Contempt Petition No. 315 of 2008 · Madras High Court · 2009

2The above Contempt Petition coming on this day beforethis Court for hearing in the presence of Mr.K.Alagirisamy,Senior Counsel for Mr.P.Arivudainambi, Advocate for thepetitioner herein; and of Mr.M.Ravindran, AdditionalSolicitor General of India for Mr.S.Rajasekaran, AdditionalCentral Government Standing Counsel for the respondentsherein; and upon reading the petition and affidavit ofDeepak Shah, filed herein; and the counter affidavits ofK.Venkata Ramana, R.Srinivassan and Dr.Niranjan Mardi,filed herein; and the reply counter affidavit of DeepakShah, filed herein; the Court made the following order:-1. The applicant in the contempt petition would stateas follows:-a. The applicant filed W.P.No.9210 of 2006 challengingthe order of the second respondent, the National HighwaysAuthority of India in its proceedings dated 22.03.2006whereby the second respondent sought to recover the arrearsof rent due to Tiruvottriyur Municipality. This Court waspleased to pass an order on 03.04.2006, directing theapplicant herein to furnish bank guarantee for a sum ofRs.20 lakhs in favour of the National Highways Authority ofIndia. The bank guarantee so given was ordered to be keptalive till the Commissioner & Secretary to Government,Municipal https://hcservices.ecourts.gov.in/hcservices/ 3Administration and Water supply passes order determiningthe rent payable for the premises let out by TiruvottiyurMunicipality. The impugned communication dated 22.03.2006signed by the National Highways Authority of India and sentto the applicant herein was ordered to be kept in abeyance.b. Pursuant to the above said direction of this Court,the applicant furnished a bank guarantee for Rs.20 lakhs on12.04.2006 and kept the same alive till the date ofarbitrary encashment made by the second respondent on24.12.2007. The applicant approached the State Governmentfor determination of rent inspite of the orders of thisCourt passed in W.P.No.9210 of 2006 dated 03.04.2006. Thefirst respondent Chennai-Ennore Port Road Co. Ltd., passedan order dated 22.08.2007 directing the applicant to pay asum of Rs.85.7 lakhs towards the rent for 36 months on orbefore 29.08.2007 with a threat to encash bank guaranteefurnished by the applicant towards Performance Security.The said order was passed by the 1st respondent in blatantviolation of the orders passed by this Court in theaforesaid writ petition. Therefore, the same would amountto contempt of the orders passed by this Court. c. The applicant again filed W.P.No.28450 of 2007challenging the first respondent's order dated 22.08.2007.The impugned order dated 22.8.2007 passed by the firstrespondent was stayed by this Court. Even if there was no https://hcservices.ecourts.gov.in/hcservices/ 4such order of stay granted subsequently by this Court, theorder originally passed by this Court on 3.4.2006 is stillin force and has to be obeyed. No attempt can be made torecover the amount by any of the parties till the rent isfixed as aforesaid. The interim order passed by this Courtin the subsequent W.P.No.28450 of 2007 directing theapplicant to renew the bank guarantee for a sum ofRs.2,45,71,272/-, Rs.20,00,000/- and Rs.62,50,000/- withinten days is the subject matter of the modification petitionfiled by the petitioner in M.P.No.1 of 2008 in thesubsequent writ petition. d. The applicant sent communications to the first andsecond respondents not to invoke the bank guarantee as theywere bound by the earlier orders of this court inW.P.No.9210 of 2006. Inspite of the communications sent bythe applicant to the respondents, they have willfully anddeliberately encashed the bank guarantees forRs.61,42,818/- furnished towards retention money andRs.20,00,000/- furnished in obedience to the orders passedby this Court in W.P.No.9210 of 2006 dated 3.4.2006. Withthe aforesaid pleadings the applicant prayed for punishingthe respondents 1 and 2 and also for a direction to therespondents 1 and 2 to re-deposit the sum of Rs.20,00,000/-and Rs.61,42,818/-. 