Contempt Appeal No. 4 of 1997 · High Court · 1995

IN THE HIGH COURT OF JUDICATURE AT MADRASDATED: 4.7.2006CORAM:THE HON'BLE MR.JUSTICE P.D.DINAKARANANDTHE HON'BLE MR.JUSTICE P.P.S.JANARTHANA RAJAContempt Appeal No.4 of 19971.S.A.Rajan2.N.Sakthivelu.. AppellantsVsA.VenkatesanPower agent of thePlaintiff V.Krishnan.. Respondent PRAYER: Appeal under Sec.19(1)(a) of contempts of Courts Act 1971Against the judgment dated 14.10.1997 in Contempt Application No.154of 1996 of this Court. For Appellants:Mr.C.Ramakrishna, Senior Counselfor M/s.M.V.KrishnanFor Respondent:Mr.R.Alagar, Senior Counselfor M/s.K.V.AnanthakrishnanJ U D G M E N T(Delivered by P.D.DINAKARAN,J.)This contempt appeal is directed against the judgment dated14.10.1997 made in Contempt Application No.154 of 1996, whereunderthe appellants herein (respondents 3 and 4 in the contemptapplication), who are practicing advocates were found guilty ofcontempt under Section 14 of the Contempt of Courts Act, 1971, forhaving committed a fraud on the Court by false representation andwithdrawing the suit without the knowledge of the contemptapplicant, one A.Venkatesan, who is the respondent herein, andpunished with simple imprisonment for a term of 30 days and 15 daysrespectively in addition to the fine of Rs.2,000/- and Rs.500/-respectively; the first respondent in the contempt application,V.Krishnan, was sentenced to undergo simple imprisonment for a term https://hcservices.ecourts.gov.in/hcservices/ of six months and also to pay a fine of Rs.2000/-; the secondrespondent in the contempt application, one M.S.Dhananjayan, theowner of the property/ seller, who is nonetheless the client of theappellants herein, was discharged in the contempt application.2. For better appreciation of the case, the following factsare stated in brief:2.1.The contempt applicant, A.Venkatesan is the Power Agent ofone V.Krishnan, who is arrayed as the first respondent in thecontempt application. The said V.Krishnan, hereinafter referred toas the Principal, entered into a sale agreement with oneM.S.Dhananjayan, second respondent in the contempt application, whois the owner of the property, on 18.10.1988 for sale of hisproperty in question. 2.2. On the ground that M.S.Dhananjayan was not honouring thesale agreement dated 18.10.1988, the Principal, V.Krishnan, gave apower of attorney to A.Venkatesan, the respondent herein on22.8.1994 to file a suit for specific performance of the agreementdated 18.10.1988. Accordingly, A.Venkatesan, as a power agent ofthe Principal filed a suit for specific performance in C.S.No.1269of 1994 on the file of this Court against M.S.Dhananjayan (secondrespondent in the contempt application). 2.3. In the suit, C.S.No.1269 of 1994 on the file of thisCourt, the appellants in the contempt appeal, practicing advocatesof this Court filed a Vakalat on behalf of M.S.Dhananjayan, theowner of the property/Seller.2.4. A memorandum dated 22.12.1995 was entered into betweenV.Krishnan, who is the Principal/agreement holder/purchaser andM.S.Dhananjayan, the owner of the property/seller and the same wasfiled in the Court. The memorandum dated 22.12.1995 reads asfollows:"Memo filed by the PlaintiffThe plaintiff declares the suit has been settled out ofCourt and hence he withdraws the suit as not pressed andprays that this Hon'ble Court may be pleased to dismiss thesuit as not pressed and withdrawn and prays that half courtmay be refunded in the name of the Counsel. Dated at Madras this 22nd December, 1995.sd/- xxxxsd/- V.KrishnanCounsel for Plaintiff Plaintiff" https://hcservices.ecourts.gov.in/hcservices/

2.5. Based on the said memorandum dated 22.12.1995, the suitwas dismissed on 22.12.1995 as settled out of Court and thejudgment dated 22.12.1995 reads as follows:"Learned counsel appearing for the plaintiff has filed amemo stating that the suit claim has been settled out ofCourt. In view of this Memo, the suit is dismissed assettled out of Court. Issue Certificate to the refund ofhalf of the Court-fee paid on the plaint, and the same maybe issued in the name of learned counsel for the plaintiff."2.6. Thereafter, the power agent, A.Venkatesan, on a specificallegation that he was not informed about the withdrawal of thesuit by his Principal and that the Principal/AgreementHolder/Purchaser and the Owner of the Property/Seller,M.S.Dhanjayan as well as the appellants herein colluded andcommitted a fraud on the Court by false representation for havingwithdrawn the suit without the knowledge of the contempt applicant, who is the power agent, filed an application for contempt of Courtproceedings under Section 14 of the Contempt of Courts Act.2.7. On receipt of the notice in the above contemptapplication, the appellants filed counters denying their role inthe matter, however, they expressed unconditional apology for theact, if any, alleged against them.2.8. The learned Single Judge took the contempt applicationfor trial and passed the following order on 14.10.1997:" .. 