URBAN INFRASTRUCTURE REAL ESTATE FUND v. DHARMESH S. JAIN & Anr.

(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 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 – Further, irrespective of whether or not a decree is executable, the question to be considered in determining whether a case for contempt has been made out was, whether, the conduct of the contemnor was such as would make a 1148 B C D E F G H URBAN INFRASTRUCTURE REAL ESTATE FUND v. DHARMESH S. JAIN AND ANR. 1149 fit case for awarding punishment for contempt of Court – In the case at hand, the conduct of respondent-contemnors was such as would justify invocation of contempt jurisdiction of Supreme Court – Not only did the contemnors unreasonably delay and default in compliance of orders of Supreme Court without explaining the cause for such default, or seeking extension of time for compliance; but they 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 not mandatory, but directory and therefore non-compliance thereof would not constitute contempt – On facts, respondents-contemnors willfully disobeyed the orders passed by the Court and were thereby guilty of civil contempt and rendered themselves liable for suitable punishment under provisions of Contempt of Courts Act – Arbitration and Conciliation Act, 1996 – s.34.

Contempt of Courts Act, 1971 – Contempt jurisdiction – Invocation of – Powers of the Court – Scope and ambit of – Held: 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 – 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 – Contempt is a matter which is between the Court passing the order of which contempt is alleged and the contemnor; questions as to executability of such order is a question which concerns the parties inter-se – Power of the Court to invoke contempt jurisdiction, is not, in any way, altered by the rights of the parties inter-se. Disposing of the contempt petition, the Court HELD:1.1 In the instant case, the High Court, by order dated 08th August, 2019 stayed the arbitral award dated 30.08.2018 passed in arbitral proceedings filed by the petitioner against the respondents-alleged contemnors 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 A B C D E F G H 1150 SUPREME COURT REPORTS [2022] 3 S.C.R. 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. [Para 13.1][[1170-B-C]

1.2. Further, it is trite law that the jurisdiction of a Court under the Contempt of Courts Act, 1971, 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. [Para 13.2][1170-D]

1.3. 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. Contempt is a matter which is between the Court passing the order of which contempt is alleged and the 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. [Para 13.3][1170-E]

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. 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. [Para 14][1170-F-G; 1171-C-D] A B C D E F G H URBAN INFRASTRUCTURE REAL ESTATE FUND v. DHARMESH S. JAIN AND ANR. 1151

3.1. 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 32 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. [Para 15][1171-D-F]

3.2. Further, 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. [Para 15.1][1171-G]

4.1. In the case at hand, 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 not mandatory, but directory and therefore non-compliance thereof would not constitute contempt. [Para 16][1171-H; 1172-A-B]

4.2. 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 A B C D E F G H 1152 SUPREME COURT REPORTS [2022] 3 S.C.R. A themselves liable for suitable punishment under the provisions of Contempt of Courts Act. [Para 17][1172-C-D]