2. The first respondent has contended in the counter https://hcservices.ecourts.gov.in/hcservices/ 5as follows:At the outset, the first respondent tendersunconditional apology in case this Court comes to aconclusion that a contempt was committed by him. There wasabsolutely no violation of any of the orders passed by thisCourt in the writ proceedings. The applicant has filed thecontempt application with a mala fide intention. The bankguarantee came to be encashed only after the interim orderpassed by this Court on 28.08.2007 was automaticallyvacated for non-compliance of the conditional order passedby this Court. Therefore, the first respondent seeks topurge him from contempt.3. Averments found in the counter filed by the secondrespondent read as follows:a. The second respondent at the outset tendersunconditional apology in case this Court comes to aconclusion that a contempt was committed by him. There wasabsolutely no violation of any of the orders passed by thisCourt in the writ proceedings. An agreement was enteredinto between the first respondent Chennai-Ennore Port RoadCo. Ltd., a special purpose vehicle floated by the NationalHighways Authority of India (NHAI) and the applicant forexecuting sea protection works in Ennore Expressway inChennai. For the purpose of putting up site office andWeigh Bridge and also for stock piling of stones, the https://hcservices.ecourts.gov.in/hcservices/ 6vacant premises of Tiruvottriyur Municipality admeasuring8.57 acres was agreed to be given to Tamilnadu RoadDevelopment Company Limited, the Managing Associate of thesecond respondent let out to the applicant as per theagreement entered into between the applicant and TamilnaduRoad Development Company Ltd., on 9.7.2003. b. The applicant agreed to pay monthly rent as fixedby Tiruvottriyur Municipality/Government of Tamilnadu.Demand letters were received from the Commissioner,Tiruvottriyur Municipality, claiming rents includingarrears to the tune of Rs.70,78,580/-. The claim made bythe second respondent on 22.3.2006 became the subjectmatter of challenge before this Court in W.P.No.9210 of2006 filed by the applicant. The applicant furnished bankguarantee for a sum of Rs.20,00,000/- and complied with theconditional order passed by this Court in the aforesaidWrit Petition on 2.4.2006. The first respondent throughits letter dated 22.08.2007 had only directed the applicantto deposit a sum of Rs.85.7 lakhs towards the rental dues.But the applicant challenged the aforesaid proceedings inW.P.No.28450 of 2007. c. The interim Order already passed in the said writpetition was extended subject to the condition that theapplicant should renew the bank guarantee for a sum of https://hcservices.ecourts.gov.in/hcservices/ 7Rs.2,45,71,272/-, Rs.20,00,000/- and Rs.62,50,000/- withinten days failing which the interim order already passedwould stand vacated automatically. The applicant extendedthe bank guarantee only for a sum of Rs.20,00,000/- on20.12.2007 but failed to comply with the rest of theconditions, and hence the respondents encashed the bankguarantee to the tune of Rs.20,00,000/- and Rs.61,42,818/-which were in force as on that date. It is submitted thatthe said act was not in violation of any Court order butwas in compliance with the order dated 13.12.2007 passed inM.P.Nos.1,2 and 3 of 2007 in W.P.No.28450 of 2007. Theearlier order passed on 3.4.2006 in W.P.No.9210 of 2006 gotmerged with the subsequent interim order passed by thisCourt on 3.12.2007 in W.P.No.28450 of 2007. Therefore, itis contended that there was no willful disobedience of theorders of this Court and that therefore the respondents maybe purged from contempt.4. In the reply filed to the counter affidavit, theapplicant has contended that the respondents were alreadyaware that final fixation of rent was done by theGovernment even on the date of invocation of the bankguarantee. The representations made by the applicantbefore the Government for fixing the rent are yet to bedisposed of, it has been contended. The applicantreiterated that the contemnors have deliberately and https://hcservices.ecourts.gov.in/hcservices/ 8willfully disobeyed the orders of this Court.5. The learned Senior Counsel Thiru K. Alagirisamyappearing for the applicant would contend that this Courthas made clear in the order passed in W.P.No.9210 of 2006that the recovery proceedings shall not be initiated by therespondents till the Government determines the monthly rentpayable by the applicant. Despite such a clear cutdirection, the first respondent Chennai-Ennore Port RoadCo. Ltd., issued proceedings directing the applicant to paythe arrears of rent on or before 29.8.2007 failing whichthe bank guarantee towards performance security and theother bank guarantees given by the applicant would beencashed. It is his submission that such a proceedingissued by