Translate
Text Highlighter

Bookmark

PDF

Share

Report a problem
AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
Judges
Acts
  • Companies Act (Current Transport and Finance Private Limited).
  • provisions of O. 39, rule 2 (3) of the Code of Civil Procedure.
  • sub-rule (3) of O. 39 rule 2, Code of Civil Procedure.
  • s. 20 of the Contempt of Courts Act, 1971 (the Act)
  • O. 39 rule 2 (3), of the Code.41. Contempt
  • O. 38 rule 5 (IA 991 of 1972)
  • CONTEMPT OF COURTS ACT
  • Order 38 rule 5
Are you a practicing lawyer?
Enhance your digital presence and reach by creating a Casemine profile.
Upload pleading to use the new AI search
Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
Judges
Acts
  • Companies Act (Current Transport and Finance Private Limited).
  • provisions of O. 39, rule 2 (3) of the Code of Civil Procedure.
  • sub-rule (3) of O. 39 rule 2, Code of Civil Procedure.
  • s. 20 of the Contempt of Courts Act, 1971 (the Act)
  • O. 39 rule 2 (3), of the Code.41. Contempt
  • O. 38 rule 5 (IA 991 of 1972)
  • CONTEMPT OF COURTS ACT
  • Order 38 rule 5
Smart Summary

Factual and Procedural Background

These proceedings arise from contempt of court proceedings brought against Kuldip Singh (defendant No. 7) for alleged breach of an undertaking given to the court on October 9, 1972 (and earlier orders dated July 17, 1972 and May 4, 1973 are also in the background). The Central Bank of India filed a suit on May 26, 1972 for recovery of Rs. 4,73,873 against Current Transport and Finance Private Limited (defendant No. 1), Current Transport Service (defendant No. 2) and various directors, including Kuldip Singh, in respect of five hypothecated buses (vehicle numbers DLP 4128, DLP 4265, DLP 4383, DLP 4488 and DLP 4091).

The bank applied on May 26, 1972 under Order 38 Rule 5 for attachment before judgment and an ad interim restraint was ordered on July 17, 1972. On October 9, 1972 counsel appearing for some defendants (Mr. R.M. Gupta at the instance of Kuldip Singh) gave an undertaking recorded in court that "the buses ... will not be alienated in any manner whatsoever until this application is heard and decided." When the attachment application was later pressed the court appointed a receiver on May 17, 1973 to take possession of the five vehicles. The receiver encountered difficulty locating the buses. Multiple affidavits and statements were filed/recorded in which Kuldip Singh's account of possession and knowledge of the buses changed over time.

After efforts by the receiver(s) failed and inconsistent statements by directors, Justice Yogeshwar Dayal issued a suo moto show cause notice to Kuldip Singh dated November 19, 1974, calling upon him to show cause why he should not be punished for contempt for alleged breach of the undertaking of October 9, 1972 (and related court orders). Kuldip Singh filed a reply on December 20, 1974 and raised multiple defenses. The court heard facts, analyzed limitation and other defenses, concluded that Kuldip Singh wilfully breached the undertaking and found him guilty of civil contempt, ordering detention in civil prison for six months with subsistence to be paid by the bank; sentencing was subsequently suspended on Kuldip Singh's application to enable an intended appeal.

Legal Issues Presented

  1. Whether Kuldip Singh committed civil contempt by wilfully breaching the undertaking given on October 9, 1972 that the buses would not be alienated.
  2. Whether the show cause notice dated November 19, 1974 was within the limitation period prescribed by Section 20 of the Contempt of Courts Act, 1971.
  3. Whether an undertaking given in court (not to alienate) amounts in substance to an injunction enforceable as contempt if breached.
  4. Whether the show cause notice was sufficiently specific in alleging the contemptuous acts.
  5. Whether Kuldip Singh (defendant No. 7) could be held liable for an undertaking given on behalf of defendants 1 and 2 (company and related entity) when the attachment application was formally against defendants 1 and 2.

Arguments of the Parties

Kuldip Singh's Arguments (Defence)

  • Limitation: Proceedings were time-barred under Section 20 of the Contempt of Courts Act, 1971. Counsel argued limitation should run from dates such as May 9, 1973 (filing of reply), August 30, 1973 (order of V.D. Misra J.), October 17, 1973 (his statement denying possession), or September 24, 1973 (his affidavit denying possession), which would place the show cause notice beyond one year.
  • Meaning of "not to alienate": The undertaking only precluded transfer of proprietary rights; since registration remained unchanged, there was no breach and mere possession or use did not constitute "alienation".
  • Notice specificity: The show cause notice was alleged to be insufficiently precise; counsel cited authorities in support of the submission that precise breaches and specific acts must be stated before contempt can be found.
  • Undertaking not accepted by the bank: It was argued that because the bank later sought possession and the court appointed a receiver, the original undertaking was not effectively accepted or was rendered irrelevant.
  • Identity/Scope: Kuldip Singh argued he could not be held in contempt because the Order 38 Rule 5 application was formally made against defendants 1 and 2, and he was defendant No. 7.

