contempt - the grievance of the petitioner in thenpresent contempt petition is threefold.
First, the respondent failed to file undertaking despite direction to do so within two weeks.
Second, the respondent failed to pay the outstanding dues to the petitioner in the sum of Rs.1,32,48,794/ (Rupees one crore thirtytwo lakhs fortyeight thousand seven hundred
ninetyfour only) as on 22.3.2019.
Third, while vacating the suit premises, the respondent caused damage to the suit property.
Each of these acts of commission and omission of the respondent was intentional and in wilful disobedience of the order passed by this Court dated 22.2.2019.
1
REPORTABLE
IN THE SUPREME COURT OF INDIA
INHERENT JURISDICTION
CONTEMPT PETITION (CIVIL) NO. 591/2019
IN
SPECIAL LEAVE PETITION (CIVIL) NO. 5350/2019
Hukum Chand Deswal …Petitioner(s)
Versus
Satish Raj Deswal ...Respondent(s)
J U D G M E N T
A.M. Khanwilkar, J.
1. This contempt petition has been filed by the original plaintiff
(in CS(OS) No. 2041/2013 filed in High Court of Delhi at New
Delhi1
), under Article 129 of the Constitution of India read with
Sections 12 and 14 of the Contempt of Courts Act, 19712
and
read with Rule 3 of the Rules to Regulate Proceedings for
Contempt of the Supreme Court, 19753
in reference to the order
dated 22.2.2019 passed by this Court in SLP(C) Nos. 5147/2019
and 5350/2019, which reads thus:
1 For short, “the High Court”
2 For short, “the 1971 Act”
3 For short, “the 1975 Rules”
2
“We are not inclined to interfere with the Special Leave
Petition.
However, we accede to the request made by the
petitioner to grant four weeks’ time to vacate the suit
premises. That shall be subject to payment of all the
outstanding dues/arrears and filing undertaking before
this Court within two weeks’ from today.
It is made clear that if the premises are not vacated as
per the undertaking, it will be viewed sternly.
The Special Leave Petition is disposed of accordingly.
All IAs are also disposed of.”
2. The gravamen of the grievance of the petitioner/original
plaintiff is that the respondent [defendant in CS(OS) No.
2041/2013] failed to file undertaking, as also, to pay the
outstanding dues before vacating the suit premises and further,
caused damage to the property before handing over possession
thereof to the petitioner on 22.3.2019. Thus, the respondent
committed wilful disobedience of and violated the directions given
by this Court vide order dated 22.2.2019.
3. Shorn of unnecessary factual details, suffice it to observe
that the petitioner – M/s. Jingle Bell Amusement Park Pvt. Ltd.
(represented by its Director – Mr. Hukum Chand Deswal) had
filed the aforementioned suit for permanent injunction,
possession and for recovery of rent and damages/mesne profits
till the recovery of possession in respect of the property bearing
3
No. 41/24, 25, 42/20, 50/1, 51/4 min at Village Alipur, TehsilDelhi, Delhi against the respondent – Sagu Dreamland Pvt. Ltd.
(represented by its Managing Director – Mr. Satish Raj Deswal).
4. The respondent/defendant, on the other hand, filed a suit
being CS(OS) No. 1592/2014 in the High Court against Splash
Island Pvt. Ltd. and its two Directors – Hukum Chand Deswal
[present petitioner/original plaintiff in CS(OS) No. 2041/2013]
and Karandeep Singh Deswal, seeking permanent injunction
restraining them from infringing the trademark acquired by the
respondent.
5. CS(OS) No. 2041/2014 was eventually disposed of on
30.6.2015 on the basis of settlement arrived at between the
parties on 28.5.2015. As per the said settlement, the respondent
had agreed to vacate the suit property on or before 31.12.2017
and handover peaceful and vacant possession thereof to the
petitioner herein. The respondent was permitted to take away
civil structures and movable fixtures installed by it in the suit
property. It could also offer the same to the petitioner for
consideration on or before September, 2017. The petitioner
would have sole discretion to purchase the same or not. The
4
agreement also records that an amount of Rs.25,00,000/
(Rupees twentyfive lakhs only) deposited by the respondent with
the petitioner as security amount without interest, shall be
returned to the respondent after handing over the vacant
peaceful possession of the suit property. The parties also agreed
for revised monthly rent and the respondent paid the outstanding
dues in terms of the said agreement by way of cheque(s) and
future rent by way of postdated cheque(s). The agreement also
records that the petitioner herein or any of the Directors of the
petitioner shall not use the trademark “SPLASH” in any manner
and the cases filed by either of the parties in this regard shall be
withdrawn by the concerned party in Delhi or elsewhere. It is
also noted in the agreement that breach of terms and conditions
of the settlement/agreement/compromise deed by either party,
shall entitle the other party to take legal recourse before the
competent Court/authority for legal remedy. Another crucial
condition stipulated in the agreement is that if the respondent
failed to vacate and handover peaceful vacant possession of the
suit premises on or before 31.12.2017 or after the termination of
tenancy, the petitioner herein would be entitled to recovery of
double the amount of last paid rent as unauthorised occupation
5
charges from the respondent. The monthly rent payable as on
December, 2017 in terms of the agreement was fixed at
Rs.9,25,000/ (Rupees nine lakhs twentyfive thousand only) per
month. Resultantly, in case of default, the petitioner would
become entitled for recovery of double the amount of
Rs.9,25,000/ (Rupees nine lakhs twentyfive thousand only)
every month as unauthorised occupation charges. This
agreement was reached as final settlement of all the past, present
and future claims between the parties and to be effective only
after appropriate order was passed in CS(OS) No. 2041/2013
filed by the petitioner herein.
6. Even the suit filed by the respondent being CS(OS) No.
1592/2014 came to be disposed of as withdrawn on 31.8.2015 in
terms of the settlement arrived at between the parties.
7. Before the time to vacate the suit premises specified in the
settlement had expired, the respondent filed Contempt Case
(Civil) No. 225/2017 before the High Court against the petitioner,
alleging wilful violation and disobedience of the settlement terms
dated 28.5.2015 by illegally using the word “SPLASH” and
continued infringement of the trademark of the respondent. The
6
High Court disposed of the said petition on 20.3.2017 giving
liberty to the respondent to take recourse to execution
proceedings.
8. The respondent then filed an application bearing I.A. No.
14331/2017 in CS(OS) No. 1592/2014 seeking recall of the order
dated 30.6.2015 and to restore the said suit to its original
number on the assertion that the Settlement Agreement arrived
at between the parties on 28.5.2015 has been frustrated by the
petitioner by continuing to infringe the trademark of the
respondent. That application came to be disposed of on
12.7.2018 after recording the second agreement arrived at
between the parties, whereunder the petitioner herein undertook
to abstain from using the word “SPLASH” or any deceptively
similar word, either as a part of the trademark, trade
name/corporate name or with a prefix or suffix in any manner
whatsoever. It was also agreed by the petitioner that the
company – Splash Island Pvt. Ltd. will apply to the Registrar of
Companies within a period of ten days for change of name
wherein it could adopt any name without the word “SPLASH” or a
deceptively similar word. That was to be done on or before
7
31.10.2018 and that use of the word “SPLASH” by the petitioner
would be completely stopped on or from 31.10.2018. The Court
also recorded the assurance given by the respondent herein that
it would handover vacant and peaceful possession of the suit
property on or before 30.11.2018 to the representatives of M/s.
Jingle Bell Amusement Park Pvt. Ltd. and shall not cause any
damage to the constructed area while vacating the property and
abide by clause 6(b) of the Settlement Agreement.
9. The respondent then filed another application(s) in October,
2018, being I.A. Nos. 13958/2018 and 13957/2018 in CS(OS)
Nos. 2041/2013 and 1592/2014 respectively before the High
Court seeking intervention of the Court in implementing the
Settlement Agreement dated 28.5.2015 in an equitable manner,
as the respondent was suffering losses because of the wilful
disobedience and violation of the Settlement Agreement by the
petitioner herein, by continuing to use the trademark “SPLASH”,
which belonged to the respondent and also because the
respondent was required to pay enhanced monthly rent as per
the revised agreement, of Rs.9,25,000/ (Rupees nine lakhs
twentyfive thousand only) per month. The respondent,
8
therefore, prayed for modification of the order dated 12.7.2018 to
the extent that the time given to it to vacate the suit premises be
extended for a period of two years in terms of the Settlement
Agreement between the parties. These applications were rejected
by the learned single Judge of the High Court on 8.10.2018 after
noting that no ground was made out for extending time to
handover possession as prayed for. The essence of the grievance
made in the applications filed by the respondent was to
compensate the respondent for the damage suffered due to
continued violation of the obligation by the petitioner by not
abstaining from using the trademark “SPLASH” belonging to the
respondent.
