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C.P. Syndicate, Ltd. Vs. K.P. Ghiara - Court Judgment

LegalCrystal Citation
SubjectContempt of Court
CourtMumbai
Decided On
Case NumberO.C.J. Suit No. 1726 of 1945
Judge
Reported in(1947)49BOMLR450
AppellantC.P. Syndicate, Ltd.
RespondentK.P. Ghiara
Excerpt:
.....above mentioned i have come to the conclusion that the defendant has failed in bringing home to the opponents the charges (a), (b) (j) (k) and (m) which were the only charges pressed against the opponents. 8. it has been conceded by counsel on behalf of the defendant as well as the opponents that the costs of this notice of motion should be taxed on a long cause scale with two counsel. it was only the good sense of counsel appearing for the defendant which prevented him from pressing any other charges except charges (a), (b), (j), (k) and (m) at the final hearing before me. evidence was led before me and the hearing went on for well nigh two clays......with his management of the plaintiff company as a general manager. the plaintiffs here took out a notice of motion on november 18, 1945, and obtained certain interim orders from kania j. restraining the defendant inter alia from doing various things in his capacity as the managing director and/or the general manager of the plaintiff company. this notice of motion came on for hearing on december 5, 1945, when a consent order was taken between the plaintiffs and the defendant. the three opponents were present in court at the time when this consent order was obtained. the relevant terms of that consent order in so far as they are material for the purposes of this notice of motion are:(e) that no new contracts shall be entered into by or on behalf of the plaintiff company without the.....
Judgment:

Bhagwati, J.

1. This is a notice of motion taken out by the defendant for contempt against D.P.R. Cassad, Mrs. Shirinbai Byramji and Mrs. Kamalrukh D.P.R. Cassad, who will be hereafter referred to as the opponents, in respect of certain breaches committed by them of the orders dated December 5, 1945, August 13, 1946, and August 28, 1946.

2. The plaintiffs are a private limited company in which there are four share-holders and four directors, the defendant being one of them, and the opponents being the others. The affairs of the plaintiff company appear to have been managed without any friction up to October, 1945, when D.P.R. Cassad married Mrs. Kamalrukh D.P.R. Cassad. After the marriage it is alleged Mrs. Shirinbai Byramji tried to oust the defendant from the management and disputes arose between the parties which culminated in the filing of a suit by the defendant on November 16, 1945, in Nagpur, being Civil Suit No. 45A of 1945 in the Court of Third Civil Judge, First Class, Nagpur, and the filing of a suit by the plaintiffs on November 18, 1945, against the defendant here, being suit No. 1726 of 1945. In the suit filed by him at Nagpur the defendant obtained an injunction against the plaintiff company and also the opponents restraining them from holding a meeting of the board of directors on November 19, 1945, as convened or on any date in future and from giving effect to the resolution passed at the meeting of the board of directors. in meetings Nos. 39 to 44 and from interfering with his management of the plaintiff company as a general manager. The plaintiffs here took out a notice of motion on November 18, 1945, and obtained certain interim orders from Kania J. restraining the defendant inter alia from doing various things in his capacity as the managing director and/or the general manager of the plaintiff company. This notice of motion came on for hearing on December 5, 1945, when a consent order was taken between the plaintiffs and the defendant. The three opponents were present in Court at the time when this consent order was obtained. The relevant terms of that consent order in so far as they are material for the purposes of this notice of motion are:

(e) That no new contracts shall be entered into by or on behalf of the plaintiff company without the consent in writing of the defendant and D.P.R. Cassad.

(i) That the said Shirinbai E.P. Byramji, D.P.R. Cassad, K.D. Cassad and the defendant shall not move any resolution either in the Board or in the shareholders' meetings which may affect the status quo of the said parties or their rights and contentions in this suit as also in the said suit No. 45-A of 1045, and

(j) That no member of the staff shall be dismissed nor shall any new member of the staff be engaged without the consent of both the defendant and the said 1). P.R. Cassad, save and except that the said D.P.R. Cassad be at liberty to engage an assistant at a salary not exceeding rupees five hundred per month to be paid by the plaintiff company. This consent order was drawn up and completed on January 30, 1946.