Plaintiff (Central Bank) / Court's Position (as summarized in the opinion)

  • The bank pressed for attachment and, although the undertaking was given, the court accepted it and did not proceed immediately to attachment; the undertaking remained binding on Kuldip Singh.
  • The court emphasized possession (actual or constructive) over mere proprietary registration for purposes of enforcing hypothecation-based relief; "possession is all important."
  • The bank's position, as inferred from the court record, was that the buses were being spirited away and that the undertaking had been breached, frustrating enforcement of the attachment order.
  • The court treated the undertaking given at the instance of Kuldip Singh (by his counsel) as binding on him personally because he acted on behalf of the company and was in control of company affairs and fleet.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Sudesh Kumar v. Jai Narain, 1974 PLR (23) (1) Cited in relation to the limitation question under Section 20 of the Contempt of Courts Act — supporting the court's conclusion on when limitation begins to run. The court relied on this authority (cited after the limitation analysis) in holding that the show cause notice was within time, concluding limitation began with the receiver's report dated 22 November 1973.
Ramesh Chandra v. Lt. Governor Delhi (1977 Cr. L.J 4 (2)) Cited by defence counsel for the proposition that a contempt notice must state precise breaches and specific acts complained of. The court considered the submission but rejected it, holding that the notice in this case sufficiently identified the breach (the undertaking of 9 October 1972) and the surrounding orders.
Roshanlal Thakur v. Kishanlal Kapoor (1977 Cr. L.J 9 (3)) Cited by defence counsel on the need for specificity in a contempt notice. The court noted the citation but held the show cause notice was adequate as it referred specifically to the undertaking and related orders.
Jayantilal Hiralal & Co. v. Waman Narayan Velinkar, AIR 1932 Bom. 638 Cited by defence counsel concerning the specificity required in alleging contemptuous acts. The court considered the authority in assessing the adequacy of the notice and found the notice adequate in the present case.
Kilachand Devchand & Co. v. Ajodhyaprasad Sukhanand, AIR 1934 Bom. 452 Cited by defence counsel on requirements for a contempt notice to specify acts complained of. The court rejected the contention that the notice here was deficient and held the show cause notice sufficiently informed the contemner.
Gurumurthi v. Perumal, AIR 1936 Madras 651 Principle that an undertaking accepted by a court is equivalent in substance to an injunction and breach of it amounts to contempt. The court relied on this ratio to support the conclusion that the undertaking given by or at the instance of Kuldip Singh was binding and its breach constituted contempt analogous to breach of an injunction.
Halsbury's Laws of England (4th ed., Vol. 9 para 75) (treatise) Authority cited for the proposition that breach of an undertaking given to the court has the same force as an injunction and breach amounts to contempt. The court quoted Halsbury to reinforce the principle that an undertaking accepted by the court is to be treated as equivalent to a court order and breach is contemptuous.

Court's Reasoning and Analysis

The court's reasoning follows a sequential analysis of facts, legal nature of undertakings and applicable law:

  1. Factual assessment and credibility of statements:
    • The court reviewed affidavits and oral statements showing Kuldip Singh's position changed repeatedly — from apparent control/possession, to lack of knowledge, to claiming some buses were with Jassa Singh and finally asserting all five buses were with Jassa Singh.
    • Other directors' affidavits and statements consistently indicated that Kuldip Singh had control of the company's affairs and the fleet; some affirmed that Kuldip Singh had actual possession of at least three buses.
    • The receiver's investigations and the co-receiver's report (November 22, 1973) documented inability to locate the buses and conflicting blame between Kuldip Singh and Jassa Singh.
  2. Legal character of the undertaking:
    • The court treated the undertaking given in open court on October 9, 1972 (given at Kuldip Singh's instance by counsel) as accepted by the court and therefore binding.
    • Relying on authority (Halsbury and Gurumurthi v. Perumal), the court held that an undertaking accepted by the court is in substance equivalent to an injunction and breach is contempt.
  3. Limitation analysis:
    • The court considered Section 20 of the Contempt of Courts Act, 1971 (one-year limitation) and also noted that powers under the Code (O.39 r.2(3)) and Article 215 of the Constitution do not prescribe limitation periods and are additional to the Act.
    • The court concluded that contempt, for limitation purposes, occurred when Kuldip Singh was appointed co-receiver (October 17, 1973) and then failed to assist in securing the buses, with the critical report by co-receiver Sachdeva on November 22, 1973 marking the date from which limitation should run. On that basis the show cause notice of November 19, 1974 was within time, a conclusion supported by citation to Sudesh Kumar v. Jai Narain.
  4. Substance over form — possession vs. proprietary registration:
    • The court emphasized that for enforcement against hypothecated movables, actual or constructive possession is the vital factor; mere registration in the Transport Authority does not safeguard the bank's security if possession has been lost or the vehicles have been spirited away.
    • The court rejected the defence that "not to alienate" referred only to transfer of proprietary title; it held the power to alienate includes power to dispose which presupposes possession — "possession is nine-tenths of law" (as the court put it).
  5. Adequacy of show cause notice:
    • The court addressed defence arguments that the notice lacked specificity, but held the notice sufficiently identified the core contempt: breach of the undertaking of October 9, 1972, in the factual and procedural context of earlier orders (July 17, 1972 and May 4/17, 1973).
  6. Liability of Kuldip Singh despite corporate form:
    • The court found that Kuldip Singh acted on behalf of the company and had substantial stake/control; thus an undertaking given at his instance by counsel bound him personally and he could be held in contempt for breach of it.
  7. Conclusion on guilt and relief available:
    • Given the shifting explanations, admissions that three buses were once in his actual possession, failure to assist the court despite repeated opportunities and evidence of control, the court found Kuldip Singh guilty of civil contempt for wilful and contumacious breach of the undertaking.
    • The court considered available remedies under the Contempt of Courts Act, O.39 r.2(3) of the Code (attachment/sequestration), and Article 215, and determined that detention (civil imprisonment) and possible attachment/sequestration of property were appropriate.
  8. Procedural note on suspension:
    • On Kuldip Singh's application, the court by separate order suspended the punishment to enable him to prefer an appeal.

