Rayat

Colleg
e of
Law,
SUBJECT -PROFESSIONAL
ropar ETHICS

camp
TOPIC – Prithwi Nath Ram Vs. State of
us Jharkhand and others

Submitted By- Aryaman Bhardwaj Submitted To – Dr. Mumtaz Zabeen

LLB Semester-5th Semester

Roll no - 221395
 Declaration

I Aryaman Bhardwaj of LLB semester 5th of Rayat College of Law

declare project work of professional ethics on the topic “Prithwi Nath
Ram Vs. State of Jharkhand and others” to Dr. Mumtaz Zabeen.

I further declare that the work reported in this project has not been
submitted, either in part or in full, for the award of any degree or
diploma in this campus or any other campus

Aryaman Bhardwaj

SIGNATURE
ACKNOWLEDGEMENT
I would like to express my sincere gratitude to the subject
teacher of “PROFESSIONAL ETHICS” Dr. Mumtaz Zabeen
for giving me the opportunity to make project on the topic "
Prithwi Nath Ram Vs. State of Jharkhand and others ” and
guiding me with some useful tips for the completion of project.

I would also like to thank you for teaching us about the concept
of the project which has helped me to complete this project more
efficiently. Thank you for being so kind and patient every time. I
would also like to thank library of Rayat College of Law, for
providing with books which had helped me in completing my
project with great ease and frequency.
CASE NO.: Appeal (civil) 5024 of 2000

PETITIONER: Prithawi Nath Ram

RESPONDENT: State of Jharkhand and Ors.

DATE OF JUDGMENT: 24/08/2004

BENCH: ARIJIT PASAYAT & D.M. DHARMADHIKARI

JUDGMENT: J U D G M E N T WITH

IA NOS. 10-11 OF 2004

ARIJIT PASAYAT, J

J U D G M E N T WITH IA NOS. 10-11 OF 2004 ARIJIT PASAYAT, J Appellant filed an

application under Sections 11 and 15 of the Contempt of Courts Act, 1971 (in short the 'Act')
read with Article 215 of the Constitution of India, 1950 (in short the 'Constitution'). The
foundation of such application was alleged non-compliance of the directions given by a learned
Single Judge of the Patna High Court in CWJC 1120 of 1998 by order dated 30.3.1999.

A learned Single Judge of the said High Court, while dealing with the application for initiation of
contempt proceedings, has passed the impugned judgment holding that it would not be proper to
take any action for contempt. Though learned Single Judge noticed that the scope of
consideration while dealing with an application for initiation of contempt proceedings was
confined to the question whether there was compliance with the order or not, yet proceeded to
examine the correctness of the order and called upon the parties to satisfy him that the direction
of the kind contained in the order dated 30.3.1999 could be issued. After an indepth analysis, he
came to hold that the directions could not have been given and therefore there was no scope for
taking any action for contempt.

Learned counsel for the appellant submitted that the learned Single Judge has not kept the correct
parameters of law in view while dealing with the application for contempt. In essence he has sat
in judgment over the decision rendered by another learned Single Judge. It was not open in the
contempt proceedings to examine whether the order, non-implementation of which was being
urged, is valid or not. That is beyond the scope of consideration.

In response, learned counsel for the State submitted that there can be no straight jacket formula
which can be applied in such matters. If the order was not capable of being implemented,
certainly it was open to the learned Single Judge dealing with the application for initiation of
contempt proceedings to consider whether the order was legal or not. While dealing with an
application for contempt, the Court is really concerned with the question whether the earlier
decision which has received its finality had been complied with or not. It would not be
permissible for a Court to examine the correctness of the earlier decision which had not been
assailed and to take the view different than what was taken in the earlier decision. A similar view
was taken in K.G. Derasari and Anr. V. Union of India and Ors. (2001 (10) SCC 496). The Court
exercising contempt jurisdiction is primarily concerned with the question of contumacious
conduct of the party who is alleged to have committed default in complying with the directions
in the judgment or order. If there was no ambiguity or indefiniteness in the order, it is for the
concerned party to approach the higher Court if according to him the same is not legally tenable.
Such a question has necessarily to be agitated before the higher Court. The Court exercising
contempt jurisdiction cannot take upon itself power to decide the original proceedings in a
manner not dealt with by the Court passing the judgment or order. Though strong reliance was
placed by learned counsel for the State of Bihar on a three-Judge Bench decision in Niaz
Mohammad and Ors. v. State of Haryana and Ors. (1994 (6) SCC 352), we find that the same has
no application to the facts of the present case. In that case the question arose about the
impossibility to obey the order. If that was the stand of the State, the least it could have done was
to assail correctness of the judgment before the higher Court. State took diametrically opposite
stands before this Court. One was that there was no specific direction to do anything in particular
and, second was what was required to be done has been done. If what was to be done has been
done, it cannot certainly be said that there was impossibility to carry out the orders. In any event,
the High Court has not recorded a finding that the direction given earlier was impossible to be
carried out or that the direction given has been complied with.