3. After this content order was obtained by the parties one should have thought the affairs of the plaintiff company would have been managed without any friction. That was, however, not to be. The moment the parties left Bombay for Nagpur it appears they did not see eye to eye with each other and the joint management of the affairs of the plaintiff company, which was contemplated by the terms of this consent order, did not come about. The defendant on the one hand and D.P.R. Cassad on the other fell out and a deadlock was created in the administration of the affairs of the plaintiff company. A notice of motion was taken out on August 3, 1946, at the instance of the plaintiffs for vacating the consent order and for the appointment of D.P.R. Cassad or some other fit and proper person as receiver of the concern of the plaintiff company. Certain interim orders were-obtained in this notice of motion on August 12, 1946, and August 28, 1946. It is not necessary for me in the events that have happened to advert to these interim orders at any particular length. All the charges which have been levelled against the opponents, even though they were set out in considerable detail on this notice of motion, have not been pressed, the only charges which have been pressed against the opponents being those which consist of the. breaches and disobedience of the provisions of the consent order dated December 5, 1945. As regards the consent order also the charges which have been pressed are charges (a), (b), (j), (k) and (m) which involve the alleged breaches and disobedience of Clauses (e), (i) and (j) of the consent order.

4. When the matter first came on before me on October 4, 1946, I adjourned it to be on board after the last notice of motion on my board. It was then contemplated by both the parties that evidence should be led in behalf of the various allegations and counter allegations which were made in the affidavits on this notice of motion. This notice of motion finally reached before me on October 31, 1946, and such evidence as the parties thought proper was led in the matter of the charges which were pressed by the defendant against the opponents.

5. In so far as the consent order was drawn up or completed on January 30, 1946, and was not personally served on the opponents until August 26, 1946, Mr. Desai for the opponents raised a preliminary objection that the contempt motion did not lie in respect of the alleged breaches and disobedience of the provisions of the order which were all committed after January 30, 1946, and before August 26, 1946. Relying upon a passage in Halsbury's Laws of England, Hailsham Edition, Vol. VII, p. 42, para. 59:-

In the case of service of a prohibitory order pronounced, but not yet drawn up, it is sufficient to prove that the person affected has had notice of its being made, but formal service of the completed order should be effected as soon as possible.

Mr. Desai contended that the order was completed on January 30, 1946, that it was not served personally on the opponents as soon as possible thereafter but was served only on August 26, 1946, and that therefore no charge can be made against the opponents in respect of the breaches and disobedience of the prohibitive terms of the order which were committed between January 30, 1946, and August 26, 1946. Reading the statement of the law as it has been contained in this passage which I quoted from Halsbury, it would appear as if the contention of Mr. Desai was well-founded. Having looked, however, at the cases which have been cited in support of this proposition in Halsbury as well as the later case of United Telephone Company v. Dale (1884.) 25 Ch. D. 778 where the same eases which have been relied upon in support of the proposition as set out in Halsbury, viz. James v. Dowries (1811) 18 Ves. 522 and Vansandau v. Rose (1820) 2 Jac. & W. 264 have been commented upon by Pearson J., I have come to the conclusion that there is no force in this contention of Mr. Desai. The position in law has been summarised at p. 203 of Oswald on Contempt, where it is stated:

In order to justify committal for breach of a prohibitive order it is not necessary that the order should have been served upon the party against whom it has been granted, if it be proved that he had notice of the order aliunde, as by telegram, or newspaper report, or otherwise, and knew that it was intended to be enforced, or if he consented to the order, or if he was present in Court when the order was pronounced, or when the motion was made, although he left before the order was pronounced. This rule is not limited to cases in which a breach is committed before there has been time to get the order drawn up and entered; but delay in endeavouring to complete and serve the order may justify the assumption that it has been abandoned, and the Court will not in such a case treat the defendant as in contempt for a breach, even though he was present in Court upon the hearing of the motion.

There are no doubt observations in the two eases which I have above referred to, viz. James v. Downes and Vansandau v. Rose, which would, if there was nothing more, lead to the conclusion that, in the opinion of Lord Eldon L.C. there, the service of the completed order was a condition of the proceedings in contempt. In the first of these cases, James v. Downes, the Lord Chancellor observed (p. 524) :-. but the Court can never intend, that the Plaintiff, having obtained the Order granting the Injunction, is to lie by for four Months, as if it had not been granted. The Court, interposing to assist the Plaintiff, and prevent his losing the Benefit of the Process, while he is actually pursuing it, cannot consider him entitled under the Order for three or four Months together.