the first respondent is in total violation of theorders passed by this Court in W.P.No.9210 of 2006 dated3.4.2006. He would further submit that even if theapplicant had not obtained any order of stay of theproceedings dated 22.8.2007 passed by the first respondent,the order already passed by this Court in W.P.No.9210 of2006 is still in force and therefore the invocation of thebank guarantee given in compliance with the earlier orderpassed by this Court is in total violations of the orderpassed by this Court on 13.12.2007 in W.P.No.28450 of 2007which is the subject matter of the modification petitionmoved by the applicant. Inspite of the fact that the https://hcservices.ecourts.gov.in/hcservices/ 9applicant has specifically brought to the notice of therespondents about the subsistence of the order alreadypassed by this Court on 3.4.2006 and requested them not toproceed with the recovery proceedings, the respondentschose to encash the bank guarantees, one given forperformance of the contract and another one given incompliance with the orders of this Court. The secondrespondent has admitted in W.P.No.28450 of 2007, that finalfixation of the rent had not yet been done by theGovernment. The plea that the respondents were not awareof the fact that the Government of Tamilnadu had not fixedmonthly rent for the vacant site used by the applicant doesnot hold water. Therefore, he would submit that therespondents have committed gross contempt. 6. The learned Additional Solicitor General Sri.M.Ravindran, appearing for the respondents 1 and 2 wouldvehemently submit that even as per the order passed by thisCourt in w.P.No.9120 of 2006, the respondents were directednot to recover the rental dues in the running bills. Therewas no clear cut direction by this Court that the NationalHighways Authority of India shall not take any sort ofrecovery proceedings for collecting the rental arrears fromthe applicant till the Government fixes monthly rent.Referring to the letter shot off by Tamilnadu RoadDevelopment Company Limited to the second respondent herein https://hcservices.ecourts.gov.in/hcservices/ 10he would submit that the second respondent was specificallyinformed that the Government had already fixed monthly rentand based on such a fixation, the Commissioner,Tiruvottriyur Municipality directed them to pay the arrearsof rent. It is his submission that the second respondentwas under the impression that the Government had in factpassed order fixing the monthly rent payable by theapplicant herein. He would further submit that a new causeof action arose in the aftermath of the impugned orderdated 22.8.2007 passed by the second respondent based onthe communication received from the Tamilnadu RoadDevelopment Company Limited. It is his further submissionthat the conditional order passed in the writ petitionwhich arose out of a fresh cause of action was not fullycomplied with by the applicant within the deadline fixed bythe Court. Therefore, the respondents initiative to invokethe bank guarantee was not at all hit by the order of staypassed by this Court. After the expiry of the deadlinefixed by the Court they rightly invoked the bankguarantees. It is his further submission that the proposalto invoke the bank guarantee was not the subject matter ofthe earlier writ petition filed by the applicant inW.P.No.9210 of 2006. The proposal to invoke bank guaranteewas the subject matter of the subsequent writ petition.Inasmuch as the interim order already passed by this Courtwas not in vogue, the bank guarantee was rightly invoked, https://hcservices.ecourts.gov.in/hcservices/ 11it is submitted. He would further submit that thecommunication sent by the applicant requesting therespondents not to invoke the bank guarantee or thepetition filed seeking modification of the order passed bythis Court would be of no consequence, inasmuch as there isno order restraining the respondents from invoking the bankguarantee.7. The National Highways Authority of India, thesecond respondent herein, as per the impugned proceedingsdated 22.3.2006, directed the applicant herein to payarrears of rent to the tune of Rs.70,77,580/-. Theapplicant has also been cautioned thereunder that the saidamount would be recovered from the applicant's forthcomingbills. There was no threat to invoke any bank guaranteegiven by the applicant in the aforesaid proceedings. Asper the order passed by this Court in W.P.No.9210 of 2006dated 3.4.2006 