On the question of impossibility to carry out the direction, the views expressed in T.R.
Dhananjaya v. J. Vasudevan (1995 (5) SCC 619) need to be noted. It was held that when the
claim inter se had been adjudicated and had attained finality, it is not open to the respondent to
go behind the orders and truncate the effect thereof by hovering over the rules to get round the
result, to legitimize legal alibi to circumvent the order passed by a Court.

In Mohd. Iqbal Khanday v. Abdul Majid Rather (AIR 1994 SC 2252), it was held that if a party
is aggrieved by the order, he should take prompt steps to invoke appellate proceedings and
cannot ignore the order and plead about the difficulties of implementation at the time contempt
proceedings are initiated.

If any party concerned is aggrieved by the order which in its opinion is wrong or against rules or
its implementation is neither practicable nor feasible, it should always either approach to the
Court that passed the order or invoke jurisdiction of the Appellate Court. Rightness or wrongness
of the order cannot be urged in contempt proceedings. Right or wrong the order has to be
obeyed. Flouting an order of the Court would render the party liable for contempt. While dealing
with an application for contempt the Court cannot traverse beyond the order, non-compliance of
which is alleged. In other words, it cannot say what should not have been done or what should
have been done. It cannot traverse beyond the order. It cannot test correctness or otherwise of the
order or give additional direction or delete any direction. That would be exercising review
jurisdiction while dealing with an application for initiation of contempt proceedings. The same
would be impermissible and indefensible. In that view of the matter, the order of the High Court
is set aside and the matter is remitted for fresh consideration. It shall deal with the application in
its proper perspective in accordance with law afresh. We make it clear that we have not
expressed any opinion regarding acceptability or otherwise of the application for initiation of
contempt v
In a given case, even if ultimately the interim order is vacated or relief in the main proceeding is
not granted to a party, the other side cannot take that as a ground for dis-obedience of any
interim order passed by the Court.

It is to be noted that after re-organisation of States, the dispute presently pertains to the State of
Jharkhand, which has been substituted in place of original respondent, the State of Bihar.

Appeal is allowed to the aforesaid extent with no order as to costs.

This petition is filed to punish the respondent for contempt of Court, for violating the order of
this Court dated 8.2.2005 in WPMP No. 2333 of 2005 in WP No. 23156 of 2004.

2. Petitioner filed WP No. 23156 of 2004 questioning the order dated 6.12.2004 of the Reserve
Bank of India cancelling the licence of the Prudential Co-operative Bank Limited (for short - 'the
Bank') under Section 22 of the Banking Regulation Act and the consequential order passed by
the Registrar of the Co-operative Societies in appointing the respondent as the liquidator of the
Bank. During the pendency of the said writ petition, the Bank, with the permission of the State
Government, introduced a Scheme of One Time Settlement (OTS Scheme). Questioning
introduction of the said OTS Scheme, petitioner filed WPMP No. 2333 of 2005 in WP No.
23156 of 2004 and sought the suspension of the said OTS Scheme. By the order dated 8.2.2005
interim suspension of the OTS Scheme was granted by this Court. Subsequently, by the common
order dated 5.5.2005 in WP Nos. 23156 and 24346 of 2004 and 2501 of 2005 and WPMP No.
2333 of 2005 in WP No. 23156 of 2004, WP No. 23156 of 2004 was partly allowed and the
order of the Reserve Bank of India directing the winding up of the Bank and the consequential
order of Registrar of Co-operative Societies appointing the respondent as Liquidator, were set
aside and WPMP No. 2333 of 2005 in WP No. 23156 of 2004 in which the interim order violated
was passed was dismissed. It is stated that an appeal in WA No. 1053 of 2005 was preferred
questioning the order dated 5.5.2005, partly allowing WP No. 23156 of 2004, and that a Division
Bench heard that appeal and reserved the case 'for orders'.

3. Alleging that the respondent had, in violation of the interim order granted on 8.2.2005 in
WPMP No. 2333 of 2005 suspending the operation of the OTS Scheme, given the benefit of
OTS Scheme to Mr. Y. Rajiv Reddy and his associates (for short-'the borrowers') and thus
violated the above interim order of this Court, the petitioner in WPMP No. 2333 of 2005 filed
this petition to punish the respondent for contempt of Court.