10. Feeling aggrieved, the respondent carried the matter in
appeal before the Division Bench of the High Court, reiterating
the grievance made in the stated applications. In the appeals, it
was expressly stated that the respondent was suffering losses not
only because of the continued violation of the conditions/terms
specified in the Settlement Agreement in the form of infringement
of the trademark of the respondent, but also because the
respondent is required to pay enhanced rent to the petitioner as
9
per the agreement/settlement dated 28.5.2015. The Division
Bench, however, rejected the appeals vide order dated 28.1.2019
by observing as follows:
“5. We are not impressed by the said submission of
Mr. Kaul for the simple reason that the Suits were
disposed of in terms of the settlement entered between
the parties. If there is a violation of the
settlement/decree, it is for the appellant to seek
execution of the decree or any other relief as
permissible in law rather than seeking a benefit of
further time on the premise that the respondent has
violated the terms of agreement. This is clearly
impermissible as any direction by us, shall also be at
variance with the order disposing of the suits. We find
that the learned Single Judge has rightly dismissed the
applications seeking modification of the order dated 12th
July, 2018.
We do not find any merit in the appeals. The same
are dismissed.
(emphasis supplied)
11. Against this decision, the respondent had approached this
Court by way of special leave petitions being SLP(C) Nos.
5147/2019 and 5350/2019, which came to be dismissed vide
common order dated 22.2.2019, as reproduced in paragraph 1
above.
12. It is not in dispute that the respondent vacated the suit
premises before the date prescribed in the order of this Court,
dated 22.2.2019. However, the grievance of the petitioner in the
present contempt petition is threefold. First, the respondent
failed to file undertaking despite direction to do so within two
10
weeks. Second, the respondent failed to pay the outstanding
dues to the petitioner in the sum of Rs.1,32,48,794/ (Rupees
one crore thirtytwo lakhs fortyeight thousand seven hundred
ninetyfour only) as on 22.3.2019. Third, while vacating the suit
premises, the respondent caused damage to the suit property.
Each of these acts of commission and omission of the respondent
was intentional and in wilful disobedience of the order passed by
this Court dated 22.2.2019.
13. The respondent besides tendering unconditional apology
has offered explanation pointing out that he was not in arrears
and no amount was outstanding or payable to the petitioner who
had continued to infringe the trademark “SPLASH” belonging to
the respondent, even after 31.10.2018. The revised settlement
arrived at between the parties on 12.7.2018, as recorded by the
High Court, clearly obligated the petitioner to stop using the
trademark “SPLASH” belonging to the respondent on and from
31.10.2018 whilst extending the time to vacate the suit premises
upto 30.11.2018 without altering the stipulation regarding
monthly rent set out in the Settlement Agreement dated
28.5.2015. In other words, the respondent was liable to pay only
11
Rs.9,25,000/ (Rupees nine lakhs twentyfive thousand only) per
month even after December, 2017 until 30.11.2018 and
thereafter, because of the indulgence shown by the High Court in
the first place and later by this Court vide order dated 22.2.2019
giving time to the respondent to vacate the suit premises upto
22.3.2019. According to the understanding of the respondent,
the revised agreement dated 12.7.2018 was a comprehensive
arrangement worked out in the backdrop of the grievance of the
respondent that he had suffered huge losses due to the
continued infringement of trademark “SPLASH” by the petitioner,
despite the stipulation in the Settlement Agreement dated
28.5.2015 in that regard, and also due to the enhancement in the
monthly rent in respect of the suit premises. It is also pointed
out that the petitioner had moved the executing Court to direct
the respondent to pay double the amount of rent as
compensation for unauthorised occupation of the suit premises
beyond 30.11.2018. The said prayer was considered in execution
proceedings by the learned single Judge of the High Court and
was disposed of vide order dated 29.5.2019 passed in CM(M) No.
109/2019 and CM Appl. Nos. 3331/2019 and 3876/2019. The
said order reads thus:
12
“O R D E R
29.05.2019
1. This petition under Article 227 of the Constitution of
India is directed against an order dated 21.12.2018 in
execution proceedings.
2. The suit between the parties was initially disposed
of, by a mediated settlement dated 28.05.2015. The
respondent herein has filed for execution of that
settlement agreement. However, the parties had
approached this Court by way of certain interim
applications in the suit after the settlement. Those
applications were decided by an order of the learned
Single Judge dated 12.07.2018. It appears that the
petitioner had, then, sought modification of the order
dated 12.07.2018, which was declined by an order dated
08.10.2018. Against this order, the petitioner filed FAO
(OS) 172/2018 which was dismissed by the Division
Bench vide the judgment dated 28.01.2019. The
judgment dated 28.01.2019 was carried to the Supreme
Court in SLP (Civil) No. 5147/2019, which was disposed
of with the following order:
“We are not inclined to interfere with the
Special Leave Petition. However, we accede to
the request made by the petitioner to grant
four weeks’ time to vacate the suit premises.
That shall be subject to payment of all the
outstanding dues/arrears and filing
undertaking before this Court within two
weeks’ from today.
It is made clear that if the premises are not
vacated as per the undertaking, it will be
viewed sternly.
The Special Leave Petition is disposed of
accordingly. All IAs are also disposed of.”
3. It is not disputed that the possession of the
premises in question has been handed over by the
petitioner to the respondent, pursuant to the order of the
Supreme Court. The present dispute relates to the
amount payable by the petitioner to the respondent, if
any. Under the settlement agreement, the petitioner was
liable to pay twice the amount of the last rent fixed, in the
event it did not vacate the premises in question by the
agreed date, i.e. 31.12.2017. According to the petitioner,
by the order dated 12.07.2018, the time originally fixed
13
for vacation of the suit premises was extended until
30.11.2018, and the petitioner was, therefore, not liable
to pay twice the amount of the last paid rent as
unauthorized occupation charges until 30.11.2018. This
contention is disputed by the learned counsel for the
respondent, who submits that the order dated 12.07.2018
merely extended the time for vacating the premises, and
did not alter the liability of the petitioner to pay twice the
amount of the last rent paid for the period after
31.12.2017.
4. Be that as it may, I have also been informed that
pursuant to the order of the Supreme Court, the
petitioner has made a further payment to the respondent
and given a statement of accounts by a letter dated
07.03.2019. In these facts and circumstances, counsel
for the parties submit that they will file their
respective statements of account before the executing
Court, which would then determine whether any
amount remains payable from the petitioner to the
respondent.
5. All the rights and contentions of the parties in this
regard are left open and the petition is disposed of in
terms of the above.”
(emphasis supplied)
According to the respondent, neither the learned single Judge nor
the Division Bench in the earlier proceedings had dealt with the
question of liability of the respondent to pay monthly rent over
and above mentioned in the Settlement Agreement dated
28.5.2015 at the rate of Rs.9,25,000/ (Rupees nine lakhs
twentyfive thousand only) per month, which position was
reinforced vide order dated 12.7.2018. In that, double the
amount of last paid rent towards unauthorised occupation
charges would have become payable after 30.11.2018 but for the
14
protection extended to the respondent by the High Court and this
Court. As a matter of fact, the Division Bench in the judgment
dated 28.1.2019 (which was impugned in special leave petitions
before this Court), had left the parties to pursue their remedy
before the executing Court. Moreover, even this Court did not
adjudicate the question regarding the liability of the respondent
to pay further rent or so to say, outstanding dues payable to the
petitioner. That is a matter which ought to be considered by the
executing Court in view of the liberty granted by the learned
single Judge, as well as, the Division Bench of the High Court, in
the backdrop of the grievance made by the respondent about the
continued infringement of its trademark by the petitioner, for
which the petitioner must compensate the respondent
appropriately including to provide due adjustments. It is the
case of the respondent that the order dated 12.7.2018 extended
the time to vacate the suit premises until 30.11.2018 and
thereafter, considering the protection given by the High Court
and also by this Court in terms of order dated 22.2.2019, it must
follow that the possession of the respondent was lawful and not
unauthorised as such. It is urged that the order of this Court
could be understood to mean that “if” the respondent was in
15
arrears, it ought to pay such amount to the petitioner before the
specified date. A priori, the respondent would not be liable to pay
double the amount of rent in terms of the Settlement Agreement
dated 28.5.2015. To buttress this submission, reliance is placed
on the decision of this Court in Union of India vs. Banwari lal
& Sons (P) Ltd.4
, wherein this Court opined that right to mesne
profits presupposes a wrong whereas a right to rent proceeds on
the basis that there is a contract. Further, there is an
intermediate class of cases in which the possession though not
wrongful in the beginning assumes a wrongful character when it
is unauthorizedly retained and in such cases, owner is not
entitled to claim mesne profits but only the fair rent.
