# [2001] Supp. 1 S.C.R. 387

- **Citation:** [2001] Supp. 1 S.C.R. 387
- **Court:** Supreme Court of India
- **Decided:** 2001-08-10
- **Bench:** B.N. Kirpal, Ruma Pal, Brijesh Kumar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/2001-supp-1-s-c-r-387-18012
- **Pages:** 29

## Headnote

B
Contempt of Courts Act, 1971-Sections 20 and 22-lnterim order of
Special Court to appellant not to alienate, encumber, sell or transfer his
movable or immovable assets, including bank accounts-Appellant set up C
benami companies and transferred and/or alienated his properties including
cash in violation of the interim order-Facts detected during income tax raids ·
conducted by Revenue-Application for initiation of contempt proceedings
filed by Custodian-Period of limitation of action for contempt-Held, on
facts, fraud had been committed by the appellant-Benefit of /imitation cannot
be claimed by virtue of fraud-Period of limitation starts from the date of D
knowledge and not from date of commission of contempt-Hence the application
is within the period of limitation-Action taken by Special Court to punish the
appellant for contempt valid-Limitation Act, 1963-Section 17.
Special Court (Trial of Offences Relating to Transactions in Securities)
Act, 1992-Section 11-A-Power of Special Court to punish for contempt of" E
itself-Held, the power is available under the Constitution-Constitution of
India, 1950-Article 215.
Constitution of India, 1950-Articles 129 and 215-Power of Supreme
Court/High Court to punish for contempt of itself-Validity of any provision/ F
law abrogating or stultifying the power-Held, not a valid provision/lawProvision regarding quantum of punishment or the various acts of contempt
or providing for a period of limitation for initiating contempt proceedingsHeld valid.
Certain company was notified under the provisions of the Special Court G
constituted under the Special Court (Trial of Offences Relating to Transactions
in Securities) Act, 1992 and the properties belonging to the company were
attached under the Act. Respondent-custodian, who was appointed under the
Act, filed an application seeking a decree for Rs. 50 crores on behalf of the
notified company against the appellant. The appellant consented to pay the
387
H
388
SUPREME COURT REPORTS [2001) SUPP. I S.C.R.
A amount in instalments. and paid Rs. 2 crores but defaulted in payment of
further instalments. The custodian filed an execution application before the
Special Court_. The Court directed the appellant to file an affidavit declaring
all his assets and further restrained the appellant from alienating,
encumbering, selling off or parting with possession or transferring in any
B manner whatsoever any of his assets, movable and immovable, including bank
accounts. Affidavit was filed accordingly. The Special Court passed an interim
order of attachment of some of the assets.
Meanwhile, income tax raids were conducted on the appellant On some
newspaper reports about detection of assets belonging to the appellant by the
C Revenue, the Special Court directed the respondent-custodian to obtain
complete details of all the assets of the appellant from the Revenue. The
custodian found from the Revenue that the appellant had set up five benami
companies; that the assets of the five companies belong to the appellant; that
the appellant, along with his wife, had several cash deposits amounting to Rs.
2.81 crores made in the bank accounts of the five companies, which were his
D undisclosed income; and that these companies were to receive substantial
amounts from other companies/individuals.
The custodian filed an application before the Special Court for initiating
contempt proceedings on the ground that the appellant had set up benami
companies and had transferred and/or alienated his property including cash,
E inter alia, with a view to defeat the decree passed against him by the Special
Court. The Special court, after issuing a show-cause notice, held the appellant
guilty of contempt of Court and sentenced him to one month's simple
imprisonment with a fine of Rs. 2,000. The Special court further held that its
action was not barred by limitation as contemplated by Section 20 of the
F Contempt of Courts Act, 1971 on the ground that this was a case of continuing
wro

## Text

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...
PALLAV SHETH
A
v .
CUSTODIAN AND ORS.
AUGUST 10, 2001
(B.N. KIRPAL, RUMA PAL AND BRIJESH KUMAR, JJ.]
B
Contempt of Courts Act, 1971-Sections 20 and 22-lnterim order of
Special Court to appellant not to alienate, encumber, sell or transfer his
movable or immovable assets, including bank accounts-Appellant set up C
benami companies and transferred and/or alienated his properties including
cash in violation of the interim order-Facts detected during income tax raids ·
conducted by Revenue-Application for initiation of contempt proceedings
filed by Custodian-Period of limitation of action for contempt-Held, on
facts, fraud had been committed by the appellant-Benefit of /imitation cannot
be claimed by virtue of fraud-Period of limitation starts from the date of D
knowledge and not from date of commission of contempt-Hence the application
is within the period of limitation-Action taken by Special Court to punish the
appellant for contempt valid-Limitation Act, 1963-Section 17.
Special Court (Trial of Offences Relating to Transactions in Securities)
Act, 1992-Section 11-A-Power of Special Court to punish for contempt of" E
itself-Held, the power is available under the Constitution-Constitution of
India, 1950-Article 215.
