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Synopsis

The Delhi High Court, recently, held that “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 bench of Justice C. Hari Shankar made these observations in a contempt petition filed by Viterra BV, a Canadian company that supplies essential food and feed products, against Sharp Corp Limited. 

Senior Advocate Darpan Wadhwa, representing Viterra, contended that Sharp violated the order of the Single Judge that restrained the alienation or creation of third-party rights. It was asserted that Sharp committed contempt by selling a property located in Siraspur on November 28, 2022, without informing the Court. Senior Advocate Wadhwa argued that no pre-existing mortgage or charge on the property was disclosed, and supporting documents were submitted with the contempt petition.

Senior Advocate Vikram Nankani, representing Sharp, argued that the restraint on alienating immovable properties, referenced in the order of the single judge, was explicitly subject to the prior rights of financial institutions. He clarified that the term "prior right" was used in the order, not "mortgage," and stated that the State Bank of India (SBI) correctly certified that the Siraspur property was not mortgaged with the bank or its consortium.

The court noted that the primary characteristic of contempt was best understood by referring to the etymological meaning of “contempt.” Dictionaries defined it as a lack of respect or reverence, coupled with disdain or mockery. 

In the legal context, the court highlighted that not all disobedience of court orders constituted contempt; intent was the essence. Without wilfulness, no contempt existed.

The court referring to Section 2(b) of the Contempt of Courts Act, 1971, noted that mere disobedience did not amount to contempt unless it was deliberate. Acts demonstrating indifference to compliance obligations might also qualify as contempt, provided intent was evident. When intent was unclear, courts allowed contemnors opportunities to rectify breaches, thus “purging” the contempt. Persistent disobedience after such opportunities indicated intent and led to consequences, the court added. 

The court emphasized “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”.

The court noted that ambiguity in orders or the possibility of multiple interpretations served as a valid defense against contempt allegations. Furthermore, the alleged breach had to be evident and undeniable, as courts refrained from interpretative inquiries into the intent behind orders or alleged breaches. These principles governed contempt proceedings.

Therefore, the court held that “It cannot be said that, by selling the Siraspur property, the respondents were guilty of disobedience” and dismissed the petition. 

For Decree Holder: Senior Advocate Darpan Wadhwa with Advocates Raunaq B. Mathur and Keshav Somani
For SBI: Advocates Siddharth Sangali and Harshita Agrawal
For Judgment Debtor: Senior Advocate Vikram Nankani with Advocates Arvind Kumar and Heena George 
Case Title: Viterra B.V. v Sharp Corp Limited (2024:DHC:9302)