14. In substance, the respondent besides offering unconditional
apology, has offered explanation to persuade this Court to take a
view that the respondent had not committed any act, much less
intentional, amounting to wilful disobedience. As regards the
allegation regarding the damage caused to the suit property,
while handing over possession to the petitioner, it is stated on
affidavit supported by contemporaneous record and photographs
to indicate that the respondent has taken away only those
4 (2004) 5 SCC 304
16
fixtures which he was permitted to do under clause 24 of the first
agreement dated 21.3.2003, which reads thus:
“Clause 24: “That the second party shall hand over the
premises of the water sports in full and with all
infrastructure in running conditions at the end of the
period of 8 years. That any additional equipments/sports
facility installed by the 2nd party shall be the property of
the 2nd party, which he has been to take away after expiry
of lease period.”
This clause has been referred to in the Settlement Agreement
dated 28.5.2015. Further, it is manifest from the record that the
allegation regarding damage was based on misleading
photographs produced alongwith contempt petition, whereas the
photographs of the same site taken by the respondent at the time
of vacating the suit property would reveal that what was left
behind was only debris without causing any permanent damage
to the structure or the suit property. As a matter of fact, the
petitioner immediately (in less than 23 months) after taking
possession of the suit property, started operating the water park
in the suit premises. The case made out by the petitioner about
defacement of the suit property is entirely misleading and
mischievous. It is urged that no case for initiating contempt
action has been made out by the petitioner and the amount
deposited by the respondent in this Court in the sum of
17
Rs.1,50,00,000/ (Rupees one crore fifty lakhs only) pursuant to
direction given by this Court in the present contempt petition on
25.9.2019, be refunded to the respondent alongwith interest
accrued thereon, forthwith. The respondent has also invited
appropriate direction in I.A. No. 152785/2019 filed by it to
modify the amount deposited in this Court to Rs.87,37,677/
(Rupees eightyseven lakhs thirtyseven thousand six hundred
seventyseven only), based on calculations given in the said
application.
15. We have heard Mr. Nakul Diwan, learned senior counsel for
the petitioner and Mr. Parag Tripathi, learned senior counsel for
the respondent.
16. At the outset, we must advert to the contours delineated by
this court for initiating civil contempt action in Ram Kishan vs.
Tarun Bajaj & Ors.5
. In paragraphs 11, 12 and 15 of the
reported decision, this Court noted thus:
“11. The contempt jurisdiction conferred on to the law
courts power to punish an offender for his wilful
disobedience/contumacious conduct or obstruction to the
majesty of law, for the reason that respect and authority
commanded by the courts of law are the greatest
guarantee to an ordinary citizen that his rights shall be
protected and the entire democratic fabric of the society
5 (2014) 16 SCC 204
18
will crumble down if the respect of the judiciary is
undermined. Undoubtedly, the contempt jurisdiction is a
powerful weapon in the hands of the courts of law but
that by itself operates as a string of caution and unless,
thus, otherwise satisfied beyond reasonable doubt, it
would neither be fair nor reasonable for the law courts to
exercise jurisdiction under the Act. The proceedings are
quasicriminal in nature, and therefore, standard of proof
required in these proceedings is beyond all reasonable
doubt. It would rather be hazardous to impose sentence
for contempt on the authorities in exercise of the
contempt jurisdiction on mere probabilities. (Vide V.G.
Nigam v. Kedar Nath Gupta, (1992) 4 SCC 697, Chhotu
Ram v. Urvashi Gulati, (2001) 7 SCC 530, Anil Ratan
Sarkar v. Hirak Ghosh, (2002) 4 SCC 21, Bank of
Baroda v. Sadruddin Hasan Daya, (2004) 1 SCC
360, Sahdeo v. State of U.P., (2010) 3 SCC 705
and National Fertilizers Ltd. v. Tuncay Alankus, (2013) 9
SCC 600.
12. Thus, in order to punish a contemnor, it has to be
established that disobedience of the order is “wilful”. The
word “wilful” introduces a mental element and hence,
requires looking into the mind of a person/contemnor by
gauging his actions, which is an indication of one's state
of mind. “Wilful” means knowingly intentional, conscious,
calculated and deliberate with full knowledge of
consequences flowing therefrom. It excludes casual,
accidental, bona fide or unintentional acts or genuine
inability. Wilful acts does not encompass involuntarily or
negligent actions. The act has to be done with a “bad
purpose or without justifiable excuse or stubbornly,
obstinately or perversely”. Wilful act is to be distinguished
from an act done carelessly, thoughtlessly, heedlessly or
inadvertently. It does not include any act done negligently
or involuntarily. The deliberate conduct of a person
means that he knows what he is doing and intends to do
the same. Therefore, there has to be a calculated action
with evil motive on his part. Even if there is a
disobedience of an order, but such disobedience is the
result of some compelling circumstances under which it
was not possible for the contemnor to comply with the
order, the contemnor cannot be punished. “Committal or
sequestration will not be ordered unless contempt
involves a degree of default or misconduct.” (Vide S.
Sundaram Pillai v. V.R. Pattabiraman, (1985) 1 SCC
591, Rakapalli Raja Ram Gopala Rao v. Naragani Govinda
Sehararao, (1989) 4 SCC 255, Niaz Mohammad v. State of
19
Haryana, (1994) 6 SCC 332, Chordia Automobiles v. S.
Moosa, (2000) 3 SCC 282, Ashok Paper Kamgar
Union v. Dharam Godha, (2003) 11 SCC 1, State of
Orissa v. Mohd. Illiyas, (2006) 1 SCC 275 and Uniworth
Textiles Ltd. v. CCE, (2013) 9 SCC 753.
xxx xxx xxx
15. It is wellsettled principle of law that if two
interpretations are possible, and if the action is not
contumacious, a contempt proceeding would not be
maintainable. The effect and purport of the order is to be
taken into consideration and the same must be read in its
entirety. Therefore, the element of willingness is an
indispensable requirement to bring home the charge
within the meaning of the Act. [See Sushila Raje
Holkar v. Anil Kak, (2008) 14 SCC 392 and Three Cheers
Entertainment (P) Ltd. v. CESC Ltd., (2008) 16 SCC 592.”
Similarly, in R.N. Dey & Ors. vs. Bhagyabati Pramanik &
Ors.6
, this Court expounded in paragraph 7 as follows:
“7. We may reiterate that the weapon of contempt is
not to be used in abundance or misused. Normally, it
cannot be used for execution of the decree or
implementation of an order for which alternative remedy
in law is provided for. Discretion given to the court is to
be exercised for maintenance of the court's dignity and
majesty of law. Further, an aggrieved party has no right
to insist that the court should exercise such jurisdiction
as contempt is between a contemner and the court. It is
true that in the present case, the High Court has kept the
matter pending and has ordered that it should be heard
along with the first appeal. But, at the same time, it is to
be noticed that under the coercion of contempt
proceeding, appellants cannot be directed to pay the
compensation amount which they are disputing by
asserting that claimants were not the owners of the
property in question and that decree was obtained by
suppressing the material fact and by fraud. Even
presuming that the claimants are entitled to recover the
amount of compensation as awarded by the trial court as
no stay order is granted by the High Court, at the most
they are entitled to recover the same by executing the
6 (2000) 4 SCC 400
20
said award wherein the State can or may contend that the
award is a nullity. In such a situation, as there was no
wilful or deliberate disobedience of the order, the
initiation of contempt proceedings was wholly
unjustified.”
Keeping the settled legal principle expounded in the aforesaid
decisions, in mind, we may now proceed to consider the three
stated violations of the order dated 22.2.2019 by the respondent
to ascertain whether the same is intentional and wilful
disobedience of the order/direction passed by this Court.
