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Supreme Court of India
Shyam Sahni vs Arjun Prakash on 19 March, 2020Author: R. Banumathi
Bench: R. Banumathi, Ashok Bhushan, A.S. Bopanna
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2210 OF 2020
(Arising out of SLP(C) No.9322 of 2019)
SHYAM SAHNI …Appellant
VERSUS
ARJUN PRAKASH AND OTHERS …Respondents
JUDGMENT
R. BANUMATHI, J.
Leave granted.
2. This appeal has been filed assailing the impugned judgment
and final order dated 01.08.2018 passed by the High Court of Delhi
at New Delhi in FAO (OS) No.210 of 2017 in and by which the
Division Bench of the High Court has set aside the order of the
learned Single Judge and allowed the appeal filed by respondent
No.1 (defendant No.4) herein by holding that the passport of
respondent No.1 (defendant No.4) ought not to have been ordered
to be detained and further directed return of the passport of
Signature Not Verified respondent No.1 (defendant No.4).
Digitally signed by
MAHABIR SINGH
Date: 2020.03.19
18:20:01 IST
3. Brief facts which led to filing of this appeal are as follows:-
Reason:
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The appellant filed a civil suit being CS (OS) No.1134 of 2008
before the High Court seeking declaration, permanent injunction
and possession of the suit property being the first and second floor
of the residential house constructed upon Plot No.68, Friends
Colony (West), New Delhi. Alternatively, appellant has sought the
partition of the suit property. Case of the appellant is that in 1954,
Late Niamat Sahni acquired Plot No.68, Friends Colony (West),
New Delhi, measuring 3000 sq. yards from Friends Colony
Cooperative Housing Building Society Limited wherein, she
constructed a main building having a ground floor and first floor.
Niamat Sahni herself and with her son Shyam Sahni (appellant) and
his family were residing in the ground floor. Soon after the demise of
Niamat Sahni, the appellant came to know that Sarabjit Prakash
and respondent No.1 have executed documents purporting to be
sale deeds and other documents in their favour or in favour of other
persons qua first floor and second floor and terrace in the residential
building constructed upon 68, Friends Colony (West) New Delhi
belonging to mother of the appellant, the appellant has filed a civil
suit seeking declaration, possession and permanent injunction and
also for partition in CS (OS) No.1134 of 2008 which is pending at
the stage of cross-examination of the defendants witnesses.
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4. Respondent No.1 resisted the suit contending that first
respondent’s mother Usha Prakash took physical possession of the
first floor and terrace and the second floor in 1974 and the same
was let out. On 13.08.1984, Niamat Sahni made a registered will in
Hindi dividing equal shares between her son- appellant Shyam
Sahni and her daughter Usha Prakash (mother of respondent No.1).
On 23.12.1992, Niamat Sahni also made another registered will in
English which was identical to her previous will made in 1984. It is
stated that on 06.12.1999, an Irrevocable Memorandum of Family
Settlement was signed between the appellant and Usha Prakash
(mother of respondent No.1) which was confirmed by Niamat Sahni
thus, dividing 50% of the undivided share in the plot of land
between her son and daughter. According to respondent No.1, as
per settlement, ground floor of the suit property was given to the
appellant with the entire parking, garages and servant quarters on
the left side of the property; while the first floor and also subsequent
floors (with entire parking and front entrance on the right side of the
suit property) were given to Usha Prakash-mother of respondent
No.1. According to respondent No.1, the family settlement dated
06.12.1999 is an irrevocable Family Settlement between the
appellant and Usha Prakash and was also acted upon dividing the
suit property by meets and bounds. Respondent No.1 has further
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stated that Niamat Sahni had executed a General Power of Attonery
on 03.01.2002 and pursuant to the said Power of Attorney, Usha
Prakash sold three flats on the second floor to separate parties and
first floor to her husband Sarabjit Prakash by way of separate
registered sale deeds. On 26.06.2005, Usha Prakash passed away
due to cancer.