4. In his counter-affidavit, the respondent alleged that if his act of extending benefits of the OTS
Scheme to the borrowers, despite its suspension by the Court, is felt improper by the Court, he
tenders unconditional apology, and stated that he, after introduction of the OTS Scheme,
received 66 applications in respect of overdraft accounts and 123 applications in respect of
overdue loans till 5.2.2005, and that he did not receive further applications under that OTS
Scheme subsequently, in view of the interim order passed by this Court in WPMP No. 2333 of
2005 on 8.2.2005, and that the borrowers who borrowed Rs. 22,36,25,492/- under different
accounts by creating equitable mortgage by way of deposit of title deeds etc., had repaid an
amount of Rs. 22,66,44,108/- upto 31.12.2004 and had, after the introduction of the OTS
Scheme, expressed their willingness to settle their loan account in full under Option-I of the OTS
Scheme, whereunder they would have to pay Rs. 10,29,82,489/-towards full and final settlement
of the dues from them, and had in fact paid Rs. 7,44,82,489/- through three demand drafts dated
2.2.2005 and for the balance amount of Rs. 2,85,00,000/- due from them they issued post-dated
cheques, bearing dates from 10.3.2005 to 30.3.2005, on 2.2.2005 itself, and as the OTS Scheme
was introduced on 24.1.2005 and as the borrowers who expressed their willingness to avail the
benefits of the said Scheme under Option-I paid some amounts on 2.2.2005 and gave post-dated
cheques on 2.2.2005 itself, and as the demand drafts were encashed even prior to the passing of
the interim order on 8.2.2005, and as he did not accept the cheques from the borrowers after
8.2.2005, his presenting the cheques for encashment does not amount to contempt of Court, and
as he has great respect for the orders of the Court and as he did not in fact flout the orders of the
Court dated 8.2.2005, he is not liable for punishment.

5. Subsequently, after the case was posted for hearing, respondent filed his additional counter-
affidavit taking a plea that inasmuch as this petition is filed more than one year after the date of
the alleged contempt, the petition is liable to be dismissed as barred by time.

6. Petitioner filed his reply affidavit inter alia contending that this petition filed within one year
from the date of knowledge of the contempt committed by the respondent, is not barred by time.

7. The point for consideration is whether the respondent violated the orders of the Court in
WPMP No. 2333 of 2005 dated 8.2.2005 and, if so, is it a wilful violation ?

8. The contention of Sri V. Srinivas, learned Counsel for petitioner is since the respondent, a
Joint Registrar of Co-operative Societies, who was appointed as the Liquidator of the Bank, had,
after the passing of the interim order dated 8.2.2005 in WPMP No. 2333 of 2005 suspending the
operation of the OTS Scheme, wilfully and deliberately extended the benefit of the said Scheme
to the borrowers after encashing the cheques issued by the borrowers subsequent to 8.2.2005,
even without informing or obtaining the permission of the Court, is guilty of gross contempt of
Court. He drew my attention to the earlier writ petitions filed by the borrowers and the
undertaking given by the borrowers to a Division Bench of this Court about their intention to pay
the entire amount borrowed by them from the Bank without seeking further concessions within
the dates mentioned in the said undertaking and about the Court recording the said undertaking,
and contended that the respondent, who is well aware of the said undertaking and also the
suspension of the OTS Scheme on 8.2.2005, would not have, had he acted in a bona fide manner,
extended the benefit of the OTS Scheme to the borrowers after 8.2.2005 and so it is clear that
respondent wilfully, and only with a view to benefit to the borrowers in spite of suspension of the
OTS Scheme by the Court extended the benefit of the OTS Scheme to the borrowers, with a view
to favour them and so he should be punished for contempt of Court for disobeying the order of
the Court dated 8.2.2005.

9. The contention of Sri E. Manohar, the learned Senior Advocate, appearing on behalf of the
respondent, is that inasmuch as the respondent received the application of the borrowers,
expressing their intention to avail the benefit of OTS Scheme, along with demand drafts and
post-dated cheques on 2.2.2005 itself i.e., even prior to the passing of the interim order dated
8.2.2005, the respondent under the bona fide impression that he can encash the cheques even
after passing of the interim order, encashed the post-dated cheques and inasmuch as the
respondent did not receive any applications for OTS subsequent to the passing of the interim
order on 8.2.2005, there is no wilful disobedience of the interim order dated 8.2.2005 of this
Court on the part of the respondent and as the respondent tendered his unconditional apology
whole-heartedly even in the opening paragraph of his counter-affidavit, the respondent may be
pardoned. His next contention is that this petition filed on 6.6.2006 i.e., more than one year after
the closure of the accounts of the borrowers by the respondent in April, 2005 is hopelessly barred
by time.

