SUMAN CHADHA & ANR. versus CENTRAL BANK OF INDIA

Citation: [2021] 8 S.C.R. 370 · Decided: 09-08-2021 · Supreme Court of India · Bench: INDIRA BANERJEE · Disposal: Disposed off
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Judgment (excerpt)

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SUPREME COURT REPORTS
[2021] 8 S.C.R.
SUMAN CHADHA & ANR.
v.
CENTRAL BANK OF INDIA
(Special Leave Petition (C) No. 28592 of 2018)
August 09, 2021
[INDIRA BANERJEE AND V. RAMASUBRAMANIAN, JJ.]
Contempt of Courts Act, 1971: ss. 2(b), 19 – Contempt of
court – Wilful breach of the undertaking given to the Court – On
facts, bank filed a petition u/ss. 10 and 12 for punishing the
petitioners for wilful and deliberate breach of their undertaking –
Petitioners case that breach of an undertaking made with a view to
secure a conditional order of stay may not tantamount to contempt,
especially when the consequences of breach of such undertaking
are spelt out in the Court order itself – Single judge of the High
Court held the petitioners guilty of contempt and sentenced to simple
imprisonment for three months with fine – Division Bench upheld
the said order – On appeal, held: Held: Wilful breach of the
undertaking given to the Court amounts to contempt of Court
u/s. 2(b) – However, the Court has to see, the nature of the
undertaking made; the benefit if any, reaped by the party giving
the undertaking; and whether the filing of the undertaking was
with a view to play fraud upon the court or to mislead the opposite
party – Series of acts committed by the petitioners, subsequent to
the undertaking given by the petitioners, convinced the High Court
to believe that the undertaking given was not based upon good
faith but intended to mislead the Court – Subsequent conduct of
the petitioners seems to   have   tilted the balance   against   them –
Thus, the Single Judge as well as the Division Bench of the High
Court rightly held the petitioners guilty of contempt of court,
however, the period of sentence is reduced from three months to the
period of imprisonment already suffered/undergone by the
petitioners.
Disposing of the SLP, the Court
HELD: 1.1 The undertaking dated 08.04.15 given by the
first petitioner was  also accompanied by an affidavit  sworn to by
the  second petitioner. On the basis of the undertaking filed, the
[2021] 8 S.C.R. 370
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High Court passed an order in the Writ Petition on the same  day,
namely, 08.04.2015. It  is  seen from the portion of the order of
the High Court that it was not an order passed on the basis of an
affidavit/undertaking. It was on the basis of an offer made by the
petitioners, the first of whom was actually present in Court. The
offer so made was accepted by the Bank and hence the order was
actually based upon the consent of parties. [Para 13-15][379-G-
H; 380-G-H]
1.2 This Court has held that the wilful breach of the
undertaking given to the Court  amounts  to  contempt  of  Court
under  Section  2(b)  of  the Contempts of Courts Act, 1971. But
the  Court  has always seen (i) the nature of the undertaking
made; (ii) the benefit if any, reaped by the party giving the
undertaking; and (iii) whether the filing of the undertaking was
with a view to play  fraud  upon  the  court  or  to hoodwink the
opposite party. [Para 16][381-D-E]
1.3 It is true that an undertaking given by a party should be
seen in the context in which it was made and (i) the benefits that
accrued to the undertaking party; and (ii) the detriment/injury
suffered by the counter party. It  is  also  true  that  normally the
question whether a party is guilty of contempt is to be seen in
the specific context of the disobedience and the wilful nature of
the same and not on the basis of the conduct subsequent thereto.
While it is open to the court to see whether the subsequent
conduct of the alleged contemnor would tantamount to an
aggravation of the contempt already committed, the very
determination of an act of contempt cannot simply be based upon
the subsequent conduct. But the subsequent conduct of the party
may throw light upon one important aspect namely whether it
was just the inability of the party to honour the commitment or it
was part of a larger design to hoodwink the court. [Para 25-26][384-
A-D]
1.4 The subsequent conduct of the petitioners after the order
dated 08.04.2015, seems to have tilted the balance against the
petitioners. All the events that happened after 08.04.2015,
convinced the High Court to come to the conclusion that the
petitioners  had actually played a fraud upon the Court. This is
SUMAN CHADHA & ANR. v. CENTRAL BANK OF INDIA
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SUPREME COURT REPORTS
[2021] 8 S.C.R.
why the Single Judge  as well  as the  Division Bench of the High
Court held th
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