Page 1

1
REPORTABLE
IN THE SUPREME COURT OF INDIA
CRIMINAL ORIGINAL JURISDICTION
WRIT PETITION (CRIMINAL) NO. 57 OF 201
S!"#$%$ R&' S$($#$ ). P*%+%+&,*#
-*#.!.
U,+&, &/ I,0+$ $,0 &%(*#. ). R*.1&,0*,%.
J U D G M E N T
J$20+.( S+,2( 3(*($#4 J.
I. S(&!50 6* "* (*$#+,2 %(+. 7$.*8
W&!50 +% ,&% "* "*%%*#4 /&# $,&%(*# B*,7( %& (*$# %(+. 7$.*8
1. In the present writ petition, the petitioner has made the following
prayers:-
(a) Declare the order dated 4.3.!14 as "oid, n#llity and non-est
in the eyes of law$
(%) Declare that the incarceration and the c#stody of the petitioner
are illegal which sho#ld %e terminated forthwith$
(c) Iss#e s#ch other writ in the nat#re of &a%eas (corp#s) or other
writs, order or direction for release of the petitioner from the
illegal c#stody.
(d) 'ass s#ch f#rther orders as this &on(%le )o#rt may deem fit
and proper in the facts and circ#mstances of the case.*
+ per#sal of the prayers made in the writ petition re"eals, that in s#m and
s#%stance the petitioner has assailed the order dated 4.3.!14 passed %y
#s in )ontempt 'etition ()i"il) nos. 41 and 413 of !1 and )ontempt
'etition ()i"il) no. ,! of !13. -o #nderstand the e.act p#rport of the
prayers made in the writ petition, it is essential to e.tract herein the order
Page 2

dated 4.3.!14, which is s#%/ect matter of challenge thro#gh the present

criminal writ petition:-
1. )ontemnors are personally present in the )o#rt, incl#ding the
fifth respondent, who has %een %ro#ght to the )o#rt %y the
0.'. 'olice, in d#e e.ec#tion of o#r non-%aila%le warrant of
arrest.
. 1e ha"e heard the 2enior )o#nsel on "ario#s occasions and
per#sed the "ario#s doc#ments, affida"its, etc. 1e ha"e
heard the learned co#nsel and contemnors today as well. 1e
are f#lly con"inced that the contemnors ha"e not complied
with o#r directions contained in the /#dgment dated +#g#st 31,
!1, as well as orders dated Decem%er 3, !1 and
4e%r#ary 3, !13 passed in )i"il +ppeal no. 5,43 of !1
and I.+. no. ,6 of !13 %y a three 7#dge 8ench of this )o#rt.
3. 2#fficient opport#nities ha"e %een gi"en to the contemnors to
f#lly comply with those orders and p#rge the contempt
committed %y them %#t, rather than a"ailing of the same, they
ha"e adopted "ario#s dilatory tactics to delay the
implementation of the orders of this )o#rt. 9on-compliance of
the orders passed %y this )o#rt sha:es the "ery fo#ndation of
o#r /#dicial system and #ndermines the r#le of law, which we
are %o#nd to hono#r and protect. -his is essential to maintain
faith and confidence of the people of this co#ntry in the
/#diciary.
4. 1e ha"e fo#nd that the contemnors ha"e maintained an
#nreasona%le stand thro#gho#t the proceedings %efore 2;8I,
2+-, &igh )o#rt and e"en %efore this )o#rt. <eports=analysis
filed %y 2;8I on 15..!14 ma:e detailed reference to the
s#%missions, doc#ments, etc. f#rnished %y the contemnors,
which indicates that they are filing and ma:ing #naccepta%le
statements and affida"its all thro#gh and e"en in the contempt
proceedings. Doc#ments and affida"its prod#ced %y the
contemnors themsel"es wo#ld apparently falsify their ref#nd
theory and cast serio#s do#%ts a%o#t the e.istence of the so-
called in"estors. +ll the fact finding a#thorities ha"e opined
that ma/ority of in"estors do not e.ist. 'reser"ation of mar:et
integrity is e.tremely important for economic growth of this
co#ntry and for national interest. >aintaining in"estors(
confidence re?#ires mar:et integrity and control of mar:et
a%#se. >ar:et a%#se is a serio#s financial crime which
#ndermines the "ery financial str#ct#re of this co#ntry and will
ma:e im%alance in wealth %etween ha"es and ha"e nots.
Page 3
3
3. 1e notice, on this day also, no proposal is forthcoming to
hono#r the /#dgment of this )o#rt dated 31
st
+#g#st, !1 and
the orders passed %y this )o#rt on Decem%er !3, !1 and
4e%r#ary 3, !13 %y the three 7#dge 8ench. In s#ch
circ#mstances, in e.ercise of the powers conferred #nder
+rticles 1@ and 14 of the )onstit#tion of India, we order
detention of all the contemnors, e.cept >rs. Aandana
8harga"a (the fo#rth respondent) and send them to /#dicial
c#stody at Delhi, till the ne.t date of hearing. -his concession
is %eing e.tended towards the fo#rth respondent %eca#se she
is a woman Director, and also, to ena%le the contemnors to %e
in a position to propose an accepta%le sol#tion for e.ec#tion of
o#r orders, %y coordinating with the deten#es. >rs. Aandana
8harga"a, who herself is one of the Directors, is permitted to
%e in to#ch with the rest of the contemnors and s#%mit an
accepta%le proposal arri"ed at d#ring their detention, so that
the )o#rt can pass appropriate orders.
,. Bist on >arch 11, !14 at .!! p.m. +ll the contemnors %e
prod#ced in )o#rt on that date. >rs. Aandana 8harga"a, the
fo#rth respondent, to appear on her own. &owe"er, li%erty is
granted for mentioning the matters for preponement of the
date, if a concrete and accepta%le proposal can %e offered in
the meantime.*
. 1hen this matter came #p for hearing for the first time on 1.3.!14,
>r. <am 7ethmalani, learned 2enior )o#nsel appearing for the petitioner,
so#ght li%erty to ma:e a fran: and candid s#%mission. &e told #s, that it
wo#ld %e em%arrassing for him, to can"ass the s#%missions which he is
%o#nd to raise in the matter %efore #s, i.e., %efore the 8ench as it was
presently str#ct#red. It was also his s#%mission, that hearing this matter
wo#ld also discomfort and em%arrass #s as well. &e therefore s#ggested,
that we sho#ld rec#se o#rsel"es from hearing the case, and re?#ire it to %e
heard %y another composition, not incl#ding either of #s.
3. >r. +r"ind Datar, learned 2enior )o#nsel, appearing for the
respondents, "ocifero#sly implored #s not to withdraw o#rsel"es from
Page 4
4
hearing the case. It was his "igoro#s and emphatic contention, that the
present petition was not maintaina%le, either #nder the pro"isions of the
)onstit#tion of India, or #nder any other law of the land. In"iting the
)o#rt(s attention to the heading of the petition, it was s#%mitted, that it did
not disclose any legal pro"ision, where#nder the present writ petition had
%een filed. &e s#%mitted, that as per its own showing (ascertaina%le from
the title of the petition), the present writ petition had %een filed, #nder the
power recogniCed and e.ercised %y this )o#rt, in +.<. +nt#lay ". <.2.
9aya:, (1@55) 2)) ,!. It was the assertion of learned co#nsel, that
the a%o"e /#dgment, has now %een clarified %y this )o#rt. +ccording to
learned co#nsel, it has now %een settled, that the a%o"e /#dgment did not
fashion or create any s#ch power or /#risdiction, as is so#ght to %e in"o:ed
%y the petitioner.
4. 8esides the a%o"e p#rely legal s#%mission, learned 2enior )o#nsel
for the respondents e?#ally candidly s#%mitted, that the filing of this
petition was a caref#lly engineered de"ice, adopted %y the petitioner as a
stratagem, to see: o#r withdrawal from the matter. In order to emphasise
that this 8ench was %eing arm twisted, learned co#nsel in"ited o#r
attention to the foot of the last page of the petition, i.e., to the a#thorship of
the petition, /#st #nder the prayer cla#se. -he te.t, to which o#r attention
was drawn, is set o#t %elow:-
2igned and appro"ed %y:-
>r. <am 7ethmalani, 2r. +d".
Dr. <a/ee" Dhawan, 2r. +d".
>r. <a:esh Dwi"edi, 2r. +d".
Page 5
3
>r. 2. Danesh, 2r. +d".
>r. <a"i 2han:ar 'rasad, 2r. +d".*
+ccording to learned co#nsel, this is the first petition he has seen in his
entire professional career, which is settled %y fi"e 2enior )o#nsel, all of
them of recogniCed eminence.
3. It wo#ld %e rele"ant to mention, that when the matter was ta:en #p
for hearing %y #s, for the first time on 1.3.!14 at .!! '>, it had %een so
listed on the directions of &on(%le the )hief 7#stice in f#rtherance of a
mentioning for listing*, on the morning of the same day, i.e., 1.3.!14.
1e had therefore, no occasion to go thro#gh the pleadings of the present
writ petition. +fter ha"ing heard s#%missions of ri"al co#nsel noticed
a%o"e, we decided not to proceed with the matter, %efore going thro#gh
the pleadings of the case. 1e therefore directed the posting of the case
for hearing on the following day, i.e., 13.3.!14.
,. 8y the ne.t date, we had an opport#nity to determine, how e.actly
the matter was listed %efore #s, as also, to ascertain whether the pleadings
of the present criminal writ petition incorporated material which wo#ld
em%arrass #s, as s#ggested %y the learned co#nsel for the petitioner. 2o
far as the filing and listing of the present petition is concerned, it was filed
%y the petitioner in the <egistry of this )o#rt on 11.3.!14. -hereafter,
learned co#nsel for the petitioner, appeared %efore the 8ench presided
o"er %y &on(%le the )hief 7#stice, on the morning of 1.3.!14 to mention
for listing*, for the same day. -he )o#rt >aster of the 8ench presided o"er
%y &on(%le the )hief 7#stice, recorded the following note:-
Page 6
,
+s directed list today i.e., 1.3.!14, if in order, in the mentioning
list at .!! '>, %efore appropriate 8ench.*
4or the concerned 8ench %efore which the matter was to %e posted, the
noting file of the %ranch, reads as #nder:-
+pprised.
>ay %e listed %efore the 2pecial 8ench comprising &on(%le
>r. 7#stice E.2. <adha:rishnan and &on(%le >r. 7#stice 7.2.
Ehehar.*
-he a%o"e note was recorded on the directions of &on(%le the )hief
7#stice. + per#sal of the a%o"e se?#ence of e"ents re"eals, that e"en
tho#gh o#r com%ination as a 8ench did not e.ist for 1.3.!14, yet a
2pecial 8ench was constit#ted for listing the present writ petition, in its
present arrangement. It is therefore reasona%le to infer, that the present
constit#tion of the 8ench, was a conscio#s determination of &on(%le the
)hief 7#stice.
6. 9ow the em%arrassment part. &a"ing gone thro#gh the pleadings of
the writ petition we were satisfied, that nothing e.pressed therein co#ld %e
ass#med, as wo#ld h#miliate or discomfort #s %y p#tting #s to shame. -o
modify an earlier order passed %y #s, for a mista:e we may ha"e
committed, which is apparent on the face of the record, is a /#risdiction we
reg#larly e.ercise #nder +rticle 136 of the )onstit#tion of India. +dded to
that, it is open to a party to file a c#rati"e petition as held %y this )o#rt in
<#pa +sho: &#rra ". +sho: &#rra, (!!) 4 2)) 355. -hese /#risdictions
are reg#larly e.ercised %y #s, when made o#t, witho#t any
em%arrassment. )orrection of a wrong order, wo#ld ne"er p#t anyone to
Page 7
6
shame. <ecognition of a mista:e, and its rectification, wo#ld certainly not
p#t #s to shame. In o#r considered "iew, em%arrassment wo#ld arise
when the order assailed is act#ated %y personal and=or e.traneo#s
considerations, and the pleadings record s#ch an acc#sation. 9o s#ch
allegation was made in the present writ petition. +nd therefore, we were
f#lly satisfied that the feeling entertained %y the petitioner, that we wo#ld
not pass an appropriate order, if the order imp#gned dated 4.3.!14 was
fo#nd to %e partly or f#lly #n/#stified, was totally misplaced.
5. It is therefore, that we informed learned 2enior co#nsel, that we
wo#ld hear the matter. It seems that o#r determination to hear the matter
mar:ed to #s %y &on(%le the )hief 7#stice, was not palata%le to some of
the learned co#nsel for the petitioner. 4or, >r. <am 7ethmalani, learned
2enior )o#nsel, was now more forthright. &e told #s, that we sho#ld not
hear the matter, %eca#se his client* had apprehensions of pre/#dice. &e
wo#ld, howe"er, not spell o#t the %asis for s#ch apprehension. Dr. <a/ee"
Dhawan, came o#t all g#ns %laCing, in s#pport of his colleag#e, %y posing
a ?#ery: &as the )o#rt made a mista:e, serio#s eno#gh, gi"ing rise to a
pres#mption of %ias F e"en if it is not there F*G It was diffic#lt to
#nderstand what he meant. 8#t serio#sly, in the manner Dr. <a/ee"
Dhawan had addressed the )o#rt, it so#nded li:e an insin#ation. >r. <am
7ethmalani /oined in to inform #s, that the 8ar (those sitting on the side he
represented) was shell-shoc:ed, that an order "iolating the petitioner(s
rights #nder +rticle 1 of the )onstit#tion of India, had %een passed, and it
Page 8
5
did not seem to ca#se any concern to #s. -he petitioner had %een ta:en
into /#dicial c#stody, we were told, witho#t affording him any opport#nity of
hearing. Bearned co#nsel as:ed the 8ench, to accept its mista:e in
ordering the arrest and detention of the petitioner, and ac:nowledge the
h#man error* committed %y the )o#rt, while passing the imp#gned order
dated 4.3.!14. Dr. <a/ee" Dhawan, then informed the )o#rt, that F
moments come in the profession, tho#gh rarely, when we tell the 7#dges of
the 2#preme )o#rt, that yo# ha"e committed a terri%le terri%le mista:e, %y
passing an order which has "iolated the ci"il li%erties of o#r client. F that
the order passed is "oid F*. +nd moments later, referring to the order, he
said, F it is a draconian order F* -he serio#sness of the s#%missions
apart, none of them, e"en remotely, demonstrated %ias*.
@. 8#t >r. ).+. 2#ndaram, another 2enior )o#nsel representing the
petitioner, distanced himself from the a%o"e s#%missions. &e informed the
)o#rt, F I am not in"o:ing the doctrine of %ias, as has %een alleged F*
1e are of the "iew, that a gen#ine plea of %ias alone, co#ld ha"e ca#sed
#s to withdraw from the matter, and re?#ire it to %e heard %y some other
8ench. Detailed s#%missions on the allegations constit#ting %ias, were
addressed well after proceedings had gone on for a few wee:s, the same
ha"e %een dealt with separately (#nder heading AIII, 1hether the
imp#gned order dated 4.3.!14, is "itiated on acco#nt of %iasG*). 8ased
on the s#%missions ad"anced %y learned co#nsel, we co#ld not pers#ade
o#rsel"es in accepting the prayer for rec#sal.
Page 9
@
1!. 1e ha"e recorded the a%o"e narration, lest we are acc#sed of not
correctly depicting the s#%missions, as they were can"assed %efore #s. In
o#r #nderstanding, the oath of o#r office, re?#ired #s to go ahead with the
hearing. +nd not to %e o"erawed %y s#ch s#%missions. In o#r "iew, not
hearing the matter, wo#ld constit#te an act in %reach of o#r oath of office,
which mandates #s to perform the d#ties of o#r office, to the %est of o#r
a%ility, witho#t fear or fa"o#r, affection or ill will. -his is certainly not the
first time, when solicitation for solicitation for rec#sal has %een so#ght %y
learned co#nsel. 2#ch a recorded peremptory prayer, was made %y >r.
<.E. +nand, an eminent 2enior +d"ocate, %efore the &igh )o#rt of Delhi,
see:ing the rec#sal of >r. 7#stice >anmohan 2arin from hearing his
personal case. >r. 7#stice >anmohan 2arin while declining the re?#est
made %y >r. <.E. +nand, o%ser"ed as #nder:
H-he path of rec#sal is "ery often a con"enient and a soft option.
-his is especially so since a 7#dge really has no "ested interest in
doing a partic#lar matter. &owe"er, the oath of office ta:en #nder
+rticle 1@ of the )onstit#tion of India en/oins the 7#dge to d#ly and
faithf#lly and to the %est of his :nowledge and /#dgment, perform the
d#ties of office witho#t fear or fa"o#r, affection or ill will while
#pholding the constit#tion and the laws. In a case, where #nfo#nded
and moti"ated allegations of %ias are so#ght to %e made with a "iew
of for#m h#nting = 8ench preference or %row-%eating the )o#rt, then,
s#cc#m%ing to s#ch a press#re wo#ld tantamo#nt to not f#lfilling the
oath of office.H
-he a%o"e determination of the &igh )o#rt of Delhi was assailed %efore
this )o#rt in <.E. +nand ". Delhi &igh )o#rt, (!!@) 5 2)) 1!,. -he
determination of the &igh )o#rt where%y >r. 7#stice >anmohan 2arin
declined to withdraw from the hearing of the case came to %e #pheld, with
the following o%ser"ations:
Page 10
1!
-he a%o"e passage, in o#r "iew, correctly s#ms #p what sho#ld %e
the )o#rtIs response in the face of a re?#est for rec#sal made with
the intent to intimidate the co#rt or to get %etter of an Jincon"enientI
/#dge or to o%f#scate the iss#es or to ca#se o%str#ction and delay
the proceedings or in any other way fr#strate or o%str#ct the co#rse
of /#stice.*
(emphasis is o#rs)
11. In fact, the o%ser"ations of the &igh )o#rt of Delhi and those of this
)o#rt reflected, e.actly how it felt, when learned co#nsel addressed the
)o#rt, at the commencement of the hearing. If it was learned co#nsel(s
post#ring antics, aimed at %ench-h#nting or %ench-hopping (or sho#ld we
say, %ench-a"oiding), we wo#ld not allow that. +ffronts, /i%es and caref#lly
and conscio#sly planned sn#%s co#ld not deter #s, from discharging o#r
onero#s responsi%ility. 1e co#ld at any time, d#ring the co#rse of hearing,
wal: o#t and ma:e way, for another 8ench to decide the matter, if e"er we
felt that, that wo#ld %e the righteo#s co#rse to follow. 1hether or not, it
wo#ld %e %etter for another 8ench to hear this case, will emerge from the
concl#sions, we will draw, in the co#rse of the present determination.
1. 1hat is it that this )o#rt had done thro#gh its order dated 31.5.!1
while #pholding the earlier orders passed %y the 2;8I (4->) (dated
3.,.!11) and the 2+- (dated 15.1!.!11)G 1e had merely confirmed
the directions earlier iss#ed to the two companies, to ref#nd the moneys
collected %y them from in"estors, who had s#%scri%ed to their K4)D(s, %y
the 2;8I (4->) and %y the 2+-. -he directions did not e.tend to f#nds
contri%#ted %y the promoters, the directors or the other sta:eholders. -he
ref#nd did not incl#de any %#siness gains earned %y the two companies
Page 11
11
d#ring the s#%sistence of their enterprise. +ccording to the stance
adopted %y the two companies %efore this )o#rt, all the in"estors( money
collected thro#gh K4)D(s, had mainly %een in"ested with the other
companies of the 2ahara Dro#p. -his position was e.pressly reiterated, in
the two separate affida"its filed %y 2ahara India <eal ;state )orporation
Bimited (hereinafter referred to as L2I<;)B() and 2ahara &o#sing
In"estment )orporation Bimited (hereinafter referred to as L2&I)B() dated
4.1.!1, %efore this )o#rt. It is now their case, that these properties were
sold to other 2ahara Dro#p companies to redeem the K4)D(s. It is
therefore all within the companies of the 2ahara Dro#p. -hat is how, sale
transactions %y way of cash ha"e %een e.plained. It is therefore apparent,
that we had not directed a ref#nd of any other amo#nt, %esides that which
was collected from the in"estors themsel"es. -he petitioner herein M >r.
2#%rata <oy 2ahara, d#ring the co#rse of his personal oral hearing
informed #s, that most of the in"estments were made %y petty peasants,
la%o#rers, co%%lers, %lac:smiths, woodc#tters and other s#ch li:e artisans,
ranging mostly %etween <s.,!!!=- and <s.3,!!!=-. +lmost all the
in"estors, according to the petitioner, did not e"en ha"e a %an: acco#nt.
-hat was why, they had chosen to in"est the same thro#gh K4)D(s, in the
two companies. If the a%o"e position was=is correct, and the ref#nd related
only to deposits made %y these petty poor citiCens of this co#ntry, why are
the two companies or the petitioner M >r. 2#%rata <oy 2ahara, in his
capacity as promoter, and the other concerned directors, so agitated with
o#r order. -he findings against the two companies ha"e %een conc#rrent.
Page 12
1
+t all le"els, where iss#es raised %y the two companies were considered
and agitated, the determination has %een in one "oice, that the action of
the two companies was #nlawf#l and accordingly the moneys collected
had to %e ref#nded. -here is not e"en a single order at any le"el, in fa"o#r
of the two companies. -he two companies were re?#ired to ref#nd the
money to its in"estors, %eca#se of the a%sol#te illegality in its collection.
13. 8eca#se %oth the 2;8I and the 2+- were do#%tf#l a%o#t the
"eracity of the receipt of the f#nds as alleged, they had directed the ref#nd
to the in"estors %y way of cash thro#gh* demand draft or pay order.
D#ring the co#rse of final hearing of the appellate proceedings %efore this
)o#rt, s#%missions were heard o"er a period of three wee:s d#ring the
s#mmer "acation. 1e entertained a similar impression and s#spicion.
4irstly %eca#se, the two companies ne"er made a"aila%le any information
so#ght from them. -hey always stonewalled all attempts to gather
information %y the 2;8I, e"en %y e.erting infl#ence from the >inistry of
)orporate +ffairs, and %y raising p#rely technical pleas. +nd also
%eca#se, the little %its of information made a"aila%le %y the companies for
e"al#ation, were fo#nd to %e serio#sly do#%tf#l. It is also important for #s
to record, that the pointed position adopted %y the 2;8I %efore this )o#rt,
d#ring the disposal of )i"il +ppeal nos. @513 and @533 of !11 was, that
neither 2I<;)B, nor 2&I)B, e"er pro"ided details of its in"estors to the
2;8I (4->). -hey contested the proceedings initiated %y the 2;8I (4->),
only on technical gro#nds. 1e were told that e"en %efore the 2+-, no
Page 13
13
details were f#rnished. -he position remained the same, e"en %efore this
)o#rt. 8ased on the non disclos#re of information so#ght from the two
companies, it was not possi%le to record a firm finding, either ways. It is,
therefore, that a different proced#re was adopted %y this )o#rt while
disposing the appeals preferred %y the two companies, "ide order dated
31.5.!1. -he companies were restrained from ma:ing direct ref#nds.
-hey were directed to deposit all in"estor related f#nds (along with
interest) with the 2;8I. -he 2;8I was in t#rn directed, to ma:e the
ref#nds to the in"estors. In case the in"estors co#ld not %e identified, or
were fo#nd to %e non-e.istent or %og#s, the remaining f#nds along with
interest, were directed to %e deposited with the Do"ernment of India. -his
seems to #s, to %e the reason, for all these twists and t#rns, in the
aftermath of this )o#rt(s order dated 31.5.!1. If the two companies were
ready and willing to pay the money, as has %een made o#t, on %ehalf of
the two companies, there wo#ld %e no ca#se for agitation.
14. Kne of the reasons for retaining the instant petition for hearing with
o#rsel"es was, that we had heard eminent 2enior )o#nsel engaged %y the
two companies e.cl#si"ely for o"er three wee:s d#ring the s#mmer
"acation of !1. 1e had %een ta:en thro#gh tho#sands of pages of
pleadings. 1e had the occasion to watch the demeano#r and defences
adopted %y the two companies and the contemnors from time to time, from
close ?#arters. 1riting the /#dgment, had occ#pied the entire remaining
period of the s#mmer "acation of !1, as also, a%o#t two months of
Page 14
14
f#rther time. -he /#dgment dated 31.5.!1 r#ns into ,@ printed pages.
8oth of #s had rendered separate /#dgments, conc#rring with one another,
on each aspect of the matter. D#ring the co#rse of writing the /#dgment,
we had the occasion to min#tely e.amine n#mero#s comm#nications,
e.changed %etween the ri"al parties. -hat too had res#lted in a different
:ind of #nderstanding, a%o#t the contro"ersy. 4or any other 8ench to
#nderstand the n#ances of the contro"ersy determined thro#gh o#r order
dated 31.5.!1, wo#ld re?#ire prolonged hearing of the matter. >onths
of time, /#st in the same manner as we had ta:en while passing the order
dated 31.5.!1, wo#ld ha"e to %e spent again. 'ossi%ly the s#%missions
made %y the learned co#nsel see:ing o#r rec#sal, was conscio#sly aimed
at the a%o"e o%/ecti"e. 1as this the reason for the theatrics, of some of
the learned 2enior )o#nselG Diffic#lt to say for s#re. 8#t deep within,
don(t we all #nderstandG It was also for the sa:e of sa"ing precio#s time
of this )o#rt, that we decided to %ear the %r#nt and the rhetoric, of some of
the learned 2enior )o#nsel representing the petitioner. 1e are therefore
satisfied, that it wo#ld not %e %etter, for another 8ench to hear this case.
II. M!.% 9!0+7+$5 &#0*#. "* &"*'*0 $% $55 7&.%.8
C$, $ 9!0+7+$5 &#0*# "* 0+.#*2$#0*04 +/ %(* 1*#.&, 7&,7*#,*0
/**5.4 %($% %(* &#0*# +. 6(&55' +55*2$5 $,0 -&+08
13. 8y the time a 7#dge is called #pon to ser"e on the 8ench of the
2#preme )o#rt of India, he #nderstands his responsi%ilities and
d#tiesF..and also his powers and a#thority. + 7#dge has the solemn d#ty
of deciding conflicting iss#es %etween ri"al parties. <i"al parties ine"ita%ly
Page 15
13
claim diagonally opposite rights. -he decision has howe"er to %e rendered
in fa"o#r of one party (and against the other). -hat, howe"er, is not a
ca#se for m#ch worry, %eca#se a 7#dge is to decide e"ery disp#te, in
consonance with law. If one is not free to decide in consonance with his
will, %#t m#st decide in consonance with law, the concept of a 7#dge %eing
an indi"id#al possessing power and a#thority, is %#t a del#sion. -he
sa"ing grace is, that only a few #nderstand this reality. 8#t what a 7#dge
is ta#ght d#ring his ard#o#s and onero#s /o#rney to the 2#preme )o#rt is,
that his calling is %ased on, the faith and confidence reposed in him to
ser"e his co#ntry, its instit#tions and citiCens. ;ach one of the a%o"e (the
co#ntry, its instit#tions and citiCens), needs to %e preser"ed. ;ach of them
grows to prosper, with the others( s#pport. ;ach of them has d#ties,
o%ligations and responsi%ilitiesF..and also rights, %enefits and
ad"antages. -heir harmonio#s glory, emerges from, what is commonly
#nderstood as, the r#le of law.* -he /#diciary as an instit#tion, has
e.tremely sacrosanct d#ties, o%ligations and responsi%ilities. 1e shall, in
the s#cceeding paragraphs, attempt to e.press these, in a formal
perspecti"e.
1,. -he 'resident of India is "ested with e.ec#ti"e power of the 0nion.
+ll e.ec#ti"e actions of the Do"ernment of India, are e.pressed to %e
ta:en in his name. -he responsi%ility, and the power, which is "ested in
the 'resident of India, is to %e discharged= e.ercised, in accordance with
the pro"isions of the )onstit#tion of India. 4or that, the 'resident of India
Page 16
1,
may e"en cons#lt the 2#preme )o#rt, on a ?#estion of law or fact of p#%lic
importance. +nd when so cons#lted, the 2#preme )o#rt is o%liged to
tender its opinion to the 'resident. 4#rthermore, the )onstit#tion of India
contemplates, that law declared %y the 2#preme )o#rt, is %inding on all
co#rts within the territory of India. It also mandates, that an order made %y
the 2#preme )o#rt, is enforcea%le thro#gho#t the territory of India. 8#t
what is the scope of the law declared %y the 2#preme )o#rtG +nd what
are the :inds of orders it passesG -he 2#preme )o#rt has %een "ested
with the power to decide s#%stantial ?#estions of law, as also, to interpret
the pro"isions of the )onstit#tion of India. -he 2#preme )o#rt e.ercises
/#risdiction to determine, whether or not, laws made %y 'arliament or %y a
2tate Begislat#re, are consistent with the pro"isions of the )onstit#tion of
India. +nd in case any legislation is fo#nd to %e enacted, in "iolation of the
pro"isions of the )onstit#tion of India, this )o#rt is constrained to stri:e it
down. -he res#ltant effect is, that a law enacted %y the 'arliament or %y a
2tate Begislat#re, is declared illegal or "oid. +fter a )o#rt(s "erdict has
attained finality, not once, ne"er and ne"er, has any legislati"e %ody e"er
diso%eyed or disrespected an order passed %y a co#rt, declaring a
legislation, illegal or "oid. -he 2#preme )o#rt also e.ercises original
/#risdiction, to settle disp#tes %etween the Do"ernment of India and one or
more 2tates$ or %etween the Do"ernment of India and any one 2tate or
more 2tates on the one side, and one or more other 2tates on the other$ or
%etween two or more 2tates. In s#ch disp#tes, the order co#ld %e in
fa"o#r of (or against), the Do"ernment of India, and=or one or the other
Page 17
16
2tate Do"ernment(s) concerned. Net, the orders passed %y the 2#preme
)o#rt on the a%o"e disp#tes, ha"e #nfailingly %een accepted and complied
with, despite the serio#sness of the conse?#ences, emerging from s#ch
orders. -he settlement of s#ch disp#tes %y the 2#preme )o#rt, has not
e"er earned scorn, disdain, disrespect or denigration of the parties
concerned. -he 2#preme )o#rt also enforces thro#gh its writ /#risdiction,
f#ndamental rights of the citiCens of this co#ntry. In case an indi"id#al(s
f#ndamental rights (or other legal rights), are fo#nd to ha"e %een "iolated,
the Do"ernment of India, or the concerned 2tate Do"ernment, or the
instr#mentality=instit#tion concerned, is directed to restore to the indi"id#al,
what is d#e to him. -he Do"ernment (or the instr#mentality=instit#tion)
concerned, which is directed to e.tend %enefits denied to an indi"id#al(s),
has always hono#ra%ly o%eyed and implemented )o#rt orders, gracef#lly.
-here are n#mero#s instit#tions created to assist the e.ec#ti"e
go"ernment, in matters of go"ernance. 2ome of them are constit#tional
a#thorities, others are creat#res, either of a legislation or of the e.ec#ti"e.
-he o%/ect of e.ec#ti"e go"ernance, is to enforce d#ties, o%ligations and
responsi%ilities, and also, to e.tend rights, %enefits and ad"antages.
)o#rts also e.ercise, the power of /#dicial re"iew, o"er actions of s#ch
instr#mentalities=instit#tions. 1hile e.ercising the power of /#dicial re"iew,
)o#rts also pass orders and directions, to enforce legal rights. )o#rts are
rarely confronted with a sit#ation where an e.ec#ti"e department of a
go"ernment, or an instr#mentality=instit#tion, has denied compliance.
Bi:ewise, the 2#preme )o#rt is also "ested with the responsi%ility to
Page 18
15
ad/#dicate pri"ate disp#tes %etween indi"id#als (%oth ci"il and criminal), so
as to render a determination of their indi"id#al rights. -hese too, are as a
r#le (almost) always complied with "ol#ntarily and gracef#lly.
16. -here is no escape from, acceptance, or o%edience, or compliance
of an order passed %y the 2#preme )o#rt, which is the final and the
highest )o#rt, in the co#ntry. 1here wo#ld we find o#rsel"es, if the
'arliament or a 2tate Begislat#re insists, that a stat#tory pro"ision str#c:
down as #nconstit#tional, is "alidG Kr, if a decision rendered %y the
2#preme )o#rt, in e.ercise of its original /#risdiction, is not accepted for
compliance, %y either the Do"ernment of India, and=or one or the other
2tate Do"ernment(s) concernedG 1hat if, the concerned go"ernment or
instr#mentality, chooses not to gi"e effect to a )o#rt order, declaring the
f#ndamental right of a citiCenG Kr, a determination rendered %y a )o#rt to
gi"e effect to a legal right, is not accepta%le for complianceG 1here wo#ld
we %e, if decisions on pri"ate disp#tes rendered %etween pri"ate
indi"id#als, are not complied withG -he answer tho#gh prepostero#s, is
not far fetched. In "iew of the f#nctional position of the 2#preme )o#rt
depicted a%o"e, non-compliance of its orders, wo#ld dislodge the
cornerstone maintaining the e?#ili%ri#m and e?#animity in the co#ntry(s
go"ernance. -here wo#ld %e a %rea:down of constit#tional f#nctioning. It
wo#ld %e a mayhem of sorts.
15. 8efore we ad"ert to the ?#estion, whether this )o#rt can order
o%edience of an order passed %y it, it may %e rele"ant to #nderstand, the
Page 19
1@
e.tent and width of /#risdiction, within the framewor: whereof this )o#rt
can pass orders. In this %ehalf reference may %e made to the nine-7#dge
)onstit#tion 8ench /#dgment of this )o#rt, in 9aresh 2ridhar >ira/:ar ".
2tate of >aharashtra, +I< 1@,6 2) 1, wherein it was held as #nder:-
,!. -here is yet another aspect of this matter to which it is
necessary to refer. -he &igh )o#rt is a s#perior )o#rt of <ecord and
#nder +rticle 13 , shall ha"e all powers of s#ch a )o#rt of <ecord
incl#ding the power to p#nish contempt of itself. Kne disting#ishing
characteristic of s#ch s#perior )o#rts is that they are entitled to
consider ?#estions of their /#risdiction raised %efore them. -his
?#estion fell to %e considered %y this )o#rt in 2pecial <eference 9o.
1 of 1@,4, (1@,3) 1 2.).<. 413 at p. 4@@. In that case, it was #rged
%efore this )o#rt that in granting %ail to Eesha" 2ingh, the &igh
)o#rt had e.ceeded its /#risdiction and as s#ch, the order was a
n#llity. <e/ecting this arg#ment, this )o#rt o%ser"ed that in the case
of a s#perior )o#rt of <ecord, it is for the )o#rt to consider whether
any matter falls within its /#risdiction or not. 0nli:e a co#rt of limited
/#risdiction, the s#perior co#rt is entitled to determine for itself
?#estions a%o#t its own /#risdiction. -hat is why this )o#rt did not
accede to the proposition that in passing the order for interim %ail,
the &igh )o#rt can %e said to ha"e e.ceeded its /#risdiction with the
res#lt that the order in ?#estion was n#ll and "oid. In s#pport of this
"iew, this )o#rt cited a passage from &als%#ryIs Baws of ;ngland
where it is o%ser"ed that:-
prima facie, no matter is deemed to %e %eyond the /#risdiction
of a s#perior co#rt #nless it is e.pressly shown to %e so, while
nothing is within the /#risdiction of an inferior co#rt #nless it is
e.pressly shown on the face of the proceedings that the
partic#lar matter is within the cogniCance of the partic#lar
)o#rt.H (&als%#ryIs Baws of ;ngland, Aol. @, p. 34@).*.
If the decision of a s#perior )o#rt on a ?#estion of its /#risdiction is
erroneo#s, it can, of co#rse, %e corrected %y appeal or re"ision as
may %e permissi%le #nder the law$ %#t #ntil the ad/#dication %y a
s#perior )o#rt on s#ch a point is set aside %y adopting the
appropriate co#rse, it wo#ld not %e open to %e corrected %y the
e.ercise of the writ /#risdiction of this )o#rt.*
(emphasis is o#rs)
7#st li:e &igh )o#rts, the 2#preme )o#rt is a s#perior )o#rt of <ecord.
-his mandate is e.pressly contained in +rticle 1@ of the )onstit#tion of
Page 20
!
India. 2ince it is not the case of the petitioner %efore this )o#rt, that there
is some legislati"e or constit#tional pro"ision, c#rtailing the /#risdiction of
this )o#rt, to pass an order of the nat#re which is imp#gned thro#gh the
instant writ petition, it stands ac:nowledged, that the a%o"e order has %een
passed %y this )o#rt, in legitimate e.ercise of its /#risdiction.
1@. Kn the s#%/ect of o%edience of orders passed %y this )o#rt, this
)o#rt recently in E.+. +nsari ". Indian +irlines Btd., (!!@) 2)) 1,4,
o%ser"ed th#s: -he respondent Indian +irlines was o%liged to o%ey and
implement the F direction. If they had any do#%t or if the order was not
clear, it was always open to them to approach the co#rt for clarification of
the F order. 1itho#t challenging the F direction or see:ing clarification,
Indian +irlines co#ld not circ#m"ent the same, on any gro#nd whatsoe"er.
Diffic#lty in implementation of an order passed %y the )o#rt, howsoe"er
gra"e its effect may %e, is no answer for its non-compliance.* It is
therefore that +rticle 14 of the )onstit#tion of India mandates that this
)o#rt Fin e.ercise of its /#risdiction may pass s#ch decree or ma:e s#ch
order as is necessary for doing complete /#stice in any ca#se or matter
pending %efore it, and any decree so passed or order so made shall %e
enforcea%le thro#gho#t the territory of IndiaF* +nd it is also inter alia for
the a%o"e enforcement, that +rticle 1@ of the )onstit#tion of India, "ests
in the 2#preme )o#rt the power, amongst other things, to enforce
compliance of )o#rt directions. -he 2#preme )o#rt has the /#risdiction
and power, to p#nish for its contempt. It is this dispensation, which
Page 21
1
a#thoriCes the 2#preme )o#rt to enforce compliance of its orders. 4or, the
power to p#nish, wo#ld ser"e no p#rpose, if the power to enforce
compliance was lac:ing. It was, therefore, that this )o#rt in >aninder/it
2ingh 8itta ". 0nion of India, (!1) 1 2)) 63, with reference to its
contempt /#risdiction o%ser"ed, th#s:-
,. It is also of some rele"ance to note that diso%edience of co#rt
orders %y positi"e or acti"e contri%#tion or non-o%edience %y a
passi"e and dormant cond#ct leads to the same res#lt.
Diso%edience of orders of the co#rt stri:es at the "ery root of r#le of
law on which the /#dicial system rests. -he r#le of law is the
fo#ndation of a democratic society. 7#diciary is the g#ardian of the
r#le of law. If the 7#diciary is to perform its d#ties and f#nctions
effecti"ely and remain tr#e to the spirit with which they are sacredly
entr#sted, the dignity and a#thority of the co#rts ha"e to %e
respected and protected at all costs (refer -.9. Doda"arman
-hir#m#lpad "s. +sho: Ehot, (!!,) 3 2)) 1). -he proceedings
%efore the highest co#rt of the land in a p#%lic interest litigation,
attain e"en more significance. -hese are the cases which come #p
for hearing %efore the co#rt on a grie"ance raised %y the p#%lic at
large or p#%lic spirited persons. -he 2tate itself places matters
%efore the )o#rt for determination which wo#ld fall, stat#torily or
otherwise, in the domain of the e.ec#ti"e a#thority.
6. It is where the 2tate and its instr#mentalities ha"e failed to
discharge its stat#tory f#nctions or ha"e acted ad"ersely to the
larger p#%lic interest that the co#rts are called #pon to interfere in
e.ercise of their e.traordinary /#risdiction to ens#re maintenance of
the r#le of law. -hese are the cases which ha"e impact in rem or on
larger section of the society and not in personam simpliciter. )o#rts
are called #pon to e.ercise /#risdiction with twin o%/ects in mind.
4irstly, to p#nish the persons who ha"e diso%eyed or not carried o#t
orders of the co#rt i.e. for their past cond#ct. 2econdly, to pass s#ch
orders, incl#ding imprisonment and #se the contempt /#risdiction as
a tool for compliance of its orders in f#t#re. -his principle has %een
applied in the 0nited 2tates and +#stralia as well.
34. &a"ing fo#nd them g#ilty #nder the pro"isions of the 1@61
+ct and #nder +rticle 1@ of the )onstit#tion of India, we p#nish
the 2ecretary, -ransport and )ommissioner, 2tate <oad -ransport
+#thority of the 2tate of &aryana as #nder:
Page 22

(i) -hey are p#nished to pay a fine of <s.,!!!=- each

and in defa#lt, they shall %e lia%le to #ndergo simple
imprisonment for a period of fifteen days.
(ii) 1e impose e.emplary cost of <s.3!,!!!=- on the
2tate of &aryana, which amo#nt, at the first instance, shall
%e paid %y the 2tate %#t wo#ld %e reco"ered from the
salaries of the erring officers=officials of the 2tate in
accordance with law and s#ch reco"ery proceedings %e
concl#ded within si. months. -he costs wo#ld %e paya%le to
the 2#preme )o#rt Begal 2er"ices )ommittee.
(iii) In "iew of the principle that the co#rts also in"o:e
contempt /#risdiction as a tool for compliance of its orders in
f#t#re, we here%y direct the 2tate Do"ernment and the
<espondent=contemnor herein now to positi"ely comply with
the orders and implement the scheme within eight wee:s
from today.*
(emphasis is o#rs)
In this conte.t, the following o%ser"ations made %y this )o#rt, in 2#preme
)o#rt 8ar +ssociation ". 0nion of India, (1@@5) 4 2)) 4!@, ill#strate the
point so#ght to %e made:
4. -he contempt of co#rt is a special /#risdiction to %e e.ercised
sparingly and with ca#tion, whene"er an act ad"ersely effects the
administration of /#stice or which tends to impede its co#rse or tends
to sha:e p#%lic confidence in the /#dicial instit#tions. -his /#risdiction
may also %e e.ercised when the act complained of ad"ersely effects
the >a/esty of Baw or dignity of the co#rts. -he p#rpose of contempt
/#risdiction is to #phold the ma/esty and dignity of the )o#rts of law.
It is an #n#s#al type of /#risdiction com%ining Hthe /#ry, the /#dge and
the hangmanH and it is so %eca#se the co#rt is not ad/#dicating #pon
any claim %etween litigating parties. -his /#risdiction is not e.ercised
to protect the dignity of an indi"id#al /#dge %#t to protect the
administration of /#stice from %eing maligned. In the general interest
of the comm#nity it is imperati"e that the a#thority of co#rts sho#ld
not %e imperiled and there sho#ld %e no #n/#stifia%le interference in
the administration of /#stice. It is a matter %etween the co#rt and the
contemner and third parties cannot inter"ene. It is e.ercised in a
s#mmary manner in aid of the administration of /#stice, the ma/esty
of law and the dignity of the co#rts. 9o s#ch act can %e permitted
which may ha"e the tendency to sha:e the p#%lic confidence in the
fairness and impartiality of the administration of /#stice.*
(emphasis is o#rs)
Page 23
3
1e are satisfied to hold, that the pro"isions referred to %y #s in the order
dated 4.3.!14 (+rticles 1@ and 14 of the )onstit#tion of India) "est in
the 2#preme )o#rt, the power to pers#ade, and if necessary, compel
o%edience and o%ser"ance, of /#dicial orders. It is not possi%le, to "iew
this matter in any other perspecti"e, in the %ac:gro#nd of the concl#sion
recorded %y #s hereina%o"e, namely, non-compliance of the orders of the
2#preme )o#rt, wo#ld dislodge the cornerstone maintaining the
e?#ili%ri#m and e?#animity, in the go"ernance of this co#ntry. -his has
%een the manner of #nderstanding, of the power of this )o#rt. In case
there has %een any am%ig#ity, let it now %e #nderstood, that this )o#rt has
the #nlimited power (in fact, the sacred o%ligation), to compel o%edience
and o%ser"ance of its orders.
III. F$7%. #*/5*7%+,2 %(* 0*:*$,&!# &/ %(* %6& 7&:1$,+*.4 %(*
1*%+%+&,*#4 $,0 &%(*# 0+#*7%&#. &/ SIRECL $,0 SHICL4 +, %(*
1#&7*.. &/ 5+%+2$%+&,4 5*$0+,2 !1%& %(* 1$..+,2 &/ %(* &#0*#
0$%*0 ;1.<.2012.
!. D#ring o#r entire careers as +d"ocates practicing %efore the &igh
)o#rt and %efore this )o#rt, and as 7#dges of different &igh )o#rts, as
)hief 7#stices of &igh )o#rts in different 2tates, and also, as 7#dges of
this )o#rt, we ha"e yet to e.perience a demeano#r of defiance, similar to
the one adopted %y 2I<;)B or 2&I)B or their promoter and directors. -he
responsi%ility of the a%o"e defiance, which constit#ted a re%ellio#s
%eha"io#r, challenging the a#thority of the 2;8I, from in"estigating into the
affairs of the two companies, re?#ired %raCenness, flowing from
#nfathoma%le power and a#thority. It is therefore essential to recapit#late,
Page 24
4
the demeano#r adopted %y the two companies, %efore the 2;8I (4->),
which position remained #naltered, %efore the 2+-. -hese need to %e
highlighted, to f#lly #nderstand how a litigant can %eha"e, to defeat the
ca#se of /#stice. -he responsi%ility for the a%o"e demeano#r, wo#ld
essentially fall, on the sho#lders of the promoter, and the directors, of the
two companies. +s a matter of fact, >r. 2#%rata <oy 2ahara (the
petitioner %efore this )o#rt), >s. Aandana 8harga"a (the director
e.empted from arrest, in the imp#gned order dated 4.3.!14), >r. <a"i
2han:ar D#%ey and >r. +sho: <oy )ho#dhary (the directors, whose
arrest and detention was ordered %y this )o#rt, along with that of the
petitioner, on 4.3.!14) were e.pressly named %y the 2;8I, and
prohi%itory orders were passed %y the 2;8I (4->), against the afore-
stated promoter and directors, e.pressly restraining them from carrying o#t
"ario#s acti"ities connected with the two companies. It is also essential, to
refer to the disposition of the two companies (#nder reference), in the
proceedings initiated %y them, %efore the &igh )o#rt of 7#dicat#re at
+llaha%ad, B#c:now 8ench (hereinafter referred to as, Lthe &igh )o#rt().
-he a%o"e referred disposition, led to passing of strict#res, and the
"acation of an interim order passed %y the &igh )o#rt, in their fa"o#r. -hat
too, wo#ld show their spirit of defiance. -he impressions gathered %y this
)o#rt, when the two companies appeared %efore this )o#rt in )i"il +ppeal
9os. @513 and @533 of !11, are also significant. -h#s, the a%o"e details
are %eing set o#t %riefly, herein %elow.
Page 25
3
1. + complaint was addressed %y 'rofessional Dro#p for In"estors
'rotection* on 3.1.!!@, alleging "iolation of the pro"isions of the
2ec#rities and ;.change 8oard of India +ct, 1@@ (hereinafter referred to
as, Lthe 2;8I +ct(), against the companies #nder reference. Kn similar
lines, another complaint was addressed to the 2;8I %y one <oshan Bal*
on !4.!1.!1!. In order to pro%e the a#thenticity of the allegations le"eled
in the complaints, the 2;8I so#ght information from ;nam 2ec#rities
'ri"ate Bimited - a merchant %an:er. In its response dated 1..!1!,
;nam 2ec#rities 'ri"ate Bimited asserted, that the K4)Ds iss#ed %y
2I<;)B and 2&I)B, had %een iss#ed in conformity with all applica%le
laws. In s#m and s#%stance, the a%o"e merchant %an:er did not tender
any reply, which co#ld ha"e %een of help, to determine the a#thenticity of
the allegations le"eled in the complaints.
. +ll the same, the 2;8I again so#ght f#rther details from ;nam
2ec#rities 'ri"ate Bimited. -he partic#lars of the information so#ght are
%eing e.tracted herein %elow:
a. details regarding the filing of <&' of the said companies with
the concerned <o).
%. date of opening and closing of the s#%scription list.
c. details regarding the n#m%er of application forms circ#lated
after the filing of the <&' with <o).
d. details regarding the n#m%er of applications recei"ed.
e. the n#m%er of allottees
f. list of allottees.
g. the date of allotment.
h. date of dispatch of de%ent#re certificates etc.
i. copies of application forms, <&', pamphlets and other
promotional material circ#lated.*
Page 26
,
;nam 2ec#rities 'ri"ate Bimited, howe"er, did not f#rnish the information
so#ght.
3. -he 2;8I then directly so#ght the desired information from 2I<;)B
and 2&I)B, thro#gh two separate letters dated 1.!3.!1!. Instead of
f#rnishing the details of the information so#ght, the companies #nder
reference, re?#ired the 2;8I to f#rnish them the complaints, which had
prompted it to see: the information.
4. -he 2;8I again addressed separate comm#nications to the two
companies, dated 1.3.!1!, see:ing the same information. 8oth
companies adopted the same post#re, yet again. -his time, howe"er,
2I<;)B, as well as, 2&I)B pointed o#t to the 2;8I, that it had no
/#risdiction to in?#ire into the affairs of the two companies, #nder the
pro"isions of the 2;8I +ct.
3. -he 2;8I repeated its re?#est to the two companies, for the
re?#ired information, thro#gh two separate comm#nications, dated
11.!,.!1!. Kn this occasion, the two companies addressed separate
letters dated 1,.!,.!1! to the 2;8I, informing it, that they had recei"ed a
comm#nication from the office of the 0nion >inister of 2tate for )orporate
+ffairs, to the effect, that the /#risdictional iss#e raised %y the two
companies, was #nder the consideration of the >inistry of )orporate
+ffairs. +ccordingly, the two companies informed the 2;8I, that they
wo#ld f#rnish the information so#ght, only #pon the >inistry(s concl#sion,
that the 2;8I had the /#risdiction in the matter.
Page 27
6
,. In "iew of the post#re adopted %y the two companies, s#mmons
dated 3!.5.!1! and 3.@.!1!, were iss#ed #nder 2ection 11) of the
2;8I +ct to them, to pro"ide the following information:
1. Details regarding filing of prospect#s=<ed-herring 'rospect#s
with <K) for iss#ance of K4)Ds.
. )opies of the application forms, <ed-&erring 'rospect#s,
'amphlets, ad"ertisements and other promotional materials
circ#lated for iss#ance of K4)Ds.
3. Details regarding n#m%er of application forms circ#lated,
in"iting s#%scription for K4)Ds.
4. Details regarding n#m%er of applications and s#%scription
amo#nt recei"ed for K4)Ds.
3. Date of opening and closing of the s#%scription list for the said
K4)Ds.
,. 9#m%er and list of allottees for the said K4)Ds and the
n#m%er of K4)Ds allotted and "al#e of s#ch allotment against
each allottee(s name$
6. Date of allotment of K4)Ds$
5. )opies of the min#tes of 8oard=committee meeting in which
the resol#tion has %een passed for allotment$
@ )opy of 4orm (along with anne.#res) filed with <K), if any,
regarding iss#ance of K4)Ds or e?#ity shares arising o#t of
con"ersion of s#ch K4)Ds.
1!. )opies of the +nn#al <eports filed with <egistrar of
)ompanies for the immediately preceding two financial years.
11. Date of dispatch of de%ent#re certificate etc.*
-he aforesaid s#mmons were responded to %y the companies, thro#gh two
separate comm#nications dated 13.!@.!1!, wherein the companies again
adopted the stance, that the 2;8I had no /#risdiction in the matter, and
f#rther, that the matter of /#risdiction was %eing e.amined %y the >inistry
of )orporate +ffairs. 8ased on the a%o"e response, the companies
re?#ired the 2;8I to withdraw the a%o"e s#mmons (dated 3!.5.!1! and
3.@.!1!).
Page 28
5
6. Kn 3!.!@.!1!, thro#gh separate letters iss#ed %y 2I<;)B and
2&I)B, the companies adopted the stance, that they did not ha"e the
complete information so#ght %y the 2;8I. -his was indeed a shoc:ing
disclos#re, %y two stat#tory entities, holding tho#sands of crores of r#pees
of in"estment f#nds, deposited %y crores of in"estors. 2#ch li:e
a%s#rdities, were ro#tine defences, adopted %y the two companies.
5. -he )hief 4inancial Kfficer of the 2ahara India Dro#p of )ompanies
so#ght an opport#nity of personal hearing. -he 2;8I (4->) afforded the
a%o"e so#ght opport#nity of hearing, on !3.11.!1!. D#ring the co#rse of
hearing, it was impressed #pon the )hief 4inancial Kfficer, that he sho#ld
f#rnish information solicited %y the 2;8I (thro#gh the aforesaid s#mmons,
dated 3!.5.!1! and 3.@.!1!), f#lly and acc#rately, witho#t any delay.
Despite the a%o"e, neither of the two companies, f#rnished the information
so#ght.
@. Kn its own, the 2;8I o%tained a part of the information, from the
>)+-1 portal maintained %y the >inistry of )orporate +ffairs. -his
information had %een f#rnished %y 2I<;)B, to the <egistrar of )ompanies,
0ttar 'radesh and 0ttara:hand$ and %y 2&I)B, to the <egistrar of
)ompanies, >aharashtra. 8y an order dated 4.11.!1!, the 2;8I (4->)
drew the following inferences=concl#sions:
4irstly, neither 2I<;)B nor 2&I)B had denied their ha"ing iss#ed
K4)Ds. 2econdly, 2I<;)B as also 2&I)B ac:nowledged ha"ing
filed <&'s in respect of the K4)Ds iss#ed %y them with the
concerned <egistrar of )ompanies. -hirdly, %esides the dates of
filing the <&'s with the respecti"e <egistrar of )ompanies, neither
Page 29
@
of the companies had f#rnished any other information=doc#ment
so#ght from the companies %y 2;8I. 4o#rthly, the companies had
adopted a stance, that they did not ha"e complete details relating to
the sec#rities iss#ed %y them. -his stance adopted %y the two
companies, according to the 2;8I, was prepostero#s. 4ifthly, 2;8I
had so#ght details of the n#m%er of application forms circ#lated, the
n#m%er of application forms recei"ed, the amo#nt of s#%scription
deposited, the n#m%er and list of allottees, the n#m%er of K4)Ds
allotted, the "al#e of allotment, the date of allotment, the date of
dispatch of de%ent#re certificates, copies of %oard=committee
meetings, min#tes of meetings d#ring which the said allotment was
appro"ed. +ccording to 2;8I, since the information so#ght was
merely %asic, the denial of the same %y the companies amo#nted to
a calc#lated and deli%erate denial of information. 2i.thly,
information so#ght %y the 2;8I depicted at serial n#m%er fifthly
hereina%o"e, was solicited to determine the a#thenticity of the
assertion made %y the companies, that the K4)Ds had %een iss#ed
%y way of pri"ate placement. 1hereas, it was %elie"ed %y the 2;8I
that the companies had iss#ed the K4)Ds to the p#%lic. 2e"enthly,
since the companies had adopted the position, that the K4)Ds were
iss#ed %y way of pri"ate placement to friends, associate gro#p
companies, wor:ers=employees and other indi"id#als who were
associated=affiliated=connected to the 2ahara Dro#p of )ompanies,
according to 2;8I it was highly impro%a%le, that the details and
partic#lars of s#ch friends, associate gro#p companies,
wor:ers=employees and other indi"id#als which were
associated=affiliated=connected to the 2ahara India Dro#p of
companies, was not a"aila%le with them (for %eing passed o"er to
2;8I).*
wherein the following s#mmary of inferences was recorded:
i. -he iss#e of K4)Ds %y the companies ha"e %een made to a
%ase of in"estors that are fifty or more in n#m%er.
ii. -he companies themsel"es tacitly admit the same as they
ha"e no case that f#nds ha"e %een mo%iliCed from a gro#p
smaller than fifty.
iii. + resol#tion #nder section 51(1+) of the +ct does not ta:e
away the Lp#%lic( nat#re of the iss#e.
i". -he filing of a prospect#s #nder the +ct signifies the intention
of the iss#er to raise f#nds from the p#%lic.
-herefore, for the aforesaid reasons, the s#%mission of the
companies that their K4)D iss#es are made on pri"ate placement
and do not fall #nder the definition of a p#%lic iss#e, is not tena%le.
-he instances disc#ssed a%o"e wo#ld prima facie s#ggest that the
offer of K4)Ds made %y the companies is p#%lic* in nat#re .*
Page 30
3!
3!. 8ased on the DI' D#idelines and the I)D< <eg#lations, the 2;8I
(4->) fo#nd, that the two companies had committed, the following
"iolations:
a) fail#re to file the draft offer doc#ment with 2;8I$
%) fail#re to mention the ris: factors and pro"ide the ade?#ate
disclos#res that is stip#lated, to ena%le the in"estors to ta:e a
well-informed decision.
c) denied the e.it opport#nity to the in"estors.
d) fail#re to loc:-in the minim#m promoters contri%#tion.
e) fail#re to grade their iss#e.
f) fail#re to open and close the iss#e within the stip#lated time
limit.
g) fail#re to o%tain the credit rating from the recogniCed credit
rating agency for their instr#ments.
h) fail#re to appoint a de%ent#re tr#stee
i) fail#re to create a charge on the assets of the company.
/) fail#re to create de%ent#re redemption reser"e, etc.*
8ased on the a%o"e concl#sions, the 2;8I (4->) iss#ed directions %y way
of an ad interim e. parte order, restraining 2I<;)B and 2&I)B from
mo%iliCing f#nds #nder their respecti"e <&'s, dated 13.!3.3!!5 and
!,.1!.!!@. -he companies were also directed, not to offer their e?#ity
shares=K4)Ds or any other sec#rities, to the p#%lic and=or in"ite
s#%scription in any manner whatsoe"er, either directly or indirectly, till
f#rther directions. -he 2;8I(s ad interim e. parte order dated 4.11.!1!
e.pressly referred to >r. 2#%rata <oy 2ahara, >s. Aandana 8harga"a, >r.
<a"i 2han:ar D#%ey and >r. +sho: <oy )ho#dhary. -hey were named
as promoter and directors, in the <&'s filed %y the two companies, %efore
the respecti"e <egistrar of )ompanies. -he a%o"e named promoter and
directors, were e.pressly prohi%ited from iss#ing prospect#s, or any other
offer doc#ment, or iss#ing ad"ertisement for soliciting money, from the
Page 31
31
p#%lic for the iss#e of sec#rities, in any manner whatsoe"er, either directly
or indirectly, till f#rther orders.
31. -he 2;8I(s order dated 4.11.!1! was challenged %efore the &igh
)o#rt thro#gh 1rit 'etition 9o.116! (>=8) of !1! on @.11.!1!. Kn
13.1.!1!, the &igh )o#rt stayed the operation of the order dated
4.11.!1!. Kn an application filed %y the 2;8I, the &igh )o#rt "acated
its interim order. 1hile "acating the interim order, the &igh )o#rt
o%ser"ed, inter alia:
4. F..-he petitioners were s#pposed to cooperate in the in?#iry
and their interest was protected %y restraining the 2;8I from
passing any final orders. -he matter was %eing heard finally #nder
the e.pectation that the ass#rances gi"en %y the learned co#nsel for
the petitioners wo#ld %e hono#red %y the petitioners and the matter
wo#ld %e finished at the earliest. 8#t the petitioners appear to ha"e
tho#ght otherwise. -he co#rt(s order cannot %e allowed to %e
"iolated or circ#m"ented %y any means.
1e, therefore, do not find any gro#nd to contin#e with the interim
order, which is here%y "acated for the own cond#ct of the petitioners
and for which they ha"e to than: their own stars.*
(emphasis is o#rs)
It is, therefore, apparent that the &igh )o#rt had denied relief to the
companies %eca#se of their non-cooperati"e attit#de in the in?#iry %eing
cond#cted %y the 2;8I. It was also so#ght to %e concl#ded against the
two companies, that they had not hono#red the commitments gi"en to the
)o#rt. +nd f#rther that, they were g#ilty of "iolating and circ#m"enting
)o#rt(s orders. -he order passed %y the &igh )o#rt, is yet another
instance of the defiance of the two companies, in allowing their affairs to
%e in"estigated.
Page 32
3
3. -he 2;8I iss#ed yet another show ca#se notice dated !.3.!11, to
the two companies, principally on the same facts and gro#nds, as the
earlier show ca#se notice dated 4.11.!1!. -he a%o"e notices were
contested %y %oth the companies, again on legal technicalities.
Importantly, the companies yet again, did not f#rnish any fact#al details to
the 2;8I. -he defiance contin#ed.
33. Kn 3.,.!11, the 2;8I(4->), passed the following directions:-
1. -he two )ompanies, 2ahara )ommodity 2er"ices )orporation
Bimited (earlier :nown as 2ahara India <eal ;state )orporation
Bimited) and 2ahara &o#sing In"estment )orporation Bimited and its
promoter, >r. 2#%rata <oy 2ahara, and the directors of the said
companies, namely, >s. Aandana 8harga"a, >r. <a"i 2han:ar
D#%ey and >r. +sho: <oy )ho#dhary, /ointly and se"erally, shall
forthwith ref#nd the money collected %y the aforesaid companies
thro#gh the <ed &erring 'rospect#s dated >arch 13, !!5 and
Kcto%er ,, !!@, iss#ed respecti"ely, to the s#%scri%ers of s#ch
Kptionally 4#lly )on"erti%le De%ent#res with interest of 13O per
ann#m from the date of receipt of money till the date of s#ch
repayment.

. 2#ch repayment shall %e effected only in cash thro#gh
Demand Draft or 'ay Krder.

3. 2ahara )ommodity 2er"ices )orporation Bimited (earlier
:nown as 2ahara India <eal ;state )orporation Bimited) and 2ahara
&o#sing In"estment )orporation Bimited shall iss#e p#%lic notice, in
all editions of two 9ational Dailies (one ;nglish and one &indi) with
wide circ#lation, detailing the modalities for ref#nd, incl#ding details
on contact persons incl#ding names, addresses and contact details,
within fifteen days of this Krder coming into effect.

4. 2ahara )ommodity 2er"ices )orporation Bimited (earlier
:nown as 2ahara India <eal ;state )orporation Bimited) and 2ahara
&o#sing In"estment )orporation Bimited are restrained from
accessing the sec#rities mar:et for raising f#nds, till the time the
aforesaid payments are made to the satisfaction of the 2ec#rities
and ;.change 8oard of India.

Page 33
33
3. 4#rther, >r. 2#%rata <oy 2ahara, >s. Aandana 8harga"a, >r.
<a"i 2han:ar D#%ey and >r. +sho: <oy )ho#dhary are restrained
from associating themsel"es, with any listed p#%lic company and
any p#%lic company which intends to raise money from the p#%lic, till
s#ch time the aforesaid payments are made to the satisfaction of the
2ec#rities and ;.change 8oard of India.*
(emphasis is o#rs)
34. -he order of the 2;8I (4->) came to %e assailed %y the two
companies, %efore the 2+-. ;"en d#ring the co#rse of appellate
proceedings, the companies did not disclose, the fact#al position. -he
companies, contin#ed to contest the claim of the respondents, %y relying
on technicalities of law, i.e., on the same legal parameters, as had %een
adopted %y them %efore the 2;8I (4->). -he 2+- %y its order dated
15.1!.!11 #pheld the order passed %y the 2;8I (4->) dated 3.,.!11.
-he 2+- directed the appellant companies to ref#nd the entire money
collected from the in"estors, within si. months (from the date of its order
dated 15.1!.!11).
33. -here#pon the matter was %ro#ght to this )o#rt %y way of appeals
preferred %y the two companies concerned, i.e., )i"il +ppeal nos. @513
and @533 of !11. Kn 5.11.!11, this )o#rt passed the following interim
order:-
8y the imp#gned order, the appellants ha"e %een as:ed %y 2+- to
ref#nd a s#m of <s.16,4!! crores appro.imately on or %efore
5.11.!11. 1e e.tend the period #pto @.1.!1.*
It is, therefore, that this )o#rt while iss#ing the interim directions, merely
permitted the two companies concerned to ref#nd a s#m of <s.16,4!!
crores (appro.imately) as directed %y the 2;8I (4->) and 2+-, #pto
@.1.!1. It is, howe"er, imperati"e to #nderstand, that this )o#rt while
Page 34
34
passing the a%o"e interim order, did not "ary the manner of ma:ing
ref#nds, in case the two companies concerned decided to ma:e any
ref#nd to the in"estors. In this %ehalf it needs to %e noticed, that in its
order dated 3.,.!11, the 2;8I (4->) had clearly directed, that s#ch
repayment co#ld only %e made in cash thro#gh demand draft or pay order.
9o li%erty was granted to the two companies, to con"ert the in"estment
made %y the holders of the K4)D(s, into similar in"estments, with the other
companies. In other words, cash con"ersion in any other format, was not
permitted. -o comply with the letter and spirit of the a%o"e orders,
therefore, e"en if ref#nd was to %e made %y the in"estors, it co#ld ha"e
%een done, only %y way of demand drafts or pay orders, and not, %y way of
cash. -he alleged cash payment made %y the two companies, while
redeeming the K4)D(s, was therefore per se illegal, and in "iolation of the
orders, dated 3.,.!11 (passed %y the 2;8I (4->)) and 15.1!.!11
(passed %y the 2+-). 1e m#st, therefore emphatically point o#t, that the
"ery s#%mission now made %y the companies, that the in"estors were
ref#nded their deposits %y way of cash, is per se another tactic in the
series of manoe#"res adopted %y the two companies, to defeat the
process of law. 4act#ally, there is no accepta%le proof of s#ch ref#nd.
-his aspect is %eing dealt with separately, hereafter.
3,. D#ring the co#rse of ad/#dication of )i"il +ppeal 9o.@513 of !11
(along with )i"il +ppeal 9o.@533 of !11), the iss#es were can"assed at
the %ehest of the appellants, as is apparent from the order passed %y this
Page 35
33
)o#rt on 31.5.!1, on the same legal iss#es, which were can"assed on
%ehalf of the companies #nder reference %efore the 2;8I (4->) and the
2+-. In the ad/#dication rendered %y this )o#rt, it was concl#ded that the
material so#ght %y the 2;8I from the companies, tho#gh a"aila%le with
them, m#st %e deemed to ha"e %een conscio#sly withheld. 2ince the
companies willf#lly a"oided to f#rnish the information to the 2;8I, it was
felt that an ad"erse inference sho#ld %e drawn against the two companies.
&a"ing e.amined the fact#al details a"aila%le on the record, this )o#rt also
e.pressed an impression that the material made a"aila%le %y the
companies F was totally #nrealistic and co#ld well %e fictitio#s, concocted
and made #pF*. 1hile disposing of the appeals, filed %y the two
companies, this )o#rt was not certain whether all the s#%scri%ers were
gen#ine, and therefore, while concl#ding the matter, this )o#rt in its order
dated 31.!5.!1, e.pressed the hope that all the s#%scri%ers were
gen#ine. +nd so also, the s#%scription amo#nt, as there was indeed a
needle of s#spicion on this s#%/ect as well. +ccordingly this )o#rt, in its
order dated 31.5.!1 o%ser"ed, that F whole affair %eing do#%tf#l,
d#%io#s and ?#estiona%leF*. -hese o%ser"ations were recorded,
%eca#se the actions of the appellants made the gen#ineness of the affairs
of the two companies, ?#estiona%le.
36. It is also important for #s to record that the positi"e position adopted
%y the 2;8I %efore this )o#rt, d#ring the disposal of )i"il +ppeal 9os.@513
and @533 of !11 was, that neither 2I<;)B nor 2&I)B e"er pro"ided
Page 36
3,
details of its in"estors to the 2;8I (4->) or to the 2+-. -he two
companies had, contested the proceedings initiated against them, only on
technical gro#nds. 1e may record, that we were told, that e"en %efore the
2+-, no details were f#rnished. +s against the a%o"e, the position
adopted %y the 2I<;)B %efore #s, d#ring the co#rse of the appellate
proceedings was, that 2I<;)B had f#rnished a compact disc to the 2;8I
(4->), along with its operating :ey. -he compact disc, according to
learned co#nsel, had complete in"estor related data, pertaining to 2I<;)B.
1hilst it was ac:nowledged %y the 2;8I %efore this )o#rt, that a compact
disc (allegedly containing details a%o#t the in"estors) was f#rnished %y
2I<;)B, yet it was emphatically pointed o#t, that its operating :ey was
withheld. -his was another deli%erate manoe#"re adopted, to withhold
in"estor related information from the 2;8I(4->). <es#ltantly, no details
whatsoe"er were e"er disclosed %y 2I<;)B either %efore the 2;8I (4->)
or the 2+-.
35. -he position adopted %y 2&I)B was e"en worse. It is necessary to
place on record the fact, that the 2&I)B, one of the two concerned
companies, ne"er e"er disclosed the names and other connected details of
its in"estors to the 2;8I. 1e made a repeated poser, d#ring open hearing
(in the present writ petition), a%o#t 2&I)B ha"ing ne"er f#rnished its
in"estor details. -he a%o"e position was confirmed %y learned co#nsel
representing the 2;8I. 0nfort#nately, >r. 2. Danesh, learned 2enior
)o#nsel for the petitioner, on the last day of hearing, "ent#red to contest
Page 37
36
the a%o"e position. &e handed o"er to #s two "ol#mes of papers r#nning
into ,! pages #nder the title M 9ote on information pro"ided %y 2&I)B to
the 2;8I). 1e re?#ired him to in"ite o#r attention to doc#ments indicating
disclos#re of the a%o"e information. &is s#%terf#ge stood e.posed, when
no material depicting disclos#re of names and other connected details %y
2&I)B to the 2;8I emerged from the two "ol#mes of papers, handed o"er
to #s. 1hat is essential to record is, that till date 2&I)B has ne"er e"er
s#pplied in"estor related details to the 2;8I. + fact a%o#t which there is
now no am%ig#ity (specially after, learned co#nsel, filed the
aforementioned two "ol#mes of papers). Does it lie in the mo#th of
learned co#nsel to assert, that #n/#stified concl#sions ha"e %een recorded,
in the imp#gned order dated 4.3.!14 against the two companies witho#t
any %asisG 1e are f#lly satisfied, that the fact#al position depicted
hereina%o"e, f#lly /#stifies o#r mentioning in the imp#gned order (dated
4.3.!14), that the contemnors had maintained an #nreasona%le stand
thro#gho#t the proceedings %efore the 2;8I, 2+-, &igh )o#rt, and e"en
%efore this )o#rt.
3@. +ccording to the assertions made %y 2I<;)B, it had collected an
amo#nt of <s.1@,4!!,5,,,4,!! thro#gh its open ended schemes %etween
3.4.!!5 and 13.4.!11. Its collections, after ta:ing into consideration
redemptions, statedly stood at <s.16,3,3,33,,3!! as on 31.5.!11. -he
a%o"e collection was allegedly made from ,1,!6,61 in"estors. It is not
possi%le for #s to narrate similar fig#res in respect of the amo#nt collected
Page 38
35
%y 2&I)B, or for that matter, the n#m%er of in"estors, %eca#se the records
depicting the a%o"e details ha"e ne"er %een disclosed %y 2&I)B. -he
fig#res mentioned in the order dated 31.5.!1, are therefore, the fig#res
pro"ided %y 2I<;)B and 2&I)B. +ll those fig#res are #na#thenticated. In
s#m and s#%stance, nothing was :nown. +ll assertions made %y the two
companies were s#%/ect to "erification. -he a%o"e fact#al position
indicates the %asis and the rationale, of the directions iss#ed %y this )o#rt
on 31.5.!1. 1e had simply re?#ired the two companies, to deposit the
admitted in"estor f#nds. 1e had directed dis%#rsement, only on
"erification. -he fact#al position depicted a%o"e also inter alia depicts, that
the petitioner M >r. 2#%rata <oy 2ahara as promoter, and >r. +sho: <oy
)ho#dhary and >r. <a"i 2han:ar D#%ey, as directors, were always treated
as acti"ely in"ol"ed in the matter, and therefore, "ario#s orders (incl#ding
restraint orders) were passed, wherein they were e.pressly named. 2ince
they sho#ldered the o"erall responsi%ility of the affairs of the two
companies, it was f#lly /#stified for this )o#rt, to re?#ire them to comply
with the orders passed %y this )o#rt on 31.5.!1 and 3.1.!1.
I=. E//&#%. :$0* "' %(+. C&!#%4 %& 7$9&5* %(* 7&,%*:,&#.4 +,75!0+,2
%(* 1*%+%+&,*# > M#. S!"#$%$ R&' S$($#$4 /&# 7&:15+$,7* &/ %(*
&#0*#. &/ %(+. C&!#%4 0$%*0 ;1.<.2012 $,0 5.12.2012
4!. D#ring the co#rse of hearing of the instant writ petition, we were
gi"en to #nderstand, that all co#nsel representing the petitioner were ta:en
%y s#rprise when we passed the order dated 4.3.!14 (e.tracted at the
%eginning of this order). It was s#%mitted, that a person of the eminence of
Page 39
3@
the petitioner, co#ld not %e s#ddenly sent to /ail witho#t notice. It was
asserted, that the petitioner had entered appearance to assist this )o#rt,
and to e.plain his position, %#t no opport#nity was granted to him. 2ome
of the learned co#nsel representing the petitioner accordingly descri%ed
the imp#gned order dated 4.3.!14 as a draconian order*. 8eca#se,
according to them, the said imp#gned order, had "iolated the petitioner(s
rights #nder +rticle 1 of the )onstit#tion of India. +nd also %eca#se, it
was iss#ed witho#t affording the petitioner an opport#nity of showing
ca#se.
41. -he bona fides of the a%o"e s#%mission, are diffic#lt to fathom. It
seems to #s, that rather than the petitioner tendering his e.planation to this
)o#rt, for not complying with the orders passed %y it, the petitioner(s
co#nsel were posing a ?#estion to this )o#rt to e.plain to them, the
legitimacy of the proced#re adopted %y the )o#rt. In o#r #nderstanding,
learned co#nsel who represented the petitioner, were s#rely insincere to
the ca#se of /#stice, when they dr#mmed their assertions, witho#t %lin:ing
an eye$ since they were aware, that the fact#al position was otherwise.
4or learned co#nsel for the petitioner, to ad"ance s#ch s#%missions, to
state the least, was #nimagina%le. 8oth >r. <am 7ethmalani and Dr.
<a/ee" Dhawan, were lead co#nsel representing the contemnors in the
contempt proceedings. -hey s#rely o#ght to ha"e :nown %etter, %eca#se
they had appeared in the contempt proceedings, in the defence of the
contemnors. It is not for a )o#rt, to tender any e.planation to any litigant,
Page 40
4!
or to his co#nsel. +ccordingly, it sho#ld ne"er %e considered as o%ligatory,
on the part of this )o#rt, to tender any s#ch e.planation. 0ndo#%tedly, it is
open to a party to see: re"iew, of an order passed %y this )o#rt, #nder
+rticle 136 of the )onstit#tion of India. Kr to file a c#rati"e petition, after a
re"iew petition had %een re/ected, as laid down %y this )o#rt in <#pa
+sho: &#rra(s case (s#pra), if it is felt that a serio#s mista:e had %een
committed. 7#st for this case, in order to depict the position in its correct
perspecti"e, we shall narrate in the s#cceeding paragraphs, the long rope
which was e.tended to the petitioner (as also, to the other contemnors) to
comply with the directions iss#ed %y this )o#rt (on 31.5.!1 and
3.1.!1), %efore the order dated 4.3.!14 was passed.
4. ;"er since the disposal of )i"il +ppeal nos. @513 and @533 of !11,
on the iss#e of compliance (as also, the alleged non-compliance), one or
the other proceeding was listed for hearing, for no less than the following
33 dates, %efore the order dated 4.3.!14 was passed:-
11.@.!1, 5.@.!1, 1@.1!.!1, 1@.11.!1, 5.1.!13, ,..!13,
5..!13, 1@..!13, 3..!13, 4.4.!13, .4.!13, .3.!13,
5.3.!13, 16.6.!13, 4.6.!13, 3!.6.!13, ,.5.!13, 13.5.!13,
,.5.!13, .@.!13, 1,.@.!13, 4.1!.!13, 5.1!.!13, 31.1!.!13,
1.11.!13, !.11.!13, 1.11.!13, 11.1.!13, 16.1.!13,
.1.!14, @.1.!14, 5.1.!14, 11..!14, !..!14 and ,..!14*
In recording the dates of hearing, we ha"e not ta:en into consideration the
dates of hearing in )i"il +ppeal no. 5,43 of !1 (and 1rit 'etition ()i"il)
no. 36 of !1), d#ring the proceedings whereof a three-7#dge 8ench of
this )o#rt, passed the order dated 3.1.!1. 2#rely, d#ring the 33 dates
of hearing, whereafter the order dated 4.3.!14 was passed, the petitioner
Page 41
41
m#st ha"e %een a%le to #nderstand, what was going on. 4or the
proceedings were not smooth and fa"o#ra%le for the petitioner. + n#m%er
of earlier orders, affected the petitioner(s rights ad"ersely. It is therefore,
that we ha"e recorded hereina%o"e, that the stand can"assed %y learned
co#nsel was #nimagina%le. 1e may therefore first record the happenings,
after we passed the order dated 31.5.!1.
43. Kn ,..!13, this )o#rt iss#ed notices in )ontempt 'etition ()i"il)
nos. 41 and 413 of !1. 'ersonal appearance of the contemnors (which
incl#ded the petitioner) was dispensed with. -he 2;8I was also directed
to file a stat#s report. -he receipt of the a%o"e notices, sho#ld ha"e %een
the first information to the petitioner, of this )o#rt(s concern, a%o#t the non-
compliance of the order dated 31.5.!1. -he petitioner came to %e
represented in the contempt proceedings thro#gh co#nsel, on 4.4.!13.
Bearned co#nsel for the petitioner, ha"e howe"er %een ma:ing their
s#%missions as if, the petitioner had entered appearance only on 4.3.!14,
when the imp#gned order was passed. -here were act#ally 3 dates of
hearing after the petitioner had %een represented in the contempt
proceedings, and %efore the imp#gned order was passed (on 4.3.!14).
44. 1e were shoc:ed, when we were informed that e.tension of time to
comply with this )o#rt(s orders dated 31.5.!1 and 3.1.!1 was, in the
first instance, so#ght %y the two companies, from the 2;8I. 1hen the
2;8I declined, the concerned parties approached the 2+- %y preferring
+ppeal nos. 4 of !13 (2#%rata <oy 2ahara ". 2;8I), 45 of !13 (2&I)B
Page 42
4
". 2;8I), 4@ of !13 (2I<;)B ". 2;8I) and 3! of !13 (+sho: <oy
)ha#dhary ". 2;8I). 4or /#st the same p#rpose, 1rit 'etition no. !55 of
!13, was filed %efore the &igh )o#rt. 1e are at a loss to #nderstand,
how rela.ation of an order passed %y this )o#rt, co#ld ha"e %een so#ght
either from the 2;8I or the 2+-, or for that matter, e"en from the &igh
)o#rt. &ow this a%#se of process, was handled %y #s, stands recorded in
a s#%se?#ent paragraph.
43. -he 2;8I filed Interloc#tory +pplication nos. 6 and 63 of !13.
9otice in the a%o"e applications was iss#ed for 5.3.!13. -he a%o"e
Interloc#tory +pplications pertained to proceedings initiated %y the
contemnors %efore the 2+- and the &igh )o#rt. -he said proceedings
were initiated %y the contemnors, after the 2;8I had declined to e.tend the
time frame, fi.ed %y this )o#rt thro#gh its order dated 31.5.!1.
Interestingly, the petitioner in the instant writ petition, had initiated one
s#ch proceeding in his own name (+ppeal no. 4 of !13, 2#%rata <oy
2ahara ". 2;8I). 1e are of the prima facie "iew, that the initiation of the
a%o"e proceedings was aimed at di"erting the iss#e of implementation of
o#r order dated 31.5.!1. +ccordingly on 16.6.!13, we directed F that
no &igh )o#rt, 2ec#rities +ppellate -ri%#nal and any other 4or#m shall
pass any order against the orders passed %y the 2ec#rities and ;.change
8oard of India (2;8I) in implementation of this )o#rt(s /#dgment dated
31.5.!1*.
Page 43
43
4,. Kn 4.6.!13, this )o#rt iss#ed notice, in )ontempt 'etition ()i"il)
no. ,! of !13 on acco#nt of non-compliance of the orders passed %y this
)o#rt on 3.1.!1. -he order dated 3.1.!1 (passed in )i"il +ppeal
no. 5,43 of !1 and 1rit 'etition ()i"il) no. 36 of !1) is %eing
e.tracted here#nder:-
-his appeal is directed against the /#dgment and order dated @th
9o"em%er, !1, passed %y the 2ec#rities +ppellate -ri%#nal, in
+ppeal 9o.1 of !1, holding that the same was premat#re and
was not, therefore, maintaina%le
. In earlier appeals, %eing ).+.9o.@513 of !11 and
).+.9o.@533 of !11, this )o#rt was concerned with the powers of
the 2ec#rities and ;.change 8oard of India (2;8I) #nder 2ection
33+(%) of the )ompanies +ct, 1@3,, to administer "ario#s pro"isions
relating to iss#e and transfer of sec#rities to the p#%lic %y listed
companies or companies which intend to get their sec#rities listed
on any recogniCed 2toc: ;.change in India and also the ?#estion
whether Kptionally 4#lly )on"erti%le De%ent#res, offered %y the
appellants, sho#ld ha"e %een listed on any recogniCed 2toc:
;.change in India, %eing '#%lic Iss#e #nder 2ection 63 read with
2ection ,!8 and allied pro"isions of the )ompanies +ct. -he said
appeals were heard and finally disposed of on 31st +#g#st, !1,
with the following directions:-
1. 2aharas (2I<;)B P 2&I)B) wo#ld ref#nd the amo#nts
collected thro#gh <&'s dated 13.3.!!5 and 1,.1!.!!@
along with interest Q 13O per ann#m to 2;8I from the date of
receipt of the s#%scription amo#nt till the date of repayment,
within a period of three months from today, which shall %e
deposited in a 9ationaliCed 8an: %earing ma.im#m rate of
interest.
. 2aharas are also directed to f#rnish the details with
s#pporting doc#ments to esta%lish whether they had ref#nded
any amo#nt to the persons who had s#%scri%ed thro#gh <&'s
dated 13.3.!!5 and 1,.1!.!!@ within a period of 1! (ten)
days from the prono#ncement of this order and it is for the
2;8I (1->) to e.amine the correctness of the details
f#rnished.
3. 1e ma:e it clear that if the doc#ments prod#ced %y
2aharas are not fo#nd gen#ine or accepta%le, then the 2;8I
Page 44
44
(1->) wo#ld proceed as if the 2aharas had not ref#nded any
amo#nt to the real and gen#ine s#%scri%ers who had in"ested
money thro#gh <&'s dated 13.3.!!5 and 1,.1!.!!@.
4. 2aharas are directed to f#rnish all doc#ments in their
c#stody, partic#larly, the application forms s#%mitted %y
s#%scri%ers, the appro"al and allotment of %onds and all other
doc#ments to 2;8I so as to ena%le it to ascertain the
gen#ineness of the s#%scri%ers as well as the amo#nts
deposited, within a period of 1! (ten) days from the date of
prono#ncement of this order.
3. 2;8I (1->) shall ha"e the li%erty to engage
In"estigating Kfficers, e.perts in 4inance and +cco#nts and
other s#pporting staff to carry o#t directions and the e.penses
for the same will %e %orne %y 2aharas and %e paid to 2;8I.
,. 2;8I (1->) shall ta:e steps with the aid and
assistance of In"estigating +#thorities=;.perts in 4inance and
+cco#nts and other s#pporting staff to e.amine the
doc#ments prod#ced %y 2aharas so as to ascertain their
gen#ineness and after ha"ing ascertained the same, they
shall identify s#%scri%ers who had in"ested the money on the
%asis of <&'s dated 13.3.!!5 and 1,.1!.!!@ and ref#nd
the amo#nt to them with interest on their prod#ction of
rele"ant doc#ments e"idencing payments and after co#nter
chec:ing the records prod#ced %y 2aharas.
6. 2;8I (1->), in the e"ent of finding that the
gen#ineness of the s#%scri%ers is do#%tf#l, an opport#nity
shall %e afforded to 2aharas to satisfactorily esta%lish the
same as %eing legitimate and "alid. It shall %e open to the
2aharas, in s#ch an e"ent#ality to associate the concerned
s#%scri%ers to esta%lish their claims. -he decision of 2;8I
(1->) in this %ehalf will %e final and %inding on 2aharas as
well as the s#%scri%ers.
5. 2;8I (1->) if, after the "erification of the details
f#rnished, is #na%le to find o#t the wherea%o#ts of all or any of
the s#%scri%ers, then the amo#nt collected from s#ch
s#%scri%ers will %e appropriated to the Do"ernment of India.
@. 1e also appoint >r. 7#stice 8.9. +grawal, a retired
7#dge of this )o#rt to o"ersee whether directions iss#ed %y
this )o#rt are properly and effecti"ely complied with %y the
2;8I (1->) from the date of this order. >r. 7#stice 8.9.
+grawal wo#ld also o"ersee the entire steps adopted %y 2;8I
Page 45
43
(1->) and other officials for the effecti"e and proper
implementation of the directions iss#ed %y this )o#rt. 1e fi.
an amo#nt of <s.3 la:hs towards the monthly rem#neration
paya%le to >r. 7#stice 8.9. +grawal, this will %e in addition to
tra"elling, accommodation and other e.penses,
commens#rate with the stat#s of the office held %y 7#stice
8.9. +grawal, which shall %e %orne %y 2;8I and reco"era%le
from 2aharas. >r. 7#stice 8.9. +grawal is re?#ested to ta:e
#p this assignment witho#t affecting his other engagements.
1e also order that all administrati"e e.penses incl#ding the
payment to the additional staff and e.perts, etc. wo#ld %e
%orne %y 2aharas.
1!. 1e also ma:e it clear that if 2aharas fail to comply with
these directions and do not effect ref#nd of money as directed,
2;8I can ta:e reco#rse to all legal remedies, incl#ding
attachment and sale of properties, freeCing of %an: acco#nts
etc. for realiCations of the amo#nts.
11. 1e also direct 2;8I(1->) to s#%mit a stat#s report,
d#ly appro"ed %y >r. 7#stice 8.9. +grawal, as e.peditio#sly
as possi%le, and also permit 2;8I (1->) to see: f#rther
directions from this )o#rt, as and when, fo#nd necessary. -he
appeals were, therefore, dismissed with the aforesaid
directions.
3. +s indicated a%o"e, the present appeal is directed against the
order of the 2ec#rities +ppellate -ri%#nal, in the +ppeal, %eing
9o.1 of !1, which had %een filed on 6
th
9o"em%er, !1,
complaining that the 2;8I had not accepted the doc#ments, which
were to %e f#rnished to it %y the appellants, since they were
tendered a co#ple of days after the stip#lated period.
4. 1e are not inclined to interfere with the s#%stance of the order
of the -ri%#nal imp#gned in this appeal. -he only ?#estion which we
are inclined to consider is whether the time for implementing the
directions contained in the earlier order of 31st +#g#st, !1, may
%e e.tended or not.
3. >r. Dopal 2#%ramani#m, learned 2enior )o#nsel, s#%mitted
that after the aforesaid order had %een passed, certain amo#nts had
%een paid to in"estors and that according to them a s#m of J 31!=-
)rores remained to %e paid to 2;8I, o#t of the amo#nt already
indicated, for the p#rpose of distri%#tion to the in"estors.
,. &a"ing heard learned 2enior )o#nsel, >r. Dopal
2#%ramani#m, appearing for the appellants, >r. Datar, for 2;8I and
Page 46
4,
>r. Ai:as 2ingh, appearing for 0ni"ersal In"estors +ssociation P
Krs., who has filed a separate 1rit 'etition, we are not inclined to
accept the s#%missions made %y >r. Dopal 2#%ramani#m, at their
face "al#e, since, in the order of 31st +#g#st, !1, it has %een
indicated that if any payments had %een made, the details thereof,
along with s#pporting doc#ments, were to %e s#%mitted to 2;8I to
"erify the same. ;ssentially, the appellants ha"e failed on %oth
co#nts, since neither the amo#nt indicated in the order, together with
interest Q 13O per ann#m, accr#ed thereon, has %een paid, nor
ha"e the doc#ments %een s#%mitted within the time stip#lated in the
said order. -he reliefs prayed for in the writ petition filed %y 0ni"ersal
In"estors +ssociation,amo#nts to a re"iew of the order passed %y
this )o#rt on 31.!5.!1.
6. 1e, therefore, dispose of the appeal and the writ petition, as
also the inter"ention applications with the following directions:-
(I) The appellants shall immediately hand over the
Demand Drafts, which they have produced in Court, to SEBI,
for a total sum of !"#$%& Crores and deposit the balance in
terms of the order of '"st (u)ust, #$"#, namely, "*,+$$%&
Crores and the entire amount, includin) the amount
mentioned above, to)ether with interest at the rate of "! per
cent, per annum, with SEBI, in two installments, The first
installment of "$,$$$%&Crores, shall be deposited with SEBI
within the first wee- of .anuary, #$"', The remainin) balance,
alon) with the interest, as calculated, shall be deposited within
the first wee- of /ebruary, #$"', The time for filin) documents
in support of the refunds made to any person, as claimed by
the appellants, is e0tended by a period of "! days, 1n receipt
of the said documents, SEBI shall implement the directions
contained in the order passed on '"st (u)ust, #$"#, In default
of deposit of the said documents within the stipulated period,
or in the event of default of deposit of either of the two
installments, the directions contained in para)raph "$ of the
aforesaid order dated '"st (u)ust, #$"#, shall immediately
come into effect and SEBI will be entitled to ta-e all le)al
remedies, includin) attachment and sale of properties,
free2in) of ban- accounts etc, for relisation of the balance
dues,
5. Bet a copy of this order %e made a"aila%le to >r. 7#stice 8.9.
+grawal, who has %een appointed %y this )o#rt, %y tomorrow, to
ena%le &is Bordship to o"ersee the wor:ing of the Krder of 31st
+#g#st, !1, and this Krder passed %y #s today.
Page 47
46
@. &a"ing regard to the nat#re of the case, the appellants shall
%ear the costs of the respondent(s) in these proceedings.
1!. In the e"ent any e.cess payment is fo#nd to ha"e %een made
%y the appellants %y "irt#e of the earlier Krder and this Krder, the
same shall %e ref#nded to the appellants %y 2;8I.*
(emphasis is o#rs)
1hen the a%o"e order was passed %y this )o#rt, sho#ld the petitioner not
ha"e :nown, that the e.ercise of see:ing e.tension of time had come to an
end, and the first installment of <s.1!,!!! crores had to %e paid within the
first wee: of 7an#ary, !13*G
46. ;"en tho#gh responses to the contempt petitions referred to a%o"e,
had %een filed, and we were hearing learned co#nsel representing the
contemnors, on the s#%/ect of contempt, we were also trying to ca/ole the
two companies, into an #nderstanding that they were o%liged to comply
with the orders dated 31.5.!1 and 3.1.!1. In o#r "iew, compliance of
the a%o"e orders wo#ld red#ce the serio#sness of the iss#e. -he effort on
o#r part was always to a"oid hardship, to any of the concerned parties.
8#t in o#r a%o"e effort, we co#ld not compromise, the interest of the
in"estors. +s already noticed, in the disc#ssion recorded #nder the
preceding heading, the two companies ne"er s#pplied any a#thentic
details of their in"estors. 9or the details of the moneys collected.
1hate"er the two companies asserted, had to %e accepted on its face
"al#e, to proceed f#rther. 1hen learned co#nsel for the petitioner, made a
proposal to sec#re the amo#nt paya%le to the in"estors of the two
companies, we were not a"erse to the proposal. 1e wished to e.plore
some intermediary means to sec#re compliance. -hat wo#ld ha"e
Page 48
45
deferred adoption of harsher meas#res. 1ith the a%o"e o%/ect in mind, we
accepted the proposal of the learned co#nsel for the petitioner (and the
other contemnors), to f#rnish a list of #nenc#m%ered immo"a%le
properties, which wo#ld sec#re the lia%ility of the two companies (for
compliance of the order dated 31.5.!1, as well as, the s#%se?#ent order
dated 3.1.!1). -he list of properties f#rnished to this )o#rt, co#ld not
ha"e %een so f#rnished, witho#t the petitioner(s e.press appro"al. -here
can %e no do#%t a%o#t the aforesaid inference, %eca#se the stance now
adopted %y the petitioner shows, that the petitioner is in a%sol#te charge of
all the affairs of the companies. +nd nothing can mo"e witho#t his acti"e
in"ol"ement. D#ring the co#rse of hearing of the present petition, learned
co#nsel ha"e repeatedly emphasiCed that f#rther deposits will %e possi%le,
only after the petitioner is released from /#dicial c#stody. -his stance
shows, that in the affairs of the 2ahara Dro#p, >r. 2#%rata <oy 2ahara, is
the only person who matters. +nd therefore, the other indi"id#al directors,
may ha"e hardly any say in the matter.
45. -he lists of properties which were pro"ided %y the two companies
d#ring the a%o"e e.ercise, were re/ected %y the 2;8I, for good reason. It
is not necessary for #s to record the details herein, why the lists of
properties f#rnished to this )o#rt were fo#nd to %e #naccepta%le. 1e
may, howe"er, record, that we were satisfied with the s#%missions
ad"anced at the %ehest of the 2;8I, that the proposed properties, wo#ld
not sec#re the amo#nt of the ref#nd contemplated %y the orders of this
Page 49
4@
co#rt. It is therefore, that another attempt was made, conse?#ent #pon an
offer made on %ehalf of the two companies, that other companies within
the framewor: of the 2ahara Dro#p, wo#ld also ma:e a"aila%le to the
2;8I, their #nenc#m%ered immo"a%le properties. Is it possi%le for anyone
to say, after the petitioner agreed to pro"ide the list of immo"a%le
properties, that he was not aware of the nat#re of proceedings %eing
cond#cted in this )o#rt, or their gra"ityG Is it possi%le for the petitioner to
say, that he was not aware of the reason, why these lists were %eing
f#rnished to this )o#rtG -here can %e no do#%t, that it was a%#ndantly
clear to the petitioner, that the properties mentioned in the lists f#rnished,
wo#ld %e sold if necessary, to comply with this )o#rt(s order dated
31.5.!1. -his was s#fficient notice to the petitioner, of the serio#sness
of the sit#ation.
4@. 2ince o#r efforts of this )o#rt, to sec#re the in"estors( interests,
determined "ide its order dated 31.5.!1, were %eing systematically
fr#strated this )o#rt in order to demonstrate the serio#sness of the iss#e,
directed that F the alleged contemnors (respondents) shall not lea"e the
co#ntry witho#t the permission of this )o#rtF* till compliance of the a%o"e
order. -he a%o"e direction was iss#ed on 5.1!.!13. Is it open to the
learned co#nsel for the petitioner, after the a%o"e restraint order was
passed, to contend that the petitioner was not aware of the happenings in
)o#rtG &e was aware that the a%o"e restraint order was passed, d#ring
the pendency of the contempt proceedings, which were initiated %eca#se
Page 50
3!
of non-compliance of the orders dated 31.5.!1 and 3.1.!1. It is
therefore incorrect to contend, that the petitioner had no notice, and was
ta:en #nawares. D#ring the co#rse of one of the s#%se?#ent hearings (on
the s#%/ect), learned co#nsel representing the contemnors, clarified, that
the properties in the list pro"ided to this )o#rt, co#ld not %e p#t to sale, in
e.ec#tion of the orders dated 31.5.!1 and 3.1.!1. 1hat was the
p#rpose so#ght to %e achie"ed, if the properties (incl#ded in the list
f#rnished to this )o#rt) co#ld not %e sold, for the satisfaction of the
/#dgment dated 31.5.!1G 2#rely, the contemnors, were ta:ing this
)o#rt for a ride. -he demeano#r of the contemnors to stonewall the
process of law, from the time in"estigation was commenced %y the 2;8I in
!!@, contin#ed e"en after the /#dicial process had attained finality, %y this
)o#rt(s order dated 31.5.!1. +ll along the petitioner feigns ignorance of
e"erything.
3!. ;"en tho#gh this )o#rt had no intention to grant any rela.ation to
the contemnors, on the restraint order passed on 5.1!.!13 (%y which the
contemnors, were stopped from lea"ing this co#ntry), yet when
Interloc#tory +pplication no. 4 was filed (in )ontempt 'etition ()i"il) no.
,! of !13), contending that >r. 2#%rata <oy 2ahara, had foreign
commitments, the )o#rt rela.ed the a%o"e order, and permitted the
petitioner to go a%road. 8#t, sim#ltaneo#sly the )o#rt directed the
petitioner, to immediately ret#rn %ac:, and %e present in the co#ntry, in
case of non-compliance of this )o#rt(s directions, (to s#%mit original title
Page 51
31
deeds of #nenc#m%ered properties of the 2ahara Dro#p of )ompanies).
Kn 1.11.!13, the )o#rt was informed %y the learned co#nsel for the
contemnors, that the properties depicted in the list f#rnished to this )o#rt
(in f#rtherance of the order dated 5.1!.!13), co#ld not %e sold witho#t
the appro"al of the 8oard of Directors, of the concerned companies (to
which the indi"id#al properties %elonged). -he )o#rt was then constrained
to record, that the order dated 5.1!.!13 passed %y this )o#rt, had not
%een complied with, in its letter and spirit. It is, therefore, the )o#rt too:
one f#rther step to demonstrate to the petitioner, as also, the other
contemnors, the serio#sness of the iss#e, %y ordering on 1.11.!13 F
that the 2ahara Dro#p of )ompanies shall not part with any mo"a%le or
immo"a%le property, #ntil f#rther orders...* Is it open to the petitioner to
contend, that he had no notice, of the a%o"e )o#rt proceedingsG -he
%#siness o%ligations of the petitioner, were %o#nd to ha"e %een serio#sly
affected, %y the a%o"e order. -he petitioner wo#ld ha"e to %e h#gely
#nconcerned and disinterested, if he was still #naware of the nat#re of the
ongoing contempt proceedings$ and where the proceedings were leading
to. -he )o#rt f#rther directed (%y the same order), that all the alleged
contemnors wo#ld not lea"e the co#ntry, witho#t the permission of this
)o#rt. 8y this, the )o#rt restored its earlier order dated 5.1!.!13. -his
order also had serio#s reperc#ssions, for the petitioner. 1hen the a%o"e
order was passed, sho#ld the petitioner %e permitted to contend, that he
did not ha"e any ad"erse %#siness conse?#encesG If it did, was it open
Page 52
3
for him to assert, that he had no notice, and was #naware a%o#t the
direction towards which, the contempt proceedings were mo"ingG
31. )onse?#ent #pon passing of the a%o"e order dated 1.11.!13, a
fresh list of properties was made a"aila%le %y the companies, to this )o#rt.
-he )o#rt permitted learned 2enior )o#nsel representing the 2;8I, time,
to e.amine the a#thenticity of the list of properties f#rnished, incl#ding the
"al#ation reports pertaining to the said properties. +fter a few dates of
hearing, learned co#nsel for the contemnors informed this )o#rt, that the
list of properties offered, co#ld not %e sold for the e.ec#tion of this )o#rt(s
orders dated 31.5.!1 and 3.1.!1. 1e were then satisfied, that all the
efforts made %y #s were systematically sc#ttled %y the contemnors, %y
adopting one or the other e.c#se. -he petitioner was adopting these
tactics %eca#se, he had notice. 9otice to comply with the orders dated
31.5.!1 and 3.1.!1. Net, he stonewalled all efforts for compliance.
&e adopted the latter. 9ot e"en a single paisa has %een deposited, after
this )o#rt(s order dated 3.1.!1.
3. D#ring the pendency of the contempt proceedings, we also decided
to determine the "eracity of the redemption theory, pro/ected %y the two
companies. +s a matter of law, it was not open to the two companies to
raise the aforesaid defence. -his is %eca#se, e.actly the same defence
was raised %y the two companies, when they had approached this )o#rt
%y filing )i"il +ppeal no. 5,43 of !1 (and 1rit 'etition ()i"il) no. 36 of
!1). In the aforesaid )i"il +ppeal, it was s#%mitted on %ehalf of the two
Page 53
33
companies, that they sho#ld %e e.empted from depositing the amo#nt
already redeemed %y them. -he a%o"e contention ad"anced %y the two
companies was not accepted, %y the three-7#dge Di"ision 8ench, when it
disposed of )i"il +ppeal no. 5,43 of !1 (and 1rit 'etition ()i"il) no. 36
of !1) %y order dated 3.1.!1. It is, therefore apparent, that the
instant defence of ha"ing already redeemed most of the K4)D(s, was not
open to the two companies (and e"en the contemnors). Net, so as to
ens#re, that no in/#stice was done, we permitted the two companies to
place material on the record of this case, to s#%stantiate the fact#m of
redemption. -he a%o"e iss#e has %een dealt with %y #s in this /#dgment
(#nder the heading IR, + few words, a%o#t the defence of redemption of
K4)D(s, offered %y the two companies*). It is, therefore, that details a%o#t
the concl#sions on the alleged redemptions, are not %eing e.pressed here.
+ll that needs to %e stated is, that the two companies adopted the same
tactics, as were adopted %y them on all earlier occasions. 9o material
worth the name, was e"er prod#ced %efore this )o#rt, to esta%lish the
defence of redemption, e"en tho#gh ample opport#nities were afforded to
the petitioner to do so. -he instant fact#al position, has %een placed on
the record of this case, only to demonstrate the efforts made %y this )o#rt,
to ca/ole the contemnors (incl#ding the petitioner M >r. 2#%rata <oy
2ahara) into compliance of this )o#rt(s orders dated 31.5.!1 and
3.1.!1. In the process, the )o#rt e.amined each and e"ery defence
raised on %ehalf of the two companies. -he )o#rt also e.amined
alternati"e a"en#es %y which, the compliance of the orders dated
Page 54
34
31.5.!1 and 3.1.!1, co#ld %e ens#red. In recording o#r concl#sions,
we may only state, that the petitioner only engaged eminent learned 2enior
)o#nsel, to a"oid or defer compliance.
33. &a"ing done the #tmost, in re?#iring the contemnors to comply with
the orders dated 31.5.!1 and 3.1.!1, wherein this 8ench wo#ld meet
e.cl#si"ely for the %enefit of the contemnors, the )o#rt felt that it had
misera%ly failed, to pers#ade the contemnors to comply with its directions.
+ccordingly on 4.3.!14, in e.ercise of the powers conferred #nder
+rticles 1@ and 14 of the )onstit#tion of India, this )o#rt ordered the
arrest and detention of all the contemnors (e.cept >rs. Aandana
8harga"a) in /#dicial c#stody at Delhi, till the ne.t date of hearing. 8y the
order dated 4.3.!14, the )o#rt e.pressly granted li%erty to the
contemnors to propose an accepta%le sol#tion, for e.ec#tion of its orders.
>rs. Aandana 8harga"a, who was e.c#sed from the order of detention,
was permitted to coordinate with those whose detention the )o#rt had
ordered, so as to ena%le them to form#late an accepta%le sol#tion for
e.ec#tion of the a%o"e orders. It is apparent, that right from the %eginning,
and e"en after ordering the detention of the contemnors incl#ding the
petitioner herein, -he )o#rt was only endea"o#ring, to ens#re the
compliance of the orders passed %y this )o#rt on 31.5.!1 and
3.1.!1. Kn the following date of hearing i.e., on 6.3.!14, at the as:ing
of the learned co#nsel representing the contemnors, we enhanced the
"isitation times permissi%le to the deten#es, so as to ena%le them to meet
Page 55
33
their financial cons#ltants and lawyers for two ho#rs e"ery day. Kn
,.3.!14, #nilaterally, and witho#t the as:ing of the contemnors, the
)o#rt also passed the following order:-
1e ha"e gone thro#gh the fresh proposal filed
on 3.!3.!14. -ho#gh the same is not in compliance with o#r
Krder dated 31.!5.!1 or the Krder passed %y the three-7#dge
8ench of this )o#rt on !3.1.!1 in )i"il +ppeal 9o.5,43 of
!1 and on 3.!.!13 in I.+. 9o.,6 of !13 in )i"il +ppeal
9o.@513 of !11 with I.+. 9o.3 of !13 in )i"il +ppeal 9o.@533 of
!11, we are inclined to grant interim %ail to the contemnors who are
detained %y "irt#e of o#r order dated !4.!3.!14, on the
condition that they wo#ld pay the amo#nt of <s.1!,!!! crores -
o#t of which <s.3,!!! crores to %e deposited %efore this )o#rt and
for the %alance a 8an: D#arantee of a nationaliCed %an: %e
f#rnished in fa"o#r of 2.;.8.I. and %e deposited %efore this )o#rt.
Kn compliance, the contemnors %e released
forthwith and the amo#nt deposited %e released to 2.;.8.I. 1e
ma:e it clear that this order is passed in order to facilitate the
contemnors to f#rther raise the %alance amo#nt so as to comply with
the )o#rtIs Krders mentioned a%o"e.*
1e are not, and ha"e ne"er %een interested in the detention of the
petitioner (and the two directors) in /#dicial c#stody. K#r only p#rpose has
%een, to ens#re compliance of this )o#rt(s orders dated 31.5.!1 and
3.1.!1.
34. Despite affording the contemnors close to 4! hearings, and despite
p#tting them to terms which o#ght to ha"e shown them, that leniency
wo#ld not %e e.tended fore"er, the contemnors ha"e remained adamant,
and steadfast. -hey made only one deposit of <s.3,1! crores on
3.1.!1. 8esides that amo#nt, not a single paisa has %een deposited %y
the contemnors. -he tho#ght, that repeatedly comes to o#r mind is, why
the two companies had not %een a%le to pay anything for the last a%o#t 1S
Page 56
3,
years (close to 16 months) from this )o#rt(s order dated 3.1.!1,
whereas, in a period of three=fo#r months (%efore o#r order dated
31.5.!1) 2I<;)B claims to ha"e #nilaterally ref#nded <s.16,443 crores,
and 2&I)B claims to ha"e on its own, redeemed <s.3,44 crores, to their
in"estors. If the money co#ld %e easily collected and dis%#rsed to the
in"estors then, why not nowG )onsidering the attit#de of the petitioner
%efore this )o#rt, one wonders what wo#ld happen to the /#dicial system, if
e"ery )o#rt order had to %e implemented, in the manner as the one in
hand. 1e are informed, that the total amo#nt presently paya%le in terms of
this )o#rt(s order dated 31.5.!1, has swelled #p to <s.3,,,!5 crores. In
the a%o"e scenario, no other order, %#t the one passed %y #s, co#ld ha"e
%een passed on 4.3.!14.
33. K#r leniency is apparent from the fact, that we ha"e %y o#r order
dated ,.3.!14 ordered the petitioner and the other contemnors to %e
released on %ail, on the receipt of a payment of <s.1!,!!! crores, which is
less than a third of the amo#nt presently d#e. -hat wo#ld constit#te, the
first small step, ta:en %y the contemnors, for the satisfaction of the orders
passed %y this )o#rt on 31.5.!1 and 3.1.!1. -he a%o"e orders
m#st, #nder all circ#mstances, %e gi"en effect to in letter and spirit, and till
that is done, the process of enforcing compliance, shall ha"e to go on.
-he petitioner may %e released from /#dicial c#stody, if he complies with
o#r order dated ,.3.!14. -hat wo#ld howe"er not e.c#se the petitioner
from ma:ing the %alance payment, in terms of the orders dated 31.5.!1
Page 57
36
and 3.1.!1, e"en if it means the re-arrest of the petitioner again and
again, for the p#rpose of compliance of this )o#rt(s orders.
=. W(*%(*# %(*#* +. ,& 1#&-+.+&,4 6(*#*!,0*# $, &#0*# &/ $##*.%
$,0 0*%*,%+&, 7$, "* 1$..*0 /&# %(* *?*7!%+&, &/ $ :&,*'@
0*7#**8
3,. Kne of the emphatic contentions ad"anced %y some of the learned
co#nsel for the petitioner was, that e.ec#tion of a money-decree %y way of
arrest was a proced#re #n:nown to law*. <eco#rse to arrest of an
indi"id#al for reco"ery of money, according to one learned co#nsel,
constit#ted a draconian order*. D#ring the co#rse of their s#%missions,
learned co#nsel for the petitioner, chose to address the )o#rt %y #sing
lang#age, which we had not heard (either as practicing +d"ocates, or e"en
as 7#dges in the &igh )o#rts or this )o#rt). 1e wo#ld, howe"er,
#nhesitatingly state, that it is not possi%le for #s to accept, that learned
co#nsel who addressed the instant s#%mission, were #naware of the
rele"ant pro"isions of law. It is howe"er interesting to notice, that in the
written s#%missions handed o"er to #s d#ring the co#rse of hearing,
reference was act#ally made to s#ch a pro"ision. It was asserted in the
written s#%missions prepared %y >r. <am 7ethmalani, that 9o
imprisonment for fail#re to comply with a decree or order for payment of
money can %e inflicted on a person lia%le to pay in compliance, witho#t
complying with the conditions of 2ection 31 pro"iso (%) of the )').*. +
contradiction in terms. 8#t there were many s#ch contradictions, e"en on
facts. + new phase of ad"ocacy seems to ha"e dawned.
Page 58
35
36. It is, therefore, that we shall first "ent#re to set o#t the pro"isions
contained in the )ode of )i"il 'roced#re, 1@!5 (hereinafter referred to as,
the )')), as also, the )ode of )riminal 'roced#re, 1@63 (hereinafter
referred to as, the )r.'.).), to highlight the pro"isions where#nder, a )o#rt
may order arrest and detention, for the e.ec#tion of a money-decree (or for
the enforcement of a financial lia%ility).
35. It is necessary, first of all, to place on record, the pro"isions of
2ections 31, 33 and 35 of the )'). -he same are %eing e.tracted
here#nder:-
31. 'owers of )o#rt to enforce e.ec#tion
2#%/ect to s#ch conditions and limitations as may %e
prescri%ed, the )o#rt may, on the application of the decree-
holder, order e.ec#tion of the decree-
(a) %y deli"ery of any property specifically decreed$
(%) %y attachment and sale or %y the sale witho#t attachment
of any property$
(c) %y arrest and detention in prison for s#ch period not
e.ceeding the period specified in section 35, where arrest and
detention is permissi%le #nder that section$
(d) %y appointing a recei"er$ or
(e) in s#ch other manner as the nat#re of the relief granted
may re?#ire:
'ro"ided that, where the decree is for the payment of money,
e.ec#tion %y detention in prison shall not %e ordered #nless,
after gi"ing the /#dgment-de%tor an opport#nity of showing
ca#se why he sho#ld not %e committed to prison, the )o#rt,
for reasons recorded in writing, is satisfied-
(a) that the /#dgment-de%tor, with the o%/ect or effect of
o%str#cting or delaying the e.ec#tion of the decree,-
(i) is li:ely to a%scond or lea"e the local limits of the
/#risdiction of the )o#rt, or
Page 59
3@
(ii) has, after the instit#tion of the s#it in which the
decree was passed, dishonestly transferred, concealed,
or remo"ed any part of his property, or committed any
other act of %ad faith in relation to his property, or
(%) that the /#dgment-de%tor has, or has had since the date of
the decree, the means to pay the amo#nt of the decree or
some s#%stantial part thereof and ref#ses or neglects or has
ref#sed or neglected to pay the same, or
(c) that the decree is for a s#m for which the /#dgment-de%tor
was %o#nd in a fid#ciary capacity to acco#nt.
;.planation.- In the calc#lation of the means of the /#dgment-
de%tor for the p#rposes of cla#se (%), there shall %e left o#t of
acco#nt any property which, %y or #nder any law or c#stom
ha"ing the force of law for the time %eing in force, is e.empt
from attachment in e.ec#tion of the decree.*
33. +rrest and detention
(1) + /#dgment-de%tor may %e arrested in e.ec#tion of a
decree at any ho#r and on any day, and shall, as soon as
practica%le, %e %ro#ght %efore the )o#rt, and his detention
may %e in the ci"il prison of the district in which the )o#rt
ordering the detention is sit#ate, or, where s#ch ci"il prison
does not afford s#ita%le accommodation, in any other place
which the 2tate Do"ernment may appoint for the detention of
persons ordered %y the )o#rts of s#ch district to %e detained:
'ro"ided, firstly, that, for the p#rpose of ma:ing an arrest
#nder this section, no dwelling-ho#se shall %e entered after
s#nset and %efore s#nrise:
'ro"ided, secondly, that no o#ter door of a dwelling-ho#se
shall %e %ro:en open #nless s#ch dwelling-ho#se is in the
occ#pancy of the /#dgment-de%tor and he ref#ses or in any
way pre"ents access thereto, %#t when the officer a#thorised
to ma:e the arrest has d#ly gained access to any dwelling-
ho#se, he may %rea: open the door of any room in which he
has reason to %elie"e the /#dgment-de%tor is to %e fo#nd:
'ro"ided, thirdly, that, if the room is in the act#al occ#pancy of
a woman who is not the /#dgment-de%tor and who according
to the c#stoms of the co#ntry does not appear in p#%lic, the
officer a#thorised to ma:e the arrest shall gi"e notice to her
that she is at li%erty to withdraw, and, after allowing a
reasona%le time for her to withdraw and gi"ing her reasona%le
Page 60
,!
facility for withdrawing, may enter the room for the p#rpose of
ma:ing the arrest:
'ro"ided, fo#rthly, that, where the decree in e.ec#tion of
which a /#dgment-de%tor is arrested, is a decree for the
payment of money and the /#dgment-de%tor pays the amo#nt
of the decree and the costs of the arrest to the officer arresting
him, s#ch officer shall at once release him.
() -he 2tate Do"ernment may, %y notification in the Kfficial
DaCette, declare that any person or class of persons whose
arrest might %e attended with danger or incon"enience to the
p#%lic shall not %e lia%le to arrest in e.ec#tion of a decree
otherwise than in accordance with s#ch proced#re as may %e
prescri%ed %y the 2tate Do"ernment in this %ehalf.
(3) 1here a /#dgment-de%tor is arrested in e.ec#tion of a
decree for the payment of money and %ro#ght %efore the
)o#rt, the )o#rt shall inform him that he may apply to %e
declared an insol"ent, and that he may %e discharged, if he
has not committed any act of %ad faith regarding the s#%/ect of
the application and if he complies with pro"isions of the law of
insol"ency for the time %eing in force.
(4) 1here a /#dgment-de%tor e.presses his intention to apply
to %e declared an insol"ent and f#rnishes sec#rity, to the
satisfaction of the )o#rt, that he will within one month so
apply, and that he will appear, when called #pon, in any
proceeding #pon the application or #pon the decree in
e.ec#tion of which he was arrested, the )o#rt may release
him from arrest, and, if he fails so to apply and to appear, the
)o#rt may either direct the sec#rity to %e realiCed or commit
him to the ci"il prison in e.ec#tion of the decree.
35. Detention and release
(1) ;"ery person detained in the ci"il prison in e.ec#tion of a
decree shall %e so detained,-
(a) where the decree is for the payment of a s#m of
money e.ceeding fi"e tho#sand r#pees, for a period not
e.ceeding three months, and
(%) where the decree is for the payment of a s#m of
money e.ceeding two tho#sand r#pees, %#t not
e.ceeding fi"e tho#sand r#pees, for a period not
e.ceeding si. wee:s:
Page 61
,1
'ro"ided that he shall %e released from s#ch detention %efore
the e.piration of the said period of detention-
(i) on the amo#nt mentioned in the warrant for his
detention %eing paid to the officer in charge of the ci"il
prison, or
(ii) on the decree against him %eing otherwise f#lly
satisfied, or
(iii) on the re?#est of the person on whose application
he has %een so detained, or
(i") on the omission %y the person, on whose application
he has %een so detained, to pay s#%sistence allowance:
'ro"ided, also, that he shall not %e released from s#ch
detention #nder cla#se (ii) or cla#se (iii), witho#t the order of
the )o#rt.
(1+) 4or the remo"al of do#%ts, it is here%y declared that no
order for detention of the /#dgment-de%tor in ci"il prison in
e.ec#tion of a decree for the payment of money shall %e
made, where the total amo#nt of the decree does not
e.ceed two tho#sand r#pees.
() + /#dgment-de%tor released from detention #nder this
section shall not merely %y reason of his release %e
discharged from his de%t, %#t he shall not %e lia%le to %e re-
arrested #nder the decree in e.ec#tion of which he was
detained in the ci"il prison.*
(emphasis is o#rs)
+ per#sal of 2ection 31 of the )'), lea"es no room for any do#%t, that for
the e.ec#tion of a decree for payment of money, an e.ec#ting )o#rt may
order the arrest and detention of the /#dgment-de%tor. 2ection 33 of the
)') lays down the manner and modalities to %e followed, while e.ec#ting
an order of arrest or detention. + per#sal of 2ection 35 of the )')
post#late the detention of a /#dgment-de%tor for #p to si. wee:s for the
reco"ery of a meager amo#nt, of less than <s.3,!!!=-. 1here the amo#nt
is in e.cess of <s.3,!!!=-, the pro"ision post#lates, detention for #pto three
Page 62
,
months. Interestingly, the first pro"iso to 2ection 35(1) of the )') clearly
%rings o#t, the p#rpose of the person(s detention. It pro"ides for the
concerned person(s release, on the satisfaction of the money-decree, e"en
%efore the d#ration, for which he had %een ordered to %e detained. 8#t the
second pro"iso to 2ection 35(1) of the )') pro"ides, that s#ch an order of
detention wo#ld not %e re"o:ed witho#t the order of the )o#rt.*. +nother
interesting aspect pertaining to the detention of an indi"id#al for the
e.ec#tion of a money-decree, is contained in 2ection 35() of the )'),
which pro"ides, that a person who has %een ordered to %e arrested and
detained (in the co#rse of e.ec#tion of a money-decree) and has %een
released from /ail, wo#ld not %e treated as ha"ing %een discharged from
his de%t. In other words, the detention of a /#dgment-de%tor in prison (for
the e.ec#tion of a money-decree), wo#ld not li%erate=free him from the
financial lia%ility which he owes to the decree-holder. It is therefore
apparent, from the pro"isions of the )'), that a )o#rt can order for the
arrest and detention of a person, e"en for the enforcement of a paltry
amo#nt of <s.,!!!=- (and also for reco"ery of amo#nts, in e.cess
thereof).
3@. 1e may also refer to the pro"isions #nder the )r.'.). which
mandate arrest and detention, for compliance of a monetary payment.
<eference in this %ehalf is to %e made to 2ections 13 and 15 of the
)r.'.)., which are %eing e.tracted here#nder:-
13. Krder for maintenance of wi"es, children and parents-
Page 63
,3
(1) If any person ha"ing s#fficient means neglects or ref#ses to
maintain-
(a) his wife, #na%le to maintain herself, or
(%) his legitimate or illegitimate minor child, whether married or
not, #na%le to maintain itself, or
(c) his legitimate or illegitimate child (not %eing a married
da#ghter) who has attained ma/ority, where s#ch child is, %y
reason of any physical or mental a%normality or in/#ry #na%le
to maintain itself, or
(d) his father or mother, #na%le to maintain himself or herself,
+ >agistrate of the first class may, #pon proof of s#ch neglect
or ref#sal, order s#ch person to ma:e a monthly allowance for the
maintenance of his wife or s#ch child, father or mother, at s#ch
monthly rate, as s#ch magistrate thin:s fit, and to pay the same to
s#ch person as the >agistrate may from time to time direct:
'ro"ided that the >agistrate may order the father of a minor female
child referred to in cla#se (%) to ma:e s#ch allowance, #ntil she
attains her ma/ority, if the >agistrate is satisfied that the h#s%and of
s#ch minor female child, if married, is not possessed of s#fficient
means.
'ro"ided f#rther that the >agistrate may, d#ring the pendency of the
proceeding regarding monthly allowance for the maintenance #nder
this s#%-section, order s#ch person to ma:e a monthly allowance for
the interim maintenance of his wife or s#ch child, father or mother,
and the e.penses of s#ch proceeding which the >agistrate
considers reasona%le, and to pay the same to s#ch person as the
>agistrate may from time to time direct:
'ro"ided also that an application for the monthly allowance for the
interim maintenance and e.penses for proceeding #nder the second
pro"iso shall, as far as possi%le, %e disposed of within si.ty days
from the date of the ser"ice of notice of the application to s#ch
person.
;.planation: 4or the p#rposes of this )hapter.
(a) minor* means a person who, #nder the pro"isions of the
Indian >a/ority +ct, 1563 (@ of 1563) is deemed not to ha"e
attained his ma/ority$
(%) wife* incl#des a woman who has %een di"orced %y, or has
o%tained a di"orce from, her h#s%and and has not remarried.
Page 64
,4
() +ny 2#ch allowance for the maintenance or interim
maintenance and e.penses of proceeding shall %e paya%le from the
date of the order, or, if so ordered, from the date of the application
for maintenance or interim maintenance and e.penses of
proceeding, as the case may %e.
(3) If any person so ordered fails witho#t s#fficient ca#se to
comply with the order, any s#ch >agistrate may, for e"ery %reach of
the order, iss#e a warrant for le"ying the amo#nt d#e in the manner
pro"ided for le"ying fines, and may sentence s#ch person, for the
whole, or any part of each month(s allowance for the maintenance or
the interim maintenance and e.penses of proceeding, as the case
%e, remaining #npaid after the e.ec#tion of the warrant, to
imprisonment for a term which may e.tend to one month or #ntil
payment if sooner made:
'ro"ided that no warrant shall %e iss#ed for the reco"ery of any
amo#nt d#e #nder this section #nless application %e made to the
co#rt to le"y s#ch amo#nt within a period of one year from the date
on which it %ecame d#e:
'ro"ided f#rther that if s#ch person offers to maintain his wife on
condition of her li"ing with him, and she ref#ses to li"e with him,
s#ch >agistrate may consider any gro#nds of ref#sal stated %y her,
and may ma:e an order #nder this section notwithstanding s#ch
offer, if he is satisfied that there is /#st gro#nd for so doing.
;.planation: If a h#s%and has contracted marriage with another
woman or :eeps a mistress, it shall %e considered to %e /#st gro#nd
for his wife(s ref#sal to li"e with him.
(4) 9o wife shall %e entitled to recei"e an allowance for the
maintenance or the interim maintenance and e.penses of
proceeding, as the case may %e, from her h#s%and #nder this
section if she is li"ing in ad#ltery, or if, witho#t any s#fficient reason,
she ref#ses to li"e with her h#s%and, or if they are li"ing separately
%y m#t#al consent.
(3) Kn proof that any wife in whose fa"o#r an order has %een made
#nder this section is li"ing in ad#ltery, or that witho#t s#fficient
reason she ref#ses to li"e with her h#s%and, or that they are li"ing
separately %y m#t#al consent, the >agistrate shall cancel the order.
15. ;nforcement of order of maintenance.
+ copy of the order of maintenance or interim maintenance and
e.penses of proceeding, as the case may %e, shall %e gi"en witho#t
payment to the person in whose fa"o#r it is made, or to his g#ardian,
if any, or to the person to whom the allowance for the maintenance
Page 65
,3
or the allowance for the interim maintenance and e.penses of
proceeding, as the case may %e, is to %e paid$ and s#ch order may
%e enforced %y any >agistrate in any place where the person
against whom it is made may %e, on s#ch >agistrate %eing satisfied
as to the identity of the parties and the non-payment of
the allowance, or as the case may %e, e.penses, d#e.*
(emphasis is o#rs)
<ather than "ent#ring an interpretation of 2ections 13 and 15 of the
)r.'.)., in order to demonstrate the nat#re of orders, that can %e passed
there#nder, reference may %e made to the decision rendered %y this )o#rt
in E#ldip Ea#r ". 2#rinder 2ingh, (1@5@) 1 2)) 4!3, wherein this )o#rt
o%ser"ed as #nder:-
,. + distinction has to %e drawn %etween a mode of enforcing
reco"ery on the one hand and effecting act#al reco"ery of the
amo#nt of monthly allowance which has fallen in arrears on the
other. 2entencing a person to /ail is a Imode of enforcementI. It is not
a Imode of satisfactionI of the lia%ility. -he lia%ility can %e satisfied
only %y ma:ing act#al payment of the arrears. -he whole p#rpose of
sending to /ail is to o%lige a person lia%le to pay the monthly
allowance who ref#ses to comply with the order witho#t s#fficient
ca#se, to o%ey the order and to ma:e the payment. -he p#rpose of
sending him to /ail is not to wipe o#t the lia%ility which he has
ref#sed to discharge. 8e it also realised that a person ordered to pay
monthly allowance can %e sent to /ail only if he fails to pay monthly
allowance Iwitho#t s#fficient ca#seI to comply with the order. It wo#ld
indeed %e strange to hold that a person who Iwitho#t reasona%le
ca#seI ref#ses to comply with the order of the )o#rt to maintain his
neglected wife or child wo#ld %e a%sol"ed of his lia%ility merely
%eca#se he prefers to go to /ail. + sentence of /ail is no s#%stit#te for
the reco"ery of the amo#nt of monthly allowance which has fallen in
arrears. >onthly allowance is paid in order to ena%le the wife and
child to li"e %y pro"iding with the essential economic wherewithal.
9either the neglected wife nor the neglected child can li"e witho#t
f#nds for p#rchasing food and the essential articles to ena%le them
to li"e. Instead of pro"iding them with the f#nds, no #sef#l p#rpose
wo#ld %e ser"ed %y sending the h#s%and to /ail. 2entencing to /ail is
the means for achie"ing the end of enforcing the order %y reco"ering
the amo#nt of arrears. It is not a mode of discharging lia%ility. -he
section does not say so. -he 'arliament in its wisdom has not said
so. )ommonsense does not s#pport s#ch a constr#ction. 4rom
where does the )o#rt draw inspiration for pers#ading itself that the
Page 66
,,
lia%ility arising #nder the order for maintenance wo#ld stand
discharged #pon an effort %eing made to reco"er itG -he order for
monthly allowance can %e discharged only #pon the monthly
allowance %eing reco"ered. -he lia%ility cannot %e ta:en to ha"e
%een discharged %y sending the person lia%le to pay the monthly
allowance, to /ail. +t the cost of repetition it may %e stated that it is
only a mode or method of reco"ery and not a s#%stit#te for reco"ery.
9o other "iew is possi%le. -hat is the reason why we set aside the
order #nder appeal and passed an order in the following terms:
I&eard %oth the sides.
-he appeal is allowed. -he order passed %y the learned
>agistrate as confirmed %y the &igh )o#rt in e.ercise of its
re"isional /#risdiction to the effect that the amo#nt of monthly
allowance paya%le #nder 2ection 13 of the )ode of )riminal
'roced#re is wiped o#t and is not reco"era%le any more %y
reason of the fact that respondent 9o. 1, 2#rinder 2ingh, was
sent to /ail in e.ercise of the powers #nder 2ection 13 of the
)ode of )riminal 'roced#re is set aside. In o#r opinion,
respondent 9o. 1, h#s%and of appellant, is not a%sol"ed of his
lia%ility to pay the monthly allowance %y reason of his
#ndergoing a sentence of /ail and the amo#nt is still
reco"era%le notwithstanding the fact that the respondent 9o. 1
h#s%and who is lia%le to pay he monthly allowance has
#ndergone a sentence of /ail for fail#re to pay the same. K#r
reasons for reaching this concl#sion will follow.
2o far as the amo#nt of monthly allowance awarded in this
partic#lar case is concerned, %y consent of parties, we pass
the following order in regard to f#t#re payments with effect
from 13th +#g#st, 1@5,.
1e direct that respondent 9o. 1, 2#rinder 2ingh shall pay <s.
63 (<s.!! for the wife and <s.63 for the child) as and %y
way of maintenance to the appellant 2mt. E#ldip Ea#r
commencing from +#g#st 13, 1@5,. -he amo#nt of <s.63
shall %e paid %y the 13th of e"ery s#cceeding month. Kn
fail#re to pay any monthly allowance for any month hereafter
on the part of respondent 9o. 1, 2#rinder 2ingh, the learned
>etropolitan >agistrate shall iss#e a warrant for his arrest,
ca#se him to %e arrested and p#t in /ail for his fail#re to
comply with this )o#rtIs order and he shall not %e released till
he ma:es the payment.
1ith regard to the arrears which ha"e %ecome d#e till +#g#st
13, 1@5,, learned )o#nsel for the appellant states that ha"ing
regard to the fact that respondent 9o. 1, has agreed to the
Page 67
,6
aforesaid consent order, the appellant will not apply for the
respondent %eing sent to /ail #nder 2ection 13 of the )ode of
)riminal 'roced#re %#t will reser"e the li%erty to realiCe the
said amo#nt (<s.3!@! pl#s the difference %etween the amo#nt
that %ecame d#e and the amo#nt act#ally paid #nder the
interim order) #nder the law e.cept %y see:ing an order for
sending respondent 9o. 1 to /ail.
-he appeal will stand disposed of accordingly.*
(emphasis is o#rs)
Kn the s#%/ect in hand, reference may also %e made to a recent /#dgment
of this )o#rt in 'oongodi ". -hanga"el, (!13) 1! 2)) ,15. -he rele"ant
o%ser"ations rendered %y this )o#rt in the a%o"e /#dgment are, %eing
reprod#ced here#nder:-
,. In another decision of this )o#rt in Shantha v, B,3,
Shivanan4appa, (!!3) 4 2)) 4,5, it has %een held that the lia%ility
to pay maintenance #nder 2ection 13 )r.'.). is in the nat#re of a
contin#ing lia%ility. -he nat#re of the right to recei"e maintenance
and the concomitant lia%ility to pay was also noticed in a decision of
this )o#rt in Shahada 5hatoon and 1rs, v, (m4ad (li and 1rs,,
(1@@@) 3 2)) ,6. -ho#gh in a slightly different conte.t, the remedy
to approach the co#rt %y means of s#ccessi"e applications #nder
2ection 13(3) )r.'.). highlighting the s#%se?#ent defa#lts in
payment of maintenance was ac:nowledged %y this )o#rt
in Shahada 5hatoon.
6. -he ratio of the decisions in the aforesaid cases s?#arely applies
to the present case. -he application dated !3.!.!! filed %y the
+ppellants #nder 2ection 13(3) was in contin#ation of the
earlier applications and for s#%se?#ent periods of defa#lt on
the part of the <espondent. -he first pro"iso to 2ection 13(3),
therefore did not e.ting#ish or limit the entitlement of the
+ppellants to the maintenance granted %y the learned trial co#rt, as
has %een held %y the &igh )o#rt.
5. In "iew of the a%o"e, we are left in no do#%t that the order passed
%y the &igh )o#rt needs to %e interfered with %y #s which we
accordingly do. -he order dated 1.!4.!!4 of the &igh )o#rt is set
aside and we now iss#e directions to the <espondent to pay the
entire arrears of maintenance d#e to the +ppellants commencing
from the date of filing of the >aintenance 'etition (>.). 9o. 1 of
1@@3) i.e. 4..1@@3 within a period of si. months and c#rrent
maintenance commencing from the month of 2eptem%er, !13
Page 68
,5
paya%le on or %efore 6
th
of Kcto%er, !13 and thereafter contin#e to
pay the monthly maintenance on or %efore the 6
th
of each s#ccessi"e
month. If the a%o"e order of this )o#rt is not complied with %y the
<espondent, the learned -rial )o#rt is directed to iss#e a warrant for
the arrest of the <espondent and ens#re that the same is e.ec#ted
and the respondent ta:en into c#stody to s#ffer imprisonment as
pro"ided %y 2ection 13(3) )r.'.). *.
(emphasis is o#rs)
It is, therefore apparent, that e"en for a petty amo#nt of maintenance
(which in E#ldip Ea#r(s case (s#pra) was a meager amo#nt of <s.63=- per
month), the respondent was ordered to %e arrested and p#t in /ail for his
fail#re to comply with the )o#rt(s order, with a f#rther direction that he
wo#ld not %e released till he had made the payment. >ost importantly, the
p#rpose of sending a person to /ail, m#st %e #nderstood as %eing a
manner, proced#re or de"ice, for the satisfaction of the lia%ility. +rrest and
detention is only to coerce compliance. -he lia%ility to pay, wo#ld stand
discharged only %y act#al payment, of the amo#nt d#e. <emaining in /ail,
wo#ld not discharge the lia%ility to pay.
,!. Insofar as the pro"isions of the )r.'.). are concerned, reference
may also %e made to 2ections 336, 41 and 431, which are %eing
e.tracted here#nder:-
336. Krder to pay compensation.
(1) 1hen a )o#rt imposes a sentence of fine or a sentence
(incl#ding a sentence of death) of which fine forms a part, the )o#rt
may, when passing /#dgment order the whole or any part of the fine
reco"ered to %e applied-
(a) in defraying the e.penses properly inc#rred in the prosec#tion$
(%) in the payment to any person of compensation for any loss or
in/#ry ca#sed %y the offence, when compensation is, in the opinion
of the )o#rt, reco"era%le %y s#ch person in a )i"il )o#rt$
Page 69
,@
(c) when any person is con"icted of any offence for ha"ing ca#sed
the death of another person or of ha"ing a%etted the commission of
s#ch an offence, in paying compensation to the persons who are,
#nder the 4atal +ccidents +ct, 1533 (13 of 1533), entitled to reco"er
damages from the person sentenced for the loss res#lting to them
from s#ch death$
(d) when any person is con"icted of any offence which incl#des
theft, criminal misappropriation, criminal %reach of tr#st, or cheating,
or of ha"ing dishonestly recei"ed or retained, or of ha"ing "ol#ntarily
assisted in disposing of, stolen property :nowing or ha"ing reason to
%elie"e the same to %e stolen, in compensating any %ona fide
p#rchaser of s#ch property for the loss of the same if s#ch property
is restored to the possession of the person entitled thereto.
() If the fine is imposed in a case which is s#%/ect to appeal, no
s#ch payment shall %e made %efore the period allowed for
presenting the appeal has elapsed, or, if an appeal %e presented,
%efore the decision of the appeal.
(3) 1hen a )o#rt imposes a sentence, of which fine does not form a
part, the )o#rt may, when passing /#dgment order the acc#sed
person to pay, %y way of compensation, s#ch amo#nt as may %e
specified in the order to the person who has s#ffered any loss or
in/#ry %y reason of the act for which the acc#sed person has %een
so sentenced.
(4) +n order #nder this section may also %e made %y an +ppellate
)o#rt or %y the &igh )o#rt or )o#rt of 2ession when e.ercising its
powers of re"ision.
(3) +t the time of awarding compensation in any s#%se?#ent ci"il s#it
relating to the same matter, the )o#rt shall ta:e into acco#nt any
s#m paid or reco"ered as compensation #nder this section.
41. 1arrant for le"y of fine.
(1) 1hen an offender has %een sentenced to pay a fine, the )o#rt
passing the sentence may ta:e action for the reco"ery of the fine in
either or %oth of the following ways, that is to say, it may-
(a) iss#e a warrant for the le"y of the amo#nt %y attachment and
sale of any mo"a%le property %elonging to the offender$
(%) iss#e a warrant to the )ollector of the district, a#thoriCing him to
realise the amo#nt as arrears of land re"en#e from the mo"a%le or
immo"a%le property, or %oth, of the defa#lter:
Page 70
6!
'ro"ided that, if the sentence directs that in defa#lt of payment of
the fine, the offender shall %e imprisoned, and if s#ch offender has
#ndergone the whole of s#ch imprisonment in defa#lt, no )o#rt shall
iss#e s#ch warrant #nless, for special reasons to %e recorded in
writing, it considers it necessary so to do, or #nless it has made an
order for the payment of e.penses or compensation o#t of the fine
#nder section 336.
() -he 2tate Do"ernment may ma:e r#les reg#lating the manner in
which warrants #nder cla#se (a) of s#%- section (1) are to %e
e.ec#ted, and for the s#mmary determination of any claims made %y
any person other than the offender in respect of any property
attached in e.ec#tion of s#ch warrant.
(3) 1here the )o#rt iss#es a warrant to the )ollector #nder cla#se
(%) of s#%-section (1), the )ollector shall realise the amo#nt in
accordance with the law relating to reco"ery of arrears of land
re"en#e, as if s#ch warrant were a certificate iss#ed #nder s#ch law:
'ro"ided that no s#ch warrant shall %e e.ec#ted %y the arrest or
detention in prison of the offender.
431. >oney ordered to %e paid reco"era%le as fine.-
+ny money (other than a fine) paya%le %y "irt#e of any order made
#nder this )ode, and the method of reco"ery of which is not
otherwise e.pressly pro"ided for, shall %e reco"era%le as if it were a
fine:
'ro"ided that 2ection 41 shall, in its application to an order #nder
2ection 33@, %y "irt#e of this section, %e constr#ed as if in the
pro"iso to s#%-section (1) of 2ection 41, after the words and fig#res
#nder 2ection 336*, the words and fig#res or an order for payment
of costs #nder 2ection 33@* had %een inserted.H
(emphasis is o#rs)
-he a%o"e pro"isions were e.amined %y this )o#rt in E.+. +%%as &.2.+. ".
2a%# 7oseph P +nr. ;tc., (!1!) , 2)) 3!, a rele"ant e.tract of the
o%ser"ations made in the a%o"e /#dgment, are %eing reprod#ced
here#nder:-
16. In 8alra/ ". 2tate of 0', +I< 1@@3 2) 1@33, this )o#rt has
held, that, 2ection 336(3) )r. '.). pro"ides for ordering of payment
%y way of compensation to the "ictim %y the acc#sed. It is an
important pro"ision and it m#st also %e noted that power to award
compensation is not ancillary to other sentences %#t it is in addition
Page 71
61
thereto. In &ari Eishan ". 2#:h%ir 2ingh and Krs., +I< 1@55 2)
16, this )o#rt has o%ser"ed that, 2#%-section (1) of 2ection 336
pro"ides power to award compensation to "ictims of the offence o#t
of the sentence of fine imposed on acc#sed.
15. In this case, we are not concerned with 2#%-section (1). 1e
are concerned only with 2#%-section (3). It is an important pro"ision
%#t )o#rts ha"e seldom in"o:ed it. 'erhaps d#e to ignorance of the
o%/ect of it. It empowers the )o#rt to award compensation to "ictims
while passing /#dgment of con"iction. In addition to con"iction, the
)o#rt may order the acc#sed to pay some amo#nt %y way of
compensation to "ictim who has s#ffered %y the action of acc#sed. It
may %e noted that this power of )o#rts to award compensation is
not ancillary to other sentences %#t it is in addition thereto. -his
power was intended to do something to reass#re the "ictim that he
or she is not forgotten in the criminal /#stice system. It is a meas#re
of responding appropriately to crime as well of reconciling the "ictim
with the offender. It is, to some e.tent, a constr#cti"e approach to
crimes. It is indeed a step forward in o#r criminal /#stice system. 1e,
therefore, recommend to all )o#rts to e.ercise this power li%erally so
as to meet the ends of /#stice in a %etter way.
1@. In Dilip 2. Dahan#:ar ". Eota: >ahindra )o. Btd. and
+nr. (!!6) , 2)) 35, this )o#rt differentiated %etween fine and
compensation, and while doing so, has stated that the distinction
%etween 2#%-sections (1) and (3) of 2ection 336 is apparent. 2#%-
section (1) pro"ides for application of an amo#nt of fine while
imposing a sentence of which fine forms a part$ whereas 2#%-
section (3) calls for a sit#ation where a )o#rt imposes a sentence of
which fine does not form a part of the sentence.
-he co#rt f#rther o%ser"ed:
6. )ompensation is awarded towards s#fferance of any loss
or in/#ry %y reason of an act for which an acc#sed person is
sentenced. +ltho#gh it pro"ides for a criminal lia%ility, the
amo#nt which has %een awarded as compensation is
considered to %e reco#rse of the "ictim in the same manner
which may %e granted in a ci"il s#it.
4inally the co#rt s#mmed #p:
31. 1e m#st, howe"er, o%ser"e that there e.ists a distinction
%etween fine and compensation, altho#gh, in a way it see:s to
achie"e the same p#rpose. +n amo#nt of compensation can
%e directed to %e reco"ered as a IfineI %#t the legal fiction
raised in relation to reco"ery of fine only, it is in that sense
Page 72
6
JfineI stands on a higher footing than compensation awarded
%y the )o#rt.
!. >o"ing o"er to the ?#estion, whether a defa#lt sentence can %e
imposed on defa#lt of payment of compensation, this )o#rt in the
case of &ari 2ingh ". 2#:h%ir 2ingh and in 8alra/ ". 2tate of 0.',
has held that it was open to all co#rts in India to impose a sentence
on defa#lt of payment of compensation #nder 2#%-section (3) of
2ection 336 . In &ari 2ingh ". 2#:h%ir 2ingh (s#pra), this )o#rt has
noticed certain factors which re?#ires to %e ta:en into consideration
while passing an order #nder the section:
11. -he payment %y way of compensation m#st, howe"er, %e
reasona%le. 1hat is reasona%le, may depend #pon the facts
and circ#mstances of each case. -he ?#ant#m of
compensation may %e determined %y ta:ing into acco#nt the
nat#re of crime, the /#stness of claim %y the "ictim and the
a%ility of acc#sed to pay. If there are more than one acc#sed
they may %e as:ed to pay in e?#al terms #nless their capacity
to pay "aries considera%ly. -he payment may also "ary
depending #pon the acts of each acc#sed. <easona%le period
for payment of compensation, if necessary %y installments,
may also %e gi"en. -he )o#rt may enforce the order %y
imposing sentence in defa#lt.*
... ... ... ... ...
. -he law laid down in &ari 2ingh ". 2#:h%ir 2ingh (s#pra) was
reiterated %y this )o#rt in the case of 2#ganthi 2#resh E#mar ".
7agdeeshan, (!!) 2)) 4!. -he co#rt o%ser"ed:
3. In the said decision this )o#rt reminded all concerned that
it is well to remem%er the emphasis laid on the need for
ma:ing li%eral #se of 2ection 336(3) of the )ode. -his was
o%ser"ed %y reference to a decision of this )o#rt in, 1@5@ )ri
B7 11, &ari 2ingh ". 2#:h%ir 2ingh.
... ... ... ... ...
1!. -hat apart, 2ection 431 of the )ode has only prescri%ed
that any money (other than fine) paya%le %y "irt#e of an order
made #nder the )ode shall %e reco"era%le Has if it were a
fineH. -wo modes of reco"ery of the fine ha"e %een indicated
in 2ection 41(1) of the )ode. -he pro"iso to the 2#%-section
says that if the sentence directs that in defa#lt of payment of
the fine, the offender shall %e imprisoned, and if s#ch offender
Page 73
63
has #ndergone the whole of s#ch imprisonment in defa#lt, no
co#rt shall iss#e s#ch warrant for le"y of the amo#nt.
... ... ... ... ...
3. In order to set at rest the di"ergent opinion e.pressed in
E#nhapp#Is case (s#pra), this )o#rt in the case of Ai/ayan ".
2adanandan E. and +nr., (!!@) , 2)) ,3, after noticing the
pro"ision of 2ection 41 and 431 of )r.'), which dealt with mode of
reco"ery of fine and 2ection ,4 of I'), which empowered the co#rts
to pro"ide for a sentence of imprisonment on defa#lt of payment of
fine, the )o#rt stated:
4. 1e ha"e caref#lly considered the s#%missions made on
%ehalf of the respecti"e parties. 2ince a decision on the
?#estion raised in this petition is still in a ne%#lo#s state, there
appear to %e two "iews as to whether a defa#lt sentence on
imprisonment can %e imposed in cases where compensation
is awarded to the complainant #nder 2ection 336(3) )r.'.).
+s pointed o#t %y >r. 8asant in Dilip 2. Dahan#:arIs case, the
distinction %etween a fine and compensation as #nderstood
#nder 2ection 336(1)(%) and 2ection 336(3) )r.'.). had %een
e.plained, %#t the ?#estion as to whether a defa#lt sentence
cla#se co#ld %e made in respect of compensation paya%le
#nder 2ection 336(3) )r.'.), which is central to the decision
in this case, had not %een considered.
-he co#rt f#rther held:
31. -he pro"isions of 2ections 336(3) and 431 )r.'.)., when
read with 2ection ,4 I'), empower the )o#rt, while ma:ing
an order for payment of compensation, to also incl#de a
defa#lt sentence in case of non-payment of the same.
3. -he o%ser"ations made %y this )o#rt in &ari 2inghIs case
(s#pra) are as important today as they were when they were
made and if, as s#%mitted %y Dr. 'illay, reco#rse can only %e
had to 2ection 41 )r.'.). for enforcing the same, the "ery
o%/ect of 2#%-section (3) of 2ection 336 wo#ld %e fr#strated
and the relief contemplated therein wo#ld %e rendered
somewhat ill#sory.*
4. In 2hantilal ". 2tate of >.'., (!!6) 11 2)) 43, it is stated,
that, the sentence of imprisonment for defa#lt in payment of a fine or
compensation is different from a normal sentence of imprisonment.
-he co#rt also del"ed into the factors to %e ta:en into consideration
Page 74
64
while passing an order #nder 2ection 336(3) of the )r.'). -his
)o#rt stated:
31. F-he term of imprisonment in defa#lt of payment of fine
is not a sentence. It is a penalty which a person inc#rs on
acco#nt of non-payment of fine. -he sentence is something
which an offender m#st #ndergo #nless it is set aside or
remitted in part or in whole either in appeal or in re"ision or in
other appropriate /#dicial proceedings or HotherwiseH. + term
of imprisonment ordered in defa#lt of payment of fine stands
on a different footing. + person is re?#ired to #ndergo
imprisonment either %eca#se he is #na%le to pay the amo#nt
of fine or ref#ses to pay s#ch amo#nt. &e, therefore, can
always a"oid to #ndergo imprisonment in defa#lt of payment
of fine %y paying s#ch amo#nt. It is, therefore, not only
the power , %#t the duty of the co#rt to :eep in "iew the nat#re
of offence, circ#mstances #nder which it was committed, the
position of the offender and other rele"ant considerations
%efore ordering the offender to s#ffer imprisonment in defa#lt
of payment of fine.*
(emphasis in original)
3. In E#ldip Ea#r ". 2#rinder 2ingh and +nr., +I< 1@5@ 2) 3, in
the conte.t of 2ection 13 )r.') o%ser"ed that sentencing a person
to /ail is a mode of enforcementF
... ... ... ... ...
,. 4rom the a%o"e line of cases, it %ecomes "ery clear, that, a
sentence of imprisonment can %e granted for defa#lt in payment of
compensation awarded #nder 2ection 336(3) of )r.'). -he whole
p#rpose of the pro"ision is to accommodate the interests of the
"ictims in the criminal /#stice system. 2ometimes the sit#ation
%ecomes s#ch that there is no p#rpose is ser"ed %y :eeping a
person %ehind %ars. Instead directing the acc#sed to pay an amo#nt
of compensation to the "ictim or affected party can ens#re deli"ery
of total /#stice. -herefore, this grant of compensation is sometimes
in lie# of sending a person %ehind %ars or in addition to a "ery light
sentence of imprisonment. &ence on defa#lt of payment of this
compensation, there m#st %e a /#st reco#rse. 9ot imposing a
sentence of imprisonment wo#ld mean allowing the acc#sed to get
away witho#t paying the compensation and imposing another fine
wo#ld %e impractical as it wo#ld mean imposing a fine #pon another
fine and therefore wo#ld not ens#re proper enforcement of the order
of compensation. 1hile passing an order #nder 2ection 336(3), it is
imperati"e for the co#rts to loo: at the a%ility and the capacity of the
Page 75
63
acc#sed to pay the same amo#nt as has %een laid down %y the
cases a%o"e, otherwise the "ery p#rpose of granting an order of
compensation wo#ld stand defeated.
... ... ... ... ...
@. 2ection 431 clearly pro"ides that an order of compensation
#nder 2ection 336(3) will %e reco"era%le in the same way as if it
were a fine. 2ection 41 f#rther pro"ides the mode of reco"ery of a
fine and the section clearly pro"ides that a person can %e
imprisoned for non-payment of fine. -herefore, going %y the
pro"isions of the code, the intention of the legislat#re is clearly to
ens#re that mode of reco"ery of a fine and compensation is on the
same footing. In light of the aforesaid reasoning, the contention of
the acc#sed that there can %e no sentence of imprisonment for
defa#lt in payment of compensation #nder 2ection 336(3) sho#ld
fail.*
(emphasis is o#rs)
It is therefore apparent, that e"en #nder the pro"isions of the )r.'.). there
is an ela%orate proced#re prescri%ed, where#nder a person can %e
s#%/ected to arrest and detention for the satisfaction of a fine or
compensation (i.e., for the reco"ery of a financial lia%ility).
,1. 4rom the a%o"e pro"isions of the )'), as also, the )r.'.). it is
apparent, that to enforce a financial lia%ility ordered %y a )o#rt, one of the
permissi%le means is, %y way of arrest and detention. -he s#%missions
ad"anced %y the learned co#nsel for the petitioner, that there is no
pro"ision, where#nder, an order of arrest and detention can %e passed, for
the e.ec#tion of a money-decree, cannot therefore %e accepted. It is also
not possi%le for #s to infer, that learned co#nsel were o%li"io#s of the
pro"isions contained in the ci"il=criminal proced#re codes. It may %e
pointed o#t, that there are a large n#m%er of standalone stat#tory
Page 76
6,
enactments, where#nder arrest and detention is ordered for the e.ec#tion
of a financial lia%ility.
=I. W(*%(*# +% 6$. +:1*#$%+-* /&# %(+. C&!#% %& $0&1% %(* 1#&7*0!#*
1#*.7#+"*0 !,0*# S*7%+&, 51 ($,0 &%(*# $55+*0 1#&-+.+&,.) &/ %(*
CPC8
W(*%(*# +/ %(* $"&-* 1#&7*0!#* 6$. ,&% /&55&6*04 %(* +:1!2,*0
&#0*# 1$..*0 "' %(+. C&!#% &, .;.201 6$. #*,0*#*0 -&+04 $,0
$. .!7(4 !,.!.%$+,$"5* +, 5$68
,. Despite the written s#%mission filed %y 2hri <am 7ethmalani, which
we ha"e ad"erted to in the immediately preceding part of this order, the
credit for ad"ancing s#%missions on the iss#e depicted in the heading
hereina%o"e, goes to Dr. +%hishe: >an# 2ingh"i, learned 2enior )o#nsel,
who also represented the petitioner. It was his s#%mission, that it was
imperati"e for this )o#rt %efore ordering the detention of the petitioner, to
ens#re compliance of the preconditions referred to in 2ection 31 of the
)'). 2ection 31 is once again %eing e.tracted here#nder:-
31. 'owers of )o#rt to enforce e.ec#tion
2#%/ect to s#ch conditions and limitations as may %e
prescri%ed, the )o#rt may, on the application of the decree-
holder, order e.ec#tion of the decree-
(a) %y deli"ery of any property specifically decreed$
(%) %y attachment and sale or %y the sale witho#t attachment
of any property$
(c) %y arrest and detention in prison for s#ch period not
e.ceeding the period specified in section 35, where arrest and
detention is permissi%le #nder that section$
(d) %y appointing a recei"er$ or
(e) in s#ch other manner as the nat#re of the relief granted
may re?#ire:
Page 77
66
'ro"ided that, where the decree is for the payment of money,
e.ec#tion %y detention in prison shall not %e ordered #nless,
after gi"ing the /#dgment-de%tor an opport#nity of showing
ca#se why he sho#ld not %e committed to prison, the )o#rt,
for reasons recorded in writing, is satisfied-
(a) that the /#dgment-de%tor, with the o%/ect or effect of
o%str#cting or delaying the e.ec#tion of the decree,-
(i) is li:ely to a%scond or lea"e the local limits of the
/#risdiction of the )o#rt, or
(ii) has, after the instit#tion of the s#it in which the
decree was passed, dishonestly transferred, concealed,
or remo"ed any part of his property, or committed any
other act of %ad faith in relation to his property, or
(%) that the /#dgment-de%tor has, or has had since the date of
the decree, the means to pay the amo#nt of the decree or
some s#%stantial part thereof and ref#ses or neglects or has
ref#sed or neglected to pay the same, or
(c) that the decree is for a s#m for which the /#dgment-de%tor
was %o#nd in a fid#ciary capacity to acco#nt.
;.planation.- In the calc#lation of the means of the /#dgment-
de%tor for the p#rposes of cla#se (%), there shall %e left o#t of
acco#nt any property which, %y or #nder any law or c#stom
ha"ing the force of law for the time %eing in force, is e.empt
from attachment in e.ec#tion of the decree.*
(emphasis is o#rs)
<eferring to 2ection 31 of the )'), it was the pointed contention of the
learned co#nsel, that the pro"iso to 2ection 31, lays down the
preconditions for e.ec#tion of a money-decree (%y way of arrest and
detention, in prison). 1hile in"iting o#r attention to the aforesaid pro"iso, it
was asserted, that it was imperati"e for a )o#rt, to afford an opport#nity to
show ca#se to a /#dgment-de%tor, %efore he is committed to prison.
4#rthermore, while interpreting the a%o"e pro"iso, it was the s#%mission of
learned 2enior )o#nsel, that s#ch detention co#ld %e ordered, only and
Page 78
65
only, if the )o#rt felt that the /#dgment-de%tor had conscio#sly o%str#cted
or delayed the e.ec#tion of a money-decree. 2#ch acti"e o%str#ction or
delay, according to the learned co#nsel, co#ld %e infera%le, if the )o#rt
was apprehensi"e, that the /#dgment-de%tor wo#ld a%scond or lea"e the
local limits of the /#risdiction of the )o#rt. Kr if the )o#rt was satisfied,
that the /#dgment-de%tor had dishonestly transferred, concealed or
remo"ed his property, so as to a"oid the e.ec#tion of the money-decree.
Kr if it was fo#nd %y the )o#rt, that the /#dgment-de%tor had committed an
act of %ad faith in relation to his property, with the a%o"e stated o%/ecti"es.
