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2004 INSC 600
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  • Section 5, Subsection 2 of the 1983 Income Tax Act (not mentioned in the excerpt, but a common format for legislative acts)
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Cites
Cited by
Citation Codes
Neutral Citations
2004 INSC 600
Equivalent Citations
citation codes
Case Number
Disposition
Attorney(S)
Judges
Acts
  • Section 5, Subsection 2 of the 1983 Income Tax Act (not mentioned in the excerpt, but a common format for legislative acts)
Smart Summary

Factual and Procedural Background

The Finance Department, Government of Nagaland, issued a wireless telegraph (WT) message on 30-12-1995 stopping all State payments except salaries and pensions. An earlier order dated 29-09-1994 had already curtailed special withdrawals from the General Provident Fund (GPF). The Confederation of All Nagaland State Services Employees Association (CANSSEA) challenged these directives in Civil Rule No. 40(K) of 1996. On 17-05-1996 the Single Judge suspended the ban on GPF withdrawals, but the administration failed to comply, prompting the first contempt petition.

On 25-02-1997 the High Court quashed the impugned government orders and directed the Finance Commissioner to lift the ban within seven days. Although an unconditional apology was noted, compliance did not follow. A second contempt petition ensued, resulting in a Division Bench order dated 26-05-1998 convicting Shri E.T. Sunup, Finance Commissioner, for contempt and sentencing him to one month’s simple imprisonment and a fine of ₹10,000. Shri Sunup appealed the conviction. While the appeal was pending, the underlying writ appeal against the Single Judge’s judgment was dismissed on 11-03-2004, and the Government finally revoked the offending orders on 23-09-2004—after arguments in the present appeal had concluded.

Legal Issues Presented

  1. Whether Shri E.T. Sunup wilfully disobeyed the High Court’s order dated 25-02-1997 directing the immediate lifting of the ban on GPF withdrawals, thereby committing civil contempt.
  2. If contempt is made out, what punishment is appropriate in the present circumstances?

Arguments of the Parties

Appellant’s Arguments (Shri E.T. Sunup)

  • Claimed non-receipt of the certified copy of the 25-02-1997 order, asserting that failure to comply was unintentional.
  • Maintained that GPF funds were in fact being disbursed, citing figures for 1996-97 (receipts ₹67.36 crores; disbursements ₹25.29 crores).
  • Relied on a stay allegedly granted by a Division Bench to negate any contempt.
  • Tendered an unconditional apology, stressing 30 years of unblemished service and imminent retirement.

Respondent’s Arguments (CANSSEA)

  • Contended that the ban remained formally in force because no administrative order revoked it, rendering any partial disbursement irrelevant.
  • Emphasised deliberate and wilful non-compliance, urging the court to uphold the conviction and sentence.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court found the High Court’s conviction “fully justified.” Although the Advocate-General had orally represented that no ban existed and some disbursements had occurred, the administrative order of 30-12-1995 (and related directives) remained operative until formally revoked on 23-09-2004, well after the contempt proceedings and even after arguments in the present appeal.

The Court characterised the appellant’s stance as an “inconsistent” and deliberate attempt to “circumvent the orders of the Court,” undermining the rule of law. It rejected the excuses of non-receipt and reliance on the interim stay, noting that no application for extension of time was ever filed and that the stay had since been vacated. Accordingly, the finding of contempt was affirmed.

On sentence, the Court balanced the need to deter disobedience with the appellant’s long service record and the belated revocation of the ban. It concluded that imprisonment was unnecessary but that a monetary penalty must be imposed to underline the seriousness of the violation.

Holding and Implications

Holding: The conviction for contempt is affirmed. The sentence is modified to a fine of ₹5,000, with simple imprisonment for one month in default of payment. The civil appeal is disposed of accordingly.

Implications: The decision reinforces that governmental authorities must honour judicial directives promptly and cannot rely on oral assurances or partial compliance. While no new legal precedent was articulated, the judgment signals that the judiciary will respond firmly to bureaucratic non-compliance, albeit with calibrated leniency in sentencing when subsequent compliance occurs.

