R. K. ARORA GENERAL MANAGER & ANR. versus M/S ACE ENTERPRISES on 7 February 2018

[2018] 1 S.C.R. 491

R. K. ARORA GENERAL MANAGER & ANR.

v.

M/S ACE ENTERPRISES

(Civil Appeal No. 1820 of 2018)

FEBRUARY 07, 2018[KURIAN JOSEPH ANDMOHAN M. SHANTANAGOUDAR, JJ.]

Contempt of Court – Contempt petition – Maintainability of –On facts, allegation of violation of injunction order – Applicationby respondent for initiating contempt – Dismissal of the applicationby the trial court holding that there was no contempt – High Courtheld that Sub-Judge assumed a jurisdiction, not vested in it underlaw – On appeal, held: Though an application for contempt wasfiled before the trial court, it was, in fact, a petition for taking actionu/Or. XXXIX, r.2A of the 1977 Act – It is not a case for initiatingcontempt on the face of it – These are two different jurisdictions,which has been clarified by the High Court – Application filed bythe respondent for initiating contempt to be treated as an applicationfor taking action u/Or. XXXIX, r. 2A of the 1977 Act – Jammu andKashmir Code of Civil Procedure Act, 1977 – Or. XXXIX, r. 2A

Disposing of the appeal, the Court

HELD: 1.1 Though an application for contempt was filedbefore the trial court, it was, in fact, a petition for taking actionunder Order XXXIX Rule 2A of Jammu and Kashmir Code ofCivil Procedure Act, 1977. It is not a case for initiating contempton the face of it. These are two different jurisdictions. That is allthat has been clarified by the High Court. It is directed that theapplication filed by the respondent for initiating contempt wouldbe treated as an application for taking action under Order XXXIXRule 2A of the 1977 Act. The trial court would first see whetherthere is any disobedience of the order of injunction and in casethere is a finding of disobedience, the rest u/Or. XXXIX r. 2Aalone shall follow.[Para 7][495-F-H; 496-A]

1.2 The submission made by the appellants regardingseparate contracts and pending application under Section 8 of

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Athe Jammu and Kashmir Arbitration Act etc. are open to theappellants to canvas before the trial court at the appropriate stage.Being a matter pending since long, the trial court is directed todecide the application expeditiously. [Para 8][496-B-C]

CIVIL APPELLATE JURISDICTION: Civil Appeal No.1820 ofB2018.

From the Judgment and Order dated 16.12.2015 of the High Courtof Jammu and Kashmir at Srinagar in OWP No.377/2014.

Tushar Mehta, ASG, Rahul Narayan, Ms.Mala Narayan, SushantGoel, Advs. for the Appellant.C

Ms.Aishwarya Bhati, Adv. for the Respondent.

Respondent-in-person.

The Judgment of the Court was delivered by KURIAN, J. 1. Leave granted.D

2. On 22.06.2011, the Court of Small Causes, Srinagar, passed anorder of injunction in the following terms :- “The application in hand will not be allowed, there are chancesthat the suit of the applicant will become infructuous. So inEthe interests of justice the application in hand is allowed andthe proceedings before the arbitration with regard to mattertitled M/s ACE Enterprises Vs. Union of India and ors is stayedtill the objections from the other side is filed. Put up this fileon 26-07-11.”

3. Alleging violation of the above order, an application was filedfor initiating contempt proceedings. The prayer reads as follows :- F

“It is therefore prayed that the contempt proceedings mayplease be intiated and the contemnors be punished accordingto law and the order of revival passed by the Arbitrator mayplease be stayed.”

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4. The Court of Small Causes treated the application filed by therespondent as an application for contempt without mentioning anyprovision. It is also significant to note that even the applicant had notmentioned any provision for initiating contempt. The Court passed anorder dated 06.11.2013 by entering a finding that there is no contemptH

and that there is no violation of the order dated 22.06.2011. The operativeportion of the order, to the extent relevant, reads as follows :-

“The proceedings of the arbitration continued by theArbitrator, is based on the understanding of the Arbitratorand the learned counsel for the defendants as to the correctimport of the order dated 22-06-2011. The said understandingarrived at, though is borne out from the facts andcircumstances pertaining to the controversy, cannot beconstrued as willful and deliberate attempt on the part ofcounsel for parties involved, to flout the order of the courtdated 22-06-2011. The arbitration proceedings is anindependent and statutory remedy available under theprovisions of Jammu and Kashmir Arbitration Act, 2002. Theprovisions of said Act have overriding effect over the generallaws. Exercise of statutory remedy and proceedings underthe special act, cannot be scuttled in ordinary course of events.Only if the statute provides for such exercise of power by thecivil court, the civil court can enter into the domain of suchjurisdiction, that too in limited sphere.

