Distinction between breach of undertaking and breach of terms of compromise decree

 It is manifest that any person appearing before the Court can give an undertaking in two way : (1) that he files an application or an affidavit clearly setting out the undertaking given by him to Court, or (2) by a clear and express oral undertaking given by the contemner and incorporated by the court in its order. If any of these conditions are satisfied then a wilful breach of the undertaking would doubtless amount to an offence under the Act. Although the High Court observed that the consent order extracted above had been passed on the basis of various undertakings given by the contemner, we are unable to find any material on record which contains such undertakings. It seems to us that the High Court has construed the consent order itself and the directions contained therein as an implied undertaking given by the appellant. Here the High Court has undoubtedly committed an error of law. There is a clear cut distinction between a compromise arrived at between the parties or a consent order passed by the court at the instance of the parties and a clear and categorical undertaking given by any of the parties. In the former, if there is violation of the compromise or the order no question of contempt of court arises, but the party has a right to enforce the order or the compromise by either executing the order or getting an injunction from the court.

In the instant case, however, as indicated above, there is no application nor any affidavit nor any written undertaking given by the appellant that he would co-operate with the receiver or that he would hand over possession of the Cinema to the receiver. Apart from this, even the consent order does not incorporate expressly or clearly that any such undertaking had been given? either by the appellant or by his lawyer before the Court that he would hand over possession of the property to the receiver. In the absence of any express undertaking given by the appellant or any undertaking: incorporated in the order impugned, it will be difficult to hold that the-appellant wilfully disobeyed or committed breach of such an undertaking. What the High Court appears to have done is that it took the consent order passed which was agreed to by the parties and by which, a receiver was appointed, to include an undertaking given by the contemner to carry out the directions contained in the order. With due respects, we are unable to agree with this view taken by the High Court. A few examples would show how unsustainable in law the view taken by the High Court is. Take the instance of a suit where the defendant agrees that a decree for Rs. 10,000 may be passed against him and the court accordingly passes the decree. The defendant does not pay the decree. Can it be said in these circumstances that merely because the defendant has failed to pay the decretal amount he is guilty of contempt of court? The answer must necessarily be in the negative. Take another instance where a compromise is arrived at between the parties and a particular property having been allotted to A, he has to be put in possession thereof by B. B does not give possession of this property to A. Can it be said that because the compromise decree has not been implemented by B, he commits the offence of contempt of court? Here also the answer must be in the negative and the remedy of B would be not to pray for drawing up proceedings for contempt of court against B but to approach the executing court for directing a warrant of delivery of possession under the provisions of the CPC.

Indeed, if we were to hold that non compliance of a compromise decree or consent order amount to contempt of court, the provisions of the CPC relating to execution of decrees may not be resorted to at all. In fact, the reason why a breach of clear undertaking given to the court amounts to contempt of court is that the contemner by making a false representation to the Court obtains a benefit for himself and if he fails to honour the undertaking, he plays a serious fraud on the court itself and thereby obstructs the course of justice and brings into disrepute the judicial institution. The same cannot, however, be said of a consent order or a compromise decree where the fraud, if any, is practised by the person concerned not on the court but on one of the parties. Thus, the offence committed by the person concerned is qua the party not qua the court, and, therefore, the very foundation for proceeding for contempt of court is completely absent in such cases. In these circumstances, we are satisfied that unless there is an express undertaking given in writing before the court by the contemner or incorporated by the court in its order, there can be no question of wilful disobedience of such an undertaking. 

IN THE SUPREME COURT OF INDIA

Criminal Appeal No. 501 of 1978

Decided On: 12.04.1979

Babu Ram Gupta  Vs. Sudhir Bhasin and Ors.

Hon'ble Judges/Coram:

A.D. Koshal and S. Murtaza Fazal Ali, JJ.

Citation: AIR 1979 SC 1528

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How to ascertain limitation if there is breach of undertaking by landlord to give accommodation to tenant?

