 in Notice of Motion No. 960 of 2019 in Commercial
Arbitration Petition No. 55 of 2019 and specifically for disobedience
of the order dated 28.10.2021 passed by this Court in
Miscellaneous Application No. 1668 of 2021 in Special Leave
Petition (C) No. 14724 of 2021 and are held liable to be punished
suitably under the provisions of the Contempt of Courts Act. Now,
the respondents shall be heard on sentence.

………………………………….J.
[M.R. SHAH]

NEW DELHI; ...……………………………….J.

MARCH 10, 2022. [B.V. NAGARATHNA]

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