The exercise of jurisdiction by the Arbitrator, available underthe provisions of Jammu and Kashmir Arbitration Act, adviserendered by the learned counsel representing the defendantin the court or before the Arbitrator, and proceedings initiatedby any party in exercise of statutory right, cannot beconstrued as flouting of the order of the civil court or willfulor deliberate violation of the order, unless the violation isclear, emphatic and apparently willful and deliberate, aimedat defeating the order passed by the court. From the natureof the order passed by the court of Sub-Judge/Judge SmallCauses Court, Srinagar, and the facts and circumstancespertaining to the case, I find no flouting or violation of theorder dated 22.06.2011, by the persons named in the contemptapplication. No justifiable and sufficient ground exists forproceedings against the said named persons for contempt ofcourt. Accordingly, the contempt proceedings are droppedagainst the said named persons. Application is dismissed.Record of application be made part of suit file on completion.”

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SUPREME COURT REPORTS

5. That order was challenged by the respondent before the HighCourt. The High Court has considered the matter in extenso. Atparagraphs 11, 13 and 17, the High Court has entered its findings asfollows :-

“11. Admittedly, the impugned order has been passed by thelearned Sub-Judge in a contempt petition filed by thepetitioner. The Jammu and Kashmir Contempt of Courts Act,1997 (Act No. XXV of 1997) (for short, Contempt of CourtsAct) was enacted to define and limit the power of certain courtsin punishing contempt of courts and to regulate theirprocedure in relation thereto. There is no provision in thisAct to empower a subordinate court to punish contempt ofitself. However, Section 10 of the Contempt of Courts Actvests with the High Court the power to punish contempts ofsubordinate courts. It says that the High Court shall haveand exercise the same jurisdiction, powers and authority inaccordance with the same procedure and practice, in respectof contempts of courts subordinate to it as it has and exercisesin respect of contempts of itself; provided that the High Courtshall not take congnizance of a contempt alleged to have beencommitted in respect of a court subordinate to it where suchcontempt is an offence punishable under the Ranbir PenalCode, 1989. Thus, the law provides that if there is contemptof any court subordinate to the High Court, it is the HighCourt alone which has the power to punish for such contempt.Essentially, therefore, a court subordinate to the High Courtcannot take cognizance and initiate proceedings to punishfor contempt of itself, the question of conducting trial of anapplication for contempt and taking a decision thereon is farremote.

13. Since the subordinate courts do not have the jurisdictionto take cognizance of contempt of itself, or initiate proceedingson a contempt petition or try it, it cannot proceed to decide itfinally. In the instant case, the learned Sub-Judge has notonly taken cognizance but has proceeded to initiate, andconducted, proceedings thereon and finally decided it.Thereby the learned Sub-Judge has assumed a jurisdiction,not vested in it under law.

R. K. ARORA GENERAL MANAGER v. M/S ACEENTERPRISES [KURIAN, J.]

17. During the course of arguments of this case, the learnedcounsel for the petitioner brought it to the notice of the Courtthat the Arbitrator appointed in violation of the ad-interimorders of the trial court has ultimately concluded theproceedings and passed the final award against the interestsof the petitioner. Pending decision in the contempt petition interms of applicable laws, there shall be stay of final award.It hardly needs a mention here that in the event it is foundthat there has been a violation of the interim order of the trialcourt, the appointment of the Arbitrator and the proceedingsconducted by him together with any award passed by himwould be rendered non-est in the eyes of law.”

6. When the matter came up before this Court, the following orderwas passed on 18.04.2016 :- “Though we do not have any quarrel with the settled positionof law, as held by the High Court that the trial court does nothave any jurisdiction to initiate proceedings under the Jammuand Kashmir Contempt of Courts Act, 1997, we find that theHigh Court has omitted to take note of the fact that there aretwo separate proceedings under different contracts.

In that view of the matter, issue notice.

In the meantime, there shall be stay of further proceedingspursuant to the impugned order.”

7. Having heard Mr. Tushar Mehta, learned Additional SolicitorGeneral, and Mr. Abdul Rehman, representing the respondent onpermission, we do not feel it necessary to refer to any other factualdetails. Though an application for contempt was filed before the trialcourt, it was, in fact, a petition for taking action under Order XXXIXRule 2A of Jammu and Kashmir Code of Civil Procedure Act, 1977. Itis not a case for initiating contempt on the face of it. These are twodifferent jurisdictions. That is all that has been clarified by the HighCourt. The appeal is, hence, disposed of with the following directions :-

i) The application filed by the respondent for initiating contemptshall be treated as an application for taking action under Order XXXIXRule 2A of the Jammu and Kashmir Code of Civil Procedure. It shall berenumbered accordingly.

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Aii) The trial court shall first see whether there is any disobedienceof the order of injunction and in case the court enters a finding ofdisobedience, the rest under Order XXXIX Rule 2A alone shall follow.

8. The submission made by the appellants regarding separatecontracts and pending application under Section 8 of the Jammu andBKashmir Arbitration Act etc. are open to the appellants to canvas beforethe trial court at the appropriate stage. It will also be open to therespondent to take all available contentions before the trial court. Beinga matter pending since long, we direct the trial court to take a decisionaccordingly on the application expeditiously and preferably within a periodof three months from the date of receipt of a copy of this Judgment.C

No costs.

Nidhi Jain

Appeal disposed of.

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