Kingfisher in the cage of Contempt

Dec 14, 2020

One must find the roots of the phrase "Contempt of Court" in Article 129 and 215 of the Constitution of India. Section 2(b) of the Contempt of Court Act, 1971 has defined civil contempt is 'willful disobedience to any judgment, decree, direction, order, writ or other processes of a Court or willful breach of an undertaking given to the court'. "The object of the discipline enforced by the Court in case of contempt of court is not to vindicate the dignity of the Court or the person of the Judge, but to prevent undue interference with the administration of justice." The Supreme Court (SC) in its verdict as on August 31 2020, has dismissed the Review Petition filed by Mr Vijay Mallya(Petitioner) against the order dated May 09 2017, whereby Supreme Court has sentenced the Petitioner for committing of civil Contempt, for the reason of disobedience of the order of Supreme Court dated 07.04.2016 and two orders dated 03.09.2013 and 13.11.2013 of the High Court of Karnataka. The details are as follows:

The reasoning for the initiation of the contempt proceeding was the order of the DRT, Bengaluru, whereby the State Bank of India and 13 other banks (Banks) filed fourInterlocutory Applications with interim Prayers of "(i) to freeze the passport of Respondent No.3 (ii) to issue an arrest warrant against Respondent No.3, (iii) to issue a garnishee order against Respondent Nos.10 and 11 from disbursing US$ 75 million, and (iv) to issue a direction to Respondent No.3 to disclose his assets on oath."

The DRT, Bengaluru considered only the third one and neglected other applications; and consequently, Banks moved to High Court for seeking relief. Further, HC also dismissed the applications. Aggrieved with the decision of HC; Banks filed a Special Leave Petition (SLP) in the SC.

On 07. 04. 2016 the SC observed, condition for showing bonafide intent of repaying loan amount of Rs.6203,35,03,879.32; Mr Vijay Mallya must disclose, on oath, all the properties, he has within, and outside India, accordingly, he disclosed his assets to the tune of Rs.20,174,146,601; but failed to whisper or suppressed about the US $40 million which he received on 25.02.2016 through J.P. Morgan Chase N.A. Bank. The Banks in Contempt Petition Nos. 421-424 of 2016 within this SLP have stated that the disclosure of the properties by Mr Vijay Mallya was vague, lack in the material of particulars and thereby, he wilfully disobeyed the order dated 07.04.2016. Subsequently, in an order dated 25.10.2016, SC has directed Mr Vijay Mallya to disclose, accurately and completely, all his properties and the disclosure of the detailed report regarding the US $40 million. Mr Vijay Mallya, by way of Gift Settlement, distributed the US $40 million to his children's' trusts and thereby, the Banks submitted that the transfer of US$ 40 million to his children was Contempt of the Orders of the injunction passed by the HC of Karnataka, for "transferring, alienating, disposing or creating third party rights in respect of movable as well as immovable properties belonging to them", in Writ petition bearing W.P.No.38870/2013 & W.P.No.39048-39052/2013. The HC of Karnataka has confirmed the same order dated 03.09.2013 on 13.11.2013. The Banks also contended that "it was an attempt to subvert the Course of Justice by diverting the funds to shield them from ongoing recovery proceedings."

On 11.01.2017, the SC in its order directed the counsel of Mr Vijay Mallya to file its reply within three weeks, for contentions of violating the orders of the HC of Karnataka and for a prayer of depositing the US $40 million with DRT or SC. In the Review Petition order dated 31.08.2020, it was clarified by the SC that the counsel of Mr Vijay Mallya had filed its reply as on 30.01.2017 and acceptance of error committed by SC regarding non-filing of reply.

The SC in SLP has cleared the dust from various law aspects. The Learned counsel for Mr Vijay Mallya argued that SC should not take cognizance of violation of HC orders. To justify this argument, SC cited Delhi Judicial Service Association, Tis Hazari Court, Delhi v. State of Gujarat and others, whereby the learned Attorney General argued that, the Apex Court is guardian and protector of law and justice, thus has a right and duty to protect courts' orders. As the SC was dealing with the same issue, which was restrained in HC orders, the SC has cognizance to deal with this matter.

The SC in its order dated 09.05.2017, found Mr Vijay Mallya guilty for civil Contempt of violation of HC orders and disobedience in non-disclosure of assets directed by SC. Accordingly, the Review Petition filed, where the counsel for Mr Vijay Mallya had opposed to the undertaking given in DRT and order of HC of Karnataka and questioned regarding oral hearing when the reply was not considered, the purport of the undertaking was different in that of the response of banks and any explanation by Mr Vijay Mallya of non-violation of orders. Nonetheless, the SC observed that the reply dated 30.01.2017 was a mere repetition of earlier submissions and nothing was opposed to the undertaking of DRT and orders of HC, therefore dismissed Review Petition on 31.08.2020.