32. In view of the unatoning conduct of the firstrespondent, who misled the court even after the filing ofthis proceedings, he deserves the maximum punishment. Therefore, he is sentenced to undergo simple imprisonmentfor a term of six months and also to pay a fine ofRs.2,000/- whereas the respondents 3 and 4 are inflictedwith the punishments of simple imprisonment for a term of 30days and 15 days respectively in addition to the fine ofRs.2,000/- against the third respondent and Rs.500/- againstthe fourth respondent. The second respondent isdischarged."2.9. Hence, the contempt appeal.3. It is important to note that throughout the contemptproceedings, the first respondent therein, V.Krishnan, thePrincipal/Agreement Holder/Purchaser, remained ex-parte andconcededly, the memorandum dated 22.12.1995 was signed byV.Krishnan, namely the Principal/ Agreement holder/Purchaser andthe appellants herein, practicing advocates were not parties to thememorandum dated 22.12.1995. https://hcservices.ecourts.gov.in/hcservices/

#4. Mr.C.Ramakrishna, learned senior counsel appearing for theappellants vehemently contends that:(a) the respondent herein, A.Venkatesan is only a poweragent of the Principal/Agreement Holder/ Purchaser,V.Krishnan, who gave the power to file a suit for specificperformance of an agreement dated 18.10.1988 against theowner of the property/Seller, M.S.Dhananjayan, andtherefore, the plaint was filed by A.Venkatesan, only onbehalf of V.Krishnan, the Principal/AgreementHolder/Purchaser. Once the Principal/AgreementHolder/Purchaser has entered into a compromise with theowner of the property/Seller for the withdrawal of the suitand filed a memorandum dated 22.12.1995 to that effect, which is signed by one N.Sakthivelu (second appellantherein), who is not engaged by A.Venkatesan (respondentherein), such an act by the Principal/ AgreementHolder/Purchaser would not amount to fraud on the poweragent A.Venkatesan, much less on the Court, as there isnothing to defraud or mislead the Court. The spirit behindthe memorandum dated 22.12.1995 is to settle the disputebetween the Principal/Agreement Holder/ Purchaser and theowner of the property/Seller and in the process, if thepower agent has got any grievance he could haveindependently exercised his right and worked out his remedyagainst the Principal/ Agreement Holder/ Purchaser, but hehas no locus to stand in the way of settling of the disputebetween the Principal/ Agreement Holder/Purchaser and ownerof the property/Seller;(b) even assuming the respondent herein has got to settlehis score against the Principal/Agreement Holder/Purchaser, he cannot have any grievance against the owner of theproperty/Seller, much less against his counsel. Since thepower agent is acting only on behalf of the Principal/Agreement Holder/Purchaser, it is beyond the imaginationthat the Principal/Agreement Holder/Purchaser cannot settlehis dispute with the owner of the property/Seller, who isthe defendant in the suit, and the power given by thePrincipal/Agreement Holder/Purchaser to the agent,A.Venkatesan cannot be abused or misused as a sword in hishands to blackmail the Principal/Agreement Holder/Purchaserhimself, objecting the reaching of a settlement in the suit;(c) Order 23 of the Code of Civil Procedure read withSections 201 and 207 of the Indian Contract Act, 1872enables the plaintiff to abandon the suit expressly orimpliedly. In the instant case, the suit having been filedby the Power Agent only on behalf of the Principal, thepower agent has no independent authority opposing the https://hcservices.ecourts.gov.in/hcservices/ withdrawal of the suit or abandoning the suit either in fullor part; and(d) the order under appeal is liable to be set aside for notcomplying with the mandatory procedure contemplated underSection 