Kr if the )o#rt co#ld arri"e at the concl#sion, that e"en tho#gh the
/#dgment-de%tor had means to pay the amo#nt e.pressed in the decree
(or some s#%stantial part thereof), yet he was ref#sing or neglecting to pay
the same. +ccording to learned co#nsel, any one of the a%o"e alternati"es
wo#ld ena%le the )o#rt concerned, to enforce payment, %y way of arrest
and detention. It was howe"er the contention of the learned 2enior
)o#nsel, that none of the a%o"e preconditions e.isted, when this )o#rt all
of a s#dden, witho#t affording an opport#nity to the petitioner, ordered his
arrest and detention along with two other directors on 4.3.!14 (%y passing
the imp#gned order).
,3. In addition to the a%o"e s#%mission, learned 2enior )o#nsel in"ited
o#r attention to Krder RRI r#les 36 and 4! of the )'). -he a%o"e <#les
are %eing e.tracted here#nder:-
36. Discretionary power to permit /#dgment-de%tor to show ca#se
against detention in prison
Page 79
6@
(1) 9otwithstanding anything in these r#les, where an
application is for the e.ec#tion of a decree for the payment of
money %y the arrest and detention in the ci"il prison of a
/#dgment-de%tor who is lia%le to %e arrested in p#rs#ance of
the application, the )o#rt shall, instead of iss#ing a warrant
for his arrest, iss#e a notice calling #pon him to appear %efore
the )o#rt on a day to %e specified in the notice and show
ca#se why he sho#ld not %e committed to the ci"il prison:
'ro"ided that s#ch notice shall not %e necessary if the )o#rt is
satisfied, %y affida"it, or otherwise, that, with the o%/ect or
effect of delaying the e.ec#tion of the decree, the /#dgment-
de%tor is li:ely to a%scond or lea"e the local limits of the
/#risdiction of the )o#rt.
() 1here appearance is not made in o%edience to the notice,
the )o#rt shall, if the decree-holder so re?#ires, iss#e a
warrant for the arrest of the /#dgment-de%tor.
4!. 'roceedings on appearance of /#dgment-de%tor in o%edience
to notice or after arrest
(1) 1hen a /#dgment-de%tor appears %efore the )o#rt in
o%edience to a notice iss#ed #nder r#le 36, or is %ro#ght
%efore the )o#rt after %eing arrested in e.ec#tion of a decree
for the payment of money, the )o#rt shall proceed to hear the
decree-holder and ta:e all s#ch e"idence as may %e prod#ced
%y him in s#pport of his application for e.ec#tion, and shall
then gi"e the /#dgment-de%tor an opport#nity of showing
ca#se why he sho#ld not %e committed to the ci"il prison.
() 'ending the concl#sion of the in?#iry #nder s#%-r#le (1)
the )o#rt may, in its discretion, order the /#dgment-de%tor to
%e detained in the c#stody of an officer of the )o#rt or
release him on his f#rnishing sec#rity to the satisfaction of the
)o#rt for his appearance when re?#ired .
(3) 0pon the concl#sion of the in?#iry #nder s#%-r#le (1) the
)o#rt may, s#%/ect to the pro"isions of section 31 and to the
other pro"isions of this )ode, ma:e an order for the detention
of the /#dgment-de%tor in the ci"il prison and shall in that
e"ent ca#se him to %e arrested if he is not already #nder
arrest :
'ro"ided that in order to gi"e the /#dgment-de%tor an
opport#nity of satisfying the decree, the )o#rt may, %efore
ma:ing the order of detention, lea"e the /#dgment-de%tor in
Page 80
5!
the c#stody of an officer of the )o#rt for a specified period not
e.ceeding fifteen days or release him on his f#rnishing
sec#rity to the satisfaction of the )o#rt for his appearance at
the e.piration of the specified period if the decree %e not
sooner satisfied.
(4) + /#dgment-de%tor released #nder this r#le may %e re-
arrested.
(3) 1hen the )o#rt does not ma:e an order of detention #nder
s#%-r#le (3), it shall disallow the application and, if the
/#dgment-de%tor is #nder arrest, direct his release.*
(emphasis is o#rs)
<elying on the afore-e.tracted r#les from Krder RRI of the )'), it was
so#ght to %e asserted, that a show ca#se notice to a /#dgment-de%tor was
imperati"e, %efore he co#ld %e committed to ci"il prison. In fact, according
to learned co#nsel, r#le 4! e.tracted a%o"e, affords an opport#nity to the
/#dgment-de%tor to lead e"idence in order to demonstrate, why he sho#ld
not %e committed to ci"il prison. 8ased on the aforementioned assertions,
it was so#ght to %e contended, that since no proced#re, of the nat#re
referred to hereina%o"e, had %een followed %efore iss#ing the order dated
4.3.!14, the said order m#st %e treated as "oid, as it m#st %e deemed to
ha"e %een passed in "iolation of the mandatory proced#re, esta%lished %y
law.
,4. In order to s#pport his a%o"e s#%missions, learned 2enior )o#nsel
also placed reliance on 2#preme )o#rt <#les, 1@,,. &e in"ited o#r
attention to Krder RIII r#le ,, which is %eing reprod#ced here#nder:-
Krder RIII
7#dgments, decrees and Krders
,. -he decree passed or order made %y the )o#rt in e"ery
appeal, and any order for costs in connection with the proceedings
therein, shall %e transmitted %y the <egistrar to the )o#rt or -ri%#nal
Page 81
51
from which the appeal was %ro#ght, and steps for the enforcement
of s#ch decree or order shall %e ta:en in that co#rt or -ri%#nal in the
way prescri%ed %y law.*
(emphasis is o#rs)
It was so#ght to %e asserted, on the %asis of the a%o"e r#le, that the power
of e.ec#tion of an order passed %y this )o#rt in appeal, did not rest with
this )o#rt, %#t was to %e e.ercised %y the )o#rt or -ri%#nal concerned, in
the manner prescri%ed %y law*. It was accordingly asserted, that this
)o#rt had transgressed the aforesaid r#le framed %y this )o#rt, inasm#ch
as, it had e.ercised the power of an e.ec#ting )o#rt while passing the
order dated 4.3.!14, whereas, no s#ch power was "ested in this )o#rt.
,3. In order to demonstrate, that it was not within the /#risdiction of this
)o#rt (in e.ercise of the power "ested in it #nder +rticle 14 of the
)onstit#tion of India), to pass the imp#gned order dated 4.3.!14, learned
2enior )o#nsel placed reliance on the /#dgment rendered %y this )o#rt in
2#preme )o#rt 8ar +ssociation(s case (s#pra), wherein this )o#rt had
declared the legal position as #nder:-
46. -he plenary powers of this co#rt #nder +rticle 14 of the
)onstit#tion are inherent in the )o#rt and are complementary to
those powers which are specifically conferred on the co#rt %y
"ario#s stat#tes tho#gh are not limited %y those stat#tes. -hese
powers also e.ist independent of the stat#tes with a "iew to do
complete /#stice %etween the parties. -hese powers are of "ery wide
amplit#de and are in the nat#re of s#pplementary powers. -his
power e.ists as a separate and independent %asis of /#risdiction,
apart from the stat#tes. It stands #pon the fo#ndation, and the %asis
for its e.ercise may %e p#t on a different and perhaps e"en wider
footing, to pre"ent in/#stice in the process of litigation and to do
complete /#stice %etween the parties. -his plenary /#risdiction is,
th#s, the resid#al so#rce of power which this )o#rt may draw #pon
as necessary whene"er it is /#st and e?#ita%le to do so and in
partic#lar to ens#re the o%ser"ance of the d#e process of law, to do
complete /#stice %etween the parties, while administering /#stice
Page 82
5
according to law. -here is no do#%t that it is an indispensa%le
ad/#nct to all other powers and is free from the restraint of
/#risdiction and operates as a "al#a%le weapon in the hands of the
)o#rt to pre"ent Hclogging or o%str#ction of the stream of /#sticeH. It,
howe"er, needs to %e remem%ered that the powers conferred on the
)o#rt %y +rticle 14 %eing c#rati"e in nat#re cannot %e constr#ed as
powers which a#thorise the )o#rt to ignore the s#%stanti"e rights of
a litigant while dealing with a ca#se pending %efore it. -his power
cannot %e #sed to Hs#pplantH s#%stanti"e law applica%le to the case
or ca#se #nder consideration of the co#rt. +rticle 14, e"en with the
width of its amplit#de, cannot %e #sed to %#ild a new edifice where
none e.isted earlier, %y ignoring e.press stat#tory pro"isions dealing
with a s#%/ect and there%y to achie"e something indirectly which
cannot %e achie"ed directly. '#nishing a contemner ad"ocate, while
dealing with a contempt of co#rt case %y s#spending his licence to
practice, a power otherwise stat#torily a"aila%le only to the 8ar
)o#ncil of India, on the gro#nd that the contemner is also an
ad"ocate, is, therefore, not permissi%le in e.ercise of the /#risdiction
#nder +rticle 14. -he constr#ction of +rticle 14 m#st %e
f#nctionally informed %y the sal#tary p#rpose of the +rticle, "iC., to
do complete /#stice %etween the parties. It cannot %e otherwise. +s
already noticed in a case of contempt of co#rt, the contemner and
the co#rt cannot %e said to %e litigating parties.*
<eliance was also placed %y the learned 2enior )o#nsel, for the same
o%/ecti"e, on '. <amachandra <ao ". 2tate of Earnata:a, (!!) 4 2))
365. In order to #nderstand the e.act p#rport of the decision, learned
co#nsel in"ited o#r attention to the fact#al position which constit#ted the
%asis of the a%o"e ad/#dication. -he fact#al position has %een e.pressed
in paragraph of the a%o"e /#dgment, which is %eing reprod#ced
here#nder:-
. In )riminal +ppeal 9o.333=!!! the appellant was wor:ing as
an ;lectrical 2#perintendent in the >angalore )ity )orporation. 4or
the chec: period 1.3.1@,1 to 3.5.1@56 he was fo#nd to ha"e
amassed assets disproportionate to his :nown so#rces of income.
)harge-sheet acc#sing him of offences #nder 2ection 13(1)(e) read
with 2ection 13() of the 're"ention of )orr#ption +ct, 1@55 was
filed on 13.3.1@@4. -he acc#sed appeared %efore the 2pecial )o#rt
and was enlarged on %ail on ,.,.1@@4. )harges were framed on
1!.5.1@@4 and the case proceeded for trial on 5.11.1@@4. &owe"er,
Page 83
53
the trial did not commence. Kn 3..1@@@ the learned 2pecial 7#dge
who was seiCed of the trial directed the acc#sed to %e ac?#itted as
the trial had not commenced till then and the period of two years had
elapsed which o%liged him to ac?#it the acc#sed in terms of the
directions of this co#rt in <a/ Deo 2harma As. 2tate of 8ihar (1@@5)
6 2)) 3!6 (hereinafter, <a/ Deo 2harma-I). -he 2tate of Earnata:a
thro#gh the D.2.'. Bo:ay#:ta, >angalore preferred an appeal
%efore the &igh )o#rt p#tting in iss#e the ac?#ittal of the acc#sed.
-he learned 2ingle 7#dge of the &igh )o#rt, "ide the imp#gned
order, allowed the appeal, set aside the order of ac?#ittal and
remanded the case to the -rial )o#rt, forming an opinion that a case
charging an acc#sed with corr#ption was an e.ception to the
directions made in <a/ Deo 2harma-I as clarified %y this )o#rt in <a/
Deo 2harma (II) As. 2tate of 8ihar (1@@@) 6 2)) ,!4. 2trangely
eno#gh the &igh )o#rt not only condoned a delay of 33 days in filing
the appeal against ac?#ittal %y the 2tate %#t also allowed the appeal
itself -- %oth witho#t e"en iss#ing notice to the acc#sed. -he
aggrie"ed acc#sed has filed this appeal %y special lea"e. 2imilar are
the facts in all the other appeals. 2horn of details, s#ffice it to say
that in all the appeals the acc#sed persons who were facing
corr#ption charges, were ac?#itted %y the 2pecial )o#rts for fail#re
of commencement of trial in spite of lapse of two years from the date
of framing of the charges and all the 2tate appeals were allowed %y
the &igh )o#rt witho#t noticing the respecti"e acc#sed persons.*
In the fact#al scenario noticed hereina%o"e, this )o#rt recorded its
concl#sions, in respect of the power a"aila%le to )onstit#tional )o#rts, %y
recording the following o%ser"ations:-
6. 'rescri%ing periods of limitation at the end of which the trial
co#rt wo#ld %e o%liged to terminate the proceedings and necessarily
ac?#it or discharge the acc#sed, and f#rther, ma:ing s#ch directions
applica%le to all the cases in the present and for the f#t#re amo#nts
to legislation, which, in o#r opinion, cannot %e done %y /#dicial
directi"es and within the arena of the /#dicial law-ma:ing power
a"aila%le to constit#tional co#rts, howsoe"er li%erally we may
interpret +rticles 3, 1, 141 and 14 of the )onstit#tion. -he
di"iding line is fine %#t percepti%le. )o#rts can declare the law, they
can interpret the law, they can remo"e o%"io#s lac#nae and fill the
gaps %#t they cannot entrench #pon in the field of legislation
properly meant for the legislat#re. 8inding directions can %e iss#ed
for enforcing the law and appropriate directions may iss#e, incl#ding
laying down of time limits or chal:ing o#t a calendar for proceedings
to follow, to redeem the in/#stice done or for ta:ing care of rights
"iolated, in a gi"en case or set of cases, depending on facts %ro#ght
Page 84
54
to the notice of the co#rt. -his is permissi%le for /#diciary to do. 8#t it
may not, li:e legislat#re, enact a pro"ision a:in to or on the lines of
)hapter RRRAI of the )ode of )riminal 'roced#re, 1@63.*
It was, therefore the "ehement contention of the learned co#nsel for the
petitioner, that the order passed %y this )o#rt was clearly impermissi%le,
not only #nder the pro"isions of the )'), %#t also in terms of the 2#preme
)o#rt <#les, 1@,,, co#pled with the legal position declared %y this )o#rt.
,,. 8efore endea"o#ring to deal with the s#%missions ad"anced at the
hands of the learned co#nsel for the petitioner, on the %asis of 2ection 31
of the )'), and other allied pro"isions referred to hereina%o"e, it is
rele"ant to :eep in mind, that the orders dated 31.5.!1 and 3.1.!1
(the implementation whereof is s#%/ect matter of consideration), arose o#t
of proceedings initiated %y the 2;8I (4->), #nder the 2;8I +ct. In the
conte.t #nder reference, it is necessary to per#se 2ections 11(3), 130 and
13N of the 2;8I +ct. -he same are accordingly %eing e.tracted
here#nder:-
11(3) 9otwithstanding anything contained in any other law for
the time %eing in force while e.ercising the powers #nder cla#se
(i) or cla#se (ia) of s#%-section () or s#%-section (+), the 8oard
shall ha"e the same powers as are "ested in a )i"il )o#rt #nder the
)ode of )i"il 'roced#re, 1@!5 (3 of 1@!5), while trying a s#it, in
respect of the following matters, namely:
(i) the disco"ery and prod#ction of %oo:s of acco#nt and
other doc#ments, at s#ch place and s#ch time as may %e specified
%y the 8oard$
(ii) s#mmoning and enforcing the attendance of persons
and e.amining them on oath$
(iii) inspection of any %oo:s, registers and other
doc#ments of any person referred to in section 1, at any place$
Page 85
53
(i") inspection of any %oo:, or register, or other
doc#ment or record of the company referred to in s#%-section (+)$
(") iss#ing commissions for the e.amination of
witnesses or doc#ments.
130. 'roced#re and powers of the 2ec#rities +ppellate -ri%#nal-
(1) -he 2ec#rities +ppellate -ri%#nal shall not %e %o#nd %y the
proced#re laid down %y the )ode of )i"il 'roced#re, 1@!5 (3 of
1@!5), %#t shall %e g#ided %y the principles of nat#ral /#stice and,
s#%/ect to the other pro"isions of this +ct and of any r#les, the
2ec#rities +ppellate -ri%#nal shall ha"e powers to reg#late their own
proced#re incl#ding the places at which they shall ha"e their sittings.
() -he 2ec#rities +ppellate -ri%#nal shall ha"e, for the p#rposes of
discharging their f#nctions #nder this +ct, the same powers as are
"ested in a )i"il )o#rt #nder the )ode of )i"il 'roced#re, 1@!5 (3 of
1@!5), while trying a s#it, in respect of the following matters, namely:
(a) s#mmoning and enforcing the attendance of any person
and e.amining him on oath$
(%) re?#iring the disco"ery and prod#ction of doc#ments$
(c) recei"ing e"idence on affida"its$
(d) iss#ing commissions for the e.amination of witnesses or
doc#ments$
(e) re"iewing its decisions$
(f) dismissing an application for defa#lt or deciding it e. parte$
(g) setting aside any order of dismissal of any application for
defa#lt or any order passed %y it e. parte$
(h) any other matter which may %e prescri%ed.
(3) ;"ery proceeding %efore the 2ec#rities +ppellate -ri%#nal shall
%e deemed to %e a /#dicial proceeding within the meaning of
sections 1@3 and 5, and for the p#rposes of section 1@, of the
Indian 'enal )ode (43 of 15,!), and the 2ec#rities +ppellate
-ri%#nal shall %e deemed to %e a )i"il )o#rt for all the p#rposes of
section 1@3 and )hapter RRAI of the )ode of )riminal 'roced#re,
1@63( of 1@64).
13N. )i"il )o#rt not to ha"e /#risdiction M
9o )i"il )o#rt shall ha"e /#risdiction to entertain any s#it or
proceeding in respect of any matter which an +d/#dicating Kfficer
Page 86
5,
appointed #nder this +ct or a 2ec#rities +ppellate -ri%#nal
constit#ted #nder this +ct is empowered %y or #nder this +ct to
determine and no in/#nction shall %e granted %y any co#rt or other
a#thority in respect of any action ta:en or to %e ta:en in p#rs#ance
of any power conferred %y or #nder this +ct.*
(emphasis is o#rs)
+ per#sal of the a%o"e pro"isions re"eals, that the f#nctionaries #nder the
2;8I +ct, ha"e %een "ested on some s#%/ects, with the same powers,
which are a"aila%le to a )i"il )o#rt #nder the )'). -his necessarily leads
to the inference, that other pro"isions of the )') are per se, not applica%le
to the s#%/ects not co"ered %y the a%o"e pro"isions. 2imilarly, for the
2+-, it has %een specially pro"ided, that the pro"isions of the )') will %e
inapplica%le to it, howe"er, in its f#nctioning it wo#ld %e g#ided %y the
principles of nat#ral /#stice. -he a%o"e pro"ision also "ests in the 2+-,
some powers as are "ested in a )i"il )o#rt. K%"io#sly therefore, on the
remaining s#%/ects the pro"isions of the )') wo#ld not %e applica%le.
2ince the pro"isions in the )') relating to e.ec#tion ha"e not %een made
applica%le for enforcement of orders passed #nder the 2;8I +ct, the
concl#sion has to %e, that the same (incl#ding the pro"isions referred to %y
learned co#nsel), wo#ld not %e applica%le for the enforcement of orders
passed #nder the 2;8I +ct. 4#rthermore, 2ection 13N of the 2;8I +ct
%ars )i"il )o#rts from entertaining any s#it or proceeding, in respect of a
contro"ersy go"erned %y the 2;8I +ct. It is, therefore apparent, that the
pro"isions of the )') are per se inapplica%le to proceedings #nder the
2;8I +ct.
Page 87
56
,6. It is howe"er important to notice, that the 2;8I +ct does not pro"ide
either to the 2;8I or the 2+-, power for e.ec#tion of orders passed %y
either of them. -herefore, no s#ch power co#ld %e e.ercised %y the a%o"e
fora for e.ec#ting e"en the appellate order(s) passed %y this )o#rt #nder
2ection 13T of the 2;8I +ct. It was when the legal position stood th#s,
that the ?#estion of e.ec#tion of the orders dated 31.5.!1 and 3.1.!1
arose (d#ring the pendency of )ontempt 'etition ()i"il) nos. 41 and 413
of !1 and )ontempt 'etition ()i"il) no. ,! of !13).
,5. It is in the a%o"e %ac:gro#nd, that we shall first determine the
s#%missions ad"anced %y learned 2enior )o#nsel, %ased on 2ection 31 of
the )'). 4irst and foremost, the proced#re contemplated #nder 2ection
31 of the )') has not %een adopted %y the 2;8I +ct, either e.pressly or
impliedly. 2econdly, 2ection 31, deals with the power of a )i"il )o#rt to
enforce e.ec#tion of money-decrees rendered %y a )i"il )o#rt. &erein, we
are concerned with the e.ec#tion of orders emanating from the pro"isions
of the 2;8I +ct, and not o#t of orders in proceedings, initiated %efore a
)i"il )o#rt. Insofar as the 2;8I +ct is concerned, as already noticed
hereina%o"e, 2ection 13N totally e.cl#des the /#risdiction of )i"il )o#rts, in
respect of s#%/ects go"erning in"estors( interest and the reg#lation of the
sec#rities mar:et. -here can, therefore %e no do#%t that 2ection 31 of the
)') is per se inapplica%le to the contro"ersy in hand.
,@. -here can howe"er %e no do#%t, that e"en tho#gh the pro"isions of
the )') are inapplica%le to proceedings #nder the 2;8I +ct (e.cept when
Page 88
55
e.pressly pro"ided for), yet we all #nderstand, that the pro"isions of the
)') ha"e e"ol"ed as a matter of long years of e.perience emanating o#t
of the common law of ;ngland. ;"en tho#gh the same may not %e
%inding, insofar as the present contro"ersy is concerned, yet if an order is
passed :eeping in mind the parameters laid down in the )'), it wo#ld %e
s#fficient to concl#de that the r#les of nat#ral /#stice were f#lly complied
with. 1e are of the "iew that the conditions contemplated in 2ection 31 of
the )') as preconditions, for the arrest and detention of a /#dgment-
de%tor for e.ec#ting a )o#rt(s order, can %e demonstrated as ha"ing %een
d#ly complied with, %efore this )o#rt passed the imp#gned order dated
!4.!3.!14. -he pro"iso to 2ection 31 of the )') contemplates certain
preconditions for e.ec#tion of a money-decree %y way of arrest and
detention in prison. +s already disc#ssed a%o"e, on the satisfaction of any
one of the preconditions, a money-decree can %e e.ec#ted, %y ordering
arrest and detention of the /#dgment-de%tor in prison.
6!. -he first sit#ation contemplated %y the pro"iso to 2ection 31 of the
)') is, when the e.ec#ting )o#rt entertains the "iew, that the /#dgment-
de%tor is li:ely to a%scond or lea"e the local /#risdiction of the )o#rt, with
the o%/ect of o%str#cting or delaying the e.ec#tion of the decree. Insofar
as the instant aspect of the matter is concerned, it is apparent that this
)o#rt act#ally entertained the "iew, that the petitioner was li:ely* to
a%scond or lea"e the local limits of the /#risdiction of this )o#rt, for
o%str#cting or delaying the e.ec#tion of the decree. It is, therefore, that
Page 89
5@
this )o#rt %y its order dated 5.1!.!13 directed, that F the alleged
contemnors (respondents) shall not lea"e the co#ntry witho#t the
permission of this )o#rtF*. ;"en tho#gh the a%o"e order was
s#%se?#ently rela.ed %y this )o#rt on a re?#est made %y the petitioner,
yet once again on 1.11.!13, this )o#rt directed F the alleged
contemnors shall not lea"e the co#ntry witho#t the permission of this
)o#rt.*. -he first of the post#lated preconditions for ordering arrest and
detention of a /#dgment-de%tor, for the e.ec#tion of the lia%ility resting on
the sho#lders of the two companies, was therefore clearly made o#t,
%efore the imp#gned order dated 4.3.!14 was passed.
61. +nother alternati"e pre-condition contemplated in the pro"iso to
2ection 31 of the )') is, when a /#dgment-de%tor has the means to pay
the amo#nt of the decree (or some s#%stantial part thereof), and yet
ref#ses or neglects to pay the same. Insofar as the instant aspect of the
matter is concerned, the two concerned companies co#ld ha"e easily paid
the contemplated amo#nts, %y selling their assets (in terms of their affida"it
dated 4.1.!1). It is also rele"ant to mention, that in the affida"its filed %y
the two concerned companies %efore the 2+- on 14.@.!11 (ta:en from
Aol#me II of additional doc#ments filed %y the respondents in )ontempt
'etition ()i"il) no. 41 of !1), it was ac:nowledged on %ehalf of the two
companies, that the %oo: "al#e=mar:et "al#e of their properties as on
3!.5.!11 were as #nder:-
8oo: Aal#e
(<s. in )rores)
>ar:et Aal#e
(<s. in )rores)
2I<;)B
Page 90
@!
i) In"estments
ii) )ash=)#rrent +ssets etc.
,,43!
13,@36
3,,!1
!,@6
2&I)B
i) In"estments
ii) )ash=)#rrent +ssets etc.
1,5,3
,,!6
3,4@5
6,,5
-otal 3!,3@ ,@,4@5
-he mar:et "al#e of the assets ac:nowledged %y the two companies,
wo#ld ha"e #ndo#%tedly appreciated f#rther, from the fig#res depicted in
!11. D#ring the co#rse of hearing %efore this )o#rt, on se"eral
occasions it was #nderta:en %y the contemnors, that they wo#ld dispose of
the #nenc#m%ered immo"a%le properties owned %y the 2ahara Dro#p, to
comply with the orders dated 31.5.!1 and 3.1.!1. In this %ac:gro#nd
it may also %e mentioned, that the official we%site of 2ahara India,
indicates the net worth of the 2ahara Dro#p as <s.,5,164=- crores.
+ccording to the a%o"e we%site, the 2ahara Dro#p has a land %an: of
appro.imately 3,,,31 acres, and the mar:et "al#e of the Dro#p
assets=potential earning is to the t#ne of <s.1,3,315 crores. It is also not
a matter of disp#te, that the 2ahara Dro#p owns premi#m hotels in Bondon
(the Dros"enor &o#se) and in 9ew Nor: (the 9ew Nor: 'laCa). -he a%o"e
hotels, according to the 2ahara Dro#p, are "al#ed at o"er se"eral
tho#sand crores of r#pees. 8e that as it may, after the passing of the
orders dated 31.5.!1 and 3.1.!1, no payment has %een made %y the
two concerned companies. -he last deposit of <s.31! crores was made
on 3.1.!1. It is, therefore apparent, that inspite of their means to pay,
the two companies ha"e ref#sed and neglected to pay the amo#nt d#e in
its entirety (or e"en a s#%stantial part thereof). +nother post#lated pre-
Page 91
@1
condition for ordering the arrest and detention of a /#dgment-de%tor, for the
e.ec#tion of a money-decree, was therefore clearly made o#t, %efore the
imp#gned order dated !4.!3.!14 was passed.
6. 1e are prima facie satisfied, that yet another pre-condition
contemplated in the pro"iso to 2ection 31 of the )') was also made o#t.
-he reason for e.pressing the instant "iew is, that no clear responses were
e"er gi"en %y the two companies. -he position remained the same
whether those answers were so#ght %y the 2;8I(4->), or the 2+-, or
e"en %y this )o#rt. 1hen 2I<;)B was re?#ired to disclose the manner in
which it had made payments %y way of redemption to the K4)D(s holders,
the following so#rces were disclosed:-
<#pees
(In )rores)
1. 2ahara )redit )o-operati"e 2ociety Btd. 13,3,,.15
. 2ahara India )ommercial )orporation Bimited 4354.!!
3. 2ahara U 2hop 35.3
4. Eeta: )ity &omes Btd. 1@.43
3. Eirit )ity &omes Btd. 44.!3
Bi:ewise, when similar information a%o#t redemptions was so#ght from
2&I)B, the following so#rces were disclosed:-
+t the cost of repetition we may record, that when as:ed the manner in
which the companies had forwarded the a%o"e mentioned payments to the
<#pees
(In )rores)
1. 2I))B 46@.!!
. 2ahara U 2hop 411.@!
Page 92
@
two companies, the response was, that the a%o"e amo#nts were ne"er
released, %#t were transferred to 2ahara India (4irm), for dis%#rsement.
1hen details of the a%o"e transactions were so#ght, the )o#rt was
informed that the a%o"e transactions were made %y way of cash, and the
re?#irement of the )o#rt to show %an:ing transactions, was #nfair. 1hen
as:ed how the two companies had collected the cash f#nds, which were
paid to 2ahara India (4irm), the response was, that the two companies
which had collected the f#nds, had collected the same %y way of cash.
1hen as:ed how dis%#rsements were made to the in"estors, the response
was, that a%o#t @3O of the payments made to the in"estors, were also
made %y way of cash. -o demonstrate the receipt and payment of the
f#nds %y way of cash, learned 2enior )o#nsel representing the
contemnors (incl#ding the petitioner herein), in"ited o#r attention to the
%oo:s of acco#nts (only general ledger entries) to demonstrate proof of the
transactions #nder reference. Details in this %ehalf ha"e %een recorded %y
#s #nder the heading + few words, a%o#t the defence of redemption of
K4)D(s, offered %y the two companies*. -he a%o"e e.planation may
seem to %e accepta%le to the contemnors, %#t o#r "iew is ?#ite the
con"erse. It is not possi%le for #s to accept, that the f#nds amo#nting to
tho#sands of crores, were transacted %y way of cash. 1e wo#ld,
therefore, on the face of it, re/ect the a%o"e e.planation tendered on %ehalf
of the two companies. It is necessary to notice, that one of the
preconditions contemplated #nder the pro"iso to 2ection 31 post#lates,
that if the /#dgment-de%tor dishonestly transfers, conceals or remo"es any
Page 93
@3
part of his property, or commits any act of %ad faith in relation to his
property, the concerned e.ec#ting )o#rt can enforce a money-decree, %y
way of arrest and detention. 2ince a farcical e.planation was tendered %y
the two companies in respect of receipt, payment and transfer of
tho#sands of crores of r#pees %y way of cash, witho#t reference to any
%an:ing transactions whatsoe"er, it was legitimate to infer dishonest
transfers, as well as, %ad faith, on %ehalf of the contemnors. -herefore, for
yet another reason, it was open for this )o#rt, to order arrest and detention
of the contemnors (incl#ding the present petitioner), for enforcement of the
directions iss#ed %y this )o#rt on 31.5.!1 and 3.1.!1.
63. -he three preceding paragraphs clearly demonstrate, that three
different conditions contemplated in the pro"iso to 2ection 31 of the )'),
were satisfied, %efore we ordered the arrest and detention of the
contemnors, for enforcement of the orders passed %y this )o#rt.
2atisfaction of any one of the conditions, e.pressed in the foregoing three
paragraphs, wo#ld ha"e %een s#fficient to order the arrest and detention of
the petitioner, #nder 2ection 31 of the )'). K#r instant determination
sho#ld not %e #nderstood to mean, that 2ection 31 of the )') is
applica%le to the facts and circ#mstances of this case. -he instant
determination sho#ld only %e #nderstood to mean, that the parameters laid
down in 2ection 31 of the )'), stood f#lly satisfied, %efore the arrest and
detention order dated 4.3.!14 was passed.
Page 94
@4
64. 4or the same reasons as ha"e %een recorded in the foregoing
paragraph, e"en r#les 36 and 4! of Krder RRI of the )'), wo#ld %e
inapplica%le for the e.ec#tion of this )o#rt(s orders dated 31.5.!1 and
3.1.!1. 4irstly, %eca#se the a%o"e pro"isions of the )'), relating to
e.ec#tion, ha"e not %een made applica%le for enforcement of orders
passed #nder the 2;8I +ct. 2econdly, a per#sal of r#le 36(1) of Krder RRI
of the )') re"eals, that where a )o#rt is satisfied that the /#dgment-
de%tor is li:ely to a%scond or lea"e the local limits of the /#risdiction of the
)o#rt, the proced#ral re?#irements of the aforesaid r#les is e.pressly
e.cl#ded. Bi:ewise, s#%-r#le () of r#le 36 of Krder RRI of the )')
pro"ides, that the proced#ral re?#irements depicted therein, wo#ld %e
inapplica%le when the /#dgment-de%tor does not enter appearance %efore
a )o#rt in o%edience of a notice iss#ed to him. -he impression of this
)o#rt, that the appellant wo#ld a%scond, and the fact, that the appellant
did not enter appearance when s#mmoned to do so, is apparent from the
orders passed %y this )o#rt (already e.tract a%o"e). Net, at the cost of
repetition, we may reiterate, that %y an order dated 5.1!.!13, this )o#rt
directed, that Fthe alleged contemnors (respondents) shall not lea"e the
co#ntry witho#t the permission of this )o#rtF*. ;"en tho#gh the a%o"e
order was rela.ed %y this )o#rt on a re?#est made %y the petitioner, yet
once again on 1.11.!13 this )o#rt directed F the alleged contemnors
shall not lea"e the co#ntry witho#t the permission of this )o#rt.*. -he
a%o"e restraint order was s#%sisting when the petitioner(s order of arrest
and detention was passed. 4#rthermore, ha"ing e.pressed its satisfaction,
Page 95
@3
that the information f#rnished %y the contemnors (incl#ding the petitioner)
did not esta%lish the stance adopted %y them, this )o#rt %y its order dated
!..!14 noticing the defiant and non-cooperati"e attit#de of the
contemnors, had directed the personal presence of the alleged
contemnors and the directors of the respondent companies in )o#rt on
4e%r#ary ,, !14 at .!! pmF* Kn 3..!14, a mention was made on
%ehalf of the petitioner herein, for e.emption from personal presence on
,..!14. -he same was declined. Despite the a%o"e ref#sal, >r.
2#%rata <oy 2ahara did not enter appearance %efore this )o#rt on
,..!14. -he other directors were present. -h#s there is no room for
any do#%t, that the a%o"e pro"ision was rendered inapplica%le, insofar as
the petitioner is concerned. + per#sal of r#le 4! of Krder RRI of the )')
re"eals, that the proced#ral re?#irements e.pressed in the same, wo#ld
come into play inter alia, after the person concerned F is %ro#ght %efore
the )o#rt after %eing arrested in e.ec#tion of a decree for payment of
moneyF*. <eference to a%o"e r#le, on %ehalf of the petitioner, is
therefore wholly misconcei"ed. -he a%o"e deli%erations, sho#ld not %e
#nderstood to mean, that the aforesaid pro"isions of the )'), relied #pon
%y the learned co#nsel, were applica%le to this case. -he a%o"e
deli%erations only demonstrated, that the parameters laid down in the
a%o"e pro"isions cannot %e stated to ha"e %een disregarded, when the
imp#gned order dated 4.3.!14 was passed.
Page 96
@,
63. Insofar as r#le , of Krder RIII of the 2#preme )o#rt <#les, 1@,,, is
concerned, the same mandates the enforcement of an order passed %y
this )o#rt, %y transmitting the order to %e enforced to the )o#rt or -ri%#nal
in the way prescri%ed %y law*. 1e ha"e already concl#ded hereina%o"e,
that no e.ec#ting mechanism was in place #nder the pro"isions of the
2;8I +ct, when the orders dated 31.5.!1 and 3.1.!1 were passed.
-h#s "iewed, e"en r#le , of Krder RIII of the 2#preme )o#rt <#les, 1@,,
wo#ld %e inapplica%le to deal with the iss#e in hand, as it was not possi%le
for this )o#rt to transmit F to the )o#rt or -ri%#nal from which the appeal
was %ro#ght ...* for e.ec#tion of this )o#rt(s orders dated 31.5.!1 and
3.1.!1.
6,. -he orders dated 31.5.!1 and 3.1.!1, co#ld therefore ha"e
only %een e.ec#ted %y this )o#rt, in e.ercise of the power conferred on it
#nder +rticles 1@ and 14 of the )onstit#tion of India. 'assing an order
#nder the a%o"e pro"isions was necessary to ens#re the o%ser"ance of
d#e process of law, in the facts and circ#mstances of this case, and to
maintain the ma/esty of law and the dignity of this )o#rt. -he imp#gned
order dated 4.3.!14 was accordingly passed there#nder. -he power of
arrest and detention can %e e.ercised, as and when this )o#rt is satisfied,
in the facts and circ#mstances with which this )o#rt is confronted in a
gi"en case, that the a%o"e means sho#ld %e adopted for the e.ec#tion of
its orders.
Page 97
@6
66. Irrespecti"e of the s#%missions noticed hereina%o"e, >r. <am
7ethmalani, learned 2enior )o#nsel appearing on %ehalf of the petitioner,
placed "ehement reliance on the /#dgment rendered %y this )o#rt in 7olly
Deorge Aarghese P +nr. ". 8an: of )ochin, (1@5!) 2)) 3,!, so as to
contend, that detention per se was impermissi%le for enforcement of a
money decree. <eliance was placed on the following o%ser"ations
recorded in the a%o"e /#dgment:-
1!. ;?#ally meaningf#l is the import of +rticle 1 of the
)onstit#tion in the conte.t of imprisonment for non-payment of
de%ts. -he high "al#e of h#man dignity and the worth of the h#man
person enshrined in +rticle 1 , read with +rticles 14 and 1@ ,
o%ligates the 2tate not to incarcerate e.cept #nder law which is fair,
/#st and reasona%le in its proced#ral essence. >ane:a DandhiIs
case (1@65) 1 2)) 45, as de"eloped f#rther in 2#nil 8atra ". Delhi
+dministration, (1@65) 4 2)) 4@4, 2ita <am and Krs. ". 2tate of
0.'., (1@6@) 2)) ,3,, and 2#nil 8atra ". Delhi +dministration
(1.'. no. 1!!@ of 1@6@ decided on Decem%er !, 1@6@), lays down
the proposition. It is too o%"io#s to need ela%oration that to cast a
person in prison %eca#se of his po"erty and conse?#ent ina%ility to
meet his contract#al lia%ility is appalling. -o %e poor, in this land of
daridra narayana, is no crime and to reco"er de%ts %y the proced#re
of p#tting one in prison is too flagrantly "iolati"e of +rticle 1 #nless
there is proof of the minimal fairness of his wilf#l fail#re to pay in
spite of his s#fficient means and a%sence of more terri%ly pressing
claims on his means s#ch as medical %ills to treat cancer or other
gra"e illness. 0nreasona%leness and #nfairness in s#ch a proced#re
is infera%le from +rticle 11 of the )o"enant. 8#t this is precisely the
interpretation we ha"e p#t on the pro"iso to 2ection 31 ).'.). and
the lethal %low of +rticle 1 cannot stri:e down the pro"ision, as now
interpreted.
11. -he words which h#rt are Hor has had since the date of the
decree, the means to pay the amo#nt of the decreeH. -his implies,
s#perficially read, that if at any time after the passing of an old
decree the /#dgment-de%tor had come %y some reso#rces and had
not discharged the decree, he co#ld %e detained in prison e"en
tho#gh at that later point of time he was fo#nd to %e penniless. -his
is not a so#nd position apart from %eing inh#man going %y the
standards of +rticle 11 (of the )o"enant) and +rticle 1 (of the
)onstit#tion). -he simple defa#lt to discharge is not eno#gh. -here
Page 98
@5
m#st %e some element of %ad faith %eyond mere indifference to pay,
some deli%erate or rec#sant disposition in the past or, alternati"ely,
c#rrent means to pay the decree or a s#%stantial part of it. -he
pro"ision emphasiCes the need to esta%lish not mere omission to
pay %#t an attit#de of ref#sal on demand "erging on dishonest
disowning of the o%ligation #nder the decree. &ere considerations of
the de%torIs other pressing needs and straitened circ#mstances will
play prominently. 1e wo#ld ha"e, %y this constr#ction, sa#ced law
with /#stice, harmoniCed 2ection 31 with the )o"enant and the
)onstit#tion.
1. -he ?#estion may s?#arely arise some day as to whether the
pro"iso to 2ection 31 read with Krder 1. <#le 36 is in e.cess of the
)onstit#tional mandate in +rticle 1 and %ad in part. In the present
case since we are remitting the matter for reconsideration, the stage
has not yet arisen for #s to go into the "ires, that is why we are
desisting from that essay.
13. In the present case the de%tors are in distress %eca#se of the
%lan:et distraint of their properties. 1hate"er might ha"e %een their
means once, that finding has %ecome o%solete in "iew of later
happenings. 2ri Erishnam#rthi lyer for the respondent fairly agreed
that the law %eing what we ha"e stated, it is necessary to direct the
e.ec#ting co#rt to re-ad/#dicate on the present means of the de%tors
"is-a-"is the present press#res of their inde%tedness, or alternati"ely
whether they ha"e had the a%ility to pay %#t ha"e improperly e"aded
or postponed doing so or otherwise dishonestly committed acts of
%ad faith respecting their assets. -he co#rt will ta:e note of other
honest and #rgent press#res on their assets, since that is the
e.ercise e.pected of the co#rt #nder the pro"iso to 2ection 31. +n
earlier ad/#dication will %ind if rele"ant circ#mstances ha"e not
materially changed.*
(emphasis is o#rs)
1e ha"e gi"en o#r tho#ghtf#l consideration to the s#%missions ad"anced
at the hands of the learned co#nsel for the petitioner, %ased on the
/#dgment rendered %y this )o#rt in 7olly Deorge Aerghese(s case (s#pra).
1e are of the "iew, that the concl#sions to which o#r attention has %een
in"ited, m#st %e "iewed with reference to the fact#al matri., as also, the
act#al consideration which had res#lted in the a%o"e determination. In the
instant "iew of the matter, the fact#al matri. ta:en into consideration
Page 99
@@
emerges from the following narration in 7olly Deorge Aerghese(s case
(s#pra):-
1. -his litigation has sec#red special lea"e from #s %eca#se it
in"ol"es a profo#nd iss#e of constit#tional and international law and
offers a challenge to the nascent champions of h#man rights in India
whose politiciCed pre-occ#pation has forsa:en the ci"il de%tor whose
personal li%erty is imperilled %y the /#dicial process itself, than:s to
2ection 31 ('ro"iso) and Krder 1, <#le 36, )i"il 'roced#re )ode.
&ere is an appeal %y /#dgment-de%tors- the appellants - whose
personal freedom is in peril %eca#se a co#rt warrant for arrest and
detention in the ci"il prison is chasing them for non-payment of an
amo#nt d#e to a %an: - the respondent, which has ripened into a
decree and has not yet %een discharged. Is s#ch depri"ation of
li%erty illegalG
... ... ... ... ...
4. -he facts. -he /#dgment-de%tors (appellants) s#ffered a
decree against them in K.2. 9o. 36 of 1@6 in a s#m of <s..3
la:hs, the respondent-%an: %eing the decree-holder. -here are two
other money decrees against the appellants (in K.2. @ of 1@6 and
@4 of 1@64), the total s#m paya%le %y them %eing o"er <s.6 la:hs. In
e.ec#tion of the decree in ?#estion (K.2. 36 of 1@6) a warrant for
arrest and detention in the ci"il prison was iss#ed to the appellants
#nder 2ection 31 and Krder 1, <#le. 36 of the )i"il 'roced#re
)ode on 7#ne , 1@6@. ;arlier, there had %een a similar warrant
for arrest in e.ec#tion of the same decree. 8esides this process, the
decree-holders had proceeded against the properties of the
/#dgment-de%tors and in conse?#ence, all these immo"a%le
properties had %een attached for the p#rpose of sale in discharge of
the decree de%ts. It is a"erred that the e.ec#tion co#rt has also
appointed a <ecei"er for the management of the properties #nder
attachment. In short, the en/oyment or e"en the power to alienate
the properties %y the /#dgment-de%tors has %een for%idden %y the
co#rt direction :eeping them #nder attachment and appointing a
<ecei"er to manage them. 9e"ertheless, the co#rt has iss#ed a
warrant for arrest %eca#se, on an earlier occasion, a similar warrant
had %een already iss#ed. -he &igh )o#rt, in a short order, has
s#mmarily dismissed the re"ision filed %y the /#dgment-de%tors
against the order of arrest. 1e see no in"estigation ha"ing %een
made %y the e.ec#ting co#rt regarding the c#rrent a%ility of the
/#dgment-de%tors to clear off the de%ts or their mala fide ref#sal, if
any, to discharge the de%ts. -he ?#estion is whether #nder s#ch
circ#mstances the personal freedom of the /#dgment-de%tors can %e
held in ransom #ntil repayment of the de%t, and if 2ection 31 read
Page 100
1!!
with Krder 1, <#le 36, ).'.). does warrant s#ch a step, whether
the pro"ision of law is constit#tional, tested on the to#chstone of fair
proced#re #nder +rticle 1 and in conformity with the inherent
dignity of the h#man person in the light of +rticle 11 of the
International )o"enant on )i"il and 'olitical <ights. + modern
2hyloc: is shac:led %y lawIs h#mane handc#ffs.
... ... ... ... ...
@. 1e conc#r with the Baw )ommission in its constr#ction of
2ection 31 ).'.). It follows that ?#ondom affl#ence and c#rrent
indigence witho#t inter"ening dishonesty or %ad faith in li?#idating
his lia%ility can %e consistent with +rticle 11 of the )o"enant,
%eca#se then no detention is permissi%le #nder 2ection 31, ).'.).*
(emphasis is o#rs)
&a"ing per#sed the /#dgment rendered %y this )o#rt in 7olly Deorge
Aerghese(s case (s#pra), we are of the "iew, that the concl#sions recorded
therein, ha"e a pointed and definite reference to the a%ility of a /#dgment-
de%tor, to pay off his de%t. -he concl#sion drawn in the a%o"e /#dgment,
was with respect to a /#dgment-de%tor, who was #na%le to pay off his de%t.
+ccordingly it was felt, that an order of detention in prison sho#ld not %e
adopted, to effect#ate the e.ec#tion of the decree. 1hile dealing with the
preconditions e.pressed in the pro"iso to 2ection 31 of the )'), we ha"e
already concl#ded, that the 2ahara Dro#p has enormo#s assets with a
h#ge mar:et and mar:eta%le "al#e. It is also clear that after 3.1.!1,
the two companies ha"e not deposited a single paisa, in f#rtherance of the
compliance of this )o#rt(s orders (dated 31.5.!1 and 3.1.!1). It is
therefore clear, that despite the petitioner (and the other companies)
ha"ing means to pay, they ha"e #nfairly and willf#lly failed to pay. It is,
therefore also clear, that the petitioner in the present case is not similarly
sit#ated as the petitioner in 7olly Deorge Aerghese(s case (s#pra).
Page 101
1!1
+ccordingly reliance placed %y the learned co#nsel for the petitioner on the
a%o"e /#dgment, is wholly misconcei"ed.
=II. W(*%(*# %(* +:1!2,*0 &#0*# 0$%*0 .;.2014 6$. 1$..*0 +,
-+&5$%+&, &/ %(* #!5*. &/ ,$%!#$5 9!.%+7*8
65. 1hile arg#ing on merits, the "ery first plea ad"anced on %ehalf of
the petitioner was, that the order of detention dated 4.3.!14 was passed
all of a s#dden, witho#t affording any opport#nity to the petitioner. Dr.
<a/ee" Dhawan, learned 2enior )o#nsel, who spearheaded s#%missions
on the instant iss#e, informed this )o#rt, that an order passed witho#t
affording an opport#nity of hearing, %y any a#thority whosoe"er (incl#ding
this )o#rt), wo#ld %e constit#tionally #naccepta%le, and therefore "oid.
-he order dated 4.3.!14, according to learned 2enior )o#nsel, was
passed witho#t affording the petitioner any opport#nity to :now why, and
also, witho#t any effecti"e opport#nity to respond to, whate"er was the
%asis of passing s#ch order. -he petitioner, according to learned co#nsel,
is till date not aware of the reasons which had prompted this )o#rt to pass
the imp#gned order dated 4.3.!14. &e apologiCed to #s, while informing
#s, that he had no option %#t to %e %l#nt. <eferring to the imp#gned order,
he reiterated, No#r Bordships ha"e passed a draconian order*. Bearned
2enior )o#nsel in the a%o"e conte.t, asserted, that this )o#rt had made a
Fterri%le terri%le mista:eF, which needed to %e correctedF*. In this
%ehalf his s#%mission was, that Fto err was h#manF* and his ad"ice
was, that ... it is imperati"e for yo#, to correct this %l#nder...*. In
Page 102
1!
s#pporting the a%o"e contention ad"anced %y Dr. <a/ee" Dhawan, >r.
<am 7ethmalani, learned 2enior )o#nsel, also representing the petitioner,
s#%mitted, that F the whole 8ar was shell-shoc:edF*, when this )o#rt
o#t of the %l#e, directed the arrest of the petitioner, witho#t affording him
any opport#nity to state his case. It was the contention of the learned
2enior )o#nsel, that the order passed %y this )o#rt on 4.3.!14 was F
e.tremely dist#r%ingF*. It was s#%mitted, that there was no hearing of the
matter. 2#ddenly on the concl#sion of the day(s hearing on 4.3.!14, F
when there was still m#ch to %e saidF*, a /#dicial order was passed, to the
detriment of the petitioner F depri"ing him of his ci"il li%ertiesF*. -he
order, it was contended, F was an a%sol#te n#llityF*. Bearned co#nsel
ad"ised the )o#rt, F h#mility was the greatest attri%#te of h#man
reso#rceF*, and as s#ch, F yo# m#st ha"e the co#rage to accept, that
the order dated 4.3.!14 was a n#llity in law..., and yo# sho#ld ha"e the
co#rage to recall yo#r "oid orderF*. 1e were also ad"ised, that the
mandate e.pressed in +rticle 14 of the )onstit#tion of India (#nder which
pro"ision, the order dated 4.3.!14, was passed), F was to do /#stice
according to law, and not %y whim or caprice...*. D#ring the co#rse of
hearing, learned co#nsel for the petitioner, addressed a n#m%er of ?#eries
to the 8ench. &as any person e"er %een committed to /ail, witho#t
:nowing what offence he had committedG -he whole of the criminal law is
codified, has any%ody e"er %een incarcerated, e.cept according to the
proced#re laid down in the )r.'.).G 1hat offence, p#nisha%le #nder what
pro"ision of law, has the petitioner committed, that yo# ha"e sent him to
Page 103
1!3
/ailG )an an order of arrest and detention %e passed orallyF, witho#t
there %eing any writingF, witho#t there %eing any noticeF, witho#t any
opport#nity to reply to the sameG F No# ha"e done all this, and moreF*,
we were told. 1hat has %een done %y this )o#rt on 4.3.!14, according to
learned co#nsel, was a %l#nder which needed to %e re"ised. Dr. <a/ee"
Dhawan then affirmed, confirmed and repeated what his colleag#e had
s#%mitted. &e informed #s, F >r. <am 7ethmalani is rightF we all ma:e
mista:es...*. &e went on to state F we tell "ery rarely, what we ha"e had
to tell this 8ench, that it has gone terri%ly terri%ly wrong...* &e, howe"er,
reminded #s, that e"ery e.traordinary sit#ation, has to %e dealt with, in an
e?#ally e.traordinary manner i.e., in e.actly the manner he had done. 8y
informing the )o#rt #pfront, that it had erred, and therefore, the mista:e
committed %y it, needed to %e corrected, >r. <am 7ethmalani in the a%o"e
conte.t told the )o#rt, +c:nowledgement of a mista:e enhances the
prestige of the )o#rt. I hope yo#r Bordships will ac:nowledge this
mista:e.*
6@. 2erio#sly, we were ta:en a%ac: %y the ferocity with which, the a%o"e
s#%missions were ad"anced. &ad we %een a part of the a#dience, we
wo#ld ha"e acclaimed the co#rage and the capacity of learned 2enior
)o#nsel, to %e a%le to call a spade a spade. 1e wo#ld ha"e felt, that their
eminence was rightf#lly %estowed on them, and well deser"ed. -hat of
co#rse, wo#ld ha"e %een s#%/ect to the condition, that what was so#ght to
%e con"eyed thro#gh er#dite grandilo?#ence, was fact#ally correct. -he
Page 104
1!4
?#estion therefore that needs to %e considered is, whether the a%o"e
s#%missions made %y the learned co#nsel for the petitioner, are %ased on
a tr#thf#l fo#ndation. If their assertions are correct, we wo#ld concede at
the %eginning, that their inferences wo#ld ha"e to %e accepted as correct.