10. In reply the contention of the learned Counsel for the petitioner is that inasmuch as the
petitioner was not aware of the respondent extending the benefits of the OTS Scheme to
borrowers after the order dated 8.2.2005 of this Court till October, 2005, and as the petitioner
had, immediately after coming to know that the respondent, in collusion with the borrowers,
closed the debts of the borrowers under the OTS Scheme, and that the prosecution launched
against the borrowers in connection with the said borrowing was withdrawn by the Government,
filed WP No. 21905 of 2005 inter alia questioning the withdrawal of prosecution launched
against the borrowers, and as the petitioner had no access or information relating to the acts done
by the respondent in connivance with the borrowers, he was not aware of the respondent closing
the accounts of the borrowers or about the Government issuing a G.O. withdrawing the
prosecution against the borrowers prior to October, 1995, and as the period of limitation for
filing contempt proceedings commences only from the date of knowledge but not from the actual
date of contempt, this petition filed on 6.6.2006 and admitted on 9.8.2006, cannot be said to be
barred by time, more so because the respondent failed to explain as to how petitioner could have
had knowledge of his closing the accounts of the borrowers, done by him in secretive manner,
immediately after closure of their debt accounts. He relied on Pallav Sheth v.
Custodian and Bank of Baroda v. Sadruddin Hasan Daya, , in support of his said contention that
limitation commences from the date of knowledge.

11. The contention of Sri E. Manohar is that since the affidavit of the petitioner, filed in support
of the application, is mute about the date of knowledge of the petitioner relating to the closure of
the accounts of the borrowers, and as the averment in the reply affidavit relating to the alleged
lack of knowledge is made only with a view to wriggle out of the law of limitation, that plea
relating to the petitioner not having knowledge of the closure of the accounts of the borrowers
cannot be believed or accepted. He faintly contended that inasmuch as the Court dismissed
WPMP No. 2333 of 2005 observing that the prayer made therein is beyond the scope of the writ
petition, a lenient view may be taken and the act of the respondent in closing the accounts of the
borrowers, if taken as a violation of the order dated 8.2.2005 of this Court may be condoned by
accepting his apology made at the earliest opportunity.

12. The petition cannot be dismissed merely because WPMP No. 2333 of 2005 was dismissed on
5.5.2005 on the ground that that petition is beyond the scope of the writ petition, inasmuch as the
question whether a person, against whom contempt is alleged, committed the contempt alleged
or not, does not depend on the result of the main proceedings, as the point for consideration in a
contempt case would be whether the person against whom the contempt is alleged, had wilfully
disobeyed the order of the Court or not. Therefore, the legality or sustainability of the order
disobeyed is not relevant for deciding a contempt case, because even a wrong order of the Court
has to be obeyed and followed till it is set aside by the same Court or the appellant-forum or
Supreme Court. In fact the apex Court in Prithawi Nath Ram v. State of Jharkhand 2004 AIR
SCW 4742 : 2005 AILD 35 (SC), held that the Court exercising contempt jurisdiction cannot
take upon itself the power to decide the sustainability of the order disobeyed, and even if
ultimately the interim order is vacated or relief granted in the interlocutory order is not granted
finally if violation of. the interim order alleged is negated in the main proceedings, the other side
cannot make negation of the relief in the main proceedings a ground for disobedience of any
interim order passed by the Court. The learned Senior Counsel, obviously being aware of the
said legal position relating to contempt, did not lay much stress on the point faintly raised by
him. So, the fact that WPMP No. 2333 of 2005 is dismissed is of no relevance to decide this
petition.

13. I would first advert to the question whether there is contempt of the order of the Court dated
8.2.2005 or not, and decide the question relating to limitation later.

14. WP No. 23156 of 2004 questioning the appointment of the respondent as Liquidator of the
Bank was filed in 2004. During the pendency of that petition, OTS Scheme, with the approval of
the Government, was introduced by the Bank on 24.1.2005. Petitioner filed WPMP No 2333 of
2005 questioning the said OTS Scheme in February 2005. Interim order suspending the operation
of the OTS Scheme was passed on 8.2.2005. The case of the respondent is that even on 2.2.2005
i.e., much prior to the passing of the interim order on 8.2.2005 the borrowers applied for
discharge of their loans under OTS Scheme and gave three demand drafts, and some post-dated
cheques bearing dates from 10.3.2005 to 30.3.2005 and that he, under the impression that he can
encash those cheques and grant benefit of OTS Scheme to them, in spite of the order dated
8.2.2005 of this Court, had encashed the cheques and gave the benefit of the OTS Scheme to the
borrowers subsequent to 8.2.2005. So, it is clear that it is not the case of the respondent that he
extended the benefit of the OTS Scheme to the borrowers, without knowledge of the Court
suspending the OTS Scheme. In fact, the respondent, who is made a party to the writ petition in
his personal capacity and was represented by a Counsel in the writ petition, was very well aware
of the interim order dated 8.2.2005, because that order was passed in the presence of his Counsel.
So, it is beyond any pale of doubt that the respondent, having full knowledge of the fact that this
Court suspended the OTS Scheme on 8.2.2005, gave the benefit of the OTS Scheme to the
borrowers long subsequent to 8.2.2005 and cleared their debt under the OTS Scheme, inspite of
its suspension by this Court on 8.2.2005.