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    E.T Sunup v. C.A.N.S.S Employees Association And Another

    A.K Mathur, J.— This appeal is directed against the order passed by the Gauhati High Court dated 26-5-1998 whereby the Division Bench has convicted Shri E.T Sunup, Commissioner-cum-Secretary to Government, Finance Department, Government of Nagaland, and sentenced him to undergo simple imprisonment of one month and also to pay a fine of Rs 10,000, and in default, further simple imprisonment of one month. However, Respondent 2 A.C Saikia was impleaded as party in this contempt petition but he was not party in Civil Rule No. 40(K) of 1996 against which this contempt arises, therefore, he was discharged. More so he stood retired on reaching superannuation sometime in the month of June/July 1997.

    2. The brief facts which are necessary for the disposal of the appeal are as follows: That by a WT message dated 30-12-1995 the State Government in the Department of Finance had stopped all payments of the employees of the State Government except salaries and pensions. The WT message reads as under:

    “No. bud/1-2/95-96 dtd 30.12.1995(.) stop all state govt. payments rpt stop all state govt. payments with immediate effect until further orders except salaries and pensions for december 1995 to be paid from 5.1.96 rpt 5.1.96 onwards(.) no other payment rpt no other payment shall be allowed even against drawal authorities already issued until further orders(.) please confirm strict compliance(.)”

    3. The above message was amended on 30-1-1996 and the ban imposed was relaxed with regard to payment of salaries to regular staff, pension, including arrears of pension, leave encashment and GIS of the retired government employees.

    4. Earlier on 29-9-1994 it was stated that no application for special relaxation of GPF will be entertained. The message reads as under:

    “No. fin/gen/39/93: dt. kma the 29th Sept '94 (.) no application for special relaxation of g.p.f will be entertained till financial position improves (.) request not to forward any appln. during oct' 94.”

    5. Thereafter the above orders were challenged by the Confederation of All Nagaland State Services Employees Association (in short canssea). canssea filed Civil Rule No. 40(K) of 1996 by its General Secretary. The grievance of the petitioner Association was banning of withdrawal of GPF. While issuing a rule returnable within 6 weeks the Court on 17-5-1996 after hearing both the parties, passed an interim order which reads as under:

    “In the facts and circumstances of this case and in the light of submission made at the Bar, I am of the view that an interim order has become necessary. Accordingly, the impugned order dated 30-12-1995 issued by the Finance Department insofar as it concerns withdrawal of GPF money shall remain suspended until further orders.”

    6. The interim order was not complied with by the respondent. Therefore, the canssea Association filed a contempt petition which came to be registered as Civil Original (Contempt) Petition No. 17(K) of 1996 in which the present contemnor Shri E.T Sunup, Finance Commissioner, Government of Nagaland, Kohima was arrayed as Respondent 1 and a notice was issued and he filed a counter. Since the earlier civil rule was complete in all respects, therefore, both the civil rule and contempt petition were heard together and they were accordingly disposed of vide court's order dated 25-2-1997 and the following directions were given:

    “14. Having said enough, this petition is disposed of with the following directions:
    (a) Second respondent is directed to lift the ban with regard to withdrawal/advance of GPF within a week from the date of receipt of this order.
    (b) The GPF withdrawal/advance shall be allowed only after submission of statements with regard to the availability of the amount in the credit of the subscriber.
    (c) Every Treasury Officer shall, before honouring of withdrawal/advance of GPF insist that latest statement showing the accounts in the credit of the subscriber are made available before him.
    (d) The Accountant General shall see that the latest statements are issued correctly and on the basis of actual subscription subscribed by the subscriber.
    (e) Every Head of the Department shall also see that before they forward the application of GP Fund withdrawal/advance, the latest statement indicating the availability of money in the credit of the subscriber is made available.”