the applicant was directed to furnish bankguarantee for a sum of Rs.20,00,000/-in favour of theNational Highways Authority of India in order to safe guardthe interest of Tiruvottriyur Municipality. The bankguarantee was directed to be kept alive till thecommissioner & Secretary to Government, MunicipalAdministration and Water Supply passes an order determiningthe rent payable by the applicant. With the aforesaiddirection the impugned order dated 23.3.2006 passed by t he https://hcservices.ecourts.gov.in/hcservices/ 12National Highways Authority of India was ordered to be keptin abeyance.8. As rightly pointed out by the learned AdditionalSolicitor General Sri.M. Ravindran that there was no clearcut directions to the respondents in the aforesaid orderthat they shall not plunge into any recovery proceedings.When the second respondent proposed to recover the amountfrom the forthcoming bills, this Court directed as per theaforesaid order that the said proceedings should be kept inabeyance. Only when there is a clear direction to do or notto do a particular act a person who fails to adhere to theorder of the Court would be hauled up in a contemptproceeding. When there is no clear directions to therespondents that they shall not venture to issue anyproceedings to recover rental arrears and their proceedingto recover rental arrears from the running bills alone wasstayed, in the considered opinion of the Court, therespondents have not committed any contempt of the orderspassed by this Court on 3.4.2006.9. Tamilnadu Road Development Company Ltd., haswritten a letter dated 31.7.2007 to the National HighwaysAuthority of India informing them specifically that theCommissioner and Secretary to Government of Tamilnadu,Municipal Administration and Water supply had already fixed https://hcservices.ecourts.gov.in/hcservices/ 13a monthly rent and the Commissioner, TiruvottriyurMunicipality had directed the respondents (TNRDC) to paythe arrears of rent only based on such fixation of the rentby the Commissioner and Secretary to Government ofMunicipal Administration and Water Supply.10. It is rightly contended by the learned AdditionalSolicitor General that the National Highways Authority ofIndia was completely guided by such a communicationreceived from the Tamilnadu Road Development CompanyLimited, which is not one of the parties to the contemptproceedings and issued the impugned order dated 22.8.2007calling upon the applicant to pay the arrears of rentfailing which the respondents would be forced to encash thebank guarantee given for performance security and also thebank guarantee given as per the order of this Court passedearlier. Of course, the learned Senior Counsel appearingfor the applicant brings to the notice of the Court thatthe counter filed by the respondents in W.P.No.28450 of2007 wherein they have admitted that finalisation of rentpayable by the applicant was pending with the Government.There is no admission by the respondents that even prior tothe filing of W.P.No.28450 of 2007, they were aware of thefact that the Government had not passed any final ordersfixing the monthly rent payable by the applicant herein.It is found that the impugned order dated 22.8.2007 had https://hcservices.ecourts.gov.in/hcservices/ 14been passed by the first respondent herein only based onthe information furnished by the Tamilnadu Road DevelopmentCompany Limited. I find that there was no disobedienceshown by the first respondent in passing the aforesaidimpugned order.11. It is true that the bank guarantee forRs.20,00,000/- given by the applicant, pursuant to theorders of this Court passed earlier and the bank guaranteefor Rs.62,50,000/- towards performance security wereadmittedly encashed by the second respondent on 24.12.2007.It is to be analysed whether such an act of therespondents would amount to contempt of Court.12. As already pointed out by this Court, the impugnedorder dated 22.8.2007 was passed by the second respondentthoroughly guided by the information furnished by theTamilnadu Road Development Company Limited. It is to benoted that the Tamilnadu Road Development Company Limitedis not one of the parties to the contempt proceedingsinitiated by the applicant. The threat to invoke bankguarantees given by the applicant was put in challenge in afresh writ petition filed by the applicant in W.P.No.28450of 2007. This Court extended the interim order alreadypassed subject to the condition that the petitioner shouldrenew the bank guarantee for a sum of Rs.2,45,71,272/-, https://hcservices.ecourts.gov.in/hcservices/ 15Rs.20,00,000/- and Rs.62,50,000/- within ten days failingwhich the interim order already granted shall standautomatically vacated. 