Holding and Implications

Holding: The court held that Kuldip Singh was guilty of civil contempt for wilful and contumacious breach of the undertaking given to the court on October 9, 1972.

Consequences and immediate orders:

  • The court ordered that Kuldip Singh (defendant No. 7) be detained in civil prison for a period of six months; the bank was directed to pay his subsistence allowance.
  • The court noted that, alternatively or additionally, the bank could apply for sequestration and attachment of property under Order 39 Rule 2(3) of the Code of Civil Procedure if the company or Kuldip Singh had property.
  • On application by Kuldip Singh, the court by a separate order suspended the punishment to permit an intended appeal.

Implications beyond the parties: The opinion enforces the principle that an undertaking accepted by the court is equivalent to an injunction and breach thereof constitutes contempt. The decision imposes direct consequences on Kuldip Singh (detention and potential attachment/sequestration). The opinion does not purport to lay down a novel legal doctrine beyond applying established principles (no express claim in the text that a new precedent was created).

    Central Bank Of India v. Current Transport Finance (F) Ltd.

    Avadh Behari Rohatgi, J. (Oral):— These are contempt of court proceedings. On November 19, 1974, Yogeshwar Dayal J. issued a notice to Kuldip Singh (defendant No. 7) calling upon him to show cause why he should not be punished for contempt for breach of the undertaking given to this court on July 17, 1972, October 9, 1972 and May 4, 1973.

    2. On May 26, 1972, the Central Bank of India brought a suit for the recovery of Rs. 4,73,873 against (1) Current Transport and Finance Private Limited, and (2) Current Transport Service and (3) the directors of the company. One of the directors admittedly is Kuldip Singh, defendant No. 7. The suit is for the recovery of money which the bank had advanced to the defendants on the hypothecation of the following five buses:

    (i) Vehicle No. DLP 4128 make T.M.B Model 1968 Chassis No. 342.050.86.14299, engine No. 312.978.86.07011
    (ii) Vehicle No. DLP 4265 make T.M.B Model 1969 Chassis No. 342.050.86.14299, engine No. 312.978.86.14979
    (iii) Vehicle No. DLP 4383 make T.M.B Model 1969 Chassis No. 342.050.96.03021, engine No. 312.978.86.02779
    (iv) Vehicle No. DLP 4488 make T.M.B Model 1969 Chassis No. 342.050.96.03854, Engine No. 312.978.96.03958

    (v) Vehicle No. DLP 4091 make T.M.B Model 1968 Chassis No. 342.050.86.03183, Engine No. 312.978.86.02148

    3. On May 26, 1972, itself the bank moved an application under O. 38 rule 5 (IA 991 of 1972) praying that the aforesaid buses may be attached before judgment. This application came up for ex parte hearing on July 17, 1972 before B.C Misra J. He ordered notice of the application to issue to defendants 1 and 2. For the meanwhile he passed an order restraining them from transferring, alienating or parting with the possession of the motor vehicles in suit. The suit was adjourned to October 9, 1972.

    4. On October 9, 1972, Mr. R.M Gupta, Advocate appeared on behalf of some of the defendants. He filed his power of attorney on behalf of defendants 1, 2, 7, 8, 15 to 19 dated October 9, 1972. This power of attorney is admittedly signed by Kuldip Singh defendant No. 7. It appeared that the service of the application was not affected on all the defendants. The court therefore ordered notice to issue again to the defendants. At this stage Mr. R.M Gupta gave an undertaking to T.P.S Chawla J. who was seized of the case. The order reads:

    “Mr. Gupta gives an undertaking that the buses mentioned in para 2 of this application will not be alienated in any manner whatsoever until this application is heard and decided.”

