H.S. Thakur, J.
1. This is an appeal filed by the appellants/contemners under Section 19 of the Contempt of Courts Act, 1971 against the judgment of the learned single Judge (T.R. Handa, J.) whereby the appellants have been punished with simple imprisonment for a period of two months and to pay a fine of Rs. 2000/- each, for committing the contempt of the Court.
2. The relevant facts culminating in the contempt proceedings may be stated in brief. The appellants, besides others, were the Directors of the Company known as Hypine Carbons Limited, Nalagarh. A petition for winding up of the Company was filed in this Court on 31-3-1977. After a protracted trial, this Court on 16-5-1978 passed orders that the affairs of the aforesaid Company be compulsorily wound up and necessary further steps in this behalf be taken. Against this order of the winding up, the Company preferred an appeal being Coy. Appeal No. 1 of 1978. An application under Section 466 of the Act read with Rule 9 of the Company (Court) Rules, 1959, praying for the stay of the operation of the winding up order, was also filed. The then Acting Chief Justice (Justice T.U. Mehta) on 31-5-1978, passed an interim order staying the winding up proceedings. Notices were also sent to the respondents and the official liquidator. The Official Liquidator as also Shri Kuldip Parkash, at whose instance the winding up order was passed, filed reply to the stay application. The matter came up before the then Acting Chief Justice on 27-6-1978 who was pleased to pass the following order:-
Present Shri S.S. Ahuja, Advocate, for the appellant, Shri K.D. Sud for the respondents, Shri K. Kumar Official Liquidator.
O. M P.. No. 6 of 1978.
Shri Sud who appears for the respondents opposes this application. During the course of the hearing Shri Ahuja who appears on behalf of M/s. R.G. Saraf, B. Himmat Singka and S.S. Fatehpuria shows his willingness to give an undertaking that his above named clients are willing to pay off the arrears of the wages of the labourers employed by the Company in the past or to arrive at some settlement with the labour union with regard to these arrears within one month from now. According to the report of the Official Liquidator the arrears of wages of labourers amounted to about rupees six lakhs about four to six months ago. Shri Ahuja also states on behalf of the above referred clients that in case the arrears of the labour as stated above, are not paid up or settlement is not arrived at within one month, his clients would be liable for contempt of court for breach of the undertaking unless the above referred period of one month is extended by the Court on proper grounds being shown.
Shri Ahuja further states that his above referred clients are prepared to defend the various proceedings pending before the Authority under the Payment of Wages Act. Shri Ahuja also states that his above referred clients further undertake to complete the accounts of the company within one month and to hand over all the remaining account books to the Official Liquidator within that time. Shri Ahuja states that the erstwhile servants of the Company are already there to safeguard the property of the Company. Under the circumstances, in view of the suspension of the winding up order the official liquidator will not be responsible for safeguarding the property of the Company at Nalagarh till further orders.
In view of the above undertaking, the matter be fixed on 2-8-1978. Dasti orders on ususal terms.
Sd/- C. J.
3. As directed in the above order, the matter was taken up on 2-8-1978, when Shri S. S. Ahuja Advocate, appeared for the appellants. Till that time the appellants had not honoured their undertaking as contained in the order referred to above. The Court on 2-8-1978 passed an order in the following terms:-
It is found that till this date there has been no settlement about the arrears of wages of Company's labour. Shri Ahuja states that the Directors are already in negotiations with the labour leaders about the same, the result of which will be forthcoming within ten days.
Shri Sud who appears on behalf o the respondents informs Shri Ahuia about the date of 8-8-1978 which is fix-ed before the Judicial Magistrate 1st Class at Nalagarh for proceedings under the Payment of Wages Act.
4. The matter was again taken up on 17-8-1978 and the following order was passed by the Court on that date:-
Shri Ahuja states that his clients will be kept present on 23-8-1978 in Court. He further informs the Court that he will try to see that his clients or their representatives would remain here present with some instructions and with some amount to be paid to the labourers as their wages. Put the matter on board on 23-8-1978.