15. That the respondent seems to be very much interested in the borrowers, and tried his best to
help them by hook or crook in extending the benefit of the OTS Scheme under which they got a
benefit of several crores of rupees and the Bank seems to have lost those crores-may be due to
their closeness to the powers that be, as disclosed from Para 5 at Page 4 in the affidavit of the
petitioner filed in support of WP No. 21905 of 2005 reading It is relevant to mention here that
the 7th respondent is a close relative of the present Chief Minister of the State who was the
Leader of Opposition in the Assembly prior to 2004. Due to the political influence exercised by
the 7th respondent, the 5th respondent Bank has irregularly sanctioned loans and overdrafts to
him and his group and the same were not recovered at all." (7th respondent in WP No. 21905 of
2005 is Mr. Y. Rajiv Reddy, the main borrower from the Bank shown as the 5th respondent in
vthe said writ petition) or for other reasons, is very clear from G.O. Rt. No. 640 dated 11.5.2005
issued by the Government withdrawing the prosecution against the borrowers, as it reads:

...as the aforesaid (borrowers) have paid the entire amount as per O.T.S. Scheme as evidenced by
the letter of Liquidator for Prudential Bank dated 3.2.2005 addressed to the Principal Secretary to
Home Department....
(Underlining mine) Therefore, it is clear that the respondent had, even on 3.2.2005 i.e., long
before encashing the post-dated cheques bearing dates from 10.3.2005 to 30.3.2005, addressed a
letter to the Government that borrowers cleared the loans due to the Bank, when in fact the loans
taken by the borrowers from the Bank admittedly were not cleared by 3.2.2005. In fact it is not
the case of the respondent even in his counter-affidavit in this petition that the borrowers cleared
all the loans even by 3.2.2005. That issuance of a post-dated cheque does not clear a loan must
be within the knowledge of the respondent, a high-ranking responsible officer in the Co-
operative Department. So, it is very clear that the respondent knowing that the debts due to the
Bank from the borrowers, in fact, were not cleared by 3.2.2005 addressed a letter to the
Government on 3.2.2005 informing that the borrowers cleared the loans due to the Bank.
Respondent could not have, and admittedly did not, encash the post-dated cheques bearing dates
from 10.3.2005 to 30.3.2005 given by the borrowers to the Bank by 3.2.2005. I wonder if the
respondent would have issued any receipt of full satisfaction to any other debtor of the Bank by
receiving post-dated cheques and without encashing those cheques. Probably because the
borrowers were 'Special' to him, the respondent might have addressed such a letter to the
Government even on 3.2.2005 informing that the borrowers had discharged the loans due to the
Bank, to enable the borrowers to move their pawns in the Government for withdrawal of the
prosecution against them.

16. Respondent does not deny his violating the order of the Court dated 8.2.2005 suspending the
OTS Scheme, by extending its benefit to the borrowers after 8.2.2005. His case is that his action
of extending the benefit of OTS Scheme after 8.2.2005 is not a wilful disobedience of the order
dated 8.2.2005. So, it has to be seen whether the respondent wilfully disobeyed the order dated
8.2.2005 of this Court or not.

17. In State of Orissa v. Md. Illiyas , the apex Court while considering the meaning of 'wilful',
held:

(12) THE expression 'wilful' excludes casual, accidental, bona fide or unintentional acts or
genuine inability. It is to be noted that a wilful act does not encompass accidental, involuntary, or
negligence. It must be intentional, deliberate, calculated and conscious with full knowledge of
legal consequences flowing therefrom. The expression 'wilful' means an act done with a bad
purpose, with an evil motive.
(13) "wilful" is a word of familiar use in every branch of law, and although in some branches of
law it may have a special meaning, it generally, as used in Courts of law, implies nothing
blameable, but merely that the person of whose action or default the expression is used is a free
agent, and that what has been done arises from the spontaneous action of his will. It amounts to
nothing more than this, that he knows what he is doing, and intends to do what he is doing, and is
a free agent....
Respondent being a Joint Registrar of Cooperative Societies in the Co-operative Department of
the Government should be presumed to know that he is bound by the order of the Court, because
in T.N. Godavarman Thirumulpad v. Ashok Khot it is observed--

in Major Genl. B.M. Bhattacharjee (Retd.) and Ans. v. Russel Estate Corporation and Anr. , it
was observed by this Court that -