    5. IA 991 of 1972 then came up before V.D Misra, J. In his order dated May 4, 1973 he said:

    “Mr. R.M Gupta states that he was under the impression that his undertakings not to sell away the vehicles in question would be enough to decide the application. It was for that reason that he did not file the reply. He requests for an opportunity to file a detailed reply because Mr. Chopra is not willing to accept any undertaking given by Mr. Gupta.”

    6. The defendants were allowed to file their reply. On May 9, 1973, a reply to the attachment application was filed on behalf of defendants 1 and 2. In this reply it was stated in paragraph 3 that

    “Para 3 of the application is not denied. But it is suggested that the possession of defendants 1 and 2 is actual with respect to some and constructive with respect to the others.”

    7. On May 17, 1973, the application for attachment before judgment came up for hearing before me. I took the view that defendants 1 and 2 should not be allowed to ply the vehicles as that will diminish the security of the plaintiff bank. I, therefore, ordered that the five vehicles be taken into possession by a receiver. I appointed Mr. H.S Mac as the receiver to take possession of the five vehicles.

    8. Mr. Mac made his report on May 23, 1973. He made efforts to find out the vehicles. He went to the premises of defendants 1 and 2. He met Kuldip Singh. He enquired from him about the whereabouts of the vehicles. Kuldip Singh made a statement which the receiver recorded. In his statement Kuldip Singh stated that he did not know where the vehicles were. He was also unable to state whether other directors were aware of the whereabouts of the vehicles or not. His words are:

    “I can help the court in securing the possession of the vehicles only if I am made aware of the whereabouts of these vehicles. So far as I am concerned I do not know where they are.”

    He gave the names and addresses of other four directors and said:

    “I cannot say whether these directors will be able to give information about these vehicles.”

    9. On July 30, 1973, the bank made another application under Orders 38, 39 and 40 and s. 151, Code of Civil Procedure (IA 1860 of 1973). In this application the bank prayed that defendants 1 and 2 be asked to produce the vehicles in court so that the receiver may take possession.

    10. On August 30, 1973, V.D Misra J. passed a detailed order. The learned judge felt satisfied that defendants 1 and 2 and some of their directors were trying to flout the order of the court dated May 17, 1973, directing the receiver to take possession of the vehicles. He, therefore, directed all the directors to file their affidavits. In the affidavits the directors were required to state the whereabouts of the vehicles in question and the names of the persons in whose possession these have been from time to time. This order was made in order to trace the vehicles so that the orders of the court could be enforced and possession of the vehicles obtained.

    11. Kuldip Singh, defendant No. 7, Sukhpal Ahluwalia defendant No. 3, Narain Dass Khattar defendant No. 8, Jassa Singh defendant No. 9, and Amar Singh defendant No. 4 filed their affidavits. They are all directors of the company defendant No. 1.

    12. Kuldip Singh in his affidavit denied all knowledge about the whereabouts of the vehicles. In paragraph 4 he said:

    “That I do not know the present whereabouts of the following vehicles that are in dispute, but after the death of Shri Amrit Lal Dhingra, the Transport Department was looked after by Shri Jassa Singh, director of Current Transport & Finance Private Ltd. and he was also in possession of the same.

    1. DLP — 4091

    2. DLP — 4128

    3. DLP — 4265

    4. DLP — 4383

    5. DLP — 4488.”

    This was the stand of Kuldip Singh.

    13. Other defendants positively stated on oath that Kuldip Singh was in complete control of the affairs of the company and that the entire fleet of vehicles including the vehicles in dispute was in his possession and control. Jassa Singh in his affidavit stated that he had never participated in the business or management of the company and that “Kuldip Singh and his associates” were managing and controlling the affairs of the company. As regards the vehicles he said:

    “These buses are being run . . . by Kuldip Singh along with his associates.”

    14. On October 17, 1973, the statement of Kuldip Singh was recorded by V.D Misra, J. In his examination-in-chief Kuldip Singh admitted that he had signed a power of attorney on behalf of the company in favour of his lawyer, Mr. R.M Gupta. As regards the undertaking he said:

    “It is correct that I directed Mr. Gupta to make a statement before the court that buses in question will not be allienated in any manner whatsoever. These included the buses which were either in actual or constructive possession. At the time my lawyer made the statement in Court, Jassa Singh, director, was in actual possession of two of the buses in dispute and since I was acting on behalf of the company the statement that some were in actual possession were to that extent correct, I had hoped that Jassa Singh or any other person will not be able to transfer these buses without my knowledge since I was the only person acting on behalf of the company. After the death of Amrit Lal Dhingra, director, Jassa Singh was made incharge of all the departments of the company. At that time the other three buses were lying in a most dilapidated condition. In the meantime application for winding up had been moved. I approached Jassa Singh and convinced him that if he could use the buses and earn some money, we will be able to pay off our debts. Jessa Singh also suggested that instead of selling the buses, we should be able to ply them because the sale in those circumstances would not fetch adequate price. In these circumstances Jassa Singh got the three buses repaired at his own cost and thereafter started plying them. Before the Company Court, Jassa Singh director had made an application alleging that he wanted to dispose of these buses. I told the Company Court that I was not going to sell or dispose of these buses.

    At the time my lawyer made the statement in Court, those three buses were being got repaired and it is in these circumstances that the statement was made. It was thereafter that Jassa Singh suddenly took those buses out of Delhi. I say that all the five buses are in the possession of Jassa Singh.”

    15. While Kuldip Singh was being cross-examined by Mr. P.C Khanna, counsel for Jassa Singh, V.D Misra J. asked Kuldip Singh if he was willing to act as a receiver and help in finding out the buses in dispute. Kuldip Singh agreed to act as a receiver. V.D Misra, J. adjourned the remaining cross-examination. He made an order appointing Kuldip Singh and Prithvi Raj Sachdeva, Advocate, as joint receivers of the buses in dispute.

    16. Prithvi Raj Sachdeva made efforts to search the vehicles in question. He went to Hapur. He made enquiries. He also met Jessa Singh and talked to him. Jassa Singh told Mr. Sachdeva that

    “Kuldip Singh the co-receiver had taken away the vehicles and had disposed them of after probably changing the numbers on their engines and chassis.”

    Sachdeva was of opinion that both Jassa Singh and Kuldip Singh were blaming each other and it was not possible for him to find out the vehicles. He submitted his report stating all this on November 22, 1973.

    17. On November 27, 1973, Kuldip Singh appeared before V.D Misra, J. He stated the buses in question were at Hapur and he was ready to point out the buses to the receiver and the officials of the bank. Kuldip Singh expressed his willingness to go to Hapur on December 3, 1973, to point out the buses in question. V.D Misra, J. directed the co-receivers to go to Hapur or such other place as is pointed out by Kuldip Singh in order to find out the buses.

    On December 11, 1973, Sachdeva reported that while they were proceeding to Hapur their car met with an accident. In the accident Kuldip Singh was injured. Kuldip Singh was again directed to locate the buses and take them in his possession as a receiver.

    18. On February 25, 1974, I directed defendants 3, 7, 8, 9 and 12 to be present in person on March 6, 1974. On that date Kuldip Singh appeared. He again appeared on April 11, 1974. On that date I recorded the statement of Kuldip Singh. In his statement he said this:

    “In the winding up proceedings launched by Jassa Singh, Jassa Singh made an application restraining the company from transferring the vehicles including the vehicles mortgaged with the Central Bank. I made a reply in the company court and I said that vehicles DLP 4069, DLP 4128 and DLP 4265 which are mortgaged with the Central Bank may be allowed to be sold by me so that payment may be made to the Central Bank. It is not correct that I sought permission to sell all the five vehicles mortgaged with the bank. I sought permission only in respect of the three vehicles numbers of which I have indicated above. The other two vehicles were already with Jassa Singh and, therefore, I did not ask for permission to sell them. It is correct that I did not make the assertion in my reply that the remaining two vehicles were with Jassa Singh. I did say in my reply that I was in actual possession of the above three vehicles and was constructively in possession of two vehicles which were actually with Jassa Singh. These were DLP 4383 and DLP 4488.”

    Then he said that Jassa Singh

    “took away the three vehicles from the company's office.”

    on the pretext that he would sell them in Meerut at much higher prices than what he (Kuldip Singh) had proposed. Kuldip Singh admitted that the statement made by him before Mr. H.S Mac was correct.
    At the end of his statement Kuldip Singh said:

    “I deny the suggestion that the five disputed vehicles are with me or were sold by me. These five vehicles are with Jassa Singh.”

    Kuldip Singh had not stated before Mr. H.S Mac that all the five vehicles were with Jassa Singh. To this his reply was:

    “Since the receiver did not enquire from me as to whether Jassa Singh had taken away the vehicles I did not state so.”

    19. The statements of Sukhpal Ahluwalia, Narain Dass Khattar and Gurbux Singh were also recorded on April 11, 1974. Both Ahluwalia and Narain Dass stated that Kuldip Singh was managing the affairs of the company and that he had the possession of the buses. Narain Dass Khattar said:

    “To my knowledge Jassa Singh did not take control of the buses.”

    In his affidavit dated September 24, 1973 Sukhpal Ahluwalia had stated:

    “The entire fleet of vehicles, including the vehicles in dispute had always been in possession and under the control of Shri Kuldip Singh.”

    20. On November 19, 1974, Yogeshwar Dayal J. issued a show cause notice suo moto to Kuldip Singh, as I have said. On December 20, 1974, Kuldip Singh filed his reply. In defence he took a number of objections. He denied that he had committed contempt or had in any manner disobeyed the orders of the court.

    21. Now the question is: Has Kuldip Singh committed contempt ? Kuldip Singh's case is that he has not violated the orders of the court and as such has incurred no liability.

    22. It will be recalled that on October 9, 1972, Kuldip Singh had given the undertaking before T.P.S Chawla, J. that the buses will not be alienated. On the earlier date of hearing, July 17, 1972, defendants 1 and 2 had been “restrained from transferring, disposing of or otherwise parting with the possession of the motor vehicles mentioned in the application.” It is in the backdrop of this order of B.C Misra J. that we have to see the value and worth of the undertaking given by Kuldip Singh's counsel on October 9, 1972.

    23. The application for attachment before judgment came up before V.D Misra J. on May 4, 1973, as we have seen. Counsel said that he thought that his undertaking was sufficient to dispose of the application but if it was not so then he would file a reply. The reason for this was that counsel for the bank was interested in the actual possession of the vehicles. I accordingly on May 17, 1973, made an order appointing a receiver to take possession of the vehicles.

    24. This in brief is the course of the proceedings. Let me now examine the effect of the undertaking. Can a man set the authority of law at defiance ? That is the question.

    25. Kuldip Singh, it appears to me, has been shifting his stand from time to time. It is an admitted case that on October 9, 1972, his counsel Mr. R.M Gupta gave the undertaking at his instance. This ex facie showed that Kuldip Singh had possession of the five buses. But when the court wanted to obtain possession of the vehicles and appointed H.S Mac as the receiver, Kuldip Singh disclaimed all knowledge about the whereabouts of the buses. In his affidavit dated September 24, 1973 and in his examination on October 17, 1973 he set up this case. In para 4 of the affidavit he said:

    “I do not know the present whereabouts of the following vehicles that are in dispute. . .”

    Then Kuldip Singh took another stand. Now he said that these vehicles were in charge of Jassa Singh since after the death of Amrit Lal Dhingra, Jassa Singh had been put in charge of the transport section of the company. Subsequently he again changed his position. Now his case was that out of the five vehicles three were with him and two were with Jassa Singh. Later on in his statements dated October 17, 1973 and April 11, 1974 his final stand was that all the five buses were in the possession of Jessa Singh.

    26. The affidavits of the directors and their statements recorded in court clearly prove the following:

    1. Kuldip Singh was in control of the buses of the company.

    2. That Kuldip Singh had possession of the buses.

    3. That at least three buses were with Kuldip Singh in his actual possession at one time on his own admission.

    4. According to the statement of Kuldip Singh two buses were with Jessa Singh.

    5. But Jassa Singh denies the possession of any bus and in this he is supported by other directors.

    27. Kuldip Singh was given several opportunities both by Justice V.D Misra and myself to help the court in getting possession of the buses. While his statement was being recorded on October 17, 1973 by V.D Misra J. Kuldip Singh showed his willingness to help the court in getting possession of the buses. V.D Misra J. adjourned the hearing. Kuldip Singh was asked to assist the court receiver Sachdeva in getting possession of the vehicles. Similarly, when this case came up before me on February 3, 1977, February, 14, 1977 and March 3, 1977 each time Kuldip Singh prayed for time to find out the whereabouts of the buses. I gave him as much as three months' time to find out the buses. These opportunities were of no avail. Indulgence shown bore no fruit. The court was faced with a difficult situation. The buses eluded its grasp. The solemm undertaking given to a court was proving an empty formality, devoid of all content. Ultimately I decided to hear arguments on the show cause notice.

    28. From the affidavits and the statements of the directors it is clear beyond doubt that it is Kuldip Singh who has been incharge and control of the business of the company and that he had the possession of buses. On his own showing he had actual possession of three buses at one time and constructive possession of the remaining two which he said were with Jassa Singh on behalf of the company. Later on he came out with the story that the three buses were being repaired when Jassa Singh took them away from the premises of the company. He does not deny that these three buses were with him. If three buses were with Kuldip Singh, as he admits them to be at one time, he is responsible to the court for their production. The court is not concerned with Jassa Singh. The undertaking was given at the instance of Kuldip Singh by his counsel. The undertaking means that the buses will not be alienated. The bank had moved this court for attachment before judgment. The application was not pressed for immediate hearing in view of the undertaking given. On May 4, 1973 counsel insisted that undertaking was not enough and that his application for attachment should be decided. Mr. Gupta then said that he would file the reply. Reply was actually filed on May 9, 1973.

    But the undertaking dated October 9, 1972 remains binding. The court has accepted it. Kuldip Singh is bound to produce the buses in terms of his undertaking.

    29. Counsel for Kuldip Singh has taken several points in defence. I will deal with them one by one.

    The first and foremost is the question of limitation. Counsel for Kuldip Singh argued that the show cause notice issued by Yogeshwar Dayal J. on November 19, 1947 was barred by time as under s. 20 of the Contempt of Courts Act, 1971 (the Act) proceedings for contempt had to be initiated within one year “from the date on which the contempt is alleged to have been committed.” Counsel argued that in this case limitation began from the following dates: —
    (i) Either from May 9, 1973 when the reply was filed by Kuldip Singh to the application for attachment before judgment under O. 38 r. 5, C.P.C; or
    (ii) August 30, 1973, from the order of V.D Misra J. when the learned judge was considering the report of the receiver Mr. H.S Mao; or
    (iii) October 17, 1973 when Kuldip Singh made his statement denying the possession of the buses; or
    (iv) from September 24, 1973 when Kuldip Singh made his affidavit denying that he had the possession of the buses.

    It is true that all these four dates take the show cause notice beyond the period of one year. But the question is: When did limitation start ? What is the date on which contempt is alleged to have been committed?

    30. The question of limitation can be viewed from three angles. Kuldip Singh is in contempt of court's order dated October 9, 1973. In the first place it is a contempt under the Act. Under s. 2 (b) Civil contempt means

    “wilful breach of an undertaking given to a court”.

    Section 20 will apply to it.
    Secondly, the breach of the undertaking can be said to be under the provisions of O. 39, rule 2 (3) of the Code of Civil Procedure. Instead of making an order for attachment the court granted an ad interim injunction on July 17, 1972. It was in terms of order that the undertaking was given. This is a case of disobedience and breach of the terms of the undertaking.

    Thirdly, under Article 215 of the Constitution this court being a court of record has “the power to punish for its contempt”. Neither under O. 39 of the Code nor under Article 215 of the Constitution has any limitation been prescribed. The powers to punish under the Code and the Constitution are in addition to and not in derogation of the provisions of the Act (section 20).

    31. Even under s. 20 of the Act I am of the view that contempt proceedings are within time. Contempt was committed when V.D Misra J. appointed P.R Sachdeva as the co-receiver with Kuldip Singh on October 17, 1973. This was done when Kuldip Singh showed his willingness to act as a scout in the search of buses. He was willing to lend a helping hand to the court. The court accepted the preferred aid. But Kuldip Singh did not keep his word. On November 22, 1973 Sachdeva made the report expressing his inability to find out the buses. I think limitation begins from the date of this report i.e November 22, 1973. I hold therefore that the show cause notice is within time: See Sudesh Kumar v. Jai Narain, 1974 PLR (23) (1).

    32. Even today Kuldip Singh is in contempt as he continues to be in breach of the undertaking. Wilfully and contumaciously he has refused to hand over the vehicles. He refuses to abide by the undertaking. This is a case of breach of the undertaking.

    33. In the second place, counsel for Kuldip Singh argued that there is no breach of the undertaking at all. He submitted that his client's undertaking “not to alienate the buses” means that Kuldip Singh was not to transfer the proprietory rights of the buses and that the buses will remain in the name of defendants 1 and 2. Counsel said that is so even now as there is no change in the registration of the buses with the Transport Authority. I cannot accept this submission. The power to alienate means the power of disposition. Disposing power means actual possession. How else will a man have control, management or administration of a thing. Possession is the kernel. The rest is husk. The power to alienate cannot be conceived apart from possession, at least in movables like motor vehicles. Proprietory rights in the buses are of little help to us in this case. The court is concerned with their actual possession since the claim in suit is on the basis of hypothecation of the buses with the bank. Seen in this light possession is all important. Possession is nine-tenths of law.

    34. Next it was argued that the show cause notice dated November 19, 1974, is illegal as it does not set out precisely the specific acts complained of. Precise breaches of the order and specific acts must be stated before a party can be held in contempt, counsel argued. He referred me to Ramesh Chandra v. Lt. Governor Delhi 1977 Cr. L.J 4 (2), Roshanlal Thakur v. Kishanlal Kapoor, 1977 Cr. L.J 9 (3), Jayantilal Hiralal & Co. v. Waman Narayan Velinkar, AIR 1932 Bom. 638 (4) and Kilachand Devchand and Co. v. Ajodhyaprasad Sukhanand, AIR 1934 Bombay 452 (5) in support of his submission. In my opinion, the notice sets out clearly the contempt Kuldip Singh is alleged to have committed. There is one act of contempt. It is the breach of the undertaking which he gave to the court on October 9, 1972. This order is specifically referred to in the show cause notice. This order has to be read in the light of what preceded July 17, 1972 and what happened subsequently on May 4, 1973. Those two other orders are also mentioned in the show cause notice. Nothing more is required to be stated in order to inform a contemner of the case he is to meet.

    35. Next it was argued that the undertaking dated October 9, 1972 was never accepted by the bank. My attention in this connection was invited to the orders dated May 4, 1973 and May 17, 1973. As I read those two orders, it does not mean that the undertaking was washed out or completely effaced from the record of the court. On May 4, 1973, opportunity to file a reply to the application for attachment before judgment was given. On May 17, 1973, I appointed the receiver to take possession of the vehicle. The solid fact remains that the court accepted the undertaking. This is why no order of attachment before judgment was made immediately on the application.

