The Delhi High Court recently observed that not every violation of a court’s order can be construed as contempt of court and that an act becomes contempt only if there is an intent to violate an order [Viterra BV Vs Sharp Comp Ltd]..Justice Hari Shankar made the observation while dismissing a contempt petition filed by Canadian giant Viterra BV against a company called Sharp Corp Limited.“Every disobedience, or breach, of an order passed by a court, is not contempt. Intent is the essence of contempt. Sans intent, there can be no contempt," the Court said. .Sans intent, there can be no contempt.Delhi High Court.In its contempt petition, Viterra had accused Sharp of deliberately and willfully disobeying a court order issued on June 3, 2022, by a single judge in an arbitration-related case. The core of the dispute involves the sale of a property located in Siraspur, New Delhi, which was allegedly covered by an injunction preventing its sale or transfer to third parties.The petitioner (Viterra) claimed that the sale of this property in November 2022 violated the court's order, which restrained such transactions. Sharp argued that the sale was lawful because the property was subject to a "prior right" of the State Bank of India (SBI) rather than being mortgaged or pledged. The SBI confirmed that the property was not mortgaged but acknowledged financial dealings involving the respondent company (Sharp).The petitioner contended that no valid charge or mortgage over the property existed and that the respondents’ actions constituted a breach of the court's injunction. The respondents countered by asserting that the property sale was in compliance with existing financial agreements and did not violate the court's directive..The Court explained that the essence of contempt of court is a disdain and disrespect for the court, and the subsequent acts by a party that reflects this attitude. It pointed out that Section 2 (b) of the Contempt of Courts Act, 1971 defines “civil contempt” as “wilful disobedience to any judgement, decree, direction, order, writ or other process of court or wilful breach of an undertaking given to a court.” Therefore, the Court found that disobedience of an order of a court does not become contempt unless it is done wilfully. “That said, the expression 'wilful' has to be understood in the context of the understanding of contempt of court as an attitude, or an act, which belittles, or undermines, the need to comply with court directives. The duty to respect orders and directives of the court, and to honour undertakings tendered before court, includes, within it, a positive obligation to do so,” the Court said. The Bench added that courts always grant parties an opportunity to rectify their mistakes to rid themselves of contempt action. The Court further noted that if the party still continues to disobey Court orders despite the opportunity, the Court assumes their actions are intentional, and the consequences for contempt will follow. The Court found that civil contempt cases have a partly criminal nature since being found guilty can result in penalties, including imprisonment. Because of the potential loss of liberty, courts must act carefully when deciding if contempt has occurred, it said. Courts should maintain a balanced and thoughtful approach, avoiding being overly reactive or excessively sensitive in such matters. Reasonable judgment is key to handling contempt cases appropriately, Justice Shankar observed. “Civil contempt actions, too, partake of quasi-criminal character, inasmuch as, if contempt is found to have been committed, the punishment that follows may entail loss of liberty. Courts have, therefore, to be cautious while arriving at findings of commission of contempt, and can in no case be over-sensitive in their approach. Sensibility, while dealing with contempt actions, is of the essence; sensitivity is to be eschewed,” the Court said..Thus, the Court noted that to ascertain whether an act is a contempt , the allegations for violation should be clear and unambiguous. “Ambiguity in the direction, or the order, of which disobedience is alleged is, therefore, if found to exist, an absolute defence to a contempt action. The possibility of the order being amenable to more than one interpretation is equally fatal to a plea of contempt,” the Court said. .In view of this, the Court dismissed the contempt petition against Sharp Corp for selling the Siraspur property, ruling that no deliberate violation of the court's order dated June 3, 2022, had occurred. The sale of the property was carried out to meet pre-existing financial obligations to banks, as documented by various supporting records, it found. The Court noted that the Siraspur property was under the banks' charge and that Sharp Corp acted in good faith to comply with its financial commitments. The sale proceeds were used exclusively for repaying loans, with no misappropriation by the company. The Court concluded that the claims of wilful disobedience were unfounded and dismissed the contempt petition..Viettera was represented by Senior Advocate Darpan Wadhwa, with Advocates Raunaq B Mathur, and Keshav Somani.SBI was represented by Advocates Siddharth Sangali and Harshita Agrawal. Sharp Corp was represented by Senior Advocate Vikram Nankani with Advocates Arvind Kumar, Heena George, Karan Bharihoke and Sarthak Sachdev..[Read Judgment]