Constitution of India, 1950-Articles 129 and 215-Power of Supreme
Court/High Court to punish for contempt of itself-Validity of any provision/ F
law abrogating or stultifying the power-Held, not a valid provision/lawProvision regarding quantum of punishment or the various acts of contempt
or providing for a period of limitation for initiating contempt proceedingsHeld valid.
Certain company was notified under the provisions of the Special Court G
constituted under the Special Court (Trial of Offences Relating to Transactions
in Securities) Act, 1992 and the properties belonging to the company were
attached under the Act. Respondent-custodian, who was appointed under the
Act, filed an application seeking a decree for Rs. 50 crores on behalf of the
notified company against the appellant. The appellant consented to pay the
387
H
388
SUPREME COURT REPORTS [2001) SUPP. I S.C.R.
A amount in instalments. and paid Rs. 2 crores but defaulted in payment of
further instalments. The custodian filed an execution application before the
Special Court_. The Court directed the appellant to file an affidavit declaring
all his assets and further restrained the appellant from alienating,
encumbering, selling off or parting with possession or transferring in any
B manner whatsoever any of his assets, movable and immovable, including bank
accounts. Affidavit was filed accordingly. The Special Court passed an interim
order of attachment of some of the assets.
Meanwhile, income tax raids were conducted on the appellant On some
newspaper reports about detection of assets belonging to the appellant by the
C Revenue, the Special Court directed the respondent-custodian to obtain
complete details of all the assets of the appellant from the Revenue. The
custodian found from the Revenue that the appellant had set up five benami
companies; that the assets of the five companies belong to the appellant; that
the appellant, along with his wife, had several cash deposits amounting to Rs.
2.81 crores made in the bank accounts of the five companies, which were his
D undisclosed income; and that these companies were to receive substantial
amounts from other companies/individuals.
The custodian filed an application before the Special Court for initiating
contempt proceedings on the ground that the appellant had set up benami
companies and had transferred and/or alienated his property including cash,
E inter alia, with a view to defeat the decree passed against him by the Special
Court. The Special court, after issuing a show-cause notice, held the appellant
guilty of contempt of Court and sentenced him to one month's simple
imprisonment with a fine of Rs. 2,000. The Special court further held that its
action was not barred by limitation as contemplated by Section 20 of the
F Contempt of Courts Act, 1971 on the ground that this was a case of continuing
wrong.
In appeal to this Court, the appellant contended that the Special Court
had initiated proceedings for contempt after the expiry of a period of one
year from the date on which the contempt was committed; that under Section
G 20 of the Contempt of Courts Act, 1971, the court is prohibited from taking
any action at a belated stage; that Section 20 is mandatory; that Section 20
does not mention of filing an application for initiating proceedings for
contempt and, therefore the provisions of Section 29(2) of the Limitation Act,
1963 would have no application; that an action of contempt was between the
Court and the alleged contemner and so the date of filing of the petition was
H not relevant; and that the issuance of show-cause notice was not the initiation
PALLAV SHETH v. CUSTODIAN
389
of contempt proceedings by the Court.
A
The respondent-custodian contended that the power of the High Court
to punish for contempt of itself under Article 215 of the Constitution cannot
be curbed, curtailed, abrogated, stultified or restricted by any other statutory
law including the Contempt of Courts Act, 1971; that Section 20 of the
Contempt of Courts Act cannot bind the High Court exercising inherent B
powers under Article 215 of the Constitution; that the proceedings are initiated
by the filing of an application and the period of limitation will begin to run
from the date of knowledge in cases where the contempt has been concealed
by fraud or dishonest conduct of the contemner.
Dismissing the appeals, the Court
HELD: 1.1. The Rules framed under Section 23 of the Contempt of
Courts Act, 1971 by the Supreme Court and High Courts show that
proceedings are initiated inter a/ia with the filing of an application or a petition
c
in that behalf. If however, the proceedings are not initiated by filing of an
application within a period of one year from the date on which the contempt D
is alleged to have been committed, then the court shall not have jurisdiction
to punish for contempt. If, on the other •hand, proceedings are properly
initiated by the filing of an application, in the case of civil contempt before
the court within the period oflimitation then the provisions ofSeCtion 20 will
not stand in t.he way of the court exercising its-jurisdiction. [410-A, B]
E
1.2. In the case of criminal contempt of subordinate court, the High
Court may take action on a reference made to it by the subordinate court or
on a motion made by the Advocate-General or the Law Officer of the Central
Government in the case of Union Territory. This reference or motion can
conceivably commence on an application being filed by a person whereupon F
the subordinate court or the Advocate-General if it is so satisfied may refer
the matter to the High Court. Proceedings for civil contempt normally
commence with a person aggrieved bringing to the notice of the court the
wilful disobedience of any judgment, decree, order etc. which could amount
to the commission of the offence. The attention of the court is drawn to such
a contempt being committed only by a person by filing an application in that G
behalf. In other words, unless a court was to take a suo motu action, the
proceeding under the Contempt of Courts Act, 1971 would normally
commence with the filing of an application drawing attention of the court to
the contempt having been committed. When the judicial procedure requires
an application being filed either before the court or consent being sought by H
390
SUPREME COURT REPORTS [2001) SUPP. I S.C.R.