    7. The orders dated 30-12-1995, 30-1-1996 and 29-9-1994 were quashed, so far as the withdrawal and advance of GPF was concerned. The contempt petition was also disposed of and it was observed by the High Court under para 4 of the aforesaid order that the contemnor had made a misleading statement in para 3 of the counter because it had been categorically stated by the contemnor that the impugned WT message dated 30-12-1995 was effectively withdrawn. However, the order of withdrawal of ban imposed on 30-12-1995 was not produced by the contemnor. While disposing of the contempt petition, the following observations were made by the Court:

    “This Court has given seven days' time from the date of receipt of the order to the contemnors to lift the ban imposed on withdrawal/advance of GP Fund on 30-12-1995. Contemnors also in para 8 of their counter tender unqualified apology if there is some omission or commission which might have taken place in giving effect to the order of the Court. Contemnor also categorically averred that he has the highest respect for this Court and he has no intention of showing any disregard or disobedience to any order or direction passed by this Court. Whenever the direction of this Court is not carried out to its logical conclusion, it is the rule of law that suffers. Carrying out the order of this Court is an enforcement of the rule of law. We, therefore, insist that our order should be carried out to enforce the rule of law. However, although the contempt has been made out, in view of the averment made in para 8 of the counter by contemnors tendering unqualified apology, this Court with great hesitation accepts the unqualified apology tendered by the contemnor keeping in view that the Court has already directed the contemnors to lift ban on withdrawal/advance of GP Fund imposed on 30-12-1995 and 29-9-1994 passed in Civil Rule No. 40(K) of 1996.”

    8. Despite the aforesaid order, it was not complied with and, therefore, a second contempt petition was filed which is the subject-matter of the present appeal.

    9. It was submitted before the Court that despite leniency shown by the Court for withdrawing the order within one week, the respondent has deliberately and wilfully not abided by the order and flouted the same thereby bringing the administration of justice into disrespect. A reply was filed to this contempt petition and it was submitted that the copy of the order was not received by the respondent and therefore it could not be complied with and he denied that he had violated the order of the Court. It was submitted that meanwhile an appeal was filed and operation of order was stayed by the Division Bench. Therefore, no contempt was committed, however, an apology was also tendered for omission and commission if any.

    10. An issue with regard to receipt of the certified copy of order was dealt with by the Court at length to show that certified copy was delivered in the office of the Finance Commissioner but it is irrelevant now because the impugned order was stayed by the Division Bench of the High Court on 28-5-1997. However, fact remains that no application was moved for extension of time given by the Court i.e one week.

    11. Subsequently, the writ appeal was also disposed of by the Division Bench of the Gauhati High Court vide its order dated 11-3-2004 and it was observed as under:

    “In view of the discussion, we find no good reason to interfere with the order passed by the learned Single Judge and dismiss the appeal with an observation that whatever applications may be pending or moved for withdrawals by the subscribers/employees, they shall be dealt with in accordance with rule applicable as contained in the General Provident Fund (Central Services) Rules, 1960.”

    12. A statement was made before the Division Bench by the Advocate General that he was authorised to make a statement that now no ban was there against withdrawal of amount by the employees from their provident fund accounts. However, the order of the Single Judge Bench was affirmed by the Division Bench. The learned counsel for the appellant submitted that there was no ban in reality because provident fund amount was released from time to time, and in support of it he drew our attention to Annexure ‘G’ showing GPF receipts and disbursements in the year 1996-97. Accordingly, total receipt towards GPF was Rs 67.36 crores and disbursement was Rs 25.29 crores. The amount of Rs 25.29 crores was disbursed after the order passed by the learned Single Judge. However, learned counsel for the appellant was unable to point out at the time of argument whether the administrative order passed by the authorities was revoked or not. But subsequently he filed an affidavit of Mr E.T Sunup, the then Finance Commissioner that the Government now on 23-9-2004 has withdrawn the order. The order reads as under:

    “In compliance with the Hon'ble Gauhati High Court orders dated 25-2-1997 in Civil Rule No. 40(K) of 1996 and dated 11-3-1999 in Writ Appeal No. 262 of 1997, the following orders of the State Government, given by the Finance Department, insofar relating to advances and withdrawals of GPF by the State Government employees, that were quashed by the Hon'ble Gauhati High Court, are hereby being revoked with immediate effect:
    (i) No. FIN/GEN/39/93 of 29-9-1994
    (ii) No. BUS/1-2/95-96 of 30-12-1995 and
    (iii) WT message of 30-1-1996

    (H. Khulu)

    Finance Commissioner”

    (But this administrative order was issued after close of arguments.)