5. On 23-8-1978 neither the appellants nor their representatives appeared and on that date the Court made the following observations in its order:-
Shri Ahuia undertakes on behalf of his clients to produce all the other accounts books, pass books, bank books, stock hooks and vouchers etc. for the purpose of enabling the auditors to complete the accounts. These materials should be handed over to the official liquidator within a week from now.
The concerned Directors and other officers of the Company are directed to co-operate with the auditors and supply all necessary information and materials which could be supplied.
So far as the wages of the labourers are concerned, Shri Ahuja states that about rupees twenty thousand would be deposited by. his clients on 26-8-1978 with the Court of the Judicial Magistrate Nalagarh for payment to the workers.
6. No steps appear to have been taken by the appellants to honour the undertaking given on their behalf on 27-6-1978. Shri Kuldip Parkash (respondent No. 2) and the official liquidator, consequently filed an application in this Court for vacating the stay order and further prayed to proceed against the appellants for contempt of the Court. On a rule issued to the appellants to show cause why they should not be proceeded against for the contempt of Court, a reply was filed on their behalf by Shri S.S. Ahuia Advocate, which was supported by an affidavit filed by one Shri B.P. Sinha. Inter alia, it was pleaded in the reply that the labour leaders were invited to Calcutta at the expense of the Directors for negotiations, but due to their non-co-operation the negotiations failed. It was further stated in the reply that the amount of Rs. 30,000/- mentioned in para 4 of the application could not be deposited because of some misunderstanding amongst the Directors. However, readiness was shown by the appellants to pay this amount,
7. The matter ultimately came up before the learned single Judge on 12-3-1981. It is observed by the learned Judge in his judgment that since the reply earlier filed on behalf of the appellants to the contempt petition had not been supported by affidavit of either of these appellants, it was considered proper to afford them a fresh opportunity to explain their conduct. The oral statements of the appellants were also recorded. On 13-3-1981 the appellants/contemners filed affidavits that contained their unqualified apologies as well. The learned single Judge, however, considering the facts and circumstances of the case did not accept the apologies tendered by the appellants and found them guilty for committing the contempt of the Court and consequently directed that each of the respondents be detained in civil prison for a period of two months and to pay a fine of Rs. 2000/-.
8. Aggrieved by the aforesaid order, the appellants have preferred this appeal.
9. The appeal came up for admission before us on 17-3-1981. On that day the appellants were not present in person and were directed to be present at the time of admission of the appeal. The appeal was accordingly adjourned to 22-3-1981. On that day we passed orders in the following terms:-
Appellants are present in person. Unqualified apology in writing has been tendered on behalf of the appellants. Let this be placed on record.
An offer has been made to deposit Rs. 30,000/- in terms of the order dated 23-8-1978. Let the amount be deposited with the Registrar of this Court.
Appeal admitted. To be heard on 18-5-1981 as number one subject to part heard, if any. Appellants need not be present except on the date fixed for announcing the judgment.
Cr. M. P. No. 27 of 1981 :
The operation of the order under appeal is suspended till further orders on the basis of the security already furnished.
10. We have heard the learned Counsel for the parties at length. Shri S.N. Andley, the learned Counsel for the appellants, has assailed the order of the learned single Judge on numerous grounds. It is contended by him that in the order dated 27-6-1978 it is contained that Shri Ahuja showed only the willingness on behalf of the appellants and Shri S. S. Fatehpuria (deceased) to give an undertaking as contained in the said order and that a mere willingness to give an undertaking did not amount to an undertaking actionable under the Contempt of Courts Act. 1971. According to the learned Counsel an undertaking must be an undertaking on the face of which the court sanctions a particular course of action or inaction. In other words, it is contended that the undertaking must be accepted by the court on the basis of which the court passes an order. At the same time, according to the learned Counsel, the undertaking should not be gratuitous but should be clear, definite and unambiguous. It is also urged that the order of the Court on the basis of the undertaking must result in some benefit to the party giving the undertaking and to the prejudice of the opposite party.