17. Reverting to the first violation of not filing undertaking
within two weeks, as directed, that per se cannot be the basis to
initiate contempt action against the respondent. Indeed, the
undertaking was required to be filed “if” the respondent wanted
to avail of the time granted by this Court in terms of the order
dated 22.2.2019. In this case, admittedly, the respondent
vacated the suit property before the time specified in the order of
which contempt has been alleged. Hence, nonfiling of
undertaking does not take the matter any further nor do we find
any reason to precipitate the matter on that count alone.
18. We now turn to the grievance about nonpayment of
outstanding dues in terms of the direction in the order dated
22.2.2019. It is not in dispute that in the application filed by the
21
respondent before the High Court, specific grievance was made
that it was suffering huge losses on two counts, namely, on
account of petitioner continuing to use the trademark “SPLASH”
even after 31.10.2018 unabated and second, on account of
liability of the respondent to pay enhanced rent in terms of the
Settlement Agreement dated 28.5.2015 of Rs.9,25,000/ (Rupees
nine lakhs twentyfive thousand only) per month. The
respondent requested the High Court to pass an equitable order
in implementing the Settlement Agreement dated 28.5.2015. The
fact remains that neither the learned single Judge nor the
Division Bench clearly ruled on the factum of outstanding
dues/arrears payable by the respondent. On the other hand, the
Division Bench in its order dated 28.1.2019, left the parties to
pursue execution of the decree or any other relief, as may be
permissible in law, whilst rejecting the prayer of the respondent
to grant time to vacate the suit premises beyond the time
prescribed in the order dated 12.7.2018. The relevant
observation has been extracted in paragraph 10 above, which
reinforces this position. Similarly, while disposing of the
grievance of the respondent made in Contempt Petition No.
225/2017, the High Court noted that the respondent was free to
22
pursue the same in execution proceedings. And again, the
learned single Judge of the High Court vide order dated
29.5.2019, left the parties to pursue their claim on relevant
aspects before the execution Court by filing respective statements
of account for determination of liability of the respondent, if any,
as can be discerned from the observations in the said order
reproduced in paragraph 13 above.
19. Pertinently, the special leave petitions were filed by the
respondent against the order dated 28.1.2019, which as
aforesaid, did not deal with the question regarding the monthly
rent payable by the respondent but explicitly left the parties to
pursue the same before the executing Court. The
plaintiff/petitioner having acquiesced of that observation of the
High Court, cannot be allowed to contend to the contrary. This
Court in Jhareswar Prasad Paul & Anr. vs. Tarak Nath
Ganguly & Ors.7
, in paragraph 11, opined thus:
“11. … The court exercising contempt jurisdiction is not
entitled to enter into questions which have not been dealt
with and decided in the judgment or order, violation of
which is alleged by the applicant. The court has to
consider the direction issued in the judgment or order
and not to consider the question as to what the judgment
or order should have contained. At the cost of repetition,
7 (2002) 5 SCC 352
23
be it stated here that the court exercising contempt
jurisdiction is primarily concerned with the question of
contumacious conduct of the party, which is alleged to
have committed deliberate default in complying with the
directions in the judgment or order. If the judgment or
order does not contain any specific direction regarding a
matter or if there is any ambiguity in the directions
issued therein then it will be better to direct the parties to
approach the court which disposed of the matter for
clarification of the order instead of the court exercising
contempt jurisdiction taking upon itself the power to
decide the original proceeding in a manner not dealt with
by the court passing the judgment or order. If this
limitation is borne in mind then criticisms which are
sometimes levelled against the courts exercising contempt
of court jurisdiction “that it has exceeded its powers in
granting substantive relief and issuing a direction
regarding the same without proper adjudication of the
dispute” in its entirety can be avoided. This will also avoid
multiplicity of proceedings because the party which is
prejudicially affected by the judgment or order passed in
the contempt proceeding and granting relief and issuing
fresh directions is likely to challenge that order and that
may give rise to another round of litigation arising from a
proceeding which is intended to maintain the majesty and
image of courts.”
20. Thus understood, we find force in the explanation offered by
the respondent that as per its bona fide understanding, there was
no outstanding dues payable to the petitioner. Moreover, as
observed by the High Court, these aspects could be answered by
the executing Court if the parties pursue their claim(s) before it
in that regard. Suffice it to observe that it is not a case of
intentional violation or wilful disobedience of the order passed by
this Court to initiate contempt action against the respondent.
Instead, we hold that it would be open to the parties to pursue
24
their claim(s) in execution proceedings or any other proceedings,
as may be permissible in law in respect of the issue(s) under
consideration. In such proceedings, all aspects can be
considered by the concerned forum/Court on merits in
accordance with law. We say no more.
21. Reverting to the allegation about damage caused to the suit
property by the respondent at the time of vacating the same, in
our opinion, the respondent has made out a formidable case that
it did not cause any damage, much less permanent damage to
the structure in the suit property. Whereas, the petitioner was
relying on photographs concerning the debris on the site left
behind at the time of vacating the suit property. The debris
cannot cause damage and it is certainly not a case of defacement
of the suit property. That position is reinforced from the fact that
the water park in the suit premises was started and became fully
functional within 23 months. Viewed thus, it is rightly urged
that it can be safely assumed that no damage was caused by the
respondent to the structure in question. Minor repairs required
to be carried out by the petitioner for making the water park
functional cannot be painted as intentional disobedience of the
25
order of this Court. In any case, that being a complex question of
fact, need not be adjudicated in the contempt proceedings. We
leave it open to the petitioner to pursue even that claim in
execution proceedings or such other proceedings as may be
permissible in law. We may not be understood to have expressed
any final opinion in respect of condition of the suit premises,
whilst handing over possession to the petitioner. We hold that
even this issue under consideration does not warrant initiation of
contempt action against the respondent.
22. Taking overall view of the matter, therefore, we decline to
precipitate the matter any further against the respondent.
Instead, we deem it appropriate to discharge the show cause
notice(s) and relegate the parties to such remedies as may be
permissible in law to espouse their cause(s)/claim(s) including
mentioned in the present contempt petition. All questions in that
regard are left open to be decided by the concerned forum/Court
appropriately as per law.
23. The next aspect is about the prayer of the respondent to
refund the amount of Rs.1,50,00,000/ (Rupees one crore fifty
lakhs only) alongwith interest accrued thereon. In I.A. No.
26
152785/2019 filed by the respondent, it is prayed that the
deposit amount be reduced to Rs.87,37,677/ (Rupees eightyseven lakhs thirtyseven thousand six hundred seventyseven
only), in terms of the calculations given therein. Considering the
fact that we have relegated the parties before the executing Court
to pursue their claim(s) in respect of and arising from the
agreement/settlement, in particular the Settlement Agreement
dated 28.5.2015 and order of the High Court dated 12.7.2018
recording the revised agreement, we accede to the request of the
respondent to retain sum of Rs.87,37,677/ (Rupees eightyseven
lakhs thirtyseven thousand six hundred seventyseven only) and
interest accrued thereon out of the total amount deposited in this
Court in the sum of Rs.1,50,00,000/ (Rupees one crore fifty
lakhs only) alongwith interest accrued thereon.
24. Accordingly, the amount of Rs.87,37,677/ (Rupees eightyseven lakhs thirtyseven thousand six hundred seventyseven
only) and interest accrued thereon be transferred to the executing
Court, who in turn, after considering the rival claim(s), may pass
appropriate orders in that regard in accordance with law. The
respondent, however, is permitted to withdraw the excess
27
amount [in excess of Rs.87,37,677/ (Rupees eightyseven lakhs
thirtyseven thousand six hundred seventyseven only) and
interest accrued thereon], subject to filing an undertaking in this
Court to the effect that if the executing Court so directs, the sum
so withdrawn or portion thereof would be deposited in the
executing Court as and when required and not later than four
weeks from the date of such direction. In addition, the
respondent shall furnish a solvent security commensurate with
the amount to be withdrawn by the respondent, but not less than
Rs.75,00,000/ (Rupees seventyfive lakhs only) as precondition.
The solvent security should be to the satisfaction of the executing
Court. This arrangement would meet the ends of justice and also
secure the interests of both sides.
25. Accordingly, the contempt petition and I.A. No.
152785/2019 are disposed of in the above terms. The show
cause notice(s) issued to the respondent stand(s) discharged.
Pending interlocutory applications, if any, shall stand disposed
of.
..................................J.
28
(A.M. Khanwilkar)
..................................J.