A a person from the Advocate-General or a Law Officer, it must logically follow
that proceeding for contempt are initiated when the applications are made.
[410-C, D, E, F)
1.3. One of the principles underlying the law of limitation is that a
litigant must act diligently and not sleep over his rights. In this background,
B such an interpretation should be placed on Section 20 of the Act which does
not lead to an anomalous result causing hardship to the party who may have
acted with utmost diligence and because of the inaction on the part of the
court, a contemner cannot be made to suffer. Interpreting the section in the
manner canvassed by the appellant would mean that the court would be
C rendered powerless to punish even though it may be fully convinced of the
blatant nature of a contempt having been committed and the same having
been brought to the notice of the court soon after the committal of the
contempt and within the period of one year of the same. Section 20, therefore,
has to be construed in a manner which would avoid such an anomaly and
hardship both as regards the litigant as also by placing a pointless fetter on
D the part of the court to punish for its contempt. An interpretation of Section
20, like the one canvassed by the appellant would render the constitutional
power of the court nugatory in taking action for contempt even in cases of
gross contempt, successfully hidden for a period of one year by practising
fraud by the contemner rendering Section 20 as being in conflict with Article
E 129 and/or Article 215. Such a rigid interpretation must therefore be avoided.
A provision like Section 20 of the Contempt of Courts Act has to be interpreted
having regard to the realities of the situation. (410-H; 411-A, 8, C, D, E(
1.4. Action for contempt is divisible into two categories namely, that
initiated suo motu by the court and that instituted otherwise than on the court's
F own motion. The mode of initiation in each case would necessarily be different.
While in the case of suo motu proceedings, it is the court itself which must
initiate by issuing a notice. In other case initiation can only be by a party
filing an application. Therefore, the proper construction to be placed on ·
Section 20 of the Contempt of Courts Act must be that action must be initiated,
either by filing of an application or by the court issuing notice suo motu, within
G a period of one year from the date on which the contempt is alleged to have
been committed. (413-F, G, HI
1.5. Section 29(2) of the Limitation Act, 1963 provides where any special
or local law prescribes for any suit, appeal or application a period oflimitation
different from the period prescribed hy the Schedule, the provisions of Section
H 3 shall apply as if such period were the period prescribed by the Schedule
-
-
PALLAV SHETH v. CUSTODIAN
391
and for the purpose of determining any period of limitation prescribed for A
any suit, appeal or application by any special or local law, the provisions
contained in Sections 4 to 24 (inclusive) shall apply insofar as, and to the extent
to which, they are not expressly excluded by such special or local law. By virtue
of Section 29(2) read with Section 3 of the Limitation Act, limitation stands
prescribed as a special law under Section 19 of the Contempt of Courts Act, B
1971 and in consequence thereof the provisions of Sections 4 to 24 of the
Limitation Act stand attracted. (414-C, D, E(
State of West Bengal and Ors. v. Kartick Chandra Das and Ors., (199615
sec 342, relied on.
1.6. Section 17 of the Limitation Act, 1963 embodies fundamental C
principles of justice and equity, viz, that a party should not be penalised for
failing to adopt legal proceedings when the facts or material necessary for
him to do so have been wilfully concealed from him and also that a party
who has acted fradulently should not gain the benefit of limitation running
in his favour by virtue of such fraud. The provisions are applicable in the D
present case. The fraud perpetuated by the appellant was unearthed only on
the custodian receiving information from the Income Tax Department. On
becoming aware of the fraud, application for initiating contempt proceedings
was filed which was well within the period of limitation prescribed by Section
20 of the Contempt of Courts Act. It is on this application the Special Court
directed the application to be treated as a show-cause notice to appellant to E
punish him for contempt. In view of the facts and in the light of the correct
interpretation of Section 20 of the Contempt of Courts Act, it follows that
the action taken by the Special Court to punish the appellant for contempt
was valid. The Special Court has only faulted in being unduly lenient in
awarding the sentence. Therefore, the action for contempt was not barred F
by Section 20 of the Contempt of Courts Act. The appellant will surrender
and serve out the sentence awarded to him by the Special Court.·
(414-H; 415-A, B, C, D, El
Manjit Singh and Ors. v. Darshan Singh and Ors., (1984) Crl. LJ 301
(P&H) (FB), approved.
G
Baradakanta Mishra v. Mr. Justice Gatikrushna Misra, Chief Justice of the
Orissa High Court, (1975( 3 SCC 535, distinguished.