 So far as question of limitation is concerned, according to Mr. Rege, the undertaking or statement of the Advocate for the landlord was recorded by Justice Patankar on 20.2.1996 and the contempt petition is filed by the tenant on 2.8.1999. Therefore, according to Mr. Rege, even if it is accepted that the tenant was informed by Municipal Council about completion of building, the contempt petition is barred by limitation under Section 20. This argument has to be rejected because in the undertaking given by the landlord to Justice Patankar no time limit is fixed by him for giving accommodation to the tenant in newly constructed building. Therefore, till the premises are given to the tenant in the newly constructed building, there is continuing contempt on the part of the landlord. Possession was not given to the tenant in the newly constructed building till filing of the complaint, and therefore, period of limitation would not start as alleged by Mr. Rege and at any rate the period of limitation would be running against the landlord on every day including first of August, 1999 i.e. the day preceding filing of the contempt petition. Thereafter the contempt petition came for admission before Justice H. L. Gokhale on 19.8.1999 and on 11.2.2000 I passed the impugned order putting the tenant in possession. That order dated 11.2.2000 is passed within one year of filing of the contempt petition.

IN THE HIGH COURT OF BOMBAY

Contempt Petition No. 339 of 1999 with Civil Application No. 1731 of 2000

Decided On: 12.10.2000

Shriniwas R. Shelar  Vs. Girish Kanhaiyalal Oswal

Hon'ble Judges/Coram:

D.G. Deshpande

Citation: 2001(2) BOM CR 12

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What is distinction between O 39 R 2A of CPC and O 21 R 32 of CPC?

 In KANWAR SINGH SAINI v. HIGH COURT OF

DELHI  the Supreme Court discussed categorically about the distinction between Order XXXIX Rule 2A and Order XXI Rule 32 CPC. It is held: "An application under Order XXXIX Rule 2A lies only where disobedience/breach of injunction granted or order complained of was one that is granted by the Court under Order XXXIX Rules 1 and 2 CPC, which is naturally to enure during the pendency of the suit. However, once a suit is decreed, the interim order, if any, merges into the final order and if the case is ultimately dismissed, the interim order stands nullified automatically. On the other hand in case there is a grievance of non-compliance with the terms of the decree passed in the civil suit, the remedy available to the aggrieved person is to approach the execution Court under Order XXI Rule 32 CPC which provides for elaborate proceedings in which the parties can adduce their evidence and can examine and cross-examine the witnesses as opposed to the proceedings in contempt which are summary in nature. An application under Order XXXIX Rule 2-A CPC is not maintainable once the suit is decreed. Law does not permit to skip the remedies available under order XXI Rule 32 CPC and resort to the contempt proceedings for the reason that the Court has to exercise its discretion under the Contempt of Courts Act, 1971 when an effective and alternative remedy is not available to the person concerned. Thus, when the matter relates to the infringement of a decree or decretal order embodies rights, as between the parties, it is not expedient to invoke and exercise contempt jurisdiction, in essence, as a mode of executing the decree or merely because other remedies may take time or are more circumlocutory in character. Thus, the violation of permanent injunction can be set right in executing the proceedings and not the contempt proceedings. There is a complete fallacy in the argument that the provisions of Order XXXIX Rule 2A CPC would also include the case of violation of breach of permanent injunction granted at the time of passing of the decree. It is also observed that in an undertaking given to the Court during the pendency of the suit on the basis of which the suit itself has been disposed of becomes a part of the decree and breach of such undertaking is to be dealt with in execution proceedings under Order XXI Rule 32 CPC and no by way of contempt proceedings."

Supreme Court of India

Kanwar Singh Saini vs High Court Of Delhi on 23 September, 2011

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Whether breach of undertaking given in consent decree amounts to contempt of court?

