Supreme Court Modifies Contempt Order for Breach of Undertaking, Removes Civil Imprisonment but Enhances Compensation
Kiran Raj
The Supreme Court has upheld the Karnataka High Court’s order holding two individuals guilty of contempt for violating an undertaking given to a trial court, while modifying the punishment by removing the sentence of three months' civil imprisonment. The court directed the contemnors to pay enhanced compensation of ₹13 lakhs and maintained the attachment of the subject property for one year.
The bench comprising Justice Pankaj Mithal and Justice Sanjay Karol delivered the judgment in an appeal arising from a contempt order passed by the Karnataka High Court. The appellants, who were defendants in a civil suit, had provided an undertaking before the trial court that they would not alienate the disputed property. However, the property was subsequently sold in violation of this undertaking. The trial court had dismissed the contempt petition, granting the appellants the benefit of doubt, but the High Court set aside this order and held them guilty of contempt.
The case originated from a dispute concerning a Joint Development Agreement (JDA) executed on April 30, 2004, between the appellants and the respondents regarding the construction of residential apartments. The agreement required completion within 24 months, but the construction remained incomplete beyond the stipulated period. The respondents, as plaintiffs, issued a legal notice on March 23, 2007, canceling the JDA and subsequently filed a civil suit seeking a declaration that the agreement stood revoked.
During the pendency of the suit, the counsel for the appellants filed a memo on July 11, 2007, undertaking that the suit property would not be alienated. A similar undertaking was submitted on August 13, 2007. On November 17, 2007, the trial court took cognizance of these undertakings and passed an order restraining the appellants from alienating the property. This restraint was extended periodically. Despite these directives, the appellants executed multiple sale deeds transferring portions of the property on various dates, including November 19, 2007, December 3, 2008, and June 15, 2009.
The respondents later filed a contempt petition under Order XXXIX Rule 2A of the Code of Civil Procedure, 1908, alleging willful disobedience of the court’s orders. The trial court dismissed the petition on August 2, 2013, holding that the property description in the suit was incomplete and ambiguous and that the violation was not proven beyond reasonable doubt. The respondents appealed to the High Court, which set aside the trial court’s order, holding that the appellants had breached their undertaking and the court’s injunction order. The High Court found that the sale of property, despite express restraint, amounted to contempt of court. It sentenced contemnor No. 3 to three months’ civil imprisonment and ordered the attachment of the subject property for one year. Additionally, both contemnors were directed to pay ₹10 lakhs as compensation for the hardship caused to the respondents.
Before the Supreme Court, the appellants challenged the High Court’s order, arguing that no specific restraint on creating third-party rights was sought in the original suit. They contended that the trial court had granted them the benefit of doubt and that there had been suppression of facts regarding the sale of property before the filing of the suit. They also submitted that an unconditional apology had been tendered and that contemnor No. 3, being of advanced age and suffering from ailments, should not be subjected to imprisonment.
The Supreme Court examined the applicability of Order XXXIX Rule 2A and the nature of contempt proceedings. It referred to previous decisions, including Samee Khan v. Bindu Khan, which held that even if an injunction order is later set aside, the disobedience of such an order does not get erased. The court also referred to Kanwar Singh Saini v. High Court of Delhi, which distinguished between temporary injunctions granted under Order XXXIX and permanent injunctions enforceable through execution proceedings.
Addressing the appellants’ claim that their counsel had given an undertaking without authorization, the court discussed the fiduciary nature of the lawyer-client relationship. It cited Himalayan Coop. Group Housing Society v. Balwan Singh, which emphasized that a lawyer cannot bind a client to a compromise without express authorization but is presumed to act within the scope of legal representation in procedural matters. The court observed that the undertaking in this case was reaffirmed on multiple occasions and later became an express order of the trial court, which was repeatedly extended. The court recorded, “The undertaking, subject matter of controversy, was given in July 2007 and the miscellaneous application was filed in the year 2011, i.e., after a period of four and a half years. Had the situation been that the said undertaking was without requisite authority, the clients were perfectly within their rights to seek discharge of that order. However, no such step was taken.”
The court also addressed the principles governing contempt jurisdiction, citing Supreme Court Bar Association v. Union of India, which stated that contempt powers exist to uphold the dignity and majesty of law. It recorded, “When there has been an express violation of an order of a Court, as is in the present case, the exercise of contempt jurisdiction cannot be faulted with.”
While upholding the High Court’s finding of contempt, the Supreme Court modified the punishment. Considering the age and health condition of contemnor No. 3, the court deleted the sentence of three months’ civil imprisonment. However, it maintained the attachment of the property for one year and increased the compensation amount from ₹10 lakhs to ₹13 lakhs. The court also directed that the compensation amount carry simple interest at 6% per annum from August 2, 2013, the date of the trial court’s order.
The appeal was partly allowed with these modifications, and all pending applications were disposed of.
Case Title: Smt. Lavanya C & Anr. v. Vittal Gurudas Pai (Since Deceased) by LRs & Ors.
Neutral Citation: 2025 INSC 325
Case Number: Civil Appeal No. 13999 of 2024
Bench: Justice Pankaj Mithal and Justice Sanjay Karol
[Read/Download order]