It is further vehemently argued that in order to be actionable there should be wilful breach of the undertaking which should be of such a nature as to substantially interfere or tend substantially to interfere with the due course of justice. A mere order for payment of money to a party cannot give rise to an action for contempt if the money is not paid and much less so, if there is no executable order and there is a mere offer to pay a person or persons not parties to the action. It is urged that the sum of Rs. six lakhs as indicated in the order dated 27-6-1978, was not a settled amount payable to the labour. In fact, the official liquidator had inflated this amount. As such, in the said order no specific amount was shown payable to the labour but it was observed that settlement was to be arrived at with the labour union. According to the appellants some labour leaders were invited to Calcutta to settle the matter, but they did not cooperate. It is further contended that genuine efforts were made by the appellants to settle the matter with the labour. It is also argued that the appellants as Directors, were not personally liable for the wages of the labour. All the same, the appellants were making efforts and were anxious to run the factory so that the labour could be paid. But they failed in their efforts. It is also stressed that there is no evidence to show that the appellants made a wilful default in honouring the undertaking.
It is vehemently argued that no proper opportunity was given to the appellants to substantiate their cause except that on the date prior to the final hearing, the learned single Judge examined both the appellants, but that did not amount to a proper opportunity having been given. The learned Counsel has invited our attention to Section 530 of the Companies Act to show that otherwise also all wages or salary of any employee have to be paid on preferential basis. Our attention has also been drawn to the application dated 2-8-1978 filed on behalf of the Company wherein it is mentioned that Kuldip Parkash (respondent No. 2) had taken advantage of the order passed by this Court on 27-6-1978 and has filed the said order before the Judicial Magistrate 1st Class Nalagarh where proceedings under Sections 15 and 16 of the Payment of Wages Act for the recovery of Rs. 1,54,630.37 paise were pending. On this basis, it is contended by the learned Counsel that the total labour wages could not exceed the aforesaid amount, on the date of the order. Accordingly, it is urged that the labour wages had been inflated by the official liqudator to six lakhs with some ulterior motive. The learned Counsel urges that the learned single Judge has proceeded with the matter on the assumption that this huge amount of rupees six lakhs was actually due to the labourers. He has brought to our notice an order passed by the Authority, under the Payment of Wages Act, Nalagarh dated 1-3-1977.
The order was passed on the basis of the application filed by the Labour Inspector, Solan Circle, aaainst the Company and two others. In that order the Company and respondent No. 2 were directed to pay a sum of Rs, 1,54,630.37 paise as wages to the workers along with compensation. The learned Counsel has also referred to a decision in Abdul Razack Sahib v. Mrs. Azizunnissa Begum,AIR 1970 Mad 14 : 1970 Cri LJ 55. He has pointedly referred to paras 3 and 4 of the said judgment. It is useful to reproduce the same:-
3. In Ramalingam v. Mahalinga Nadar : AIR1966Mad21 we formulated the principle of contempt jurisdiction thus (at p. 36 of Cri. L. J.) :-
Essentially Contempt of Court is a matter which concerns the administration of justice and the dignity and authority of judicial tribunals: a party can bring to the notice of Court, facts constituting what may appear to amount to Contempt of Court, for such action as the Court deems it expedient to adopt. But essentially, jurisdiction in contempt is not a right of a party, to be invoked for the redressal of his grievances; nor is it a mode by which the rights of a party, adjudicated upon by a tribunal, can be enforced against another party.If we may use what may be considered an irrelevant expression, having regard to the high function of a Court of justice, proceedings by way of Contempt of Court should not be used as a 'legal thumbscrew' by a party against his opponent for enforcement of his claim. But that is what the petitioners have attempted in this case.