Mr. Nedumpara, learned Counsel for the Respondents, argues that the order passed by this court on 27 September 2012 is a consent order. Learned Counsel submits that a consent order merely records an agreement between the parties. Learned Counsel submits that merely because in its body, the word 'undertaking' is included, the order does not undergo any change; it is still a consent order passed on a compromise between the parties. Learned Counsel submits that no contempt can be alleged of any such order; such order can only be executed by the court. This controversy has finally been laid to rest by the Supreme Court in case of Rama Narang Vs. Ramesh Narang MANU/SC/1960/2006 : (2006) 11 Supreme Court Cases 114. The definition of civil contempt under Section 2(b) of the Contempt of Courts Act, 1971, as noted by the court in that case, provides for two categories of cases, first, any willful disobedience to a process of court, and second, any breach of an undertaking given to a court. The Supreme Court held that the word 'any' indicated the wide nature of the power. No distinction could be statutorily drawn in this behalf between an order passed after adjudication and an order passed by consent. Any wilful violation of any order or decree would be tantamount to contempt. A compromise decree or order is as much a decree or order as a decree or order passed on adjudication, and not merely an agreement between the parties; in passing a decree by consent, the court adds its mandate to the consent so that the consent decree may be said to be composed of both command and contract. A consent decree, in other words, is a contract with the imprimatur of the court added to it. By passing a decree in terms of consent terms, the court authorises and approves the course of action consented to. Just as an order or decree passed on adjudication is executable under the Code of Civil Procedure, even a consent order or decree is of course executable, but merely because of that, it does not take away the jurisdiction of the court to deal with its violation or breach under the Contempt of Courts Act, provided the court is satisfied that the violation or breach complained of is such as would warrant a punishment under Section 13 of that Act. The present consent order is no different. Besides, the breach alleged in the present case is not merely of the consent order, but of an express undertaking given to the court and which was recorded and accepted by it in the consent order. A willful breach of an undertaking given to a court clearly and unequivocally attracts its contempt jurisdiction.

IN THE HIGH COURT OF BOMBAY

Contempt Petition No. 29 of 2016 in Suit No. 2503 of 2012

Decided On: 31.10.2018

 Swaranjeet Singh  Vs.  Melco Technologies India Pvt. Ltd. and Ors.

Hon'ble Judges/Coram:

S.C. Gupte, J.

Citation: 2019(2) MHLJ 277

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Whether court can remove agent of court receiver While exercising contempt jurisdiction?

Disobedience of an undertaking may in the like manner be enforced through process other than committal to prison as for example where the breach of undertaking is to deliver possession of property in a landlord-tenant dispute. Apart from punishing the contemner, the court to maintain the majesty of law may direct the police force to be utilised for recovery of possession and burden the contemner with costs, exemplary or otherwise."

27. It is true, as pointed out by Mr. Kini, the learned counsel for the contemnor that the Supreme Court has observed, after incorporation of types of punishments in case of an established contempt that have been specified in the Contempt of Courts Act, 1971, that no new type of punishment can be created or assumed. However, it cannot be said that making an order of injunction or a change in the agentship of a receiver, would be an order which imposes a new punishment. That order is an order to punish a wrong doing and to prevent the possibility of a further wrong doing and it may not be considered as the creation of a new type of punishment for contempt of court.

28. Now in the present case, the contemner breached the injunction order after he was appointed as an agent of the court receiver by order dated 13th & 14th October, 2003. He actually took charge as agent of the court receiver on 20th April, 2005. Indeed it would not have been possible for him to exploit the situation and part with possession of the premises for a commercial gain but for the fact that he was in a possession as an agent of the court receiver. In fact no party would have agreed to pay for using the said premises unless the contemnor had some semblance of authority and possession. In the circumstances, it is clear that the contemner can not be left to scrupulously avoid the judicial process and it is difficult to rely on his future conduct. Even accepting his undertaking may not serve the purpose since he appears to have inducted those persons in breach of the injunction order. In the circumstances of the case, I am of view that the contemner forfeited the trust with which he was appointed as agent of the receiver and ought to be deprived of his status as an agent.

High Court of Judicature at Bombay

V.D. Kavatkar, Registrar, Small Causes Court, Bombay vs. Fatima Huseni Radhapurwala & Others

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Whether person can be held guilty for contempt of court if he fails to honour undertaking given to court?