In the second of these cases, Vasandau v. Rose, the Lord Chancellor observed (p. 265) :-

What I have now stated must be subject to this observation, that there has been no delay in endeavouring to get the order drawn up, and the injunction under seal and serving it when obtained.

These cases were, however, discussed and explained by Pearson J. in United Telephone Company v. Dale. The facts in that ease were very similar to those obtaining in the present ease before me. The injunction in that case was granted by the Court on February 1, 1883. The order had been drawn up and completed on February 23, 1883, but was not served on the opponent at all. There were certain breaches of the prohibitive order committed by the opponent in February, 1883, and in July, 1883, and the notice of motion for contempt was taken out against the opponent much later without the order as completed having been at all served on the opponent. A preliminary objection was taken to the motion that the order granting the injunction had never been served upon the opponent and that therefore the notice of motion could not lie. This objection was considered of sufficient importance by the learned Judge, Pearson J., and he went into the decided cases on the point. He discussed and explained the two cases of James v. Downes and Vansandau v. Rose, which I have above referred to, and the observations of Lord Eldon contained therein, which I have above quoted. After discussing those cases and the observations therein, the learned Judge came to the conclusion that the observations of Lord Eldon were to be read as referring to a possible position which the opponent might take up, viz. that it was not the plaintiff's intention to enforce the injunction. If the circumstances of a particular case were such that the opponent might possibly be misled into believing that the plaintiffs had no intention to enforce the injunction, the non-service of the order, even though drawn up, on the opponent would be a circumstance of very great importance. The learned Judge, however, proceeded to observe (p. 786) :

But I do not believe the rule to be, and I shall not act upon the rule as it has been stated to me, that in no case will the Court enforce obedience to its injunction by means of a committal to prison, simply upon the ground that the order has not been served, when it appears beyond all doubt or dispute that the defendant is aware that the injunction has been granted, and that it is the intention of the plaintiff to enforce it.

This is the correct position in law and it has been summarised in the passage from Oswald on Contempt above cited. If it could be demonstrated beyond any shadow of doubt that even though the party taking out the contempt proceedings did not serve the order personally on the opponents after it was completed, his intention was to enforce the order, mere non-service would be of no avail to the opponent. It would be open to the party taking out the contempt proceedings to prove to the satisfaction of the Court that notwithstanding the non-service of the completed order personally upon the opponent it was his intention to enforce the prohibitive order against the opponent. This the defendant in the present ease before me has proved by putting in the compilation of the correspondence, Exs. 10 and 11. Both the parties and in particular the defendant treated the prohibitive terms contained in the consent order as alive and subsisting. The defendant threatened the opponents times without number with dire proceedings in the event of their committing breaches and disobedience of the terms of the order and it cannot be at all validly contended before me that it was ever the intention of the defendant not to enforce the prohibitive terms of the consent order. Under the circumstances 1 am of opinion that this preliminary objection of Mr.Desai fails.

6. [After discussing the facts, the judgment concluded:]

7. Under the circumstances above mentioned I have come to the conclusion that the defendant has failed in bringing home to the opponents the charges (a), (b) (j) (k) and (m) which were the only charges pressed against the opponents. I hold that the opponents were and are not guilty of any contempt of Court as charged by the defendant.

8. It has been conceded by counsel on behalf of the defendant as well as the opponents that the costs of this notice of motion should be taxed on a long cause scale with two counsel. I am of the same opinion, apart from the concession which they have made. The charges which were brought against the opponents comprised breaches and disobedience of three orders, viz., the consent order dated December 5, 1945, and the interim orders dated August 13, 1946, and August 28, 1946, and were detailed as charges (a) to (q). These were the charges which the opponents came to meet before me. It was only the good sense of counsel appearing for the defendant which prevented him from pressing any other charges except charges (a), (b), (j), (k) and (m) at the final hearing before me. For this, however, the defendant cannot claim any credit. Evidence was led before me and the hearing went on for well nigh two clays. Under the circumstances, I think the proper order is that the costs should be taxed on the scale mentioned above. I accordingly order that the notice of motion be dismissed and the defendant do pay to the opponents the costs of this notice of motion taxed on a long cause scale with two counsel.


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