    13. He also submitted that subsequently a similar ban was imposed and Contempt Petition No. 5 of 1999 was filed in the Gauhati High Court and the Hon'ble Court on 14-3-2000 set aside the impugned order and directed that whatever applications were pending or moved for withdrawal by the subscribers/employees be dealt with in accordance with rules. The contempt petition was thereafter disposed of.

    14. Learned counsel submitted that on account of subsequent event now the ban does not survive and GPF is being disbursed and order has been withdrawn, the appellant's apology be accepted and he be discharged. He submitted that the appellant has put in 30 long years of service and he has never shown any disrespect to the Court's order. Learned counsel for the respondent supported the order of the High Court.

    15. We have heard both the learned counsel at length. We are of the opinion that the present order passed by the High Court in the facts and circumstances of the case is fully justified. Once a stand was taken by the Advocate General that the ban does not survive and amount of GPF was disbursed during the period 1996-97, then there was no reason why the order banning disbursement of GPF was not revoked. The stand taken by the State on one hand that amount of GPF was disbursed, still they were not prepared to revoke the order, we fail to understand this inconsistent stand. Once the administrative order is issued then it cannot be revoked by oral submission before court. It has to be revoked by another administrative order (which they have now passed). If the Advocate General had made a statement before the Court then it should have been followed with the administrative order revoking the ban. Till the date of argument learned counsel for the appellant could not produce before us the order revoking the ban, on the contrary the ban was kept in force and the second contempt petition was filed before the Court and the Advocate General again made a statement that GPF applications will be processed; that makes the matter worse for the petitioner and it does not mitigate the situation. It is different that realisation has now dawned upon the authorities as they find no escape route for them, therefore, they have now revoked the order dated 25-2-1997 by the order dated 23-9-2004 after close of arguments.

    16. It has become a tendency with the government officers to somehow or the other circumvent the orders of court and try to take recourse to one justification or other. This shows complete lack of grace in accepting the orders of the Court. This tendency of undermining the Court's order cannot be countenanced. This Court time and again has emphasised that in a democracy the role of the court cannot be subservient to administrative fiat. The executive and legislature have to work within the constitutional framework and the judiciary has been given the role of watchdog to keep the legislature and executive within check. In the present case, we fail to understand the counter filed by the appellant before the Court. On one hand they say that all the cases of GPF have been processed and on the other hand they are not prepared to revoke the administrative order. This only shows a deliberate attempt on the part of the bureaucracy to circumvent the order of the Court and stick to their stand. This is clear violation of the Court's order and the appellant is guilty of flouting the Court's order.

    17. In the facts and circumstances of the case, the view taken by the High Court does not call for interference.

    18. While coming to the question of sentence, learned counsel for the appellant submitted that the incumbent is on the verge of retirement and he has suffered a lot and he has an unblemished career of 30 years of service. More so now order dated 25-2-1997 has been revoked though belatedly, therefore mercy be shown to him and his apology may be accepted. But if the Court's orders are flouted like this, then people will lose faith in the courts. Therefore, it is necessary to deal with such type of violation of the Court's order with strong hands and to convey to the authorities that the courts are not going to take things lightly. However, looking to the long career of this officer and now that the order has been revoked, we do not propose to punish him with imprisonment but we propose to impose a fine of Rs 5000 (Rupees five thousand) only and in default of payment of fine, to undergo simple imprisonment for one month. The incumbent shall deposit the amount in the State Treasury within one month from today.

    19. Hence, as a result we affirm the order of the High Court and punish Respondent 1 for committing contempt of court's order and impose a fine of Rs 5000 (Rupees five thousand) only, in default of payment of fine, sentence him to simple imprisonment for one month. The impugned order is modified to this extent. The civil appeal is disposed of accordingly.

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    E.T Sunup v. C.A.N.S.S Employees Association And Another
    (Oct 13, 2004)