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The Bombay High Court recently found film producer Gaurang Doshi guilty of contempt of court and sentenced him to six months’ imprisonment.
The Court, vide an earlier order, had directed Doshi to deposit an amount of Rs. 1.25 crore. Having failed to do so, the Court found that he wilfully breached the order, leading to the contempt proceedings. The Single Judge Bench of Justice SJ Kathawalla has now sentenced Doshi to six months imprisonment as a result of the contempt.
“A lenient sentence in this case to Shri Gaurang Doshi / Respondent No. 2 would mean and send a message that the Court is itself not outraged by the flagrant disregard shown by the Contemnors / Respondents”, the Court observed.
Facts of the case:
The contempt proceedings were initiated by the petitioner company, Scorg International Consulting Private Ltd, which had to provide finance worth Rs 1 Crore for a film, “Aankhen-2”, that Doshi was producing. For the said purpose, the two parties entered into an agreement back in December 2016.
The agreement contained a clause specifying that the same amount was to be refunded by Doshi’s company to the petitioner on or before March 26, 2017, and specified certain contingencies. Further, the petitioner company paid an additional amount of Rs 25 lakh to Doshi’s company between January-February 2016.
Eventually, the film for which the agreement was entered into did not release, and thus, a total amount of Rs. 1.25 crore was to be returned by the respondent to the petitioner.
Upon non-payment of the same, the petitioner invoked the Arbitration clause and initiated proceedings under Section 9 of the Arbitration and Conciliation Act, 1996 in April 2017.
On April 20, 2017, Justice GS Patel of the Bombay High Court directed the respondents to disclose all their assets, both movable and immovable, including bank statements and securities held by all the Directors. The respondents neither complied with the order, nor did they appeal against it.
Subsequently, on June 20, 2017, this arbitration petition came up before Justice KR Shriram, who finalized the order passed in April and directed the respondents to pay the specified sum of money.
The petitioner’s advocate called upon the respondents to comply with the orders, but to no avail. The petitioner, represented by Advocate Dr. Abhinav Chandrachud, who was briefed by ALMT Legal, filed a contempt petition against the respondents in October 2017.
After seeking an adjournment in the matter from Justice MS Sanklecha, the matter came up before Justice Kathawalla in March 2018.
The respondents submitted that Justice Shriram’s order did not specify the time period within which the money was to be deposited. The same was, however, clarified on March 7 by Justice Shriram, who said that the amount was to be deposited forthwith. This order of clarification was challenged by the respondents.
In April, when the contempt matter was called before the Court, advocate for the respondents NS Dube told the Court that despite several attempts, the respondents have failed to appear before the Court and that the Court’s order was not complied with. He also apprised the Court that he had informed the respondents that he would no longer appear for them in any of their matters.
A bailable arrest warrant was issued against Doshi, and the Court also proceeded to discharged Dube from the case, while directing the respondent to be present in court on the next date of hearing.
After engaging new counsel Hemang Engineer, briefed by Gordhandas and Fozdar, the respondents appeared before the Court on May 4 and deposited a cheque in favour of the petitioners for a sum of Rs 10 lakh, along with an undertaking that the cheque would be honoured.
Despite the undertaking, the cheque was not honoured on the grounds that the account was blocked, and Doshi continued to remain absent from the proceedings. The Court was informed that Doshi had left the country and had overseas travel plans for the purpose of arranging for funds. The air tickets, according to Doshi’s submissions, were sponsored by financer Renu Patel, who would help him in arranging the funds.
The Court had noted in its order in May that the explanation furnished by Doshi to cover up for his absence was “not only a blatant lie but also a grossly dishonest explanation” and placed the petition for final hearing. Calling the explanation given by Doshi “preposterous”, the Court further observed,
“if one were to go through the Orders passed against Mr. Doshi in the past by this Court, in several other matters, his dishonesty in complying with the Orders of the Court is evident.”
Despite the Bench warning him that it would issue a non-bailable warrant against him if he did not appear in court, Doshi remained absent. Moreover, another cheque deposited with the court was once again dishonoured.
Chandrachud, appearing for petitioners, submitted before the Court that the entire ordeal was nothing but Doshi’s willful and intentional breach of Court orders. He pointed out Justice Shriram’s order which noted that Doshi’s dishonest conduct was “repeatedly deprecated by the Single Judges of this Court in their respective orders”.
It was also submitted that Doshi’s overseas trips and prolonged stays go to show that he has sufficient funds and the failure to deposit court-ordered sum was a wilful breach. Chandrachud demanded maximum punishment for the respondents and submitted,
“Respondents have no regard or respect for the Courts and the Orders passed by the Courts”
Hemang Engineer, appearing for respondents, submitted that Doshi’s conduct cannot be defended and he has indeed committed contempt of Court. He, however, urged the Court to accept the unconditional apology tendered by Doshi’s mother on account of her old age, and award minimum punishment for her.
The Court held that both Doshi and his mother were guilty of contempt, but keeping in view the old age of the latter, the Court imposed a fine of Rs 2000 on her.
As regards Doshi himself, the Court noted,
“an unhealthy trend seems to have set in amongst a section of litigants, who often brazenly and with impunity flout provisions of Law and / or Orders passed by the Courts. At such times, the Court cannot be a mute spectator, but needs to step in and be proactive in stopping this unhealthy trend, which would otherwise corrode the faith of the common man in the Judiciary as a means of redressing his grievances.”
Stressing on the need to deter such flagrant conduct by litigants and parties, it was stated that such a trend “would destroy the very principle of deterrence.”
The Court thus issued an arrest warrant against Gaurang Doshi and sentenced him to six months’ simple imprisonment.
Read the Order: