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REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 1820 OF 2018

[@ SPECIAL LEAVE PETITION (C) NOS. 9820 OF 2016] R K ARORA GENERAL MANAGER & ANR.             Appellant(s)

                               VERSUS M/S ACE ENTERPRISES                           Respondent(s)

J U D G M E N T

KURIAN, J. 1. Leave granted. 2. On  22.06.2011,  the  Court  of  Small  Causes, Srinagar,  passed  an  order  of  injunction  in  the following terms :-

“The  application  in  hand  will  not  be allowed, there are chances that the suit of the applicant will become infructuous. So  in  the  interests  of  justice  the application  in  hand  is  allowed  and  the proceedings  before  the  arbitration  with regard  to  matter  titled  M/s  ACE Enterprises Vs. Union of India and ors is stayed till the objections from the other side  is  filed.   Put  up  this  file  on 26-07-11.”

3.  Alleging  violation  of  the  above  order,  an application  was  filed  for  initiating  contempt proceedings.  The prayer reads as follows :-

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“It is therefore prayed that the contempt proceedings  may  please  be  intiated  and the contemnors be punished according to law and the order of revival passed by the Arbitrator may please be stayed.”  

  4. The Court of Small Causes treated the application filed  by  the  respondent  as  an  application  for contempt  without  mentioning  any  provision.   It  is also significant to note that even the applicant had not mentioned any provision for initiating contempt. The  Court  passed  an  order  dated  06.11.2013  by entering a finding that there is no contempt and that there is no violation of the order dated 22.06.2011. The  operative portion  of the  order, to  the extent relevant, reads as follows :-

“The  proceedings  of  the  arbitration continued by the Arbitrator, is based on the understanding of the Arbitrator and the learned counsel for the defendants as to the correct import of the order dated 22-06-2011.   The  said  understanding arrived at, though is borne out from the facts and circumstances pertaining to the controversy,  cannot  be  construed  as willful  and  deliberate  attempt  on  the part of counsel for parties involved, to flout  the  order  of  the  court  dated 22-06-2011.  The arbitration proceedings is  an  independent  and  statutory  remedy available under the provisions of Jammu and Kashmir Arbitration Act, 2002.  The

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provisions  of  said  Act  have  overriding effect over the general laws.  Exercise of statutory remedy and proceedings under the special act, cannot be scuttled in ordinary course of events.  Only if the statute  provides  for  such  exercise  of power by the civil court, the civil court can  enter  into  the  domain  of  such jurisdiction, that too in limited sphere.

The  exercise  of  jurisdiction  by  the Arbitrator,  available  under  the provisions  of  Jammu  and  Kashmir Arbitration Act, advise rendered by the learned  counsel  representing  the defendant  in  the  court  or  before  the Arbitrator, and proceedings initiated by any party in exercise of statutory right, cannot be construed as flouting of the order of the civil court or willful or deliberate violation of the order, unless the  violation  is  clear,  emphatic  and apparently willful and deliberate, aimed at  defeating  the  order  passed  by  the court.   From  the  nature  of  the  order passed  by  the  court  of  Sub-Judge/Judge Small  Causes  Court,  Srinagar,  and  the facts and circumstances pertaining to the case, I find no flouting or violation of the  order  dated  22.06.2011,  by  the persons  named  in  the  contempt application.   No  justifiable  and sufficient ground exists for proceedings against  the  said  named  persons  for contempt  of  court.   Accordingly,  the contempt proceedings are dropped against

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the said named persons.  Application is dismissed.  Record of application be made part of suit file on completion.”  

  5.  That  order  was  challenged  by  the  respondent before the High Court.  The High Court has considered the matter in extenso.  At paragraphs 11, 13 and 17, the High Court has entered its findings as follows :-

“11. Admittedly, the impugned order has been passed by the learned Sub-Judge in a  contempt  petition  filed  by  the petitioner.   The  Jammu  and  Kashmir Contempt  of  Courts  Act,  1997  (Act  No. XXV  of  1997)  (for  short,  Contempt  of Courts  Act)  was  enacted  to  define  and limit  the  power  of  certain  courts  in punishing  contempt  of  courts  and  to regulate  their  procedure  in  relation thereto.  There is no provision in this Act  to  empower  a  subordinate  court  to punish  contempt  of  itself.   However, Section 10 of the Contempt of Courts Act vests with the High Court the power to punish contempts of subordinate courts. It says that the High Court shall have and  exercise  the  same  jurisdiction, powers and authority in accordance with the  same  procedure  and  practice,  in respect  of  contempts  of  courts subordinate  to  it  as  it  has  and exercises  in  respect  of  contempts  of itself;  provided  that  the  High  Court shall not take congnizance of a contempt alleged  to  have  been  committed  in

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respect  of  a  court  subordinate  to  it where  such  contempt  is  an  offence punishable under the Ranbir Penal Code, 1989.  Thus, the law provides that if there  is  contempt  of  any  court subordinate to the High Court, it is the High Court alone which has the power to punish for such contempt.  Essentially, therefore,  a  court  subordinate  to  the High  Court  cannot  take  cognizance  and initiate  proceedings  to  punish  for contempt  of  itself,  the  question  of conducting trial of an application for contempt and taking a decision thereon is far remote.   

13. Since the subordinate courts do not have the jurisdiction to take cognizance of  contempt  of  itself,  or  initiate proceedings  on  a  contempt  petition  or try it, it cannot proceed to decide it finally.   In  the  instant  case,  the learned  Sub-Judge  has  not  only  taken cognizance  but  has  proceeded  to initiate,  and  conducted,  proceedings thereon and finally decided it.  Thereby the  learned  Sub-Judge  has  assumed  a jurisdiction,  not  vested  in  it  under law.

17.  During  the  course  of  arguments  of this case, the learned counsel for the petitioner brought it to the notice of the Court that the Arbitrator appointed in violation of the ad-interim orders of

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the trial court has ultimately concluded the  proceedings  and  passed  the  final award  against  the  interests  of  the petitioner.   Pending  decision  in  the contempt petition in terms of applicable laws,  there  shall  be  stay  of  final award.  It hardly needs a mention here that in the event it is found that there has  been  a  violation  of  the  interim order  of  the  trial  court,  the appointment  of  the  Arbitrator  and  the proceedings  conducted  by  him  together with any award passed by him would be rendered non-est in the eyes of law.”

6. When the matter came up before this Court, the following order was passed on 18.04.2016 :-

“Though we do not have any quarrel with the settled position of law, as held by the High Court that the trial court does not  have  any  jurisdiction  to  initiate proceedings under the Jammu and Kashmir Contempt of Courts Act, 1997, we find that the High Court has omitted to take note  of  the  fact  that  there  are  two separate  proceedings  under  different contracts.   In  that  view  of  the  matter,  issue notice.  In the meantime, there shall be stay of further  proceedings  pursuant  to  the impugned order.”

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7. Having heard Mr. Tushar Mehta, learned Additional Solicitor General, and Mr. Abdul Rehman, representing the  respondent  on  permission,  we  do  not  feel  it necessary  to  refer  to  any  other  factual  details. Though an application for contempt was filed before the  trial  court,  it  was,  in  fact,  a  petition  for taking action under Order XXXIX Rule 2A of Jammu and Kashmir Code of Civil Procedure Act, 1977.  It is not a case for initiating contempt on the face of it. These are two different jurisdictions.  That is all that  has  been  clarified  by  the  High  Court.   The appeal  is,  hence,  disposed  of  with  the  following directions :- i)   The  application  filed  by  the  respondent  for initiating  contempt  shall  be  treated  as  an application for taking action under Order XXXIX Rule 2A of the Jammu and Kashmir Code of Civil Procedure. It shall be renumbered accordingly. ii)  The trial court shall first see whether there is any disobedience of the order of injunction and in case the court enters a finding of disobedience, the rest under Order XXXIX Rule 2A alone shall follow.   

8. The submission made by the appellants regarding separate  contracts  and  pending  application  under Section 8 of the Jammu and Kashmir Arbitration Act etc. are open to the appellants to canvas before the

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trial court at the appropriate stage.  It will also be  open  to  the  respondent  to  take  all  available contentions before the trial court.  Being a matter pending since long, we direct the trial court to take a  decision  accordingly  on  the  application expeditiously and preferably within a period of three months from the date of receipt of a copy of this Judgment.

No costs.   .......................J.

             [ KURIAN JOSEPH ]  

.......................J.               [ MOHAN M. SHANTANAGOUDAR ]  

New Delhi; February 07, 2018.

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ITEM NO.4               COURT NO.5               SECTION XVI -A                S U P R E M E  C O U R T  O F  I N D I A                        RECORD OF PROCEEDINGS Petition(s) for Special Leave to Appeal (C)  No(s).  9820/2016 (Arising out of impugned final judgment and order dated  16-12-2015 in OWP No. 377/2014 passed by the High Court Of Jammu&kashmir At Srinagar) R K ARORA GENERAL MANAGER & ANR.                   Petitioner(s)                                 VERSUS M/S ACE ENTERPRISES                                Respondent(s) (IA No.78069/2017-PERMISSION TO FILE ADDITIONAL DOCUMENTS and IA No.126071/2017-PERMISSION TO APPEAR AND ARGUE IN PERSON) Date : 07-02-2018 This matter was called on for hearing today. CORAM :  HON'BLE MR. JUSTICE KURIAN JOSEPH          HON'BLE MR. JUSTICE MOHAN M. SHANTANAGOUDAR For Petitioner(s) Mr. Tushar Mehta, ASG

Mr. Rahul Narayan, AOR Ms. Mala Narayan, Adv.  Mr. Sushant Goel, Adv.  

                   For Respondent(s) Ms. Aishwarya Bhati, AOR                     Respondent-in-person                          UPON hearing the counsel the Court made the following                              O R D E R

Leave granted.  The  civil  appeal  is  disposed  of  in  terms  of  the  signed

reportable Judgment.   Pending Interlocutory Applications, if any, stand disposed of.

(JAYANT KUMAR ARORA)                              (MADHU NARULA)    COURT MASTER   COURT MASTER

(Signed reportable Judgment is placed on the file)