(all of the officers of the Government) must be presumed to know that under the constitutional
Scheme obtaining in this country, orders of the Courts have to be obeyed implicitly and that
orders of the apex Court-for that matter any Court-should not be trifled with As stated earlier, the
respondent can be imputed with knowledge that the OTS Scheme ceased to be in operation from
8.2.2005 because of its suspension by the Court. So, till suspension is revoked, the OTS Scheme
is as good as non-existing. Therefore, question of extending its benefit to any body, after its
suspension by the Court, does not arise. Had the respondent received the entire amount due from
the borrowers i.e., without extending the benefit of the OTS Scheme, it would not amount to
contempt of Court, because the benefit of the OTS Scheme is not extended. But, if the
respondent, by granting the benefit of the OTS Scheme, receives amounts less than that are
actually due as per the contract, or the previous undertaking from any borrower after 8.2.2005,
and during the period of operation of the said interim order, it cannot but be said that he
deliberately, wilfully and wantonly and in disregard of the order of suspension of the OTS
Scheme by the Court, granted the benefit of that Scheme to that debtor. Respondent, though was
aware that the OTS Scheme is suspended by this Court on 8.2.2005, having extended its benefit
to the borrowers after 8.2.2005 cannot be heard to say that inasmuch as he received the post-
dated cheques from the borrowers on 2.2.2005 i.e., prior to the suspension of the OTS Scheme,
he could grant benefit of the suspended OTS Scheme to them. As stated earlier, surprisingly,
even before encashing the post-dated cheques respondent had on 3.2.2005 itself addressed the
Government that the borrowers cleared the debts due to the Bank under the OTS Scheme. In the
circumstances of the case, I am of the considered opinion that the respondent, in order to justify
his writing to the Government on 3.2.2005 about the borrowers clearing the loans, probably with
a view to save himself from the consequences of sending a false report relating the discharge of
the loans by the borrowers, when in fact the loans of the borrowers were not cleared by 3.2.2005,
must have extended the benefit of the OTS Scheme to them, by encashing the cheques after
8.2.2005, deliberately, probably under an impression that that action of his may go unnoticed, or
might have thought that he can, by filing an affidavit stating that he is tendering unconditional
apology, get away from the contempt proceedings, if initiated.

18. Encashing of post-dated cheques bearing dates in March, 2005, after 8.2.2005 per se may not
amount to violation of the order dated 8.2.2005 of the Court, because by mere encashment of the
cheques issued by the borrowers, they i.e., the borrowers would not get the benefit of the
suspended OTS Scheme. But, granting the benefit of the OTS Scheme by the respondent to the
borrowers subsequent to 8.2.2005 without the knowledge or permission of the Court, in the
circumstances stated above, cannot but be said to be a deliberate and wilful violation of the order
of the Court dated 8.2.2005, by the respondent.

19. If the respondent entertained a doubt as to whether he can extend benefit of the OTS Scheme
to the borrowers, subsequent to 8.2.2005 due to his receiving of the application and post-dated
cheques bearing dates in Mach, 2005 prior to 8.2.2005, and if really the respondent was acting in
a bona fide fashion, he as on ordinary prudent person would have sought a clarification from the
Court whether he could in those circumstances extended the benefit of the OTS Scheme to the
borrowers or not. He did not do so. So, he deserves to be punished for contempt of the order of
this Court dated 8.2.2005.

20. The next question is whether the apology of the respondent relieves him of the consequences
of the contempt committed by him. As contended by Sri E. Manohar, the learned Senior
Advocate for the petitioner, it is no doubt true that the counter-affidavit of the respondent
contains the following as Para 3.

I submit that I tender unconditional apology, if this Hon'ble Court comes to the conclusion that I
have extended the benefits of OTS Scheme dated 24.1.2005 to the borrowers of the Prudential
Co-operative Bank Ltd., despite the suspension of the same by this Hon'ble Court by order dated
8.2.2005 in WPMP No. 2333/2005.

The statement in the counter-affidavit of the respondent reading 'If the Court comes to a
conclusion'' that the act done by him is in violation of the interim order dated 8.2.2005, he is
sorry for what he has done, makes me feel that the respondent is under an impression that though
he did not violate the order of the Court dated 8.2.2005 he is unnecessarily dragged to the Court
by filing this petition. There is no repentance for the breach of the order of the Court committed
by him. So, it is clear that the alleged 'unconditional' apology is not from the heart of the
respondent, but is a mere eyewash. The observations of the apex Court in L.D. Jaikwal v. State
of Uttar Pradesh reading:

WE are sorry to say we cannot subscribe to the 'slap-say sorry-and forget' school of thought in
administration of contempt jurisprudence. Saying 'sorry' does not make the slapper poorer. Nor
does the cheek which has taken the slap smart less upon the said hypocritical word being uttered
through the very lips which not long ago slandered a judicial officer without the slightest
compunction.
fits like a glove to the facts of this case. In T.N. Godavarman Thirumulpad's case (supra), the
apex Court held that when mens rea in committing the contempt is writ large, apology cannot be
accepted and the contemnor deserves severe punishment.