4. The inapplicability of contempt process to an order like the one before us, is too well established to require any citation. We shall, however, refer to one case where the principle is neatly brought out. In Buckley v. Crawford (1893) 1 QB 105 at P. 107 in Volume I, an application was made for an order to commit the plaintiff in the action for disobedience to an order which had been made directing him to pay a sum of money to the claimant in inter-pleader proceedings. It was argued in that case that there was a bargain and an undertaking, and a breach of the undertaking to pay amounted to contempt of Court which may be punished by attachment, just as a breach of an injunction may. Wills, J., with whom Lord Coleridge C.J. concurred, holding that there was no jurisdiction in the Court in such a case to make an order for attachment for contempt, observed-This was a simple order to pay money, but u is sought to treat the default in obeying the order as a contempt of Court, on the ground that the order of payment was made in pursuance of an undertaking which had been given by the plaintiff. There is, however, no difference between an order to pay money made in pursuance of an undertaking and any other order to pay a sum of money. It is true that the undertaking is the original ground of the liability, but attachment is never granted except for disobedience of an order to do or abstain from doing some specific thing.
11. The learned Counsel has further contended that at the most the order dated 27-6-1978 was a compromise arrived at to pay the wages of the labour and cannot be termed as 'an undertaking given to the Court' There is also no mention in the order that such an undertaking had been accepted by the Court. In the end it is stressed that even if it is presumed that it was an undertaking given to the Court, the appellants had tendered their unqualified apology before the learned single Judge as also before us and a turn of Rs. 30,000/- had also been deposited, the apologies under the facts and circumstances deserved to be accepted.
12. On the contrary, it is contended by Shri K. D. Sud, the learned Counsel for the respondents, that the appellants have wilfully made a breach of the undertaking given to the court. On the basis of that undertaking the appellants, derived the benefit of staying the winding up proceedings. It is further contended that the undertaking had to be honoured wh'di was in fact accepted by the Court and on that basis the stay was granted. He has referred to a decision in Bajranglal Gangadhar v. Kapurchand : AIR1950Bom336 . The learned Counsel has laid emphasis on the observations contained in para 7 of the said judgment which reads as under:-
But in our opinion the expression 'undertake' has come to acquire through long practice, a technical meaning. In all orders and decrees of the Court, whenever the expression 'a party undertakes' has been used, it has always borne the meaning that the undertaking has been to the Court.' The learned Counsel has also invited our attention to a judgment in Babu Ram Gupta v. Sudhir Bhasin 1979 Cri LJ 952(SC). In this judgment, the Supreme Court came to the conclusion that there was no expression or specific undertaking given by the contemner to the Court to deliver the possession of the property and on that account the contemner was not found guilty of the Contempt of Court. The Supreme Court further observed that the violation of a consent order or a compromise decree where the fraud, if any, is practised by the person concerned not on the Court but on one of the parties, did not constitute an offence under the Contempt of Courts Act. The learned Counsel has also referred to the decision in Chhaganbhai Norsinbhai v. Soni Chandu-bhai Gordhanbhai : 3SCR786 . In this judgment the Supreme Court held the solemn undertaking given to the Court which was on record, deliberate violation of such an undertaking amounted to contempt of the Court. The Supreme Court, however, further observed as under (al p. 1910):-Another feature of the case is that the appellant gave no sign of even regret at any stage not to mention an apology of any kind. Even in this Court, learned Counsel for the appellant took up the impossible position that there had been no breach of any undertaking.
13. The learned Counsel for the appellants has drawn our attention to a decision in Kuldip Rastogi v. Vishwa Nath Khanna : AIR1979Delhi202 . He has pointedly referred to paragraphs 47 and 49 of the said judgment. It is useful to reproduce these paragraphs:-
47. Thus accords completely with the quotation from Bramwell, L. J.. with which I started. It follows that 'wilful' has the same meaning in the law of contempt as in other branches of the law. I can see no reason why in the matter of contempt it should have some special or peculiar meaning, Bowen. L.J., said In re Young and Harston's Contract (1855) 31 Ch D 168. that it 'is not a term of art'. And, the ordinary meaning of 'wilful', as defined in the Concise Oxford Dictionary, is that for which compulsion or ignorance or accident cannot be pleaded as an excuse, intentional) deliberate....