5!. >r. +r"ind Datar, learned 2enior )o#nsel appearing for the 2;8I
wo#ld contend, that there was nothing farther from the tr#th, in what had
%een s#%mitted on %ehalf of the petitioner. 1e were ta:en thro#gh piles of
pleadings, paper wor:, and orders passed %y this )o#rt, to demonstrate an
e.press written notice to the petitioner, his written response, n#mero#s
opport#nities of hearing afforded to learned 2enior )o#nsel representing
him, and finally, e"en an opport#nity of personal oral hearing to the
petitioner - >r. 2#%rata <oy 2ahara, himself.
51. 8efore e.amining the "eracity of the s#%missions ad"anced %y the
learned 2enior )o#nsel for the petitioner, we wo#ld #nhesitatingly
concede, that they were correct on one aspect of the matter. -hat it was
an e.traordinary sit#ation. 4or many many years now, e"er since we
mo"ed from the 8ar to the 8ench, we were the ones who were posing the
?#estions, and the warring factions pro/ecting their conflicting claims
%efore #s, were o%liged to respond. 9ow for once, ?#estions were %eing
posed %y a litigant as:ing the )o#rt, for its response. 9ot that we find
anything wrong with that, only that we too were shell-shoc:ed, that we had
committed a %l#nder, as to %e informed %y learned co#nsel, that we had
passed a "oid order, that needed to %e corrected. 1e wo#ld li:e to
Page 105
1!3
ac:nowledge, that all this was possi%le %eca#se of the legal ac#men
possessed %y learned 2enior )o#nsel. If what was stated was correct, no
)o#rt wo#ld ha"e any hesitation to correct s#ch an error. -he )o#rt was
an #nconnected disinterested party. -he )o#rt wo#ld neither gain nor
loose, if the contentions ad"anced %y the petitioner, were to %e accepted.
In s#ch an e"ent#ality, %y rendering the correction, the p#rpose of law
wo#ld %e ser"ed, /#stice wo#ld %e done. 1e wo#ld ne"er e"er, refrain
from rising to s#ch an occasion. 8#t if the fact#al position on the %asis
whereof the assertions were made, was fo#nd to %e incorrect, learned
2enior )o#nsel wo#ld most definitely ha"e committed a terri%le
professional mista:e. 1e say so, %eca#se >r. <am 7ethmalani and Dr.
<a/ee" Dhawan, learned 2enior )o#nsel, attended each date of hearing,
of the proceedings in )ontempt 'etition ()i"il) nos. 41 and 413 of !1
and )ontempt 'etition ()i"il) no. ,! of !13, and were personally aware
of the day to day happenings.
5. 9ow the merits of the contention. Interloc#tory +pplication nos. ,5
and ,@ of !13 in )i"il +ppeal no. @513 of !11 were filed %y the 2;8I.
-he prayers made therein inter alia, read as #nder:-
(d) pass an order permitting 2;8I V1->W to ta:e meas#res for
arrest and detention in ci"il prison of promoter of 2aharas 2hri
2#%rata <oy 2ahara and the two male directors, "iC., 2hri
+sho: <oy )ho#dhary and 2hri <a"i 2han:ar D#%ey after
gi"ing reasona%le opport#nity of hearing.
(f) pass an order directing the promoter of 2I<;)B and 2&I)B
2hri 2#%rata <oy 2ahara and their Directors, "iC., 2hri +sho:
<oy )ho#dhary, 2hri <a"i 2han:ar D#%ey and >s. Aandana
8harga"a to deposit forthwith their respecti"e passport with
the 2ecretary Deneral of this &on(%le )o#rt and not to lea"e
Page 106
1!,
the co#ntry witho#t the prior permission of this &on(%le )o#rt$
and
(g) pass s#ch other and=or f#rther order(s) as this &on(%le )o#rt
may deem fit and proper in the facts and circ#mstances of the
case.*
(emphasis is o#rs)
In "iew of the a%o"e prayers made in Interloc#tory +pplication nos. ,5 and
,@ of !13, wherein notice was iss#ed to the petitioner, can it %e said, that
the petitioner had no noticeG )an it not %e said, that there was a pending
Interloc#tory +pplication e.pressly, see:ing his arrest and detentionG 1e
are f#lly satisfied, that the petitioner M >r. 2#%rata <oy 2ahara had d#e
notice, as also, that he was f#lly ali"e to the %asis and reasons, why his
arrest and detention (along with the directors of the two companies) was
%eing so#ght.
53. -he said Interloc#tory +pplication nos. ,5 and ,@ of !13 were
ta:en #p for consideration on .4.!13. >r. Da#ra" Ee/riwal, >r. 0.0.
Balit, and >r. ).+. 2#ndaram, learned 2enior )o#nsel appearing for the
contemnors #ndertoo: to file their response to the a%o"e applications,
within one wee:. +ccordingly, li%erty was granted to >r. 2#%rata <oy
2ahara (and the other contemnors) to file their reply affida"its %y
@.4.!13. -he petitioner herein - >r. 2#%rata <oy 2ahara, act#ally filed
his personal co#nter affida"it dated 5.3.!13 in reply to Interloc#tory
+pplication nos. ,5 and ,@ of !13. &e asserted in paragraph of his
affida"it as #nder:-
F while so see:ing relief for arrest and detention in a ci"il prison,
depositing of passport etc., wo#ld not %e warranted in fact or in law.
I s#%mit that s#ch reliefs are granted in e.treme cases of e.ec#tion
Page 107
1!6
of decree only when it is esta%lished that a /#dgment-de%tor ha"ing
the means to pay, is willf#lly and intentionally not paying the
amo#ntF*
(emphasis is o#rs)
In paragraph 4 of the co#nter affida"it filed %y the petitioner M >r. 2#%rata
<oy 2ahara, to Interloc#tory +pplication nos. ,5 and ,@ of !13, it was
s#%mitted:-
1itho#t pre/#dice to the aforesaid, I f#rther s#%mit that, there wo#ld
%e no warrant or /#stification for 2;8I to see: reliefs as they ha"e
prayed for. In the first place, all my assets ha"e already %een
attached %y 2;8I and partic#lars of which are gi"en to 2;8I in
compliance of its order. It is neither allegation of 2;8I that I ha"e
secreted away any assets, nor any part of moneys recei"ed %y
2I<;)B=2&I)B from the in"estors has %een di"erted to me. 1hilst
so there is no case made o#t %y 2;8I, for the orders as so#ght %y
2;8I. +part from the aforesaid, I also s#%mit that I am
%#sinessman, holding Indian passport residing in India and most of
my assets and %#sinesses are in India. >y entire family and home,
is also in India. 1hile so there cannot %e any apprehension, lea"e
alone reasona%le apprehension=gro#nd re?#iring my detention or
restrain on any tra"el as so#ght for. In a%sence of any s#ch
reasona%le apprehension, I s#%mit that the application is not %ona
fide and warranted in any manner whatsoe"er.*.
(emphasis is o#rs)
&is a%o"e affida"it ended with a prayer, that the relief so#ght %y 2;8I
o#ght not to %e granted. In "iew of the a%o"e personal co#nter-affida"it
filed %y the petitioner, is it not a%#ndantly clear, that the petitioner was
conscio#s of the implications of the prayer made in Interloc#tory
+pplication nos. ,5 and ,@ of !13G 1e are also satisfied, that he was
also f#lly conscio#s, of the pro"isions #nder which the prayer made had to
%e e.amined, and therefore, relied #pon the "ario#s technicalities of law, in
his defence. &e also placed, certain personal factors on record in his
defence. In other words, not only was he aware of the reasons, why his
arrest and detention was so#ght, %#t he had a"ailed of the opport#nity to
Page 108
1!5
respond to the same in writing. 1e are f#lly satisfied, that the petitioner M
>r. 2#%rata <oy 2ahara had a notice depicting the reasons why his arrest
and detention was so#ght, and an opport#nity to caref#lly respond to the
same, %y stating his defence in writing.
54. -he matter was thereafter posted for hearing on .3.!13. &a"ing
fo#nd, that the petitioner - >r. 2#%rata <oy 2ahara (and the other
contemnors) were engaging themsel"es in #nnecessary litigation arising
o#t of o#r order dated 31.5.!1, the following interim order came to %e
passed on .3.!13:-
1e are inclined to stay all f#rther proceedings in +ppeal 9os.
4=!13 (2#%rata <oy 2ahara ". 2;8I), 45=!13 (2&I)B ". 2;8I),
4@=!13 (2I<;)B ". 2;8I) and 3!=!13 (+sho: <oy )ha#dhary P
Krs. ". 2;8I) pending %efore the 2ec#rities +ppellate -ri%#nal,
>#m%ai, and in 1rit 'etition 9o. !55=!13 pending %efore the &igh
)o#rt of 7#dicat#re at +llaha%ad, B#c:now 8ench, since we are
e.amining the ?#estion, whether the respondents ha"e complied
with the "ario#s conditions stip#lated in o#r /#dgment dated 31st
+#g#st, !1.*
53. Interloc#tory +pplication nos. ,5 and ,@ of !13 contin#ed to %e
listed on each date of hearing thereafter, i.e., on .3.!13, 5.3.!13 and
16.6.!13. -o ens#re, that the iss#e of compliance of the orders passed
%y #s on 31.5.!1, wo#ld %e listed only %efore this )o#rt, we passed,
inter alia, the following order on 16.6.!13:-
1e call for the +ppeals 9os.4=!13 (titled
2#%rata <oy 2ahara ". 2;8I), 45=!13 (titled 2&I)B ". 2;8I),
4@=!13 (titled 2I<;)B ". 2;8I) and 3!=!13 (titled +sho: <oy
)ha#dhary P Krs., 2;8I) pending %efore the 2ec#rities +ppellate
-ri%#nal >#m%ai and 1.'. 9o.!55 of !13 (titled 2ahara India
B#c:now P +nr., ". 2;8I) pending %efore the &igh )o#rt of
7#dicat#re at +llaha%ad, which shall stand transferred to this )o#rt.
Page 109
1!@
1e ma:e it clear that no &igh )o#rt, 2ec#rities
+ppellate -ri%#nal and any other 4or#m shall pass any orders
against the orders passed %y 2ec#rities and ;.change 8oard of
India (2;8I) in implementation of this )o#rtIs /#dgment dated
31.!5.!1.*
-he a%o"e order was considered essential %eca#se it seemed to #s, that
the petitioner was #nnecessarily opening and e.tending the litigation
pertaining to the e.ec#tion of order dated 31.5.!1, to other 4ora
incl#ding the &igh )o#rt.
5,. -he matter was then ta:en #p for hearing on "ario#s dates incl#ding
4.6.!13, 3!.6.!13, ,.5.!13, 13.5.!13, ,.5.!13, .@.!13,
1,.@.!13, 4.1!.!13 and 5.1!.!13. Kn all the a%o"e dates,
Interloc#tory +pplication nos. ,5 and ,@ of !13, were act#ally posted for
hearing. 8y now, eno#gh time had %een afforded to the petitioner to solicit
compliance of the orders passed %y this )o#rt. <ather than act#al
compliance %y ma:ing financial deposits, an alternati"e ro#te was so#ght
to %e treaded %y >r. ).+. 2#ndram, learned 2enior )o#nsel. Bearned
2enior )o#nsel informed #s, that the contemnors were willing to ma:e
a"aila%le to the 2;8I, the details of #nenc#m%ered properties worth
<s.!,!!!=- crores. It was apparent, that the implied p#rpose to ma:e
a"aila%le the a%o"e properties was, to g#arantee the payment ordered %y
this )o#rt on 31.5.!1 and 3.1.!1. 9oticing the a%o"e fact#al
position, this )o#rt passed the following order:-
>r. ).+. 2#ndaram, learned 2enior )o#nsel appearing for
respondent 9o.3 (alleged contemnor), %ro#ght to o#r notice letter
dated Kcto%er 16, !13 recei"ed from the >anaging Director and
);K of the '98 In"estment 2er"ices Bimited. -he same is ta:en on
record and is mar:ed as I+nne.#re-+I.
Page 110
11!
>r. 2#ndaram, on the %asis of the said letter and on instr#ctions
recei"ed from the 2ahara Dro#p of )ompanies, s#%mitted that the
alleged contemnors are willing to ma:e a"aila%le to 2;8I the original
title deeds of #nenc#m%ered properties, worth J!,!!! crores, along
with proper "al#ation reports, within a period of three wee:s from
today. 2;8I, in t#rn, will e.amine the same and ma:e their
response, which shall %e considered %y this )o#rt on the ne.t date
of hearing.
-ill the a%o"e direction is complied with to the satisfaction of 2;8I,
the alleged contemnors (respondents) shall not lea"e the co#ntry
witho#t the permission of this )o#rt.*
(emphasis is o#rs)
It is in f#rtherance of the prayer (f) made in Interloc#tory +pplication nos.
,5 and ,@ of !13, that the a%o"e order came to %e passed on
5.1!.!13, restraining the petitioner (and the other contemnors) from
lea"ing the co#ntry, witho#t this )o#rt(s permission. -his )o#rt thro#gh its
a%o"e order, iss#ed its first disciplinary order. 1e had hoped, that the
a%o"e order wo#ld con"ey to the contemnors, the serio#sness of the
matter.
56. -he matter was then ta:en #p on 31.1!.!13 and 1.11.!13.
&a"ing considered the s#%missions ad"anced on %ehalf of the petitioner -
>r. 2#%rata <oy 2ahara in Interloc#tory +pplication no. 4 (in )ontempt
'etition ()i"il) no. ,! of !13 in )i"il +ppeal no. 5,43 of !1), that he
needed to go a%road #rgently, in connection with some %#siness
commitments, we permitted him the li%erty to lea"e the co#ntry, with a
clear direction, that he wo#ld ret#rn %ac: %efore the e.piry of the period of
three wee:s, if the directions iss#ed %y #s in the order dated 5.1!.!13
Page 111
111
were not complied with. +n e.tract of the a%o"e order dated 1.11.!13 is
%eing reprod#ced here#nder:-
4or the reasons indicated in para 4 of the application, we ma:e it
clear that it is open for the alleged contemnor 9o.3 in )ontempt
'etition ()i"il) 9os. 41 and 413 of !1 to go a%road, %#t, in the
e"ent of non-compliance of the directions contained in the order
dated Kcto%er 5, !13, he shall immediately ret#rn %ac: and %e
present in the co#ntry %efore the e.piry of the period of three wee:s,
as indicated in the said order.*
(emphasis is o#rs)
It is therefore apparent, that this )o#rt did not wish any harm to the
petitioner. -he re?#ests made %y him were d#ly considered, and
appropriate orders were passed, to ens#re that his %#siness "ent#res
wo#ld not %e ad"ersely affected.
55. -he matter was ta:en #p for hearing thereafter, on !.11.!13 and
1.11.!13. Kn 1.11.!13, finding the cond#ct of the petitioner and the
other contemnors #naccepta%le, and in complete disregard with the order
passed %y #s on 5.1!.!13, we iss#ed f#rther directions on 1.11.!13
restraining the 2ahara Dro#p of )ompanies, from parting with any
mo"a%le or immo"a%le properties, #ntil f#rther orders. 1e f#rther directed,
that all the alleged contemnors wo#ld not lea"e the co#ntry, witho#t the
prior permission of this )o#rt. In this %ehalf it wo#ld %e rele"ant to
mention, that the a%o"e order came to %e passed %eca#se, the )o#rt felt
that an attempt had %een made to mislead the )o#rt, %y s#%mitting a false
e"al#ation report. In this %ehalf we may record, that learned 2enior
)o#nsel representing the 2;8I had in"ited o#r attention to an order
passed %y the 8om%ay &igh )o#rt, depicting that the main properties
Page 112
11
offered %y the alleged contemnors, in compliance with the order dated
5.1!.!13, fell in the )<T Tone, where no constr#ction whatsoe"er was
permissi%le. +n e.tract of the order dated 1.11.!13 is reprod#ced
here#nder:-
1e are con"inced that the order dated 5.1!.!13 passed %y this
)o#rt has not %een complied with in its letter and spirit. In s#ch
circ#mstances, we direct that the 2ahara Dro#p of )ompanies shall
not part with any mo"a%le or immo"a%le properties #ntil f#rther
orders. 1e f#rther direct that all the alleged contemnors shall not
lea"e the co#ntry witho#t the permission of this )o#rt.*
(emphasis is o#rs)
-his was another order, in the series of correcti"e and deterrent orders
passed %y this )o#rt, in the process of enforcement of o#r orders dated
31.5.!1 and 3.1.!1. -his )o#rt thro#gh its a%o"e order, restrained
the entire 2ahara Dro#p of )ompanies, from transferring any of their
mo"a%le or immo"a%le properties. 9eedless to mention, that the a%o"e
order was also clearly passed in f#rtherance of the prayer made in
Interloc#tory +pplication nos. ,5 and ,@ of !13, which was act#ally listed
on the a%o"e date of hearing. -his was another order in the series of
orders passed %y this )o#rt, which wo#ld ha"e certainly made the
petitioner aware, that se?#entially harsher orders were %eing passed %y
this )o#rt, in the light of the prayers made in the aforesaid Interloc#tory
+pplications.
5@. -he matter was then listed for hearing on 11.1.!13, 16.1.!13,
.1.!14 and @.1.!14. Kn all the a%o"e dates, Interloc#tory +pplication
nos. ,5 and ,@ of !13 were also listed for hearing. Kn @.1.!14, this
)o#rt passed the following order:-
Page 113
113
&eard co#nsel on either side.
>r. ).+. 2#ndaram, learned 2enior )o#nsel appearing for one of
the alleged contemnors, s#%mitted that earlier this )o#rt on
Decem%er 11, !13 has only reiterated the s#%mission made %y >r.
+r"ind Datar, learned 2enior )o#nsel appearing for 2;8I, that they
did not disclose the so#rce from which they got money for
repayment, despite 2;8IIs letter dated >ay 5, !13.
>r. 2#ndaram is right in his s#%mission. &owe"er, we feel that it
wo#ld %e appropriate to gi"e a direction of the nat#re stated a%o"e.
+ccordingly, we direct the alleged contemnors to disclose the
complete details and so#rce from which they repaid the amo#nt to
the in"estors as also the manner of ma:ing payments. -hey shall
also disclose the information which 2;8I has so#ght from them from
time to time. 2#ch information shall %e pro"ided to 2;8I and also %e
filed in this )o#rt %y 7an#ary 3, !14.
'#t #p on 7an#ary 5, !14 at .!! p.m.
In the meantime, 2;8I shall "erify the information pro"ided to it %y
the alleged contemnors.*
It is imperati"e for #s to gi"e the %ac:gro#nd e.plaining why the order
e.tracted hereina%o"e came to %e passed. In this %ehalf it is rele"ant to
mention, that >r. +r"ind Datar, learned 2enior )o#nsel appearing for the
2;8I, had informed this )o#rt, that the contemnors incl#ding the petitioner
herein, had %een asserting that they had ref#nded <s.16,443 crores
(appro.imately) in the case of 2I<;)B and <s.3,44 crores
(appro.imately) in the case of 2&I)B, %#t had not gi"en any details, nor
prod#ced any rele"ant record to show the so#rce from which the two
companies had collected the money, for s#ch h#ge repayments. -his
information, according to >r. Datar, had %een so#ght %y the 2;8I from the
alleged contemnors thro#gh a letter dated 5.3.!13 (i.e., more than si.
months prior to the passing of the a%o"e order). 1e were of the "iew, that
Page 114
114
mentioning the aforesaid fact#al position was s#fficient to prompt the two
companies to f#rnish the a%o"esaid details. -he demeano#r of the two
companies has remained the same, thro#gho#t. -hey ha"e ne"er s#pplied
any in"estor related information. 9ot e"en s#ch information, which wo#ld
ha"e s#%stantiated their own defence. It is this repeated %eha"io#r, that
has gi"en #s the repeated impression, that the s#%missions ad"anced on
%ehalf of the two companies, were /#st a pac: of lies. -he fact that the
companies had not f#rnished the a%o"e details, was %ro#ght to o#r notice
%y >r. Datar on @.1.!14, prompting #s to pass an e.press order directing
the two companies, as also, the alleged contemnors incl#ding the present
petitioner M >r. 2#%rata <oy 2ahara, to f#rnish the re?#ired partic#lars.
-he a%o"e order discloses the games the two companies, and the alleged
contemnors, ha"e %een playing with this )o#rt.
@!. -hereafter the matter was ta:en #p for consideration on 5.1.!14,
when we passed the following order:-
&eard >r. <am 7ethmalani, learned 2enior )o#nsel and >r.
+r"ind '. Datar, learned 2enior )o#nsel.
>r. Datar s#%mitted that the 2aharas ha"e not disclosed the details
as to when the ref#nd was made. <eference was made to pages ,
to @ of the reply affida"it filed today.
>r. Datar f#rther s#%mitted that the 2;8I re?#ires an e.planation
from 2aharas with regard to the payments made on %ehalf of 2ahara
India <eal ;state )orporation Btd. (2I<;)B) (partnership firm) %y
the following firms, as mentioned %elow:-
<#pees
(In )rores)
1. 2ahara )redit )o-operati"e 2ociety Btd. 13,3,,.15
. 2ahara India )ommercial )orporation 4354.!!
Page 115
113
Bimited
3. 2ahara U 2hop 35.3
4. Eeta: )ity &omes Btd. 1@.43
3. Eirit )ity &omes Btd. 44.!3
2imilarly, 2;8I re?#ires 2aharas to show the following payments
made on %ehalf of 2ahara &o#sing In"estment )orporation Btd.
(2&I)B) (partnership firm), %y the following firms, as mentioned
%elow:-
<#pees
(In )rores)
1. 2I))B 46@.!!
. 2ahara U 2hop 411.@!
4#rther, the 2aharas will also pro"ide the %an: statements of the
a%o"e firms showing when the amo#nt was paid to the partnership
firms and s#%se?#ently when and how partnership firm made the
dis%#rsement, as so#ght for %y the 2;8I.
>r. <am 7ethmalani, learned 2enior )o#nsel appearing for the
respondents s#%mitted that he will e.amine the same and come o#t
with a response within a wee:.*
(emphasis is o#rs)
-he a%o"e order is self-e.planatory. -he two companies, as also, the
contemnors incl#ding the present petitioner, were o%"io#sly not pro"iding
the re?#ired %an: statements, e"en tho#gh in +ppeal no. 4@ of !13 filed
%y 2I<;)B %efore the 2+-, it had committed to f#rnish %an: acco#nts of
2ahara India to esta%lish redemption of payments. -he rele"ant
paragraph containing the assertions made therein is %eing e.tracted
here#nder:-
(ee) -he +ppellant has in"ested the f#nds of K4)D
as per the details mentioned in the +ffida"it dated !4.!1.!1 of 2hri
8.>. -ripathi filed %efore the &on(%le 2#preme )o#rt in )i"il +ppeal
9o. @533 of !11 which is already on the record of the &on(%le
2#preme )o#rt. 4#rther, it is s#%mitted that in order to ma:e
redemptions to the K4)D holders, the +ppellant had to dispose of
the in"estments. +mo#nts realiCed on s#ch disposal were #tiliCed to
pay the in"estors, on redemption thro#gh 2ahara India-'artnership
4irm to ma:e the redemptions. -he redemptions made to in"estors
Page 116
11,
are clearly reflected and fo#nd in the 8oo:s of +cco#nts of 2ahara
India. -he +ppellant cra"e lea"e to refer to and rely #pon %an:
acco#nts of 2ahara India as and when prod#ced.*
(emphasis is o#rs)
In a similar +ppeal no. 45 of !13, filed %y 2&I)B %efore the 2+-, e.actly
the same stance (as adopted %y 2I<;)B, and e.tracted a%o"e), was
ta:en. ;"en tho#gh the position adopted %y the two companies was, that
"erification of redemption of K4)D(s co#ld %e esta%lished from %an:
acco#nts of 2ahara India Bimited, the said %an: acco#nts depicting the
said transactions were not %eing disclosed. + per#sal of the a%o"e order
dated 5.1.!14 re"eals, that >r. <am 7ethmalani, learned 2enior )o#nsel
so#ght time to e.amine the matter, so as to %e a%le to come o#t, with an
appropriate response. Kn !..!14, conflicting stands were ta:en %y
learned co#nsel appearing for the alleged contemnors (incl#ding the
present petitioner). Kne learned co#nsel, went to the e.tent of contending,
that the position adopted %y the two companies in the two appeals, was
the res#lt of a typographical error. +ll along, most ridic#lo#s and a%s#rd
defences were raised. K#r impression is, that this was done to a"oid
f#rnishing of the information so#ght. >ay%e there was no information to
s#pply.
@1. -his )o#rt was also con"inced, that the attit#de of the alleged
contemnors was defiant and non-cooperati"e, insofar as the
implementation of its orders dated 31.5.!1 and 3.1.!1 was
concerned. +ccordingly the personal presence of the alleged contemnors
was ordered. -his was yet another order, in the line of orders passed %y
Page 117
116
#s, this time sterner than the pre"io#s ones. Net again, aimed at ca/oling
compliance of the orders dated 31.5.!1 and 3.1.!1. Kn all the
earlier dates of hearing, as also on !..!14, Interloc#tory +pplication
nos. ,5 and ,@ of !13 were posted for hearing. It was e"ident, that the
order dated !..!14 was passed %y this )o#rt, in f#rtherance of the
prayers made in the a%o"e Interloc#tory +pplications. + rele"ant portion
thereof is reprod#ced here#nder:-
&eard >r. <am 7ethmalani and >r. ).+. 2#ndaram, learned 2enior
)o#nsel appearing for the alleged contemnors and >r. +r"ind '.
Datar, learned 2enior )o#nsel appearing for 2;8I.
In "iew of the conflicting stands ta:en %y the 2enior )o#nsel
appearing for the alleged contemnors and the defiant and non-
cooperati"e attit#de adopted %y the contemnors in hono#ring the
/#dgment dated +#g#st 31, !1, passed %y this )o#rt as well as
orders dated Decem%er !3, !1 and 4e%r#ary 3, !13 passed in
)i"il +ppeal 9o. 5,43 of !1 and I+ 9o. ,6 of !13 %y a three
7#dge 8ench of this )o#rt, we direct the personal presence of the
alleged contemnors and the Directors of the respondent companies
in )o#rt on 4e%r#ary ,, !14 at .!! p.m., on which date the matter
will %e ne.t ta:en #p.*
(emphasis is o#rs)
+ per#sal of the a%o"e order re"eals, that the contemnors were to appear
personally %efore this )o#rt on ,..!14. >ost importantly, it also re"eals
why the petitioner was %eing s#mmoned to this )o#rt. 1e are also
satisfied, that the petitioner was f#lly conscio#s, of the reason why he was
%eing s#mmoned to )o#rt, anyway his personal presence was directed
(along with the other contemnors). It therefore does not lie in the mo#th of
the petitioner M >r. 2#%rata <oy 2ahara, or his learned co#nsel, that they
were not aware why the a%o"e s#mmoning order was passed.
Page 118
115
@. Kn 3..!14, an oral re?#est was made %y >r. <am 7ethmalani,
learned 2enior )o#nsel. &e prayed for e.emption, of the petitioner(s
personal presence. -he a%o"e oral re?#est was specifically t#rned down.
1hen the matter was ta:en #p on ,..!14, whilst the other alleged
contemnors were present in )o#rt, >r. 2#%rata <oy 2ahara, the petitioner
herein, did not enter appearance. -his )o#rt passed the following order
on ,..!14, to enforce the presence of the petitioner >r. 2#%rata <oy
2ahara on the ne.t date of hearing, i.e., on 4.3.!14:-
-his )o#rt passed an order on 4e%r#ary !, !14 directing the
personal presence of the alleged contemnors and the Directors of
the respondent companies today, i.e. on 4e%r#ary ,, !14 at .!!
p.m. Kn o#r directions, >r. +sho: <oy )ho#dhary, >r. <a"i 2han:ar
D#%ey and 2mt. Aandana 8harga"a are present in )o#rt today.
;"en tho#gh, >r. <am 7ethmalani, learned 2enior )o#nsel
appearing for the alleged contemnors, made a mention yesterday,
i.e. on 4e%r#ary 3, !14, %efore this 8ench for dispensing with the
personal presence of >r. 2#%rata <oy 2ahara, alleged contemnor
9o.3, that re?#est was specifically t#rned down %y this )o#rt.
-oday, when the matter is ta:en #p, same re?#est was made %y >r.
7ethmalani, %y mo"ing an application, which was s#pported %y a
medical certificate. -he said medical certificate was iss#ed %y
2ahara &ospital and, in o#r "iew, the fact#al position indicated
therein does not solicit the e.emption so#ght.
2ince, we ha"e already declined to grant e.emption from personal
presence of alleged contemnor 9o.3 on 4e%r#ary 3, !14, we find
no reason to accede to the renewal of the re?#est made today.
+ccordingly, we iss#e non-%aila%le warrants of arrest ?#a >r.
2#%rata <oy 2ahara, alleged contemnor 9o.3. &e shall %e arrested
and prod#ced %efore this )o#rt on >arch !4, !14 at .!! p.m.
-he afore-mentioned Directors, who are present today, shall also
remain present in )o#rt on the ne.t date.
'#t #p on >arch !4, !14 at .!! p.m.*
(emphasis is o#rs)
Page 119
11@
Kn 4.3.!14, all the contemnors were present. 9ot only were learned
co#nsel appearing for the petitioner permitted to address arg#ments, we
afforded an opport#nity of hearing to each of the directors present in )o#rt,
as also, >r. 2#%rata <oy 2ahara. In the facts and circ#mstances of the
contro"ersy it needs to %e noticed, that >r. 2#%rata <oy 2ahara was
repeatedly heard on 4.3.!14, as and when he desired to e.press his
"iew, till he had nothing f#rther to state.
@3. It is there#pon that the imp#gned order dated 4.3.!14 e.tracted at
the %eginning of this order, was passed.
@4. 8ased on the fact#al position noticed in the foregoing paragraphs, it
was the "ehement contention of >r. +r"ind Datar, learned 2enior )o#nsel
appearing for the 2;8I, that the entire %asis of the s#%missions can"assed
on %ehalf of the petitioner was fallacio#s. It was s#%mitted, that a written
prayer was made in Interloc#tory +pplication nos. ,5 and ,@ of !13, inter
alia praying for the arrest of the petitioner herein M >r. 2#%rata <oy
2ahara, and also, that of two other male directors of the companies,
namely, >r. +sho: <oy )ho#dhary and >r. <a"i 2han:ar D#%ey. -he
imp#gned order dated 4.3.!14, was e.actly to the a%o"e effect. In
consonance with the prayer made %y the 2;8I, the imp#gned order dated
4.3.!14 directed the arrest and detention of >r. 2#%rata <oy 2ahara, >r.
+sho: <oy )ho#dhary and >r. <a"i 2han:ar D#%ey. 1e did not tra"erse
%eyond the prayers made in the Interloc#tory +pplications. 1e did not
order the arrest and detention of another contemnor 2mt. Aandana
Page 120
1!
8harga"a, %eca#se no prayer for her arrest had %een made, and also
%eca#se of the reasons e.pressed in the order dated 4.3.!14. -here
co#ld therefore %e no reason to do#%t, that the order dated 4.3.!14 had
%een passed in f#rtherance of e.press prayers made to this )o#rt, in
Interloc#tory +pplication nos. ,5 and ,@ of !13.
@3. 1e find each one of the s#%missions ad"anced %y >r. +r"ind Datar
on %ehalf of the 2;8I, as f#lly /#stified. 1e ha"e recorded o#r own
o%ser"ations, at the end of each of the a%o"e paragraphs, dealing with the
fact#al position %ro#ght to o#r notice, %y the learned 2enior )o#nsel for
the 2;8I. 1e are satisfied, that >r. 2#%rata <oy 2ahara was well aware
of the proceedings %efore this )o#rt. &e was well aware of the prayers
made in Interloc#tory +pplication nos. ,5 and ,@ of !13. &e filed his
written response thereto, %y way of an affida"it. -he petitioner was aware
of the serio#sness of the iss#e, on acco#nt of "ario#s restraining,
correcti"e and deterrent orders passed %y this )o#rt, from time to time,
each gra"er than the pre"io#s ones. &e remained #naffected to all the
efforts made %y this )o#rt, to enforce ref#nd of the moneys collected %y
the two companies, to those who had in"ested in their K4)D(s, along with
interest, in terms of this )o#rt(s orders dated 31.5.!1 and 3.1.!1. It
is, therefore, that this )o#rt was left with no other option, %#t to order the
arrest and detention of two of the directors, and >r. 2#%rata <oy 2ahara.
1e were satisfied, that the a%o"e order was necessary to ens#re the
o%ser"ance of the d#e process of law, in the facts and circ#mstances of
Page 121
11
the case. -he a%o"e order was also imperati"e, if we were to perform o#r
d#ties and f#nctions effecti"ely, and if we were to maintain the ma/esty of
law and=or the dignity of the 2#preme )o#rt.
@,. It is not possi%le for #s to accept, that while passing the a%o"e order,
no opport#nity was afforded to the petitioner - >r. 2#%rata <oy 2ahara.
Indeed e"ery response made %y the alleged contemnors, was ta:en into
consideration on each occasion. -he alleged contemnors were fo#nd to
%e playing tric:s with this )o#rt. 9ot only were learned co#nsel
representing the alleged contemnors heard from time to time, personal
hearing was also afforded to the directors and >r. 2#%rata <oy 2ahara,
the petitioner herein on 4.3.!14. In fact, >r. 2#%rata <oy 2ahara, the
petitioner herein, was heard repeatedly to his heart(s content, %efore the
order dated 4.3.!14 was passed. 4or the reasons recorded hereina%o"e,
it is not possi%le for #s to accept the contention ad"anced at the hands of
the learned co#nsel for the petitioner, that the order dated 4.3.!14 was
passed witho#t following the r#les of nat#ral /#stice, or that, the a%o"e
order "iolates any of the petitioner(s f#ndamental rights.
=III. W(*%(*# %(* +:1!2,*0 &#0*# 0$%*0 .;.2014 +. -+%+$%*0 &,
$77&!,% &/ "+$.8
@6. -o %e fair to >r. <am 7ethmalani and Dr. <a/ee" Dhawan, learned
2enior )o#nsel representing the petitioner, it is essential to indicate, that
one of the reasons e.pressed %y them, for #s not to hear this matter was,
that we entertained a %ias against the petitioner. -he pointed contention
Page 122
1
was, that the deli%erations cond#cted %y #s, had generated a reasona%le
apprehension in the mind of the petitioner, that we had already arri"ed at a
final resol"e, and that, we wo#ld not %e satisfied #nder any circ#mstances,
with the petitioner(s arg#ments and s#%missions on merits. It was,
therefore s#%mitted, that the merits of the contro"ersy wo#ld not ma:e any
difference to this 8ench, since the 8ench had already pre-/#dged the
matter, and that, no relief co#ld %e e.pected %y the petitioner from #s.
@5. In order to s#pport his a%o"e s#%mission, learned 2enior )o#nsel
for the petitioner arg#ed, that the petitioner had %een confined to -ihar 7ail,
since 4.3.!14, witho#t any /#stification. It was s#%mitted, that the
incarceration of the petitioner was "oid, and with the march of e"ents,
d#ring the co#rse of hearing of the instant petition, it had f#rther %ecome
clear to the petitioner, that it was li:ely that the petitioner wo#ld contin#e to
remain in c#stody for an indefinite period. In this %ehalf it was s#%mitted,
that it was the petitioner(s impression that the 7#dges hearing the matter,
wished to enforce the orders dated 31.5.!1 and 3.1.!1, at all costs.
It was s#%mitted, that the a%o"e orders had %een s#%stantially complied
with, yet witho#t following the r#les of nat#ral /#stice, the petitioner has
%een acc#sed of not complying with the orders of this )o#rt. It was
s#%mitted, that the petitioner(s incarceration "ide order dated 4.3.!14 was
a complete n#llity, and it was the d#ty of this )o#rt, to terminate his
#nlawf#l detention, and to order his release forthwith.
Page 123
13
@@. It was the pointed s#%mission of the learned co#nsel for the
petitioner, that d#ring the co#rse of hearing (of )ontempt 'etition ()i"il)
nos. 41 and 413 of !1 and )ontempt 'etition ()i"il) no.,! of !13), in
order to determine whether or not the respondents therein (incl#ding the
present petitioner) were act#ally g#ilty of contempt, one of the 7#dges
hearing the matter (7.2. Ehehar, 7.), had pres#ma%ly in agreement with the
other 7#dge on the 8ench (E.2. <adha:rishnan, 7.) informed learned
co#nsel, that the iss#e as to whether the respondents in the a%o"e
petitions, had committed contempt or not, wo#ld only %e considered after
the )o#rt(s satisfaction, that the orders dated 31.5.!1 and 3.1.!1
had %een complied with. It was the s#%mission of the learned 2enior
)o#nsel for the petitioner, that when the petitioner(s detention was ordered
on 4.3.!14, neither the petitioner nor his co#nsel #nderstood the p#rpose
for which the petitioner, as promoter of the two companies, and the other
directors of the two companies, had %een s#mmoned to this )o#rt.
8esides the a%o"e stated fact#al s#%mission, it was also the contention of
the learned 2enior )o#nsel for the petitioner, that the petitioner is still
#naware, of the reasons for which his detention has %een ordered.
1!!. It was s#%mitted, that #nder the stress created %y the order passed
%y this )o#rt on 4.3.!14, %y which the petitioner(s li%erty had %een ta:en
away, the petitioner has made repeated efforts to s#ggest a possi%le
settlement, yet all efforts made %y the petitioner were re/ected. -he
petitioner(s proposals were constr#ed, according to learned co#nsel, as an
Page 124
14
ins#lt to the )o#rt. It was s#%mitted, that all these e"ents, had generated a
reasona%le apprehension in the mind of the petitioner, that this )o#rt had
already arri"ed at a final decision. In order to s#pport the instant
s#%mission, learned co#nsel for the petitioner in"ited this )o#rt(s attention
to something which had completely shoc:ed the petitioner, and had made
him incapa%le to e.pecting a /#st decision at the hands of the 7#dges
hearing the matter. In this %ehalf it was pointed o#t, that in the imp#gned
order a finding had %een recorded, that F all the fact finding a#thorities
had opined that a ma/ority of the in"estors did not e.istF* It was
s#%mitted, that the identity of the a#thorities which had arri"ed at the
a%o"e concl#sion, had not %een disclosed, %y this )o#rt. It was pointed
o#t, that no s#ch mention had %een made in the affida"it filed %y the 2;8I,
and no s#ch s#%mission was ad"anced, d#ring the co#rse of hearing. It
was therefore, the contention of the learned co#nsel for the petitioner, that
the petitioner was of the firm %elief, that in "iew of o#r pre-disposition,
legitimate "erification of the doc#ments f#rnished %y the two companies to
the 2;8I, cannot %e e.pected. It was s#%mitted, that the sit#ation created
%y this )o#rt was s#ch, that the petitioner is in no position, e"en to ma:e
an effort to find a compromise sol#tion to the pro%lem. It was also the
assertion of the learned co#nsel for the petitioner, that the imp#gned order
recited, that the respondents=contemnors (incl#ding the petitioner herein)
were heard, whereas, the respondents were called #pon when only a few
min#tes were left for this )o#rt to rise on 4.3.!14. 1hile ac:nowledging,
that all the fo#r respondents (incl#ding the present petitioner) were
Page 125
13
indi"id#ally as:ed, as to whether they had anything to say, they were not
informed what they were as:ed to respond to. +ccordingly, all the
respondents who had appeared %efore this )o#rt on 4.3.!14, were f#lly
/#stified in stating to this )o#rt on 4.3.!14, that their response was the
same as had %een s#%mitted to this )o#rt, on their %ehalf, %y their
respecti"e learned 2enior )o#nsel. It was accordingly so#ght to %e
s#ggested, that only an ill#sory hearing, in total defiance of the r#les of
nat#ral /#stice, was afforded to the petitioner, and the other
contemnors=respondents. 8ased on the a%o"e premise, it was the
s#%mission of the learned 2enior )o#nsel for the petitioner, that on
acco#nt of the lac: of confidence of the petitioner, in this 8ench, it wo#ld
%e improper for this 8ench to hear the present case on its merit, and to
render /#dgment thereon.
1!1. In order to s#pport his a%o"e contention, and to %ring forth the
principles en#nciated %y this )o#rt, which were rele"ant to the present
case, >r. <am 7ethmalani, learned 2enior )o#nsel, placed reliance on
>ana: Bal ". Dr. 'rem )hand, (1@36), 2)< 363. In"iting the )o#rt(s
attention to the fact#al %ac:gro#nd of the contro"ersy in the a%o"e case, it
was %ro#ght o#t, that Dr. 'rem )hand, the respondent, had filed a
complaint against >ana: Bal, the petitioner, #nder the 8ar )o#ncils +ct.
D#ring the co#rse of ad/#dication, %oth the >em%ers of the -ri%#nal (#nder
the 8ar )o#ncils +ct) and the 7#dges of the &igh )o#rt of <a/asthan,
accepted the complainant(s "ersion, and re/ected the pleas raised %y
Page 126
1,
>ana: Bal. <es#ltantly, >ana: Bal was held g#ilty of gross professional
miscond#ct. It was the a%o"e finding, which was assailed %y >ana: Bal
%efore this )o#rt. -he contention ad"anced on his %ehalf was, that the
>em%ers of the -ri%#nal, nominated to en?#ire into the miscond#ct of
>ana: Bal, had %een improperly nominated. -he improper constit#tion of
the -ri%#nal was premised on the fact, that 2hri )hhangani who was the
)hairman of the -ri%#nal, had pre"io#sly filed a power of attorney on
%ehalf of Dr. 'rem )hand, in a matter %eing determined #nder 2ection 143
of the )r.'.). It was s#%mitted that 2hri )hhangani, had also arg#ed the
a%o"e matter, on %ehalf of Dr. 'rem )hand on 3.5.1@3. &a"ing
appeared for the opponent, it was s#%mitted, that 2hri )hhangani was
dis?#alified from acting as )hairman=>em%er of the -ri%#nal. -his )o#rt
in the a%o"e fact#al %ac:gro#nd, held as #nder:-
-here is some force in this arg#ment. It is well settled that e"ery
mem%er of a tri%#nal that is called #pon to try iss#es in /#dicial or
?#asi-/#dicial proceedings m#st %e a%le to act /#dicially$ and it is of
the essence of /#dicial decisions and /#dicial administration that
/#dges sho#ld %e a%le to act impartially, o%/ecti"ely and witho#t any
%ias. In s#ch cases the test is not whether in fact a %ias has affected
the /#dgment$ the test always is and m#st %e whether a, litigant
co#ld reasona%ly apprehend that a %ias attri%#ta%le to a mem%er of
the tri%#nal might ha"e operated against him in the final decision of
the tri%#nal. It is in this sense that it, is often said that /#stice m#st
not only %e done %#t m#st also appear to %e done.*
(emphasis is o#rs)
Kn the iss#e, that /#stice m#st not only %e done, %#t m#st also appear to
%e done, this )o#rt in the a%o"e /#dgment, had relied on the /#dgment
rendered in 4rome 0nited 8reweries )o. ". 8ath 7#stices, (1@,) +) 35,,
and there#pon, had o%ser"ed as #nder:-
Page 127
16
+s Aisco#nt )a"e B. ). has o%ser"ed in 4rom 0nited 8rewerses )o.
". 8ath 7#stices, Hthis r#le has %een asserted not only in the case of
)o#rts of 7#stices and other /#dicial tri%#nals %#t in the case of
a#thorities which, tho#gh in no sense to %e called )o#rts, ha"e to act
as /#dges of the rights of others H. In dealing with cases of %ias
attri%#ted to mem%ers constit#ting tri%#nals, it is necessary to ma:e a
distinction %etween pec#niary interest and pre/#dice so attri%#ted. It
is o%"io#s that pec#niary interest, howe"er small it may %e in a
s#%/ect-matter of the proceedings, wo#ld wholly dis?#alify a mem%er
from acting as a /#dge. 8#t where pec#niary interest is not attri%#ted
%#t instead a %ias is s#ggested, it often %ecomes necessary to
consider whether there is a reasona%le gro#nd for ass#ming the
possi%ility of a %ias and whether it is li:ely to prod#ce in the minds of
the litigant, or the p#%lic at large a reasona%le do#%t a%o#t the
fairness of the administration of /#stice. It wo#ld always %e a ?#estion
of fact to %e decided in each case. H -he principle says &als%#ry,
Hnemo debet esse 4ude0 in causaproprta sua precl#des a /#stice, who
is interested in the s#%/ect matter of a disp#te, from acting as a
/#stice therein* (&als%#ry(s Baws of ;ngland, Aol. RRI, page 333,
para @3). In o#r opinion, there is and can %e no do#%t a%o#t the
"alidity of this principle and we are prepared to ass#me that this
principle applies not only to the /#stices as mentioned %y &als%#ry
%#t to all tri%#nals and %odies which are gi"en /#risdiction to
determine /#dicially the rights of parties.*
(emphasis is o#rs)
In >ana: Bal(s case (s#pra), reliance was also placed %y this )o#rt on <e.
". 2#sse. 7#stices, ;. parte >c)arthy, (1@4) 1 E8 3,. <elying on the
a%o"e /#dgment, this )o#rt had e.pressed as #nder:-
In s#pport of his arg#ment, 2hri Daphtary referred #s to the
decision in <e. ". 2#sse. 7#stices, ;. parte >c)arthy. In this case,
the )o#rt was dealing with a case arising o#t of a collision %etween
a motor "ehicle %elonging to the applicant and one %elonging to 1.
+t the hearing of the s#mmons the acting cler: to the /#stices was a
mem%er of the firm of solicitors who were acting for 1 in a claim for
damages against the applicant for in/#ries recei"ed in the collision.
+fter the e"idence was recorded the /#stices retired to consider their
decision and the acting cler: also retired with them in case they
sho#ld desire to %e ad"ised on any point of law. -he applicant was
con"icted in the case. -his con"iction was challenged %y the
applicant on the gro#nd that it was "itiated %y the improper cond#ct
of the /#stices in allowing the acting cler: to %e associated with them
when they deli%erated a%o#t the merits of the case. +n affida"it was
filed on %ehalf of the /#stices that they reached their decision witho#t
Page 128
15
cons#lting the acting cler: and that the acting cler: had in fact
a%stained from referring to the case. -his affida"it was accepted as
tr#e %y all the learned /#dges who heard the case and yet the
con"iction was ?#ashed. H-he ?#estion isH o%ser"ed Bord &ewart
).7. whether the acting cler: was so related to the case in its ci"il
aspect, as to %e #nfit to act as a cler: to the /#stices in the criminal
matterH and the learned /#dge added that Hthe answer to that
?#estion depends not #pon what e.actly was done %#t #pon what
might appear to %e done. 9othing is to %e done which creates e"en
a s#spicion that there has %een an improper interference in the
co#rse of /#stice.H B#sh 7. who agreed with Bord &ewart ).7.
li:ewise accepted the affida"it made on %ehalf of the /#stices %#t
o%ser"ed, Hthat they ha"e placed themsel"es in an impossi%le
position %y allowing the cler: in those circ#mstances to retire with
them into their cons#ltation room.H
(emphasis is o#rs)
-his )o#rt in >ana: Bal(s case (s#pra) also placed reliance on <e. ".
;sse. 7#stices, ;. parte 'er:ins, (1@6) E8 463. -he concl#sions
recorded in the latter /#dgment were accepted %y this )o#rt, %y holding as
#nder:-
-he same principle was en#nciated with e?#al emphasis in <e. ".
;sse. 7#stices, ;. parte 'er:ins. -his was a disp#te %etween a
h#s%and and his wife and it appeared that the wife had cons#lted
the solicitor(s cler: in their office a%o#t the preparation of a deed of
separation from her h#s%and and the lawyer acted in the matter for a
time after which she ceased to cons#lt him. 9o mention of the matter
was made to the solicitor himself e.cept one "ery short reference to
it in a wee:ly report from his cler:. 2#%se?#ently the solicitor acted
as a cler: to the /#stices who tried the case. &e stated in his affida"it
that, when acting as a cler: to the /#stices on the occasion in
?#estion, he had no :nowledge that his firm had acted for the wife
and that he was in no way ad"erse to the h#s%and. It was #rged
that the decision of the /#stices sho#ld %e set aside as the /#stices
were not properly constit#ted and it appears also to ha"e %een
s#ggested that the decision might, perhaps, ha"e %een infl#enced
%y a pre/#dice tho#gh indirectly and to a "ery small e.tent. <e/ecting
the arg#ment that the decision of the /#stices had %een infl#enced
e"en remotely %y the impropriety alleged, +"ory 7. stated that
Htho#gh the cler: to the /#stices and the (/#stices did not :now that
his firm had acted for the applicant(s wife, the necessary, or at least
the reasona%le, impression, on the mind of the applicant wo#ld %e
that /#stice was not done seeing that the solicitor for his wife was
Page 129
1@
acting with the /#stices and ad"ising( them on the hearing of the
s#mmons which she had ta:en against him.H
(emphasis is o#rs)
-he s#%mission of 2hri <am 7ethmalani, learned 2enior )o#nsel for the
petitioner, ha"ing placed reliance on the /#dgments was, that we were
dis?#alified from hearing the merits of the claim pro/ected thro#gh the
instant petition, %eca#se of o#r %ias.
1!. Dr. <a/ee" Dhawan, learned 2enior )o#nsel for the petitioner,
seconded the position e.pressed %y >r. <am 7ethmalani. It was his
contention, that there is a pre-disposition in the matter on the part of the
8ench. -he a%o"e pre-disposition, according to him, appears to %e on the
%asis of a strong commitment towards the other side*. -he inference of
his assertion, according to learned co#nsel, co#ld %e gathered from the
fact, that all the proposals offered %y the petitioner for his release from
detention, had %een re/ected %y #s, one after the other. +ccording to
learned co#nsel, the 8ench had demonstrated its rigidity to s#ch an e.tent,
that the petitioner finds no play in the /oints*. In other words, according to
learned co#nsel, we were willing to accept nothing short of, what we had
already ordered. -he 8ench according to learned 2enior )o#nsel, had
rep#lsed all alternati"e reasona%le gro#nds of compromise. Bearned
co#nsel then in"ited o#r attention to an order passed %y #s on ,.3.!14.
-he said order is %eing e.tracted here#nder:-
1e ha"e gone thro#gh the fresh proposal filed
on 3.!3.!14. -ho#gh the same is not in compliance with o#r
Krder dated 31.!5.!1 or the Krder passed %y the three-7#dge
8ench of this )o#rt on !3.1.!1 in )i"il +ppeal 9o.5,43 of
!1 and on 3.!.!13 in I.+. 9o.,6 of !13 in )i"il +ppeal
Page 130
13!
9o.@513 of !11 with I.+. 9o.3 of !13 in )i"il +ppeal 9o.@533 of
!11, we are inclined to grant interim %ail to the contemnors who are
detained %y "irt#e of o#r order dated !4.!3.!14, on the
condition that they wo#ld pay the amo#nt of <s.1!,!!! crores -
o#t of which <s.3,!!! crores to %e deposited %efore this )o#rt and
for the %alance a 8an: D#arantee of a nationaliCed %an: %e
f#rnished in fa"o#r of 2.;.8.I. and %e deposited %efore this )o#rt.