21. In the circumstances stated above, mens rea on the part of the respondent to bestow a favour
on the borrowers by extending the benefit of the OTS Scheme after March 2005 even though it
was suspended by the Court, in writ large, and so the respondent cannot be let off by accepting
his apology, because accepting apology, and letting off the respondent in a case like this would
send wrong signals, and would embolden people to violate the orders of Court, because they
would get an impression that by their just writing a sentence in their counter-affidavit that they
are tendering an unconditional apology, they get purged of the contempt alleged against them,
and the Courts would not take any further action against them.

22. Coming to the question of limitation, it is no doubt true that in the affidavit filed in support of
this petition, the date on which the petitioner came to know about the respondent extending the
benefit of the OTS Scheme to the borrowers is not mentioned. But that fact is not much of
consequence because petitioner could not have had knowledge of the date when the respondent
actually extended the benefit of the OTS Scheme to the borrowers, even on the day the benefit
thereof was extended to the borrowers, because the respondent, and the borrowers, were
executing their plan and design of the flouting of the interim order of this Court dated 8.2.2005,
in a clandestine fashion. Moreover, it is not the case of the respondent that he published the
factum of his giving the benefit of the OTS Scheme to the borrowers on the Notice Board of the
Bank, or through any other mode, for the public or the petitioner to know about that fact even on
the day on which he extended the benefit of the OTS Scheme to the borrowers, or on any other
day. Court can take judicial notice of the fact that it would take sometime for third parties
knowing about the collusion between parties, who execute their plan or design in a clandestine
fashion.

23. Referring to the averments in the Additional Reply Affidavit filed by the petitioner, where he
alleged that he filed WP No. 21905 of 2005 questioning the action of the Government in
withdrawing the prosecution against the borrowers, where he made a reference to G.O. Rt. No.
640 dated 11.5.2005 issued by the Government of Andhra Pradesh, learned Counsel for the
respondent contended that petitioner should be imputed with the knowledge of the respondent
extending the benefit of the OTS Scheme to the borrowers even by 11.5.2005, if not earlier, and
so this petition filed one year after 11.5.2005 is barred by time. I am not able to agree with the
said contention. Merely because the date of the G.O., and the date on which the benefit of the
Scheme was extended by the respondent to the borrowers, are mentioned in the affidavit filed in
support of the WP No. 21905 of 2005, and in the affidavit filed in support of this contempt
petition, petitioner cannot be imputed with knowledge of those events, even on the dates on
which the proceedings bear. Petitioner, who is not expected to keep a watch on all the activities
of the respondent and the borrowers, cannot be expected to go around the Secretariat to find out
what G.Os. are being issued by the Government in respect of the criminal case filed against the
borrowers. Since it is not the case of the respondent that he gave notice of his intention to close
the accounts of the borrowers, by extending the benefit of the suspended OTS Scheme, prior to
his taking the step of closing the debt accounts of the borrowers or that he has put the petitioner
on notice about his intention to close the debt accounts of the borrowers after 8.2.2005 or about
thee Government issuing G.O. Rt. No. 640 dated 11.5.2005 closing the crime against the
borrowers, petitioner could not have had knowledge of those events on the dates they bear.
Public or Petitioner can know that such events took place only after lapse of considerable time,
when those events gradually gain publicity either due to the non-appearance of the borrowers in
the criminal Courts for hearings or due to some other events. The respondent did not state as to
how the petitioner could have had knowledge of his closing the accounts of the borrowers after
8.2.2005, and before October, 2005.

24. From a reading of the affidavit of the petitioner filed in support of the WP No. 21905 of 2005
it can be taken that the petitioner had knowledge of the respondent extending the benefit of the
OTS Scheme to the borrowers and the Government withdrawing the prosecution against the
borrowers only on or after 31.7.2005, because in Paras 7 and 8 thereof it is stated:

7...It is submitted that the amount due from the 7th respondent and his group as on 31.7.2005
was Rs. 42.82 crores as appears in the books of the Bank and the amount of Rs. 10.29 crores paid
by them has been kept in a suspense account. Even then the amount due from the said group of
persons is Rs. 32.52 crores.
8. It is respectfully submitted that even as on today the books of accounts of the Bank shows the
above mentioned amount due from the 7th respondent and his group. However, the 6th
respondent addressed a letter to the 3rd respondent to withdraw the criminal case pending against
the 7th respondent since the loans have been settled under the new OTS Scheme. It appears that
the 1st and 2nd respondents and thereafter G.O. Rt. No. 640 dated 11.5.2005 has been issued for
withdrawing the criminal case pending against the 7th respondent....