(Dinesh Maheshwari)
New Delhi;
May 6, 2020.
First, the respondent failed to file undertaking despite direction to do so within two weeks.
Second, the respondent failed to pay the outstanding dues to the petitioner in the sum of Rs.1,32,48,794/ (Rupees one crore thirtytwo lakhs fortyeight thousand seven hundred
ninetyfour only) as on 22.3.2019.
Third, while vacating the suit premises, the respondent caused damage to the suit property.
Each of these acts of commission and omission of the respondent was intentional and in wilful disobedience of the order passed by this Court dated 22.2.2019.
1
REPORTABLE
IN THE SUPREME COURT OF INDIA
INHERENT JURISDICTION
CONTEMPT PETITION (CIVIL) NO. 591/2019
IN
SPECIAL LEAVE PETITION (CIVIL) NO. 5350/2019
Hukum Chand Deswal …Petitioner(s)
Versus
Satish Raj Deswal ...Respondent(s)
J U D G M E N T
A.M. Khanwilkar, J.
1. This contempt petition has been filed by the original plaintiff
(in CS(OS) No. 2041/2013 filed in High Court of Delhi at New
Delhi1
), under Article 129 of the Constitution of India read with
Sections 12 and 14 of the Contempt of Courts Act, 19712
and
read with Rule 3 of the Rules to Regulate Proceedings for
Contempt of the Supreme Court, 19753
in reference to the order
dated 22.2.2019 passed by this Court in SLP(C) Nos. 5147/2019
and 5350/2019, which reads thus:
1 For short, “the High Court”
2 For short, “the 1971 Act”
3 For short, “the 1975 Rules”
2
“We are not inclined to interfere with the Special Leave
Petition.
However, we accede to the request made by the
petitioner to grant four weeks’ time to vacate the suit
premises. That shall be subject to payment of all the
outstanding dues/arrears and filing undertaking before
this Court within two weeks’ from today.
It is made clear that if the premises are not vacated as
per the undertaking, it will be viewed sternly.
The Special Leave Petition is disposed of accordingly.
All IAs are also disposed of.”
2. The gravamen of the grievance of the petitioner/original
plaintiff is that the respondent [defendant in CS(OS) No.
2041/2013] failed to file undertaking, as also, to pay the
outstanding dues before vacating the suit premises and further,
caused damage to the property before handing over possession
thereof to the petitioner on 22.3.2019. Thus, the respondent
committed wilful disobedience of and violated the directions given
by this Court vide order dated 22.2.2019.
3. Shorn of unnecessary factual details, suffice it to observe
that the petitioner – M/s. Jingle Bell Amusement Park Pvt. Ltd.
(represented by its Director – Mr. Hukum Chand Deswal) had
filed the aforementioned suit for permanent injunction,
possession and for recovery of rent and damages/mesne profits
till the recovery of possession in respect of the property bearing
3
No. 41/24, 25, 42/20, 50/1, 51/4 min at Village Alipur, TehsilDelhi, Delhi against the respondent – Sagu Dreamland Pvt. Ltd.
(represented by its Managing Director – Mr. Satish Raj Deswal).
4. The respondent/defendant, on the other hand, filed a suit
being CS(OS) No. 1592/2014 in the High Court against Splash
Island Pvt. Ltd. and its two Directors – Hukum Chand Deswal
[present petitioner/original plaintiff in CS(OS) No. 2041/2013]
and Karandeep Singh Deswal, seeking permanent injunction
restraining them from infringing the trademark acquired by the
respondent.
5. CS(OS) No. 2041/2014 was eventually disposed of on
30.6.2015 on the basis of settlement arrived at between the
parties on 28.5.2015. As per the said settlement, the respondent
had agreed to vacate the suit property on or before 31.12.2017
and handover peaceful and vacant possession thereof to the
petitioner herein. The respondent was permitted to take away
civil structures and movable fixtures installed by it in the suit
property. It could also offer the same to the petitioner for
consideration on or before September, 2017. The petitioner
would have sole discretion to purchase the same or not. The
4
agreement also records that an amount of Rs.25,00,000/
(Rupees twentyfive lakhs only) deposited by the respondent with
the petitioner as security amount without interest, shall be
returned to the respondent after handing over the vacant
peaceful possession of the suit property. The parties also agreed
for revised monthly rent and the respondent paid the outstanding
dues in terms of the said agreement by way of cheque(s) and
future rent by way of postdated cheque(s). The agreement also
records that the petitioner herein or any of the Directors of the
petitioner shall not use the trademark “SPLASH” in any manner
and the cases filed by either of the parties in this regard shall be
withdrawn by the concerned party in Delhi or elsewhere. It is
also noted in the agreement that breach of terms and conditions
of the settlement/agreement/compromise deed by either party,
shall entitle the other party to take legal recourse before the
competent Court/authority for legal remedy. Another crucial
condition stipulated in the agreement is that if the respondent
failed to vacate and handover peaceful vacant possession of the
suit premises on or before 31.12.2017 or after the termination of
tenancy, the petitioner herein would be entitled to recovery of
double the amount of last paid rent as unauthorised occupation
5
charges from the respondent. The monthly rent payable as on
December, 2017 in terms of the agreement was fixed at
Rs.9,25,000/ (Rupees nine lakhs twentyfive thousand only) per
month. Resultantly, in case of default, the petitioner would
become entitled for recovery of double the amount of
Rs.9,25,000/ (Rupees nine lakhs twentyfive thousand only)
every month as unauthorised occupation charges. This
agreement was reached as final settlement of all the past, present
and future claims between the parties and to be effective only
after appropriate order was passed in CS(OS) No. 2041/2013
filed by the petitioner herein.
6. Even the suit filed by the respondent being CS(OS) No.
1592/2014 came to be disposed of as withdrawn on 31.8.2015 in
terms of the settlement arrived at between the parties.
7. Before the time to vacate the suit premises specified in the
settlement had expired, the respondent filed Contempt Case
(Civil) No. 225/2017 before the High Court against the petitioner,
alleging wilful violation and disobedience of the settlement terms
dated 28.5.2015 by illegally using the word “SPLASH” and
continued infringement of the trademark of the respondent. The
6
High Court disposed of the said petition on 20.3.2017 giving
liberty to the respondent to take recourse to execution
proceedings.
8. The respondent then filed an application bearing I.A. No.
14331/2017 in CS(OS) No. 1592/2014 seeking recall of the order
dated 30.6.2015 and to restore the said suit to its original
number on the assertion that the Settlement Agreement arrived
at between the parties on 28.5.2015 has been frustrated by the
petitioner by continuing to infringe the trademark of the
respondent. That application came to be disposed of on
12.7.2018 after recording the second agreement arrived at
between the parties, whereunder the petitioner herein undertook
to abstain from using the word “SPLASH” or any deceptively
similar word, either as a part of the trademark, trade
name/corporate name or with a prefix or suffix in any manner
whatsoever. It was also agreed by the petitioner that the
company – Splash Island Pvt. Ltd. will apply to the Registrar of
Companies within a period of ten days for change of name
wherein it could adopt any name without the word “SPLASH” or a
deceptively similar word. That was to be done on or before
7
31.10.2018 and that use of the word “SPLASH” by the petitioner
would be completely stopped on or from 31.10.2018. The Court
also recorded the assurance given by the respondent herein that
it would handover vacant and peaceful possession of the suit
property on or before 30.11.2018 to the representatives of M/s.
Jingle Bell Amusement Park Pvt. Ltd. and shall not cause any
damage to the constructed area while vacating the property and
abide by clause 6(b) of the Settlement Agreement.
9. The respondent then filed another application(s) in October,
2018, being I.A. Nos. 13958/2018 and 13957/2018 in CS(OS)
Nos. 2041/2013 and 1592/2014 respectively before the High
Court seeking intervention of the Court in implementing the
Settlement Agreement dated 28.5.2015 in an equitable manner,
as the respondent was suffering losses because of the wilful
disobedience and violation of the Settlement Agreement by the
petitioner herein, by continuing to use the trademark “SPLASH”,
which belonged to the respondent and also because the
respondent was required to pay enhanced monthly rent as per
the revised agreement, of Rs.9,25,000/ (Rupees nine lakhs
twentyfive thousand only) per month. The respondent,
8
therefore, prayed for modification of the order dated 12.7.2018 to
the extent that the time given to it to vacate the suit premises be
extended for a period of two years in terms of the Settlement
Agreement between the parties. These applications were rejected
by the learned single Judge of the High Court on 8.10.2018 after
noting that no ground was made out for extending time to
handover possession as prayed for. The essence of the grievance
made in the applications filed by the respondent was to
compensate the respondent for the damage suffered due to
continued violation of the obligation by the petitioner by not
abstaining from using the trademark “SPLASH” belonging to the
respondent.