Kn compliance, the contemnors %e released forthwith and the
amo#nt deposited %e released to 2.;.8.I.
1e ma:e it clear that this order is passed in
order to facilitate the contemnors to f#rther raise the %alance
amo#nt so as to comply with the )o#rtIs Krders mentioned a%o"e.*
(emphasis is o#rs)
It was s#%mitted, that the a%o"e order passed %y this )o#rt was an
impossi%le order. 8eca#se it was impossi%le to implement. It was
s#%mitted, that e"en after the passing of the a%o"e order, the petitioner
had repeatedly so#ght modification thereof, thro#gh f#rther proposals. In
order to demonstrate %ias at the hands of the 8ench, it was contended,
that all s#%se?#ent proposals made %y the petitioner were re/ected
#nceremonio#sly. -his, according to the learned 2enior )o#nsel for the
petitioner demonstrates, that the mind of the 7#dges hearing the matter
was closed, and that, e"en gen#ine proposals made %y the petitioner were
%eing re/ected, witho#t d#e application of mind.
1!3. +ll that has %een noticed hereina%o"e, has %een so recorded, lest
we are acc#sed of, not ha"ing ta:en into consideration the s#%missions
ad"anced %y the learned co#nsel for the petitioner, in their correct
perspecti"e. &owe"er %raCen the arg#ments may %e, it is o#r onero#s
d#ty to deal with the contentions ad"anced %y the learned 2enior )o#nsel
Page 131
131
for the petitioner. 1e will ma:e a h#m%le effort to deal with the same, in
the following paragraphs.
1!4. 9o allegation of %ias or pre/#dice was le"elled, when this "ery 8ench
was constit#ted to decide )i"il +ppeal nos. @513 and @533 of !11. 1e
had heard the learned 2enior )o#nsel for the two companies at great
length, and had ad/#dicated the matter ta:ing into consideration each and
e"ery aspect of the contro"ersy pro/ected %efore #s. It has ne"er %een the
case of the petitioner, that we were %iased when we had disposed of the
appeals %y o#r common order dated 31.5.!1. Kn the iss#e of
dis%#rsement of payments %y the two companies (to the 2;8I), the date of
deposit, was e.tended %y an order dated 3.1.!1, passed %y a three-
7#dge Di"ision 8ench (in )i"il +ppeal no. 5,43 of !1 and 1rit 'etition
()i"il) no. 36 of !1). 9either of #s was on the three-7#dge Di"ision
8ench, which passed the order dated 3.1.!1. It needs to %e clearly
#nderstood, that the order dated 31.5.!1 read with the order dated
3.1.!1 is final and %inding, and no proceedings are pending %efore this
)o#rt, either at the hands of the two companies, or the petitioner herein,
for their reconsideration on merits. 1e ha"e neither the /#risdiction, nor
the a#thority to rela. the terms and conditions of the a%o"e orders. In fact,
we wo#ld %e committing contempt if we were to, on o#r own, interfere with
the a%o"e directions. +s a matter of fact, it is not open to #s, to rela. the
order dated 3.1.!1, which was passed %y a three-7#dge Di"ision
Page 132
13
8ench, re?#iring the contemnors to deposit the first installment of
<s.1!,!!! crores, in the first wee: of 7an#ary !13.
1!3. Kn ,..!13, we iss#ed notice, in )ontempt 'etition ()i"il) 9os. 41
and 413 of !1. Kn 4.6.!13, we iss#ed notice, in )ontempt 'etition
()i"il) 9o. ,! of !13. 1e heard the a%o"e contempt petitions on
n#mero#s dates (details whereof ha"e already %een en#merated a%o"e).
9o allegation of %ias was e"er le"elled %y any of the contemnors, not e"en
%y the petitioner herein, %efore the hearing of the present writ petition.
Despite prolonged hearings in the matters pertaining to the two
companies, which wo#ld directly affect the petitioner herein, no allegation
of %ias was e"er le"elled against this 8ench hither to %efore. 1e are
therefore, satisfied that the instant plea of %ias, is %ased on the petitioner(s
fr#stration, arising o#t of %eing cornered into a sit#ation, wherefrom there
is no escape.
1!,. -he assertion, that we wo#ld not %e satisfied #nder any
circ#mstances, with the petitioner(s arg#ments and s#%missions on merits,
is clearly misconcei"ed. -he assertion made %y the petitioner, that we had
already pre/#dged the matter, and no relief co#ld %e e.pected from #s, is
li:ewise a total misconstr#ction of the proceedings we are dealing with. It
needs to %e #nderstood, that there is no lis pending %efore #s, wherein we
ha"e to determine the merits of the claims raised %y the ri"al parties. In a
sit#ation, where ri"al claims of parties, ha"e to %e decided on merits, s#ch
a s#%mission co#ld ha"e possi%ly %een made. >erits of the claims (and
Page 133
133
co#nter-claims) ha"e already %een settled %y this )o#rt(s order dated
31.5.!1. -he proceeding wherein the imp#gned order was passed, was
%eing cond#cted in the contempt /#risdiction of this )o#rt (#nder +rticle
1@ of the )onstit#tion of India). -he scope of the instant contempt
/#risdiction e.tends to, p#nishing contemnors for "iolating )o#rt(s orders$
p#nishing contemnors for diso%eying )o#rt(s orders$ p#nishing contemnors
for %reach of #nderta:ings gi"en to )o#rts. It also e.tends to enforcement
of )o#rt(s orders. )ontempt /#risdiction e"en e.tends to p#nishing those
who scandaliCe (or lower the a#thority of) any )o#rt$ p#nishing those who
interfere in d#e co#rse of /#dicial proceedings$ and p#nishing those who
o%str#ct the administration of /#stice. D#ring the co#rse of hearing,
learned co#nsel again and again, admitted %reach of this )o#rt(s orders,
dated 31.5.!1 and 3.1.!1. It was inter alia admitted, that payments
co#ld not %e made within the time frame stip#lated. )ontempt %y way of
%reach of this )o#rt(s orders ha"ing %een admitted, the allegation of %ias is
clearly a plea which is not a"aila%le to the petitioner. In s#ch
consideration, there is no room which remains for f#rther ad/#dication on
merits. -here cannot, therefore %e a pre/#dged mind (all that has to %e
decided, has already %een ad/#dged). 4or the same reason, there is no
scope for a compromise. Iss#es of compromise arise %etween parties,
while merits of ri"al claims are pending. -he disp#te %etween the parties
has already %een settled, and contempt %y way of %reach has already
%een admitted. -he ?#estion of compromise does not arise at all. 1e
Page 134
134
therefore re/ect all the a%o"e s#%missions ad"anced %y the learned
co#nsel for the petitioner.
1!6. 1e shall now deal with the s#%stance, and the import, of the
/#dgments relied #pon. It is not the case of the petitioner, that we ha"e
any connection with either the two companies #nder reference, or any
other company=firm which constit#tes the 2ahara Dro#p. 1e may state,
that neither of #s has e"en a single share with the two concerned
companies or with any other company=firm comprising of the 2ahara
Dro#p. In order to remo"e all am%ig#ity in the matter we wo#ld f#rther
state, that neither of #s, nor any of o#r dependent family mem%ers, own
e"en a single share in any company whatsoe"er. 9either of #s has %een
assisted in this case, for its determination on merits %y any law cler:, intern
or staff mem%er, while hearing, dealing with or deciding the contro"ersy.
9or has any assertion in this %ehalf, %een made against #s, %y the
petitioner or his learned co#nsel. +ccordingly the fact#al position, which
was the %asis of the decisions relied #pon %y the learned co#nsel, is not
a"aila%le in the facts and circ#mstances of this case. In the a%o"e "iew of
the matter, it is %#t nat#ral to concl#de, that none of the /#dgments relied
#pon %y the learned 2enior )o#nsel for the petitioner, on the s#%/ect of
%ias, are applica%le to the facts and circ#mstances of this case. 1e are
satisfied that none of the disg#ised aspersions cast %y learned 2enior
)o#nsel, wo#ld %e s#fficient to /#stify the in"ocation of the ma.im, that
/#stice m#st not act#ally %e done, %#t m#st also appear to %e done. +s
Page 135
133
already noticed a%o"e, e"en tho#gh o#r com%ination as a 8ench, did not
e.ist at the time, when the present petition was filed, a 2pecial 8ench, with
the present composition, was constit#ted %y &on(%le the )hief 7#stice, as a
matter of his conscio#s determination. 9o litigant, can %e permitted to
diss#ade #s, in discharging the onero#s responsi%ility assigned to #s %y
&on(%le the )hief 7#stice.
1!5. Knce it is #nderstood, that we are no longer possessed with any
ad/#dicatory role, insofar as the contro"ersy on merits is concerned, the
principal allegation of %ias itself pales into insignificance. -his )o#rt %y its
order dated 31.5.!1 had directed the two companies to F ref#nd the
amo#nts collected thro#gh <&'s dated 13.3.!!5 and 1,.1!.!!@ along
with interest at the rate of 13O per ann#m to the 2;8I, from the date of
receipt of the s#%scription amo#nt till the date of repayment, within a
period of three months from todayF* -he a%o"e amo#nt was paya%le %y
the two companies %y 3!.11.!1. It is not a matter of disp#te, that neither
the two companies nor its promoter or the directors, e"er so#ght e.tension
of time in ma:ing the a%o"e payment, %y initiating proceedings :nown to
law, either in )i"il +ppeal no. @513 or @533 of !11. -he two companies,
howe"er, filed 1rit 'etition ()i"il) no. 36 of !1 in the same manner, as
the petitioner has filed the present writ petition. -he filing of the a%o"e writ
petition was itself a matter of serio#s concern with the legal fraternity, to
the e.tent that the 'resident of the 2#preme )o#rt 8ar +ssociation had
suo moto inter"ened in the a%o"e matter, to ad"ance s#%missions %efore
Page 136
13,
the three-7#dge Di"ision 8ench. -he three-7#dge Di"ision 8ench while
disposing of the matter on 3.1.!1, declined to accept the prayer made
%y the two companies, for ta:ing into consideration the ref#nd already
made %y way of redemptions to in"estors. +t the time of disposal of 1rit
'etition ()i"il) no. 36 of !1 (and )i"il +ppeal no. 5,43 of !1) on
3.1.!1, it was directed, that the demand draft in the s#m of <s.3,1!
crores, which had %een prod#ced %efore this )o#rt on 3.1.!1, %e
immediately handed o"er. It was concl#ded, that the %alance amo#nt of
<s.16,4!! crores, together with interest at the rate of 13O per ann#m, was
still paya%le (e"en after the deposit of a%o"e <s.3,1! crores). + direction
was accordingly iss#ed to pay the first installment of <s.1!,!!! crores
within the first wee: of 7an#ary, !13. -he application filed %y the
petitioner for e.tension of time to ma:e the a%o"e deposit, was re/ected %y
a three-7#dge Di"ision 8ench of this )o#rt on 3..!13. -he direction to
pay the first installment of <s.1!,!!! crores, %y the first wee: of 7an#ary,
!13, therefore, ass#med finality. 1e ha"e neither the a#thority nor the
/#risdiction to entertain any prayer for red#cing the s#m directed to %e paid,
as the first installment. -he s#%mission of the learned 2enior )o#nsel for
the petitioner, that we are #nrelenting, or that we are pre-disposed, or that
we ha"e a closed mind, is therefore, /#st a %ogey pro/ected %y learned
2enior )o#nsel representing the petitioner. +s a matter of fact, %y o#r
conscio#s effort, we ha"e #nilaterally rela.ed the rigor of the first
installment of <s.1!,!!! crores, as m#ch as we co#ld, %y o#r order dated
,.3.!14. 0nfort#nately, the a%o"e order is also not accepta%le to the
Page 137
136
petitioner. 8#t accepta%ility apart, o#r a%o"e "ol#ntary action of slac:ening
the effect of the first installment, directed to %e paid %y the two companies,
within the first wee: of 7an#ary !13, is clearly s#fficient to rep#diate and
re/ect, all s#%missions in the nat#re of o#r ha"ing a predisposed mind.
1!@. 1hile rendering the instant /#dgment, we ha"e recorded the efforts
made %y this )o#rt to ca/ole the contemnors (incl#ding the present
petitioner) into compliance of this )o#rt(s orders dated 31.5.!1 and
3.1.!1, #nder an independent heading (IA. ;fforts made %y this )o#rt
to ca/ole the contemnors, incl#ding the petitioner M >r. 2#%rata <oy
2ahara, for compliance of the orders of this )o#rt, dated 31.5.!1 and
3.1.!1). -he long rope gi"en to the two companies incl#ding the
petitioner, and the other directors, demonstrates the efforts made %y #s to
help the petitioner (and others) o#t of the mess, in which they find
themsel"es. +s of now, the amo#nt paya%le in f#rtherance of the
directions iss#ed %y this )o#rt (on 31.5.!1 and 3.1.!1), has swelled
#p to <s.3,,,!5 crores. ;ach proposal made %y the petitioner till date,
re"eals an ac:nowledgment to pay. -he petitioner has offered to deposit
<s.,3!! = 3,!!! crores, in the proposals made th#s far, and the remaining
amo#nt of the first instalment (i.e., <s.6,3!! = 6,!!! crores), later on.
-herefore, the proposals s#%mitted th#s far, only ac:nowledge payment of
<s.1!,!!! crores. 9one of the proposals, co"ers the whole amo#nt
paya%le. -he proposals, as a matter of a precondition, demand the
re"ocation of restraint orders on %an: acco#nts, and mo"a%le as well as,
Page 138
135
immo"a%le properties. It may %e #nderstanda%le, that the restraint order is
lifted in respect of the %an: acco#nts, and properties, which are to %e
#tiliCed in discharge of the lia%ility arising o#t of this )o#rt(s orders (dated
31.5.!1 and 3.1.!1). <epeatedly, d#ring )o#rt hearings, we ha"e
%een ass#ring learned co#nsel for the petitioner, that indi"id#al acco#nts
will %e permitted to %e operated, if the deposits therein are to %e
transferred to the 2;8I. Bi:ewise, orders pertaining to partic#lar
immo"a%le properties, will %e lifted, if the sale proceeds thereof are to %e
#tiliCed in hono#ring the commitment to ref#nd in"estors( deposits (with
13O interest). 9one of the contemnors, ha"e made any proposal, in
consonance with the a%o"e li%erty. +cceptance of the proposals is /#st not
possi%le, in the teeth of the order dated 3.1.!1, passed %y a three-
7#dge Di"ision 8ench, re?#iring the two companies to ma:e a deposit of
<s.1!,!!! crores in the first wee: of 7an#ary, !13. 8y now, a%o#t 16
f#rther months ha"e elapsed witho#t the petitioner and the two companies
ha"ing made any deposit whatsoe"er. 1ithin the framewor: of the
re?#irement depicted in the order dated 3.1.!1, we, %y o#r own order
dated ,.3.!14 (e.tracted a%o"e), softened the mod#s of payment. It is,
therefore, not possi%le for #s to accept, that there has %een no play in the
/oints* for the enforcement of the orders passed %y this )o#rt. 1e find the
s#%mission made %y the learned co#nsel for the petitioner to the effect,
that o#r order dated ,.3.!13 cannot %e complied with, %eca#se it was
premised on impossi%le conditions, is wholly #n/#stified. -he assets of the
Page 139
13@
2ahara Dro#p are s#fficient to discharge the entire lia%ility, witho#t m#ch
diffic#lty.
11!. Insofar as the assertion made %y Dr. <a/ee" Dhawan, learned
2enior )o#nsel, that the fact#al position e.pressed in the order dated
4.3.!14 was not correct, is concerned, we may at the cost of repetition
once again notice, that it is also important for #s to record that the positi"e
position e.pressed %y the 2;8I %efore this )o#rt (d#ring the disposal of
)i"il +ppeal 9os.@513 and @533 of !11) was, that neither 2I<;)B nor
2&I)B e"er pro"ided details of its in"estors to the 2;8I (4->). -hey
contested the proceedings initiated %y the 2;8I (4->) only on technical
gro#nds. 1e were told that e"en %efore the 2+-, no details were
f#rnished. +s against the a%o"e, the position adopted %y the 2I<;)B
%efore #s, d#ring the co#rse of appellate proceedings was, that 2I<;)B
had f#rnished a compact disc with all details to the 2;8I (4->), along with
its operating :ey. 1hilst it was ac:nowledged %y the 2;8I %efore this
)o#rt, that a compact disc (allegedly containing details a%o#t the
in"estors) was f#rnished %y 2I<;)B, yet it was emphatically pointed o#t,
that its operating :ey was withheld. -his was another ploy, in the series of
mo"es adopted %y the two companies to withhold the pro"iding of any
details to the 2;8I. <es#ltantly, no details whatsoe"er were e"er
disclosed %y 2I<;)B either %efore the 2;8I (4->) or the 2+-. -he
position adopted %y 2&I)B was e"en worse. It is necessary to place on
record the fact, that the 2&I)B has ne"er e"er disclosed, the names and
Page 140
14!
other connected details of e"en a single in"estor to the 2;8I, despite this
prolonged litigation. 1e had repeatedly made a poser, d#ring the hearing
of the present petition, a%o#t 2&I)B, as indicated a%o"e. -he position was
confirmed %y learned 2enior )o#nsel representing the 2;8I.
0nfort#nately, >r. 2. Danesh, learned 2enior )o#nsel for the petitioner, on
the last day of hearing, "ent#red to contest the a%o"e position. &e handed
o"er to #s two "ol#mes of papers r#nning into ,! pages (#nder the title M
9ote on information pro"ided %y 2&I)B to the 2;8I). 1e re?#ired him to
in"ite o#r attention, to doc#ments indicating disclos#re of the a%o"e
information. &is ploy stood e.posed, when no material depicting
disclos#re of names, and other connected details of 2&I)B to the 2;8I,
co#ld %e %ro#ght to o#r notice. -hat apart, what is essential to record is,
that till date 2&I)B has ne"er e"er s#pplied in"estor related details to the
2;8I. + fact a%o#t which there is now no am%ig#ity, specially after learned
2enior )o#nsel filed the two "ol#mes of papers referred to a%o"e. -he
a%o"e fact#al position remained #naltered %efore the 2+- and e"en %efore
this )o#rt. Does it lie in the mo#th of learned 2enior )o#nsel to assert,
that #n/#stified concl#sions had %een recorded against the two companies,
witho#t any %asisG
111. Dr. <a/ee" Dhawan, learned 2enior )o#nsel also acc#sed #s of
ha"ing a pre-disposition in respect of the contro"ersy. -his predisposition,
according to him, appeared to %e on the %asis of a strong commitment
towards the other side*. -his assertion was repeated se"eral times d#ring
Page 141
141
the hearing. 8#t, which is the other sideG In terms of o#r order dated
31.5.!1, the only gainer on the other side, is the Do"ernment of India.
-he eighth direction of o#r order dated 31.5.!1, reads as #nder:-
5. 2;8I (1->) if, after the "erification of the details f#rnished, is
#na%le to find o#t the wherea%o#ts of all or any of the s#%scri%ers,
then the amo#nt collected from s#ch s#%scri%ers will %e
appropriated to the Do"ernment of India.*
(emphasis is o#rs)
If the other side*, is the Do"ernment of India, there is certainly no
s#%stance in the aspersion cast %y the learned co#nsel. 7#st the a%o"e
aspect of the matter is s#fficient to %#rst the %#%%le, of all the caref#lly
crafted insin#ations, systematically offloaded, %y learned co#nsel, for effect
and impact.
11. +t this /#nct#re we may refer to a decision of this )o#rt which has a
%earing on the s#%/ect in hand. <eference is %eing made to the
o%ser"ations made %y this )o#rt, in 7aswant 2ingh ". Airender 2ingh P
Krs., 1@@3 2#pp. (1) 2)) 354:-
3. 8efore parting with this /#dgment, there is howe"er, one
matter which has ca#sed #s considera%le concern and we wish to
ad"ert to it. +fter the reco#nt had %een ordered %y the learned
2ingle 7#dge in the &igh )o#rt and the Dep#ty <egistrar had carried
o#t the inspection of the %allot papers of the specified %ooths, the
appellant filed an application in the &igh )o#rt #nder
2ection 131 )') see:ing stay of the f#rther arg#ments to ena%le
the appellant to mo"e the 2#preme )o#rt. In the said application
the appellant referred to certain Lo%ser"ations( made %y the learned
7#dge d#ring the co#rse of arg#ments and also referred to the
manner in which the two pac:ets containing %allot papers which had
%een o%/ected to %y %oth the parties and had %een :ept for scr#tiny
of the learned 2ingle 7#dge, were handled %y the learned 7#dge.
-he appellant went on to say that H%y doing this the &onI%le )o#rt
was pleased to ma:e these %allot papers s#spect and do#%tf#l and
these cannot %e considered for any decision on them regarding their
"alidity or otherwise as these remained in #nsealed condition for
Page 142
14
#ncertaina%le time witho#t the petitioner or his )o#nsel %eing
present thereH. -he learned 7#dge %y his order dated 13.3.1@@3
recorded the following proceedings:
)o#nsel for the petitioner has not appeared and the petitioner
himself has made a re?#est that he wants to mo"e the &onI%le
2#preme )o#rt for transfer of the ;lection 'etition from this
)o#rt. In "iew of this statement, the petition is %eing
ad/o#rned. -he petitioner wants to place as application for
transfer on record. &e may file it in the <egistry, if so ad"ised.
D#ring the co#rse of arg#ments yesterday, two sealed
en"elopes relating to polling %ooth 9os. 5 and 31 had %een
opened in the presence of the parties and their )o#nsel at the
time when the report of the )ommissioner who carried o#t test
chec:ing was %eing considered. -hese open en"elopes had
remained in my c#stody in my +lmirah #nder loc: and :ey.
2ince the case is now %eing ad/o#rned, these open en"elopes
%e resealed and the same %e handed o"er to the +dditional
<egistrar (7#dicial) alongwith other sealed en"elopes.*
33. -hereafter, the appellant as already noticed, filed a transfer
petition in this )o#rt which was dismissed on 3!.5.1@@3. -he
transfer petition li:e the application (s#pra) cast aspersions on the
learned 7#dge in the discharge of his /#dicial f#nctions and had the
tendency to scandalise the )o#rt. It was an attempt to %row %eat
the learned 7#dge of the &igh )o#rt and ca#se interference in the
cond#ct of a fair trial. 9ot only are the aspersions derogatory,
scandalo#s and #ncalled for %#t they also tend to %ring the a#thority
and administration of law into disrespect. -he contents of the
application see:ing stay as also of the transfer petition, %ring the
)o#rt into disrep#te and are an affront to the ma/esty of law and
offend the dignity of the )o#rt. -he appellant is an +d"ocate and it
is painf#l that %y filing the application and the petition as a party in
person, co#ched in an o%/ectiona%le lang#age, he permitted himself
the li%erty of ind#lging in an action, which ill %eho"es him and does
little credit to the no%le profession to which he %elongs. +n ad"ocate
has no wider protection than a layman when he commits an act
which amo#nts to contempt of co#rt. It is most #n%efitting for an
ad"ocate to ma:e imp#tations against the 7#dge only %eca#se he
does not get the e.pected res#lt, which according to him is the fair
and reasona%le res#lt a"aila%le to him. 7#dges cannot %e
intimidated to see: fa"ora%le orders. Knly %eca#se a lawyer
appears as a party in person, he does not get a license there%y to
commit contempt of the )o#rt %y intimidating the 7#dges or
scandalising the co#rts. &e cannot #se lang#age, either in the
pleadings or d#ring arg#ments, which is either intemperate or
#nparliamentary. -hese safeg#ards are not for the protection of any
Page 143
143
7#dge indi"id#ally %#t are essential for maintaining the dignity and
decor#m of the co#rts and for #pholding the ma/esty of law. 7#dges
and co#rts are not #nd#ly sensiti"e or to#chy to fair and reasona%le
criticism of their /#dgments. 4air comments, e"en if, o#t-spo:en, %#t
made witho#t any malice or attempting to impair the administration
of /#stice and made in good faith, in proper lang#age, do not attract
any p#nishment for contempt of co#rt. &owe"er, when from the
criticism a deli%erate, moti"ated and calc#lated attempt is discerni%le
to %ring down the image of /#diciary in the estimation of the p#%lic or
to impair the administration of /#stice or tend to %ring the
administration of /#stice into disrep#te the co#rts m#st %estir
themsel"es to #phold their dignity and the ma/esty of law. -he
appellant, has, #ndo#%tedly committed contempt of the )o#rt %y the
#se of the o%/ectiona%le and intemperate lang#age. 9o system of
/#stice can tolerate s#ch #n%ridled licence on the part of a person,
%e he a lawyer, to permit himself the li%erty of scandalising a )o#rt
%y casting #nwarranted, #ncalled for and #n/#stified aspersions on
the integrity, a%ility, impartiality or fairness of a 7#dge in the
discharge of his /#dicial f#nctions as it amo#nts to an interference
with the d#es co#rse of administration of /#stice.*
(emphasis is o#rs)
-he o%ser"ations recorded in the a%o"e /#dgment are f#lly applica%le, to
the mannerism and demeano#r of the petitioner M >r. 2#%rata <oy 2ahara
and some of the learned 2enior )o#nsel. 1e wo#ld ha"e declined to
rec#se from the matter, e"en if the other side*, had %een a pri"ate party.
4or, o#r oath of office re?#ires #s to discharge o#r o%ligations, witho#t fear
or fa"o#r. 1e therefore also commend to all )o#rts, to similarly rep#lse all
%aseless and #nfo#nded insin#ations, #nless of co#rse, they sho#ld not %e
hearing a partic#lar matter, for reasons of their direct or indirect
in"ol"ement. -he %enchmar:, that /#stice m#st not only %e done %#t
sho#ld also appear to %e done, has to %e preser"ed at all costs.
IA. A /*6 6&#0.4 $"&!% %(* 0*/*,7* &/ #*0*:1%+&, &/ OFCDB.4
&//*#*0 "' %(* %6& 7&:1$,+*.C
Page 144
144
113. -he 2;8I (4->) "ide order dated 3.,.!11 passed the following
directions:-
1. -he two )ompanies, 2ahara )ommodity 2er"ices )orporation
Bimited (earlier :nown as 2ahara India <eal ;state )orporation
Bimited) and 2ahara &o#sing In"estment )orporation Bimited and its
promoter, >r. 2#%rata <oy 2ahara, and the directors of the said
companies, namely, >s. Aandana 8harga"a, >r. <a"i 2han:ar
D#%ey and >r. +sho: <oy )ho#dhary, /ointly and se"erally, shall
forthwith ref#nd the money collected %y the aforesaid companies
thro#gh the <ed &erring 'rospect#s dated >arch 13, !!5 and
Kcto%er ,, !!@, iss#ed respecti"ely, to the s#%scri%ers of s#ch
Kptionally 4#lly )on"erti%le De%ent#res with interest of 13O per
ann#m from the date of receipt of money till the date of s#ch
repayment.

. 2#ch repayment shall %e effected only in cash thro#gh
Demand Draft or 'ay Krder.

3. 2ahara )ommodity 2er"ices )orporation Bimited (earlier
:nown as 2ahara India <eal ;state )orporation Bimited) and 2ahara
&o#sing In"estment )orporation Bimited shall iss#e p#%lic notice, in
all editions of two 9ational Dailies (one ;nglish and one &indi) with
wide circ#lation, detailing the modalities for ref#nd, incl#ding details
on contact persons incl#ding names, addresses and contact details,
within fifteen days of this Krder coming into effect.

4. 2ahara )ommodity 2er"ices )orporation Bimited (earlier
:nown as 2ahara India <eal ;state )orporation Bimited) and 2ahara
&o#sing In"estment )orporation Bimited are restrained from
accessing the sec#rities mar:et for raising f#nds, till the time the
aforesaid payments are made to the satisfaction of the 2ec#rities
and ;.change 8oard of India.

3. 4#rther, >r. 2#%rata <oy 2ahara, >s. Aandana 8harga"a, >r.
<a"i 2han:ar D#%ey and >r. +sho: <oy )ho#dhary are restrained
from associating themsel"es, with any listed p#%lic company and
any p#%lic company which intends to raise money from the p#%lic, till
s#ch time the aforesaid payments are made to the satisfaction of the
2ec#rities and ;.change 8oard of India.*
(emphasis is o#rs)
-hereafter, the 2+- %y its order dated 15.1!.!11, #pheld the order
passed %y the 2;8I (4->) dated 3.,.!11. -he 2+- ha"ing so held,
Page 145
143
directed the appellant companies (as was the position of parties therein) to
ref#nd the money to the in"estors within si. months (from the date of its
order dated 15.1!.!11). -here#pon, the matter was %ro#ght to this )o#rt
%y way of appeals preferred %y the two companies concerned, i.e., )i"il
+ppeal nos. @513 and @533 of !11. Kn 5.11.!11, this )o#rt passed
the following interim order:-
8y the imp#gned order, the appellants ha"e %een as:ed %y 2+- to
ref#nd a s#m of <s.16,4!! crores appro.imately on or %efore
5.11.!11. 1e e.tend the period #pto @.1.!1.*
-he a%o"e interim order was contin#ed indefinitely, %y this )o#rt on
@.1.!1. -he direction to ref#nd, therefore, stood eclipsed. It is
necessary to #nderstand the c#m#lati"e effect of the interim orders passed
on 5.11.!11 and @.1.!1. -he a%o"e orders need to %e interpreted, %y
:eeping in mind the two affida"its dated 4.1.!1 filed %y the two
companies (in )i"il +ppeal nos. @531 and @533 of !11). -he a%o"e
affida"its were filed in compliance of this )o#rt(s order, re?#iring the two
companies to p#t on record, the manner in which the companies had
applied the f#nds collected from the in"estors. -his )o#rt was informed
that the f#nds were safe as they were either in"ested directly or indirectly,
in real estate pro/ects, or were held as c#rrent assets=cash and %an:
%alances (as de"elopment rights on land and pro/ects, and ad"ances
#nder /oint "ent#res etc.). 8elie"ing the fact#al position depicted in the two
affida"its, this )o#rt was satisfied, that the in"estors( deposits in the
K4)D(s of the two companies were safe, therefore, the direction to ref#nd
(ordered %y the 2;8I (4->) and the 2+-), came to %e stayed. 8#t the
Page 146
14,
orders of the 2;8I (4->) and 2+- were not interfered with, in any other
manner. It is, therefore clear, that this )o#rt while passing the a%o"e
interim order, did not "ary the manner of ma:ing the ref#nds (in case the
two companies concerned, decided to ma:e any ref#nd(s) to the
in"estors). In this %ehalf it needs to %e noticed, that in its order dated
3.,.!11 the 2;8I (4->) had clearly directed, that s#ch repayment co#ld
only %e made in cash thro#gh demand draft or pay order*. -he 2+- had
reiterated the a%o"e position. 9o li%erty was granted to the two companies
concerned, to con"ert the in"estment made %y the holders of the K4)D(s,
into similar in"estments with the other companies. In other words cash
con"ersion in any other format, was not permitted. -o comply with the
letter and spirit of law, therefore, e"en if the ref#nd had to %e made %y the
two concerned companies, it co#ld ha"e %een done only thro#gh* demand
drafts or pay orders. -he alleged cash payment made %y the two
companies while redeeming the K4)D(s (e"en if we ass#me, that ref#nd
had act#ally %een made) was therefore per se, illegal and #naccepta%le in
terms of the orders dated 3.,.!11 (passed %y the 2;8I (4->)) and
15.1!.!11 (passed %y the 2+-). 1e m#st, therefore emphatically point
o#t, that the "ery s#%mission now made %y the companies, that the
in"estors were ref#nded their deposits %y way of cash, is per se another
tactic, in the series of manoe#"res, adopted %y the two companies to
defeat the process of law.
Page 147
146
114. -his iss#e needs to %e e.amined from another perspecti"e. -he
different :inds of %onds (K4)Ds) iss#ed %y 2I<;)B and 2&I)B, as also,
their mat#rity=con"ersion periods are depicted here#nder:
2I<;)B
2.9o. 9ame of 8onds -erm
(months)
>inim#m period
for redemption
(months)
'eriod for
con"ersion into
shares
(months)
(i) +%ode 8ond 1! ,! 11@
(ii) <eal ;state 8ond ,! 9il 3@
(iii) 9irman 8ond 45 15 46
2&I)B
2.9o. 9ame of 8onds -erm
(months)
>inim#m period
for redemption
(months)
'eriod for con"ersion
into shares
(months)
(i) >#ltiple 8ond 15! 1! 16@
(ii) Income 8ond 1! 9il 11@
(iii) &o#sing 8ond 15! 1! 16@
It wo#ld %e rele"ant to mention, that in f#rtherance of the terms and
conditions attached to the different :inds of %onds, it was ac:nowledged,
that e.cept for 9irman 8onds iss#ed %y 2I<;)B, no other %ond co#ld %e
redeemed %efore the year !13. -he earliest redemption of the %onds,
co#ld ha"e %een made in !13. -he a%o"e fact#al position was e.pressed
%y the two companies in separate affida"its dated 4.1.!1 (filed %efore
this )o#rt). -he affida"its in #nmista:a%le terms also clearly narrated, that
only one o#t of the si. different types of %onds iss#ed, %y the two
companies was partially redeema%le, in the financial year !1-13. -he
companies also confirmed in their a%o"e affida"its, that the total amo#nt
which wo#ld %ecome redeema%le, towards the end of the financial year
!1-13, was only <s.331 crores. -here was therefore, no ?#estion of
Page 148
145
redeeming tho#sands of crores of r#pees of deposits made towards the
a%o"e K4)D(s, in !1 itself. It needs to %e #nderstood, that a de%ent#re
(K4)D) is a contract %etween a company and the de%ent#re holder. It
sets o#t the terms and conditions on the %asis of which, the de%ent#re
certificate, which is a de%t instr#ment, has %een iss#ed. It is neither open
to the concerned company, nor the de%ent#re holder, to grant=see:
premat#re redemption. 9o company can #nilaterally redeem the
de%ent#res, %efore the prescri%ed period. -he theory of redemption
propo#nded %y the two companies, is therefore in clear "iolation of law. In
any case, there was no reason for the two companies to ref#nd any money
to the in"estors, specially %eca#se the two companies were protected %y
an order of this )o#rt, from ma:ing any ref#nd to the in"estors, d#ring the
pendency of the appellate proceedings ()i"il +ppeal 9os. @513 and @533
of !11), which contin#ed #p to 31.5.!1. + s#%mission was, howe"er,
made d#ring the co#rse of hearing, that the in"estors were mo#nting a
collecti"e press#re for premat#re payments. -he two companies (nor the
petitioner, in this case) did not place any material on the record of its
pleadings, at any stage to demonstrate, that mo%s had gathered at the
companies collection centres, demanding redemptions. &ad the a%o"e
position %een correct, the same wo#ld ha"e definitely %een noticed and
reported %y the media. -here was not e"en an iota of s#ch media
reporting. It is therefore prima facie, not possi%le for #s to accept the
ref#nd theory, pro/ected on %ehalf of the two companies (or e"en %y the
petitioner). 8esides the fact#al position e.pressed in the instant
Page 149
14@
paragraph, there are other reasons also, to come to the same concl#sion.
-he same are separately %eing recorded hereinafter.
113. 4act#ally there is no accepta%le proof of s#ch ref#nd=redemption of
K4)D(s %y the two companies to the in"estors. -herefore, we find no
reason to accept per se, that any s#ch redemption was act#ally made.
K#r reasons for the same, are %eing narrated hereafter. 1hen 2I<;)B
was re?#ired to disclose, the so#rces from which, it had made payments
%y way of redemption to the K4)D(s holders, the following so#rces were
disclosed:-
<#pees
(In )rores)
1. 2ahara )redit )o-operati"e 2ociety Btd. 13,3,,.15
. 2ahara India )ommercial )orporation Bimited 4354.!!
3. 2ahara U 2hop 35.3
4. Eeta: )ity &omes Btd. 1@.43
3. Eirit )ity &omes Btd. 44.!3
Bi:ewise, when similar information a%o#t redemptions was so#ght from
2&I)B, the following so#rces were disclosed:-
1hen as:ed a%o#t the manner in which the aforesaid companies, had
forwarded the a%o"e mentioned payments to the two companies, the
response was, that the a%o"e amo#nts were ne"er released to the two
companies. -he case set #p was, that the amo#nts were transferred to
<#pees
(In )rores)
1. 2I))B 46@.!!
. 2ahara U 2hop 411.@!
Page 150
13!
2ahara India (4irm). 1hen as:ed to e.plain the manner in which the
companies had forwarded the f#nds to 2ahara India (4irm), the s#%mission
was, that the companies had collected the f#nds %y way of cash, and had
forwarded the same to 2ahara India (4irm), %y cash. +nd 2ahara India
(4irm) had then directly made ref#nds to the in"estors. 1hen proof of the
same was so#ght, the s#%mission ad"anced on %ehalf of the two
companies was, that the a%o"e transfers were not made thro#gh %an:ing
channels, and therefore %an:ing transactions were not a"aila%le to
esta%lish the same. 1hen as:ed how the amo#nts were dis%#rsed to the
in"estors concerned, it was s#%mitted, that a%o#t @3O of the a%o"e
payments to the in"estors, were also made %y way of cash. -o
demonstrate the receipts and payments of the f#nds %y way of cash,
learned co#nsel representing the contemnors (incl#ding the petitioner
herein), in"ited o#r attention to the %oo:s of acco#nts, which had %een d#ly
a#dited. -his according to learned co#nsel, was proof of the transactions
#nder reference. -he a%o"e e.planation may seem to %e accepta%le to
the contemnors, %#t o#r "iew is ?#ite the con"erse. It is not possi%le for #s
to accept, that the f#nds amo#nting to tho#sands of crores co#ld ha"e
%een transacted %y way of cash. -he credi%ility of the %oo:s of acco#nts
relied #pon %y the two companies has %een dealt with separately
hereinafter.
11,. 1e had also made efforts to o%tain details in respect of redemption
from the two companies, after >r. +r"ind Datar, learned 2enior )o#nsel
Page 151
131
appearing for the 2;8I, informed this )o#rt, that the contemnors incl#ding
the petitioner herein, had %een asserting that they had ref#nded <s.16,443
crores (appro.imately) in case of 2I<;)B and <s.3,44 crores
(appro.imately) in case of 2&I)B, %#t had not gi"en any details, nor
prod#ced any rele"ant record, to show the so#rce from which they had got
the a%o"e moneys for repayment. -his information, according to >r.
Datar, had %een so#ght %y the 2;8I from the alleged contemnors thro#gh
a letter dated 5.3.!13. 8ased on the a%o"e prayer, we passed the
following order on 11.1.!13:-
&eard co#nsel on either side.
4ollowing o#r orders dated 5.1!.!13, 1.11.!13 and 1.11.!13,
>r. ).+. 2#ndaram, learned senior co#nsel, has ta:en #s thro#gh
+nne.#re-+, filed alongwith I+ no. 5 of !13, which gi"es details of
"ario#s properties which the alleged contemnors ha"e agreed to
offer to 2;8I. <eference was specifically made to properties
mentioned at Item nos. ,5, ,@ and 6!, which, according to >r.
2#ndaram, wo#ld fetch a "al#e of more than <s.11,!!! crores.
>r. +r"ind Datar, learned 2enior )o#nsel appearing for the 2;8I,
prayed for some time to "erify the same as well as the "al#ation
reports filed along with the I+ in s#pport of that prayer. &owe"er, he
s#%mitted that if it is the stand of the alleged contemnors that they
had ref#nded the amo#nts (<s.16443 crores appro.imately in case
of 2I<;)B and <s.344 crores appro.imately in case of 2&I)B),
then they sho#ld prod#ce the rele"ant records, d#ly certified %y a
competent a#thority which is accepta%le in a )o#rt of law, indicating
the so#rces from which they got the money for repayment, as
re?#ested "ide 2;8I(s letter dated >ay 5, !13.
'#t #p on 7an#ary !@, !14 at .!! p.m.*
(emphasis is o#rs)
116. -he fact that the companies had not f#rnished the a%o"e details,
was %ro#ght to o#r notice %y >r. +r"ind Datar on @.1.!14. 8#t the
a#dacity and the fearlessness of the two companies is apparent, from the
Page 152
13
reason e.pressed to this )o#rt, for not f#rnishing the a%o"e information.
1e were informed, that we had not passed any e.press direction to the
companies, to f#rnish the information, therefore the companies were not
o%liged to pro"ide the information to the 2;8I. Krdinarily, an honest
person wo#ld immediately pro"ide the information so#ght, to o%"iate any
ad"erse impression. >oreo"er, the 2;8I had not only the a#thority, %#t
e"ery reason to see: the said information. -he a%o"e stance adopted %y
the two companies, therefore, prompted #s on @.1.!14 to pass an
e.press order directing the two companies, as also, the alleged
contemnors (incl#ding the present petitioner), to f#rnish the re?#ired
partic#lars. -he order dated @.1.!14 is %eing e.tracted %elow:-
&eard co#nsel on either side.
>r. ).+. 2#ndaram, learned 2enior )o#nsel appearing for one of
the alleged contemnors, s#%mitted that earlier this )o#rt on
Decem%er 11, !13 has only reiterated the s#%mission made %y >r.
+r"ind Datar, learned 2enior )o#nsel appearing for 2;8I, that they
did not disclose the so#rce from which they got money for
repayment, despite 2;8IIs letter dated >ay 5, !13.
>r. 2#ndaram is right in his s#%mission. &owe"er, we feel that it
wo#ld %e appropriate to gi"e a direction of the nat#re stated a%o"e.
+ccordingly, we direct the alleged contemnors to disclose the
complete details and so#rce from which they repaid the amo#nt to
the in"estors as also the manner of ma:ing payments. -hey shall
also disclose the information which 2;8I has so#ght from them from
time to time. 2#ch information shall %e pro"ided to 2;8I and also %e
filed in this )o#rt %y 7an#ary 3, !14.
'#t #p on 7an#ary 5, !14 at .!! p.m.
In the meantime, 2;8I shall "erify the information pro"ided to it %y
the alleged contemnors.*
(emphasis is o#rs)
Page 153
133
If redemption of f#nds had act#ally %een made %y the two companies, they
wo#ld ha"e immediately f#rnished the information so#ght. 9ow that there
was an e.press order to f#rnish the information, room for any e.c#se, was
r#led o#t. 2#rprisingly, the position remained the same. -he two
companies ne"er pro"ided any a#thentic information. -he 2;8I, 2+- and
the 2#preme )o#rt, were re?#ired to accept the fact#m of redemption, /#st
%eca#se the companies were asserting the fact#m of redemption.
115. -o pers#ade the companies once again, to pro"ide the information
so#ght %y the 2;8I, we passed yet another e.plicit order on 5.1.!14.
-he same is %eing e.tracted here#nder:
&eard >r. <am 7ethmalani, learned 2enior )o#nsel and >r. +r"ind
'. Datar, learned 2enior )o#nsel.
>r. Datar s#%mitted that the 2aharas ha"e not disclosed the details
as to when the ref#nd was made. <eference was made to pages ,
to @ of the reply affida"it filed today.
>r. Datar f#rther s#%mitted that the 2;8I re?#ires an e.planation
from 2aharas with regard to the payments made on %ehalf of 2ahara
India <eal ;state )orporation Btd. (2I<;)B) (partnership firm) %y
the following firms, as mentioned %elow:-
<#pees
(In )rores)
1. 2ahara )redit )o-operati"e 2ociety Btd. 13,3,,.15
. 2ahara India )ommercial )orporation
Bimited
4354.!!
3. 2ahara U 2hop 35.3
4. Eeta: )ity &omes Btd. 1@.43
3. Eirit )ity &omes Btd. 44.!3
2imilarly, 2;8I re?#ires 2aharas to show the following payments
made on %ehalf of 2ahara &o#sing In"estment )orporation Btd.
(2&I)B) (partnership firm), %y the following firms, as mentioned
%elow:-
<#pees(In )rores)
Page 154
134
1. 2I))B 46@.!!
. 2ahara U 2hop 411.@!
4#rther, the 2aharas will also pro"ide the %an: statements of the
a%o"e firms showing when the amo#nt was paid to the partnership
firms and s#%se?#ently when and how partnership firm made the
dis%#rsement, as so#ght for %y the 2;8I.
>r. <am 7ethmalani, learned 2enior )o#nsel appearing for the
respondents s#%mitted that he will e.amine the same and come o#t
with a response within a wee:.*
(emphasis is o#rs)
-he a%o"e order is self-e.planatory. -he two companies, as also, the
contemnors incl#ding the present petitioner, were o%"io#sly not pro"iding
the re?#ired %an: statements, e"en tho#gh in +ppeal no. 4@ of !13 filed
%y 2I<;)B %efore the 2+-, and in +ppeal no. 45 filed %y 2&I)B %efore the
2+-, the two companies had committed to f#rnish their %an: acco#nts, to
esta%lish redemption of payments. -he rele"ant paragraph containing the
#nderta:ing gi"en %y 2I<;)B, is %eing e.tracted here#nder:-
(ee) -he +ppellant has in"ested the f#nds of K4)D
as per the details mentioned in the +ffida"it dated !4.!1.!1 of 2hri
8.>. -ripathi filed %efore the &on(%le 2#preme )o#rt in )i"il +ppeal
9o. @533 of !11 which is already on the record of the &on(%le
2#preme )o#rt. 4#rther, it is s#%mitted that in order to ma:e
redemptions to the K4)D holders, the +ppellant had to dispose of
the in"estments. +mo#nts realiCed on s#ch disposal were #tiliCed to
pay the in"estors, on redemption thro#gh 2ahara India-'artnership
4irm to ma:e the redemptions. -he redemptions made to in"estors
are clearly reflected and fo#nd in the 8oo:s of +cco#nts of 2ahara
India. -he +ppellant cra"e lea"e to refer to and rely #pon %an:
acco#nts of 2ahara India as and when prod#ced.*
(emphasis is o#rs)
+n e.actly similar commitment, in e.actly the same words was made %y
2&I)B, in +ppeal no. 45 of !13, filed %y it %efore the 2+-. ;"en tho#gh
the stance adopted %y the two companies was, that "erification of
redemptions of K4)D(s co#ld %e esta%lished from %an: acco#nts of
Page 155
133
2ahara India Bimited, the said %an: acco#nts depicting the said
transactions were ne"er disclosed.
11@. +ll that needs to %e noticed is, that in f#rtherance of the directions
iss#ed %y this )o#rt, >r. 2. Danesh, learned 2enior )o#nsel, d#ring the
co#rse of hearing, prod#ced general ledger entries of 2I<;)B and 2&I)B,
to a#thenticate the receipt of f#nds, o#t of which ref#nds were made. -he
general ledger entries %ro#ght to o#r notice merely indicated large
amo#nts of inflow=o#tflow of cash. 1e had wished to e.tract the same
herein. -he entire general ledger entries, placed for the consideration of
the )o#rt to demonstrate receipt of f#nds, o#t of which redemptions were
made, wo#ld ha"e e.posed the companies( o#trageo#s defence. 8#t
since the a%o"e entries wo#ld ma:e this /#dgment #nnecessarily %#l:y, we
considered it /#st and appropriate, to e.tract entries of only one day, i.e., of
31.3.!1. + day pic:ed #p randomly, witho#t any comprehension, of its
e"ent#al effect. -he date was chosen only with one o%/ecti"e, namely, it
fell within the period d#ring which the two companies claim to ha"e made
cash ref#nds to the in"estors. -he same are accordingly reprod#ced
%elow:-
2+&+<+ I9DI+ <;+B ;2-+-; )K<'K<+-IK9 B-D.
,
-&
4BKK<, )+2& P 8+9E
D;9;<+B B;DD;<
AK). D+-; AK).
9K.
)&U.
9K.
9+<<+-IK9 K4 -&; AK0)&;< 208
)KD;
D;8I- )<;DI-
31=!3=!1 3!!!!@
@8A
!65 )&;U0; D;'K2I-;D 8N 2+&+<+
I9DI+
1,4!,!!,!!!.!!
31=!3=!1 3!!!14
@7A
+>-. K4 ;--+R '+ID -&. 2+&+<+
I9DI+
11,!3,,!.!!
31=!3=!1 3!!!13
!7A
+>-. K4 ;--+R '+ID -&. 2+&+<+
I9DI+
11,11,31.!!
Page 156
13,
31=!3=!1 3!!!13
37A
8;I9D 7A 9K. 3!!!1! D-. ,!31
1<K9DBN )< -K I920<+9); -K
A;&I)B; I92-;+D K4 2I 9K1
<;)-I4I;D +9D -<4 -K1+<D2
I920<+9); +>-. D;D0)-;D
4<K> 2I
4!,1,.!!
31=!3=!1 3!!!1,
17A
8;I9D 8A 9K 3!!!!3,! D-
1!!3!1 1<K9DBN )< -K 2I
I92-;+D K4 209D<N +DA 43!1!@
33,63,@3.!!
'+D; -K-+B 33,63,@3.!! 33,,1,6,661.!!
)+<<I;D 4K<1+<D ,5,,43,!4,15.65 3!,43,15,43,@63.5
RRR RRR RRR RRR RRR
2+&+<+ I9DI+ <;+B ;2-+-; )K<'K<+-IK9 B-D.
,
-&
4BKK<, )+2& P 8+9E
D;9;<+B B;DD;<
AK). D+-; AK).
9K.
)&U.
9K.
9+<<+-IK9 K4 -&; AK0)&;< 208
)KD;
D;8I- )<;DI-
8<K0D&- 4K<1+<D ,5,,43,!4,15.65 3!,43,15,43,@63.5
31=!3=!1 3!!!1
537A
8;I9D +>- K4 2;)0<I-N 409D
'+ID >2 2) N+ D+A -&<K0D& )A
9K 3!!!33! D- 31!31
E24!!!
(;>'BK
N;;
>I22I9D
)
,!!!.!!
31=!3=!1 3!!!1
567A
8;I9D +>K09- K4 )K>>I22IK9
'+ID D0<I9D -&; >=K >+N-!1
,,466.!!
31=!3=!1 3!!!1
5@7A
8;I9D <;9- K4 1+<; &K02;2
'<KAID;D 4K< -&; >=K >+N-
!1 +2 ';< +D<;;>;9-
,,61,63,.!!
31=!3=!1 3!!!1
@17A
8;I9D +>K09- D;'K2I-;D 8N
2+&+<+ I9DI+ ;>'BKN;;(2 P
;>'BKN;<(2 )K9-<I80-IK9 '4,
';92IK9, +D> )&D K9 '4, ;DBI
4K< -&; >=K +'<-!1
13,4,!1.!!
31=!3=!1 3!!!1
@,7A
8;I9D +>K09- K4 ;DBI
)&+<D;2 4K< -&; >=K >+N,
!1 '+ID 8N 2+&+<+ I9DI+
,5!.!!
31=!3=!1 3!!!
!17A
8;I9D +>- <;);IA+8B; 4<K>
2I)KB +2 ';< -;<>I9+-IK9
+D<;;>;9- D+-;D 11.!3.!1
-<4 -K 2+&+<+ I9DI+ +2 ';<
B;--;< D+-;D 4.!3.!1
1@,4,,3,436.!!
31=!3=!1 3!!!
!37A
8;I9D +>- <;);IA+8B; 4<K>
2I)KB +2 ';< -;<>I9+-IK9
+D<;;>;9- D+-;D 11.!3.!1
-<4 -K 2+&+<+ I9DI+ +2 ';<
B;--;< D+-;D 3.!3.!1
44,!4,5,,1!.!!
31=!3=!1 3!!!
!67A
8;I9D +>K09- <;);IA+8B;
4<K> 2U20<'B +D+I92-
+D<;;>;9- D-. 31.!3.1 -<4D.
