Judicial System Can't Function If Parties Are Allowed To Resile From Their Undertaking Without Any Reasons: Delhi High Court

The Delhi High Court has observed that the judicial system cannot function if the parties are permitted to resile from the undertaking given by them without any reasons.

Justice Jasmeet Singh said that there is solemnity and seriousness attached to court proceedings and parties cannot give undertakings without intending to honour them, or at least, they must make sincere and conscious efforts to comply with the same.

“If undertakings are given and the parties are permitted to resile from the same without any reasons, the judicial system cannot function. The Court in contempt proceedings is to ensure that the dignity and majesty of the Court are maintained and any act and conduct of a party tantamount to lowering the dignity and majesty of the Court would amount to contempt,” the court said.

Justice Singh made the observations while dealing with a plea moved by an entity, State Trading Corporation of India Limited, seeking initiation of contempt proceedings against officials of an entity, Akshata Mercantile Pvt. Ltd., for violating an undertaking given before a Metropolitan Magistrate in August 2014 in a case registered under Sections 138, 141, 142 of the Negotiable Instruments Act, 1881.

As per the undertaking, the officials said that the company will repay Rs. 10 crores to Rs. 15 crores each and every continuing month to State Trading Corporation and would ensure that the total outstanding amount is liquidated within a period of 6 to 8 months. Since the undertaking was not fulfilled, the contempt plea was filed.

The court found the whole time Director of Akshata Mercantile guilty of contempt, observing that he was responsible for non-compliance of the undertakings for and on behalf of the entity before the MM.

“For the said reasons, I am of the view that the Respondent No. 2 is guilty of contempt and must be punished accordingly. The Respondent No. 2 is given 4 weeks to file a reply to show-cause as to why he should not be punished for contempt for non-compliance of the undertaking given before the learned MM on 04.08.2014,” the court said.

Keeping in view the official's conduct to not make the payment as agreed between the parties and recorded as per the judicial order, the court observed that the apology of the official could not be said to be bona fide.

“…apology may be considered as a mitigating circumstance. However, the apology has to be seen with regard to the nature of disobedience and the pre and post circumstances surrounding the apology,” the court said.

Counsel for Petitioner: Mr. Dinesh Agnani, Sr. Adv. with Ms. Madhu Sudan Bhayana, Mr. Vikrant Rana, Advs

Counsel for Respondents: Mr. Siddharth Dave, Sr. Adv., Mr. Jeevesh Nagrath, SPP

Title: THE STATE TRADING CORPORATION OF INDIA LTD v. SHEELA ABHAY LODHA & ORS

Citation: 2023 LiveLaw (Del) 1307

Click Here To Read Order