Firm Ganpat Ramkumar v. Kalu Ram and Ors., (1989( Supp. 1SCR223
and Om Prakash Jaiswal v. D.K. Mittal and Anr., (2000( 3 SCC 171, referred to.
H
392
SUPREME COURT REPORTS (2001] SUPP. I S.C.R.
A
Quinn v. leathern, (1901) AC 495, referred to.
Webster's Third New International Dictionary; Shorter Oxford English
Dictionary, referred to.
2.1. The Special Court, which is established under the Special Court
B (Trial of Offences Relating to Transactions in Securities) Act 1992, has to
consist of one or more sitting judges of the High Court and has the same power
-
as the High Court in respect of contempt of itself. This power could be
..
exercised in addition to the exercise of power under the provisions of
Contempt of Courts Act, 1971. The implication of this is that like the High
Court, being a court of record and which has the power under Article 215 of
C the Constitution to punish for contempt of itself, the Special Court, consisting
of a judge of the High Court, can also exercise that power available under
Article 215 of the Constitution. [395-F, G, HJ
3.1. The Constitution of India has given the Supreme Court and High
Courts, being courts of record, the power to punish for contempt This power
D cannot be abrogated or stultified. If there is any provision of the law, which
stultifies or abrogates the power under Article 129 and/or Article 215 of the
Constitution, then such law would not be regarded as having been validly
enacted. However, providing for the quantum of punishment or what may
or may not be regarded as acts of contempt or even providing for a period of
E limitation for initiating contempt proceedings cannot be taken to be a
provision which abrogates or stultifies the contempt jurisdiction under Article
129 or Article 215 of the Constitution. Just as power or jurisdiction under
Article 226 has to be exercised in accordance with law, if any, enacted by the
legislature it would stand to reason that the power under Article 129 and/or
Article 215 should be exercised in consonance with the provisions of a validly
F enacted law. In case of apparent or likelihood of conflict, the provisions should
be construed harmoniously. (406-G, H; 407-A, B, CJ
Sukhdev Singh Sodhi v. The Chief Justice and Judges of the Pepsu High
Court, (1954) SCR 454; Delhi Judicial Service Association, Tis Hazari Court,
Delhi v. State of Gujarat and Ors etc., (1991) 4 SCC 406; R.l. Kapur v. State of
G Madras, [1972) l SCC 65; In Re: Vinay Chandra Mishra, [1995) 2 SCC 584;
Income Tax Appellate Tribunal through President v. V.K. Agarwal and Anr.,
[1999) I SCC 16; Supreme Court Bar Association v. Union of India and Anr.,
[1998) 4 SCC 409 (CB) and Dr. l.P. Misra v. State of UP., [1998) 7 SCC 379,
referred to.
H
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 2106-
PALLAV SHETH v. CUSTODIAN [KIRPAL, J.]
393
2107 of 2001.
From the Judgment and Order dated 3I.1.2001 and 7.2.2001 of the
Special Court (Trial of Offences Relating to Transactions in Securities) Act
at Bombay in M.A. No. 276/98 in M.A. No. 343/94 in M.A. No. 193/93 and
M.A. No. 83/2000)
K.K. Venugopal, Dinesh Purandare, Vinod Bobde, R.N. Karanjawala
Gopal Jain, Ms. Avantika Keswani and Ms. Manik Karanjawala, Ms. Nandini
Gore, Ms. Reshma Ruparrel, Kavita Gulati, Ms. Ruby Singh Ahuja, Shiraz
Rustomjee, Gourav Joshi, A. Subba Rao for the appearing parties.
The Judgment of the Court was delivered by
KIRPAL, J. These appeals by special leave are against the judgment
of the Special Court constituted under the Special Court (Trial of Offences
Relating to Transactions in Securities) Act, 1992 (hereinafter referred to as
A
B
c
'the Special Court Act') whereby the Appellant has been held to have
committed civil contempt as defined under Section 2(b) of the Contempt of D
Courts Act, 1971 and sentenced to undergo simple imprisonment for a period
of one month and a fine of Rs. 2,000.
Mis Fairgrowth Financial Services Limited was notified on 2nd July,
1992 under the provisions of the Special Court Act. As a result thereof, all
properties belonging to the said notified party stood automatically attached. E
The Custodian appointed under the Special Court Act filed Misc. Application
No. 193 of 1993 and sought a decree for Rs. 50 crores on behalf of the
notified party against Pallav Sheth, the Appellant herein. On 24th February,
1994 the Appellant submitted to a Consent Decree for a sum of Rs. 51.49
crores which was to be paid in instalments. Rs. 2.00 crores were paid but p
thereafter the Appellant defaulted in the payment of further instalments.