10. Feeling aggrieved, the respondent carried the matter in
appeal before the Division Bench of the High Court, reiterating
the grievance made in the stated applications. In the appeals, it
was expressly stated that the respondent was suffering losses not
only because of the continued violation of the conditions/terms
specified in the Settlement Agreement in the form of infringement
of the trademark of the respondent, but also because the
respondent is required to pay enhanced rent to the petitioner as
9
per the agreement/settlement dated 28.5.2015. The Division
Bench, however, rejected the appeals vide order dated 28.1.2019
by observing as follows:
“5. We are not impressed by the said submission of
Mr. Kaul for the simple reason that the Suits were
disposed of in terms of the settlement entered between
the parties. If there is a violation of the
settlement/decree, it is for the appellant to seek
execution of the decree or any other relief as
permissible in law rather than seeking a benefit of
further time on the premise that the respondent has
violated the terms of agreement. This is clearly
impermissible as any direction by us, shall also be at
variance with the order disposing of the suits. We find
that the learned Single Judge has rightly dismissed the
applications seeking modification of the order dated 12th
July, 2018.
We do not find any merit in the appeals. The same
are dismissed.
(emphasis supplied)
11. Against this decision, the respondent had approached this
Court by way of special leave petitions being SLP(C) Nos.
5147/2019 and 5350/2019, which came to be dismissed vide
common order dated 22.2.2019, as reproduced in paragraph 1
above.
12. It is not in dispute that the respondent vacated the suit
premises before the date prescribed in the order of this Court,
dated 22.2.2019. However, the grievance of the petitioner in the
present contempt petition is threefold. First, the respondent
failed to file undertaking despite direction to do so within two
10
weeks. Second, the respondent failed to pay the outstanding
dues to the petitioner in the sum of Rs.1,32,48,794/ (Rupees
one crore thirtytwo lakhs fortyeight thousand seven hundred
ninetyfour only) as on 22.3.2019. Third, while vacating the suit
premises, the respondent caused damage to the suit property.
Each of these acts of commission and omission of the respondent
was intentional and in wilful disobedience of the order passed by
this Court dated 22.2.2019.
13. The respondent besides tendering unconditional apology
has offered explanation pointing out that he was not in arrears
and no amount was outstanding or payable to the petitioner who
had continued to infringe the trademark “SPLASH” belonging to
the respondent, even after 31.10.2018. The revised settlement
arrived at between the parties on 12.7.2018, as recorded by the
High Court, clearly obligated the petitioner to stop using the
trademark “SPLASH” belonging to the respondent on and from
31.10.2018 whilst extending the time to vacate the suit premises
upto 30.11.2018 without altering the stipulation regarding
monthly rent set out in the Settlement Agreement dated
28.5.2015. In other words, the respondent was liable to pay only
11
Rs.9,25,000/ (Rupees nine lakhs twentyfive thousand only) per
month even after December, 2017 until 30.11.2018 and
thereafter, because of the indulgence shown by the High Court in
the first place and later by this Court vide order dated 22.2.2019
giving time to the respondent to vacate the suit premises upto
22.3.2019. According to the understanding of the respondent,
the revised agreement dated 12.7.2018 was a comprehensive
arrangement worked out in the backdrop of the grievance of the
respondent that he had suffered huge losses due to the
continued infringement of trademark “SPLASH” by the petitioner,
despite the stipulation in the Settlement Agreement dated
28.5.2015 in that regard, and also due to the enhancement in the
monthly rent in respect of the suit premises. It is also pointed
out that the petitioner had moved the executing Court to direct
the respondent to pay double the amount of rent as
compensation for unauthorised occupation of the suit premises
beyond 30.11.2018. The said prayer was considered in execution
proceedings by the learned single Judge of the High Court and
was disposed of vide order dated 29.5.2019 passed in CM(M) No.
109/2019 and CM Appl. Nos. 3331/2019 and 3876/2019. The
said order reads thus:
12
“O R D E R
29.05.2019
1. This petition under Article 227 of the Constitution of
India is directed against an order dated 21.12.2018 in
execution proceedings.
2. The suit between the parties was initially disposed
of, by a mediated settlement dated 28.05.2015. The
respondent herein has filed for execution of that
settlement agreement. However, the parties had
approached this Court by way of certain interim
applications in the suit after the settlement. Those
applications were decided by an order of the learned
Single Judge dated 12.07.2018. It appears that the
petitioner had, then, sought modification of the order
dated 12.07.2018, which was declined by an order dated
08.10.2018. Against this order, the petitioner filed FAO
(OS) 172/2018 which was dismissed by the Division
Bench vide the judgment dated 28.01.2019. The
judgment dated 28.01.2019 was carried to the Supreme
Court in SLP (Civil) No. 5147/2019, which was disposed
of with the following order:
“We are not inclined to interfere with the
Special Leave Petition. However, we accede to
the request made by the petitioner to grant
four weeks’ time to vacate the suit premises.
That shall be subject to payment of all the
outstanding dues/arrears and filing
undertaking before this Court within two
weeks’ from today.
It is made clear that if the premises are not
vacated as per the undertaking, it will be
viewed sternly.
The Special Leave Petition is disposed of
accordingly. All IAs are also disposed of.”
3. It is not disputed that the possession of the
premises in question has been handed over by the
petitioner to the respondent, pursuant to the order of the
Supreme Court. The present dispute relates to the
amount payable by the petitioner to the respondent, if
any. Under the settlement agreement, the petitioner was
liable to pay twice the amount of the last rent fixed, in the
event it did not vacate the premises in question by the
agreed date, i.e. 31.12.2017. According to the petitioner,
by the order dated 12.07.2018, the time originally fixed
13
for vacation of the suit premises was extended until
30.11.2018, and the petitioner was, therefore, not liable
to pay twice the amount of the last paid rent as
unauthorized occupation charges until 30.11.2018. This
contention is disputed by the learned counsel for the
respondent, who submits that the order dated 12.07.2018
merely extended the time for vacating the premises, and
did not alter the liability of the petitioner to pay twice the
amount of the last rent paid for the period after
31.12.2017.
4. Be that as it may, I have also been informed that
pursuant to the order of the Supreme Court, the
petitioner has made a further payment to the respondent
and given a statement of accounts by a letter dated
07.03.2019. In these facts and circumstances, counsel
for the parties submit that they will file their
respective statements of account before the executing
Court, which would then determine whether any
amount remains payable from the petitioner to the
respondent.
5. All the rights and contentions of the parties in this
regard are left open and the petition is disposed of in
terms of the above.”
(emphasis supplied)
According to the respondent, neither the learned single Judge nor
the Division Bench in the earlier proceedings had dealt with the
question of liability of the respondent to pay monthly rent over
and above mentioned in the Settlement Agreement dated
28.5.2015 at the rate of Rs.9,25,000/ (Rupees nine lakhs
twentyfive thousand only) per month, which position was
reinforced vide order dated 12.7.2018. In that, double the
amount of last paid rent towards unauthorised occupation
charges would have become payable after 30.11.2018 but for the
14
protection extended to the respondent by the High Court and this
Court. As a matter of fact, the Division Bench in the judgment
dated 28.1.2019 (which was impugned in special leave petitions
before this Court), had left the parties to pursue their remedy
before the executing Court. Moreover, even this Court did not
adjudicate the question regarding the liability of the respondent
to pay further rent or so to say, outstanding dues payable to the
petitioner. That is a matter which ought to be considered by the
executing Court in view of the liberty granted by the learned
single Judge, as well as, the Division Bench of the High Court, in
the backdrop of the grievance made by the respondent about the
continued infringement of its trademark by the petitioner, for
which the petitioner must compensate the respondent
appropriately including to provide due adjustments. It is the
case of the respondent that the order dated 12.7.2018 extended
the time to vacate the suit premises until 30.11.2018 and
thereafter, considering the protection given by the High Court
and also by this Court in terms of order dated 22.2.2019, it must
follow that the possession of the respondent was lawful and not
unauthorised as such. It is urged that the order of this Court
could be understood to mean that “if” the respondent was in
15
arrears, it ought to pay such amount to the petitioner before the
specified date. A priori, the respondent would not be liable to pay
double the amount of rent in terms of the Settlement Agreement
dated 28.5.2015. To buttress this submission, reliance is placed
on the decision of this Court in Union of India vs. Banwari lal
& Sons (P) Ltd.4
, wherein this Court opined that right to mesne
profits presupposes a wrong whereas a right to rent proceeds on
the basis that there is a contract. Further, there is an
intermediate class of cases in which the possession though not
wrongful in the beginning assumes a wrongful character when it
is unauthorizedly retained and in such cases, owner is not
entitled to claim mesne profits but only the fair rent.