    36. Lastly, it was submitted that Kuldip Singh cannot be said to be in contempt as he is defendant No. 7 to the suit while the application under Order 38 rule 5 was made against defendants 1 and 2. I do not agree. On behalf of defendants 1 and 2 the undertaking was given by Kuldip Singh. Defendant No. 1 is the company incorporated under the Companies Act (Current Transport and Finance Private Limited). Defendant No. 2 (Current Transport Service) is owned by the company, defendant No. 1. Therefore, on behalf of the company it was Kuldip Singh who was appearing. In his statement on October 17, 1973 he had said:

    “. . . I was the only person acting on behalf of the company.”

    He instructed his counsel to give the undertaking on behalf of defendants 1 and 2. In his statement Kuldip Singh admitted that as he had substantial stake in the company he was defending the legal proceedings in this court as well as in the company court. If the undertaking was given at his instance by the counsel he cannot escape his liability.
    In Halsbury's Laws of England it is said:

    “The breach of an undertaking given to the court by a person or corporation, in pending proceedings, on the faith of which the court sanctions a particular course of action or inaction has the same force as an injunction made by the court and a breach of the undertaking is misconduct amounting to contempt.”

    [4th (Hailsham) ed. Vol. 9 para 75].

    37. Disobedience of an undertaking is contempt. The power of Courts of Record to punish contempt brevi manu and of inferior courts to punish cases of contempt in facia curiae are parts of the same thing. The power in either case is necessary, so that justice may not be obstructed and the majesty of Law is not jeopardised by the disrespect and contumacy of people.

    38. This court cannot allow itself to be trifled with. Litigants before this court ought to know that they will not be permitted to give an undertaking to this court and then break it with impunity. Both V.D Misra J. and I formed the impression that the order of the court was being intentionally and deliberately flouted. Both he and I gave ample time to Kuldip Singh to fulfil his undertaking. But he has not cared to produce even those three buses which admittedly were in his “actual possession”. The dichotomy of “actual” and “constructive” possession invented by him in the pleadings is a snare and a delusion. It is a subterfuge employed in an attempt to get away with the serious consequences of his own act.

    The court cannot allow the buses to be spirited away in this fashion. Buses are not ether. They are huge substantial things. If a contemner thinks that he can spirit the buses out of the reach of the court the contemner will be sternly dealt with.

    39. I am of opinion that not only Kuldip Singh has taken the matter lightly but has also exhibited a complete defiance and wilful disobedience to the orders of the court. He believes that the arm of the law is not long enough to reach him. But is law powerless to defend itself against onslaughts on its majesty?

    I would therefore hold that Kuldip Singh is guilty of civil contempt and there is a contumacious and wilful breach on his part of the undertaking given by him to this court on October 9, 1972.

    40. Now remains the question of punishment. S. 12 of the Act of 1971 prescribes punishment for contempt. I am for awarding the severest punishment in a case like this. If it were the case of an individual associated with a company I would have awarded the maximum six months imprisonment and fine of rupees two thousand. But as defendant No. 1 is a company I would order that Kuldip Singh (defendant No. 7) be detained in a civil prison for a period of six months. The bank will pay the subsistence allowance. Kuldip Singh will be taken in detention forthwith.

    If the company or Kuldip Singh have property the bank can apply for its sequestration and attachment under O. 39 rule 2 (3), of the Code.

    41. Contempt covers a multitude of sins. A breach of an undertaking is also a breach of the injunction order. The reason is that an undertaking amounts in substance to an injunction order. Malsbury says this. Indian decisions also take this view. In Gurumurthi v. Perumal, AIR 1936 Madras 651 (6) Varadacharia J. said:

    “Whether what has happened in any particular case amounts to an injunction or not must be decided with reference to the substance of the Court's order and not as a mere matter of form. In the view that I am bound to uphold the authority of the Court so far as is reasonable and within the limits permitted by law, I would hold that when a Court accepts an undertaking given by a party its order amounts in substance to an injunction restraining him from acting in breach thereof. The form only implies that the court is prepared to deal with him honourably in the expectation that he will treat his undertaking as equivalent to an order of Court. It does not seem to me to come with any grace from the mouth of a person who has given such an undertaking to say that because the Court was good enough to accept that undertaking and did not pass an order of its own he is not in the position of a person bound by an order of the Court.”

    42. A breach of the undertaking is also punishable under sub-rule (3) of O. 39 rule 2, Code of Civil Procedure. The power to punish under the Contempt of Courts Act is in addition to the Code. The Code permits attachment of the property of a contemner if he is in continued disobedience. I think this is a case of continued disobedience. Attachment of property can also be ordered. This is my conclusion.

    43. On an application moved by Kuldip Singh I have by a separate order suspended the punishment as he intends to prefer an appeal against my order.

    Ordered accordingly.

    Use AI to get other relevant cases.

    Comments

    Central Bank Of India v. Current Transport Finance (F) Ltd.
    (May 5, 1977)