49. Many Indian cases use the word 'contumacious' in describing contempt. Almost invariably they use it disjunctively with 'wilful' or 'deliberate': See K. J. Pathare v. S. J. Pathare (1971) 73 Bom LR 616, Butalia H. S. v. Subhas Kumar (1974) 1 Serv LR 23 : 1974 Cri LJ 528 and Debabrata Bando-padhyay v. State of West Bengal : 1969CriLJ401 . That in itself, indicates that 'contumacious' is used as a synonym, and not for the purpose of adding something more to the meaning of 'wilful' than it otherwise bears. The English cases to which I have referred support this inference. Besides, 'civil contempt' is now denned by the statute, and the word it employs is 'wilful'.
14. We have thoroughly considered the arguments of the learned Counsel for the parties. We find that the following facts emerge from the record before us:-
(i) The appellant/contemners tendered unqualified apologies m the form of affidavits before the learned single Judge before the order of punishment was announced.
(ii) It is not indicated in the order dated 27-6-1978 quoted above in extenso that the undertaking given by the coun- sel of the appellants .had been accepted by the Court.
(iii) In the said order it is point out that according to the report of the official liquidator arrears of wages of labour amounted to about rupees six lakhs, four to six months ago. This calculation is approximate and not specific. On the contrary, according to the proceedings pending before the Authority under the Payment of Wages Act, the total arrears of labour wages as claimed came to Rs. 1,54,630-37 paise.
(iv) It is clarified in the order referred to above that in case the arrears of the labour as stated are not paid up or settlement is not arrived at within one month, the appellants would be liable for contempt of Court.
(v) It is on record that the appellants/ contemners invited the labour leaders to Calcutta at their expense for making settlement and they came and stayed there.
(vi) It is on record as found in the reply to the contempt notice, that the Union leaders on the basis of the order referred to above considered that all their wages would be paid by the Directors and as such their attitude was not co-operative at all. The reply has been filed on the affidavit of Shri B.P. Sinha who has stated that the reply had been prepared and approved by the contemners.
(vii) The facts as contained in the reply have not been controverted by any labour leader either by filing an affidavit or otherwise.
(viii) As pointed out earlier above, the appellants have tendered unqualified apology before us before the commencement of the arguments and have also deposited a sum of Rs. 30,000/-.
(ix) It is apparent that the order containing the undertaking was passed on 27-6-1978. Thereafter the matter came up before the Court on 2-8-1978, On that date, the period of one month had expired and the undertaking was not honoured. No action was, however, taken against the contemners. Even thereafter when this matter was taken up on 17-8-1978 and 23-8-1978, no action for initiating the proceedings under the Contempt of Courts Act was taken. The official liquidator and respondent No. 2 did not file a separate application for initiating such proceedings. But in the application filed for vacating the stay order on 19-3-1979, a prayer was made for taking action under the Contempt of Courts Act. Such a sequence of events shows that the parties and the Court were under the impression that negotiations were going on to settle the matter with the labour. In any event, no one came forward from the side of the labour to urge that efforts for settlement were not made.
15. In the face of the aforesaid facts and circumstances, we are of the view that the said undertaking being not express or specific, but being vague and that too not having been accepted in clear words by the Court, it is difficult to find the appellants guilty for the contempt of Court. Moreover, there is material on record to show that the appellants were trying to settle the matter with the labour leaders who, in fact, visited Calcutta for the purpose at the expense of the appellants but a settlement did not materialize. No material has been placed on record to show that the allegations of the appellants are false. In view of the unrebut-ted material on record, we cannot ignore the same.
16. For the foregoing reasons we are of the opinion that no offence under the Contempt of Courts Act has been established against the appellants. The appeal is accordingly allowed and the judgment and order passed by the learned single Judge is set aside. There is, however, no order as to costs.