14. In substance, the respondent besides offering unconditional
apology, has offered explanation to persuade this Court to take a
view that the respondent had not committed any act, much less
intentional, amounting to wilful disobedience. As regards the
allegation regarding the damage caused to the suit property,
while handing over possession to the petitioner, it is stated on
affidavit supported by contemporaneous record and photographs
to indicate that the respondent has taken away only those
4 (2004) 5 SCC 304
16
fixtures which he was permitted to do under clause 24 of the first
agreement dated 21.3.2003, which reads thus:
“Clause 24: “That the second party shall hand over the
premises of the water sports in full and with all
infrastructure in running conditions at the end of the
period of 8 years. That any additional equipments/sports
facility installed by the 2nd party shall be the property of
the 2nd party, which he has been to take away after expiry
of lease period.”
This clause has been referred to in the Settlement Agreement
dated 28.5.2015. Further, it is manifest from the record that the
allegation regarding damage was based on misleading
photographs produced alongwith contempt petition, whereas the
photographs of the same site taken by the respondent at the time
of vacating the suit property would reveal that what was left
behind was only debris without causing any permanent damage
to the structure or the suit property. As a matter of fact, the
petitioner immediately (in less than 23 months) after taking
possession of the suit property, started operating the water park
in the suit premises. The case made out by the petitioner about
defacement of the suit property is entirely misleading and
mischievous. It is urged that no case for initiating contempt
action has been made out by the petitioner and the amount
deposited by the respondent in this Court in the sum of
17
Rs.1,50,00,000/ (Rupees one crore fifty lakhs only) pursuant to
direction given by this Court in the present contempt petition on
25.9.2019, be refunded to the respondent alongwith interest
accrued thereon, forthwith. The respondent has also invited
appropriate direction in I.A. No. 152785/2019 filed by it to
modify the amount deposited in this Court to Rs.87,37,677/
(Rupees eightyseven lakhs thirtyseven thousand six hundred
seventyseven only), based on calculations given in the said
application.
15. We have heard Mr. Nakul Diwan, learned senior counsel for
the petitioner and Mr. Parag Tripathi, learned senior counsel for
the respondent.
16. At the outset, we must advert to the contours delineated by
this court for initiating civil contempt action in Ram Kishan vs.
Tarun Bajaj & Ors.5
. In paragraphs 11, 12 and 15 of the
reported decision, this Court noted thus:
“11. The contempt jurisdiction conferred on to the law
courts power to punish an offender for his wilful
disobedience/contumacious conduct or obstruction to the
majesty of law, for the reason that respect and authority
commanded by the courts of law are the greatest
guarantee to an ordinary citizen that his rights shall be
protected and the entire democratic fabric of the society
5 (2014) 16 SCC 204
18
will crumble down if the respect of the judiciary is
undermined. Undoubtedly, the contempt jurisdiction is a
powerful weapon in the hands of the courts of law but
that by itself operates as a string of caution and unless,
thus, otherwise satisfied beyond reasonable doubt, it
would neither be fair nor reasonable for the law courts to
exercise jurisdiction under the Act. The proceedings are
quasicriminal in nature, and therefore, standard of proof
required in these proceedings is beyond all reasonable
doubt. It would rather be hazardous to impose sentence
for contempt on the authorities in exercise of the
contempt jurisdiction on mere probabilities. (Vide V.G.
Nigam v. Kedar Nath Gupta, (1992) 4 SCC 697, Chhotu
Ram v. Urvashi Gulati, (2001) 7 SCC 530, Anil Ratan
Sarkar v. Hirak Ghosh, (2002) 4 SCC 21, Bank of
Baroda v. Sadruddin Hasan Daya, (2004) 1 SCC
360, Sahdeo v. State of U.P., (2010) 3 SCC 705
and National Fertilizers Ltd. v. Tuncay Alankus, (2013) 9
SCC 600.
12. Thus, in order to punish a contemnor, it has to be
established that disobedience of the order is “wilful”. The
word “wilful” introduces a mental element and hence,
requires looking into the mind of a person/contemnor by
gauging his actions, which is an indication of one's state
of mind. “Wilful” means knowingly intentional, conscious,
calculated and deliberate with full knowledge of
consequences flowing therefrom. It excludes casual,
accidental, bona fide or unintentional acts or genuine
inability. Wilful acts does not encompass involuntarily or
negligent actions. The act has to be done with a “bad
purpose or without justifiable excuse or stubbornly,
obstinately or perversely”. Wilful act is to be distinguished
from an act done carelessly, thoughtlessly, heedlessly or
inadvertently. It does not include any act done negligently
or involuntarily. The deliberate conduct of a person
means that he knows what he is doing and intends to do
the same. Therefore, there has to be a calculated action
with evil motive on his part. Even if there is a
disobedience of an order, but such disobedience is the
result of some compelling circumstances under which it
was not possible for the contemnor to comply with the
order, the contemnor cannot be punished. “Committal or
sequestration will not be ordered unless contempt
involves a degree of default or misconduct.” (Vide S.
Sundaram Pillai v. V.R. Pattabiraman, (1985) 1 SCC
591, Rakapalli Raja Ram Gopala Rao v. Naragani Govinda
Sehararao, (1989) 4 SCC 255, Niaz Mohammad v. State of
19
Haryana, (1994) 6 SCC 332, Chordia Automobiles v. S.
Moosa, (2000) 3 SCC 282, Ashok Paper Kamgar
Union v. Dharam Godha, (2003) 11 SCC 1, State of
Orissa v. Mohd. Illiyas, (2006) 1 SCC 275 and Uniworth
Textiles Ltd. v. CCE, (2013) 9 SCC 753.
xxx xxx xxx
15. It is wellsettled principle of law that if two
interpretations are possible, and if the action is not
contumacious, a contempt proceeding would not be
maintainable. The effect and purport of the order is to be
taken into consideration and the same must be read in its
entirety. Therefore, the element of willingness is an
indispensable requirement to bring home the charge
within the meaning of the Act. [See Sushila Raje
Holkar v. Anil Kak, (2008) 14 SCC 392 and Three Cheers
Entertainment (P) Ltd. v. CESC Ltd., (2008) 16 SCC 592.”
Similarly, in R.N. Dey & Ors. vs. Bhagyabati Pramanik &
Ors.6
, this Court expounded in paragraph 7 as follows:
“7. We may reiterate that the weapon of contempt is
not to be used in abundance or misused. Normally, it
cannot be used for execution of the decree or
implementation of an order for which alternative remedy
in law is provided for. Discretion given to the court is to
be exercised for maintenance of the court's dignity and
majesty of law. Further, an aggrieved party has no right
to insist that the court should exercise such jurisdiction
as contempt is between a contemner and the court. It is
true that in the present case, the High Court has kept the
matter pending and has ordered that it should be heard
along with the first appeal. But, at the same time, it is to
be noticed that under the coercion of contempt
proceeding, appellants cannot be directed to pay the
compensation amount which they are disputing by
asserting that claimants were not the owners of the
property in question and that decree was obtained by
suppressing the material fact and by fraud. Even
presuming that the claimants are entitled to recover the
amount of compensation as awarded by the trial court as
no stay order is granted by the High Court, at the most
they are entitled to recover the same by executing the
6 (2000) 4 SCC 400
20
said award wherein the State can or may contend that the
award is a nullity. In such a situation, as there was no
wilful or deliberate disobedience of the order, the
initiation of contempt proceedings was wholly
unjustified.”
Keeping the settled legal principle expounded in the aforesaid
decisions, in mind, we may now proceed to consider the three
stated violations of the order dated 22.2.2019 by the respondent
to ascertain whether the same is intentional and wilful
disobedience of the order/direction passed by this Court.