5. Respondent No.1 further stated that in October, 2007,
M/s. Soul & Attires Creations Private Limited (a company formed by
first respondent, his wife and his father Sarabjit Prakash) took a
term loan for Rs.4.25 crores from Bank of India. Sarabjit Prakash
also stood as the Guarantor for the said project funding loan from
the Bank of India and an equitable mortgage has been created on
the first floor of the property as the secondary collateral security to
Bank of India as per RBI guidelines. In the written submission, first
respondent has further alleged that the appellant had filed a civil
suit being CS (OS) No.1134 of 2008 concealing the factum of
irrevocable Memorandum of Family Settlement on 06.12.1999. In
October, 2008, an additional Working Capital Limit (stated to be
against Stocks and Book Debts) was granted to the aforesaid
company by the Bank of India for Rs.5 crores. By end of 2009, the
account of M/s. Soul & Attires Creations Private Limited was
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declared as Non-performing Assets by Bank of India and Bank of
India took physical possession of the first floor on 31.10.2011. Since
the loan has become Non-performing Assets, Bank of India had
filed O.A. No.297 of 2011 before DRT, New Delhi and the same was
decreed by DRT and RC No.172/2012 was issued by the Bank of
India and the recovery proceedings are still going on before the
Recovery Officer.
6. The grievance of respondent No.1 is that the loan facility was
availed and equitable mortgage was created even in the first week
of October, 2007 much prior to the ex-parte order dated 02.06.2008.
Further grievance of the first respondent is that they were not heard
before granting the ex-parte stay on 02.06.2008.
7. The learned Single Judge vide order dated 02.06.2008
granted interim injunction restraining the defendants from selling,
alienating or creating any third party rights in the suit property.
Taking note of the plaint averments that defendant No.1-Sarabjit
Prakash and respondent No.1 are raising further construction on the
suit property and they have been creating documents executed by
Usha Prakash and other defendants, the learned Single Judge
found that the balance of convenience lies in favour of the
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appellant-plaintiff thereby, granted the ex-parte order of stay on
02.06.2008.
8. Aggrieved by the disobedience of the injunction order by the
defendants, the appellant filed an application being I.A. No.19801 of
2011 under Order XXXIX Rule 2A CPC read with Sections 10 and
12 of the Contempt of Courts Act for breach of injunction order
dated 02.06.2008. It is alleged that in spite of above injunction
order, respondent No.1 (defendant No.4) and defendant No.1
(Sarabjit Prakash) who is father of respondent No.1 availed financial
facilities from Bank of India by mortgaging the first floor of the suit
property to the tune of Rs.4.20 crore to Rs. 5.20 crore which was
enhanced on two different occasions i.e. when the defendants
created charge over suit property to Rs.9.24 crore and later on, to
Rs.11 crore.
9. The contempt petition was heard by the learned Single Judge
on various dates and number of orders came to be passed. Though
number of orders have been passed, we will only refer to those of
the orders which are relevant for consideration of this appeal. On
05.12.2011, when the matter came up for hearing, learned Single
Judge confirmed the injunction order dated 02.06.2008 directing the
parties to maintain status-quo with respect to the suit property. In
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the subsequent hearing, by order dated 21.05.2013, learned Single
Judge held defendant No.1 guilty of contempt and directed
defendant No.1 and defendant No.4-respondent No.1 to appear
before the Court disclosing the list of assets. On 02.07.2013, both
defendant No.1 and defendant No.4-respondent No.1 submitted
that the charge so created on the suit property will be cleared by
them within four months from their own funds and resources.
Accordingly, the Court directed defendant No.1-Sarabjit Prakash
and respondent No.1-defendant No.4 to file an undertaking in this
regard. The said direction was complied with and both of them
submitted their respective undertakings on 15.07.2013. However, on
16.12.2013, Court recorded that despite submitting their
undertaking to that effect, both Sarabjit Prakash and respondent
No.1 (defendant No.4) have failed to comply with the undertakings
given by them.