25. So this petition filed on 6.6.2006 within one year from 31.7.2005 is very much within time.

26. Till the date of filing of this petition, the Court also was not made aware of the respondent
extending the benefit of the OTS Scheme to the borrowers, either by the respondent or by
anybody else through a memo or otherwise. So, it is clear that till the petitioner filed this petition,
the Court also was not aware of the respondent violating the orders of this Court dated 8.2.2005.
Hence, the possibility of this Court taking suo motu action for contempt arose only when this
petition came up for admission before this Court but not earlier.

27 The facts in Thiruvalkani K. Nagaraj v. Thiruvalkani Sarojamma , relied on by Sri E.

Manohar, which was decided by me, are entirely different from the facts of this case. In that
case, violation of the undertaking given by the contemnor came to the knowledge of a Division
Bench of this Court even long time prior to the date of initiation of the suo motu proceedings for
contempt by me, when CMP No. 7898 of 2001 came up for hearing before me. During the course
of arguments it was brought to my notice that violation of the undertaking given by the
contemnor was brought to the notice of a Division Bench of the Court, when CMP No. 15271 of
2000 came up for hearing before that Division Bench and that the Division Bench by its order
dated 8.9.2000, dismissed the CMP with certain observations, without initiating proceedings for
contempt suo motu. By the date I initiated suo motu contempt proceedings one year elapsed from
the date of knowledge of the contempt, which was brought to the notice of the Division Bench.
On the ground that the Division Bench, which had knowledge of the contempt committed by the
contemnor did not initiate suo motu action for that contempt, and as more than one year elapsed
by the date I initiated the suo motu contempt proceedings, I dropped the suo motu proceedings
for contempt initiated by me, as barred by time, because Court is indivisible. In this case the
Court had knowledge of the violation of the order of this Court dated 6.6.2006 by the respondent,
only when the petitioner filed this petition but not earlier. A learned Judge before whom this case
came up for admission, admitted this petition on 9.8.2006. The learned Judge admitting the
petition for contempt can be treated as a suo motu action for contempt, because there, in fact, is
no difference between a suo motu contempt proceeding and a contempt proceeding initiated by
any other party as far as the contemnor is concerned. When contempt of its order comes to the
notice of the Court, and if nobody files a petition for contempt, the Court takes up the contempt
proceedings suo motu within one year from the date of knowledge as held in Pallav Sheth 's case
(supra). As it would be redundant to initiate suo motu contempt proceedings when a petition for
that purpose is filed, Courts do not initiate suo motu contempt proceedings after a petition for
contempt is filed by some other person. The reason for initiating contempt proceedings is to
make people aware that violation of order of the Court would result in punishment. Persons who
deliberately violate the orders of Court deserve to be punished.
28. In view of the ratio in Pallav Sheth's case (supra), the date of knowledge would be the criteria
for determining the period of limitation for initiation of contempt proceedings. Since there is no
material on record to show that the petitioner had knowledge of the respondent extending the
benefit of the suspended OTS Scheme at any time after 8.2.2005 and prior to his filing the WP
No. 21905 of 2005, and since it is the specific case of the petitioner that he came to know about
the respondent extending the benefit of the suspended OTS Scheme to the borrowers, and also
the Government withdrawing the criminal cases against the borrowers only in October, it cannot
be said that the petition is barred by time.

29. Since the Court also has power to initiate action for contempt suo motu for violation of its
order, the Court which had knowledge of the violation of its order by the respondent through the
petition filed by the respondent took cognizance of the case on 9.8.2006 i.e., well within one year
of the date of its knowledge about the respondent committing contempt of the order of the Court,
it can be taken that the Court took cognizance of the case well within the period of one year from
the date of knowledge and so I am unable to agree with the contention of Sri E. Manohar that the
case is barred by time.

30. In my considered opinion, imposition of fine, even heavy fine, against the respondent would
not suffice, because there is every possibility of the respondent seeking the help of the borrowers
to come to his rescue for payment of that heavy fine, as a quid pro quo for his conferring the
benefit of the suspended OTS Scheme on them whereby they i.e., the borrowers, got a benefit of
Rs. 32.5 crores, as per the case of the petitioner. So, the borrowers would happily help the
respondent in paying the heavy fine, because they came out the criminal cases and the heavy
debts due to the Bank only due to the respondent extending the benefit of the suspended OTS
Scheme to them. Therefore, as a deterrent, respondent has to be sentenced to imprisonment, so
that orders of Court are not violated with impunity, and the contemnors may not come forward
with an apology with lips expressing sorry for what they did, and get away happily unpunished.

31. Contemnor present. Heard him on the question of punishment. Counsel for respondent says
that respondent is tendering unconditional apology under proviso to Section 12(1) of the
Contempt of Courts Act, 1971. For the same reasons mentioned above the apology of the
respondent is not accepted. In the circumstances, respondent is sentenced to simple
imprisonment for four months and a fine of Rs. 1,000/- (Rupees one thousand only) in default
simple imprisonment for one month.