13. There is no dispute to the fact that the applicanthaving renewed the bank guarantee for a sum ofRs.20,00,000/-, failed to comply with the entire conditionsimposed by this Court while extending the interim orderalready passed in W.P.No.28450 of 2007. The order passedon 13.12.2007 stood automatically vacated on 23.12.2007inasmuch as the applicant admittedly had not complied withthe directions of this Court to enjoy the extension of theinterim order passed by this Court. The fact remains thatthe respondents chose to invoke bank guarantees andencashed the same on 24.12.2007, despite the hue and cryraised by the applicant not to invoke the bank guarantee asan order passed by this Court in W.P.No.9120 of 2006 wasstaring at the respondents. It was also informed to therespondents that a modification petition also was pendingat the instance of the applicant. 14. As rightly pointed out by the learned AdditionalSolicitor General Sri.M. Ravindran, a communication wassent by the applicant requesting the respondents not toinvoke bank guarantees and the pendency of the modificationpetition would be of no consequence. On a fresh cause of https://hcservices.ecourts.gov.in/hcservices/ 16action arisen on account of the impugned order passed bythe second respondent calling upon the applicant to pay thearrears or to face the invocation of the bank guarantee,the W.P.No.28450 of 2007 was filed by the applicant. Heinvited an interim order not to invoke the bank guaranteeon certain conditions. Those conditions imposed by thisCourt were not complied with. The proposal to invoke thebank guarantee was not the cause of action for filing theearlier W.P.9210 of 2006, whereas the present W.P.No.28450of 2007 was filed on the fresh cause of action threateningthe applicant with invocation of the bank guarantee byrespondent. Therefore, the cause of action which has givenrise to the present writ petition has nothing to do withthe cause of action arisen for filing earlier case inW.P.No.9210 of 2006. The respondents were restrained frominvoking the bank guarantees on certain conditions thatshould be complied with by the applicant. When theapplicant failed to comply with those conditions, therespondents were at liberty to invoke the bank guarantees.15. In case the applicant had obtained an order formthis Court that the respondents should not initiate anyrent recovery proceedings till the Government fixes therent for the premises let out by the TiruvottriyurMunicipality, the applicant may have a case. As alreadypointed out by this Court, the proceedings initiated by therespondents to recover the rental arrears in the running https://hcservices.ecourts.gov.in/hcservices/ 17bills alone was stayed. There was no blanket orderprohibiting the respondents to initiate any sort of rentalrecovery proceedings. If at all the respondents havestarted to recover the rental arrears in the running bills,then they would be committing contempt of Court. Theimpugned order dated 22.8.2007 was also passed by thesecond respondent innocuously based on the communicationsent by the Tamilnadu Road Development Company Ltd. It isfound that there was no disobedience much less willfuldisobedience on the part of the respondents in complyingwith the orders of this Court passed in W.P.No.9210 of 2006and W.P.No.28450 of 2007. There is no merit in the contemptpetition.16. In view of the above, the contempt petition filedby the applicant stands dismissed. There is no order as tocosts.Witness the Hon'ble Thiru HEMANT LAXMAN GOKHALE, theChief Justice of High Court at Madras, as aforesaid, thisthe 23rd day of December, 2009. Sd/-DEPUTY REGISTRAR (OS)//Certified to be true copy//Dated at Madras this the day of February, 2010.COURT OFFICER(O.S.)From 25th Day of September 2008 the Registry is issuingcertified copies of the Orders/Judgments/Decrees in thisformat. https://hcservices.ecourts.gov.in/hcservices/ 18 SMVCONTEMPT PETITION No.315/2008 THE HON'BLE MR.JUSTICE M.JEYAPAULORDERDATED : 23/12/2009FOR APPROVAL :APPROVED ON :COPY TO:Tamilnadu Road DevelopmentCompany Limited,Sindur Pantheon Plaza II Floor,346, Pantheon Road,Egmore, Chennai 8.(4th Respondent inW.P.No.9210/2006 inCont.P.No.315/2008)