Upon perusal of the above mentioned definition of “civil contempt”, it is very clear that so as to hold somebody guilty of contempt of court, the concerned person must have willfully disobeyed any judgment, decree, direction, order, writ or any other process of a court or should have willfully committed breach of an undertaking given to a court.

12. In the instant case, from the facts stated hereinabove, it is crystal clear that the appellant had no intention of committing breach of the undertaking given to the court. It was physically impossible for the appellant to produce the documents as the documents had already been given by him to his mother, on whose behalf he had collected the same from the court and the said documents had been subsequently destroyed because of a natural calamity. In our opinion, after knowing the above stated facts, the court should not have directed the appellant to produce the documents because it was impossible for the appellant to produce the documents. It would not be fair on the part of a court to give a direction to do something which is impossible and if a person has been asked to do something which is impossible and if he fails to do so, he cannot be held guilty of contempt.

13. It is deplorable that the appellant has been held guilty and has also undergone the sentence imposed by the High Court. We hold that the appellant was not guilty of committing contempt of court as there was no willful breach of the undertaking given to the court.

NON-REPORTABLE

Supreme Court of India

Gyani Chand vs State Of A.P on 20 September, 2016

Author: A R Dave

Bench: Anil R. Dave, Uday Umesh Lalit, L. Nageswara Rao

Citation:(2016) 15 SCC 164

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Whether breach of undertaking given in consent decree amounts to contempt of court?

The depth of the solemn aspect of an undertaking given to Court has been considered since the case of Bajranglal Gangadhar Khemka and Anr. v. Kapurchand Ltd. MANU/MH/0014/1950 : AIR 1950 Bom 336, in the Division Bench judgment of Justice Chagla C.J and Gajendragadkar, J., as they then were. The giving of the undertaking in all orders and decrees of Court has been considered to mean an undertaking given to the Court. It is observed that the expression " a party undertakes" has borne the meaning that the undertaking has been to the Court.

That was a suit of specific performance of a contract. The Plaintiffs had an option to purchase the leased property which was sought to be sold to another without giving them the option. The parties compromised the action and executed Consent Terms. The Defendants were to execute a lease in favour of the Plaintiffs. The Defendants undertook to have the 3rd party joined as a confirming party to the lease and failed to execute the lease as agreed upon. The Plaintiffs called upon the Defendants to join the 3rd party as such and upon failure of the Defendants sued on contempt. The learned single Judge Bhagwati, J., as he then was, held that there was a willful default on the part of the Defendants, and ordered them to carry out the undertaking within one monthfrom the date of the order, failing which a warrant for committal of the Defendants to prison would be issued. It was contended on behalf of the Defendants that the undertaking was a mere solemn promise given to the Plaintiffs and that there was no undertaking to the Court such as to constitute contempt. Negativing that contention it was held by the Division Bench that there was no reason why even in a Consent Decree a party may not give an undertaking to the Court. It was observed that when the Court passed a decree it puts its imprimatur upon those terms and makes the terms a rule of the Court. It was, therefore, held that there was nothing contrary to any provision of law whereby an undertaking cannot be given by a party to the Court in a Consent Decree, which undertaking can be enforced in proper committal proceedings. It was observed that when an undertaking is given by a party to the Court, it becomes an order of the court and a particular mode is prescribed for enforcement of that particular order. That mode is the proceedings for contempt for enforcement of the order. The fact of giving of an undertaking to Court can be seen by looking at the Consent Decree itself. The Court considered the scheme of the agreement containing the undertaking and confirmed the order of the learned single Judge in directing compliance of the undertaking and dismissed the Appeal upholding the order of committal in case of its failure.

29. In a later short and concise judgment of the Supreme Court in the case of Chhaganbhai Norsinbhai v. Soni Chandubhai Gordhanbhai MANU/SC/0078/1976 : (1976) 2 S.C.C. 951, again held that willful breach of an undertaking given to the Court amounted to its contempt.