-K 2+&+<+ I9DI+ +2 ';< B;--;<
D-. 31.!3.1 P +DA. K4 4 208I
+B2K -<4
3,36,56,16,!,,.!!
31=!3=!1 3!!!
!67A
8;I9D +>K09- <;);IA+8B;
4<K> 2U20<'B +D+I92-
+D<;;>;9- D-. 31.!3.1 -<4D.
-K 2+&+<+ I9D+ +2 ';< B;--;<
D-. 31.!3.1 P +DA K4 4 208I
+B2K -<4.
4,36,14!.!!
31=!3=!1 3!!!
117A
8;I9D +>- <;);IA+8B; 4<K>
2+&+<+ I9DI+ +2 ';< 2I<;)B
B;--;< D+-;D 11.!3.1
14,36,!!,!!,!!!.!!
Page 157
136
31=!3=!1 3!!!
137A
8;I9D +>K09- <;);IA+8B;
4<K> 2))2B -K1+<D2 2+B; K4
2&+<;2 9K1 <;);IA+8B; 4<K>
2+&+<+ I9DI+ +2 ';< B;-;<
;9)BD.
1,33,,,,15,11,6!.!!
31=!3=!1 3!!!
137A
8;I9D +>- K4 214 D;D0)-;D
D0<I9D -&; >=K >+N-1
1!,4,4.!!
31=!3=!1 3!!!
1,7A
8;I9D +>- K4 4I9; P ';9+B-I;2
D;D0)-;D 4<K> 1K<E;< I9
>=K >+N-!1
3!.!!
31=!3=!1 3!!!
167A
8;I9D +>- D;D0)-;D -K1+<D2
+'9+ '+<I1+< D0<I9D -&; >=K
>+N-1
4!.!!
31=!3=!1 3!!!
157A
8;I9D +>- K4 2214 D;D0)-;D
D0<I9D -&; >=K >+N-1
35.!!
31=!3=!1 3!!!
1@7A
8;I9D +>K09- <;)KA;<;D
4<K> 4.1. D0<I9D -&; >=K >+N-
1
,!.!!
31=!3=!1 3!!!
!7A
8;I9D 2;<AI); )&D <;);IA;D
I9 -&; >=K >+N-!1
45.!!
31=!3=!1 3!!!
17A
8;I9D +>K09- <;);IA;D 4<K>
)02-K>;< D0<I9D -&; >=K
>+N-1
36,,@,63!.!!
31=!3=!1 '+D; -K-+B 1,34,!3,13,1@,3@3.!! ,3,!64.!!
31=!3=!1 )+<<I;D 4K<1+<D 1,6,,@1,,!,3,61.65 3!,43,4!,,@,!4@.5
RRR RRR RRR RRR RRR
2+&+<+ I9DI+ <;+B ;2-+-; )K<'K<+-IK9 B-D.
,
-&
4BKK<, )+2& P 8+9E
D;9;<+B B;DD;<
AK). D+-; AK).
9K.
)&U.
9K.
9+<<+-IK9 K4 -&; AK0)&;< 208
)KD;
D;8I- )<;DI-
8<K0D&- 4K<1+<D 1,6,,@1,,!,3,61.65 3!,43,4!,,@,!4@.5
31=!3=!1 3!!!
7A
8;I9D +>K0- <;);IA;D 4<K>
)02-K>;< D0<I9D -&; >=K
>+N-1
1,!5,@,,.!!
31=!3=!1 3!!!
37A
8;I9D +>K09- <;);IA;D 4<K>
)02-K>;< D0<I9D -&; >=K
>+N-1
5,,6,3.!!
31=!3=!1 3!!!
47A
8;I9D +>K09- <;);IA;D 4<K>
)02-K>;< D0<I9D -&; >=K
>+N-1
4@,346.!!
31=!3=!1 3!!!
37A
8;I9D +>K09- <;);IA;D 4<K>
4.1. D0<I9D -&; >=K >+N-1
11.!!
31=!3=!1 3!!!
,7A
8;I9D +>K09- '+ID -K 8K9D
&KBD;<2 D0<I9D -&; >=K >+N-
1
36,3@,5,,43,63!.!!
31=!3=!1 3!!!
67A
8;I9D I9--. '+ID -K 8K9D
&KBD;<2 D0<I9D -&; >=K >+N-
1
1,,41,3!,35@.!!
31=!3=!1 3!!!
57A
8;I9D +>- '+ID -K 8K9D
&KBD;< -K1+<D2 BK+9
+D+I92- K4)D D0<I9D -&; >=K
>+N-1
3@,6,6@,@6!.!!
31=!3=!1 3!!!
@7A
8;I9D +>- <;)KA;<;D 4<K>
8K9D &KBD;<2 D0<I9D -&; >=K
>+N-1 -K1+<D2 BK+9 DIA;9
+D+I92- K4)D
1,13,!3,45,!3@.!!
31=!3=!1 3!!!
3!7A
8;I9D I9-- <;)KA;<;D 4<K>
8K9D &KBD;<2 D0<I9D -&; >=K
>+N-1 -K1+<D2 BK+9 DIA;9
+D+I92- K4)D
13,33,3,,53.!!
31=!3=!1 3!!!
317A
8;I9D -D2 D;D0)-;D D0<I9D
-&; >=K >+N-1 +D+I92- I9--
1,3!,!3,56,.!!
Page 158
135
'+ID -K 8K9D &KBD;<
31=!3=!1 3!!!
37A
8;I9D +>K09- K4 )K>>I22IK9
'+ID -K K-&;< -&+9 2I<;)B
2-+44
3!,4,@54.!!
31=!3=!1 3!!!
347A
8;I9D )K>>I22IK9 '+ID D0<I9D
-&; >=K >+N-1
1,,1,16,!3.!!
31=!3=!1 3!!!
337A
8;I9D +>K09- K4 D;+-& &;B'
'+ID -K 8K9D &KBD;<
6,!!.!!
(the sole che?#e entry has %een #nderlined, all the remaining entries are cash
entries).
+ per#sal of the a%o"e general ledger entries re"eals /#st one che?#e
entry, and enormo#s inflow=o#tflow of f#nds %y way of cash. Kn a single
day (31.3.!1), the cash inflow is shown as <s.13,333,5@,,3,,!1.!! (i.e.
more than r#pees fifteen tho#sand fi"e h#ndred and thirty fi"e crores).
>ind %oggling inflows, /#st %y cash. >ost certainly not accepta%le as tr#e,
#nless there is a#thentic s#pporting material. )an these general ledger
entries e"er %e the %asis for accepting, that the entire cash transactions
were correctG 1e do not thin: so. >r. 2. Danesh, learned 2enior )o#nsel
for the petitioner, was s#rprisingly in agreement with #s. 8#t his pointed
s#%mission was, that the a%o"e entries ass#med a#thenticity, %eca#se
they had %een d#ly a#dited %y a firm of )hartered +cco#ntants. K#r
attention was in"ited to the two certificates iss#ed %y the firm of )hartered
+cco#ntants, %oth dated 31.1.!14, which were placed on the record of
the case %y the petitioner, for o#r consideration. -he certificate pertaining
to 2I<;)B is %eing reprod#ced here#nder:-
)+ D; P 8ose
in association with +2& +ssociates 0E
5=, Eiran 2an:ar <oy <oad,
nd
4loor
<oom no. 1 P 15, Eol:ata M 6!! !!1
'h.: 453!3@. 4a.: @1-33-43-45,4
;-mail: d#rgadasQcal3."snl.net.in
Page 159
13@
1, Darstin 'lace, 0nit 1;, K<8I-,
Eol:ata M 6!! !!1. 'hone: 45 644
-K 1&K> I- >+N )K9);<9
1e, >=s. D; P 8ose, )hartered +cco#ntants, 2tat#tory +#ditor of >=s.
2ahara India <eal ;state )orporation Bimited, registered office at 2ahara
India 8hawan, 1, Eapoorthala )omple., +ligan/, B#c:now M ,!4, ha"e
performed the following proced#res in carrying o#t the 2pecial
+ssignment:
1. 1e ha"e e.amined %oo:s and records pro"ided to #s and also
o%tained the rele"ant information and e.planation which to the %est
of o#r :nowledge and %elief were necessary to gi"e this certificate.
. 1e ha"e relied #pon the system and proced#re of the company,
%oo:s, records, doc#ments, %an: statements, clarifications,
representations, information and statements made a"aila%le to #s
and also done "erification and scr#tiny of the same.
8ased on the a%o"e proced#res and "erification, we certify that >=s.
2ahara Indian <eal ;state )orporation Bimited had s#%scription of
Kptionally 4#lly )on"erti%le De%ent#res of appro.imately <s.645.63
crores (co"ering ,@,344 control n#m%ers) thro#gh che?#e. 4#rther till
>arch, !13, <s.1,131.! crores (co"ering ,,6!,,66 control n#m%ers)
were paid to the Kptionally 4#lly )on"erti%le De%ent#re holders on
acco#nt of redemption=pre-redemption thro#gh che?#e.
4or De P 8ose
)hartered +cco#ntants
4irm <egn. 9o. 3!163;
Date: 31.!1.!14 2d=-
'lace: Eol:ata (2#%rata De)
'artner
>em%ership no. !34@,*
(emphasis is o#rs)
-he second certificate pertaining to 2&I)B is also %eing reprod#ced
here#nder:-
)+ D; P 8ose
in association with +2& +ssociates 0E
5=, Eiran 2an:ar <oy <oad,
nd
4loor
<oom no. 1 P 15, Eol:ata M 6!! !!1
Page 160
1,!
'h.: 453!3@. 4a.: @1-33-43-45,4
;-mail: d#rgadasQcal3."snl.net.in
1, Darstin 'lace, 0nit 1;, K<8I-,
Eol:ata M 6!! !!1. 'hone: 45 644
-K 1&K> I- >+N )K9);<9
1e, >=s. D; P 8ose, )hartered +cco#ntants, 2tat#tory +#ditor of >=s.
2ahara &o#sing In"estment )orporation Bimited, registered office at
2ahara India 'oint, )-2-4! P 44, 2.A. <oad, Doregaon (1est), >#m%ai M
4!! 1!4, >aharashtra ha"e performed the following proced#res in
carrying o#t the 2pecial +ssignment:
1. 1e ha"e e.amined %oo:s and records pro"ided to #s and also
o%tained the rele"ant information and e.planation which to the %est
of o#r :nowledge and %elief were necessary to gi"e this certificate.
. 1e ha"e relied #pon the system and proced#re of the company,
%oo:s, records, doc#ments, %an: statements, clarifications,
representations, information and statements made a"aila%le to #s
and also done "erification and scr#tiny of the same.
8ased on the a%o"e proced#res and "erification, we certify that >=s.
2ahara &o#sing In"estment )orporation Bimited had s#%scription of
Kptionally 4#lly )on"erti%le De%ent#res of appro.imately <s.34.,
crores (co"ering @1,@6! control n#m%ers) thro#gh che?#e. 4#rther till
>arch, !13, <s.14.,, crores (co"ering 1!,3!1 control n#m%ers) were
paid to the Kptionally 4#lly )on"erti%le De%ent#re holders on acco#nt of
redemption=pre-redemption thro#gh che?#e.
4or De P 8ose
)hartered +cco#ntants
4irm <egn. 9o. 3!163;
Date: 31.!1.!14 2d=-
'lace: Eol:ata (2#%rata De)
'artner
>em%ership no. !34@,*
(emphasis is o#rs)
+ per#sal of the a%o"e certificates re"eals, that the a%o"e firm of
)hartered +cco#ntants, confirmed the redemption of K4)D(s which were
made %y way of che?#e only. 8oth the a%o"e certificates are silent on the
redemptions made %y way of cash. -he firm of )hartered +cco#ntants,
therefore, did not choose to confirm the redemption of K4)D(s made %y
way of cash. -his action m#st %e deemed to %e conscio#s, otherwise it
Page 161
1,1
was not necessary e"en to confirm the redemptions made %y way of
che?#e. It was the clear contention of >r. 2. Danesh, learned 2enior
)o#nsel %efore #s, that appro.imately @3O of the K4)D(s were ref#nded
%y cash, and only 3O of the K4)D(s were ref#nded %y way of che?#es.
;"en if the certificates iss#ed %y the firm of )hartered +cco#ntants were to
%e accepted to %e correct (e"en tho#gh there seems to %e no /#stifia%le
%asis for the same), the a#thenticity of the general ledger entries was
e.pressly only in respect of payments made %y the two companies, %y way
of che?#e. -here is no a#thenticity whatsoe"er, in respect of payments
made %y way of cash. It is, therefore, not possi%le for #s, on the %asis of
the record made a"aila%le to #s to accept, that any rele"ant material had
%een made a"aila%le to #s till date. 1e wish to e.press, that no other
record, %esides the a%o"e general ledger entries, was %ro#ght to o#r
notice, to demonstrate the fact#m of alleged redemptions. -herefore, e"en
a prima facie finding cannot %e recorded, that the two companies had
made a"aila%le to this )o#rt, any rele"ant material, wherefrom an
inference co#ld %e drawn, that any redemption had e"er %een made to the
in"estors, i.e., to the K4)D holders.
1!. 1e ha"e e.amined the a%o"e iss#e of redemptions only for the
petitioner(s satisfaction. +s a matter of law, it does not lie in the mo#th of
the contemnors, to agitate the iss#e of redemption. Insofar as the instant
aspect of the matter is concerned, it is necessary to highlight the fact, that
the order dated 31.5.!1 directed the two companies, to deposit with the
Page 162
1,
2;8I, the entire redeema%le amo#nt along with interest at the rate of 13O.
-he a%o"e deposit had to %e made within a period of three months, i.e., %y
3!.11.!1. -he case set #p %y the two companies has %een, that
2I<;)B had already ref#nded <s.16,443 crores to the in"estors, and
2&I)B had li:ewise ref#nded <s.3,44 crores. -he two companies
therefore assert, that they cannot %e re?#ired to ma:e the same payment
to the in"estors, for the second time. It wo#ld %e pertinent to mention, that
the two companies had approached this )o#rt %y filing )i"il +ppeal no.
5,43 of !1 (and 1rit 'etition ()i"il) no. 36 of !1). In the said
proceedings, the two companies had so#ght e.emption from depositing
the amo#nts, which they had allegedly redeemed. -he three-7#dge
Di"ision 8ench, which heard the matter(s), did not accept the redemption
theory pro/ected %y the two companies. +ccordingly, the prayer made %y
the two companies in )i"il +ppeal no.5,43 of !1 (and 1rit 'etition
()i"il) no. 36 of !1) for ded#ction of the a%o"e amo#nt, was not
accepted %y this )o#rt, when it passed the final order dated 3.1.!1.
+ccordingly, the companies were directed to deposit the entire %alance
amo#nt of <s.16,4!! crores. It is, therefore imperati"e to concl#de, that
the iss#e of ded#ction of allegedly redeemed f#nds, stood concl#ded
against the two companies, when this )o#rt passed its order dated
3.1.!1. -his plea is no longer a"aila%le to the two companies, in law.
-o contin#e to harp on the alleged redemptions, is clearly a
misrepresentation, specially when the order dated 3.1.!1 has attained
finality.
Page 163
1,3
11. -herefore, "iewed from any angle, there is no s#%stance in the
contention ad"anced on %ehalf of the two companies, that the moneys
paya%le to the in"estors had %een ref#nded to them. +ccordingly, there is
no merit in the prayer, that while ma:ing payments in compliance with this
)o#rt(s orders dated 31.5.!1 and 3.1.!1, the two companies were
entitled to ma:e ded#ctions of <s.16,443 crores (insofar as 2I<;)B is
concerned) and <s.3,44 crores (insofar as 2&I)B is concerned). 8e that
as it may, we ha"e still retained a safety "al"e, inasm#ch as, the 2;8I has
%een directed to e.amine the a#thenticity of the doc#ments prod#ced %y
the two companies, and in case the 2;8I finds, that redemptions ha"e
act#ally %een made, the two companies will %e ref#nded the amo#nts,
e?#al to the redemptions fo#nd to ha"e %een gen#inely made.
1. 1e are pers#aded to record, that either the s#%missions made to
this )o#rt on the s#%/ect of ref#nds made %y the two companies were
false$ or the present pro/ection of the two companies of their ina%ility to pay
the in"estors is false. Kne learned 2enior )o#nsel for the petitioner, >r.
2. Danesh, d#ring the co#rse of his narration, in order to s#%stantiate the
redemption of K4)D(s to the t#ne of tho#sands of crores of r#pees,
referred to the collection of tho#sands of crores of r#pees in s#ccessi"e
months, d#ring the year !1, from the acco#nt %oo:s of the two
companies. Kn a single day (31.3.!1), the cash inflow is shown as
<s.13,333,5@,,3,,!1.!! (i.e. more than <#pees fifteen tho#sand fi"e
h#ndred and thirty fi"e crores). -his was done %y collecting f#nds from all
Page 164
1,4
companies (and firms, #nder the conglomerate) of the 2ahara Dro#p. If it
was possi%le to do that, at that /#nct#re, in order to redeem the payments
claimed %y in"estors, we fail to #nderstand why the same cannot %e done
now. 2pecially when, as already noticed hereina%o"e, the %oo:
"al#e=mar:et "al#e of the properties of the 2ahara Dro#p conglomerate, is
to the t#ne of <s.1,3,3!! crores (as per its own we%site). It is after all,
close to years (a%o#t ! months) since the order dated 31.5.!1 was
prono#nced, and close to 1S years (a%o#t 16 months) since the order
dated 3.1.!1 was passed.
A. T(* :$+,%$+,$"+5+%' &/ %(* 1#*.*,% 1*%+%+&,
13. +t the "ery commencement of hearing, >r. +r"ind Datar, learned
2enior )o#nsel representing the 2;8I, raised a preliminary o%/ection. &e
contested the "ery maintaina%ility of the instant petition. &e in"ited o#r
attention to the heading of the petition, which is e.tracted here#nder:
';-I-IK9 09D;< -&; 'K1;<2 K4 -&I2 )K0<- -K
+)- ;R D;8I-K 702-I-I+; + 'K1;< ;R'<;22BN
<;)KD9IT;D 8N -&; +0-&K<I-I;2 >;9-IK9;D I9 -&;
'+<+ L+( K4 -&I2 ';-I-IK9.*
It was his "ehement contention, that the instant petition does not disclose
the pro"isions #nder which it had %een filed. In this %ehalf, it was so#ght to
%e asserted, that the right to maintain a petition can only emerge from a
stat#tory pro"ision, or a constit#tional mandate. It was also s#%mitted that
neither a ma.im of law, nor a decision of a )o#rt, co#ld create /#risdiction
in a )o#rt.
Page 165
1,3
14. -he o%/ection of /#risdiction, raised %y the learned 2enior )o#nsel
representing the 2;8I, met with the strangest possi%le response from the
learned 2enior )o#nsel representing the petitioner. It was a response of a
nat#re which we had not e.perienced in o#r professional careers as
+d"ocates, or e"en in appro.imately one and a half decades of ser"ice
rendered as 7#dges. It is necessary to point o#t, that when the a%o"e
o%/ection was raised, we had informed learned 2enior )o#nsel
representing the 2;8I, that we wo#ld not stand on technicality, inasm#ch
as, if the instant petition was maintaina%le #nder one or the other pro"ision
of law, we wo#ld read that pro"ision in the title of the present petition, e"en
tho#gh the same had not %een e.pressly mentioned therein.
13. 1hen confronted with the o%/ection of maintaina%ility, >r. <am
7ethmalani, learned 2enior )o#nsel, adopted the positi"e stance, that
there was no deficiency in the title of the petition. In his "iew, the instant
petition was maintaina%le #nder the ma.im of e0 debito 4ustitiae, a power
which has %een e.pressly recogniCed %y this )o#rt in +.<. +nt#lay(s case
(s#pra). -he decision in +.<. +n#lay(s case (s#pra) was rendered %y a
)onstit#tion 8ench of se"en &on(%le 7#dges of this )o#rt. +ccording to
>r. <am 7ethmalani, in the a%o"e /#dgment, the proposition can"assed %y
him, had %een #pheld %y a ma/ority of 3:. &e pointedly asserted, that we
sho#ld record his s#%mission to the effect, that he had e"er contended that
the instant petition was maintaina%le either #nder +rticle 3 of the
)onstit#tion of India, or /ointly #nder +rticles 1@ and 14 of the
Page 166
1,,
)onstit#tion of India. In fact he s#%mitted, that he had a#thored the
present criminal writ petition. +nd in the process, he had e.tensi"ely
researched on the iss#e of /#risdiction, %efore filing this petition. &is
#nam%ig#o#s assertion on the s#%/ect of /#risdiction was, that the petition
had not %een filed #nder a legislati"e enactment of the )onstit#tion of
India. It has %een filed #nder the ma.im e0 debito 4ustitiae.
1,. In contradistinction to the s#%missions ad"anced at the hands of >r.
<am 7ethmalani, >r. ).+. 2#ndaram, learned 2enior )o#nsel, who also
represented the petitioner, in"ited o#r attention to the prayers made in the
instant petition. -o #nderstand the tenor of his s#%mission, the prayers
made in the petition are %eing e.tracted here#nder:
'<+N;<
It is therefore most gracio#sly prayed that this &on(%le )o#rt may %e
pleased to:-
(a) Declare the order dated !4.!3.!14 as "oid, n#llity and
non-est in the eyes of law$
(%) Declare that the incarceration and the c#stody of the
'etitioner are illegal which sho#ld %e terminated forthwith$
(c) iss#e s#ch other writ in the nat#re of &a%eas or other writs,
order or direction for release of the 'etitioner from the
illegal c#stody$
(d) pass s#ch f#rther orders as this &on(%le )o#rt may deem
fit and proper in the facts and circ#mstances of the case.*
<eferring to prayer (a) e.tracted a%o"e, it was s#%mitted, that the
declaration so#ght in the instant prayer wo#ld %e in the nat#re of a writ of
certiorari. <eferring to cla#se (%) of the prayer cla#se, it was contended,
that the declaration so#ght therein wo#ld %e in the nat#re of a writ of
Page 167
1,6
certiorarified mandam#s. Insofar as prayer cla#se (c) is concerned, it was
asserted, that the prayer so#ght was in the nat#re of a writ of ha%eas
corp#s. In the a%o"e "iew of the matter, it was the s#%mission of >r. ).+.
2#ndaram, that the /#risdiction of this )o#rt to iss#e writs, co#ld %e
in"o:ed only #nder +rticle 3 of the )onstit#tion of India. +s s#ch, it was
his s#%mission, that the instant petition %e treated as ha"ing %een filed
#nder +rticle 3 of the )onstit#tion of India. In other words, the contention
of >r. ).+. 2#ndaram, learned 2enior )o#nsel was, that the title of the
petition %e read %y incl#ding +rticle 3 of the )onstit#tion of India therein.
In fact, it was the pointed s#%mission of the learned co#nsel, that he
sho#ld not %e ta:en as ha"ing can"assed, that the instant petition was
maintaina%le on acco#nt of the /#risdiction e"ol"ed thro#gh the /#dgment
rendered %y this )o#rt in +.<. +nt#lay(s case (s#pra). &e also contended,
that he sho#ld not %e ta:en to ha"e can"assed, that the present petition is
maintaina%le #nder +rticle 1@ read with +rticle 14 of the )onstit#tion of
India.
16. Dr. <a/ee" Dhawan, was yet another learned 2enior )o#nsel, who
represented the petitioner. &is candid contention was, that he co#ld not
accept the s#%missions on the s#%/ect of /#risdiction, as had %een
can"assed %y his colleag#es, >r. <am 7ethmalani and >r. ).+.
2#ndaram. It was his assertion, that the prayers made in the instant
petition co#ld %e so#ght %y the petitioner, only #nder +rticles 1@ and 14
of the )onstit#tion of India. +s s#ch, he s#%mitted that the title of this
Page 168
1,5
petition %e read %y incl#ding therein, +rticles 1@ and 14 of the
)onstit#tion of India.
15. It is apparent from the s#%missions ad"anced at the hands of the
learned co#nsel for the petitioner, that e"en learned co#nsel representing
the petitioner, were not s#re a%o#t the maintaina%ility of the instant
petition. ;ach of them while adopted an independent stance, and was
#nwilling to accept the position adopted %y his other two colleag#es. In the
a%o"e "iew of the matter, we wo#ld ha"e %een happy to follow a simple
co#rse. -o re/ect the petition(s maintaina%ility, on the %asis of the ma/ority
"iew, e.pressed %y the learned co#nsel representing the petitioner himself.
2#ch re/ection wo#ld %e, %y a ma/ority of :1. Bearned co#nsel were
pro%a%ly independently conscio#s of the legal position, that the petition
was not maintaina%le. 0nfort#nately, this co#rse is not open to a )o#rt of
law. 1e will ha"e to e.amine the maintaina%ility of the petition, %y ta:ing
into consideration all the perspecti"es presented %efore #s. -he %#rden
will nat#rally %e three-folds than the #s#al. &owe"er, :eeping in mind the
eminence of the learned 2enior )o#nsel who represented the petitioner, it
is not possi%le for #s, at first %l#sh, to draw any s#ch inference. 1e shall
endea"o#r to independently determine the iss#e of maintaina%ility,
can"assed at the hands of all the learned co#nsel representing the
petitioner. In case we arri"e at the concl#sion, that the s#%mission of any
one of the learned co#nsel is accepta%le, we wo#ld treat the instant
petition as maintaina%le.
Page 169
1,@
1@. 4irst and foremost, on the s#%/ect of maintaina%ility, we shall
determine the "eracity of the s#%missions ad"anced at the hands of >r.
<am 7ethmalani, 2enior +d"ocate. -o s#%stantiate his contention learned
co#nsel placed reliance, only on the /#dgment rendered %y this )o#rt in
+.<. +nt#lay(s case (s#pra). 8efore e.amining the decision rendered %y
this )o#rt in the a%o"e /#dgment, we shall s#mmarise the fact#al conte.t,
in which the aforesaid /#dgment was rendered. -he appellant in the a%o"e
case, +.<. +nt#lay was the )hief >inister of the 2tate of >aharashtra from
1@5! to 1@5. <.2. 9aya: %elonged to a ri"al political party. <.2. 9aya:
filed a complaint %efore the +dditional >etropolitan >agistrate, 8om%ay,
#nder 2ections 1,1 and 1,3 of the Indian 'enal )ode and 2ection 3 of the
're"ention of )orr#ption +ct, as also, #nder 2ections 354 and 4! read
with 2ections 1!@ and 1!-8 of the Indian 'enal )ode. -he complaint was
not only against the appellant +.<. +nt#lay, %#t also against other :nown
and #n:nown persons. 2ince sanction for prosec#tion had not %een
granted, the concerned >agistrate ref#sed to ta:e cogniCance. -o assail
the order of the >agistrate, a criminal re"ision application came to %e filed.
In the meantime, the Do"ernor of the 2tate of >aharashtra accorded
sanction. <.2. 9aya: there#pon, filed a fresh complaint in the )o#rt of the
2pecial 7#dge, 8om%ay, alleging the commission of the same offences,
which were the s#%/ect matter of the complaint earlier filed %y him, %efore
the >agistrate. -he 2pecial 7#dge, 8om%ay, iss#ed s#mmons to the
appellant M +.<. +nt#lay. Kn entering appearance +.<. +nt#lay adopted
the stance, that the 2pecial 7#dge, 8om%ay, had no /#risdiction to entertain
Page 170
16!
the complaint. 4or the aforesaid o%/ection, he placed reliance on 2ection 6
of the )riminal Baw +mendment +ct, 1@3. &e also asserted, that
cogniCance co#ld not %e ta:en %y the a%o"e )o#rt, on the %asis of a
pri"ate complaint. -he 2pecial 7#dge, 8om%ay, o"err#led the o%/ections
raised %y +.<. +nt#lay, and listed the matter for recording e"idence of the
complainant(s witnesses. -he aforesaid order of the 2pecial 7#dge,
8om%ay, was assailed %y +.<. +nt#lay, %y filing a criminal re"ision petition,
%efore the 8om%ay &igh )o#rt. -he said petition was dismissed. -he
order of the &igh )o#rt was then assailed %efore this )o#rt. -his )o#rt
granted special lea"e to +.<. +nt#lay, on the iss#e as to whether, a pri"ate
complaint was maintaina%le. In the meantime, an o%/ection was raised %y
+.<. +nt#lay %efore the 2pecial 7#dge, 8om%ay, to the effect, that he co#ld
not %e prosec#ted witho#t sanction of the competent a#thority. &is instant
plea was %ased on the fact, that he still contin#ed to %e a >em%er of the
Begislati"e +ssem%ly, and as s#ch, sanction was an essential pre-
condition, %efore his prosec#tion. -he a%o"e plea, was accepted %y the
2pecial 7#dge, 8om%ay. <.2. 9aya:, then filed a criminal re"ision petition
%efore the &igh )o#rt, ?#estioning the a%o"e order. -he &igh )o#rt
#pheld the order passed %y the 2pecial 7#dge, 8om%ay. <.2. 9aya: then
approached this )o#rt. -his )o#rt granted special lea"e, against the
decision of the &igh )o#rt, holding that sanction was necessary %efore
+.<. +nt#lay co#ld %e prosec#ted. -he aforesaid )riminal +ppeals were
heard %y a fi"e-7#dge )onstit#tion 8ench of this )o#rt. ;"en tho#gh, the
same 8ench heard the matters, the two appeals were disposed of %y two
Page 171
161
separate /#dgments. -he appeal preferred %y <.2. 9aya: was accepted.
-his )o#rt held, that as a >em%er of the Begislati"e +ssem%ly, +.<.
+nt#lay was not a p#%lic ser"ant, and therefore, no sanction was re?#ired
for his prosec#tion. In the a%o"e "iew of the matter, it is apparent, that this
)o#rt set aside the order of discharge passed %y the 2pecial 7#dge,
8om%ay. -his )o#rt accordingly directed the trial )o#rt, to proceed with
the trial of the matter. 1hile disposing of the two cases referred to
hereina%o"e, this )o#rt ha"ing ta:en into consideration the fact, that +.<.
+nt#lay had already s#ffered ad"ersely, as his rep#tation was tarnished %y
the imp#tations le"elled against him, for a period of two and a half years
(i.e., the period d#ring which the contro"ersy had remained pending), felt
that he deser"ed an e.peditio#s trial. In the aforesaid "iew of the matter,
while disposing of the two matters referred to a%o"e, this )o#rt directed,
that the cases filed against +.<. +nt#lay %efore the 2pecial 7#dge,
8om%ay, %e withdrawn and %e transferred to the &igh )o#rt of 8om%ay for
trial. -he )hief 7#stice of the &igh )o#rt of 8om%ay was also re?#ested,
to assign the trial of the matter, to a sitting 7#dge of the &igh )o#rt, so as
to concl#de the matter %y holding day-to-day proceedings. +ccordingly,
trial commenced %efore a 2ingle 7#dge of the &igh )o#rt of 8om%ay in
1@54. +.<. +nt#lay again contested the maintaina%ility of the trial
proceedings, %efore the &igh )o#rt of 8om%ay. -he learned 2ingle 7#dge
hearing the matter, re/ected the plea can"assed at the hands of +.<.
+nt#lay %y concl#ding, that the &igh )o#rt was %o#nd %y the order passed
%y this )o#rt. In the a%o"e circ#mstances, +.<. +nt#lay filed a writ petition
Page 172
16
%efore this )o#rt, #nder +rticle 3 of the )onstit#tion of India. + two-
7#dge Di"ision 8ench of this )o#rt, dismissed the petition. 1hilst one of
the 7#dges e.pressed the "iew, that the learned 2ingle 7#dge of the
8om%ay &igh )o#rt was not only /#stified, %#t was also d#ty %o#nd to
follow the decision of this )o#rt, which was %inding on him$ the second
7#dge on the 8ench e.pressed the "iew, that the challenge raised %y the
petitioner (%y assailing the "alidity of the /#dgment rendered %y this )o#rt,
as incorrect or a n#llity) co#ld not %e entertained. -he second &on(%le
7#dge, therefore, granted li%erty to +.<. +nt#lay, to approach this )o#rt
with an appropriate re"iew petition, if the petitioner M +.<. +nt#lay was so
ad"ised. &a"ing e.amined the witnesses prod#ced %y <.2. 9aya: %efore
the learned 2ingle 7#dge of the &igh )o#rt, 1 charges came to %e framed
(o#t of 43 draft charges, which were placed %efore the )o#rt, for its
consideration) against +.<. +nt#lay. +t the instance of the ri"al parties, the
matter again came to this )o#rt, for determining the "alidity of the order
framing only 1 charges. In the /#dgment rendered %y this )o#rt in +.<.
+nt#lay(s case (s#pra), this )o#rt held, on facts, that a prima facie case
had also %een made o#t against +.<. +nt#lay, in respect of some of the
allegations, in f#rtherance whereof no charges had %een framed. -his
)o#rt accordingly, set aside the order of the &igh )o#rt ref#sing to frame
charges, in respect of some of the alleged offences, on which +.<. +nt#lay
had %een discharged. -here#pon, the learned 2ingle 7#dge of the &igh
)o#rt framed 6@ charges against +.<. +nt#lay. -he &igh )o#rt
sim#ltaneo#sly re/ected the application made %y +.<. +nt#lay, for
Page 173
163
proceeding against the alleged co-conspirators. +.<. +nt#lay, then
challenged the aforesaid order of the &igh )o#rt %efore this )o#rt. &e,
inter alia, ?#estioned the &igh )o#rt(s /#risdiction to try the case. &e
alleged that his trial %y the 2ingle 7#dge of the &igh )o#rt, was in "iolation
of +rticles 14 and 1 of the )onstit#tion of India. -he contention ad"anced
on %ehalf of +.<. +nt#lay was, that he co#ld %e tried only in accordance
with the proced#re esta%lished %y law. -his plea was raised #nder +rticle
1 of the )onstit#tion of India. +.<. +nt#lay relied on 2ection 6(1) of the
)riminal Baw +mendment +ct, 1@3, which e.pressly pro"ided
(notwithstanding anything contained in the )ode of )riminal 'roced#re or
any other law), that the offences #nder 2ection ,(1) wo#ld %e tria%le %y a
2pecial 7#dge only. It was, therefore, so#ght to %e asserted, that his trial
%y the 2ingle 7#dge of the &igh )o#rt, was in clear "iolation of his
constit#tional rights, and the aforesaid legislati"e mandate. +.<. +nt#lay
alleged pre/#dice %y asserting, that fo#r of his "al#a%le rights had %een
ta:en away when this )o#rt had passed the direction, where%y his trial
was withdrawn from the )o#rt of the 2pecial 7#dge, 8om%ay, and
transferred to the &igh )o#rt. In this %ehalf, it was his contention, that he
was depri"ed of the right to trial %y a 2pecial 7#dge, in accordance with the
proced#re esta%lished %y law, i.e., proced#re which had %een enacted %y
'arliament. &e also asserted, that his right of re"ision to the &igh )o#rt
#nder 2ection @ of the )riminal Baw +mendment +ct, 1@3, had %een
ta:en away. It was also his s#%mission, that had the 2pecial 7#dge,
8om%ay cond#cted his trial, he wo#ld ha"e had a right of first appeal, to
Page 174
164
the &igh )o#rt. -he a%o"e right which was "ested in him #nder 2ection @
of the )riminal Baw +mendment +ct, 1@3, was also allegedly ta:en away.
&e also asserted, that #nder the pro"isions of the )riminal Baw
+mendment +ct, 1@3, %esides preferring an appeal to the &igh )o#rt, he
wo#ld ha"e a right of a second appeal %efore this )o#rt #nder +rticle 13,
of the )onstit#tion of India. It was his contention, that the right to prefer a
second appeal, was also so#ght to %e ta:en away from him. 8esides,
alleging the depri"ation of the a%o"e "al#a%le rights, it was also the
contention of +.<. +nt#lay %efore this )o#rt, that this )o#rt had suo motu
directed withdrawal of the case against +.<. +nt#lay from the 2pecial
7#dge, 8om%ay, and transferred the same to the &igh )o#rt witho#t
affording any opport#nity of hearing to him. It was, therefore, so#ght to %e
asserted, that the a%o"e order passed %y the &igh )o#rt, was clearly in
"iolation of the principles of nat#ral /#stice, and accordingly, the same
"iolated his f#ndamental rights, ca#sing gra"e pre/#dice to him, and
therefore, deser"ed to %e set aside.
13!. 4rom the /#dgment rendered %y this )o#rt in +.<. +nt#lay(s case
(s#pra), >r. <am 7ethmalani relied #pon the following o%ser"ations:-
6@. ...-hese directions were "oid %eca#se the power was not
there for this )o#rt to transfer a proceeding #nder the +ct of 1@3
from one 2pecial 7#dge to the &igh )o#rt. -his is not a case of
collateral attac: on /#dicial proceeding$ it is a case where the co#rt
ha"ing no co#rt s#perior to it rectifies its own order. 1e recognise
that the distinction %etween an error which entails a%sence of
/#risdiction and an error made within the /#risdiction is "ery fine. 2o
fine indeed that it is rapidly %eing eroded as o%ser"ed %y Bord
1il%erforce in +nisminic Btd. ". 4oreign )ompensation
)ommissioner, (1@,@) 1 +ll ;.<. !5. &a"ing regard to the enormity
Page 175
163
of the conse?#ences of the error to the appellant and %y reason of
the fact that the directions were gi"en s#o mot#, we do not find there
is anything in the o%ser"ations of Itta"ira >athai ". Aar:ey Aar:ey
(1@,4) 1 2)< 4@3 which detract the power of the co#rt to re"iew its
/#dgment e0 debito 4ustitiae in case in/#stice has %een ca#sed. 9o
co#rt, howe"er high, has /#risdiction to gi"e an order #nwarranted %y
the )onstit#tion and, therefore, the principles of 8hatia )o- operati"e
&o#sing 2ociety Btd. ". D. ). 'atel, (1@33) 2)< 153, wo#ld not
apply.
5!. ln gi"ing the directions this )o#rt infringed the constit#tional
safeg#ards granted to a citiCen or to an acc#sed and in/#stice res#lts
therefrom. It is /#st and proper for the co#rt to rectify and recall that
in/#stice, in the pec#liar facts and circ#mstances of this case.
51. -his case has ca#sed #s considera%le an.iety. -he appellant-
acc#sed has held an important position in this co#ntry, %eing the
)hief >inister of a premier 2tate of the co#ntry. &e has %een
charged with serio#s criminal offences. &is trial in accordance with
law and the proced#re esta%lished %y law wo#ld ha"e to %e in
accordance with the 1@3 +ct. -hat co#ld not possi%ly %e done
%eca#se of the directions of this )o#rt dated 4e%r#ary 1,, 1@54, as
indicated a%o"e. It has not yet %een fo#nd whether the appellant is
g#ilty or innocent. It is #nfort#nate, #nfort#nate for the people of the
2tate, #nfort#nate for the co#ntry as a whole, #nfort#nate for the
f#t#re wor:ing of democracy in this co#ntry which, tho#gh is not a
plant of an easy growth yet is with deep root in the Indian polity that
delay has occ#rred d#e to proced#ral wrangles. -he appellant may
%e g#ilty of gra"e offences alleged against him or he may %e
completely or if not completely to a large e.tent, innocent. Aal#es in
p#%lic life and perspecti"e of these "al#es in p#%lic life, ha"e
#ndergone serio#s changes and erosion d#ring the last few
decades. 1hat was #nheard of %efore is commonplace today. +
new "al#e orientation is %eing #ndergone in o#r life and in o#r
c#lt#re. 1e are at the threshold of the cross-roads of "al#es. It is,
for the so"ereign people of the co#ntry to settle these conflicts yet
the co#rts ha"e "ital roles to play in s#ch matters. 1ith the a"owed
o%/ect of speedier trial the case of the appellant had %een
transferred to the &igh )o#rt %#t on gro#nds of e.pediency of trial
he cannot %e s#%/ected to a proced#re #nwarranted %y law, and
contrary to the constit#tional pro"isions. -he appellant may or may
not %e an ideal politician. It is a fact, howe"er, that the allegations
ha"e %een %ro#ght against him %y a person %elonging to a political
party opposed to his %#t that is not the decisi"e factor. If the
appellant - 2hri +%d#l <ehman +nt#lay has infringed law, he m#st
%e dealt with in accordance with the law. 1e proclaim and
prono#nce that no man is a%o"e the law, %#t at the same time
Page 176
16,
reiterate and declare that no man can %e denied his rights #nder the
)onstit#tion and the laws. &e has a right to %e dealt with in
accordance with the law and not in derogation of it. -his )o#rt, in its
an.iety to facilitate the parties to ha"e a speedy trial ga"e directions
on 4e%r#ary 1,, 1@54 as mentioned herein%efore witho#t conscio#s
awareness of the e.cl#si"e /#risdiction of the 2pecial )o#rts #nder
the 1@3 +ct and that %eing the only proced#re esta%lished %y law,
there can %e no de"iation from the terms of +rticle 1 of the
)onstit#tion of India. -hat is the only proced#re #nder which it
sho#ld ha"e %een g#ided. 8y reason of gi"ing the directions on
4e%r#ary 1,, 1@54 this )o#rt had also #nintentionally ca#sed the
appellant the denial of rights #nder +rticle 14 of the )onstit#tion %y
denying him the e?#al protection of law %y %eing singled o#t for a
special proced#re not pro"ided for %y law. 1hen these factors are
%ro#ght to the notice of this )o#rt, e"en if there are any
technicalities this )o#rt sho#ld not feel shac:led and decline to
rectify that in/#stice or otherwise the in/#stice noticed will remain
fore"er a %lot on /#stice. It has %een said long time ago that Hact#s
c#riae neminem gra"a%itH - an act of the )o#rt shall pre/#dice no
man. -his ma.im is fo#nded #pon /#stice and good sense and
affords a safe and certain g#ide for the administration of the law.
... ... ... ... ...
53F.It appears that in gi"ing directions on 4e%r#ary 1,, 1@54, this
)o#rt acted per incuriam inasm#ch it did not %ear in mind
conscio#sly the conse?#ences and the pro"isions of 2ections , and
6 of the 1@3 +ct and the %inding nat#re of the larger 8ench
decision in (nwar (li Sar-ar case, 1@3 2)< 54 which was not
ad"erted to %y this )o#rt. -he %asic f#ndamentals of the
administration of /#stice are simple. 9o man sho#ld s#ffer %eca#se
of the mista:e of the co#rt. 9o man sho#ld s#ffer a wrong %y
technical proced#re of irreg#larities. <#les or proced#res are the
handmaids of /#stice and not the mistress of the /#stice. E0 debito
4ustitiae , we m#st do /#stice to him. If a man has %een wronged so
long as it lies within the h#man machinery of administration of /#stice
that wrong m#st %e remedied. -his is a pec#liar fact of this case
which re?#ires emphasis.*
(emphasis is o#rs)
8ased on the a%o"e parameters recorded in +.<. +nt#lay(s case (s#pra),
>r. <am 7ethmalani, learned 2enior )o#nsel "ehemently contended, that
the ma.im of actus curiae neminem )ravabit, meaning, the act of a )o#rt
will not pre/#dice any man, is fo#nded on the principle of /#stice and good
Page 177
166
conscience. -he a%o"e principle affords a safe and certain g#ide for the
administration of law. It was pointed o#t, that )o#rts in ;ngland a%ide %y
the principle, that the siCe of the 8ench did not ma:e any difference for the
ad/#dication of a contro"ersy. It was s#%mitted, that the aforesaid concept
was not "alid in this co#ntry. 1e were informed, that the law laid down %y
this )o#rt esta%lished a hierarchy within this )o#rt itself, where%y
decisions of a larger 8ench %inds a smaller 8ench. It was s#%mitted, that
a larger 8ench can o"erride the decision of a smaller 8ench. It was,
therefore pointed o#t, that when this )o#rt in +.<. +nt#lay(s case (s#pra)
e.amined the "alidity of the order passed %y this )o#rt, where%y the trial
pending %efore the 2pecial 7#dge, 8om%ay #nder the )riminal Baw
(+mendment) +ct, 1@3, was transferred to the &igh )o#rt, a )onstit#tion
8ench of this )o#rt declared the a%o"e transfer order as %eing "oid and a
n#llity in law. It was s#%mitted, that if the a%o"e determination co#ld %e
rendered, the contro"ersy in hand needs to %e similarly redressed, so as to
do /#stice to the petitioner. It was s#%mitted, that the principle of actus
curiae neminem )ravabit wo#ld apply with m#ch greater force in the
present case on acco#nt of the fact, that the petitioner has %een depri"ed
of his li%erty and has %een remanded to /ail witho#t the a#thority of law. It
was s#%mitted, that the imp#gned order dated 4.3.!14 was totally #n/#st,
witho#t any /#dgment of con"iction, witho#t proper charges %eing framed
or notice iss#ed, and witho#t a hearing. It was also the contention of the
learned 2enior )o#nsel, that the principle of audi alteram partem was
gi"en a complete go-%y, in the facts and circ#mstances of this case. It was
Page 178
165
accordingly the s#%mission of the learned 2enior )o#nsel for the
petitioner, that e"en a /#dicial order passed in derogation of the
constit#tional limitations or in derogation of principles of nat#ral /#stice, can
always %e remedied %y this )o#rt e0 debito 4ustitiae. +ccording to learned
co#nsel, it was imperati"e for this )o#rt to e.ercise the a%o"e power
witho#t insisting on the formalities of the petitioner %eing re?#ired to file a
re"iew petition or a c#rati"e petition.
131. In addition to the reliance placed %y the learned 2enior )o#nsel for
the petitioner on the /#dgment rendered %y this )o#rt in +.<. +n#tlay(s
case (s#pra), he also placed reliance on the /#dgments of this )o#rt in
2#preme )o#rt 8ar +ssociation(s case (s#pra), and on >.2. +hlawat ".
2tate of &aryana P +nr., (!!!) 1 2)) 65, wherein this )o#rt had
recalled its own order, when a litigant had approached it complaining of
miscarriage of /#stice (thro#gh an earlier order, passed %y this )o#rt).
2pecially when the earlier order was witho#t /#risdiction and witho#t
following d#e proced#re of law. +nd specially, when the challenged order
had res#lted in the incarceration of the concerned petitioner.
13. In response to the contentions ad"anced at the hands of the learned
2enior )o#nsel for the petitioner, >r. +r"ind Datar, learned 2enior )o#nsel
representing the 2;8I, in"ited o#r attention to the following o%ser"ations
made in +.<. +nt#lay(s case (s#pra):-
1!6. -here is still another aspect which sho#ld %e ta:en note of.
4inality of the orders is the r#le. 8y o#r directing recall of an order
the well settled propositions of law wo#ld not %e set at na#ght. 2#ch
a sit#ation may not rec#r in the ordinary co#rse of /#dicial f#nctioning
Page 179
16@
and if there %e one certainly the 8ench %efore which it comes wo#ld
appropriately deal with it. 9o strait-/ac:et form#la can %e laid down
for /#dicial f#nctioning partic#larly for the ape. )o#rt. -he
apprehension that the present decision may %e #sed as a precedent
to challenge /#dicial orders of this )o#rt is perhaps misplaced
%eca#se those who are familiar with the /#dicial f#nctioning are
aware of the limits and they wo#ld not see: s#pport from this case
as a precedent. 1e are s#re that if precedent "al#e is so#ght to %e
deri"ed o#t of this decision, the co#rt which is as:ed to #se this as
an instr#ment wo#ld %e ali"e to the pec#liar facts and circ#mstances
of the case in which this order is %eing made.*
(emphasis is o#rs)
8ased on the a%o"e, it was s#%mitted %y the learned co#nsel, that
challenge to an order passed %y this )o#rt wo#ld %e a rarity, and not a
common feat#re. &e emphatically pointed o#t, that if the s#%mission
ad"anced at the hands of the learned co#nsel for the petitioner was to %e
accepted, no order passed %y this )o#rt wo#ld e"er attain finality. +nd
therefore, the /#risdiction of this )o#rt wo#ld %e open to e.ploitation, any
n#m%er of times, if the petitioner=respondent contin#ed to feel, that
in/#stice had %een done to him.
133. 1e are of the "iew, that reliance %y the learned 2enior )o#nsel for
the petitioner on 2#preme )o#rt 8ar +ssociation(s case (s#pra) and on
>.2. +hlawat(s case (s#pra) is wholly misconcei"ed on acco#nt of the
determination rendered %y this )o#rt in <#pa +sho: &#rra(s case (s#pra),
wherein in paragraph 13, a fi"e-7#dge )onstit#tion 8ench, o%ser"ed as
#nder:-
13. It is, howe"er, tr#e that in 2#preme )o#rt 8ar +ssociation "s.
0nion of India, (1@@5) 4 2)) 4!@, a )onstit#tion 8ench and in >.2.
+hlawat "s. 2tate of &aryana, (!!!) 1 2)) 65, a three-7#dge
8ench, and in other cases different 8enches ?#ashed the earlier
/#dgments=orders of this )o#rt in an application filed #nder +rticle 3
of the )onstit#tion. 8#t in those cases no one /oined iss#e with
Page 180
15!
regard to the maintaina%ility of the writ petition #nder +rticle 3 of
the )onstit#tion. -herefore, those cases cannot %e read as a#thority
for the proposition that a writ of certiorari #nder +rticle 3 wo#ld lie
to challenge an earlier final /#dgment of this )o#rt.*
(emphasis is o#rs)
134. 8efore we ad"ert to the ?#estion of /#risdiction, it may %e rele"ant to
#nderstand the e.tent and width of /#risdiction within the framewor:
whereof this )o#rt can pass orders. In this %ehalf reference may %e once
again, made to the nine-7#dge 8ench /#dgment of this )o#rt in 9aresh
2ridhar >ira/:ar(s case (s#pra), wherein it was held as #nder:-
,!. -here is yet another aspect of this matter to which it is
necessary to refer. -he &igh )o#rt is a s#perior )o#rt of <ecord and
#nder +rticle 13 , shall ha"e all powers of s#ch a )o#rt of <ecord
incl#ding the power to p#nish contempt of itself. Kne disting#ishing
characteristic of s#ch s#perior )o#rts is that they are entitled to
consider ?#estions of their /#risdiction raised %efore them. -his
?#estion fell to %e considered %y this )o#rt in 2pecial <eference 9o.
1 of 1@,4, (1@,3) 1 2.).<. 413 at p. 4@@. In that case, it was #rged
%efore this )o#rt that in granting %ail to Eesha" 2ingh, the &igh
)o#rt had e.ceeded its /#risdiction and as s#ch, the order was a
n#llity. <e/ecting this arg#ment, this )o#rt o%ser"ed that in the case
of a s#perior )o#rt of <ecord, it is for the )o#rt to consider whether
any matter falls within its /#risdiction or not. 0nli:e a co#rt of limited
/#risdiction, the s#perior co#rt is entitled to determine for itself
?#estions a%o#t its own /#risdiction. -hat is why this )o#rt did not
accede to the proposition that in passing the order for interim %ail,
the &igh )o#rt can %e said to ha"e e.ceeded its /#risdiction with the
res#lt that the order in ?#estion was n#ll and "oid. In s#pport of this
"iew, this )o#rt cited a passage from &als%#ryIs Baws of ;ngland
where it is o%ser"ed that:-
prima facie, no matter is deemed to %e %eyond the /#risdiction
of a s#perior co#rt #nless it is e.pressly shown to %e so, while
nothing is within the /#risdiction of an inferior co#rt #nless it is
e.pressly shown on the face of the proceedings that the
partic#lar matter is within the cogniCance of the partic#lar
)o#rt.H (&als%#ryIs Baws of ;ngland, Aol. @, p. 34@).*.