The Custodian then moved an Execution Application No. 343 of 1994
and the Special Court there upon required the Appellant to disclose all his
assets and at the same time by an interim order restrained him from alienating,
encumbering, selling off or parting with possession or transferring in any G
manner whatsoever any of his assets movable and immovable including the
Bank accounts. On an affidavit being filed by the Appellant declaring his
assets, the Special Court on 24th August, I 994 passed further interim order
of attachment of some of the assets mentioned therein.
On I I th November, 1997 the Income Tax Department conducted raids H
394
SUPREME COURT REPORTS (2001] SUPP. I S.C.R.
A on Pallav Sheth. The newspaper reports indicated detection of assets belonging
to Pallav Sheth by the Income Tax Department whereupon the Special Court
directed the Custodian to ascertain from the Income Tax Department complete
details of all the assets of Pallav Sheth. In response to a letter written by the
Custodian, the Commissioner of Income Tax vide its letter of 5th May, 1998
B informed that during the search operations, the Income Tax Department
detected that Pallav Sheth was the de facto owner of five companies, namely,
Anzug Plastics (P) Ltd., Magan Hotels (P) Limited, Klar Chemicals (P)
Limited, Malika Foods (P) Limited and Jainam Securities (P) Limited. Pallav
Sheth is further reported to have admitted in the statements before the Income
Tax Department by him and his wife that several cash deposits amounting to
C Rs. 2.81 crores made in the bank accounts of the aforesaid five companies
were his undisclosed income. According to the Commissioner of Income
Tax, the assets of these five companies belong to Pallav Sheth and these
companies were to receive substantial amounts from other companies/
individuals.
D
It was also stated by the Income Tax Department that Pallav Sheth had
E
admitted that profits were earned from the activities of these companies in
buying and selling of shares and bogus transactions of bill discountings were
entered into to show loss, in order to offset the profits, and these monies were
actually returned by cash and found their way into the bank accounts.
The Custodian then on 18th June, 1998 filed Misc. Application No. 276
of 1998 before the Special Court with a prayer that Pallav Sheth should be
punished for committing contempt of the Special Court's order dated 24th
August, 1994 as despite the said order he had set up benami companies and
had transferred and/or alienated his property including cash inter alia with a
p
view to defeat the decree passed against him. Though Pallav Sheth in his
reply denied that the said five companies were his benami companies the
Special Court directed issuance of the show cause notice to punish Pallav
Sheth for contempt. It appears that Pallav Sheth filed an affidavit on 23rd
July, 1999 to the effect that various statements made by him before the
Income Tax Authorities were made without his understanding the full
G implications since he had been under the influence of strong medication.
Affidavits were also filed by the aforesaid five companies in support of the
stand of Pallav Sheth. It may here be noticed that by an order dated 29th
October, 1999 the Special Court allowed amendment of the Miscellaneous
Application No. 276 of 1998 permitting substitution of reference to the order
H dated 24th August, 1994 with order dated 3rd August, 1994. Ultimately by
PALLAV SHETH v. CUSTODIAN [KIRPAL, J.]
395
an order dated 3 lst January, 2001 the Special Court passed an order holding A
Pallav Sheth to be guilty of Contempt of Court and sentenced him to one
month's simple imprisonment and imposed a fine of Rs. 2,000. By a separate
order dated 7th February, 2001, the Special Court dealt with the contention
that its action was not barred by limitation as contemplated by Section 20 of
the Contempt of Courts Act on the ground that this was a case of continuing B
wrong.
Along with this appeal by Pallav Sheth the aforesaid five companies
also filed appeals. Mr. Venugopal appearing on behalf of Pallav Sheth restricted
his arguments only to the issue of limitation under Section 20 of the Contempt
of Courts Act, 1971 and he chose not to make any submissions on the merits C
of the issue. In other words, no arguments were addressed on the finding of
the Special Court in relation to the aforesaid five companies and to its
conclusion that Pallav Sheth had committed a Contempt of Court. As for the
appeals filed by the five companies, the same were dismissed as withdrawn
on I Ith April, 2001. Therefore, the only question which survives for
consideration in this appeal is whether in view of the provisions of Section D
20 of the Contempt of Courts Act, 1971, the Special Court was prohibited
from taking any action as, according to Mr. Venugopal, the Court had initiated
proceedings of contempt after the expiry of a period of one year from the
date on which the contempt was alleged to have been committed. It is the
case of the Appellant that contempt, if any, was committed more than one E
year prior to the initiation of proceedings by the Special Court and Section
20 of the Contempt of Courts Act, 197 I prohibited the Court from taking any
action at a belated stage.
Section 11-A of the Special Court Act provides that the Special Court
shall have and exercise, the same jurisdiction, powers and authority in respect F
of contempt of itself as a High Court has and may exercise for this purpose,
. the provisions of Contempt of Courts Act, 1971. It is clear from the said
provision that the Special Court which is established under Section 5 of the
Special Court Act and has to consist of one or more sitting Judges of the
High Court has the same power as the High Court in respect of contempt of G
itself. This power could be exercised in addition to the exercise of power
under the provisions of Contempt of Courts Act, I 971. The implication of
this clearly is that just as the High Court, being a Court of Record, has the
power under Article 215 of the Constituti.:m of India to punish for contempt
of itself similarly, the Special Court consisting of a Judge of the High Court
can also exercise that power available under Article 2 I 5.