17. Reverting to the first violation of not filing undertaking
within two weeks, as directed, that per se cannot be the basis to
initiate contempt action against the respondent. Indeed, the
undertaking was required to be filed “if” the respondent wanted
to avail of the time granted by this Court in terms of the order
dated 22.2.2019. In this case, admittedly, the respondent
vacated the suit property before the time specified in the order of
which contempt has been alleged. Hence, nonfiling of
undertaking does not take the matter any further nor do we find
any reason to precipitate the matter on that count alone.
18. We now turn to the grievance about nonpayment of
outstanding dues in terms of the direction in the order dated
22.2.2019. It is not in dispute that in the application filed by the
21
respondent before the High Court, specific grievance was made
that it was suffering huge losses on two counts, namely, on
account of petitioner continuing to use the trademark “SPLASH”
even after 31.10.2018 unabated and second, on account of
liability of the respondent to pay enhanced rent in terms of the
Settlement Agreement dated 28.5.2015 of Rs.9,25,000/ (Rupees
nine lakhs twentyfive thousand only) per month. The
respondent requested the High Court to pass an equitable order
in implementing the Settlement Agreement dated 28.5.2015. The
fact remains that neither the learned single Judge nor the
Division Bench clearly ruled on the factum of outstanding
dues/arrears payable by the respondent. On the other hand, the
Division Bench in its order dated 28.1.2019, left the parties to
pursue execution of the decree or any other relief, as may be
permissible in law, whilst rejecting the prayer of the respondent
to grant time to vacate the suit premises beyond the time
prescribed in the order dated 12.7.2018. The relevant
observation has been extracted in paragraph 10 above, which
reinforces this position. Similarly, while disposing of the
grievance of the respondent made in Contempt Petition No.
225/2017, the High Court noted that the respondent was free to
22
pursue the same in execution proceedings. And again, the
learned single Judge of the High Court vide order dated
29.5.2019, left the parties to pursue their claim on relevant
aspects before the execution Court by filing respective statements
of account for determination of liability of the respondent, if any,
as can be discerned from the observations in the said order
reproduced in paragraph 13 above.
19. Pertinently, the special leave petitions were filed by the
respondent against the order dated 28.1.2019, which as
aforesaid, did not deal with the question regarding the monthly
rent payable by the respondent but explicitly left the parties to
pursue the same before the executing Court. The
plaintiff/petitioner having acquiesced of that observation of the
High Court, cannot be allowed to contend to the contrary. This
Court in Jhareswar Prasad Paul & Anr. vs. Tarak Nath
Ganguly & Ors.7
, in paragraph 11, opined thus:
“11. … The court exercising contempt jurisdiction is not
entitled to enter into questions which have not been dealt
with and decided in the judgment or order, violation of
which is alleged by the applicant. The court has to
consider the direction issued in the judgment or order
and not to consider the question as to what the judgment
or order should have contained. At the cost of repetition,
7 (2002) 5 SCC 352
23
be it stated here that the court exercising contempt
jurisdiction is primarily concerned with the question of
contumacious conduct of the party, which is alleged to
have committed deliberate default in complying with the
directions in the judgment or order. If the judgment or
order does not contain any specific direction regarding a
matter or if there is any ambiguity in the directions
issued therein then it will be better to direct the parties to
approach the court which disposed of the matter for
clarification of the order instead of the court exercising
contempt jurisdiction taking upon itself the power to
decide the original proceeding in a manner not dealt with
by the court passing the judgment or order. If this
limitation is borne in mind then criticisms which are
sometimes levelled against the courts exercising contempt
of court jurisdiction “that it has exceeded its powers in
granting substantive relief and issuing a direction
regarding the same without proper adjudication of the
dispute” in its entirety can be avoided. This will also avoid
multiplicity of proceedings because the party which is
prejudicially affected by the judgment or order passed in
the contempt proceeding and granting relief and issuing
fresh directions is likely to challenge that order and that
may give rise to another round of litigation arising from a
proceeding which is intended to maintain the majesty and
image of courts.”
20. Thus understood, we find force in the explanation offered by
the respondent that as per its bona fide understanding, there was
no outstanding dues payable to the petitioner. Moreover, as
observed by the High Court, these aspects could be answered by
the executing Court if the parties pursue their claim(s) before it
in that regard. Suffice it to observe that it is not a case of
intentional violation or wilful disobedience of the order passed by
this Court to initiate contempt action against the respondent.
Instead, we hold that it would be open to the parties to pursue
24
their claim(s) in execution proceedings or any other proceedings,
as may be permissible in law in respect of the issue(s) under
consideration. In such proceedings, all aspects can be
considered by the concerned forum/Court on merits in
accordance with law. We say no more.
21. Reverting to the allegation about damage caused to the suit
property by the respondent at the time of vacating the same, in
our opinion, the respondent has made out a formidable case that
it did not cause any damage, much less permanent damage to
the structure in the suit property. Whereas, the petitioner was
relying on photographs concerning the debris on the site left
behind at the time of vacating the suit property. The debris
cannot cause damage and it is certainly not a case of defacement
of the suit property. That position is reinforced from the fact that
the water park in the suit premises was started and became fully
functional within 23 months. Viewed thus, it is rightly urged
that it can be safely assumed that no damage was caused by the
respondent to the structure in question. Minor repairs required
to be carried out by the petitioner for making the water park
functional cannot be painted as intentional disobedience of the
25
order of this Court. In any case, that being a complex question of
fact, need not be adjudicated in the contempt proceedings. We
leave it open to the petitioner to pursue even that claim in
execution proceedings or such other proceedings as may be
permissible in law. We may not be understood to have expressed
any final opinion in respect of condition of the suit premises,
whilst handing over possession to the petitioner. We hold that
even this issue under consideration does not warrant initiation of
contempt action against the respondent.
22. Taking overall view of the matter, therefore, we decline to
precipitate the matter any further against the respondent.
Instead, we deem it appropriate to discharge the show cause
notice(s) and relegate the parties to such remedies as may be
permissible in law to espouse their cause(s)/claim(s) including
mentioned in the present contempt petition. All questions in that
regard are left open to be decided by the concerned forum/Court
appropriately as per law.
23. The next aspect is about the prayer of the respondent to
refund the amount of Rs.1,50,00,000/ (Rupees one crore fifty
lakhs only) alongwith interest accrued thereon. In I.A. No.
26
152785/2019 filed by the respondent, it is prayed that the
deposit amount be reduced to Rs.87,37,677/ (Rupees eightyseven lakhs thirtyseven thousand six hundred seventyseven
only), in terms of the calculations given therein. Considering the
fact that we have relegated the parties before the executing Court
to pursue their claim(s) in respect of and arising from the
agreement/settlement, in particular the Settlement Agreement
dated 28.5.2015 and order of the High Court dated 12.7.2018
recording the revised agreement, we accede to the request of the
respondent to retain sum of Rs.87,37,677/ (Rupees eightyseven
lakhs thirtyseven thousand six hundred seventyseven only) and
interest accrued thereon out of the total amount deposited in this
Court in the sum of Rs.1,50,00,000/ (Rupees one crore fifty
lakhs only) alongwith interest accrued thereon.
24. Accordingly, the amount of Rs.87,37,677/ (Rupees eightyseven lakhs thirtyseven thousand six hundred seventyseven
only) and interest accrued thereon be transferred to the executing
Court, who in turn, after considering the rival claim(s), may pass
appropriate orders in that regard in accordance with law. The
respondent, however, is permitted to withdraw the excess
27
amount [in excess of Rs.87,37,677/ (Rupees eightyseven lakhs
thirtyseven thousand six hundred seventyseven only) and
interest accrued thereon], subject to filing an undertaking in this
Court to the effect that if the executing Court so directs, the sum
so withdrawn or portion thereof would be deposited in the
executing Court as and when required and not later than four
weeks from the date of such direction. In addition, the
respondent shall furnish a solvent security commensurate with
the amount to be withdrawn by the respondent, but not less than
Rs.75,00,000/ (Rupees seventyfive lakhs only) as precondition.
The solvent security should be to the satisfaction of the executing
Court. This arrangement would meet the ends of justice and also
secure the interests of both sides.
25. Accordingly, the contempt petition and I.A. No.
152785/2019 are disposed of in the above terms. The show
cause notice(s) issued to the respondent stand(s) discharged.
Pending interlocutory applications, if any, shall stand disposed
of.
..................................J.
28
(A.M. Khanwilkar)
..................................J.
(Dinesh Maheshwari)
New Delhi;
May 6, 2020.