In that case the Defendant undertook to the Court to handover the keys of the premises and vacate the premises within a specified time. He further undertook to pay manse profits and not part with its possession. Upon his failure, the Court observed that the order passed upon the undertakings would not be a mere Consent Order. It would be a case of express undertakings to the Court incorporated in that order. The contention on the part of the Contemnor that there was no breach of an undertaking and that it was a mere agreement between the parties to which an order of the Court has been appended was rebuked and rejected. The Supreme Court agreed with the High Court that it was a perverse and deliberate flouting of undertakings given by a litigant who, evidently, had no intention to abide by them. It was observed that the undertakings seemed to have been taken very lightly as mere cloaks for obtaining an order which would not have been passed, but for the undertakings. Hence the order of the High Court to convict the contemnor and sentence him to Civil jail was upheld observing from Halsbury's Laws of England - Fourth Edn. Vol. 9, page 44 (para 75) deals with the aspect of giving undertakings thus:

An undertaking given to the Court by a person or corporation in pending proceedings, on the faith of which the court sanctions a particular course of action or inaction, has the same force as an injunction made by the Court and a breach of the undertaking is misconduct amounting to contempt.

This has been cited with approval in the case of Chhaganbhai Norsinbhai v. Soni Chandubhai Gordhanbhai MANU/SC/0078/1976 : (1976) 2 S.C.C. 951.

30. Since any undertaking in any Consent Order is to be read as an undertaking given to the Court (Per Chagla C.J.) in the case of Bajranglal (Supra) breach of such undertaking was held to enable an application for contempt to be made.

31. The case of Bajranglal (supra) has been followed with approval by the Supreme Court in the case of Bank of Baroda v. Sadruddin Hasan Daya and Anr. MANU/SC/1031/2003 : (2004) 1 SCC 360, holding that:

The violation or breach of the undertaking which became part of the decree of the court certainly amounts to contempt of court, irrespective of the fact that it is open to the decree holder to execute the decree. Contempt is a matter between the court and the alleged contemnor and is not affected in any manner by the rights or obligations of the parties to the litigation inter se.

The underlying concept was that it was not only a case of an agreement between the parties. The Court refraining from passing its own order shows its profundity so as to clothe it with the same power as would be of an order of the Court itself.

Equivalent Citation : 2011 (7)ALLMR 212

IN THE HIGH COURT OF BOMBAY

Writ Petition No. 5394 of 2010 and Civil Application No. 2974 of 2010

Decided On: 11.02.2011

 Sanjay Angad Chaddah Vs.  Deepa Sanjay Chaddah

Hon'ble Judges/Coram:

R.S. Dalvi, J.

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Whether party becomes liable for contempt of court if he commits breach of undertaking given to court?

As pointed out by Oswald on Contempt of Court, an undertaking entered into or given to the Court by a party or his counsel or solicitor is equivalent to and has the effect of an order of the Court. So far as any infringement thereof may be made the subject of an application to the Court to punish for its breach. Therefore, when an undertaking is given by a party to the Court, it becomes an order of the Court and a particular mode is prescribed for enforcing that particular order. That mode is that proceedings for contempt can be taken out for the enforcement of that order. Therefore, if we find in this case that an undertaking was given by the party to the Court resulting in that undertaking becoming an order of the Court, then it would be open to the party aggrieved by the non-compliance with the order to come to Court and ask for committal of the party in default.

Bombay High Court

Bajranglal Gangadhar Khemka And ... vs Kapurchand Ltd. on 9 February, 1950

Equivalent citations: AIR 1950 Bom 336, (1950) 52 BOMLR 363, ILR 1951 Bom 125

Bench: Chagla, Gajendragadkar

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What action court can take when there is breach of undertaking on the basis of which suit is disposed off?