14 of the Contempt of Courts Act, 1971.5. Per contra, sustaining the order under appeal, Mr.Alagar, learned senior counsel for the respondent contends that: (a) the power given by V.Krishnan, the Principal/ AgreementHolder/Purchaser is to file a suit to enforce the agreementof sale dated 18.10.1988. Once such power is given to therespondent herein, the Principal/Agreement Holder/Purchaserhas no authority to ignore the terms of the power and arriveat a compromise with the owner of the property/sellerindependently, without the knowledge of the power agent; (b) the plaintiff is not the Principal/AgreementHolder/Purchaser, but the power agent, whose power waseffectively in force on the date of filing of the memorandumdated 22.12.1995 and who was also represented by counsel byname, Sittaranjandass, but not by N.Sakthivelu, the secondappellant herein and therefore, the contention advanced onbehalf of the appellants that the plaintiff in the suit wasonly V.Krishnan, the Principal/Agreement Holder/Purchaserand not A.Venkatesan is not tenable in law;(c) Order 23 of the Code of Civil Procedure read withSections 201 and 207 of the Indian Contract Act, 1872 isapplicable only if A.Venkatesan, the power agent files thememorandum and would not, in any event, come to the aid ofV.Krishnan, the Principal/ Agreement Holder/Purchaser, muchless M.S.Dhananjayan, the owner of the property/seller; and(d) the notice issued under Section 14 of the Contempt ofCourts Act, 1971 is a sufficient compliance of the procedurecontemplated under Section 14 of the Contempt of Courts Act,1971.6. We have given our careful consideration to the submissionsof both sides. 7. On the rival contentions made by both sides, the followingonly point arises for our consideration, whether, under the factsand in the circumstances of the case, the appellants have committedany contempt? 8. For better appreciation of the point in issue, it isapposite to extract Order XXIII of the Code of Civil Procedure, andSections 201 and 207 of the Indian Contract Act, 1872, herein belowin extenso: https://hcservices.ecourts.gov.in/hcservices/ ORDER XXIII of the Code of Civil Procedure - WITHDRAWAL ANDADJUSTMENT OF SUITS1. Withdrawal of suit or abandonment of part of claim— (1) At any time after the institution of a suit, theplaintiff may as against all or any of the defendantsabandon his suit or abandon a part of his claim:Provided that where the plaintiff is a minor or otherperson to whom the provisions contained in rules 1 to 14of Order XXXII extend, neither the suit nor any part ofthe claim shall be abandoned without the leave of theCourt.(2) An application for leave under the proviso to sub-rule (1) shall be accompanied by an affidavit of the nextfriend and also, if the minor or such other person isrepresented by a pleader, by a certificate of the pleaderto the effect that the abandonment proposed is, in hisopinion, for the benefit of the minor or such otherperson.(3) Where the Court is satisfied,—(a) that a suit must fail by reason of some formaldefect, or(b) that there are sufficient grounds for allowing theplaintiff to institute a fresh suit for the subject-matter of a suit or part of a claim, it may, on such terms as it thinks fit, grant theplaintiff permission to withdraw from such suit or suchpart of the claim with liberty to institute a fresh suitin respect of the subject- matter of such suit or suchpart of the claim.(4) Where the plaintiff—(a) abandons any suit or part of claim under sub-rule(1), or(b) withdraws from a suit or part of a claim without thepermission referred to in sub-rule (3),he shall be liable for such costs as the Court may awardand shall be preclude from instituting any fresh suit inrespect of such subject-matter or such part of the claim. https://hcservices.ecourts.gov.in/hcservices/ (5) Nothing in this rule shall be deemed to authorise theCourt to permit one of several plaintiffs to abandon asuit or part of a claim under sub-rule (1), or towithdraw, under sub-rule (3), any suit or part of aclaim, without the consent of the other plaintiffs.""Section 201 of the Indian Contract Act, 1872 - Terminationof agency:An agency is terminated by the principal revoking hisauthority, or by the agent renouncing the business of theagency; or by the business of the agency being completed; orby either the principal or agent dying or becoming ofunsound mind; or by the principal being adjudicated aninsolvent under the provisions of any Act for the time beingin force for the relief of insolvent debtors. Section 207 of the Indian Contract Act, 1872 - Revocationand renunciation may be expressed or implied:Revocation or renunciation may be expressed or may beimplied in the conduct of that principal or agentrespectively.