If the decision of a s#perior )o#rt on a ?#estion of its /#risdiction is
erroneo#s, it can, of co#rse, %e corrected %y appeal or re"ision as
may %e permissi%le #nder the law$ %#t #ntil the ad/#dication %y a
Page 181
151
s#perior )o#rt on s#ch a point is set aside %y adopting the
appropriate co#rse, it wo#ld not %e open to %e corrected %y the
e.ercise of the writ /#risdiction of this )o#rt.*
(emphasis is o#rs)
133. 2ince it is not the case of the petitioner %efore this )o#rt, that some
legislati"e or constit#tional pro"ision had c#rtailed the /#risdiction of this
)o#rt, from passing an order, of the nat#re which is imp#gned thro#gh this
criminal writ petition, there can %e no do#%t that the a%o"e order has %een
passed %y this )o#rt in legitimate e.ercise of its /#risdiction. -his will ha"e
to %e the nat#ral determination arising o#t of the law declared in 9aresh
2ridhar >ira/:ar(s case (s#pra), which is the "ery /#dgment, on which
learned co#nsel for the petitioner has placed reliance.
13,. Independently of the a%o"e p#rely legal determination, we ha"e
#nder a separate heading e.amined the iss#e, whether this )o#rt had the
/#risdiction to order the arrest and detention of the petitioner M >r. 2#%rata
<oy 2ahara. 1e ha"e independently concl#ded, that we were possessed
of s#ch /#risdiction. It is therefore apparent, that the imp#gned order dated
4.3.!14, does not s#ffer from any /#risdictional error.
136. 1e are in a%sol#te agreement with the s#%missions ad"anced %y
>r. +r"ind Datar, learned 2enior )o#nsel for the respondent. In "iew of
the fact#al position depicted in this /#dgment (#nder the heading: 1hether
the imp#gned order dated 4.3.!14 was passed, in "iolation of the r#les of
nat#ral /#sticeG*), %ased on the pleas ad"anced %y the petitioner on merits,
it is apparent, that the r#les of nat#ral /#stice were followed to the hilt,
Page 182
15
%efore the imp#gned order dated 4.3.!14 was passed. +ccordingly, the
principle of actus curiae neminem )ravabit is not a"aila%le to the petitioner.
135. 1e ha"e recorded hereina%o"e, that the instant petition is not
maintaina%le, %eca#se the challenge raised %y the petitioner herein, on the
gro#nds of a /#risdictional error, or non compliance of the r#les of nat#ral
/#stice ha"e %een fo#nd to %e not made o#t in this case. -hat was the only
%asis of interference in 9aresh 2ridhar >ira/:ar(s case (s#pra). 1e are
howe"er pers#aded, to record another reason for not accepting the
maintaina%ility of the present writ petition, on the %asis of 9aresh 2ridhar
>ira/:ar(s case (s#pra). In this %ehalf it is rele"ant to notice, from the
fact#al %ac:gro#nd of 9aresh 2ridhar >ira/:ar(s case (s#pra) which has
%een traced hereina%o"e, that +.<. +nt#lay, had earlier approached this
)o#rt, %y filing a writ petition #nder +rticle 3 of the )onstit#tion of India
(/#st in the same manner, as the petitioner herein has approached this
)o#rt). + two-7#dge Di"ision 8ench of this )o#rt dismissed the petition %y
o%ser"ing inter alia, that a writ petition challenging the "alidity of an order
and /#dgment passed %y the 2#preme )o#rt as n#llity or otherwise
incorrect, co#ld not %e entertained. -he said writ petition was accordingly
dismissed (+%d#l <ehman +nt#lay ". 0nion of India, 1rit 'etition
()riminal) no. 6!5 of 1@54, decided on 16.4.1@54$ reported as +ppendi.,
(1@55) 2)) 6,4). In the a%o"e "iew of the matter also, e"en on the
%asis of the "ery /#dgment relied #pon %y the learned co#nsel, we ha"e no
other alternati"e %#t to concl#de, that the instant writ petition is not
Page 183
153
maintaina%le, to assail the imp#gned order passed %y this )o#rt on
4.3.!14.
13@. 1e shall now endea"o#r to deal with the s#%missions ad"anced at
the hands of >r. ).+. 2#ndaram, learned 2enior )o#nsel appearing for the
petitioner, whose e.press s#%mission was, that the instant criminal writ
petition, filed %y the petitioner was maintaina%le #nder +rticle 3 of the
)onstit#tion of India. -he s#m and s#%stance of the s#%mission ad"anced
%y the learned co#nsel, has already %een noticed a%o"e, and is
accordingly not %eing repeated herein again, for reasons of %re"ity. 8efore
dealing with the iss#e in hand, it wo#ld also %e rele"ant to mention, that
while the long drawn hearing in the instant matter was coming to an end,
>r. <am 7ethmalani, learned 2enior )o#nsel, had a slight change of heart.
&is s#%mission on second tho#ghts was, that the contention ad"anced at
the hands of >r. ).+. 2#ndaram, learned 2enior )o#nsel, to the effect that
the instant petition was maintaina%le #nder +rticle 3 of the )onstit#tion of
India, had merit. In the s#cceeding paragraphs, we shall deal with the
s#%missions ad"anced %y >r. ).+. 2#ndaram, to demonstrate that the
present writ petition was maintaina%le at the hands of the petitioner, to
assail the order passed %y #s, on 4.3.!14.
14!. -he instant iss#e %eing a p#re ?#estion of law, was can"assed at
the hands of the learned co#nsel for the ri"al parties, %y placing reliance
on /#dgments rendered %y this )o#rt. In o#r considered "iew, therefore, it
Page 184
154
wo#ld %e in the fitness of matters to cite the /#dgments relied #pon %y the
learned co#nsel for the parties, for the ad/#dication of the instant iss#e.
141. 1e ha"e chosen to ta:e into consideration "ario#s /#dgments
%ro#ght to o#r notice chronologically.
(i) In this %ehalf reference may first and foremost %e made to the
/#dgment rendered %y a nine-7#dge 8ench of this )o#rt in 9aresh
2hridhar >ira/:ar, +I< 1@,6 2) 1, wherefrom o#r attention was
in"ited to the following concl#sions drawn therein:-
3. In this connection, it is necessary to refer to another
aspect of the matter, and that has relation to the nat#re and
e.tent of this )o#rtIs /#risdiction to iss#e writs of certiorari
#nder +rticle 3() . >r. 2etal"ad has conceded that if a )o#rt
of competent /#risdiction ma:es an order in a proceeding
%efore it, and the order is inter-parties, its "alidity cannot %e
challenged %y in"o:ing the /#risdiction of this )o#rt #nder
+rticle 3 , tho#gh the said order may affect the aggrie"ed
partyIs f#ndamental rights. &is whole arg#ment %efore #s has
%een that the imp#gned order affects the f#ndamental rights of
a stranger to the proceedings %efore the )o#rt$ and that, he
contends, /#stifies the petitioners in mo"ing this )o#rt #nder
+rticle 3 . It is necessary to e.amine the "alidity of this
arg#ment.
... ... ... ... ...
3@. 1e ha"e referred to these decisions to ill#strate how the
/#risdiction to iss#e writs if certiorari has %een e.ercised either
%y the &igh )o#rts #nder +rticle , or %y this )o#rt #nder
+rticle 3. 8earing these principles in mind, let #s en?#ire
whether the order imp#gned in the present proceedings can
%e said to %e amena%le to the /#risdiction of this )o#rt #nder
+rticle 3. 1e ha"e already seen that the imp#gned order
was passed %y the learned 7#dge after hearing the parties and
it was passed pres#ma%ly %eca#se he was satisfied that the
ends of /#stice re?#ired that >r. Doda sho#ld %e gi"en
protection %y prohi%iting the p#%lication of his e"idence in the
newspapers d#ring the co#rse of the trial. -his matter was
directly related to the trial of the s#it$ and in e.ercise of his
Page 185
153
inherent power, the learned 7#dge made the order in the
interests of /#stice. -he order in one sense is inter-parties,
%eca#se it was passed after hearing arg#ments on %oth the
sides. In another sense, it is not inter-parties inasm#ch as it
prohi%its strangers li:e the petitioners from p#%lishing >r.
DodaIs e"idence in the newspapers. In fact, an order of this
:ind wo#ld always %e passed after hearing parties %efore the
)o#rt and wo#ld in e"ery case affect the right of strangers li:e
the petitioners who, as 7o#rnalists, are interested in p#%lishing
co#rt proceedings in newspapers. )an it %e said that there is
s#ch a difference %etween normal orders passed inter-parties
in /#dicial proceedings, and the present order that it sho#ld %e
open to the strangers are who affected %y the order to mo"e
this )o#rt #nder +rticle 3G -he order, no do#%t, %inds the
strangers$ %#t, ne"ertheless, it is a /#dicial order and a person
aggrie"ed %y it, tho#gh a stranger, can mo"e this )o#rt %y
appeal #nder +rticle 13, of the )onstit#tion . 'rinciples of <es
/#dicata ha"e %een applied %y this )o#rt in dealing with
petitions filed %efore this )o#rt #nder +rticle 3 in Daryao
". -he 2tate of 0.'. and Kthers, +I< 1@,1 2) 1436. 1e
apprehend that somewhat similar considerations wo#ld apply
to the present proceedings. If a /#dicial order li:e the one with
which we are concerned in the present proceedings made %y
the &igh )o#rt %inds strangers, the strangers may challenge
the order %y ta:ing appropriate proceedings in appeal #nder
+rticle 13,. It wo#ld, howe"er, not %e open to them to in"o:e
the /#risdiction of this )o#rt #nder +rticle 3 and contend that
a writ of certiorari sho#ld %e iss#ed in respect of it. -he
imp#gned order is passed in e.ercise of the inherent
/#risdiction of the )o#rt and its "alidity is not open to %e
challenged %y writ proceedings.*
(emphasis is o#rs)
;"en tho#gh the challenge %efore #s is raised on acco#nt of the
alleged "iolation of +rticle 1 of the )onstit#tion of India, yet the
iss#e that needs to %e determined is, whether a writ petition wo#ld
%e maintaina%le, as against an order passed %y this )o#rt for an
alleged "iolation of a f#ndamental right. 1hile e.amining the a%o"e
proposition in respect of an alleged "iolation #nder +rticle 1@ of the
)onstit#tion of India, this )o#rt in the concl#sions drawn in the
Page 186
15,
a%o"e e.tracted paragraphs, clearly held, that a writ petition wo#ld
not %e maintaina%le against an order passed %y this "ery )o#rt,
e"en tho#gh it alleged "iolation of a f#ndamental right.
(ii) <eference was ne.t made to the decision rendered %y a three-
7#dge Di"ision 8ench of this )o#rt in )ol. Dr. 8. <amachandra <ao
". -he 2tate of Krissa P Krs., (1@6) 3 2)) 3,. ;"en tho#gh
d#ring the co#rse of hearing, learned co#nsel for the ri"al parties
read %efore #s paragraphs 3 and 6 of the present /#dgment, we are
of the "iew that for the iss#e in hand, the p#rpose wo#ld %e ser"ed
%y e.tracting herein paragraph ,, which is %eing reprod#ced
here#nder:-
,. +s admitted %y %oth sides the petitioner was sentenced
to imprisonment on con"iction %y the -hird +dditional
2essions 7#dge, 2ec#ndera%ad in Kcto%er, 1@,3.
0nfort#nately, neither side has %een a%le to inform #s as to
whether that sentence has e.pired or is still r#nning. -he /ail
a#thorities at 8h#%aneshwar, we ha"e little do#%t, m#st ha"e
information whether or not the petitioner, when %ro#ght there,
was #ndergoing a sentence of imprisonment and how m#ch
sentence remain to %e #ndergone, and the petitioner also, in
o#r opinion, m#st %e pres#med to %e aware of the sentence
imposed on him. 1e need only add that in case the petitioner
is #ndergoing the sentence of imprisonment imposed on him
%y competent )o#rt then too writ of ha%eas corp#s cannot %e
granted. -his position is well settled.*
(emphasis is o#rs)
+ per#sal of the a%o"e /#dgment lea"es no room for any do#%t, that
this )o#rt clearly declared, that in case a )o#rt of competent
/#risdiction, had passed an order of imprisonment, the order co#ld
not %e assailed %y praying for a writ in the nat#re of habeas corpus.
+ writ of habeas corpus can only %e so#ght from this )o#rt, in
Page 187
156
e.ercise of its /#risdiction #nder +rticle 3 of the )onstit#tion of
India. In the a%o"e "iew of the matter it is apparent from the
concl#sions drawn %y this )o#rt, that a writ petition was held to %e
not maintaina%le, against an order of imprisonment passed %y a
)o#rt of competent /#risdiction.
(iii) + writ petition was filed in the )o#rt, to assail the "alidity of a
con"iction order, where%y the person concerned had %een
sentenced to life imprisonment. -his )o#rt, in 7haria 2=o >aniya ".
2tate of <a/asthan P +nr., (1@53) 4 2)) 6, held that the writ petition
was not maintaina%le. Incidentally, it wo#ld %e pertinent to mention,
that the a%o"e challenge was raised (as in the instant case), %y
asserting that the imp#gned /#dgment "iolated the f#ndamental right
of the concerned deten#e, #nder +rticle 1 of the )onstit#tion of
India (as in the instant case). +dditionally, a challenge was also
raised #nder +rticles 14 and 1@ of the )onstit#tion of India. -his
)o#rt dismissed the writ petition, with the following o%ser"ations:-
. It appears that the petitioner along with two others was
arraigned %efore the 2essions 7#dge of +lwar in 2essions
-rial 9o. 11! of 1@6, for ha"ing committed an alleged offence
p#nisha%le #nder 2ection 3! of the Indian 'enal )ode,
alternati"ely, #nder 2ection 3! read with 2ection 34 of the
)ode. 8y his finding and sentence dated +pril 1, 1@66 the
learned 2essions 7#dge con"icted the petitioner and his two
associates for ha"ing committed the m#rder of the deceased
7haria in f#rtherance of their common intention #nder
2ection 3! read with 2ection 34 and sentenced each of them
to #ndergo imprisonment for life, while recording their ac?#ittal
#nder 2ection 3!. Kn appeal, a Di"ision 8ench of the
<a/asthan &igh )o#rt (7aip#r 8ench) in )riminal +ppeal 9o.
1@ of 1@66 %y /#dgment dated 7#ly 3, 1@5! maintained the
Page 188
155
con"iction of the petitioner #nder 2ection 3! read with
2ection 34 %#t ac?#itted his two associates gi"ing them the
%enefit of do#%t. Dissatisfied with the /#dgment of the &igh
)o#rt, the petitioner applied to this )o#rt for grant of special
lea"e #nder +rticle 13, of the )onstit#tion. -he special lea"e
petition was dismissed %y this )o#rt on 4e%r#ary, 3, 1@51.
+n application for re"iew was also dismissed on 9o"em%er
1@, 1@51. -hereafter, the petitioner filed this petition #nder
+rticle 3 assailing his con"iction and sentence. -he
petitioner see:s the iss#ance of a writ of mandam#s directing
the 2tate of <a/asthan to for%ear from gi"ing effect to the
/#dgment and sentence passed %y the learned 2essions
7#dge as also the /#dgment of the &igh )o#rt as well as the
order passed %y this )o#rt dismissing the special lea"e
petition. &e f#rther see:s a declaration that his con"iction
#nder 2ection 3! read with 2ection 34 %y the &igh )o#rt was
illegal and therefore his detention in /ail was witho#t the
a#thority of law and in "iolation of +rticle 1 read with
+rticles 14 and 1@ of the )onstit#tion.
3. -he petitioner contends that in "iew of the decisions of
this )o#rt in Erishna Do"ind 'atil ". 2tate of >aharashtra, +I<
1@,3 2) 1413, >aina 2ingh ". 2tate of <a/asthan, +I< 1@6,
2) 1!54 and 'iara 2innh ". 2tate of '#n/a%, (1@5!) 2))
4!1 , his con"iction #nder 2ection 3! read with
2ection 34 was illegal as he had %een charged with two other
named persons who ha"e %een ac?#itted %y the &igh )o#rt
and therefore he cannot %e con"icted of an offence
p#nisha%le #nder 2ection 3! read with 2ection 34. 0pon this
%asis, the contention is that the petitioner has %een depri"ed
of his life and li%erty witho#t the a#thority of law in "iolation of
+rticle 1 read with +rticles 14 and 1@ of the )onstit#tion . It is
represented to #s that the contention %ased #pon the
decisions of this )o#rt had %een ad"anced d#ring the co#rse
of the hearing of the special lea"e petition, %#t %oth the special
lea"e petition and the application for re"iew ha"e %een
dismissed and therefore the petitioner has no other remedy
e.cept to approach this )o#rt for appropriate writ, direction or
order #nder +rticle 3 of the )onstit#tion.
4. 1e fail to appreciate the propriety of as:ing for a
declaration in there proceedings #nder +rticle 3 that
con"iction of the petitioner %y the &igh )o#rt for an offence
p#nisha%le #nder 2ection 3! read with 2ection 34 of the
India 'enal )ode is illegal, partic#larly when this )o#rt has
declined to grant special lea"e #nder +rticle 13, . 9or can the
petitioner %e heard to say that his detention in /ail amo#nts to
depri"ation of the f#ndamental right to life and li%erty witho#t
Page 189
15@
following the proced#re esta%lished %y law in "iolation of
+rticle 1 read with +rticles 14 and 1@ . 1hen a special lea"e
petition is assigned to the learned 7#dges sitting in a 8ench,
they constit#te the 2#preme )o#rt and there is a finality to
their /#dgment which cannot %e #pset in these proceedings
#nder +rticle 3 . K%"io#sly, the 2#preme )o#rt cannot iss#e
a writ, direction or order to itself in respect of any /#dicial
proceedings and the learned 7#dges constit#ting the 8ench
are not amena%le to the writ /#risdiction of this )o#rt.*
(emphasis is o#rs)
+ per#sal of the a%o"e /#dgment, lea"es no room for any do#%t, that
in the a%o"e /#dgment, rendered %y a three-7#dge Di"ision 8ench,
this )o#rt arri"ed at the concl#sion, that a writ petition wo#ld not %e
maintaina%le to assail a /#dicial order.
(i") <eference may now %e made to the decision rendered %y this
)o#rt in <an/it 2ingh ". 0nion -erritory of )handigarh P +nr., (1@@1)
4 2)) 3!4. It wo#ld %e rele"ant to mention, that the instant
/#dgment was relied #pon %y >r. >#:#l D#pta, learned 2enior
)o#nsel, who represented the 0nion of India. -he a%o"e /#dgment
also dealt with the iss#e whether a writ petition was maintaina%le
#nder +rticle 3 of the )onstit#tion of India, to assail the directions
contained in a /#dgment rendered %y this )o#rt. 4rom the a%o"e
/#dgment, the o%ser"ations recorded in paragraphs 3 and 11 are
considered essential for the p#rpose in hand, and are accordingly
%eing e.tracted here#nder:-
3. 1e may straightaway mention that the ?#estion of grant
of relief #nder +rticle 3 of the )onstit#tion does not arise on
the a%o"e facts. -he petitionerIs incarceration is the res#lt of
a "alid /#dicial order and therefore, there can %e no "alid claim
to the infringement of any f#ndamental right which alone can
%e the fo#ndation for a writ #nder +rticle 3 of the
Page 190
1@!
)onstit#tion. -he only ?#estion, it appears, therefore, is a%o#t
the correct constr#ction of the direction gi"en %y this )o#rt in
its /#dgment dated 2eptem%er 3!, 1@53 in )riminal +ppeal
9o. 415 of 1@5 in the light of the tr#e meaning of
2ection 46() )r.'.).
... ... ... ... ...
11. 1e ha"e already stated that this petition for the
iss#ance of a writ #nder +rticle 3 of the )onstit#tion is
#ntena%le. 1e ha"e, therefore, treated it as a petition for
clarification of the /#dgment dated 2eptem%er 3!, 1@53 in
)riminal +ppeal 9o. 415 of 1@5. +ccordingly, the petition is
disposed of with this clarification.*
(emphasis is o#rs)
Net again, in the a%o"e /#dgment, this )o#rt arri"ed at the
concl#sion, that a writ petition was not maintaina%le #nder +rticle 3
of the )onstit#tion of India, to assail an order passed %y this )o#rt.
(") <eference was also made to the recent decision rendered %y
this )o#rt in >an#%hai <atilal 'atel ". 2tate of D#/arat, (!13) 1
2)) 314. In the a%o"e /#dgment, this )o#rt referred to the earlier
/#dgments rendered %y this )o#rt, and appro"ed the iss#e, which is
s#%/ect matter of consideration at o#r hands. -he o%ser"ations
which are rele"ant, are %eing e.tracted here#nder:-
14. In Ean# 2anyal ". District >agistrate, Dar/eeling and
Krs., (1@63) 2)) ,64, it was laid down that the writ of
ha%eas corp#s deals with the machinery of /#stice, not the
s#%stanti"e law. -he o%/ect of the writ is to sec#re release of a
person who is illegally restrained of his li%erty.
13. 2pea:ing a%o#t the importance of the writ of ha%eas
corp#s, a two-7#dge 8ench, in 0mm# 2a%eena ". 2tate of
Eerala and Krs. (!11) 1! 2)) 651, has o%ser"ed as follows:
13. ...the writ of ha%eas corp#s is the oldest writ
e"ol"ed %y the common law of ;ngland to protect the
indi"id#al li%erty against its in"asion in the hands of the
Page 191
1@1
e.ec#ti"e or may %e also at the instance of pri"ate
persons. -his principle of ha%eas corp#s has %een
incorporated in o#r constit#tional law and we are of the
opinion that in a democratic rep#%lic li:e India where
7#dges f#nction #nder a written )onstit#tion and which
has a chapter on f#ndamental rights, to protect
indi"id#al li%erty the 7#dges owe a d#ty to safeg#ard the
li%erty not only of the citiCens %#t also of all persons
within the territory of India. -he most effecti"e way of
doing the same is %y way of e.ercise of power %y the
)o#rt %y iss#ing a writ of ha%eas corp#s.*
In the said case, a reference was made to &als%#ryIs
Baws of ;ngland, 4th ;dn. Aol. 11, para 1434 to highlight that
a writ of ha%eas corp#s is a writ of highest constit#tional
importance %eing a remedy a"aila%le to the lowliest citiCen
against the most powerf#l a#thority.
1,. &a"ing stated a%o#t the significance of the writ of
ha%eas corp#s as a weapon for protection of indi"id#al li%erty
thro#gh /#dicial process, it is condign to refer to certain
a#thorities to appreciate how this )o#rt has dwelled #pon and
e.pressed its "iews pertaining to the legality of the order of
detention, especially that ens#ing from the order of the co#rt
when an acc#sed is prod#ced in c#stody %efore a >agistrate
after arrest. It is also worthy to note that the opinion of this
)o#rt relating to the rele"ant stage of delineation for the
p#rpose of ad/#dicating the legality of the order of detention is
of immense importance for the present case.
16. In )ol. Dr. 8. <amachandra <ao ". -he 2tate of Krissa,
(1@6) 3 2)) 3,, it was opined that a writ of ha%eas corp#s
is not granted where a person is committed to /ail c#stody %y a
competent co#rt %y an order which prima facie does not
appear to %e witho#t /#risdiction or wholly illegal.*
(emphasis is o#rs)
Net again, therefore, this )o#rt affirmed the concl#sion, that a writ petition
cannot %e filed to raise a challenge against a "alidly passed /#dicial order.
In "iew of the clear e.pression of law recorded in all the a%o"e /#dgments,
witho#t any di"ergence of "iew whatsoe"er, we ha"e no other alternati"e
%#t to concl#de, that it was not open for the petitioner to file the instant writ
Page 192
1@
petition, to assail the order passed %y this )o#rt, in e.ercise of its
/#risdiction #nder +rticles 1@ and 14 of the )onstit#tion of India. +s a
matter of a%#ndant ca#tion, it is considered necessary to record, that e"en
tho#gh reference was made to >.2. +hlawat(s case (s#pra) and 2#preme
)o#rt 8ar +ssociation(s case (s#pra), wherein this )o#rt had entertained a
challenge to earlier orders passed %y it, #nder +rticle 3 of the )onstit#tion
of India, yet, the a%o"e two /#dgments, cannot %e treated to ha"e any
%earing on the determination of the iss#e in hand, %eca#se in the aforesaid
two cases, the maintaina%ility of the petitions was not contested. K#r
instant concl#sion, has also %een recorded %y this )o#rt in, <#pa +sho:
&#rra(s case (s#pra), the rele"ant o%ser"ations wherefrom, ha"e already
%een e.tracted hereina%o"e.
14. Bast of all, we shall enda"o#r to deal with the s#%mission ad"anced
%y Dr. <a/ee" Dhawan, learned 2enior )o#nsel, to the effect that the
instant petition was maintaina%le in e.ercise of the /#risdiction "ested in
this )o#rt, #nder +rticles 1@ and 14 of the )onstit#tion of India. -he
a%o"e pro"isions are %eing e.tracted here#nder$-
1@. 2#preme )o#rt to %e a co#rt of record - -he 2#preme )o#rt
shall %e a co#rt of record and shall ha"e all the powers of s#ch a
co#rt incl#ding the power to p#nish for contempt of itself.
14. ;nforcement of decrees and orders of the 2#preme )o#rt and
orders as to disco"ery, etc. - (1) -he 2#preme )o#rt in the e.ercise
of its /#risdiction may pass s#ch decree or ma:e s#ch order as is
necessary for doing complete /#stice in any ca#se or matter pending
%efore it, and any decree so passed or order so made shall %e
enforcea%le thro#gho#t the territory of India in s#ch manner as may
%e prescri%ed %y or #nder any law made %y 'arliament and, #ntil
pro"ision in that %ehalf is so made, in s#ch manner as the 'resident
may %y order prescri%e
Page 193
1@3
() 2#%/ect to the pro"isions of any law made in this %ehalf %y
'arliament, the 2#preme )o#rt shall, as respects the whole of the
territory of India, ha"e all and e"ery power to ma:e any order for the
p#rpose of sec#ring the attendance of any person, the disco"ery or
prod#ction of any doc#ments, or the in"estigation or p#nishment of
any contempt of itself.*
<elying on the a%o"e pro"isions, learned 2enior )o#nsel asserted, that
maintaina%ility e.ists, %eca#se we can all ma:e mista:es, and the
mista:es that we ma:e, need to %e corrected*. -he s#%mission of the
learned co#nsel in this %ehalf was, that in the a%o"e "iew of the matter,
/#risdiction co#ld tr#ly %e traced, to +rticles 1@ and 14 for correcting
mista:es. It was the s#%mission of the learned co#nsel, that this )o#rt
%eing a )o#rt of record, had #nlimited /#risdiction to correct all mista:es
committed %y it. <eferring to +rticle 14 of the )onstit#tion of India it was
s#%mitted, that it was the pio#s o%ligation of )o#rt to do complete /#stice,
and accordingly, whene"er in/#stice was tracea%le, it was imperati"e for
this )o#rt to rectify the same. Kn the s#%/ect #nder reference, learned
2enior )o#nsel relied on the decision in <#pa +sho: &#rra(s case (s#pra)
and in"ited o#r pointed attention to following o%ser"ations recorded
therein:-
3. -hese contentions pose the ?#estion, whether an order
passed %y this )o#rt can %e corrected #nder its inherent powers
after dismissal of the re"iew petition on the gro#nd that it was
passed either witho#t /#risdiction or in "iolation of the principles of
nat#ral /#stice or d#e to #nfair proced#re gi"ing scope for %ias which
res#lted in a%#se of the process of the )o#rt or miscarriage of
/#stice to an aggrie"ed person.
... ... ...
Page 194
1@4
4@. -he #pshot of the disc#ssion in o#r "iew is that this )o#rt, to
pre"ent a%#se of its process and to c#re a gross miscarriage of
/#stice, may re-consider its /#dgments in e.ercise of its inherent
power.
3!. -he ne.t step is to specify the re?#irements to entertain s#ch
a c#rati"e petition #nder the inherent power of this )o#rt so that
floodgates are not opened for filing a second re"iew petition as a
matter of co#rse in the g#ise of a c#rati"e petition #nder inherent
power. It is common gro#nd that e.cept when "ery strong reasons
e.ist, the )o#rt sho#ld not entertain an application see:ing
reconsideration of an order of this )o#rt which has %ecome final on
dismissal of a re"iew petition. It is neither ad"isa%le nor possi%le to
en#merate all the gro#nds on which s#ch a petition may %e
entertained.*
(emphasis is o#rs)
143. It is not possi%le for #s to accept the contention ad"anced at the
hands of the learned 2enior )o#nsel. 8y placing reliance on the decision
rendered %y this )o#rt in <#pa +sho: &#rra(s case (s#pra), learned
co#nsel m#st %e deemed to ha"e impliedly conceded the iss#e, against
himself. In <#pa +sho: &#rra(s case (s#pra), this )o#rt e.amined the
remedies a"aila%le to an indi"id#al. In the a%o"e /#dgment, this )o#rt
e.amined the am%it and scope of +rticle 136 of the )onstit#tion of India,
where#nder, a re"iew petition co#ld %e filed for the correction of an error
apparent on the face of the record. In the /#dgment relied #pon, this )o#rt
also e.pressed the "iew, that a c#rati"e petition co#ld %e filed for
corrections of s#ch li:e errors, after a re"iew petition had %een dismissed.
It is rele"ant to mention, that in f#rtherance of the directions iss#ed %y this
)o#rt in <#pa +sho: &#rra(s case (s#pra), this )o#rt has framed r#les, for
entertaining c#rati"e petitions. 2#ch c#rati"e petitions, when entertained,
are placed %efore a fi"e-7#dge 8ench incl#ding the senior most three
Page 195
1@3
7#dges of this )o#rt. 'lacing reliance on <#pa +sho: &#rra(s case
(s#pra) e"idences, that the petitioner was aware of the /#risdiction of this
)o#rt #nder +rticle 136 of the )onstit#tion of India for filing a re"iew
petition, as also, the permissi%ility of filing a c#rati"e petition, after the
concerned party had not s#cceeded, in the re"iew petition. 0nfort#nately,
the petitioner has not chosen either of the a%o"e /#risdictions. -he instant
petition has %een styled as a criminal writ petition. -he instant petition is
not maintaina%le as no fresh petition is shown to %e maintaina%le, #nder
the pro"isions (+rticles 1@ and 14 of the )onstit#tion of India), relied
#pon %y the learned 2enior )o#nsel. >oreo"er, o#r deli%erations on the
merits of the contro"ersy f#rther re"eals, that there is neither any
/#risdictional error, nor any error in law has %een shown to %e made o#t,
from the imp#gned order dated 4.3.!14.
144. 4or all the reasons recorded hereina%o"e we are of the "iew, that
the instant petition is not maintaina%le and the same is, therefore, lia%le to
%e dismissed on the gro#nd of maintaina%ility.
AI. C&,75!.+&,.
143. In "iew of o#r findings recorded hereina%o"e, o#r concl#sions are
s#mmariCed here#nder:-
I. 1e find no merit in the contention ad"anced on %ehalf of the
petitioner, that we sho#ld rec#se o#rsel"es from the hearing of this case.
)alc#lated psychological offensi"es and mind games adopted to see:
rec#sal of 7#dges, need to %e strongly rep#lsed. 1e deprecate s#ch
Page 196
1@,
tactics and commend a similar approach to other )o#rts, when they
e.perience s#ch %eha"io#r. (4or details, refer to paragraph nos. 1 to 14).
II. Diso%edience of orders of a )o#rt stri:es at the "ery root of the r#le
of law, on which the /#dicial system rests. 7#dicial orders are %o#nd to %e
o%eyed at all costs. &owsoe"er gra"e the effect may %e, is no answer for
non-compliance of a /#dicial order. 7#dicial orders cannot %e permitted to
%e circ#m"ented. In e.ercise of contempt /#risdiction, )o#rts ha"e the
power to enforce compliance of /#dicial orders, and also, the power to
p#nish for contempt. (4or details, refer to paragraph nos. 13 to 1@).
III. -he facts of this case re"eal, that the two companies of which the
petitioner is a promoter, flo#ted orders passed %y the 2;8I (4->), 2+-,
the &igh )o#rt and of this )o#rt, with imp#nity. 4acts and information
solicited were ne"er disclosed. -he position adopted %y the two
companies was always pro/ected on the %asis of #n"erifia%le material.
-his )o#rt recorded in its order dated 31.5.!1, that the fact#al
assertions made on %ehalf of the two companies seemed to %e totally
#nrealistic and co#ld well %e fictitio#s, concocted and made #p, and also
remar:ed, that the affairs of the two companies seemed to %e do#%tf#l,
d#%io#s and ?#estiona%le. -he a%o"e position has remained #naltered,
inasm#ch as, no a#thentic and "erifia%le material so#ght has e"er %een
f#rnished %y the two companies. -he two companies remained adamant
while frittering away repeated opport#nities granted %y this )o#rt to comply
with the orders dated 31.5.!1 and 3.1.!1. -he companies adopted a
Page 197
1@6
demeano#r of defiance constit#ting a re%ellio#s %eha"io#r, not amena%le
to the r#le of law. (4or details, refer to paragraph nos. ! to 3@).
IA. ;fforts made to ca/ole the two companies and the petitioner were
always stonewalled and %r#shed off. +ll intermediary means to sec#re
compliance of this )o#rt(s orders dated 31.5.!1 and 3.1.!1, were
e"aded and s:irted. ;"en proposals to sec#re the payments (as against,
the payment itself) to %e made to the in"estors, in terms of this )o#rt(s
orders, were systematically fr#strated. 2imilar proposals made #nilaterally
%y learned 2enior )o#nsel representing the two companies and the
petitioner himself, t#rned o#t to %e ploys to sidetrac: and derail the
process of law. 2#ch #nilateral proposals, were #nilaterally withdrawn.
2ince all the efforts to ca/ole the two companies and the petitioner were
methodically circ#m"ented, we started adopting se?#entially harsher
means to pers#ade compliance of this )o#rt(s orders dated 31.5.!1 and
3.1.!1, leading finally to the passing of the imp#gned order dated
4.3.!14. (4or details, refer to paragraph nos. 4! to 33).
A. -he )ode of )i"il 'roced#re, 1@!5, which reg#lates ci"il
proceedings in India, e.pressly contemplates arrest and detention for the
enforcement of a money decree. +nd the )ode of )riminal 'roced#re,
1@63, which reg#lates criminal proceedings in India, en"isages arrest and
detention as a mean for enforcing financial lia%ility. -he s#%mission made
%y the learned 2enior )o#nsel for the petitioner to the effect, that
e.ec#tion of a money decree or enforcement of a financial lia%ility %y way
Page 198
1@5
of arrest and detention was a proced#re #n:nown to law, is therefore,
wholly misconcei"ed. (4or details, refer to paragraph nos. 3, to ,1).
AI. -he s#%mission made %y the learned co#nsel for the petitioner, that
this )o#rt was o%liged to comply with the proced#re contemplated #nder
2ection 31, and r#les 36 and 4! of Krder RRI, of the )ode of )i"il
'roced#re, 1@!5, %efore ordering the arrest and detention of the petitioner
(and the other contemnors) is de"oid of any merit, %eca#se 2ection 31 of
the )ode of )i"il 'roced#re, 1@!5 and the other allied pro"isions referred
to a%o"e, are not applica%le to actions emanating o#t of the 2;8I +ct. 2o
also, r#le , of Krder RIII of the 2#preme )o#rt <#les, 1@,,, has no
applica%ility, with reference to the 2;8I +ct. 8e that as it may, this )o#rt
%efore passing the imp#gned order dated 4.3.!14 had immac#lately
followed the proced#re contemplated #nder the pro"isions of the )ode of
)i"il 'roced#re, 1@!5, as were relied #pon %y the learned co#nsel for the
petitioner, %efore ordering the petitioner(s (and the other contemnors()
arrest and detention. -he s#%mission of the learned co#nsel for the
petitioner, so as to a"oid his arrest and detention, %ased on the /#dgment
rendered %y this )o#rt in 7olly Deorge Aarghese P +nr. ". 8an: of )ochin,
(1@5!) 2)) 3,!, %eing inapplica%le to the facts and circ#mstances of
this case, was lia%le to %e re/ected, and has accordingly %een re/ected.
(4or details, refer to paragraph nos. , to 66).
AII. In response to a prayer made %y the 2;8I (in Interloc#tory
+pplication nos. ,5 and ,@ of !13 in )i"il +ppeal no. @513 of !11), inter
Page 199
1@@
alia, see:ing the arrest and detention of the petitioner (and two other
contemnors, namely, >r. <a"i 2han:ar D#%ey and >r. +sho: <oy
)ho#dhary), the petitioner filed a personal reply %y way of an affida"it.
-he petitioner in his written reply raised all possi%le legal and fact#al
defences. Different orders were passed from time to time in f#rtherance of
the prayers made in the aforementioned interloc#tory applications,
incl#ding the order pre"enting the petitioner (and the other contemnors)
from lea"ing the co#ntry, as also, the order restraining the two companies
from parting with any mo"a%le or immo"a%le property. + n#m%er of
opport#nities of hearing were gi"en to the learned co#nsel representing the
two companies and the contemnors. 4inding the attit#de of the
contemnors defiant and non-cooperati"e, their personal presence was
ordered. -he petitioner, who was directed to %e present on ,..!14, did
not enter personal appearance. &is personal presence was enforced
thro#gh non-%aila%le warrants on 4.3.!14. D#ring the co#rse of their
personal presence in )o#rt, the petitioner and the other contemnors were
afforded an opport#nity of oral hearing. -he petitioner repeatedly
addressed this )o#rt on 4.3.!14. Knly thereafter, the imp#gned order
dated 4.3.!14 was passed. In "iew of the a%o"e facts it is not possi%le for
#s to accept, that the imp#gned order was passed witho#t following the
r#les of nat#ral /#stice or witho#t affording the petitioner an opport#nity of
hearing. (4or details, refer to paragraph nos. 65 to @,).
Page 200
!!
AIII. -he law laid down %y this )o#rt in 7aswant 2ingh ". Airender 2ingh
P Krs., 1@@3 2#pp. (1) 2)) 354, has %een fo#nd to %e f#lly applica%le to
the facts of this case, partic#larly the mannerism and demeano#r e.hi%ited
%y the petitioner and some of the learned co#nsel. K#r rec#sal from the
case so#ght on the gro#nd of %ias, has %een fo#nd to %e de"oid of any
merit. ;ach and e"ery insin#ation le"elled %y the petitioner and his
learned 2enior )o#nsel, d#ring the co#rse of hearing, has %een
considered and re/ected on merits. (4or details, refer to paragraph nos. @6
to 11).
IR. -he defence raised %y the petitioner, that the two companies had
already s#%stantially redeemed the K4)D(s, has %een e.amined #nder
two different perspecti"es. 4irstly, the a%o"e defence is #na"aila%le to the
two companies in law, after the same was re/ected on 3.1.!1 %y a
three-7#dge Di"ision 8ench (in )i"il +ppeal no. 5,43 of !1 and 1rit
'etition ()i"il) no. 36 of !1). 2econdly, the said defence has %een
e.amined from "ario#s fact#al perspecti"es and has %een fo#nd to %e
#ntena%le. 2ole reliance on general ledger entries witho#t any other
a#thentication, has %een held to %e ins#fficient proof of the ref#nds
claimed to ha"e %een made %y the two companies to the in"estors,
specially %eca#se, s#ch cash redemptions ha"e not %een affirmed in the
certificate iss#ed %y the firm of )hartered +cco#ntants, which had a#dited
the acco#nts of the two companies. (4or details, refer to paragraph nos.
113 to 1).
Page 201
!1
R. -he s#%mission ad"anced %y >r. <am 7ethmalani, learned 2enior
)o#nsel asserting the maintaina%ility of the instant petition #nder the
ma.im of e0 debito 4ustitiae, e.pressly recogniCed %y this )o#rt in +.<.
+nt#lay ". <.2. 9aya:, (1@55) 2)) ,!, is held to %e de"oid of any
merit, conse?#ent #pon a detailed analysis of the /#dgment relied #pon.
-he contention ad"anced %y >r. ).+. 2#ndaram, learned 2enior )o#nsel
for the petitioner, pro/ecting the maintaina%ility of the instant petition #nder
+rticle 3 read with +rticle 1 of the )onstit#tion of India, has %een fo#nd
to %e #naccepta%le in law on the %asis of a series of /#dgments rendered
%y this )o#rt. -he s#%mission ad"anced %y Dr. <a/ee" Dhawan, learned
2enior )o#nsel representing the petitioner, s#pporting the maintaina%ility
of the instant petition %y placing collecti"e reliance on +rticles 1@ and 14
of the )onstit#tion of India, has also %een fo#nd to %e ill-fo#nded. (4or
details, refer to paragraph nos. 13 to 144).
4or the reasons recorded hereina%o"e, we find no merit in the present
petition, and the same is accordingly dismissed.
AII. P&.% S7#+1%
14,. ;"en tho#gh o#r instant o%ser"ations are %eing recorded as a post
script, after we ha"e concl#ded e.amining the merits of the contro"ersy
arising o#t of the criminal writ petition filed %y the petitioner - >r. 2#%rata
<oy 2ahara, the instant part of o#r /#dgment sho#ld %e treated as a part
and parcel of o#r decision, %eca#se it emerges o#t of years of o#r
Page 202
!
e.perience with the /#stice deli"ery system, and is prompted on acco#nt of
the a%#se of the /#dicial process, e.posed while dealing with some 2ahara
Dro#p related cases. -he serio#sness of the concl#sions recorded herein,
we hope, shall not %e o"erloo:ed merely on acco#nt of the heading gi"en
to this part.
146. -he n#m%er of similar litigants, as the parties in this gro#p of cases,
is on the increase. -hey deri"e their strength from a%#se of the legal
process. )o#nsel are a"aila%le, if the litigant is willing to pay their fee.
-heir percentage is slightly higher at the lower le"els of the /#dicial
hierarchy, and almost non-e.istent at the le"el of the 2#preme )o#rt. Kne
wonders, what is it, that a 7#dge sho#ld %e made of, to deal with s#ch
litigants, who ha"e nothing to lose. 1hat is the le"el of merit, grit and
compos#re re?#ired, to stand #p to the press#res of today(s litigantsG
1hat is it, that is needed to %ear the affront, scorn and ridic#le h#rled at
officers presiding o"er )o#rtsG 2#rely one wo#ld need s#perh#mans to
handle the emerging press#res on the /#dicial system. -he res#ltant
d#ress is gr#eling. Kne wo#ld hope for s#pport for officers presiding o"er
)o#rts, from the legal fraternity, as also, from the s#perior /#diciary #pto
the highest le"el. -hen and only then, will it %e possi%le to maintain
e?#ili%ri#m, essential to deal with complicated disp#tations, which arise for
determination all the time, irrespecti"e of the le"el and the stat#re, of the
)o#rt concerned. +nd also, to deal with s#ch litigants.
Page 203
!3
145. 1e ha"e no do#%t, that the two companies and the present
petitioner %efore this )o#rt M >r. 2#%rata <oy 2ahara, are s#ch litigants.
-hey ne"er s#%/ected themsel"es to the a#thority and /#risdiction of the
2;8I. -hey ha"e contin#ed with the same mannerism at all le"els, right
#pto this )o#rt. -hey ha"e always adopted an acc#sing stance, %efore all
the ad/#dicatory a#thorities. ;"en against #s. ;.ha#sti"e details in this
%ehalf ha"e %een e.pressed %y #s, in the order dated 31.5.!1. -he
pleas raised ha"e %een fo#nd to %e patently false, on the face of the
record.
14@. D#ring the co#rse of passing this /#dgment, we re?#ired the <egistry
of this )o#rt to place %efore #s a compilation of the orders passed on
different dates of hearing, e"er since the filing of the appeals, which
c#lminated in passing of the order dated 31.5.!1. 1e were asto#nded
to learn, that the contro"ersy arising o#t of )i"il +ppeal nos. @513 and
@533 of !11 was listed for hearing on the following 51 dates:-
5.11.!11, @.1.!1, !.1.!1, 1!..!1, .3.!1, !.3.!1,
3.3.!1, 6.3.!1, 5.3.!1, @.3.!1, 3.4.!1, 1!.4.!1,
11.4.!1, 1.4.!1, 16.4.!1, 15.4.!1, 1@.4.!1, !.4.!1,
4.4.!1, 3.4.!1, ,.4.!1, 1.3.!1, .3.!1, 3.3.!1,
4.3.!1, 3!.3.!1, 31.3.!1, 1.,.!1, 3.,.!1, ,.,.!1,
6.,.!1, 1.,.!1, 13.,.!1, 14.,.!1, 31.5.!1, 11.@.!1,
5.@.!1, 1@.1!.!1, 1@.11.!1, 5.1.!13, ,..!13, 5..!13,
1@..!13, 3..!13, 4.4.!13, .4.!13, .3.!13, 5.3.!13,
16.6.!13, 4.6.!13, 3!.6.!13, ,.5.!13, 13.5.!13, ,.5.!13,
.@.!13, 1,.@.!13, 4.1!.!13, 5.1!.!13, 31.1!.!13, 1.11.!13,
!.11.!13, 1.11.!13, 11.1.!13, 16.1.!13, .1.!14,
@.1.!14, 5.1.!14, 11..!14, !..!14, ,..!14, 4.3.!14,
6.3.!14, 1.3.!14, 13.3.!14, ,.3.!14, 6.3.!14, 3.4.!14,
@.4.!14, 1,.4.!14, 16.4.!14 and 1.4.!14*
Page 204
!4
+ lot of these hearings cons#med this )o#rt(s f#ll wor:ing day. &earing of
the main case, cons#med one f#ll part, of the entire s#mmer "acation (of
the 2#preme )o#rt) of the year !1. 4or the "ario#s orders passed %y
#s, incl#ding the order dated 31.5.!1 (r#nning into ,@ printed pages)
and the present order (r#nning into !3 printed pages), s#%stantial 7#dge
ho#rs were cons#med. In this co#ntry, /#dicial orders are prepared,
%eyond )o#rt ho#rs, or on non-wor:ing days. It is apparent, that not a
h#ndred, %#t h#ndreds of 7#dge ho#rs, came to %e spent in the instant
single 2ahara Dro#p litigation, /#st at the hands of the 2#preme )o#rt.
-his a%#se of the /#dicial process, needs to %e remedied. 1e are,
therefore of the considered "iew, that the legislat#re needs to gi"e a
tho#ght, to a "ery serio#s malady, which has made strong inroads into the
Indian /#dicial system.
13!. -he Indian /#dicial system is grossly afflicted, with fri"olo#s litigation.
1ays and means need to %e e"ol"ed, to deter litigants from their
comp#lsi"e o%session, towards senseless and ill-considered claims. Kne
needs to :eep in mind, that in the process of litigation, there is an innocent
s#fferer on the other side, of e"ery irresponsi%le and senseless claim. &e
s#ffers long drawn an.io#s periods of ner"o#sness and restlessness,
whilst the litigation is pending, witho#t any fa#lt on his part. &e pays for
the litigation, from o#t of his sa"ings (or o#t of his %orrowings), worrying
that the other side may tric: him into defeat, for no fa#lt of his. &e spends
in"al#a%le time %riefing co#nsel and preparing them for his claim. -ime
Page 205
!3
which he sho#ld ha"e spent at wor:, or with his family, is lost, for no fa#lt
of his. 2ho#ld a litigant not %e compensated for, what he has lost, for no
fa#ltG -he s#ggestion to the legislat#re is, that a litigant who has
s#cceeded, m#st %e compensated %y the one, who has lost. -he
s#ggestion to the legislat#re is to form#late a mechanism, that anyone who
initiates and contin#es a litigation senselessly, pays for the same. It is
s#ggested that the legislat#re sho#ld consider the introd#ction of a )ode
of )omp#lsory )osts*.
131. 1e sho#ld not %e ta:en to ha"e s#ggested, that the cost of litigation
sho#ld %e enhanced. It is not o#r s#ggestion, that )o#rt fee or other
litigation related costs, sho#ld %e raised. +ccess to /#stice and related
costs, sho#ld %e as free and as low, as possi%le. 1hat is so#ght to %e
redressed is a ha%it#ation, to press illegitimate claims. -his practice and
pattern is so rampant, that in most cases, disp#tes which o#ght to ha"e
%een settled in no time at all, %efore the first )o#rt of incidence, are
prolonged endlessly, for years and years, and from )o#rt to )o#rt, #pto
the highest )o#rt.
13. -his a%#se of the /#dicial process is not limited to any partic#lar
class of litigants. -he 2tate and its agencies litigate endlessly #pto the
highest )o#rt, /#st %eca#se of the lac: of responsi%ility, to ta:e decisions.
2o m#ch so, that we ha"e started to entertain the impression, that all
administrati"e and e.ec#ti"e decision ma:ing, are %eing left to )o#rts, /#st
for that reason. In pri"ate litigation as well, the concerned litigant wo#ld
Page 206
!,
contin#e to approach the higher )o#rt, despite the fact that he had lost in
e"ery )o#rt hitherto %efore. -he effort is not to disco#rage a litigant, in
whose perception, his ca#se is fair and legitimate. -he effort is only to
introd#ce conse?#ences, if the litigant(s perception was incorrect, and if his
ca#se is fo#nd to %e, not fair and legitimate, he m#st pay for the same. In
the present setting of the ad/#dicatory process, a litigant, no matter how
irresponsi%le he is, s#ffers no conse?#ences. ;"ery litigant, therefore li:es
to ta:e a chance, e"en when co#nsel(s ad"ice is otherwise.
133. Does the concerned litigant realiCe, that the litigant on the other side
has had to defend himself, from )o#rt to )o#rt, and has had to inc#r
e.penses towards s#ch defenceG +nd there are some litigants who
contin#e to p#rs#e senseless and ill-considered claims, to somehow or the
other, defeat the process of law. -he present case, is a classic ill#stration
of what we wish to e.press. &erein the reg#lating a#thority has had to
s#ffer litigation from )o#rt to )o#rt, inc#rring p#%lic e.pense in its defence,
against fri"olo#s litigation. ;"ery order was consistently and systematically
diso%eyed. ;"ery order passed %y the 2;8I was assailed %efore the ne.t
higher a#thority, and then %efore this )o#rt. ;"en tho#gh &igh )o#rts
ha"e no /#risdiction, in respect of iss#es reg#lated %y the 2;8I +ct, some
matters were ta:en to the &igh )o#rt of 7#dicat#re at +llaha%ad (%efore its
B#c:now 8ench). ;"ery s#ch endea"o#r res#lted in fail#re, and was also
sometimes, accompanied with strict#res. ;"en after the matter had
concl#ded, after the contro"ersy had attained finality, the /#dicial process is
Page 207
!6
still %eing a%#sed, for close to two years. + conscio#s effort on the part of
the legislat#re in this %ehalf, wo#ld ser"e se"eral p#rposes. It wo#ld,
%esides e"erything else, red#ce fri"olo#s litigation. 1hen the litigating
party #nderstands, that it wo#ld ha"e to compensate the party which
s#cceeds, #nnecessary litigation will %e s#%stantially red#ced. +t the end
of the day, )o#rt time lost is a direct loss to the nation. It is a%o#t time,
that the legislat#re sho#ld e"ol"e ways and means to c#rtail this #nmindf#l
acti"ity. 1e are s#re, that an e"ent#al determination, one way or the
other, wo#ld %e in the %est interest of this co#ntry, as also, its co#ntrymen.

))))))))))).J.
(3.S. R$0($D#+.(,$,)
))))))))))).J.
(J$20+.( S+,2( 3(*($#)
9ew Delhi$
>ay ,, !14.