10. Being aggrieved, appellant filed I.A. No.41 of 2013 under
Order XXXIX Rule 2A read with Section 151 of CPC with Sections
10 and 12 of the Contempt of Courts Act against respondent No.1
(defendant No.4) and his father Sarabjit Prakash (defendant No.1)
for not complying with the respective undertaking/statement.
Respondent No.1 along with his father Sarabjit Prakash-defendant
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No.1 filed a joint reply pleading their insolvency and difficulties in
clearing the charge and furnished another undertaking to clear
charge over suit property from the amount received from selling the
suit property and another property at 33, Sundar Nagar, New Delhi.
In the meanwhile, defendant No.1 died on 28.10.2015.
11. On the next date of hearing, the Court recorded that
respondent No.1 (defendant No.4) had left Delhi and shifted to
Singapore with his family and counsel for respondent No.1 was
directed to file fresh address of respondent No.1 along with the
relevant documents to establish the proof of his residence. The said
direction was again reiterated on 28.07.2016. Respondent No.1
filed an affidavit wherein he claimed that he is still living in Delhi and
did not mention his Singapore resident details. On the next date of
hearing i.e. on 29.09.2016, the Court recorded that respondent No.1
has till date not liquidated the amount as stated by him, therefore,
his personal presence was directed in the court on 04.11.2016.
Despite such direction, respondent No.1-defendant No.4 was not
present before the court and on the next date of hearing i.e. on
13.02.2017, the proceedings were set ex-parte qua respondent
No.1.
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12. On 02.03.2017, the court recorded that the charge on the suit
property has still not been cleared till date and respondent No.1-
defendant No.4 was asked to deposit his passport and furnish
security. Accordingly, respondent No.1-defendant No.4 offered three
properties situated in Amritsar owned by his mother-in-law (Rama
Khanna) as a security and his passport was deposited in the
custody of Court Master. Respondent No.1 thereafter filed an
undertaking to the effect that passports of his family members be
revoked and proceedings for extradition can be initiated on his not
returning to India. The court vide order dated 22.03.2017 accepted
the undertaking given by respondent No.1 and directed the Court
Master to hand over the passport to respondent No.1 and court
directed him to appear on 26.05.2017. Adopting the same attitude,
respondent No.1 did not comply with the undertaking furnished by
him this time. Noting non-compliance of the earlier order and
noticing breach of repeated undertakings given by him, by order
dated 26.05.2017, the Court restrained him from leaving the country
and directed him to deposit his passport with the Assistant
Registrar.
13. Aggrieved by the order dated 26.05.2017, respondent No.1
filed I.A. No.6907 of 2017 seeking recall of the order dated
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26.05.2017. As the matter was listed, respondent No.1 once again
did not mark his presence before the Court. It was informed to the
Court by the counsel appearing on behalf of respondent No.1 that
he had not left the country as directed by the Court vide order dated
26.05.2017 and that the passport of respondent No.1 would be
deposited today itself. Vide order dated 30.05.2017, learned Single
Judge in Para (5) of the order directed the Registry to send
communication relating to his passport details to the concerned
authorities in terms of Para (4) of the order dated 26.05.2017. Under
the same order, respondent No.1 was restrained from leaving the
country and the matter was adjourned. It was later revealed from
the inspection of court file that a report from the Immigration
Department was received reflecting that respondent No.1 was
detained while returning to India on 05.07.2017.
14. The appellant once again filed an application being I.A. No.
7557 of 2017 under Order XXXIX Rule 2A CPC read with Section
151 of CPC with Sections 10 and 12 of the Contempt of Courts Act
seeking initiation of contempt proceedings and for appropriate
directions against respondent No.1.
