NDLI: Maruti Udyog Limited Vs. Mahinder C. Mehta and Ors.

Maruti Udyog Limited Vs. Mahinder C. Mehta and Ors.

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Maruti Udyog Limited Vs. Mahinder C. Mehta and Ors.

Content Provider	Supreme Court of India
e-ISSN	30484839
Language	English
Access Restriction	NDLI
Subject Keyword	Contempt of Courts Act 1970/Arbitration and Conciliation Act 1950 Article 129 1996/Constitution of India
Content Type	Text
Resource Type	Law Judgement
Jurisdiction	India
Case Type	Contempt Petition
Court	Supreme Court of India
Disposal Nature	Petition Allowed
Headnote	Contempt of Courts Act, 1970/Arbitration and Conciliation Act, 1996/Constitution of India, 1950; Article 129:Contempt - Advances obtained by respondents from customers on behalf of petitioner-car manufacturer - Amount not paid to petitioner - Invoking of arbitration agreement - Supreme Court referring the dispute to arbitrator - Arbitrator ordering respondents to furnish security - Non compliance - Contempt Petition - Held: Despite undertaking given before this Court, the alleged contemnors did not furnish any bank guarantee - Application for modification dismissed - Property in possession of Contemnor No.3 sold by them - They not only suppressed material facts but also made wrong representation regarding the value of property allegedly possessed by them - Thus, the alleged contemnors have misled this Court and have committed gross contempt of this Court - It is a fit case to invoke jurisdiction of this Court under Article 129 of the Constitution as also under provisions of 1970 Act - Contemnors directed to undergo imprisonment as indicated in the judgments except contemnor No.3 who had resigned as director of the Company.Respondents were Directors of a Company. The Company obtained various advances from the customers on behalf of the petitioner, a car manufacturer. It, however, did not pay the amount to the petitioner. The petitioner filed a suit for recovery thereof. The respondents filed an application purported to be under Section 8 of the Arbitration and Conciliation Act, 1996. Single Judge of the High Court rejected the application. An appeal preferred thereagainst by the respondents before a Division Bench of the High Court was also dismissed. A Special Leave Petition was filed before this Court. This Court vide its order dated 6.09.2002 referred the subject matter of the dispute to the arbitration of a former Chief Justice of this Court. The Arbitrator vide its order dated 25.03.2003 issued a direction upon the respondents to furnish certain amount of bank guarantee. An award was made on 10.04.2005 as against the Company for a sum of Rs.7.63 crores with interest at the rate of 8% in favour of the petitioner along with costs and expenses. In the meantime, the petitioner has flied the present Contempt Petition. Later, a proposal for settlement was made by Respondent No.1 before this Court relying on or on the basis of the said representation, a Division Bench of this Court formed an opinion that it is possible to settle the dues of the petitioner as also other creditors. By its order dated 9.02.2007, this Court directed that in terms of the proposal, the parties should find out ways and means to sell the property belonging to the first respondent company to settle the dues and also directed the High Court to dispose of the Writ petition on the said issue pending before it. The writ petition having been dismissed by the High Court, the appeal of the respondents and the Company preferred thereagainst was also taken up for hearing along with the Contempt Petition.Petitioner contended that by brazenly flouting the order of this Court dated 6.09.2002, the respondents have committed gross contempt of this Court; that the alleged contemnors were bound to comply with the orders passed by the Arbitrator in terms of this Court's order dated 6.09.2002. As they had not furnished bank guarantee pursuant thereto or in furtherance thereof and in fact the alleged contemnors have committed a contempt of this Court; and that that the contempt stands aggravated as even during pend ency of this proceeding as also the arbitration proceeding before the Arbitrator, they have sold their flat situate at Bangalore.On behalf of respondent-contemnors it was submitted that vide additional affidavits filed by the alleged contemnors, unconditional apology has been tendered; that another affidavit filed by Respondent No.3 stating that he had tendered his resignation as Director in 1997 and the Company has accepted the same; that in another counter affidavit filed by Respondent No.2 stating that he was not a signatory to the original dealership agreement and was not involved in any of the day to day affairs of the Company; that in counter affidavit filed by Respondent No.1, he had tendered unconditional apology for his inability to raise the resources and furnish a bank guarantee in terms of the order of this Court; that Respondent No.2 was forced to sell his personal flat at Bangalore to meet his debts and obligations and he was ready and willing to relinquish all rights with the respect to the other property situated at Secunderabad; and that as the Arbitrator has passed the award only against the Company, the interlocutory order passed by this Court having merged with the final award, no contempt of this Court has been committed.
Judge	Hon'ble Mr. Justice S.B. Sinha
Neutral Citation	2007 INSC 1032
Petitioner	Maruti Udyog Limited
Respondent	Mahinder C. Mehta And Ors.
SCR	[2007] 10 S.C.R. 933
Judgement Date	2007-10-10
Case Number	289

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