The Delhi High Court recently observed that not every violation of a court’s order can be construed as contempt of court and that an act becomes contempt only if there is an intent to violate an order [Viterra BV Vs Sharp Comp Ltd]..Justice Hari Shankar made the observation while dismissing a contempt petition filed by Canadian giant Viterra BV against a company called Sharp Corp Limited.“Every disobedience, or breach, of an order passed by a court, is not contempt. Intent is the essence of contempt. Sans intent, there can be no contempt," the Court said. .Sans intent, there can be no contempt.Delhi High Court.In its contempt petition, Viterra had accused Sharp of deliberately and willfully disobeying a court order issued on June 3, 2022, by a single judge in an arbitration-related case. The core of the dispute involves the sale of a property located in Siraspur, New Delhi, which was allegedly covered by an injunction preventing its sale or transfer to third parties.The petitioner (Viterra) claimed that the sale of this property in November 2022 violated the court's order, which restrained such transactions. Sharp argued that the sale was lawful because the property was subject to a "prior right" of the State Bank of India (SBI) rather than being mortgaged or pledged. The SBI confirmed that the property was not mortgaged but acknowledged financial dealings involving the respondent company (Sharp).The petitioner contended that no valid charge or mortgage over the property existed and that the respondents’ actions constituted a breach of the court's injunction. The respondents countered by asserting that the property sale was in compliance with existing financial agreements and did not violate the court's directive..The Court explained that the essence of contempt of court is a disdain and disrespect for the court, and the subsequent acts by a party that reflects this attitude. It pointed out that Section 2 (b) of the Contempt of Courts Act, 1971 defines “civil contempt” as “wilful disobedience to any judgement, decree, direction, order, writ or other process of court or wilful breach of an undertaking given to a court.” Therefore, the Court found that disobedience of an order of a court does not become contempt unless it is done wilfully. “That said, the expression 'wilful' has to be understood in the context of the understanding of contempt of court as an attitude, or an act, which belittles, or undermines, the need to comply with court directives. The duty to respect orders and directives of the court, and to honour undertakings tendered before court, includes, within it, a positive obligation to do so,” the Court said. The Bench added that courts always grant parties an opportunity to rectify their mistakes to rid themselves of contempt action. The Court further noted that if the party still continues to disobey Court orders despite the opportunity, the Court assumes their actions are intentional, and the consequences for contempt will follow. The Court found that civil contempt cases have a partly criminal nature since being found guilty can result in penalties, including imprisonment. Because of the potential loss of liberty, courts must act carefully when deciding if contempt has occurred, it said. Courts should maintain a balanced and thoughtful approach, avoiding being overly reactive or excessively sensitive in such matters. Reasonable judgment is key to handling contempt cases appropriately, Justice Shankar observed. “Civil contempt actions, too, partake of quasi-criminal character, inasmuch as, if contempt is found to have been committed, the punishment that follows may entail loss of liberty. Courts have, therefore, to be cautious while arriving at findings of commission of contempt, and can in no case be over-sensitive in their approach. Sensibility, while dealing with contempt actions, is of the essence; sensitivity is to be eschewed,” the Court said..Thus, the Court noted that to ascertain whether an act is a contempt , the allegations for violation should be clear and unambiguous. “Ambiguity in the direction, or the order, of which disobedience is alleged is, therefore, if found to exist, an absolute defence to a contempt action. The possibility of the order being amenable to more than one interpretation is equally fatal to a plea of contempt,” the Court said. .In view of this, the Court dismissed the contempt petition against Sharp Corp for selling the Siraspur property, ruling that no deliberate violation of the court's order dated June 3, 2022, had occurred. The sale of the property was carried out to meet pre-existing financial obligations to banks, as documented by various supporting records, it found. The Court noted that the Siraspur property was under the banks' charge and that Sharp Corp acted in good faith to comply with its financial commitments. The sale proceeds were used exclusively for repaying loans, with no misappropriation by the company. The Court concluded that the claims of wilful disobedience were unfounded and dismissed the contempt petition..Viettera was represented by Senior Advocate Darpan Wadhwa, with Advocates Raunaq B Mathur, and Keshav Somani.SBI was represented by Advocates Siddharth Sangali and Harshita Agrawal. Sharp Corp was represented by Senior Advocate Vikram Nankani with Advocates Arvind Kumar, Heena George, Karan Bharihoke and Sarthak Sachdev..[Read Judgment]