15. Respondent No.1 thereafter approached the Division Bench of
the High Court by filing FAO (OS) No. 210 of 2017 challenging the
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Para (4) of the order dated 26.05.2017 and Para (5) of the order
dated 30.05.2017 passed by the learned Single Judge. Vide
impugned judgment, the Division Bench allowed FAO (OS) No.210
of 2017 by holding that the bank with which the charge was created
on the property was not a party before the learned Single Judge
and that there was no reason to take any coercive steps against
respondent No.1-defendant No.4 for his failure to honour his
commitment qua the bank. Likewise, there was no reasonable
justification to impose any restriction like retention of passport and
the Division Bench directed return of the passport to respondent
No.1-defendant No.4. Aggrieved by the order of the Division Bench,
the appellant came before us.
16. Learned Senior counsel for the appellant has contended that
upon initiation of contempt proceedings by the appellant,
respondent No.1 gave an unconditional undertaking to clear the
charges created over a portion of the suit property within four
months; however, such undertaking turned out to be mere words
and no such charge was cleared by the first respondent within the
period which he has undertaken. It was submitted that respondent
No.1 was repeatedly giving evasive replies and undertakings; but
failed to comply with the same. Drawing our attention to the affidavit
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dated 27.08.2016, learned Senior counsel for the appellant has
submitted that in the said affidavit, respondent No.1 has stated that
he is still residing in Delhi, when in fact he had already shifted along
with his family to Singapore in May, 2016 itself. Learned Senior
counsel further submitted that the present case is not a case of
impounding of passport; rather the present case is where the
learned Single Judge directed respondent No.1 to deposit the
passport as per his undertaking in terms of his affidavit dated
10.03.2017 so as to ensure the presence of respondent No.1 since
the Court was of the view that respondent No.1 would leave India
for Singapore. It was contended that while dealing with the
contempt petition, in order to ensure compliance of the orders of the
Court and make sure that the parties adhere to the undertakings
filed before the Court, the Court has the power to direct deposit of
the passport and the Division Bench erred in setting aside the order
of the learned Single Judge.
17. Per contra, learned counsel appearing for the respondents
has submitted that respondent No.1 and his father Late Sarabjit
Prakash has made all the efforts to clear the bank dues; but due to
unavoidable circumstances, they could not clear the charge. The
learned counsel submitted that the equitable market value of the
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suit property No.68, Friends Colony (West), New Delhi was made
even in October, 2017 much prior to the alleged ex-parte stay order
dated 02.06.2008. It was submitted that the learned Single Judge
was not right in passing various orders restricting the jurisdiction of
the DRT for recovery of the Bank dues when the Bank of India is not
made a party to the suit. It was further submitted that there is
already an order of status-quo passed in the suit being CS (OS)
No.1134 of 2008 and therefore, there was no need for the learned
Single Judge to direct respondent No.1 to deposit his passport and
issue direction for not leaving the country. It was submitted that in
2012, the bank sought the permission of the Court to sell the first
floor to recover its dues but the bank did not pursue and resultantly,
the said application was dismissed and while so, it was not justified
for the learned Single Judge to take the burden of the bank and
directing respondent No.1 to clear the dues. It was submitted that
coercive directions given by the learned Single Judge compelling
respondent No.1 to clear the dues was not warranted and rightly set
aside by the Division Bench and the impugned order does not
warrant interference.
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18. We have carefully considered the submissions of both the
sides and perused the impugned judgment and other materials on
record.
19. Sarabjit Prakash was directed to be personally present before
the Court on 30.05.2013. On the next date of hearing i.e.
30.05.2013, Sarabjit Prakash was not present in the Court and the
matter was listed for 02.07.2013. By the order dated 02.07.2013,
Sarabjit Prakash (defendant No.1) and respondent No.1-defendant
No.4 who were present in the Court stated that if four months’ time
is given to them, they will ensure that the dues of Bank of India are
discharged and part of the suit property which is charged with the
Bank of India namely, First floor of 68, Friends Colony (West), New
Delhi, shall be freed of all charges/encumbrances. Sarabjit Prakash
and respondent No.1 have also stated that they will file appropriate
affidavit to that effect and on such statement, the contempt petition
was kept in abeyance for four months. Accordingly, Sarabjit Prakash
and respondent No.1 have filed affidavit of undertaking before the
Court on 15.07.2013 undertaking that they will clear the dues of
Bank of India when the property bearing No.68, First Floor, Friends
Colony (West), New Delhi shall be freed of all
charges/encumbrances within a period of four months and that they
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will make arrangement of the loan amount to be paid to the Bank of
India from other moveable and immoveable properties in the name
of Sarabjit Prakash.
20. When the matter was taken up by the Court, the Court noted
that as per undertaking, the amount has not been paid to the Bank
and Sarabjit Prakash and respondent No.1 have failed to clear the
charge over the suit property as per undertaking. The appellant
again filed I.A No.41 of 2013 under Order XXXIX Rule 2A against
Sarabjit Prakash and respondent No.1 for not complying with the
respective undertaking/statement made before the Court. On
24.01.2014, Sarabjit Prakash and respondent No.1 filed a joint reply
stating that due to unavoidable circumstances, they are unable to
clear the charge over the suit property and undertaking to clear the
charge over the suit property from the amount received from 33,
Sundar Nagar, New Delhi.
21. On application filed by the appellant in I.A. No.21764 of 2015,
on 20.10.2015, the High Court directed that amount of Rs.3.50
crores will not be utilized by Sarabjit Prakash and respondent No.1
except to the extent of meeting the medical expenses of Sarabjit
Prakash. One week after the above order, Sarabjit Prakash passed
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away on 28.10.2015 at Apollo Hospital, New Delhi due to multiple
heart arrests.
22. On 28.07.2016, the Court directed respondent No.1 to furnish
his current address and also the extent of bequest in his favour to
the estate of deceased Sarabjit Prakash. It is alleged by the
appellant that respondent No.1 filed a false affidavit claiming to be
residing at B-334, New Friends Colony, Ground floor, Delhi without
disclosing the Singapore address. On 02.03.2017, the Court
recorded that the encumbrances on the suit property were not
cleared till date and directed respondent No.1 to deposit his
passport and furnish the security. On the next date of hearing i.e.
07.03.2017, respondent No.1 offered three properties owned by his
mother-in-law (Rama Khanna from Amritsar) by depositing title
deeds stating that he has no other security to offer. Observing that
respondent No.1 has failed to comply with his
undertakings/statements, on 26.05.2017, the learned Single Judge
directed respondent No.1 to deposit his passport and made an
order restraining respondent No.1 from leaving India.
23. According to respondent No.1, he has shown his bonafide by
producing additional security before the Court by depositing original
title deeds of three properties belonging to his mother-in-law (Rama
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Khanna from Amritsar) to the tune of Rs.4.45 crores. Learned
counsel for respondent No.1 has submitted that equitable mortgage
of the suit property (i.e. 68, Friends Colony (West), First Floor, New
Delhi) was made even in the first week of October, 2007 which was
much prior to the ex-parte stay order dated 02.06.2008. Learned
counsel further submitted that in October, 2008, additional Working
Capital was granted to the company-M/s. Soul & Attires Creations
Private Limited for Rs.5 crores (against Stock and Book Debts) as
per banking regulations. According to respondent No.1, this
enhanced limit is never a loan against the property; but only against
Stocks and Book Debts. Learned counsel appearing for respondent
No.1 has submitted that respondent No.1 is a bonafide legal owner
of the suit property by means of registered will made in his favour by
his father-Sarabjit Prakash dated 29.09.2006 who had the legal title
in his name by way of registered sale deed executed by his wife
Usha Prakash in exercise of the power vested in her through the
registered Power of Attorney dated 03.01.2002 given to her by her
mother Niamat Sahni and thus, respondent No.1 claims title over
the suit property No.68, Friends Colony (West), First Floor, New
Delhi. The question regarding the correctness of the sale deed
executed by Usha Prakash – mother of respondent No.1 in favour
of Sarabjit Prakash and the dispute raised regarding the title of the
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property could be determined only in the suit after parties adduced
oral and documentary evidence.