H
396
SUPREME COURT REPORTS (2001] SUPP. I S.C.R.
A
On behalf of the Custodian, it was contended by Mr. Rustomjee that
the power under Article 215 of the Constitution cannot be curbed or curtailed
by Section 20 of the Contempt of Courts Act, 1971. He submitted that the
power of the High Court to commit for contempt of itself contained in Article
215 of the Constitution cannot be abrogated, stultified or restricted by any
B other statutory provision including the Contempt of Courts Act, 1971. He
contended that Section 20 can, at best, be regarded as providing for a period
of limitation but it still cannot bind the High Court exercising inherent powers
under Article 215 of the Constitution. Jn the alternative, it was submitted by
Mr. Rustomjee that even if Section 20 was applicable proceedings are initiated
by the filing of an application and the period of limitation wilt begin to run
C from the date of knowledge in cases where the contempt has been concealed
by fraud or dishonest conduct of the contemner, like in the present case.
The Contempt of Courts Act, 1926 was the first piece of legislation
which was enacted with a view to define and limit the powers of certain
Courts in punishing for Contempt. This Act was enacted with a view to
D remove doubts about the powers of the High Court to punish for contempt
and the doubts whether the High Court could punish for Contempt of Court
subordinate to it were removed by Section 2 of the said Act. The Contempt
of Courts Act, 1952 repealed the 1926 Act and made two significant departures
from it. Firstly, the expression "High Court" was defined to inc.lude the Court
E of Judicial Commissioner, which had been excluded from the purview of the
1926 Act and, furthermore, the High Courts so defined were conferred with
the jurisdiction to inquire into or try a contempt of itself or of any court
subordinate to it, irrespective of whether the contempt was committed within
or outside the local limits of jurisdiction and irrespective of whether the
person alleged to be guilty of the contempt was within or outside such
F jurisdiction. Punishment for Contempt of Court was provided by Section 4,
being that of simple imprisonment for a term which may extend to six months,
or with a fine which may extend to Rs. 2,000, or with both.
On 1st April, 1960 a Bill was introduced in the Lok Sabha to consolidate
and amend the law relating to contempt of courts. A Committee under the
G Chairmanship of Mr. H.N. Sanyal, Additional Solicitor-General, was set up
and it was required inter alia to examine the law relating to contempt of
courts and to suggest amendments therein. On the submissions of the Sanyal
Committee's report the Bill was referred to a Joint Committee of the Houses
of Parliament. The said Joint Committee submitted its report to the Rajya
H Sabha on 23rd February, 1970 suggesting a few changes in the Bill which
PALLAV SHETH v. CUSTODIAN [KIRPAL, J.]
397
had been introduced. One of the changes suggested by the Committee was A
the insertion of Clause 20, which was new and corresponds to the present
Section 20 of the Contempt of Courts Act, 1971. The Joint Committee Report
in respect of this Clause 20 opined as follows:
"The Committee are of the opinion that contempt procedures by
their very nature should be initiated and dealt with as early as possible. B
It was brought to the notice of the Committee that in some cases
contempt proceedings had been initiated long after the alleged
contempt had taken place. The Committee therefore consider it
necessary and desirable that a period of limitation should be specified
in respect of actions for contempt and have accordingly laid down in C
the new clause a period of one year at the expiration of which no
proceedings for contempt should be initiated."
The Sanyal Committee's recommendation, which had formed the basis
of the Contempt of Courts Bill that was referred to the Joint Select Committee,
had not contained any provision of limitation in relation to taking any action D
for the contempt of courts, but after the report of the Joint Select Committee
a new Clause was. added which resulted in the incorporation of Section 20.
The Contempt of Courts Act, 1971 was enacted, as per the Preamble,
with a view "to define and limit the powers ·Of certain Courts in punishing
Contempts of Courts and to regulate their procedure in relation thereto''. It E
provides for action being taken in relation to civil as well as criminal contempt.
It is not necessary, for the purpose of this case, to analyse various Sections
of the Act in any great detail except to notice that Sections 3 to 7 of the
Contempt of Courts Act, 1971 provides for what is not to be regarded as
contempt. Section 8 specifies that nothing contained in the Act shall be F
construed as implying that any other valid defence in any proceedings for
Contempt of Court ceases to be available merely by reason of the provisions
of the 1971 Act. Section 9 makes it clear that the Act will not to be implied
as enlarging the scope of contempt. Section I 0 contains the power of the
High Court to punish contempts of subordinate Courts, while Section 12
specifies the punishment which can be imposed for Contempt of Court and G
other related matters. Procedure to be followed where contempt is in the face
of the Supreme Court or a High Court is provided in Section I 4, while
cognizance of criminal contempt in other cases is dealt with by Section 15.