(emphasis supplied)9. It is true that but for the power given by V.Krishnan, thePrincipal/Agreement holder/Purchaser, A.Venkatesan, the power agenthas no right. The source of right to file the suit flows only fromthe power, which was admittedly in existence on 22.12.1995. Atthe same time, but for the power agent filing the plaint, thePrincipal/ Agreement holder/Purchaser could not abandon the suit. The basis for filing the suit by the power agent flows from thepower of attorney executed by the Principal/ Agreementholder/Purchaser. Equally, the basis for abandoning the suit bythe Principal/ Agreement holder/Purchaser flows from the power ofattorney. Therefore, on the date of withdrawing the suit, the termsof the power between the Principal/ Agreement holder/Purchaser andthe Power Agent have not been properly honoured, which in ourconsidered opinion, would definitely give rise to a cause of actionfor the power agent to proceed against the Principal/ Agreementholder/Purchaser, who can also defend himself in a manner known tolaw in independent and appropriate proceedings. 10. However, the point that arises for consideration is, can, this Court, attribute any fraud on any third party, much lessM.S.Dhananjayan, the owner of the property/Seller, or his counsel, who were not parties to the memorandum dated 22.12.1995. https://hcservices.ecourts.gov.in/hcservices/

#11. Assuming the advocate Chitranjandas, is sharing the samechamber of S.A.Rajan, in the eye of law, it is difficult to come tothe conclusion that either M.S.Dhananjayan, the owner of theproperty/seller or his counsel has committed a fraud either againstthe power agent, much less against the Court, abusing the processof Court, as neither of them is a party to the memorandum dated22.12.1995 and in any event, the appellants have filed an affidavittendering unconditional apology, for the act, if any, allegedagainst them. Therefore, if there is any abandonment of right bythe Principal/Agreement holder/ purchaser contrary to the interestof the power agent and the terms of the power of attorney, underthe shield of Order 23 of the Code of Civil Procedure read withSections 201 and 207 of the Indian Contract Act, 1872, such aviolation, in our considered opinion, by itself, would not giverise to a cause of action for initiating contempt proceedings underSection 14 of the Contempt of Courts Act, 1971, even though thepower agent has the right to proceed against thePrincipal/Agreement Holder/Purchaser independently in the mannerknown to law. 12. In our considered opinion, the finding of the learnedSingle Judge that the appellants herein committed a contempt ofcourt warranting initiation of suo motu contempt is not sustainablein law. 13. In view of the above finding arrived at, we feel there isno need to go into the other contentions raised by the learnedsenior counsel. 14. Resultantly, the appeal is allowed and the judgment dated14.10.1997 made in Contempt Application No.154 of 1996 is set asideand the appellants herein are discharged and consequently, theamount deposited as fine by the respective appellants shall berefunded to them.15. At this stage, Mr.C.Ramakrishna, learned senior counselcomes forward to donate the amount deposited as fine in thecontempt application by the appellants to the Tamil Nadu StateLegal Services Authority. If that be so, on such refund of thefine amount deposited, the appellants are at liberty to donate thesame to the Tamil Nadu State Legal Services Authority. https://hcservices.ecourts.gov.in/hcservices/

#16. It is however made clear that the finding rendered or theobservation made in this contempt appeal, will not stand in the wayto decide the rights of either side in the suit which is restored.Sd/-Asst. Registrar./true copy/Sub Asst. Registrar.sasiTo1. The Sub Assistant Registrar, Original Side, High Court, Madras.2. The Dy.Registrar, (OS)High Court, Madras.2 ccs to Mr.S.L. Sudarsanam, Advocate, Sr. 285442 ccs to Mr.K.V. Anantha Krishnan, Advocate, Sr. 28467Contempt Appeal No.4 of 1997MKJ (CO)kk 25/7