 In KANWAR SINGH SAINI v. HIGH COURT OF

DELHI  the Supreme Court discussed categorically about the distinction between Order XXXIX Rule 2A and Order XXI Rule 32 CPC. It is held: "An application under Order XXXIX Rule 2A lies only where disobedience/breach of injunction granted or order complained of was one that is granted by the Court under Order XXXIX Rules 1 and 2 CPC, which is naturally to enure during the pendency of the suit. However, once a suit is decreed, the interim order, if any, merges into the final order and if the case is ultimately dismissed, the interim order stands nullified automatically. On the other hand in case there is a grievance of non-compliance with the terms of the decree passed in the civil suit, the remedy available to the aggrieved person is to approach the execution Court under Order XXI Rule 32 CPC which provides for elaborate proceedings in which the parties can adduce their evidence and can examine and cross-examine the witnesses as opposed to the proceedings in contempt which are summary in nature. An application under Order XXXIX Rule 2-A CPC is not maintainable once the suit is decreed. Law does not permit to skip the remedies available under order XXI Rule 32 CPC and resort to the contempt proceedings for the reason that the Court has to exercise its discretion under the Contempt of Courts Act, 1971 when an effective and alternative remedy is not available to the person concerned. Thus, when the matter relates to the infringement of a decree or decretal order embodies rights, as between the parties, it is not expedient to invoke and exercise contempt jurisdiction, in essence, as a mode of executing the decree or merely because other remedies may take time or are more circumlocutory in character. Thus, the violation of permanent injunction can be set right in executing the proceedings and not the contempt proceedings. There is a complete fallacy in the argument that the provisions of Order XXXIX Rule 2A CPC would also include the case of violation of breach of permanent injunction granted at the time of passing of the decree. It is also observed that in an undertaking given to the Court during the pendency of the suit on the basis of which the suit itself has been disposed of becomes a part of the decree and breach of such undertaking is to be dealt with in execution proceedings under Order XXI Rule 32 CPC and no by way of contempt proceedings."

Supreme Court of India

Kanwar Singh Saini vs High Court Of Delhi on 23 September, 2011

Bench: P. Sathasivam, B.S. Chauhan

REPORTABLE

 Citation: 2012(1)ACR1035(SC), 2012(2)ALD58(SC), 2012 (90) ALR 24, 2012(2)ALT(Cri)SC71, 2012BomCR(Cri)522, 2011 (4) KLT(SN) 32, 2012-1-LW689, (2012)2MLJ409(SC), 2012(1)PLJR241, 2011(4)RCR(Civil)402, 2011(4)RCR(Criminal)407, 2012 115 RD291, 2011(10)SCALE725, (2012)4SCC307, 2011(6)UJ4202

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Whether Contempt proceeding can be initiated if consent decree is not complied?

 A compromise, as is well known, is an agreement between the parties with the seal of the Court super-added to it. A consent decree, therefore, is not a decree in its true sense. It would not even attract the principles of res judicata. See Baldevdas Shivlal and Anr. v. Filimistan Distributors (India) P.Ltd. & Prs.7), .

18. There exists a distinction between an undertaking given to a party to the lis and an undertaking given to a Court.

19. An undertaking given to a Court attracts the provisions of the Contempt of Courts Act, whereas an undertaking given to a party to the lis by way of an agreement of settlement or otherwise would not attract the provisions of the said Act.

 Having considered the matter, this Court is of the opinion that in the instant case no proceeding under the Contempt of Courts Act should be initiated. The undertaking given before this Court is qua the party to the lis and not qua the Court and in that view of the matter, no case for initiation of proceedings under the Contempt of Courts Act having been made out. The same view has been taken by two learned Judges of this Court in Urmila Salwan and Ors. v. Kasturi Lal Bhatia, 1999 IV AD (Delhi) 805 and Indian Overseas Bank's case (Supra)

Delhi High Court

Hindustan Motors Ltd. vs Amritpal Singh Nayar And Anr. on 31 May, 2002

Equivalent citations: 100 (2002) DLT 278, 2002 (64) DRJ 394

Bench: S.B. Sinha, C.J.

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