Section 15 has to be read with Section I 7 which provides for procedure after
cognizance has been taken under Section 15. A decision of the High Court
to punish for contempt is made appealable under S~ction 19 of the Act.
H
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SUPREME COURT R~PORTS [2001] SUPP. I S.C.R.
A
Sections 20 and 22, with which we are concerned in the present case,
read as follows:
"20. Limitation for actions for contempt.-No court shall initiate any
proceedings for contempt, either on its own motion or otherwise,
after the expiry of a period of one year from the date on which the
B
contempt is alleged to have been committed.
c
22. Act to be in addition to, and not in derogation of, other laws
relating to contempt.-The provisions of this Act shall be in addition
to, and not in derogation of, the provisions of any other law relating
to contempt of courts."
Learned counsel for the parties have drawn our attention to various
decisions of this Court in support of their respective contentions. While the
effort of both Mr. Venugopal and Mr. Bobde on behalf of the Appellant was
that even in exercise of the power under Article 215 of the Constitution the
provisions of Section 20 of the Contempt of Courts Act, 1971 prohibited any
D action being taken for contempt if a period of one year had elapsed, as was
contended in the present case, Mr. Rustomjee submitted that the constitutional
power contained under. Article 215 could not in any way be stultified or
curtailed by any Act of Parliament including Section 20 of the 1971 Act.
E
It will be appropriate to refer to some of the decisions which have a
bearing on the point in issue in the present case.
In Sukhdev Singh Sodhi v. The Chief Justice and Judges of the Pepsu
High Court' this Court was concerned with the issue whether this Court
could transfer contempt proceedings from Pepsu High Court to any other
F High Court. For transfer reliance had been placed on Section 527 0f the
Criminal Procedure Code. While holding that Section 527 did not apply in
case where a High Court has initiated proceedings for contempt of itself, it
was held that even the Contempt of Courts Act, 1952 recognised the existence
. of a right to punish for contempt in every High Court and this right is vested
in it in the High Court by the Constitution. This Court referred to Article 215
G of the Constitution and observed that so far as contempt of a High Court
itself is concerned, the Constitution vests this right in every High Court and
no Act of a legislature could take away that jurisdiction and confer it afresh
by virtue of its own authority. It, accordingly, came to the conclusion that the
Code of Criminal Procedure did not apply in matters of contempt triable by
H
I. [1954] SCR 454.
..
PALLAV SHETH v. CUSTODIAN [KIRPAL, J.)
399
the High Court which could deal with it summarily and adopt its own procedure A
which had to be fair and that the contemner was to be made aware of the
charge against him and given a fair and reasonable opportunity to defend
himself. Reliance was placed by Mr. Venugopal on a decision in Baradakanta
Mishra v. Mr. Justice Gatikrushna Misra, Chief Justice of the Orissa High
Court2 and it was contended that it was held in this case that Section 20 of B
the Contempt of Courts Act, 1971 provided a period of lir.iitation by saying
that no Court shall initiate any proceeding for contempt either on its own
motion or otherwise, after the expiry of a period of one year from the date
on which the contempt is alleged to have been committed. In Baradakanta
Mishra's case (supra) the Appellant had filed an application before the High
Court for initiating contempt proceedings against the Chief Justice and other C
Judges in their perso'nal capacity. A Full Bench of three Judges were of the
opinion that no Contempt of Court had been committed and the application
was rejected. The Appellant then purported to avail the right of appeal under
Section 19(1) of the Act and filed an appeal in this Court. A preliminary
objection was taken by the State against the maintainability of the appeal on
the ground that where the High Court had not initiated proceedings and had D
refused to take action, no appeal as of right would lie under Section 19( 1) .
This was the only issue which arose for consideration of this Court in
Baradakanta Mishra's case and this Court upheld the preliminary objection
and held that no appeal under Section 19(1) was maintainable. It is no doubt
true that during the course of discussion reference was made to Sections 15, E
17 and 20 of the Contempt of Courts Act, 1971 but this Court was in that
case not called upon to consider the effect of the provisions of the Contempt
of Courts Act vis-a-vis inherent powers of the High Court to punish for
contempt. No reference is made in the judgment to Article 129 or Article 215
of the Constitution. Furthermore interpretation of Section 20 was not an issue
and no question of limitation arose therein. Under the circumstances, we hold F
that the observations made by this Court with reference to Section 20 were
in the nature of obiter dicta and not binding on this Court in the present case.
In any case, Baradakanta Mishra's case decision does not specifically deal
with the question as to when or how proceedings for contempt are initiated
for the purposes of Section 20 and nor has it considered the applicability of G
the provisions of the Limitation Act, to which we shall presently refer.