24. The short point falling for consideration is whether respondent
No.1 is to be proceeded for contempt and whether the learned
Single Judge was right in directing the deposit of first respondent’s
passport. Of course, on 15.07.2013, Sarabjit Prakash and
respondent No.1 filed an undertaking that they shall clear dues of
Bank of India and the suit property shall be cleared of all
charges/encumbrances within a period of four months and that they
shall make arrangement of the loan amount to be paid to the Bank
of India from other moveable and immoveable properties.
Subsequently also, Sarabjit Prakash and respondent No.1 filed an
undertaking before the Court. Having filed the undertaking, it was
required of the first respondent to keep up to his undertaking filed
before the Court. On behalf of respondent No.1, learned counsel
submitted that respondent No.1 was making genuine efforts to pay
the amount to the Bank and clear the charge on the property; but
due to unavoidable circumstances, they could not clear the charge
over the suit property. As pointed out earlier, Sarabjit Prakash was
suffering from illness and passed away within one week after the
order was passed on 20.10.2015.
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25. Since repeated undertakings were filed and the same were
not complied with, learned Single Judge directed respondent No.1
to surrender his passport. The said order was passed to ensure the
presence of the first respondent and compliance of the order of the
Court. It cannot be said that the learned Single Judge exceeded the
jurisdiction or committed an error in ordering surrender of the
passport. In order to ensure the presence of the parties in the
contempt proceedings, the Court is empowered to pass appropriate
orders including the surrender of passport. While dealing with child
custody matter, in David Jude vs. Hannah Grace Jude and Another
(2003) 10 SCC 767, the Supreme Court directed Union of India to
cancel the passport of contemnor No.1 and to take necessary steps
to secure the presence of contemnor No.1 with the child in India
and to ensure her appearance before the Court on the date of
hearing.
26. It is pointed out that the Division Bench proceeded as if the
learned Single Judge has ordered impounding of the passport of
respondent No.1; whereas, the learned Single Judge has only
directed respondent No.1 to deposit his passport in the Court. As
discussed earlier, the purpose of directing respondent No.1 to
surrender his passport was only to ensure the presence of
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respondent No.1 who was filing repeated undertakings before the
Court but was not complying with the same. In our view, the Division
Bench was not right in setting aside the order of the learned Single
Judge in directing respondent No.1 to deposit his passport before
the Court and the judgment of the Division Bench cannot be
sustained. In order to ensure the presence of respondent No.1 and
to ensure further progress of the trial, the order of the learned Single
Judge directing respondent No.1 to deposit his passport before the
Court stands confirmed.
27. On behalf of the appellant, it is stated that in view of the order
of the Division Bench, the contempt petition has been disposed of
by the learned Single Judge on 04.12.2018 and prayed for
restoration of the contempt petition. Since the suit is of the year
2008 and much of the court’s time has been spent on the interim
orders and on the contempt petition, we are not inclined to issue
direction for restoration of the contempt petition. Since, the suit is of
the year 2008 and the trial has already commenced and the matter
is said to have been pending for cross-examination of the
defendants witnesses, it is suffice to direct early expeditious
disposal of the suit at the same time, ensuring that respondent No.1
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will be available at the stage when the suit is disposed and in case
he suffers an adverse decree.
28. The impugned order of the Division Bench dated 01.08.2018
passed by the High Court of Delhi at New Delhi in FAO (OS) No.210
of 2017 is set aside and this appeal is allowed. In order to ensure
the presence of respondent No.1 and to ensure further progress of
the trial, the order of the learned Single Judge directing respondent
No.1 to deposit his passport before the Court stands confirmed. The
learned Single Judge is requested to take up the civil suit being CS
(OS) No.1134 of 2008 and continue with the trial and dispose the
same expeditiously preferably within a period of nine months. No
costs.
……………………….J.
[R. BANUMATHI]
……………………….J.
[A.S. BOPANNA]
New Delhi;
March 19, 2020.
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