In Firm Ganpat Ram Rajkumar v. Kalu Ram and Ors. 3 where an Order
2. [1975] 3 sec 535.
3. [1989] Suppl. I SCR 223.
H
400
SUPREME COURT REPORTS [2001) SUPP. I S.C.R.
A of this Court ordering delivering of premises had not been complied with, an
application was filed for initiation of contempt proceedings. A contention
was raised on behalf of the alleged contemner based on Section 20 of the
Contempt of Courts Act, 1971. Dealing with this contention, this Court
observed as follows:
B
c
D
"Another point was taken about limitation of this application under
section 20 of the Act. S.20 states that no court shall initiate any
proceedings for contempt, either on its own motion or otherwise,
after the expiry of a period of one year from the date on which the
contempt is alleged to have been committed. In this case, the present
application was filed on or about 3rd November, 1988 as appears
from the affidavit in support of the application. The contempt
considered, inter alia, of the act of not giving the possession by force
of the order of the learned Sr. Sub-Judge, Namaul dated 12th February,
1988. Therefore, the application was well within the period of one
year. Failure to give possession, if it amounts to a contempt in a
situation of this nature is a continuing wrong. There was no scope for
application of s. 20 of the Act."
The above mentioned observations indicate that the contention based
on Section 20 was not accepted for two reasons firstly that the application for
initiating action for contempt was filed within one year of the date when the
E contempt was alleged to. have been committed and secondly failure to give
possession amounted to continuing wrong and, therefore, there was no scope
for application of Section 20 of the Act. This case is important for the reason
that the Court regarded the filing of the application for initiating contempt
proceedings as the relevant date from the point of view of limitation.
F
The power of this Court and the High Court under the Constitution for
taking action for contempt of subordinate court came up for consideration in
Delhi Judicial Service Association, Tis Hazari Court, Delhi v. State a/Gujarat
and Ors. etc.4 It referred to Sukhdev Singh Sodhi's case (supra) and held that
even after codification of the law of contempt in India the High Court's
G jurisdiction as the Court of Record to initiate proceedings and take seisin of
the matter remained unaffected by the Contempt of Courts Act. It also referred
to R.l. Kapur v. State of Madras' and by following the said decision observed
as follows:
4. [19911 4 sec 406.
H 5. [19721 1 sec 651.
; 1
"
PALLAV SHETH v. CUSTODIAN [KIRPAL, J.]
401
The Court further held that in view of Article 215 of the A
Constitution, no law made by a legislature could take away the
jurisdiction conferred on the High Court nor it could confer it afresh
by virtue of its own authority".
Referring to the Contempt of Courts Act, 1971 it observed with relation
of the powers of the High Court as follows:
B
" .. .Inherent powers of a superior Court of Record have remained
unaffected even after codification of Contempt Law. The Contempt
of Courts Act, 1971 was enacted to define and limit the powers of
courts in punishing contempts of courts and to regulate their procedure
in relation thereto. Section 2 of the Act defines contempt of court C
including criminal contempt. Sections 5,6,7,8 and 9 specify matters
which do not amount to contempt and the defence which may be
taken. Section I 0 relates to the power of High Court to punish for
contempt of subordinate courts. Section I 0 like Section 2 of 1926 Act
and Section 3 of 1952 Act reiterates and reaffirms the jurisdiction D
and power of a High Court in respect of its own contempt and or
subordinate courts. The Act does not confer any new jurisdiction
instead it reaffirms the High Court's power and jurisdiction for taking
action for the contempt of itself as well as of its subordinate courts .... "
The view in Delhi Judicial Service Association's case (supra) was E
reiterated and reaffirmed in the c~se of In re: Vinay Chandra Mishrd' and it
was held that the amplitude and power of this Court to punish for contempt
could not be curtailed by the law made by the Parliament or State Legislature.
As observed in Income Tax Appellate Tribunal through President v. V.K.
Agarwal and Another7 at page 25 that the judgment in Vinay Chandra Mishra's
case was partially set aside in Supreme Court Bar Association v. Union of F
India and Another' on the question of power to suspend an advocate's licence
under contempt jurisdiction, the observation in Vinay Chandra Mishra's case
with regard to amplitude of the courts power under Article 129 not being
curtailed by a law made by the Central or a State Legislature remained
unaffected. It was in exercise of the powers under Article 129 that this Court G
held the respondent in V.K. Agarwal's case (supra) guilty of Contempt of
Court as he had tried to influence or question the decision making process of
6. [1955] 2 sec 584.
7. [19991 1 sec 16 ..
8. [1998] 4 sec 409.
H
'
402
SUPREME COURT REPORTS [2001] SUPP. I S.C.R.
A the Income Tax Appellate Tribunal.
The applicability of the Limitation Act to Contempt of Courts Act,
1971 came up for consideration in State of West Bengal and Others v. Kartick
Chandra Das and Others'.